HOUSE BILL NO. 475

INTRODUCED BY D. WYATT

BY REQUEST OF THE JOINT SELECT COMMITTEE ON CI-75

A BILL FOR AN ACT ENTITLED: "AN ACT GENERALLY REVISING LAWS RELATING TO THE ISSUANCE OF BONDS TO CONFORM TO THE PROVISIONS OF ARTICLE VIII, SECTION 17, OF THE MONTANA CONSTITUTION; AMENDING SECTIONS 7-2-2730, 7-2-2747, 7-3-1321, 7-6-1506, 7-7-108, 7-7-2111, 7-7-2201, 7-7-2202, 7-7-2221, 7-7-2302, 7-7-2402, 7-7-4202, 7-7-4221, 7-7-4421, 7-7-4426, 7-7-4427, 7-11-104, 7-12-2101, 7-12-2153, 7-12-2172, 7-12-2176, 7-12-2186, 7-12-4101, 7-12-4169, 7-12-4189, 7-12-4204, 7-12-4227, 7-12-4341, 7-13-236, 7-13-237, 7-13-308, 7-13-2331, 7-13-2510, 7-14-235, 7-14-1133, 7-14-1636, 7-14-2522, 7-14-2732, 7-14-4109, 7-14-4110, 7-14-4401, 7-14-4502, 7-14-4716, 7-15-4301, 7-15-4302, 7-15-4501, 7-34-2131, 22-1-304, 76-15-501, 76-15-506, 85-7-1413, 85-7-2014, 85-8-502, 85-8-702, 85-9-406, AND 90-6-310, MCA; REPEALING SECTION 7-7-2222, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE."

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Section 7-2-2730, MCA, is amended to read:

"7-2-2730. Establishment of special warrant district or special funding bond district in continuing county. (1) After all warrants have been drawn and issued against the funds of the adjoining county to pay the claims and demands existing against that county on the date when the territory of the abandoned and abolished county was attached to the adjoining county, all money in the funds of the adjoining county must be used and applied in payment of the warrants drawn against its respective funds. If the money is not sufficient to pay all of the warrants, with the interest on the warrants, then the board of county commissioners shall issue an order creating a special warrant district and shall include within the district all of the territory of the adjoining county but may not include any of the territory of the abandoned and abolished county. The board shall, at the time of making levies for county purposes, levy a special tax against all taxable property in the district to pay the warrants, with interest , outstanding against the funds of the county. The board may in its discretion extend the tax levy over a period of not to exceed 3 years.

(2) (a) If it appears to the board that it will require too large a tax levy to pay the warrant indebtedness, with interest , within 3 years, the board, instead of creating a special warrant district, shall, upon the approval of the electors if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, create and establish a special funding bond district and shall include within the boundaries of the district all of the territory within the adjoining county but may not include any of the territory of the abandoned and abolished county attached to the adjoining county. After all money in the several funds of the county applicable to the outstanding warrants has been applied in payment of the outstanding warrants and interest on the warrants and after submitting the question of doing so to an election, the board may issue bonds in an amount sufficient to pay and redeem all warrants remaining outstanding, with interest .

(b) The bonds must be issued in the name of the adjoining county and must contain recitals to the effect that the principal and interest of the bonds will be paid by tax levies against the property situated within the boundaries of the abandoned county as they existed before the territory of the abandoned and abolished county was attached to the county and that none of the property within the territory of the abandoned and abolished county will be subjected to the levies. Except as otherwise provided in this section, the bonds must be issued and sold and tax levies must be fixed and made to pay the principal and interest on the bonds as due in the manner provided by 7-7-107, 7-7-108, 7-7-123, 7-7-124, 7-7-2104, 7-7-2106, and chapter 7, parts 22 and 23, and all the provisions of those sections, so far as applicable , apply to the bonds."

Section 2. Section 7-2-2747, MCA, is amended to read:

"7-2-2747. Details relating to special funding bond district. (1) The board of county commissioners and the county clerk of the county to which the territory of the abandoned and abolished county has been attached and made a part must be, respectively, the board of trustees and the clerk of a special funding bond district created pursuant to 7-2-2745(2), and the county treasurer shall act as the treasurer of the district. The board of trustees shall adopt an appropriate seal for the district.

(2) (a) After the district has been created and established, the board of trustees shall direct the county treasurer to apply all money in the several funds of the abandoned and abolished county, except money in any bond sinking and interest funds, to the payment of warrants issued and outstanding against the funds, with the interest on the warrants. The board of trustees shall , upon the approval of the electors of the district if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, issue and sell bonds of the special funding bond district in an amount sufficient to pay all warrants against the funds remaining outstanding and unpaid, with the interest on the warrants. The proceeds derived from the sale of the bonds may be used only for the payment of the warrants and interest on the warrants.

(b) All taxes levied for the payment of the principal and interest of the bonds, all taxes levied by the abandoned and abolished county for all of its funds (except bond sinking and interest funds) delinquent at the time the county ceased to exist, and all money owing to the abandoned and abolished county from all other sources must be, when collected, paid into a special sinking and interest fund and used for the purpose of paying the principal and interest of the bonds ."

Section 3. Section 7-3-1321, MCA, is amended to read:

"7-3-1321. Authorization to incur indebtedness -- limitation. (1) The consolidated municipality may, upon the approval of the electorate if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, borrow money or issue bonds for any municipal purpose to the extent and in the manner provided by the constitution and laws of Montana for the borrowing of money or issuing of bonds by counties and by cities and towns.

(2) The municipality may not become indebted in any manner or for any purpose to an amount, including existing indebtedness, in the aggregate exceeding 28% of the taxable value of the taxable property in the municipality, as ascertained by the last assessment for state and county taxes prior to incurring the indebtedness. All warrants, bonds, or obligations in excess of the amount given by or on behalf of the municipality is void."

Section 4. Section 7-6-1506, MCA, is amended to read:

"7-6-1506. Use of resort community tax revenue -- bond issue -- pledge. (1) Unless otherwise restricted by the voter-approved tax authorization provided for in 7-6-1504, a resort community may appropriate and expend revenue derived from a resort tax for any activity, undertaking, or administrative service that the municipality is authorized by law to perform, including costs resulting from the imposition of the tax.

(2) A resort community may, upon the approval of its electors if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, issue bonds to provide, install, or construct any of the public facilities, improvements, or undertakings authorized under 7-7-4101, 7-7-4404, and 7-12-4102. Bonds must be issued by a resolution of the governing body, stating the terms, conditions, and covenants of the municipality as the governing body considers appropriate. The bonds may be sold at a discount at a public or private sale.

