Senate Bill No. 319

Introduced By stang, ellis, harp, halligan, foster, eck, van valkenburg, wyatt, simpkins, mercer, jergeson, cocchiarella, cole, brooke, waterman



A Bill for an Act entitled: "An Act amending the property tax limitations implementing Initiative Measure No. 105 by changing the exceptions to the limitations; providing that property taxes are capped at 1996 levels; providing that the electors of a taxing unit may authorize mill levies that exceed the limitations of Title 15, chapter 10, part 4, MCA; revising ALLOWING THE DEPARTMENT OF REVENUE TO ADJUST statewide mill levies and certain mill levies fixed by law; amending sections 7-6-2514, 15-10-106, 15-10-401, 15-10-402, 15-10-412, 15-36-323, 20-9-331, 20-9-333, 20-9-360, 20-25-439, 53-2-801, 53-2-813, and 90-5-112, MCA; repealing section 15-10-411, MCA; and providing an immediate effective date and a retroactive applicability date."



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



Section 1.  Section 7-6-2514, MCA, is amended to read:

"7-6-2514.   Tax limitation applicable. The property tax limitation to 1986 levels under Title 15, chapter 10, part 4, applies to the county public safety levy authorized in 7-6-2513. The limitation is determined by the total tax levied for the county general fund. The first year a county public safety tax is levied, the public safety levy and the general fund levy may not exceed the prior year's county general fund levy. In subsequent years, any increases in the public safety levy and the general fund levy are limited under Title 15, chapter 10, part 4."



Section 2.  Section 15-10-106, MCA, is amended to read:

"15-10-106.   (Temporary) Tax levy for university system. There SUBJECT TO THE CONDITIONS OF [SECTION 6], THERE is levied upon the taxable value of all real and personal property subject to taxation in the state of Montana 6 NOT MORE THAN 6 MILLS AND NOT LESS THAN 5.1 mills or so much thereof as is the number of mills necessary to raise the amount appropriated by the legislature from the state special revenue fund for the support, maintenance, and improvement of the Montana university system, as provided in referendum measure No. 106 passed by vote of the people at the general election held November 8, 1988. The funds raised from the levy must be deposited in the state special revenue fund. (Terminates January 1, 1999--sec. 3, Ch. 588, L. 1989.)"



Section 3.  Section 15-10-401, MCA, is amended to read:

"15-10-401.   Declaration of policy. (1) The state of Montana's reliance on the taxation of property to support education and local government has placed an unreasonable burden on the owners of all classes three, four, six, nine, twelve, and fourteen of property, as those classes are defined described in Title 15, chapter 6, part 1.

(2)  The legislature's failure to give local governments and local school districts the flexibility to develop alternative sources of revenue will only lead to increases in the tax burden on the already overburdened property taxpayer.

(3)  The legislature is the appropriate forum to make the difficult and complex decisions to develop:

(a)  a tax system that is fair to property taxpayers; and

(b)  a method of providing adequate funding for local government and education.

(4)  The legislature has failed in its responsibility to taxpayers, education, and local government to relieve the tax burden on property classes three, four, six, nine, twelve, and fourteen.

(5)(2)  The people of the state of Montana declare it is the policy of the state of Montana that no further property tax increases be imposed on property classes three, four, six, nine, twelve, and fourteen as provided in 15-10-412."



Section 4.  Section 15-10-402, MCA, is amended to read:

"15-10-402.   Property tax limited to 1986 1996 levels. (1) Except as provided in subsections (2) and (3) 15-10-412, the amount of taxes levied on property described in 15-6-133, 15-6-134, and 15-6-136 Title 15, chapter 6, part 1, may not, for any taxing jurisdiction, exceed the amount levied for taxable tax year 1986 1996.

(2)  The limitation contained in subsection (1) does not apply to levies for rural improvement districts, Title 7, chapter 12, part 21; special improvement districts, Title 7, chapter 12, part 41; elementary and high school districts, Title 20; juvenile detention programs authorized under 7-6-502; or bonded indebtedness.

