_________ Bill No. _______
Introduced By _______________________________________________________________________________
A Bill for an Act entitled: "An Act establishing the Montana heritage preservation and development commission; authorizing the issuance of heritage revenue bonds for the purchase of properties in Virginia City and Nevada City; authorizing the use of the proceeds from the sale of bonds for the purchase of properties in Virginia City and Nevada City; allocating 10 percent of the accommodations tax to service the bonds and to provide for ongoing heritage preservation and development activities; authorizing the Montana heritage preservation and development commission to administer properties at Virginia City and Nevada City and other culturally and historically significant properties; amending section 15-65-121, MCA; and providing an immediate effective date."
Be it enacted by the Legislature of the State of Montana:
NEW SECTION. Section 1. Montana heritage preservation and development commission. (1) There is a Montana heritage preservation and development commission. The commission is attached to the Montana historical society for administrative purposes. The commission consists of 11 members. The members shall broadly represent the state. Five members must be appointed by the governor, two members must be appointed by the president of the senate, one from each party, and two members must be appointed by the speaker of the house, one from each party. The director of the Montana historical society and the director of the department of fish, wildlife, and parks shall serve as members.
(2) Of the members appointed by the governor:
(a) one member must have extensive experience in managing facilities that cater to the needs of tourists;
(b) one member must have experience in community planning;
(c) one member must have experience in historic preservation;
(d) one member must have broad experience in business; and
(e) one member must be a Montana historian.
(3) Except for the initial appointments, members appointed by the governor shall serve 3-year terms. Legislative appointees shall serve 2-year terms. If a vacancy occurs, the appointing authority shall make an appointment for the unexpired portion of the term.
(4) The commission may employ an executive director who has general responsibility for the selection and management of commission staff, developing recommendations for the purchase of property, and overseeing the management of acquired property and a curator, who is responsible for the display and preservation of the acquired property. The commission shall prescribe the duties and annual salary of the executive director and the curator.
NEW SECTION. Section 2. Montana heritage preservation and development commission -- initial appointments. The initial appointments to the Montana heritage preservation and development commission must be for the following terms:
(1) the member with experience managing facilities that cater to the needs of tourists, 3 years;
(2) the member with experience in community planning, 4 years;
(3) the member with experience in historic preservation, 5 years;
(4) the member with broad experience in business, 3 years;
(5) the Montana historian, 5 years; and
(6) the legislative appointments, 2 years.
NEW SECTION. Section 3. Purpose. The purpose of [sections 1 and 3 through 5] is to acquire, on behalf of the state, properties that possess outstanding historical value, display exceptional qualities worth preserving, are genuinely representative of the state's culture and history, and demonstrate the ability to become economically self-supporting. The Montana heritage preservation and development commission shall achieve this purpose by purchasing fee title interests in real and personal property.
NEW SECTION. Section 4. Powers of commission -- contracts -- rules. (1) (a) The Montana heritage preservation and development commission may contract with private organizations to assist in carrying out the purpose of [section 3]. The term of a contract may not exceed 20 years.
(b) Notwithstanding the provisions of Title 18, the contracts may be let by direct negotiation. The contracts may be entered into directly with a vendor and are not subject to state procurement laws.
(c) Architectural and engineering review and approval do not apply to the historic renovation projects.
(d) The contracts must provide for the payment of prevailing wages.
(e) A contract for supplies or services, or both, may be negotiated in accordance with commission rules.
(f) Management activities must be undertaken to encourage the profitable operation of properties.
(g) Contracts may include the lease of property managed by the commission. Provisions for the renewal of a contract must be contained in the contract.
(2) The commission may not contract for the construction of a building, as defined in 18-2-101, in excess of $200,000 without the consent of the legislature. Building construction must be in conformity with applicable guidelines developed by the national park service of the U.S. department of the interior, the Montana historical society, and the Montana department of fish, wildlife, and parks.
(3) The commission, as part of a contract, shall require that a portion of any profit be reinvested in the property and that a portion be used to pay the administrative costs of the commission.
(4) The commission may solicit funds from other sources for the purchase, management, and operation of properties.