(3) A resort community may pledge for repayment of bonds issued under this section the revenue derived from a resort tax, special assessments levied for and revenue collected from the facilities, improvements, or undertakings for which the bonds are issued, and any other source of revenue authorized by the legislature to be imposed or collected by the resort community. The bonds do not constitute debt for purposes of any statutory debt limitation, provided that in the resolution issuing the bonds the municipality determines that the resort tax revenue, special assessments levied for and revenue from facilities, improvements or undertakings, or other sources of revenue, if any, pledged to the payment of the bonds will be sufficient in each year to pay the principal and interest on the bonds when due. Bonds may not be issued pledging proceeds of the resort tax for repayment unless the issuance is approved by the electors of the municipality and the governing body determines in the resolution authorizing issuance of the bonds that in any fiscal year the annual revenue expected to be derived from the resort tax, less the amount required to reduce property taxes pursuant to 7-6-1507, equals at least 125% of the average amount of the principal and interest payable from the resort tax revenue on the bonds and any other outstanding bonds payable from the resort tax except any bonds to be refunded upon the issuance of the proposed bonds."

Section 5. Section 7-7-108, MCA, is amended to read:

"7-7-108. Authorization for additional indebtedness for water or sewer systems. (1) For the purpose of constructing a sewer system or procuring a water supply or constructing or acquiring a water system for a city-county consolidated government that owns and controls the water supply and water system and devotes the revenue from the system to the payment of the debt, a city-county consolidated government may, upon the approval of the electors if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, incur an additional indebtedness by borrowing money or issuing bonds.

(2) The additional indebtedness authorized in this section may not in the aggregate exceed 10% over and above the 39% referred to in 7-7-107 of the taxable value of the property subject to taxation as ascertained by the last assessment for state and county taxes if at the time the debt is entered into the city-county consolidated government has in place rates and charges for the use of the system that are adequate to pay the then-current costs of operating and maintaining the system and the payment of the maximum amount of annual principal and interest to come due on the indebtedness in any future fiscal year."

Section 6. Section 7-7-2111, MCA, is amended to read:

"7-7-2111. Authorization to issue construction bonds. The board of county commissioners may, upon the approval of the electorate if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, issue county coupon bonds in an amount sufficient to secure the necessary funds for the procurement of necessary building sites, for the construction of necessary public buildings, and for the construction of bridges and highways ."

Section 7. Section 7-7-2201, MCA, is amended to read:

"7-7-2201. Purposes for which general obligation bonds of county may be issued. The board of county commissioners of every county of the state may, upon the approval of the electorate if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, issue, negotiate, and sell coupon bonds , as more specifically provided in this part, for any of the following purposes:

(1) acquiring land for sites and grounds for a public building or buildings of any kind within the county and under its control that the county has lawful authority to acquire or erect, control, and maintain, except that if the bonds are sold to fund a multicounty jail facility, funds may be used in the county in which the multicounty jail facility is located;

(2) acquiring land for any other public use or activity within the county, under its control and authorized by law;

(3) constructing, erecting, or purchasing necessary public buildings within the county, under its control and authorized by law; making additions to and repairing buildings; and furnishing and equipping the same except that if the bonds are sold to fund a multicounty jail facility, funds may be used in the county in which the multicounty jail facility is located;

(4) building, purchasing, constructing, and maintaining devices intended to protect the safety of the public from open ditches carrying irrigation or other water;

(5) enabling a county to liquidate its indebtedness to another county incident to the creation of a new county or the changing of any county boundary line;

(6) funding, paying, and retiring outstanding county warrants lawfully issued against the county general fund, road fund, bridge fund, or poor fund when:

(a) there is not sufficient money in the fund against which the warrants are drawn to pay and retire the warrants; and

(b) the levying of taxes sufficient to pay and retire the warrants within a period of 3 years would, in the judgment of the board, work a hardship and be an undue burden upon the taxpayers of the county."

Section 8. Section 7-7-2202, MCA, is amended to read:

"7-7-2202. Authority to issue general obligation bonds to satisfy judgments. (1) The board of county commissioners of every county of the state may, upon the approval of the electorate if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, issue, negotiate, and sell coupon bonds , as more specifically provided in this part, for the purpose of funding, paying in full, or compromising, settling, and satisfying any judgment that may have been rendered against the county in a court of competent jurisdiction, including the repayment of tax protests lost by the county, when:

(a) there are not sufficient funds available to pay the judgment; and

(b) sufficient money cannot be raised to satisfy the judgment by an annual tax levy of 10 mills levied on all the taxable property within the county through a period of 3 years.

(2) The resolution providing for the issue of the bonds must recite the facts concerning the judgment to be funded and the terms of any compromise agreement that may have been entered into between the board and the judgment creditor."

Section 9. Section 7-7-2221, MCA, is amended to read:

"7-7-2221. Issuance of certain general obligation bonds without election. Bonds may be issued without submitting the question of issuance to an election, unless the authorization of the electors is required under Article VIII, section 17(3)(b), of the Montana constitution, if the bonds are issued for the purpose of:

(1) enabling a county to liquidate its indebtedness to another county incident to the creation of a new county or the changing of a county boundary line, as set forth in 7-7-2201(5); and

(2) funding, paying in full, or compromising, settling, and satisfying any judgment that may have been rendered against the county in a court of competent jurisdiction, as set forth in 7-7-2202 and 15-1-402."

Section 10. Section 7-7-2302, MCA, is amended to read:

"7-7-2302. Applicability of certain other bond provisions. (1) The provisions of 7-7-2203 through 7-7-2207, 7-7-2209 through 7-7-2211, 7-7-2255 through 7-7-2266, 7-7-2268 through 7-7-2270, and 7-7-2272 through 7-7-2274 apply to refunding bonds issued under this part. However, the board of county commissioners may at its option sell bonds issued under this part at a private negotiated sale or at a public sale conducted pursuant to the provisions of 7-7-2251, 7-7-2252, and 7-7-2254.

(2) If a refunding bond issue refunds only a portion of an outstanding bond issue, the unrefunded portion of the outstanding bond issue and the refunding bond issue must be treated as a single bond issue for the purposes of 7-7-2211."