(3)  New construction or improvements to or deletions from property described in subsection (1) are subject to taxation at 1986 levels.

(4)  As used in this section, the "amount of taxes levied" and the "amount levied" mean the actual dollar amount of taxes imposed on an individual piece of property, notwithstanding an increase or decrease in value due to inflation, reappraisal, adjustments in the percentage multiplier used to convert appraised value to taxable value, changes in the number of mills levied, or increase or decrease in the value of a mill."



Section 5.  Section 15-10-412, MCA, is amended to read:

"15-10-412.   Property tax limited to 1986 1996 levels -- clarification -- extension to all property classes exceptions. Section 15-10-402 is interpreted and clarified implemented as follows:

(1)  The limitation to 1986 levels is extended to apply to all classes of property described in Title 15, chapter 6, part 1.

(2)  The limitation on the amount of taxes levied is interpreted to mean means that, except as otherwise provided in this section, the actual tax liability for an individual property total amount of taxes levied by each taxing unit is capped at the dollar amount due levied in each taxing unit for the 1986 1996 tax year. In tax years thereafter, the property must be taxed in each taxing unit at the 1986 cap or the product of the taxable value and mills levied, whichever is less for each taxing unit, except in a taxing unit that levied a tax in tax years 1983 through 1985 but did not levy a tax in 1986, in which case the actual tax liability for an individual property is capped at the dollar amount due in that taxing unit for the 1985 tax year The governing body of a taxing unit shall adjust mill levies to compensate for any increase in taxable valuation to ensure that taxes levied do not exceed the amount levied in 1996.

(3) (2)  The limitation on the amount of taxes levied does not prohibit a further an increase in the total taxable valuation of taxes levied by a taxing unit as a result of:

(a)  annexation of real property and improvements into a taxing unit;

(b)  construction, expansion, or remodeling of improvements classified under 15-6-134;

(c)  transfer of property into a taxing unit;

(d)  subdivision of real property;

(e)  reclassification of property;

(f)  increases in the amount of production or the value of production for property described in 15-6-131 or 15-6-132; or

(g)  transfer of property from tax-exempt to taxable status; or

(h)  revaluations caused by:

(i)  cyclical reappraisal; or

(ii) expansion, addition, replacement, or remodeling of improvements.

(3) The limitation on the amount of taxes levied does not prohibit an increase in the total taxes levied by a taxing unit in order to compensate the taxing unit for any loss in the total amount of nonlevy revenue received in 1996 from taxes imposed under Title 15, chapter 23, part 7, and Title 15, chapter 36, part 3.

(4)  The limitation on the amount of taxes levied does not prohibit a further increase in the taxable valuation of the taxing unit or in the actual tax liability on individual property. in each class as a result of:

(a)  a revaluation caused by:

(i)  construction, expansion, replacement, or remodeling of improvements that adds value to the property; or

(ii) cyclical reappraisal;

(b)  transfer of property into a taxing unit;

(c)  reclassification of property;

(d)  increases in the amount of production or the value of production for property described in 15-6-131 or 15-6-132;

(e)  annexation of the individual property into a new taxing unit; or

(f)  conversion of the individual property from tax-exempt to taxable status.

(5)  Property in class four is valued according to the procedures used in 1986, including the designation of 1982 as the base year, until the reappraisal cycle beginning January 1, 1986, is completed and new valuations are placed on the tax rolls and a new base year designated, if the property is:

(a)  new construction;

(b)  expanded, deleted, replaced, or remodeled improvements;

(c)  annexed property; or

(d)  property converted from tax-exempt to taxable status.

(6)  Property described in subsections (5)(a) through (5)(d) that is not class four property is valued according to the procedures used in 1986 but is also subject to the dollar cap in each taxing unit based on 1986 mills levied.

