HOUSE BILL NO. 47
INTRODUCED BY W. PRICE
AN ACT GENERALLY REVISING THE LAWS GOVERNING STATE INVESTMENTS; REMOVING THE REQUIREMENT THAT STATE BANK EXAMINERS EXAMINE LOANS AND INVESTMENTS; INCREASING THE MAXIMUM LOAN FOR IN-STATE INVESTMENTS; REQUIRING COMMERCIAL LENDER PARTICIPATION FOR CERTAIN INVESTMENTS; ELIMINATING RESTRICTIONS ON MAXIMUM LOAN SIZES FOR PURPOSES OF JOB CREDIT INTEREST RATE REDUCTIONS; AMENDING SECTIONS 17-5-1529, 17-6-311, 17-6-312, 17-6-318, AND 17-6-321, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 17-5-1529, MCA, is amended to read:
"17-5-1529. Annual audits. (1) At least once each year, the bank examiners of the department shall examine loans and
investments of the board. The actual cost of this examination must be paid from the board's funds.
(2) The board's books and records related to economic development bonds must be audited at least once each fiscal year
by or at the direction of the legislative auditor. The actual costs of the audit shall must be paid from the board's funds."
Section 2. Section 17-6-311, MCA, is amended to read:
"17-6-311. Limitation on size of investments. (1) Except as provided in subsections (2) through (4), an investment
may not be made that will result in any one business enterprise or person receiving a benefit from or incurring a debt to the
permanent coal tax trust fund the total current accumulated amount of which exceeds 1% of the permanent coal tax trust
fund. This subsection does not apply to a loan made pursuant to 17-6-317.
(2) Subsection (1) does not limit the board's authority to make loans to the capital reserve account as provided in
17-6-308(2).
(3) Subsection (1) does not apply to the purchase of debentures issued by a capital company. However, the total amount
of debentures purchased by the board may not exceed 1% of the Montana permanent coal tax trust fund at the time of
purchase.
(4)(1) Except as provided in subsection (2) and this subsection, an investment may not be made that will result in any
one business enterprise or person receiving a benefit from or incurring a debt to the permanent coal tax trust fund the total
current accumulated amount of which exceeds 10% of the permanent coal tax trust fund. If an investment results in any one
business enterprise or person incurring a debt in excess of 6% of the permanent coal tax trust fund, at least 30% of the debt
incurred for the project or enterprise for the coal tax investment that was made to the business enterprise or person must be
held by a commercial lender. This subsection does not:
(a) apply to a loan made pursuant to 17-6-317;
(b) limit the board's authority to make loans to the capital reserve account as provided in 17-6-308(2);
(c) apply to the purchase of debentures issued by a capital company. However, the total amount of debentures purchased by the board may not exceed 1% of the Montana permanent coal tax trust fund at the time of purchase.
(2) The total amount of loans made pursuant to 17-6-309(2) or 17-6-317 may not exceed $50 million, and a single loan may not be less than $250,000. Except for a loan made pursuant to 17-6-317, a loan may not exceed $16,666 for each job that is estimated to be created. In determining the size of a loan made pursuant to 17-6-309(2), the board shall consider:
(a)(a) the estimated number of jobs to be created by the project within a 4-year period from the time that the loan is
made and the impact of the jobs on the state and the community where the project will be located;
(b)(b) the long-term effect of corporate and personal income taxes estimated to be paid by the business and its
employees;
(c)(c) the current and projected ability of the community to provide necessary infrastructure for economic and
community development purposes;
(d)(d) the amount of increased salaries, wages, and business incomes of existing jobholders and businesses; and
(e)(e) other matters that the board considers necessary."
Section 3. Section 17-6-312, MCA, is amended to read:
"17-6-312. State participation in loans. (1) Subject to 17-6-311(4), state participation in any loan to a business
enterprise, except for a loan made pursuant to 17-6-317 or guaranteed by a federal agency, must be limited to 80% of the
outstanding loan. The state shall participate in the security for a loan in the same proportion as the loan participation
amount.
(2) The purchase of debentures issued by a capital company is not a loan participation and is not subject to subsection (1).
(3) State participation in loans to nonprofit corporations may qualify for the job credit interest rate reductions under 17-6-318 if the interest rate reduction passes through to a for-profit business creating the jobs."
Section 4. Section 17-6-318, MCA, is amended to read:
"17-6-318. Job credit interest rate reduction for business loan participations participation. (1) A borrower who
uses the proceeds of a business loan participation funded under the provisions of this part to create jobs employing
Montana residents is entitled to a job credit interest rate reduction for each job created over a 2-year period to employ a
Montana resident. A borrower who used uses the proceeds of a loan made pursuant to 17-6-309(2) to create jobs is entitled
to a job credit interest rate reduction for each job created in the 4-year period provided for in 17-6-311(4)(a). The date of
the formal written interim or permanent loan application to the financial institution will be used as a beginning date for
counting the number of jobs created. The job credit interest rate reduction may not apply to a loan participation of more
than 1% of the total of the permanent coal tax trust fund determined at the end of the last-completed fiscal year. The job
credit interest rate reduction is equal to 0.05% for each job created to employ a Montana resident, up to a maximum interest
rate reduction of 2.5%.
(2) If the salary or wage of the job created:
(a) exceeds the average weekly wage, as defined in 39-71-116, the amount of the job credit interest rate reduction may be increased proportionately for each increment of 25% above the average weekly wage to a maximum of two times the average weekly wage; or
(b) is less than the average weekly wage, as defined in 39-71-116, the job credit interest rate reduction is reduced proportionately for each 25% increment below the average wage.
(3) A job credit interest rate reduction may not be allowed for a job created by the borrower using the proceeds of the loan for which the salary or wage is less than the minimum wage provided for in 39-3-409.
(4) A job credit may not be given unless one whole job is created.
(5) To qualify for the job credit interest rate reduction, the borrower shall provide satisfactory evidence of the creation
of jobs and shall make a written application in writing, to the board through its financial institution or, in the case of a loan
made pursuant to 17-6-309(2), shall make a written application directly to the board when the loan is delivered to the board
or not later than 45 days after the applicable anniversary dates of the loan."
Section 5. Section 17-6-321, MCA, is amended to read:
"17-6-321. Audits. (1) At least once each year, the bank examiners of the department shall examine loans and
investments of the board. The actual cost of this examination must be paid from the board's funds.
(2) The board's books and records related to in-state investments must be audited once each fiscal year by or at the
direction of the legislative auditor. The actual cost of this audit must be paid from the board's funds."
Section 6. Effective date. [This act] is effective upon passage and approval.
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