Section 11. Section 7-7-2402, MCA, is amended to read:

"7-7-2402. Election required to borrow money -- exceptions. (1) Except as provided in subsection (4), the board of county commissioners may not borrow money for any of the purposes mentioned in this title or for any single purpose in an amount exceeding the limits set in subsection (2) without:

(a) first submitting the question of a loan to a vote of the electors of the county; and

(b) obtaining the approval of a majority of the electors of the county.

(2) Based upon the taxable valuation of a county, a county may borrow the following amounts without a vote of the electorate:

(a) up to $500,000 if the county's taxable value is less than $50 million;

(b) up to $750,000 if the county's taxable value is between $50 million and $100 million; and

(c) up to $1 million if the county's taxable valuation is greater than $100 million.

(3) If a majority of the votes cast are in favor of the loan, then the board of county commissioners may enter into the loan, issuing bonds or otherwise as is in the best interests of the county.

(4) It is not necessary to submit to the electors the question of borrowing money:

(a) to refund outstanding bonds; or

(b) unless required under Article VIII, section 17(3)(b), of the Montana constitution, for the purpose of enabling any county to liquidate its indebtedness to another county incident to the creation of a new county or the change of any county boundary lines."

Section 12. Section 7-7-4202, MCA, is amended to read:

"7-7-4202. Special provisions relating to water and sewer systems. (1) Notwithstanding the provisions of 7-7-4201, for the purpose of constructing a sewer system, procuring a water supply, or constructing or acquiring a water system for a city or town that owns and controls the water supply and water system and devotes the revenue from the water supply and water system to the payment of the debt, a city or town may, upon the approval of the electorate if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, incur an additional indebtedness by borrowing money or issuing bonds.

(2) The additional total indebtedness that may be incurred by borrowing money or issuing bonds for the construction of a sewer system, for the procurement of a water supply, or for both of the purposes, including all indebtedness that is contracted and that is unpaid or outstanding, may not in the aggregate exceed 55% over and above the 28%, referred to in 7-7-4201, of the taxable value of the property in the city or town subject to taxation to be ascertained by the last assessment for state and county taxes, plus, for indebtedness to be incurred during fiscal years 1999 through 2008, an additional 33% of the taxable value of class eight property within the city or town for tax year 1995, in each case of class eight property, multiplied by 55% if at the time the debt is entered into the city or town has in place rates and charges for the use of the system that are adequate to pay the then-current costs of operating and maintaining the system and the maximum amount of annual principal and interest to come due on the indebtedness in any future fiscal year.

(3) Rates and charges and service charges may be pledged to the payment of bonds and used to abate taxes levied to pay principal of or interest on the general obligation bonds, to pay the principal or interest, or to reimburse the city or town for the application of any of its funds, including property tax revenue, that were applied to pay the principal or interest. The legislature finds, determines, and declares that if the rates and charges for a water or sewer system or improvement or if special assessments levied for the system or improvement constitute taxes within the meaning of Article VIII, section 17, of the Montana constitution, any of the rates, charges, or assessments constitute specific taxes dedicated to payment of public debt within the meaning of Article VIII, section 17(3)(b), of the Montana constitution and if the rates, charges, or assessments are:

(a) pledged to the payment of general obligation bonds approved by the electors and issued pursuant to this part;

(b) pledged to payment of principal of revenue bonds approved by the electors and issued pursuant to this part, whether the revenue bonds are net revenue bonds or gross revenue bonds;

(c) pledged to restore a reserve for the revenue bonds or to pay operating, maintenance, and replacement costs of the system or improvement; or

(d) the subject of a covenant to increase rates and charges to provide revenue in excess of the annual debt service payable on the revenue bonds if the governing body determines that the covenant is required to market the bonds on favorable terms."

Section 13. Section 7-7-4221, MCA, is amended to read:

"7-7-4221. Election on question of incurring indebtedness -- exception. (1) Except as provided in 15-1-402 and subsection (2) of this section, whenever the governing body of a municipality considers it necessary to issue bonds pledging the general credit of the municipality for any purpose authorized by law, the question of issuing the bonds must be submitted to the registered electors of the city or town.

(2) It is not necessary to submit to the electors the question of issuing refunding bonds to refund bonds issued and outstanding or the question of issuing revenue bonds not pledging the general credit of the municipality under any laws of this state, unless required under Article VIII, section 17(3)(b), of the Montana constitution."

Section 14. Section 7-7-4421, MCA, is amended to read:

"7-7-4421. Authority to issue revenue bonds. In addition to the powers that it may now have, a municipality has power under this part to:

(1) issue its bonds, upon the approval of the electorate if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, to finance in whole or in part the cost of the acquisition, purchase, construction, reconstruction, improvement, betterment, or extension of any undertaking;

(2) pledge to the punctual payment of bonds issued under part 45 or this part and interest on the bonds an amount of the revenue of the undertaking (including improvements, betterments, or extensions constructed or acquired) or of any part of the undertaking sufficient to pay the bonds and interest as they become due, with an amount consisting of any part of the revenue, and create and maintain reasonable reserves for the bonds."

Section 15. Section 7-7-4426, MCA, is amended to read:

"7-7-4426. Authorization for undertaking and issuance of bonds. (1) The acquisition, purchase, construction, reconstruction, improvement, betterment, or extension of any undertaking may be authorized under this part.

(2) Bonds may be authorized to be issued under this part by resolution or resolutions of the governing body of the municipality

when authorized by a majority of the qualified electors voting upon the question at an election ."

Section 16. Section 7-7-4427, MCA, is amended to read:

"7-7-4427. Special election on question of issuing bonds. (1) When the governing body submits the question of issuing bonds to the electorate at a special election, the special election must be conducted by mail ballot, as provided in Title 13, chapter 19, or must be held in conjunction with a regular or primary election and must be noticed and conducted as provided for municipal general obligation bonds in chapter 7, part 42.

(2) The special election must be held not later than the next municipal election that is held after the council or governing body of the municipality has by resolution or resolutions approved the acquisition, purchase, construction, reconstruction, improvement, betterment, or extension of any undertaking as provided in this part has and ordered the special election."

Section 17. Section 7-11-104, MCA, is amended to read:

"7-11-104. Authorization to create interlocal agreements -- issuance of bonds for joint construction. One or more public agencies may contract with any one or more other public agencies to perform any administrative service, activity, or undertaking, that any of the public agencies entering into the contract is authorized by law to perform. If bonds are required for the joint construction of a facility, the bonds must be authorized by the electors of each jurisdiction if authorization is required under Article VIII, section 17(3)(b), of the Montana constitution. The contract must be authorized and approved by the governing body of each party to the contract. The contract must outline fully the purposes, powers, rights, obligations, and responsibilities of the contracting parties."

