Senate Bill No. 306
Introduced By _______________________________________________________________________________
A Bill for an Act entitled: "An Act repealing the resource indemnity trust tax when the resource indemnity trust fund reaches $100 million; reducing and reallocating metalliferous mines license taxes; reducing and reallocating the oil and gas production taxes; amending sections 7-6-2225, 7-6-2226, 7-7-2101, 7-7-2203, 7-14-2524, 7-14-2525, 7-16-2327, 15-1-501, 15-36-304, 15-36-324, 15-37-103, 15-37-117, 15-38-103, 15-38-202, 20-9-231, 85-1-604, 85-2-905, and 90-2-1104, MCA; repealing sections 15-38-104, 15-38-105, 15-38-106, 15-38-107, 15-38-108, 15-38-110, 15-38-111, 15-38-112, 15-38-113, 15-38-121, 15-38-125, 15-38-126, 15-38-127, and 15-38-128, MCA; and providing effective dates."
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)(c) 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 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 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)(c) 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 7-7-2101, MCA, is amended to read:
"7-7-2101. Limitation on amount of county indebtedness. (1) A county may not become indebted in any manner or for
any purpose to in an amount, including existing indebtedness, in the aggregate exceeding 23% of the total of the taxable
value of the property in the county subject to taxation, plus the value provided by the department of revenue in
15-36-324(10)(13), as ascertained by the last assessment for state and county taxes previous to the incurring of the
indebtedness, plus, for indebtedness to be incurred during fiscal year 1997, an additional 11% of the taxable value of class
eight property within the county for tax year 1995, for indebtedness to be incurred during fiscal year 1998, an additional
22% of the taxable value of class eight property within the county for tax year 1995, and for indebtedness to be incurred
during fiscal years 1999 through 2008, an additional 33% of the taxable value of class eight property within the county for
tax year 1995, in each case of class eight property, multiplied by 23%.
(2) A county may not incur indebtedness or liability for any single purpose to an amount exceeding $500,000 without the approval of a majority of the electors of the county voting at an election to be provided by law, except as provided in 7-21-3413 and 7-21-3414.
(3) This section does not apply to the acquisition of conservation easements as set forth in Title 76, chapter 6."
Section 4. Section 7-7-2203, MCA, is amended to read:
"7-7-2203. Limitation on amount of bonded indebtedness. (1) Except as provided in subsections (2) through (4), a
county may not issue general obligation bonds for any purpose that, with all outstanding bonds and warrants except county
high school bonds and emergency bonds, will exceed 11.25% of the total of the taxable value of the property in the county,
plus the value provided by the department of revenue under 15-36-324(10)(13), to be ascertained by the last assessment for
state and county taxes prior to the proposed issuance of bonds, plus, for general obligation bonds to be issued during fiscal
year 1997, an additional 11% of the taxable value of class eight property within the county for tax year 1995, for general
obligation bonds to be issued during fiscal year 1998, an additional 22% of the taxable value of class eight property within
the county for tax year 1995, and for general obligation bonds to be issued during fiscal years 1999 through 2008, an
additional 33% of the taxable value of class eight property within the county for tax year 1995, in each case of class eight
property, multiplied by 11.25%.
(2) In addition to the bonds allowed by subsection (1), a county may issue bonds that, with all outstanding bonds and
warrants, will not exceed 27.75% of the total of the taxable value of the property in the county subject to taxation, plus the
value provided by the department of revenue under 15-36-324(10)(13), when necessary to do so, to be ascertained by the
last assessment for state and county taxes, plus, for bonds to be issued during fiscal year 1997, an additional 11% of the
taxable value of class eight property within the county for tax year 1995, for bonds to be issued during fiscal year 1998, an
additional 22% of the taxable value of class eight property within the county for tax year 1995, and for bonds to be issued
during fiscal years 1999 through 2008, an additional 33% of the taxable value of class eight property within the county for
tax year 1995, in each case of class eight property, multiplied by 27.75%, for the purpose of acquiring land for a site for
county high school buildings and for erecting or acquiring buildings on the site and furnishing and equipping the buildings
for county high school purposes.
(3) In addition to the bonds allowed by subsections (1) and (2), a county may issue bonds for the construction or improvement of a jail that will not exceed 12.5% of the taxable value of the property in the county subject to taxation, plus the adjustments permitted by 7-7-2101.
(4) The limitation in subsection (1) does not apply to refunding bonds issued for the purpose of paying or retiring county bonds lawfully issued prior to January 1, 1932, or to bonds issued for the repayment of tax protests lost by the county."