(5) The commission shall adopt rules establishing a policy for making acquisitions. With respect to each acquisition, the policy must give consideration to:
(a) whether the property represents the state's culture and history;
(b) whether the property can become self-supporting;
(c) whether the property can contribute to the economic and social enrichment of the state;
(d) whether the property lends itself to programs to interpret Montana history;
(e) whether the acquisition will create significant social and economic impacts to affected local governments and the state; and
(f) other matters that the commission considers necessary or appropriate.
(6) Public notice and the opportunity for a hearing must be given in the geographical area of a proposed acquisition before a final decision to acquire a property is made. The commission shall approve proposals for acquisition and recommend the approved proposal to the board of land commissioners.
NEW SECTION. Section 5. Montana heritage preservation and development account. (1) There is a Montana heritage preservation and development account in the state special revenue fund.
(2) Money deposited in the account must be used to service revenue bonds issued for:
(a) the purchase of properties in Virginia City and Nevada City;
(b) restoration, maintenance, and operation of historic properties in Virginia City and Nevada City; and
(c) purchasing, restoring, and maintaining historically significant properties in Montana that are in need of preservation.
NEW SECTION. Section 6. Revenue bonds -- purchase of Virginia City and Nevada City assets. (1) The board of examiners is authorized to issue $9.5 million of revenue bonds for heritage preservation and development purposes.
(2) The bond proceeds must be deposited in the Montana heritage preservation and development account provided for in [section 5]. The bond proceeds must be used for the acquisition, renovation, and preservation of real and personal property owned by Bovey restorations, inc., and the historic landmark society of Montana in the communities known as Virginia City and Nevada City and to establish necessary reserves for the bonds and to pay the costs of issuance of the bonds. A portion of the bond proceeds may be used to construct a facility to preserve the property, and the facility may be constructed without complying with the provisions of Title 18, other than Title 18, chapter 2, part 4.
(3) The bonds are a limited obligation of the state, payable solely from the designated source of revenue, and do not constitute a debt of the state. Bond payments must be made from funds allocated pursuant to 15-65-121.
(4) Notwithstanding the provisions of [sections 1 and 3 through 5], the purchase authorized in subsection (2) may be made as soon as bonds are issued. The provisions of [section 4] do not apply to the purchase authorized in subsection (2).
(5) The Montana heritage preservation and development commission, created in [section 1], is authorized to purchase and preserve the real and personal property acquired pursuant to subsection (2). The commission may deliver the purchase price to an intermediary designated by the seller, in the seller's sole discretion. In addition, the commission shall comply with the terms of the option agreement entered into by the state of Montana and the owners of the property. The commission shall cooperate fully with the seller in executing any documents reasonably necessary to effectuate an exchange of the property and take other steps necessary to carry out the seller's intent to complete a tax-deferred exchange under section 1031 of the Internal Revenue Code, 26 U.S.C. 1031.
Section 7. Section 15-65-121, MCA, is amended to read:
"15-65-121. Distribution of tax proceeds -- general fund loan authority. (1) The proceeds of the tax imposed by
15-65-111 must, in accordance with the provisions of 15-1-501, be deposited in an account in the state special revenue fund
to the credit of the department of revenue. The department may spend from that account in accordance with an expenditure
appropriation by the legislature based on an estimate of the costs of collecting and disbursing the proceeds of the tax.