Section 18. Section 7-12-2101, MCA, is amended to read:

"7-12-2101. Definitions. (1) The term "blocks", means blocks, whether regular or irregular, that are bounded by main streets or by main streets and a boundary line of the city.

(2) The term "board of county commissioners" includes any body or board that under the law is the legislative department of the government of the county.

(3) The term "city" and the term "municipality", as used in this part, must be understood and construed to include all corporations organized for municipal purposes.

(4) The terms "clerk" and "county clerk", as used in this part, include any person or officer who is clerk of the board of county commissioners.

(5) The term "county treasurer", as used in this part, means and includes any person who, under whatever name or title, is the custodian of the funds of the county.

(6) The term "engineer", as used in this part, means the person, firm, or corporation who is designated by the board of county commissioners as the engineer for the improvement.

(7) The term "incidental expenses", as used in this part, includes:

(a) the compensation of the engineer for work done by the engineer;

(b) the cost of printing and advertising, as provided in this part;

(c) interest on warrants of the county issued to pay costs of improvements as provided in this part;

(d) costs of issuance of the bonds or warrants of the special improvement district, including costs of printing the bonds, bond registration fees, attorney fees, financial consultants' fees, a premium for bond insurance, the fees and commissions of any financial institution or other entity providing a letter of credit to secure payment of the bonds, any price paid by the original purchaser of the bonds that is less than the face amount of the bonds, and interest to accrue on bonds or warrants of the special improvement district before assessments levied by the district are collected in amounts and at times sufficient to pay interest; and

(e) a reasonable administrative fee payable to the county for the creation and administration of the district by the county, its officers, and its employees.

(8) The term "main street" means an actually opened street that bounds a block.

(9) The terms "paved" or "repaved", as used in this part, means and includes pavement of stone, whether paving blocks or macadam; of bituminous rock or asphalt; or of wood, brick, or other material, whether patented or not, which the board of county commissioners by rule or resolution shall adopt.

(10) The term "quarter block", as used in this part as to irregular blocks, includes all lots or portions of lots having any frontage on either of two intersecting streets halfway from the intersection to the next main street or, when no main street intervenes, all the way to the boundary line of the city.

(11) The term "street", as used in this part, includes avenues, highways, lanes, alleys, crossings or intersections, courts, and places that have been dedicated and accepted according to the law or in common and undisputed use by the public for a period of not less than 5 years .

(12) The term "street intersection", wherever used in this part, means that parcel of land at the point of juncture or crossing of intersecting streets that lies between lines drawn from corner to corner of all lot lines immediately cornering at the juncture.

(13) The terms "work", "improved", and "improvements", as used in this part, include all work or the securing of property, by purchase or otherwise, mentioned in this part and also the construction, reconstruction, maintenance, and repair of all or any portion of the work."

NEW SECTION. Section 19. Election on special assessments. When the special assessments to be levied in a rural special improvement district constitute taxes within the meaning of Article VIII, section 17, of the Montana constitution and are not otherwise excepted from the provisions of that section, then the board of county commissioners may submit the request of levying the special assessments to the electors of the district as provided in 7-12-2151.

NEW SECTION. Section 20. Elections on pledge of revolving fund. (1) When it is proposed that the revolving fund be pledged to secure bonds and the pledge would constitute new taxes or a tax increase within the meaning of Article VIII, section 17, of the Montana constitution and would not otherwise be excepted from the provisions of that section, then the board of county commissioners may submit the question of pledging the revolving fund to the electors of the county as provided in this section. The board of county commissioners, in submitting the question to the electors for approval, may pose the question of the pledge of the revolving fund to one or more bond issues, to bond issues in a specific aggregate principal amount, or to bond issues issued within a specified period or in any other manner that the board considers appropriate, as long as the increase in taxes is evident.

(2) Instead of the procedure in subsection (1), when it is proposed that the revolving fund be pledged to secure bonds and the pledge would constitute new taxes or a tax increase within the meaning of Article VIII, section 17, of the Montana constitution and would not otherwise be excepted from the provisions of that section, then the board of county commissioners may submit the questions of the issuance of bonds to the electors as provided in subsection (3).

(3) If an election is conducted on the issuance of rural special improvement district bonds pursuant to this section, the ballot proposition may be prepared in substantially the following form, with any changes that the board of county commissioners may consider appropriate:

Shall the board of county commissioners be authorized to issue and sell rural special improvement district bonds of _____ County, in an aggregate principal amount not to exceed _____ dollars ($_____), payable over a period not to exceed ____ (__) years, for the purpose of financing (improvements) in Rural Special Improvement District No. ___, pledging to the payment and security of the bonds, in addition to the special assessments to be levied in the district, the rural special improvement district revolving fund of the county?

Section 21. Section 7-12-2153, MCA, is amended to read:

"7-12-2153. Incidental expenses considered as cost of improvements -- costs for bonds or warrants secured by revolving fund -- district reserve account. (1) Incidental expenses connected with the formation of a special improvement district, including the cost of preparation of plans, specifications, maps, or plats; engineering, superintendence, and inspection; preparation of assessment rolls; and the other incidental expenses described in 7-12-2101(7) are considered a part of the cost of making the improvements within the special improvement district.

(2) If the bonds or warrants are secured by the revolving fund pursuant to 7-12-2185, the original costs of any improvement must include an amount not less than 5% or more than 10% of the principal amount of any bonds or warrants to be issued, which must be deposited in the revolving fund created in 7-12-2181.

(3) (a) Subject to the provisions of subsections (3)(b) through (3)(e), the board of county commissioners may create a district reserve account.

(b) As part of the original costs of the improvements, the board of county commissioners may include an amount, in addition to the amount, if any, specified in subsection (2), not to exceed 10% of the principal amount of any rural special improvement district bonds or warrants issued. The amount must be deposited in a district reserve account created and maintained in the district fund.

(c) If there are insufficient funds in the district bond and interest accounts to pay when due the principal of and the interest on bonds or warrants, the district reserve account, if established, must be used to pay the principal of and the interest on the bonds or warrants issued against the district fund.

(d) If bonds or warrants are secured by the revolving fund, the district reserve account, if established, must be exhausted before a loan may be made from the revolving fund pursuant to 7-12-2183. If the bonds are general obligation bonds of the county, as provided in [section 22], and if collections of special assessments are insufficient for payment on the bonds, the district reserve account, if established, must be used to abate taxes levied to pay principal of or interest on the general obligation bonds, to pay the principal and interest, or to reimburse the county for the application of any of its funds, including property tax revenue, that were applied to pay the principal or interest.