Section 5. Section 7-14-2524, MCA, is amended to read:
"7-14-2524. Limitation on amount of bonds issued -- excess void. (1) Except as otherwise provided in 7-7-2203,
7-7-2204, and this section, a county may not issue bonds that, with all outstanding bonds and warrants except county high
school bonds and emergency bonds, will exceed 11.25% of the total of the taxable value of the property in the county, plus
the value provided by the department of revenue under 15-36-324(10)(13). The taxable property and the amount of taxes
levied on new production, production from horizontally completed wells, and incremental production must be ascertained
by the last assessment for state and county taxes prior to the issuance of the bonds.
(2) A county may issue bonds that, with all outstanding bonds and warrants except county high school bonds, will exceed
11.25% but will not exceed 22.5% of the total of the taxable value of the property, plus the value provided by the
department of revenue under 15-36-324(10)(13) when necessary for the purpose of replacing, rebuilding, or repairing
county buildings, bridges, or highways that have been destroyed or damaged by an act of God or by a disaster, catastrophe,
or accident.
(3) The value of the bonds issued and all other outstanding indebtedness of the county, except county high school bonds,
may not exceed 22.5% of the total of the taxable value of the property within the county, plus the value provided by the
department of revenue under 15-36-324(10)(13), as ascertained by the last preceding general assessment."
Section 6. Section 7-14-2525, MCA, is amended to read:
"7-14-2525. Refunding agreements and refunding bonds authorized. (1) Whenever the total indebtedness of a county
exceeds 22.5% of the total of the taxable value of the property therein in the county, plus the value provided by the
department of revenue under 15-36-324(10)(13), and the board determines that the county is unable to pay the indebtedness
in full, the board may:
(a) negotiate with the bondholders for an agreement whereby under which the bondholders agree to accept less than the full
amount of the bonds and the accrued unpaid interest in satisfaction of the bonds;
(b) enter into the agreement;
(c) issue refunding bonds for the amount agreed upon.
(2) These bonds may be issued in more than one series, and each series may be either amortization or serial bonds.
(3) The plan agreed upon between the board and the bondholders must be embodied in full in the resolution providing for the issuance of the bonds."
Section 7. Section 7-16-2327, MCA, is amended to read:
"7-16-2327. Indebtedness for park purposes. (1) Subject to the provisions of subsection (2), a county park board, in addition to powers and duties now given under law, may contract an indebtedness in behalf of a county, upon the credit of the county, in order to carry out its powers and duties.
(2) (a) The total amount of indebtedness authorized to be contracted in any form, including the then-existing indebtedness,
may not at any time exceed 13% of the total of the taxable value of the taxable property in the county, plus the value
provided by the department of revenue under 15-36-324(10)(13), ascertained by the last assessment for state and county
taxes previous to the incurring of the indebtedness.
(b) Money may not be borrowed on bonds issued for the purchase of lands and improving the land for any purpose until the proposition has been submitted to the vote of those qualified under the provisions of the state constitution to vote at the election in the affected county and a majority vote is cast in favor of the bonds."
Section 8. Section 15-1-501, MCA, is amended to read:
"15-1-501. Disposition of money from certain designated license and other taxes. (1) The state treasurer shall deposit to the credit of the state general fund in accordance with the provisions of subsection (6) all money received from the collection of:
(a) fees from driver's licenses, motorcycle endorsements, and duplicate driver's licenses as provided in 61-5-121;
(b) electrical energy producer's license taxes under chapter 51;
(c) liquor license taxes under Title 16;
(d) telephone company license taxes under chapter 53; and
(e) inheritance and estate taxes under Title 72, chapter 16.
(2) All money received from the collection of income taxes under chapter 30 of this title must, in accordance with the provisions of subsection (6), be deposited as follows:
(a) 91.3% of the taxes to the credit of the state general fund;
(b) 8.7% of the taxes to the credit of the debt service account for long-range building program bonds as described in 17-5-408; and
(c) all interest and penalties to the credit of the state general fund.
(3) All money received from the collection of corporation license and income taxes under chapter 31 of this title, except as provided in 15-31-702, must, in accordance with the provisions of subsection (6), be deposited as follows:
(a) 89.5% of the taxes to the credit of the state general fund;
(b) 10.5% of the taxes to the credit of the debt service account for long-range building program bonds as described in 17-5-408; and
(c) all interest and penalties to the credit of the state general fund.
(4) The department of revenue shall also deposit to the credit of the state general fund all money received from the collection of license taxes and fees and all net revenue and receipts from all other sources under the operation of the Montana Alcoholic Beverage Code.