(7)(5)  The limitation on the amount of taxes, as clarified in this section, is intended to leave the property appraisal and valuation methodology methodologies of the department of revenue intact. Determinations of county classifications, salaries of local government officers, and all other matters in which total taxable valuation is an integral component are not affected by 15-10-401 and 15-10-402 except for the use of taxable valuation in fixing tax levies. In fixing tax levies, the taxing units of local government may anticipate the deficiency in revenues resulting from the tax limitations in 15-10-401 and 15-10-402, while understanding that regardless of the amount of mills levied, a taxpayer's liability may not exceed the dollar amount due in each taxing unit for the 1986 tax year unless:

(a)  except as provided in subsection (8)(a), the taxing unit's taxable valuation decreases by 5% or more from the 1986 tax year. If a taxing unit's taxable valuation decreases by 5% or more from the 1986 tax year, it may levy additional mills to compensate for the decreased taxable valuation, but the mills levied may not exceed a number calculated to equal the revenue from property taxes for the 1986 tax year in that taxing unit.

(b)  a levy authorized under Title 20 raised less revenue in 1986 than was raised in either 1984 or 1985, in which case the taxing unit may, after approval by the voters in the taxing unit, raise each year thereafter an additional number of mills but may not levy more revenue than the 3-year average of revenue raised for that purpose during 1984, 1985, and 1986;

(c)  a levy authorized in 50-2-111 that was made in 1986 was for less than the number of mills levied in either 1984 or 1985, in which case the taxing unit may, after approval by the voters in the taxing unit, levy each year thereafter an additional number of mills but may not levy more than the 3-year average number of mills levied for that purpose during 1984, 1985, and 1986.

(8)  (a) Except as provided in subsection (8)(b), if a taxing unit has levied additional mills under subsection (7)(a) to compensate for a decrease in taxable valuation, it may continue to levy additional mills to equal the revenue from property taxes for the 1986 tax year when the taxing unit's taxable valuation is greater than 95% but less than 100% of the taxing unit's taxable valuation in tax year 1986.

(b)  When the taxable valuation of a taxing unit that levied additional mills under subsection (7)(a) or (8)(a) is equal to or greater than the taxing unit's taxable valuation in tax year 1986, it may not levy additional mills to compensate for a subsequent decrease in taxable valuation unless the conditions of subsection (7)(a) are satisfied.

(9) (6)  The limitation on the amount of taxes levied does not apply to the following levy or special assessment categories, whether or not they are based on commitments made before or after approval of 15-10-401 and 15-10-402: FOLLOWING LEVY CATEGORIES:

(a)  rural improvement districts;

(b)  special improvement districts;

(c)  levies pledged for the repayment of bonded indebtedness, including tax increment bonds;

(d)  city street maintenance districts;

(e)  tax increment financing districts;

(f)  satisfaction of judgments against a taxing unit;

(g)  street lighting assessments;

(h)  revolving funds to support any categories specified in this subsection (9);

(i)  levies for economic development authorized pursuant to 90-5-112(4);

(j)  levies authorized under 7-6-502 for juvenile detention programs;

(k)  levies authorized under 76-15-531 and 76-15-532 for conservation district special administrative assessments;

(l)  elementary and high school districts; and

(m)  voted poor fund levies authorized under 53-2-322

(A) THE general fund BASE BUDGET LEVY of a school district that has a general fund budget less than the BASE budget under 20-9-308;

(B) THE COUNTY LEVY IN SUPPORT OF RETIREMENT OBLIGATIONS FOR ELEMENTARY AND HIGH SCHOOL DISTRICTS AS PROVIDED IN 20-9-501;

(C) THE COUNTY LEVY IN SUPPORT OF TRANSPORTATION OBLIGATIONS FOR ELEMENTARY AND HIGH SCHOOL DISTRICTS AS PROVIDED IN 20-10-146;

(D) THE SCHOOL DISTRICT LEVY FOR TRANSPORTATION AS PROVIDED IN 20-10-144;

(E) THE SCHOOL DISTRICT LEVY FOR TUITION AS PROVIDED IN 20-3-324; AND

(F) THE SCHOOL DISTRICT LEVY FOR THE NONOPERATING FUND AS PROVIDED IN 20-9-506.