(e) Money remaining in the district reserve account after the principal and interest on all bonds and warrants drawn on the district have been paid or discharged must be transferred to the revolving fund.

(4) The establishment of a district reserve account does not preclude the board of county commissioners from requiring additional security from the owners of real property in the district. The additional security may include a requirement to deposit additional funds into the district reserve account or the revolving fund, an agreement to replenish the district reserve account if funds are withdrawn from the reserve account, or other covenants, agreements, or security devices as the board of county commissioners or the purchaser of the bonds may consider appropriate."

NEW SECTION. Section 22. Issuance of general obligation bonds. (1) In addition to the powers granted to a county in this part to finance improvements, a county may borrow money by the issuance of its general obligation bonds for a term of up to 30 years to provide funds for payment of part or all of the cost of acquisition, construction, improvement, or betterment of any improvements or to refund any bonds outstanding and issued for those purposes.

(2) The general obligation bonds must be authorized, sold, and issued and provisions must be made for their payment in the manner and subject to the conditions and limitations prescribed in Title 7, chapter 7, part 21, except to the extent the conditions and limitations conflict with express provisions of this part. The principal amount of general obligation bonds may not exceed the principal amount of special assessments levied to pay the costs of the improvements financed by the bonds.

(3) A county that issues general obligation bonds to finance the costs of an improvement shall levy special assessments against property in the district as provided in this part in an amount not less than the original principal amount of the bonds. The collections of the special assessments must be applied to abate taxes levied to pay principal of or interest on the general obligation bonds, to pay the principal or interest, or to reimburse the county for the application of any of its funds, including property tax revenue, that were applied to pay the principal or interest.

(4) General obligation bonds of the county may not be secured by the revolving fund, but may be secured by a district reserve account, as provided in 7-12-2153.

Section 23. Section 7-12-2172, MCA, is amended to read:

"7-12-2172. Procedure to issue bonds and warrants. (1) The board of county commissioners shall sell bonds or warrants issued under the provisions of 7-12-2169 and 7-12-2171 through 7-12-2174, in an amount sufficient to pay that part of the total cost and expense of the improvements that is to be assessed against the benefited property within the district, to the highest and best bidder for cash, at a price, including interest to date of delivery, not less than that prescribed by the board in the resolution calling for the sale of the bonds or warrants. The board may fix the minimum price for the bonds or warrants in an amount less than the face value of the bonds or warrants if it determines that the sale is in the best interests of the district and the county.

(2) The bonds or warrants may be sold at a public sale or a private negotiated sale as the board of county commissioners may determine.

(3) If the board conducts a public sale, the provisions of 7-7-4251, 7-7-4252, and 7-7-4254 that relate to the notice of sale, publication of notice, and manner and method of selling bonds by cities and towns, insofar as they are applicable and not in conflict with the provisions of 7-12-2173 and this section, apply to, govern, and control the form of notice of sale, publication of notice, and manner and method of selling bonds or warrants."

Section 24. Section 7-12-2176, MCA, is amended to read:

"7-12-2176. Interest rate on unpaid assessments. (1) Except as provided in subsection (3), the installments of assessments remaining unpaid bear simple interest at an annual rate equal to the sum of:

(a) 1/2 of 1% a year; plus

(b) the average interest rate payable on the outstanding bonds or warrants of the rural special improvement district; plus

(c) at the option of the board of county commissioners, up to an additional 1/2 of 1% a year.

(2) The board of county commissioners may subsequently reduce or eliminate the additional interest rate allowed under subsection (1)(c). If the additional interest rate is reduced or eliminated, it may not be subsequently increased or reimposed.

(3) If the county issues general obligation bonds to finance or refinance the costs of an improvement as provided in [section 22], the installments of assessments remaining unpaid must bear simple interest at an annual rate equal to the sum of:

(a) 2% a year; plus

(b) the average interest rate payable on the outstanding bonds."

Section 25. Section 7-12-2186, MCA, is amended to read:

"7-12-2186. Utilization of excess money in revolving fund. Whenever there is in the revolving fund an amount in excess of 5% of the then-outstanding rural special improvement district bonds and warrants secured by the revolving fund and any additional proceeds of any bonds deposited in the revolving fund as provided in 7-12-2153 and the board considers any part of the excess to be greater than the amount necessary for payment or redemption of maturing bonds or warrants secured by the fund or interest on the fund, the board may order the amount the board considers greater than the amount necessary or any part of that amount transferred to the general fund of the county or to any district reserve account for any bonds then outstanding or proposed to be issued under this part."

Section 26. Section 7-12-4101, MCA, is amended to read:

"7-12-4101. Definitions. Unless the context indicates otherwise, as used in this part and part 42, the following definitions apply:

(1) "Blocks" means blocks, whether regular or irregular, that are bounded by main streets or by main streets and a boundary line of the city.

(2) "City" or "municipality" means all corporations organized for municipal purposes.

(3) "City clerk" or "clerk" means any person or officer who is clerk of the council.

(4) "City council" means any body or board that is the legislative department of the government of the city.

(5) "City engineer" means any person or officer who is responsible for the maintenance and improvement of the streets in a city or the person, firm, or corporation designated by the governing body as the engineer for the improvement.

(6) "City treasurer" means any person who, under whatever name or title, is the custodian of the funds of the municipality.

(7) "Incidental expenses" means:

(a) the compensation of the city engineer for work done by the city engineer;

(b) the cost of printing and advertising as provided in part 42 and this part;

(c) the compensation of persons appointed by the city engineer to take charge of and superintend any of the work mentioned in this part;

(d) the expenses of making the assessment for any work authorized by this part;

(e) interest on warrants of the city issued to pay costs of improvements;

(f) costs of issuance of bonds or warrants of the special improvement district, including costs of printing the bonds, bond registration fees, attorney fees, financial consultants' fees, a premium for bond insurance, the fees and commissions of any financial institution or other entity providing a letter of credit to secure payment of the bonds, and any price paid by the original purchaser of the bonds that is less than the face amount of the bonds;

(g) interest to accrue on bonds or warrants of the special improvement district before assessments levied in the district are collected in amounts and at times sufficient to pay the interest; and

(h) a reasonable administrative fee payable to the city for the creation and administration of the district by the city, its officers, and employees.

(8) "Main street" means an actually opened street that bounds a block.

