Senate Bill No. 7

Introduced By foster

By Request of the Revenue Oversight Committee



A Bill for an Act entitled: An Act generally revising the allocation of the metal mines license tax; correcting an overallocation of the metal mines license tax; providing that 15.5 percent of the metal mines tax is distributed in the same manner as the resource indemnity and ground water assessment tax; amending sections 7-6-2225, 7-6-2226, 15-37-117, 20-9-231, 85-2-905, and 90-2-1104, MCA; and providing an effective date.



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



Section 1.  Section 7-6-2225, MCA, is amended to read:

"7-6-2225.   County hard-rock mine trust reserve account -- expenditure restrictions. (1) The governing body of a county receiving an allocation under 15-37-117(1)(f)(1)(d) shall establish a county hard-rock mine trust reserve account.

(2)  Money received by a county pursuant to 15-37-117 or 90-6-331 must remain in the account and may not be appropriated by the governing body until:

(a)  a mining operation has permanently ceased all mining related activity; or

(b)  the number of persons employed full-time in mining activities by the mining operation is less than one-half of the average number of persons employed full-time in mining activities by the mining operation during the immediately preceding 5-year period.

(3)  If the circumstances described in subsection (2)(a) or (2)(b) occur, the governing body of the county must shall allocate at least one-third of the funds proportionally to affected high school districts and elementary school districts in the county, and may use the remaining funds in the account to:

(a)  pay for outstanding capital project bonds or other expenses incurred prior to the end of mining activity or the reduction in the mining work force workforce described in subsection (2)(b);

(b)  decrease property tax mill levies that are directly caused by the cessation or reduction of mining activity;

(c)  promote diversification and development of the economic base within the jurisdiction of a local government unit;

(d)  attract new industry to the impact area;

(e)  provide cash incentives for expanding the employment base of the area impacted by the changes in mining activity described in subsection (2); or

(f)  provide grants or loans to other local government jurisdictions to assist with impacts caused by the changes in mining activity described in subsection (2).

(4)  Except as provided in subsection (3)(b), money held in the account may not be considered as cash balance for the purpose of reducing mill levies.

(5)  Money in the reserve account must be invested as provided by law. Interest and income from the investment of funds in the account must be credited to the account."



Section 2.  Section 7-6-2226, MCA, is amended to read:

"7-6-2226.   Metal mines tax reserve account. (1) The governing body of a county receiving tax collections under 15-37-117(1)(f)(1)(d) may establish a metal mines tax reserve account to be used to hold the collections. The governing body may hold money in the account for any time period considered appropriate by the governing body. Money held in the account may not be considered as cash balance for the purpose of reducing mill levies.

(2)  Money may be expended from the account for any purpose provided by law.

(3)  Money in the account must be invested as provided by law. Interest and income from the investment of the metal mines tax reserve account must be credited to the account."



Section 3.  Section 15-37-117, MCA, is amended to read:

"15-37-117.   (Temporary) Disposition of metalliferous mines license taxes. (1) Metalliferous mines license taxes collected under the provisions of this part must, in accordance with the provisions of 15-1-501, be allocated as follows:

(a)  to the credit of the general fund of the state, 58% of total collections each year;

(b)  to the state special revenue fund to the credit of a hard-rock mining impact trust account, 1.5% of total collections each year;

(c)  to the abandoned mines state special revenue account provided for in section 19, Chapter 584, Laws of 1995, 8.5% of total collections each year;

(d)  to the ground water assessment account established in 85-2-905, 2.2% of total collections each year;

(e)  to the reclamation and development grants program state special revenue account, 4.8% of total collections each year; and

(f)  to the county or counties identified as experiencing fiscal and economic impacts, resulting in increased employment or local government costs, under an impact plan for a large-scale mineral development prepared and approved pursuant to 90-6-307, in direct proportion to the fiscal and economic impacts determined in the plan, or, if an impact plan has not been prepared, to the county in which the mine is located, 25% of total collections each year, to be allocated by the county commissioners as follows:

(i)  not less than 40% to the county hard-rock mine trust reserve account established in 7-6-2225; and

(ii) all money not allocated to the account pursuant to subsection (1)(f)(i) to be further allocated as follows:

(A)  33 1/3% is allocated to the county for planning or economic development activities;

(B)  33 1/3% is allocated to the elementary school districts within the county that have been affected by the development or operation of the metal mine; and

(C)  33 1/3% is allocated to the high school districts within the county that have been affected by the development or operation of the metal mine.

(2)  When an impact plan for a large-scale mineral development approved pursuant to 90-6-307 identifies a jurisdictional revenue disparity, the county shall distribute the proceeds allocated under subsection (1)(f) in a manner similar to that provided for property tax sharing under Title 90, chapter 6, part 4.

(3)  The department shall return to the county in which metals are produced the tax collections allocated under subsection (1)(f). The allocation to the county described by subsection (1)(f) is a statutory appropriation pursuant to 17-7-502. (Terminates June 30, 1997--sec. 27, Ch. 584, L. 1995.)