Before allocating the balance of the tax proceeds in accordance with the provisions of 15-1-501 and as provided in
subsections (1)(a) through (1)(e) of this section, the department shall determine the expenditures by state agencies for
in-state lodging for each reporting period and deduct 4% of that amount from the tax proceeds received each reporting
period. The amount deducted must be deposited in the general fund. The balance of the tax proceeds received each
reporting period and not deducted pursuant to the expenditure appropriation or deposited in the general fund is statutorily
appropriated, as provided in 17-7-502, and must be transferred to an account in the state special revenue fund to the credit
of the. The first $1 million that would be transferred to the account must be transferred to the Montana heritage revenue
bond debt service account provided for in [section 8]. The special revenue account into which the remainder of the funds
are transferred is statutorily appropriated, as provided in 17-7-502, for the purposes of this section. The account may be
used by the department of commerce for tourism promotion and promotion of the state as a location for the production of
motion pictures and television commercials , to and by the Montana historical society, to the university system, and to the
department of fish, wildlife, and parks, as follows:
(a) 1% to the Montana historical society to be used for the installation or maintenance of roadside historical signs and historic sites;
(b) 2.5% to the university system for the establishment and maintenance of a Montana travel research program;
(c) 6.5% to the department of fish, wildlife, and parks for the maintenance of facilities in state parks that have both resident and nonresident use;
(d) 67.5% to be used directly by the department of commerce; and
(e) (i) except as provided in subsection (1)(e)(ii), 22.5% to be distributed by the department to regional nonprofit tourism corporations in the ratio of the proceeds collected in each tourism region to the total proceeds collected statewide; and
(ii) if 22.5% of the proceeds collected annually within the limits of a city or consolidated city-county exceeds $35,000, 50% of the amount available for distribution to the regional nonprofit tourism corporation in the region where the city or consolidated city-county is located, to be distributed to the nonprofit convention and visitors bureau in that city or consolidated city-county.
(2) If a city or consolidated city-county qualifies under this section for funds but fails to either recognize a nonprofit convention and visitors bureau or submit and gain approval for an annual marketing plan as required in 15-65-122, then those funds must be allocated to the regional nonprofit tourism corporation in the region in which the city or consolidated city-county is located.
(3) If a regional nonprofit tourism corporation fails to submit and gain approval for an annual marketing plan as required in 15-65-122, then those funds otherwise allocated to the regional nonprofit tourism corporation may be used by the department of commerce for tourism promotion and promotion of the state as a location for the production of motion pictures and television commercials."
NEW SECTION. Section 8. Montana heritage revenue bond debt service account -- deposit of bond proceeds. (1) There is in the debt service fund a Montana heritage revenue bond debt service account. The state treasurer shall deposit revenue pledged to the payment of the bonds to the credit of the Montana heritage revenue bond debt service account as required by resolution or indenture.
(2) All proceeds of an issue of bonds must be deposited in a separate account in the state special revenue fund, except that any premiums and accrued interest received may be deposited in a separate account in the debt service fund established for that bond issue by resolution or indenture. No more than the principal and interest on the bonds due in any year may be retained in the Montana heritage revenue bond debt service account for the payment of bonds. The remainder of pledged revenue is available for authorized purposes of the account established in [section 5]. Money deposited in the state special revenue fund until spent for project purposes may be pledged and appropriated for the payment of bonds, which are a first lien and prior charge upon the funds, and the funds may be used for payment of bonds to the extent that lodging facility tax revenue deposited in the Montana heritage revenue bond debt service account is not sufficient for that purpose.
(3) Interest and investment earnings on the separate accounts named in subsections (1) and (2) must be retained in the separate accounts referred to in subsection (2).
NEW SECTION. Section 9. Pledge of lodging facility tax revenue. The statutorily allocated portion of lodging facility tax is pledged to the payment of the principal, interest, and redemption premium, if any, on particular issues of heritage revenue bonds, and the pledge is and remains at all times a first lien and prior charge upon the pledged revenue credited to the Montana heritage revenue bond debt service account, subject to the pledge of particular revenue to secure particular issues of heritage revenue bonds.
NEW SECTION. Section 10. Continuation of tax and surcharge. The legislature shall provide for the continued assessment, levy, collection, and deposit of lodging facility tax revenue into the Montana heritage revenue bond debt service account in amounts sufficient to pay, when due, the annual debt service charges on all outstanding heritage revenue bonds. The board of examiners is authorized to include a contractual undertaking for the benefit of bondholders to this effect in the resolution or indenture under which the bonds are issued.