(9) "Paved" or "repaved" means pavement of stone (whether paving blocks or macadam), of bituminous rock or asphalt, or of wood, brick, or other material (whether patented or not) that the city council adopts by ordinance or resolution.

(10) "Quarter-block", when used in reference to irregular blocks, means all lots or portions of lots having any frontage on either of two intersecting streets halfway from the intersection to the next main street or, when a main street does not intervene, all the way to a boundary line of the city.

(11) "Street" means avenues, highways, lanes, alleys, crossings or intersections, courts, and places that have been dedicated and accepted according to the law or in common and undisputed use by the public for a period of not less than 5 years.

(12) "Street intersection" means that parcel of land at the point of juncture or crossing of intersecting streets that lies between lines drawn from corner to corner of all lot lines immediately cornering at the juncture.

(13) "Work", "improved", or "improvement" means all work or the securing of property, by purchase or otherwise, mentioned in part 42 and this part and also the construction, reconstruction, and repair of all or any portion of the work."

NEW SECTION. Section 27. Election on special assessments. When the special assessments to be levied in a special improvement district constitute taxes within the meaning of Article VIII, section 17, of the Montana constitution and are not otherwise excepted from the provisions of that section, then the city or town council may submit the question of levying the special assessments to the electors in the district as provided in 7-12-4161.

NEW SECTION. Section 28. Election on pledge of revolving fund. (1) When it is proposed that the revolving fund be pledged to secure bonds and the pledge would constitute new taxes or a tax increase within the meaning of Article VIII, section 17, of the Montana constitution and would not otherwise be excepted from the provisions of that section, then the city or town council may submit the question of pledging the revolving fund to the electors of the city or town as provided in this section. The city or town council, in submitting the question to the electors for approval, may pose the question of the pledge of the revolving fund to one or more bond issues, to bond issues in a specified aggregate principal amount, or to bonds issued within a specified period or in any other manner that the city or town council considers appropriate, as long as the increase in taxes is evident.

(2) Instead of the procedure in subsection (1), when it is proposed that the revolving fund be pledged to secure bonds and the pledge would constitute new taxes or a tax increase within the meaning of Article VIII, section 17, of the Montana constitution and would not otherwise be excepted from the provisions of that section, then the city or town council may submit the questions of the issuance of bonds to the electors as provided in subsection (3).

(3) If an election is conducted on the issuance of special improvement district bonds pursuant to this section, the ballot proposition may be prepared in substantially the following form, with any changes that the city or town council may consider appropriate:

Shall the (city) (town) council be authorized to issue and sell special improvement district bonds of the (city) (town) of _____, in an aggregate principal amount not to exceed _____ dollars ($_____), payable over a period not to exceed ____ (__) years, for the purpose of financing (improvements) in Special Improvement District No. ___, pledging to the payment and security of the bonds, in addition to the special assessments to be levied in the district, the special improvement district revolving fund of the (city) (town)?

Section 29. Section 7-12-4169, MCA, is amended to read:

"7-12-4169. Incidental expenses considered as cost of improvements -- costs for bonds or warrants secured by revolving fund -- district reserve account. (1) Incidental expenses connected with the formation of a special improvement district, including costs of preparation of plans, specifications, maps, and plats; engineering, superintendence, and inspection; preparation of assessment rolls; and the other incidental expenses described in 7-12-4101(7) are considered a part of the cost of making the improvements within the special improvement district.

(2) If the bonds or warrants are secured by the revolving fund under 7-12-4225, the costs of any improvement must include an amount equal to not less than 5% or more than 10% of the principal amount of any bonds or warrants to be issued, which must be deposited in the revolving fund created in 7-12-4221.

(3) (a) Subject to the provisions of subsections (3)(b) through (3)(e), the city or town council may create a district reserve account.

(b) As part of the original costs of the improvements, the city or town council may include an amount, in addition to the amount, if any, specified in subsection (2), not to exceed 10% of the principal amount of any special improvement district bonds or warrants issued. The amount must be deposited in a district reserve account created and maintained in the district fund.

(c) If there are insufficient funds in the district bond and interest accounts to pay when due the principal of and the interest on bonds or warrants, the district reserve account, if established, must be used to pay the principal of and the interest on the bonds or warrants issued against the district fund.

(d) If bonds or warrants are secured by the revolving fund, the district reserve account, if established, must be exhausted before a loan may be made from the revolving fund pursuant to 7-12-4223. If the bonds are general obligation bonds of the city or town, as provided in [section 30], and if collections of special assessments are insufficient for payments on the bonds, the district reserve account, if established, must be used to abate taxes levied to pay principal of or interest on the general obligation bonds, to pay the principal and interest, or to reimburse the city or town for the application of any of its funds, including property tax revenue, that were applied to pay the principal or interest. If the bonds are general obligation bonds of the city or town to which the taxing power of the city or town is not pledged as provided in [section 30] and if collections of special assessments are insufficient for payment on the bonds, the district reserve account, if established, must be used to pay the principal of and interest on the bonds or to reimburse the city or town for the application of any of its funds, including general fund revenue, that were applied to pay the principal or interest.

(e) Money in the district reserve account may be used to pay the final principal and interest payment on bonds or warrants.

(4) The establishment of a district reserve account does not preclude the city or town council from requiring additional security from owners of real property in the district. The additional security may include a requirement to deposit additional funds into the district reserve account or the revolving fund, an agreement to replenish the district reserve account if funds are withdrawn from the reserve account, or other covenants, agreements, or security devices as the city or town council or the purchaser of the bonds may consider appropriate."

NEW SECTION. Section 30. Issuance of general obligation bonds. (1) In addition to the powers granted to a city or town in part 42 and this part to finance improvements, a city or town may borrow money by the issuance of its general obligation bonds for a term of up to 30 years to provide funds for payment of part or all of the cost of acquisition, construction, improvement, or betterment of any improvements or to refund any bonds outstanding and issued for those purposes.

(2) The general obligation bonds must be authorized, sold, and issued and provisions must be made for their payment in the manner and subject to the conditions and limitations prescribed in Title 7, chapter 7, part 41, except to the extent the conditions and limitations conflict with express provisions of this part. The principal amount of general obligation bonds may not exceed the principal amount of special assessments levied to pay the costs of the improvements financed by the bonds.

(3) A city or town that issues general obligation bonds to finance the costs of an improvement shall levy special assessments against property in the district as provided in this part in an amount not less than the original principal amount of the bonds. The collections of the special assessments must be applied to abate taxes levied to pay principal of or interest on the general obligation bonds, to pay the principal or interest, or to reimburse the city or town for the application of any of its funds, including property tax revenue, that were applied to pay the principal or interest.