(10)(7) The limitation on the amount of taxes levied does not apply in a taxing unit if the voters in the taxing unit approve an increase in tax liability mill levies following a resolution of the governing body of the taxing unit containing under one of the following methods:

(a)   If the laws governing the taxing unit or a particular fund of the taxing unit specifically allow for a vote of the electorate to impose mill levies or to change mill levies, then mill levies may be imposed or increased after approval of the electorate of the taxing unit.

(b) If the taxing unit or a particular fund of the taxing unit does not have a statutory basis for holding an election on whether to impose or to change a mill levy, the governing body of the taxing unit may refer the question of whether to impose or to change the mill levy to the electorate of the taxing unit. The resolution must contain:

(i) a finding that there are insufficient funds to adequately operate the taxing unit or applicable governmental function as a result of 15-10-401 and 15-10-402 the limitations of this part;

(b)  an explanation of the nature of the financial emergency;

(c)  an estimate of the amount of funding shortfall expected by the taxing unit;

(d)  a statement that applicable fund balances are or by the end of the fiscal year will be depleted;

(e) (ii)  a finding that there are no alternative sources of revenue; and

(f)  a summary of the alternatives that the governing body of the taxing unit has considered; and

(g) (iii)  a statement of the need for the increased revenue and how it will be used.

(11) (a) The limitation on the amount of taxes levied does not apply to levies required to address the funding of relief of suffering of inhabitants caused by famine, conflagration, or other public calamity.

(b)  The limitation set forth in this chapter on the amount of taxes levied does not apply to levies to support:

(i)  a city-county board of health as provided in Title 50, chapter 2, if the governing bodies of the taxing units served by the board of health determine, after a public hearing, that public health programs require funds to ensure the public health. A levy for the support of a local board of health may not exceed the 5-mill limit established in 50-2-111.

(ii) county, city, or town ambulance services authorized by a vote of the electorate under 7-34-102(2); and

(iii) a rail authority, as provided in Title 7, chapter 14, part 16, authorized by a board of county commissioners. A levy for the support of a rail authority may not exceed the 6-mill limit established in 7-14-1632.

(12) (8) The limitation on the amount of taxes levied by a taxing jurisdiction subject to a statutory maximum mill levy does not prevent a taxing jurisdiction from increasing its number of mills beyond the statutory maximum mill levy to produce revenue equal to its 1986 1996 revenue.

(13) The limitation on the amount of taxes levied does not apply to a levy increase to repay taxes paid under protest in accordance with 15-1-402.

(14) A taxing jurisdiction that included special improvement district revolving fund levies in the limitation on the amount of taxes levied prior to April 22, 1993, may continue to include the amount of the levies within the dollar amount due in each taxing unit for the 1986 tax year even if the necessity for the revolving fund has diminished and the levy authority has been transferred.

(9) If a taxing unit receives a reimbursement payment under 15-1-112, then the taxing unit may not increase mill levies to compensate for a loss in taxable valuation associated with reducing the tax rate in 15-6-138.

(10) When each revaluation cycle takes effect pursuant to 15-7-111, mill levies must be reduced in order to compensate for an increase in taxable valuation, for reasons other than those described in subsection (2), in a taxing unit as a result of cyclical reappraisal."



NEW SECTION. SECTION 6.  DEPARTMENT TO ADJUST CERTAIN MILL LEVIES. (1) IN ORDER TO COMPLY WITH THE LIMITATIONS OF THIS PART, THE DEPARTMENT SHALL ADJUST MILL LEVIES IMPOSED UNDER 15-10-106, 20-9-331, 20-9-333, 20-9-360, 20-25-439, AND 53-2-813 TO COMPENSATE FOR AN INCREASE IN TAXABLE VALUE, IF ANY, FROM THE 1996 TAX YEAR DUE TO REAPPRAISAL OF CLASS FOUR PROPERTY. THE ADJUSTMENT MAY NOT TAKE INTO ACCOUNT AN INCREASE IN TAXABLE VALUE DUE TO NEW CONSTRUCTION.