(5) Oil and natural gas production taxes allocated under 15-36-324(7)(a)(8)(a) and (10)(a) must be deposited in the general
fund.
(6) Notwithstanding any other provision of law, the distribution of tax revenue must be made according to the provisions of the law governing allocation of the tax that were in effect for the period in which the tax revenue was recorded for accounting purposes. Tax revenue must be recorded as prescribed by the department of administration, pursuant to 17-1-102(2) and (5), in accordance with generally accepted accounting principles.
(7) All refunds of taxes must be attributed to the funds in which the taxes are currently being recorded. All refunds of interest and penalties must be attributed to the funds in which the interest and penalties are currently being recorded."
Section 9. Section 15-36-304, MCA, is amended to read:
"15-36-304. Production tax rates imposed on oil and natural gas. (1) The production of oil and natural gas is taxed as provided in this section. The tax is distributed as provided in 15-36-324.
(2) Natural gas is taxed on the gross taxable value of production based on the type of well and type of production according to the following schedule for working interest and nonworking interest owners:
Working Nonworking
Interest Interest
(a) pre-1985 wells 18.55% 18.05% 14.8% 14.03%
(b) post-1985 wells
(i) first 12 months of qualifying production 0.5% 0% 14.8% 14.3%
(ii) next 12 months of qualifying production 12.5% 12% 14.8% 14.3%
(iii) after 24 months 15.15% 14.65% 14.8% 14.3%
(c) stripper natural gas pre-1985 and post-1985 wells 11% 10.5% 14.8% 14.3%
(3) The reduced tax rates under subsections (2)(b)(i) and (2)(b)(ii) on production for the first 24 months of natural gas production from a post-1985 well begin following the last day of the calendar month immediately preceding the month in which natural gas is placed in a natural gas distribution system, provided that notification has been given to the department.
(4) Oil is taxed on the gross taxable value of production based on the type of well and type of production according to the following schedule for working interest and nonworking interest owners:
Working Nonworking
Interest Interest
(a) primary recovery production
(i) pre-1985 wells 13.9% 13.4% 16.9% 16.4%
(ii) post-1985 wells
(A) first 12 months of qualifying production 0.5% 0% 14.8% 14.3%
(B) next 12 months of qualifying production 7.5% 7.5% 14.8% 14.3%
(C) after 24 months 12.5% 12% 14.8% 14.3%
(b) stripper oil production
(i) pre-1985 wells 10.5% 10% 16.9% 16.4%
(ii) post-1985 wells 10.5% 10% 14.8% 14.3%
(iii) stripper exemption production
(A) pre-1985 wells 5.5% 5% 16.9% 16.4%
(B) post-1985 wells 5.5% 5% 14.8% 14.3%
(c) horizontally completed well production
(i) first 18 months of qualifying production 0.5% 0% 5.5% 5%
(ii) next 6 months of qualifying production 7.5% 7% 12.5% 12%
(iii) after 24 months 12.5% 12% 12.5% 12%
(d) incremental production
(i) new or expanded secondary recovery production
(A) pre-1985 well 8.5% 8% 16% 15.5%
(B) post-1985 well 8.5% 8% 10.5% 10%
(ii) new or expanded tertiary production
(A) pre-1985 well 5.8% 5.3% 15% 14.5%
(B) post-1985 well 5.8% 5.3% 9.5% 9%
(e) horizontally recompleted well
(i) first 18 months 5.5% 5% 5.5% 5%
(ii) after 18 months 12.5% 12% 12.5% 12%
(5) (a) The reduced tax rates under subsections (4)(a)(ii)(A) and (4)(a)(ii)(B) for the first 24 months of oil production from a post-1985 well begin following the last day of the calendar month immediately preceding the month in which oil is pumped or flows, provided that notification has been given to the department.
(b) (i) The reduced tax rates under subsection (4)(c)(i) and (4)(c)(ii) on oil production from a horizontally completed well for the first 24 months of production begin following the last day of the calendar month immediately preceding the month in which oil is pumped or flows, provided that the well has been certified as a horizontally completed well to the department by the board.
(ii) The reduced tax rate under subsection (4)(e)(i) on oil production from a horizontally recompleted well for the first 18 months of production begins following the last day of the calendar month immediately preceding the month in which oil is pumped or flows, provided that the well has been certified as a horizontally recompleted well to the department by the board.
(c) Incremental production is taxed as provided in subsection (4)(d) if the average price per barrel of oil as reported in the Wall Street Journal for west Texas intermediate crude oil during a calendar quarter is less than $30 a barrel. If the price of oil is equal to or greater than $30 a barrel in a calendar quarter as determined in subsection (5)(d), incremental production is taxed at the rate imposed on primary recovery production under subsection (4)(a)(i) for production occurring in that quarter.