(4) General obligation bonds of the city or town may not be secured by the revolving fund, but may be secured by a district reserve account, as provided in 7-12-4169.

Section 31. Section 7-12-4189, MCA, is amended to read:

"7-12-4189. Simple interest on assessments. (1) Except a provided in subsection (3), upon all special assessments and taxes levied and assessed in accordance with any of the provisions of this part, simple interest must be charged at an annual rate equal to the sum of:

(a) 1/2 of 1% a year; plus

(b) the average interest rate payable on the outstanding bonds or warrants of the special improvement district; plus

(c) at the option of the city or town council, up to an additional 1/2 of 1% a year.

(2) The city or town council may subsequently reduce or eliminate the additional interest rate allowed under subsection (1)(c). If the additional interest rate is reduced or eliminated, it may not be subsequently increased or reimposed.

(3) If the city or town issues general obligation bonds to finance or refinance the costs of an improvement as provided in [section 30], the installments of assessments remaining unpaid must bear simple interest at an annual rate equal to the sum of:

(a) 2% a year; plus

(b) the average interest rate payable on the outstanding bonds.

(4) The treasurer, in collecting the special assessment taxes if the taxes are payable in one installment, shall collect the interest as may be shown to be due on the taxes by the resolution levying the assessment. If the assessment is payable in installments, the treasurer shall, at the time of collecting the first installment, collect the interest as may be shown to be due on the assessment by the resolution levying the assessment, and the treasurer shall collect with each subsequent installment interest on the amount remaining unpaid."

Section 32. Section 7-12-4204, MCA, is amended to read:

"7-12-4204. Procedure to issue bonds and warrants. (1) The city or town council shall sell bonds or warrants issued under the provisions of 7-12-4201, in an amount sufficient to pay that part of the total cost and expense of the improvements that is to be assessed against benefited property within the district, to the highest and best bidder for cash at a price, including interest to date of delivery, not less than that prescribed by the city or town council in the resolution calling for the sale of the bonds or warrants. The city or town council may fix the minimum price for the bonds or warrants in an amount less than face value if it determines that the sale is in the best interests of the district and the city or town.

(2) The bonds or warrants may be sold at a public sale or a private negotiated sale as the governing body may determine.

(3) If the governing body conducts a public sale of the bonds, the provisions of 7-7-4251, 7-7-4252, and 7-7-4254 with regard to the notice of sale, publication of notice, and manner and method of selling bonds by cities and towns, insofar as the same are applicable and not in conflict with the provisions of 7-12-4205 and this section, apply to, govern, and control the form of notice of sale, publication of notice, and manner and method of selling the bonds or warrants."

Section 33. Section 7-12-4227, MCA, is amended to read:

"7-12-4227. Utilization of excess money in revolving fund. Whenever there is an amount in the revolving fund in excess of the amount deposited in the revolving fund under 7-12-4169(2) and in excess of 5% of the outstanding special improvement district bonds and warrants and any additional proceeds of any bonds deposited in the revolving fund as provided in 7-12-4169 and the council considers any part of the excess to be greater than the amount necessary for payment or redemption of maturing bonds or warrants secured by the fund or interest on the bonds, the council may:

(1) by vote of all of its members at a meeting called for that purpose, order the amount of the excess that is greater than the amount necessary for the payment or redemption of maturing bonds or warrants secured by the fund or interest on the bonds or any part of the fund transferred to the general fund of the city or town; or

(2) use the excess that is greater than the amount necessary for the payment or redemption of maturing bonds or warrants secured by the fund or interest on the bonds or any part of the fund for transfer to any district reserve account of any bonds then outstanding or proposed to be issued under this part or for the purchase of property at sales for delinquent taxes or assessments, or both, or property that has been struck off or sold to the county for delinquent taxes or assessments, or both, and against which property there is any unpaid assessment for special improvements because there are outstanding special improvement district bonds or warrants of the city or town."

Section 34. Section 7-12-4341, MCA, is amended to read:

"7-12-4341. Financing of lighting district improvements. All costs and expenses incurred in the construction of the improvements specified in this part must be paid for by special improvement lighting district bonds, approved by the electors of the district, or by warrants. The bonds or warrants must be in a form as may be prescribed by ordinance and must be drawn against a fund to be known as the special improvement lighting district No. .... fund."

Section 35. Section 7-13-236, MCA, is amended to read:

"7-13-236. Revenue bonds and obligations -- definitions. (1) The commissioners may issue revenue bonds, including refunding bonds, or borrow money for the acquisition of property, construction of improvements, or purchase of equipment or to pay costs related to planning, designing, and financing a solid waste management system.

(2) Revenue bonds may be issued in a form and upon terms as provided in 7-7-2501.

(3) Bonds or loans may be payable from any revenue of the solid waste management district, including revenue from:

(a) service charges authorized in 7-13-233;

(b) grants or contributions from the state or federal government; or

(c) other sources.

(4) The commissioners in the resolution authorizing the issuance of bonds pursuant to this section may specify all or a portion of the revenue of the solid waste management district to be pledged to the payment of or security for the bonds.

(5) As used in this part:

(a) "gross revenue bonds" means revenue bonds secured by a pledge of all revenue of a solid waste management district; and

(b) "net revenue bonds" means revenue bonds secured by a pledge of the revenue of a solid waste management district after payment of the operating and maintenance expenses of the solid waste management district and, if desired, the establishment of reasonable reserves for the bonds and the payment of other specified costs of the solid waste management district."

Section 36. Section 7-13-237, MCA, is amended to read:

"7-13-237. Solid waste management district bonds authorized. (1) With the approval of the board of county commissioners and upon the authorization of the electors of the district, a solid waste management district may borrow money by the issuance of its bonds to:

(a) provide funds for payment of part or all of the cost of acquisition of property, construction of improvements, and purchase of equipment;

(b) provide an adequate working capital; and

(c) pay costs related to the planning, designing, and financing of a solid waste management system.

(2) The amount of bonds issued for the purposes provided for in subsection (1) and outstanding at any time may not exceed 22.5% of the taxable value of the property in the district as ascertained by the last assessment for state and county taxes prior to the issuance of the bonds.

(3) Each year at the time of levying county taxes, the board of county commissioners shall fix and levy a tax upon all property within the district sufficient to raise the amount necessary for the payment of bonded indebtedness.