(2) THE MILL LEVY ADJUSTMENT FOR EACH LEVY DESCRIBED IN SUBSECTION (1) MUST BE WITHIN THE MILL LEVY LIMITS SPECIFIED BY LAW FOR EACH OF THE LEVIES.

(3) THE DEPARTMENT SHALL NOTIFY THE GOVERNING BODY OF EACH COUNTY OF THE ADJUSTED MILL LEVIES BY THE STATUTORY DATE FOR SETTING MILL LEVIES.



Section 7.  Section 15-36-323, MCA, is amended to read:

"15-36-323.  Calculation of unit value. For the purposes of distribution of oil and natural gas production taxes to county and school taxing units for production from pre-1985 wells, the department shall determine the unit value of oil and natural gas for each taxing unit as follows:

(1)  Subject to the conditions of subsection (3), the unit value for oil for each taxing unit is the quotient obtained by dividing the net proceeds taxes calculated on oil produced and sold in that taxing unit in calendar year 1988 by the number of barrels of oil produced in that taxing unit during 1988, excluding post-1985 wells.

(2)  Subject to the conditions of subsection (3), the unit value for natural gas is the quotient obtained by dividing the net proceeds taxes calculated on natural gas produced and sold in that taxing unit in calendar year 1988 by the number of cubic feet of natural gas produced in that taxing unit during 1988, excluding post-1985 wells.

(3)  The amount of net proceeds taxes calculated under subsections (1) and (2) may not include the amount of taxes that are attributable to a financial emergency, as described in 15-10-412(10), as that subsection read on December 31, 1996, for which additional mills were levied in fiscal year 1990."



Section 8.  Section 20-9-331, MCA, is amended to read:

"20-9-331.   Basic county tax and other revenues for county equalization of the elementary district BASE funding program. (1) The SUBJECT TO THE CONDITIONS OF [SECTION 6], THE county commissioners of each county shall levy an annual basic tax of 33 NOT MORE THAN 33 MILLS AND NOT LESS THAN 28.3 mills on the dollar of the taxable value of all taxable property within the county, except for property subject to a tax or fee under 23-2-517, 23-2-803, 61-3-504(2), 61-3-521, 61-3-527, 61-3-537, and 67-3-204, for the purposes of local and state BASE funding program support. The revenue collected from this levy must be apportioned to the support of the elementary BASE funding programs of the school districts in the county and to the state general fund in the following manner:

(a)  In order to determine the amount of revenue raised by this levy that is retained by the county, the sum of the estimated revenue identified in subsection (2) must be subtracted from the total of the BASE funding programs of all elementary districts of the county.

(b)  If the basic levy and other revenue prescribed by this section produce more revenue than is required to repay a state advance for county equalization, the county treasurer shall remit the surplus funds to the state treasurer for deposit to the state general fund immediately upon occurrence of a surplus balance and each subsequent month thereafter, with any final remittance due no later than June 20 of the fiscal year for which the levy has been set.

(2)  The revenue realized from the county's portion of the levy prescribed by this section and the revenue from the following sources must be used for the equalization of the elementary BASE funding program of the county as prescribed in 20-9-335, and a separate accounting must be kept of the revenue by the county treasurer in accordance with 20-9-212(1):

(a)  the portion of the federal Taylor Grazing Act funds distributed to a county and designated for the common school fund under the provisions of 17-3-222;

(b)  the portion of the federal flood control act funds distributed to a county and designated for expenditure for the benefit of the county common schools under the provisions of 17-3-232;

(c)  all money paid into the county treasury as a result of fines for violations of law, except money paid to a justice's court, and the use of which is not otherwise specified by law;

(d)  any money remaining at the end of the immediately preceding school fiscal year in the county treasurer's accounts for the various sources of revenue established or referred to in this section;

(e)  any federal or state money distributed to the county as payment in lieu of property taxation, including federal forest reserve funds allocated under the provisions of 17-3-213;

(f)  gross proceeds taxes from coal under 15-23-703;

(g)  oil and natural gas production taxes;

(h)  anticipated local government severance tax payments for calendar year 1995 production as provided in 15-36-325; and

(i)  anticipated revenue from property taxes and fees imposed under 23-2-517, 23-2-803, 61-3-504(2), 61-3-521, 61-3-527, 61-3-537, and 67-3-204."