(d) For the purposes of subsection (5)(c), the average price per barrel must be computed by dividing the sum of the daily price for west Texas intermediate crude oil as reported in the Wall Street Journal for the calendar quarter by the number of days on which the price was reported in the quarter.
(6) The tax rates imposed under subsections (2) and (4) on working interest owners and nonworking interest owners must be adjusted to include the privilege and license tax adopted by the board of oil and gas conservation pursuant to 82-11-131."
Section 10. Section 15-36-324, MCA, is amended to read:
"15-36-324. Distribution of taxes -- department to revise distributions. (1) For each calendar quarter, the department of revenue shall determine the amount of tax, late payment interest, and penalty collected under this part. For purposes of distribution of the taxes to county and school taxing units, the department shall determine the amount of oil and natural gas production taxes paid on production from pre-1985 wells, post-1985 wells, and horizontally drilled wells located in the taxing unit.
(2) Except as provided in subsections (3) and (4), through (5), oil production taxes must be distributed as follows:
(a) The amount equal to 41.6% 37.2% of the oil production taxes, including late payment interest and penalty, collected
under this part must be distributed as provided in subsection (7) (8).
(b) The remaining 58.4% 62.8% of the oil production taxes, plus accumulated interest earned on the amount allocated
under this subsection (2)(b), must be deposited in the agency fund in the state treasury and transferred to the county and
school taxing units for distribution as provided in subsection (8) (11).
(3) (a) The amount equal to 100% of the oil production taxes, including late payment interest and penalty, collected from
working interest owners on production from post-1985 wells occurring during the first 12 months of production must be
distributed as provided in subsection (7) (9).
(b) (i) The amount equal to 4.1% of the oil production taxes, including late payment interest and penalty, collected from working interest owners on production from post-1985 wells occurring during the next 12 months of production must be distributed as provided in subsection (9).
(ii) The remaining 95.9% of the oil production taxes, plus accumulated interest earned on the amount allocated under this subsection (3)(b), must be deposited in the agency fund in the state treasury and transferred to the county and school taxing units for distribution as provided in subsection (11).
(4) (a) The amount equal to 100% of the oil production taxes, including late payment interest and penalty, collected under
this part on production from horizontally drilled completed wells and on the incremental production from horizontally
recompleted wells occurring during the first 18 months of production must be distributed as provided in subsection (7) (9).
(b) (i) The amount equal to 4.1% of the oil production taxes, including late payment interest and penalty, collected from working interest owners on production from horizontally completed wells occurring during the next 6 months of production must be distributed as provided in subsection (9).
(ii) The remaining 95.9% of the oil production taxes, plus accumulated interest earned on the amount allocated under this subsection (4)(b), must be deposited in the agency fund in the state treasury and transferred to the county and school taxing units for distribution as provided in subsection (11).
(c) The amount equal to 100% of the oil production taxes, including late payment interest and penalty, collected under this part on the production from horizontally recompleted wells occurring during the first 18 months of production must be distributed as provided in subsection (8).
(5) (a) The amount equal to 5.7% of the oil production taxes, including late payment interest and penalty, collected from working interest owners on stripper exemption production from pre-1985 wells and post-1985 wells must be distributed as provided in subsection (9).
(b) The remaining 94.3% of the oil production taxes, plus accumulated interest earned on the amount allocated under this subsection (5)(b), must be deposited in the agency fund in the state treasury and transferred to the county and school taxing units for distribution as provided in subsection (11).
(5)(6) Except as provided in subsection (6) (7), natural gas production taxes must be allocated as follows:
(a) The amount equal to 14.6% 12% of the natural gas production taxes, including late payment interest and penalty,
collected under this part must be distributed as provided in subsection (7) (10).
(b) The remaining 85.4% 88% of the natural gas production taxes, plus accumulated interest earned on the amount
allocated under this subsection (5)(b) (6)(b), must be deposited in the agency fund in the state treasury and transferred to
the county and school taxing units for distribution as provided in subsection (8) (11).
(6)(7) (a) The amount equal to 100% of the natural gas production taxes, including late payment interest and penalty,
collected from working interest owners under this part on production from post-1985 wells occurring during the first 12
months of production must be distributed as provided in subsection (7) (9).
(b) (i) The amount equal to 2.4% of the natural gas production taxes, including late payment interest and penalty, collected from working interest owners on production from post-1985 wells occurring during the next 12 months of production must be distributed as provided in subsection (9).