NEW SECTION. Section 11. Form -- principal and interest -- fiscal agent -- bonds authorized. (1) Each series of heritage revenue bonds may be issued by the board of examiners at public or private sale, in denominations and form, whether payable to bearer or registered as to principal or both principal and interest, with provisions for the conversion or exchange, bearing interest at a rate or rates or the method of determining the rate or rates, maturing at times, not more than 40 years from date of issue, subject to redemption at earlier times and prices and upon notice, and payable at the office of a fiscal agency of the state as the board shall determine, subject to the limitations contained in [sections 8 through 20]. Any action taken by the board under [sections 8 through 20] must be approved by at least a majority vote of its members.
(2) In all other respects, the board of examiners is authorized to prescribe the form and terms of the bonds and shall do whatever is lawful and necessary for their issuance and payment.
(3) Bonds and any interest coupons appurtenant to the bonds must be signed by the members of the board of examiners, and the bonds must be issued under the great seal of the state of Montana. The bonds and coupons may be executed with facsimile signatures and seal in the manner and subject to the limitations prescribed by law. The state treasurer shall keep a record of all heritage revenue bonds issued and sold.
(4) The board of examiners may employ a fiscal agent and a bond registrar and transfer agent to assist in the performance of its duties under [sections 8 through 20].
(5) In connection with the issuance and sale of bonds, the board of examiners may arrange for lines of credit or letters of credit with any bank, firm, or person for the purpose of providing an additional source of repayment for bonds issued pursuant to [sections 8 through 20]. Amounts drawn on the lines of credit may be evidenced by negotiable or nonnegotiable notes or other evidences of indebtedness, containing terms and conditions as the board may authorize in the resolution approving the notes or evidences of indebtedness.
NEW SECTION. Section 12. Trust indenture. In the discretion of the board of examiners, bonds issued under [sections 8 through 20] may be secured by a trust indenture by and between the board and a trustee, which may be any trust company or bank having the powers of a trust company inside or outside the state. Each trust indenture or an executed counterpart of an indenture must be filed in the office of the secretary of state. The filing of a trust indenture or an executed counterpart of an indenture in the office of the county clerk and recorder of the county in which the property covered by the trust indenture is located is constructive notice of its content to all persons from the time of filing, and the recording of the trust indenture or its content is not necessary.
NEW SECTION. Section 13. Provisions for protecting bondholders. The resolution of the board of examiners providing for the issuance of bonds or the trust indenture may contain provisions for protecting and enforcing the rights and remedies of the bondholders that are reasonable, proper, and not in violation of law, including covenants setting forth the duties of the state, the board, and the departments, boards, or agencies of state government in relation to the construction, reconstruction, improvement, maintenance, and repair of the heritage projects financed with the proceeds of the bonds and the custody, safeguarding, and application of all money. The trust indenture may set forth the rights and remedies of the bondholders customary in trust indentures, deeds of trusts, and mortgages securing bonds or debentures of corporations. No enumeration of particular powers granted by this section impairs any general grant of power contained in [sections 8 through 20].
NEW SECTION. Section 14. Personal liability -- suit to compel performance. (1) The members of the board of examiners and officers and employees of the departments, boards, or agencies of state government are not personally liable or accountable by reason of the issuance of or on any bond issued by the board under [sections 8 through 20].
(2) Any holder of bonds issued under [sections 8 through 20] or any person or officer who is a party in interest, subject to any applicable agreements or trust indentures, may sue to enforce and compel the performance of the bond provisions as set out in [sections 8 through 20].
NEW SECTION. Section 15. Negotiability of bonds. Bonds issued under [sections 8 through 20] are negotiable instruments under the Uniform Commercial Code, subject only to the provisions for registration of bonds.
NEW SECTION. Section 16. Signatures of board members. In case any member of the board of examiners whose signature appears on bonds or coupons issued under [sections 8 through 20] ceases to be a member before the delivery of the bonds, the signature is nevertheless valid and sufficient for all purposes as if the member had remained in office until delivery.
NEW SECTION. Section 17. Refunding obligations. (1) The board of examiners may provide for the issuance of refunding obligations for refunding any obligations then outstanding that have been issued under [sections 8 through 20], including the payment of any redemption premium and any interest accrued or to accrue to the date of redemption of the obligations. The issuance of refunding obligations, the maturities and other details, the rights of the holders, and the rights, duties, and obligations of the state are governed by the appropriate provisions of [sections 8 through 20] that relate to the issuance of the obligations.