Section 9.  Section 20-9-333, MCA, is amended to read:

"20-9-333.   Basic special levy and other revenue for county equalization of high school district BASE funding program. (1) The SUBJECT TO THE CONDITIONS OF [SECTION 6], THE county commissioners of each county shall levy an annual basic special tax for high schools of 22 NOT MORE THAN 22 MILLS AND NOT LESS THAN 18.8 mills on the dollar of the taxable value of all taxable property within the county, except for property subject to a tax or fee under 23-2-517, 23-2-803, 61-3-504(2), 61-3-521, 61-3-527, 61-3-537, and 67-3-204, for the purposes of local and state BASE funding program support. The revenue collected from this levy must be apportioned to the support of the BASE funding programs of high school districts in the county and to the state general fund in the following manner:

(a)  In order to determine the amount of revenue raised by this levy that is retained by the county, the sum of the estimated revenue identified in subsection (2) must be subtracted from the sum of the county's high school tuition obligation and the total of the BASE funding programs of all high school districts of the county.

(b)  If the basic levy and other revenue prescribed by this section produce more revenue than is required to repay a state advance for county equalization, the county treasurer shall remit the surplus funds to the state treasurer for deposit to the state general fund immediately upon occurrence of a surplus balance and each subsequent month thereafter, with any final remittance due no later than June 20 of the fiscal year for which the levy has been set.

(2)  The revenue realized from the county's portion of the levy prescribed in this section and the revenue from the following sources must be used for the equalization of the high school BASE funding program of the county as prescribed in 20-9-335, and a separate accounting must be kept of the revenue by the county treasurer in accordance with 20-9-212(1):

(a)  any money remaining at the end of the immediately preceding school fiscal year in the county treasurer's accounts for the various sources of revenue established in this section;

(b)  any federal or state money distributed to the county as payment in lieu of property taxation, including federal forest reserve funds allocated under the provisions of 17-3-213;

(c)  gross proceeds taxes from coal under 15-23-703;

(d)  oil and natural gas production taxes;

(e)  anticipated local government severance tax payments for calendar year 1995 production as provided in 15-36-325; and

(f)  anticipated revenue from property taxes and fees imposed under 23-2-517, 23-2-803, 61-3-504(2), 61-3-521, 61-3-527, 61-3-537, and 67-3-204."



Section 10.  Section 20-9-360, MCA, is amended to read:

"20-9-360.   State equalization aid levy. (1) There SUBJECT TO THE CONDITIONS OF [SECTION 6], THERE is a levy of 40 NOT MORE THAN 40 MILLS AND NOT LESS THAN 34.3 mills imposed by the county commissioners of each county on all taxable property within the state, except property for which a tax or fee is required under 23-2-517, 23-2-803, 61-3-504(2), 61-3-521, 61-3-527, 61-3-537, and 67-3-204. Except as provided in subsection (2), proceeds of the levy must be remitted to the state treasurer and must be deposited to the credit of the state general fund for state equalization aid to the public schools of Montana.

(2)  For the benefit of each municipality that created an urban renewal area and adopted a tax increment financing provision for the urban renewal area prior to July 1, 1990, the state treasurer shall distribute each fiscal year from the state equalization aid levy to the municipality the amount, if any, equal to the product of the incremental taxable value of the urban renewal area times the reduced school levy for the area, each calculated for the fiscal year. The reduced school levy for a fiscal year is the difference between the aggregate amount of all property tax levies for school purposes in the urban renewal area, expressed in mills, in the fiscal year ended June 30, 1989, and the aggregate amount of all property tax levies for school purposes in the area or the district, expressed in mills, in the fiscal year, including the state equalization aid levy. The state treasurer shall distribute the amounts to municipalities in two equal installments on December 31 and June 30 of the fiscal year."