(ii) The remaining 97.6% of the oil production taxes, plus accumulated interest earned on the amount allocated under this subsection (7)(b), must be deposited in the agency fund in the state treasury and transferred to the county and school taxing units for distribution as provided in subsection (11).
(7)(8) The department shall, in accordance with the provisions of 15-1-501(6), distribute the state portion of oil and natural
gas production taxes specified in subsections (2)(a) and (4)(c), including late payment interest and penalty collected, as
follows:
(a) 85% 94.3% to the state general fund; and
(b) 4.3% 5.7% to the state special revenue fund for the purpose of paying expenses of the board as provided in 82-11-135;
and
(c) 10.7% to be distributed as provided by 15-38-106(2).
(9) The department shall, in accordance with the provisions of 15-1-501, distribute the state portion of oil and natural gas production taxes specified in subsections (3)(a), (3)(b)(i), (4)(a), (4)(b)(i), (5)(a), (7)(a), and (7)(b)(i), including 100% of the late payment interest and penalty collected, to the state special revenue fund for the purpose of paying expenses of the board as provided in 82-11-135.
(10) The department shall, in accordance with the provisions of 15-1-501, distribute the state portion of natural gas production taxes specified in subsection (6)(a), including late payment interest and penalty collected, as follows:
(a) 88.3% to the state general fund; and
(b) 11.7% to the state special revenue fund for the purpose of paying expenses of the board as provided in 82-11-135.
(8)(11) (a) For the purpose of distribution of the oil and natural gas production taxes from pre-1985 wells, the department
shall each calendar quarter adjust the unit value determined under 15-36-323 according to the ratio that the oil and natural
gas production taxes from pre-1985 wells collected during the calendar quarter for which the distribution occurs plus
penalties and interest on delinquent oil and natural gas production taxes from pre-1985 wells bears to the total liability for
the oil and natural gas production taxes from pre-1985 wells for the quarter for which the distribution occurs. The amount
of oil and natural gas production taxes distributions must be calculated and distributed as follows:
(i) By the dates referred to in subsection (9) (12), the department shall calculate and distribute to each eligible county the
amount of oil and natural gas production taxes from pre-1985 wells for the quarter, determined by multiplying the unit
value, as adjusted in this subsection (8)(a) (11)(a), by the units of production on which oil and natural gas production taxes
from pre-1985 wells were owed for the calendar quarter for which the distribution occurs.
(ii) Any amount by which the total tax liability exceeds or is less than the total distributions determined in subsection (8)(a)
(11)(a) must be calculated and distributed in the following manner:
(A) The excess amount or shortage must be divided by the total distribution determined for that period to obtain an excess or shortage percentage.
(B) The excess percentage must be multiplied by the distribution to each taxing unit, and this amount must be added to the distribution to each respective taxing unit.
(C) The shortage percentage must be multiplied by the distribution to each taxing unit, and this amount must be subtracted from the distribution to each respective taxing unit.
(b) Except as provided in subsection (8)(c) (11)(c), the county treasurer shall distribute the money received under
subsection (9) (12) from pre-1985 wells to the taxing units that levied mills in fiscal year 1990 against calendar year 1988
production in the same manner that all other property tax proceeds were distributed during fiscal year 1990 in the taxing
unit, except that a distribution may not be made to a municipal taxing unit.
(c) The board of county commissioners of a county may direct the county treasurer to reallocate the distribution of oil and
natural gas production tax money that would have gone to a taxing unit, as provided in subsection (8)(b) (11)(b), to another
taxing unit or taxing units, other than an elementary school or high school, within the county under the following
conditions:
(i) The county treasurer shall first allocate the oil and natural gas production taxes to the taxing units within the county in the same proportion that all other property tax proceeds were distributed in the county in fiscal year 1990.
(ii) If the allocation in subsection (8)(c)(i) (11)(c)(i) exceeds the total budget for a taxing unit, the commissioners may
direct the county treasurer to allocate the excess to any taxing unit within the county.
(d) The board of trustees of an elementary or high school district may reallocate the oil and natural gas production taxes distributed to the district by the county treasurer under the following conditions:
(i) The district shall first allocate the oil and natural gas production taxes to the budgeted funds of the district in the same proportion that all other property tax proceeds were distributed in the district in fiscal year 1990.
(ii) If the allocation under subsection (8)(d)(i) (11)(d)(i) exceeds the total budget for a fund, the trustees may allocate the
excess to any budgeted fund of the school district.