(2) Refunding obligations issued as provided in subsection (1) may be sold or exchanged for outstanding obligations issued under [sections 8 through 20]. The proceeds may be applied to the purchase, redemption, or payment of the outstanding obligations. Pending the application of the proceeds of refunding obligations, with other available funds, to the payment of principal, accrued interest, and any redemption premium on the obligations being refunded and, if permitted in the resolution authorizing the issuance of the refunding obligations or in the trust agreement securing them, to the payment of interest on refunding obligations and expenses in connection with refunding, the proceeds may be invested as provided in Title 17, chapter 6.
NEW SECTION. Section 18. Pledge of state. In accordance with the constitutions of the United States and the state of Montana, the state pledges that it will not in any way impair the obligations of any agreement between the state and the holders of notes and bonds issued by the state under [sections 8 through 20].
NEW SECTION. Section 19. Tax exemption of bonds -- legal investments. (1) All bonds issued under [sections 8 through 20], their transfer, and their income, including any profits made on their sale, are exempt from taxation by the state or any political subdivision or other instrumentality of the state, excepting inheritance, estate, and gift taxes.
(2) Bonds issued under [sections 8 through 20] are legal investments for any person or board charged with investment of public funds and are acceptable as security for any deposit of public money.
NEW SECTION. Section 20. Bond anticipation notes -- when issued -- payment of principal and interest. (1) When the board of examiners has been authorized to issue and sell bonds under [sections 8 through 20], it may, pending the issuance of the bonds, issue in the name of the state temporary notes in anticipation of the money to be derived from the sale of the bonds. The notes must be designated as "bond anticipation notes". The proceeds of the sale of the bond anticipation notes may be used only for the purposes for which the proceeds of the bonds could be used, including costs of issuance. If, prior to the issuance of the bonds, it becomes necessary to redeem outstanding notes, additional bond anticipation notes may be issued to redeem the outstanding notes. No renewal of any note may be issued after the sale of bonds in anticipation of which the original notes were issued.
(2) Bond anticipation notes or other short-term evidences of indebtedness maturing not more than 1 year after the date of issue may be issued from time to time as the proceeds of the notes are needed. The notes must be authorized by the board of investments and must have terms and details as may be provided by resolution of the board. However, each resolution of the board authorizing notes must:
(a) describe the need for the proceeds of the notes to be issued; and
(i) the principal amount of the notes or maximum principal amount of the notes that may be outstanding at any one time;
(ii) the rate or rates of interest, the maximum rate of interest, or the interest rate formula, to be determined in the manner specified in the resolution authorizing the notes, to be incurred through the issuance of the notes; and
(iii) the maturity date or maximum maturity date of the notes.
(3) Subject to the limitations contained in this section and the standards and limitations prescribed in the authorizing resolution, the board of examiners in its discretion may provide for the notes described in subsection (2) to be issued and sold, in whole or in part, from time to time, and may delegate to the state treasurer the power to determine the time or times of sale, the manner of sale, the amounts, the maturities, the rate or rates of interest, and such other terms and details of the notes as may be considered appropriate by the board, or the state treasurer in the event of a delegation. The board in its discretion, but subject to the limitations contained in this section, may also provide in the resolution authorizing the issuance of notes for:
(a) the employment of one or more persons or firms to assist the board in the sale of the notes;
(b) the appointment of one or more banks or trust companies, either in or outside the state, as depository for safekeeping and as agent for the delivery and payment of the notes;
(c) the refunding of the notes, from time to time, without further action by the board, unless and until the board revokes the authority to refund; and
(d) other terms and conditions as the board may consider appropriate.
NEW SECTION. Section 21. Codification instruction. [Sections 1 and 3 through 5] are intended to be codified as an integral part of Title 22, chapter 3, and the provisions of Title 22, chapter 3, apply to [sections 1 and 3 through 5].
NEW SECTION. Section 22. Effective date. [This act] is effective on passage and approval.