15-37-117.   (Effective July 1, 1997) Disposition of metalliferous mines license taxes. (1) Metalliferous mines license taxes collected under the provisions of this part must, in accordance with the provisions of 15-1-501, be allocated as follows:

(a)  to the credit of the general fund of the state, 58% of total collections each year;

(b)  to the state special revenue fund to the credit of a hard-rock mining impact trust account, 1.5% of total collections each year;

(c)  to the state resource indemnity trust fund and to the accounts described in 15-38-106(2), 15.5% of total collections each year to be distributed as provided in 15-38-106(2);

(d)  to the ground water assessment account established in 85-2-905, 2.2% of total collections each year;

(e)  to the reclamation and development grants program state special revenue account, 4.8% of total collections each year; and

(f)(d)  to the county or counties identified as experiencing fiscal and economic impacts, resulting in increased employment or local government costs, under an impact plan for a large-scale mineral development prepared and approved pursuant to 90-6-307, in direct proportion to the fiscal and economic impacts determined in the plan, or, if an impact plan has not been prepared, to the county in which the mine is located, 25% of total collections each year, to be allocated by the county commissioners as follows:

(i)  not less than 40% to the county hard-rock mine trust reserve account established in 7-6-2225; and

(ii) all money not allocated to the account pursuant to subsection (1)(f)(i) (1)(d)(i) to be further allocated as follows:

(A)  33 1/3% is allocated to the county for planning or economic development activities;

(B)  33 1/3% is allocated to the elementary school districts within the county that have been affected by the development or operation of the metal mine; and

(C)  33 1/3% is allocated to the high school districts within the county that have been affected by the development or operation of the metal mine.

(2)  When an impact plan for a large-scale mineral development approved pursuant to 90-6-307 identifies a jurisdictional revenue disparity, the county shall distribute the proceeds allocated under subsection (1)(f) (1)(d) in a manner similar to that provided for property tax sharing under Title 90, chapter 6, part 4.

(3)  The department shall return to the county in which metals are produced the tax collections allocated under subsection (1)(f) (1)(d). The allocation to the county described by subsection (1)(f) (1)(d) is a statutory appropriation pursuant to 17-7-502."



Section 4.  Section 20-9-231, MCA, is amended to read:

"20-9-231.   Metal mines tax reserve fund. (1) The governing body of a local school district receiving tax collections under 15-37-117(1)(f)(1)(d) may establish a metal mines tax reserve fund to be used to hold the collections. The governing body may hold money in the fund for any time period considered appropriate by the governing body. Money held in the fund may not be considered as fund balance for the purpose of reducing mill levies.

(2)  Money may be expended from the fund for any purpose provided by law.

(3)  Money in the fund must be invested as provided by law. Interest and income from the investment of the metal mines tax reserve fund must be credited to the fund.

(4)  The fund must be financially administered as a nonbudgeted fund under the provisions of this title."



Section 5.  Section 85-2-905, MCA, is amended to read:

"85-2-905.   Ground water assessment account. (1) There is a ground water assessment account within the state special revenue fund established in 17-2-102. The Montana bureau of mines and geology is authorized to expend amounts from the account necessary to carry out the purposes of this part.

(2)  The account may be used by the Montana bureau of mines and geology only to carry out the provisions of this part.

(3)  Subject to the direction of the ground water assessment steering committee, the Montana bureau of mines and geology shall investigate opportunities for the participation and financial contribution of agencies of federal and local governments to accomplish the purposes of this part.

(4)  There must be deposited in the account:

(a)  at the beginning of each fiscal year, 14.1% of the proceeds from the resource indemnity and ground water assessment tax, as authorized by 15-38-106, and 2.2% of the proceeds from the metalliferous mines license taxes, as authorized by 15-37-117, unless at the beginning of the fiscal year the unobligated cash balance in the ground water assessment account:

(i)  equals or exceeds $666,000, in which case no an allocation will may not be made and the funds proceeds must be deposited in the resource indemnity trust fund established by 15-38-201; or

(ii) is less than $666,000, in which case an amount equal to the difference between the unobligated cash balance and $666,000 must be allocated to the ground water assessment account and any remaining amount must be deposited in the resource indemnity trust fund established by 15-38-201;

(b)  funds provided by federal or state government agencies and by local governments to carry out the purposes of this part; and

(c)  funds provided by any other public or private sector organization or person in the form of gifts, grants, or contracts specifically designated to carry out the purposes of this part."



Section 6.  Section 90-2-1104, MCA, is amended to read:

"90-2-1104.   Reclamation and development grants account. (1) There is a reclamation and development grants special revenue account within the state special revenue fund established in 17-2-102.

(2)  There must be paid into the reclamation and development grants account money allocated from:

(a)  the interest income of the resource indemnity trust fund under the provisions of 15-38-202; and

(b)  the resource indemnity trust and ground water assessment tax under the provisions of 15-38-106; and

(c)  the metal mines license tax proceeds as provided in 15-37-117(1)(e).

(3)  Appropriations may be made from the reclamation and development grants account for the following purposes:

(a)  grants for designated projects; and

(b)  administrative expenses, including the salaries and expenses of personnel, equipment, office space, and other expenses necessarily incurred in the administration of the grants program. These expenses may be funded prior to funding of projects."



Section 7.  Effective date. [This act] is effective July 1, 1997.

-END-