HOUSE BILL NO. 649
INTRODUCED BY B. NEWMAN
A BILL FOR AN ACT ENTITLED: "AN ACT PROVIDING FUNDING FOR K-12 EDUCATION AND HIGHER EDUCATION; CREATING A COAL SEVERANCE TAX EDUCATION FUND WITHIN THE COAL SEVERANCE TAX TRUST FUND; TRANSFERRING FUNDS FROM THE COAL SEVERANCE TAX PERMANENT FUND TO THE COAL SEVERANCE TAX EDUCATION FUND; AUTHORIZING THE BOARD OF EXAMINERS TO ISSUE $40 MILLION OF STATE GENERAL OBLIGATION BONDS TO BE USED FOR FUNDING EDUCATION; APPROPRIATING THE BOND PROCEEDS TO FUND HIGHER EDUCATION AND K-12 EDUCATION; CREATING A STATE DEBT; PROVIDING THAT PRINCIPAL AND INTEREST ON THE BONDS ARE PAYABLE FROM THE INTEREST AND INCOME ON THE COAL SEVERANCE TAX EDUCATION FUND; AMENDING SECTION 17-5-703, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 17-5-703, MCA, is amended to read:
"17-5-703. (Temporary) Coal severance tax trust funds. (1) The trust established under Article IX, section 5, of the Montana constitution is composed of the following funds:
(a) a coal severance tax bond fund into which the constitutionally dedicated receipts from the coal severance tax must be deposited;
(b) a treasure state endowment fund;
(c) a treasure state endowment regional water system fund;
(d) a coal severance tax permanent fund;
(e) a coal severance tax income fund; and
(f) a coal severance tax education fund; and
(f)(g) a coal severance tax school bond contingency loan fund.
(2) (a) The state treasurer shall determine, on July 1 of each year, the amount necessary to meet all principal and interest payments on bonds payable from the coal severance tax bond fund during the next 12 months and retain that amount in the coal severance tax bond fund.
(b) The amount in the coal severance tax bond fund in excess of the amount required in subsection (2)(a) must be transferred from that fund as provided in subsections (3) through (5).
(3) (a) On January 21, 1992, and continuing as As long as any school district bonds secured by state loans under
20-9-466 are outstanding, the state treasurer shall from time to time and as provided in subsection (3)(b) transfer from the
coal severance tax bond fund to the coal severance tax school bond contingency loan fund any amount in the coal severance
tax bond fund in excess of the amount that is specified in subsection (2) to be retained in the fund.
(b) The state treasurer shall transfer the amount referred to in subsection (3)(a) until and unless the balance in the coal severance tax school bond contingency loan fund is equal to the amount due as principal of and interest on the school district bonds secured by state loans under 20-9-466 during the next following 12 months.
(4) (a) Beginning July 1, 1993, and ending Until June 30, 2013, the state treasurer shall quarterly transfer to the treasure
state endowment fund 75% of the amount in the coal severance tax bond fund in excess of the amount that is specified in
subsection (2) to be retained in the fund and in excess of amounts that are transferred pursuant to subsection (3).
(b) Beginning July 1, 1999, and ending Until June 30, 2013, the state treasurer shall quarterly transfer to the treasure
state endowment regional water system fund 25% of the amount in the coal severance tax bond fund in excess of the
amount that is specified in subsection (2) to be retained in the fund and in excess of amounts that are transferred pursuant to
subsection (3).
(c) The state treasurer shall monthly transfer from the treasure state endowment fund to the treasure state endowment special revenue account the amount of earnings required to meet the obligations of the state that are payable from the account in accordance with 90-6-710. Earnings not transferred to the treasure state endowment special revenue account must be retained in the treasure state endowment fund.
(d) The state treasurer shall monthly transfer from the treasure state endowment regional water system fund to the treasure state endowment regional water system special revenue account the amount of earnings required to meet the obligations of the state that are payable from the account for regional water systems authorized under 90-6-715. Earnings not transferred to the treasure state endowment regional water system special revenue account must be retained in the treasure state endowment regional water system fund.
(5) Any amount in the coal severance tax bond fund in excess of the amount that is specified in subsection (2)(a) to be retained in the fund and that is not otherwise allocated under this section must be deposited in the coal severance tax permanent fund. (Terminates June 30, 2013--sec. 6, Ch. 495, L. 1999.)