(e) For all production from post-1985 wells and horizontally drilled wells completed after December 31, 1993, the county
treasurer shall distribute oil and natural gas production taxes received under subsections (2)(b), (3)(b), (4)(b), and (5)(b),
(6)(b), and (7)(b) between county and school taxing units in the relative proportions required by the levies for state, county,
and school district purposes in the same manner as property taxes were distributed in the preceding fiscal year.
(f) The allocation to the county in subsection (8)(e) (11)(e) must be distributed by the county treasurer in the relative
proportions required by the levies for county taxing units and in the same manner as property taxes were distributed in the
preceding fiscal year.
(g) The money distributed in subsection (8)(e) (11)(e) that is required for the county mill levies for school district
retirement obligations and transportation schedules must be deposited to the funds established for these purposes.
(h) The oil and natural gas production taxes distributed under subsection (8)(b) (11)(b) that are required for the 6-mill
university levy imposed under 20-25-423 and for the county equalization levies imposed under 20-9-331 and 20-9-333, as
those sections read on July 1, 1989, must be remitted by the county treasurer to the state treasurer.
(i) The oil and natural gas production taxes distributed under subsection (8)(e) (11)(e) that are required for the 6-mill
university levy imposed under 20-25-423, for the county equalization levies imposed under 20-9-331 and 20-9-333, and for
the state equalization aid levy imposed under 20-9-360 must be remitted by the county treasurer to the state treasurer.
(j) The amount of oil and natural gas production taxes remaining after the treasurer has remitted the amounts determined in
subsections (8)(h) (11)(h) and (8)(i) (11)(i) is for the exclusive use and benefit of the county and school taxing units.
(9)(12) The department shall remit the amounts to be distributed in subsection (8) (11) to the county treasurer by the
following dates:
(a) On or before August 1 of each year, the department shall remit to the county treasurer oil and natural gas production tax payments received for the calendar quarter ending March 31 of the current year.
(b) On or before November 1 of each year, the department shall remit to the county treasurer oil and natural gas production tax payments received for the calendar quarter ending June 30 of the current year.
(c) On or before February 1 of each year, the department shall remit to the county treasurer oil and natural gas production tax payments received for the calendar quarter ending September 30 of the previous year.
(d) On or before May 1 of each year, the department shall remit to the county treasurer oil and natural gas production tax payments received for the calendar quarter ending December 31 of the previous calendar year.
(10)(13) The department shall provide to each county by May 31 of each year the amount of gross taxable value
represented by all types of production taxed under 15-36-304 for the previous calendar year multiplied by 60%. The
resulting value must be treated as taxable value for county classification purposes and for county bonding purposes.
(14) (a) In the event that the average price per barrel of oil is equal to or greater than $30 a barrel as determined in 15-36-303(21), the department shall, by rule, revise the formula under this section for the distribution of oil production taxes on incremental production oil and on stripper oil as it applies to the first 3 barrels of production.
(b) In the event that the board of oil and gas conservation revises the privilege and license tax pursuant to 82-11-131, the department shall, by rule, change the formula under this section for distribution of taxes collected under 15-36-304. The revised formula must provide for the distribution of taxes in an amount equal to the rate adopted by the board for the expenses of the board.
(15) Before the department adopts a rule pursuant to subsection (14), it shall present the proposed rule to the revenue oversight committee."
Section 11. Section 15-37-103, MCA, is amended to read:
"15-37-103. Rate of tax. (1) The annual license tax to be paid by a person engaged in or carrying on the business of
working or operating any mine or mining property in this state from which gold, silver, copper, lead, or any other metal or
metals or precious or semiprecious gems or stones are produced shall be is an amount computed on the gross value of
product which that may have been derived by the person from mining business, work, or operation within this state during
the calendar year immediately preceding.
(2) Concentrate shipped to a smelter, mill, or reduction work is taxed at the following rates:
Gross Value Rate of Tax
of Product (percentage of gross value)
first $250,000 0%
more than $250,000 1.81% 1.53% of the increment
(3) Gold, silver, or any platinum-group metal that is dore, bullion, or matte and that is shipped to a refinery is taxed at the following rates:
Gross Value Rate of Tax
of Product (percentage of gross value)
first $250,000 0%
more than $250,000 1.6% 1.35% of the increment"
Section 12. 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, 15.5% 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."
Section 13. 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% 68.6% 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% 1.8% of total collections
each year; and
(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)(c) 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% 29.6% 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)(c)(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)(c) 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)(c). The allocation to the county described by subsection (1)(f) (1)(c) 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% 68.6% 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% 1.8% of total collections
each year; and
(c) to the state resource indemnity trust fund, 15.5% 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)(c) 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% 29.6% 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)(c)(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)(c) 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)(c). The allocation to the county described by subsection (1)(f) (1)(c) is a statutory appropriation pursuant to
17-7-502."
