House Bill No. 110

Introduced By swanson, mcgee, halligan, grosfield, knox, quilici, beck

By Request of the Governor and the Department of Justice

A Bill for an Act entitled: "An Act authorizing the issuance of loans APPROPRIATING COAL SEVERANCE TAX TRUST FUNDS to the Department of Justice to be appropriated for technical, legal, and administrative activities for the State of Montana natural resource damage litigation in the Clark Fork River Basin, including a supplemental loan for the 1997 biennium; extending repayment and providing for interest on previous loans; and providing an immediate effective date."

Be it enacted by the Legislature of the State of Montana:

NEW SECTION. Section 1. Natural resource damage program loan supplementation, authorization, and appropriation. (1) There is authorized APPROPRIATED to the department of justice from the coal severance tax permanent fund a supplemental loan in the amount of $675,000, the proceeds of which are appropriated for the biennium ending June 30, 1997, for the purpose of conducting the litigation and pursuing the state of Montana's natural resource damage claims against the atlantic richfield company through the natural resource damage litigation program.

(2) There is authorized to the department of justice from the coal severance tax permanent fund for fiscal years 1998 and 1999 a loan in the amount of $1,492,000, the proceeds of which are appropriated $5 MILLION FOR THE REMAINDER OF THE CURRENT FISCAL YEAR AND for the biennium ending June 30, 1999, for the purpose of conducting the litigation and pursuing the state of Montana's natural resource damage claims, and any appeals, against the atlantic richfield company through the natural resource damage litigation program.

(3) Repayment of principal and interest on the loans authorized in subsections (1) and (2) is extended through the end of the 1999 biennium in accordance with 17-2-107(8). ANY RECOVERY IN THE LITIGATION UP TO THE AMOUNT APPROPRIATED IN THIS SECTION PLUS THE AMOUNT OF THE LOANS EXTENDED IN [SECTION 2] MUST BE DEPOSITED IN THE COAL SEVERANCE TAX PERMANENT FUND.

NEW SECTION. Section 2. Extension of previous loans. Repayment of principal and interest on all loans authorized from the coal severance tax permanent fund under Chapter 354, Laws of 1993, and Chapter 411, Laws of 1995, is extended through the end of the 1999 biennium in accordance with 17-2-107(8).

NEW SECTION. Section 3. Rate of interest. The interest to be paid on the loans authorized under [section 1] and the previous loans extended under [section 2] must be the highest rates allowable for interest recoverable under 42 U.S.C. 9607(a), which are based on the rates specified for interest on investments of the hazardous substance superfund established under 26 U.S.C. 9507. The interest is payable as of the date on which the loan proceeds were or are transferred from the coal severance tax permanent fund.

NEW SECTION. Section 4. Loan contract. In order to make the loans authorized in [section 1] and to extend the previous loans authorized in Chapter 354, Laws of 1993, and Chapter 411, Laws of 1995, the board of investments shall enter into a revised contract with the department of justice, pledging the amount recovered in the litigation to the repayment of the loans to the full extent allowable under law. The contract must provide that loan repayments must be deposited in the coal severance tax permanent fund. To the extent possible, the board shall make the loan from the portion of the coal severance tax permanent fund invested in the short-term pool. The loans authorized in [section 1] may not be made until the revised contract required by this section has become effective.

NEW SECTION. Section 5. Three-fourths vote. Because [section 1] appropriates money from the coal severance tax permanent fund, Article IX, section 5, of the Montana constitution requires a vote of three-fourths of the members of each house of the legislature for passage.

NEW SECTION. Section 6.  Effective date. [This act] is effective on passage and approval.

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