17-5-703. (Effective July 1, 2013) Coal severance tax trust funds. (1) The trust established under Article IX, section 5, of the Montana constitution is composed of the following funds:
(a) a coal severance tax bond fund into which the constitutionally dedicated receipts from the coal severance tax must be deposited;
(b) a treasure state endowment fund;
(c) a coal severance tax permanent fund;
(d) a coal severance tax income fund; and
(e) a coal severance tax education fund; and
(e)(f) a coal severance tax school bond contingency loan fund.
(2) (a) The state treasurer shall determine, on July 1 of each year, the amount necessary to meet all principal and interest payments on bonds payable from the coal severance tax bond fund during the next 12 months and retain that amount in the coal severance tax bond fund.
(b) The amount in the coal severance tax bond fund in excess of the amount required in subsection (2)(a) must be transferred from that fund as provided in subsections (3) through (5).
(3) (a) On January 21, 1992, and continuing as As long as any school district bonds secured by state loans under
20-9-466 are outstanding, the state treasurer shall from time to time and as provided in subsection (3)(b) transfer from the
coal severance tax bond fund to the coal severance tax school bond contingency loan fund any amount in the coal severance
tax bond fund in excess of the amount that is specified in subsection (2) to be retained in the fund.
(b) The state treasurer shall transfer the amount referred to in subsection (3)(a) until and unless the balance in the coal severance tax school bond contingency loan fund is equal to the amount due as principal of and interest on the school district bonds secured by state loans under 20-9-466 during the next following 12 months.
(4) (a) Beginning July 1, 1993, and ending Until June 30, 2013, the state treasurer shall quarterly transfer to the treasure
state endowment fund 50% of the amount in the coal severance tax bond fund in excess of the amount that is specified in
subsection (2) to be retained in the fund and in excess of amounts that are transferred pursuant to subsection (3).
(b) The state treasurer shall monthly transfer from the treasure state endowment fund to the treasure state endowment special revenue account the amount of earnings required to meet the obligations of the state that are payable from the account in accordance with 90-6-710. Earnings not transferred to the treasure state endowment special revenue account must be retained in the treasure state endowment fund.
(5) Any amount in the coal severance tax bond fund in excess of the amount that is specified in subsection (2)(a) to be retained in the fund and that is not otherwise allocated under this section must be deposited in the coal severance tax permanent fund."
NEW SECTION. Section 2. Education trust fund -- interest and earnings. (1) The interest and earnings on the coal severance tax education fund, created in 17-5-703, must be used to pay debt service on any bonds issued for funding K-12 education or higher education.
(2) Any interest and earnings in excess of the amount necessary for the purposes of subsection (1) must be used only for funding education.
NEW SECTION. Section 3. Fund transfer. The amount of $100 million is transferred from the coal severance tax permanent fund to the coal severance tax education fund.
NEW SECTION. Section 4. General obligation bonds -- appropriation of proceeds. (1) The board of examiners may issue and sell bonds of the state in an aggregate principal amount not to exceed $40 million for fiscal years 2002 and 2003 for funding public education. The bonds are general obligations for which the full faith and credit and taxing powers of the state are pledged for payment of the principal and interest on the bonds. The bonds must be issued as provided by Title 17, chapter 5, part 8. The principal and interest payments on the bonds are payable from the interest and income earned on the coal severance tax education fund, as provided in [section 2], and from any revenue received by the state in excess of the projected ending fund balance for a biennium that is not appropriated or dedicated to some other purpose.
(2) The amount of $10 million of bond proceeds is appropriated to the office of the commissioner of higher education to be allocated by the board of regents to university units.
(3) The amount of $30 million of bond proceeds is appropriated to the office of public instruction to be used for providing state support for public schools for BASE aid, the basic entitlement, direct state aid, and total per-ANB entitlement, as those terms are defined in 20-9-306.
NEW SECTION. Section 5. Codification instruction. [Section 2] is intended to be codified as an integral part of Title 17, chapter 2, part 1, and the provisions of Title 17, chapter 2, part 1, apply to [section 2].
NEW SECTION. Section 6. State debt. Because [section 4] authorizes the creation of state debt, Article VIII, section 8, of the Montana constitution requires a vote of two-thirds of the members of each house of the legislature for enactment of [section 4].
NEW SECTION. Section 7. Three-fourths vote required. Because [section 1] creates a subfund in the coal severance tax trust fund, Article IX, section 5, of the Montana constitution, as interpreted by the Montana supreme court in Montanans for the Coal Trust v. State, requires a vote of three-fourths of the members of each house of the legislature for passage.
NEW SECTION. Section 8. Effective date. [This act] is effective on passage and approval.
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