Section 14. Section 15-38-103, MCA, is amended to read:
"15-38-103. Definitions Definition. As used in this chapter, the following definitions apply:
(1) "Department" means department of revenue.
(2) "Gross value of product" means, except as provided in 15-38-125 through 15-38-129, the market value of any
merchantable mineral extracted or produced during the taxable year.
(3) "Mineral" means any precious stones or gems, gold, silver, copper, coal, lead, petroleum, natural gas, oil, uranium, talc,
vermiculite, limestone, or other nonrenewable merchantable products extracted from the surface or subsurface of the state
of Montana.
(4) "Total "total environment" means air, water, soil, flora, and fauna and the social, economic, and cultural conditions that
influence communities and individual citizens."
Section 15. Section 15-38-202, MCA, is amended to read:
"15-38-202. Investment of resource indemnity trust fund -- expenditure -- minimum balance. (1) All money paid
into the resource indemnity trust fund on or before January 1 of the year following the date on which the fund reaches $100
million, as certified by the governor through executive order, including money payable into the fund under the provisions
of 15-36-324 and 15-37-117, must be invested at the discretion of the board of investments. All the net earnings accruing to
the resource indemnity trust fund must annually be added to the trust fund until it has reached the sum of $10 million.
Thereafter, only the net earnings may be appropriated and expended until the fund reaches $100 million, as certified by the
governor through executive order. If the fund balance exceeds $100 million on January 1 of the year following the date of
the executive order, the excess must remain in the fund. Thereafter, all net earnings and all receipts interest income must be
appropriated by the legislature and expended, provided that the balance in the fund may never be less than $100 million. If
the fund balance is below $100 million on or after January 1 of the year following the date of the executive order, interest
income earned from the fund must be deposited in the fund until the fund reaches $100 million.
(2) (a) At the beginning of each fiscal year, there is allocated from the interest income of the resource indemnity trust fund $240,000, which is statutorily appropriated, as provided in 17-7-502, from the renewable resource grant and loan program state special revenue account to support the operations of the environmental science-water quality instructional programs at Montana state university-northern, to be used for support costs, for matching funds necessary to attract additional funds to further expand statewide impact, and for enhancement of the facilities related to the programs.
(b) At the beginning of each biennium, there is allocated from the interest income of the resource indemnity trust fund:
(i) an amount not to exceed $175,000 to the environmental contingency account pursuant to the conditions of 75-1-1101;
(ii) an amount not to exceed $50,000 to the oil and gas production damage mitigation account pursuant to the conditions of 82-11-161;
(iii) beginning in fiscal year 1996, $2 million to be deposited into the renewable resource grant and loan program state special revenue account, created by 85-1-604, for the purpose of making grants;
(iv) beginning in each fiscal year following January 1 of the year following the date that the governor certifies by executive order that the trust fund has reached $100 million, an amount not to exceed $1.33 million per biennium to the ground water assessment account established in 85-2-905;
(iv)(v) beginning in fiscal year 1996, $3 million to be deposited into the reclamation and development grants state special
revenue account, created by 90-2-1104, for the purpose of making grants; and
(v)(vi) beginning in fiscal year 1996, $500,000 to be deposited into the water storage state special revenue account created
by 85-1-631.
(c) The remainder of the interest income is allocated as follows:
(i) Thirty-six percent of the interest income of the resource indemnity trust fund must be allocated to the renewable resource grant and loan program state special revenue account created by 85-1-604.
(ii) Eighteen percent of the interest income of the resource indemnity trust fund must be allocated to the hazardous waste/CERCLA special revenue account provided for in 75-10-621.
(iii) Forty percent of the interest income from the resource indemnity trust fund must be allocated to the reclamation and development grants account provided for in 90-2-1104.
(iv) Six percent of the interest income of the resource indemnity trust fund must be allocated to the environmental quality protection fund provided for in 75-10-704.
(3) Any formal budget document prepared by the legislature or the executive branch that proposes to appropriate funds from the resource indemnity trust interest account other than as provided for by the allocations in subsection (2) must specify the amount of money from each allocation that is proposed to be diverted and the proposed use of the diverted funds. A formal budget document includes a printed and publicly distributed budget proposal or recommendation, an introduced bill, or a bill developed during the legislative appropriation process or otherwise during a legislative session."
Section 16. 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)(c) 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 17. Section 85-1-604, MCA, is amended to read:
"85-1-604. Renewable resource grant and loan program state special revenue account created -- revenue allocated -- limitations on appropriations from account. (1) There is created a renewable resource grant and loan program state special revenue account within the state special revenue fund established in 17-2-102.