Section 11.  Section 20-25-439, MCA, is amended to read:

"20-25-439.   Vocational-technical education -- mill levy required. (1) The SUBJECT TO THE CONDITIONS OF [SECTION 6], THE boards of county commissioners of Cascade, Lewis and Clark, Missoula, Silver Bow, and Yellowstone Counties shall in each calendar year levy a tax of 1 1/2 NOT MORE THAN 1.5 MILLS AND NOT LESS THAN 1.3 mills on the dollar value of all taxable property, real and personal, located within the respective county.

(2)  The funds from the mill levy must be deposited in the general fund and must be distributed for vocational-technical education on the basis of budgets approved by the board of regents."



Section 12.  Section 53-2-801, MCA, is amended to read:

"53-2-801.   Purpose. The purpose of this part is to provide for the department of public health and human services to assume all responsibilities for public assistance programs and for protective services for children and adults that, as of July 1, 1983, are provided by the counties pursuant to Titles 41 and 53. The assumption may become effective only at the option and with the express consent of each individual county requesting state assumption. State assumption allows counties to pay the state the proceeds from the 9-mill 7.7 mill levy provided for in 53-2-813 rather than an amount based on the actual cost of providing public assistance and protective services in the county. Counties that opt for state assumption may provide other optional services for indigents with money available from funds derived from the difference between the 9-mill 7.7 mill levy PERMITTED BY 53-2-813 and the maximum amount of 13.5 mills permitted by 53-2-322 PROVIDED THAT THE TOTAL AMOUNT LEVIED DOES NOT EXCEED THE AMOUNT LEVIED IN TAX YEAR 1996."



Section 13.  Section 53-2-813, MCA, is amended to read:

"53-2-813.   Mill levy for counties transferring public assistance and protective services. (1) For the purpose of this part AND SUBJECT TO THE CONDITIONS OF [SECTION 6], 9 NOT MORE THAN 9 MILLS AND NOT LESS THAN 7.7 mills must be levied annually in those counties opting for state assumption.

(2)  For a county electing state assumption, the proceeds of the mill levy established in subsection (1) must be deposited in the state special revenue fund in the state treasury to the credit of the department of public health and human services."



Section 14.  Section 90-5-112, MCA, is amended to read:

"90-5-112.   Economic development levy. (1) The governing body of a city, county, or town is authorized to may levy up to 1 mill upon the taxable value of all the property in the city, county, or town subject to taxation for the purpose of economic development. The governing body may shall:

(a)  submit the question of the mill levy to the qualified voters voting in a city, county, or town election; or

(b)  approve the mill levy by a vote of the governing body.

(2)  Funds derived from this levy may be used for purchasing land for industrial parks, constructing buildings to house manufacturing and processing operations, conducting preliminary feasibility studies, promoting economic development opportunities in a particular area, and other activities generally associated with economic development. These funds may not be used to directly assist an industry's operations by loan or grant or to pay the salary or salary supplements of government employees.

(3)  The governing body of the county, city, or town may use the funds derived from this levy to contract with local development companies and other associations or organizations capable of implementing the economic development function.

(4)  A tax authorized by a vote of the electorate, as provided in subsection (1)(a), may be levied for a period not to exceed 6 years and is not subject to the provisions of Title 15, chapter 10, part 4."



NEW SECTION. Section 15.  Repealer. Section 15-10-411, MCA, is repealed.



NEW SECTION. Section 16.  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 17.  CODIFICATION INSTRUCTION. [SECTION 6] IS INTENDED TO BE CODIFIED AS AN INTEGRAL PART OF TITLE 15, CHAPTER 10, PART 4, AND THE PROVISIONS OF TITLE 15, CHAPTER 10, PART 4, APPLY TO [SECTION 6].



NEW SECTION. Section 18.  Effective date -- retroactive applicability. [This act] is effective on passage and approval and applies retroactively, within the meaning of 1-2-109, to tax years beginning after December 31, 1996.

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