(2) Except to the extent that they are required to be credited to the renewable resource loan debt service fund pursuant to 85-1-603, there must be paid into the renewable resource grant and loan program state special revenue account:
(a) all revenue of the works and other money as provided in 85-1-332;
(b) the interest income of the resource indemnity trust fund as provided in and subject to the conditions of 15-38-202;
(c) the excess of the coal severance tax proceeds allocated by 85-1-603 to the renewable resource loan debt service fund above debt service requirements as provided in and subject to the conditions of 85-1-619; and
(d) any fees or charges collected by the department pursuant to 85-1-616 for the servicing of loans, including arrangements
for obtaining security interests; and
(e) the resource indemnity tax proceeds as provided in 15-38-106(2)(b).
(3) Appropriations may be made from the renewable resource grant and loan program state special revenue account for the following purposes and subject to the following conditions:
(a) The amount of resource indemnity trust fund interest earnings allocated under 15-38-202(2)(b)(iii) must be used for renewable resource grants.
(b) An amount less than or equal to that paid into the account under 85-1-332 and only that amount may be appropriated for the operation and maintenance of state-owned projects and works. If the amount of money available for appropriation under this subsection (3)(b) is greater than that necessary for operation and maintenance expenses, the excess may be appropriated as provided in subsection (3)(c).
(c) An amount less than or equal to that paid into the account from the resource indemnity trust account plus any excess from subsection (3)(b) and only that amount may be appropriated from the account for expenditures that meet the policies and objectives of the renewable resource grant and loan program. If the amount of money available for appropriation under this subsection (3)(c) is greater than that necessary for operation and maintenance expenses, the excess may be appropriated as provided in subsection (3)(d).
(d) An amount less than or equal to that paid into the account from the sources provided for in subsections (2)(c) and (2)(d) and any excess from subsection (3)(c) and only that amount may be appropriated from the account for loans and grants for renewable resource projects; for purchase of liens and operation of property as provided in 85-1-615; for administrative expenses, including but not limited to the salaries and expenses of personnel, equipment, and office space; for the servicing of loans, including arrangements for obtaining security interests; and for other necessities incurred in administering the loans and grants."
Section 18. 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 allocation will be made and the funds 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 the resource indemnity trust fund interest income as provided in
15-38-202(2)(b)(iv);
(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 19. 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;
(b) the resource indemnity trust 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."
NEW SECTION. Section 20. Repealer. Sections 15-38-104, 15-38-105, 15-38-106, 15-38-107, 15-38-108, 15-38-110, 15-38-111, 15-38-112, 15-38-113, 15-38-121, 15-38-125, 15-38-126, 15-38-127, and 15-38-128, MCA, are repealed.
NEW SECTION. Section 21. Saving clause. [This act] does not affect rights and duties that matured, penalties that were incurred, or proceedings that were begun before [the effective date of this act].
NEW SECTION. Section 22. Applicability. (1) Taxes owed for the previous calendar year's production must be paid pursuant to 15-38-106 as it read prior to [the effective date of this section].
(2) Taxes owed or refunds issued for production occurring in the calendar year immediately preceding [the effective date of this section] must be distributed pursuant to 15-38-106 as that section read prior to [the effective date of this act].
(3) [This act] does not affect any taxes, interest, or penalty that was incurred prior to [the effective date of this section].
(4) The department of revenue may audit any taxpayer subject to the resource indemnity trust tax prior to [the effective date of this section] and assess any tax, interest, or penalty due. The department may also undertake any action to collect the tax, interest, or penalty for any tax that was incurred under Title 15, chapter 38, as that law read prior to [the effective date of this section], subject only to the statute of limitations under 15-38-112 as that section read prior to [the effective date of this section]. Any additional taxes, interest, or penalty collected after [the effective date of this section] must be deposited into the state resource indemnity trust fund.
(5) The department shall issue tax refunds pursuant to 15-38-111 subject only to the statute of limitations provision of 15-38-112 as those sections read prior to [the effective date of this section]. Refunds must be paid from the state resource indemnity trust fund.
NEW SECTION. Section 23. Effective dates. (1) [Sections 12, 15, and 21 and this section] are effective on July 1, 1997.
(2) [Sections 1 through 11, 13, 14, 16 through 20, and 22] are effective January 1 of the year following the date that the governor by executive order certifies to the secretary of state that the resource indemnity trust fund has reached $100 million. The secretary of state shall notify the department of revenue and the legislative services division of this certification.
-END-