(4) The bonds must be authorized, sold, and issued and provisions must be made for their payment in the manner and subject to the conditions and limitations prescribed for bonds of school districts in Title 20, chapter 9, part 4. Rates and charges and service charges may be pledged to the payment of the bonds and used to abate taxes levied to pay principal of or interest on the general obligation bonds, to pay the principal or interest, or to reimburse the district for the application of any of its funds, including property tax revenue, that were applied to pay the principal or interest."

Section 37. Section 7-13-308, MCA, is amended to read:

"7-13-308. Revenue bonds and obligations. (1) A joint district may borrow money for any purpose provided in this part and issue bonds, including refunding bonds, in a form and upon terms as it may determine, payable from any revenue of the joint district, including revenue from:

(a) service charges authorized in 7-13-307;

(b) grants or contributions from the state or federal government; or

(c) other sources.

(2) The bonds may be issued by resolution of the joint district after an election, if an election is required under Article VIII, section 17(3)(b), of the Montana constitution, and without any limitation of the amount, except that bonds may not be issued at any time if the total amount of principal and interest to become due in any year on the bonds and on any then-outstanding bonds for which revenue from the same source or sources is pledged exceeds the amount of the revenue to be received in that year as estimated in the resolution authorizing the issuance of the bonds. The board shall take all action necessary and possible to impose, maintain, and collect rates, charges, rentals, and taxes, if any are pledged, sufficient to make the revenue from the pledged source in a year at least equal to the amount of the principal and interest due in that year.

(3) The bonds may be sold at public or private sale and may bear interest as provided in 17-5-102. Except as otherwise provided in this part, bonds issued pursuant to this part by a joint district may be payable in principal and interest solely from revenue of the joint district and must state on their face the applicable limitations or restrictions regarding the source from which the principal and interest are payable.

(4) Bonds issued by a joint district under this part are issued for an essential public and governmental purpose by a political subdivision within the meaning of 15-30-111(2)(a).

(5) For the security of any bond, the joint district may by resolution make and enter into any covenant, agreement, or indenture. The sums required from time to time to pay principal and interest and to create and maintain a reserve for the bonds may be paid from any revenue referred to in this part prior to the payment of current costs of operation and maintenance of the solid waste management system."

Section 38. Section 7-13-2331, MCA, is amended to read:

"7-13-2331. Issuance of general obligation bonds. (1) In addition to the powers granted to a district in this part to finance facilities and improvements, a district may issue general obligation bonds for a term of up to 40 years to:

(a) provide funds to pay part or all of the cost of acquisition, construction, or improvement of facilities; or

(b) refund any bonds issued for the acquisition, construction, or improvement of facilities.

(2) General obligation bonds issued pursuant to this section must be authorized, sold, and issued, with provisions for their payment, in the manner and subject to the conditions prescribed for bonds of school districts in Title 20, chapter 9, part 4, except to the extent that those conditions conflict with the express provisions of part 22 or this part.

(3) Nothing in this section prohibits a district from imposing rates or other charges for the use of facilities that have been financed in whole or part by general obligation bonds under this section if the revenue from the rates or charges is used to abate taxes that have been levied to pay the principal or interest on the general obligation bonds or is used to pay the principal or interest on other bonded indebtedness of the district.

(4) The legislature finds, determines, and declares that if the revenue from rates and charges pledged to the payment of general obligation bonds under this section constitutes taxes within the meaning of Article VIII, section 17, of the Montana constitution, any of the rates, charges, or assessments constitute specific taxes dedicated to payment of public debt within the meaning of Article VIII, section 17(3)(b), of the Montana constitution."

Section 39. Section 7-13-2510, MCA, is amended to read:

"7-13-2510. Powers of district. In addition to any powers granted pursuant to 7-1-201, a television district organized under this part, acting through its board of trustees, may:

(1) perform all the acts and take all the necessary or proper steps to ensure that there will be a fair, efficient, and equitable distribution of television services within the area in order that all persons within the service area are supplied by means of an appropriate electrical or electronic system for television program distribution. The authorized system must provide flexibility to permit radical improvements in technical quality without rendering receivers in the area inoperative, but discontinuance of service by the district for improvements or repairs for a temporary period may not be construed as rendering the system inoperative.

(2) if necessary or proper in the furtherance of the objects of this part, acquire, build, construct, repair, own, maintain, and operate any necessary stations transmitting simultaneous visual and aural signals intended to be received by the general public, relay stations, pickup stations, or any other necessary electrical or electronic system;

(3) make contracts to compensate any owner of land or other property for the use of the land or property for the purposes of this part;

(4) make contracts with the United States, any state or municipality, or any department or agency of those entities for carrying out the general purposes for which the district is formed;

(5) acquire, by gift, devise, bequest, lease, or purchase, real and personal property, tangible or intangible, including lands, rights-of-way, and easements, necessary or convenient for its purposes;

(6) make contracts of any lawful nature (including labor contracts or those for employees' benefits) and employ engineers, laboratory personnel, attorneys, other technical or professional assistants, and any other assistants or employees necessary to carry out the provisions of this part;

(7) issue warrants, payable at the time stated in the warrants, to evidence the obligation to repay money borrowed or any other obligation incurred by the district. Warrants draw interest at a rate fixed by the board, payable annually or semiannually as the board may prescribe.

(8) contract indebtedness or borrow money for corporate purposes and, if approved by the electors of the district if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, issue revenue bonds to be repaid from rates and charges, bearing interest as provided in 17-5-102 payable semiannually. The bonds may not be sold for less than par and accrued interest.

(9) prescribe tax rates for the providing of services throughout the area in accordance with the provisions of this part;

(10) prescribe installation or ready-to-serve charges to be used for any costs connected with preparation, acquisition, or construction of the system;

(11) apply for, accept, and be the holder of any permit or license issued by or required under federal or state law; and

(12) provide FM translator services if authorized as provided in 7-13-2512."

Section 40. Section 7-14-235, MCA, is amended to read:

"7-14-235. Transportation district bonds authorized. A transportation district may borrow money by the issuance of general obligation or revenue bonds or a combination to provide funds for the district upon the approval of the electors, if approval is required under Article VIII, section 17(3)(b), of the Montana constitution."

Section 41. Section 7-14-1133, MCA, is amended to read:

"7-14-1133. Bonds and obligations. (1) Except for providing financial support to a private development organization, including a corporation organized under Title 32, chapter 4, whose purpose is to advance the economic development of its jurisdiction and of the state and its citizens, an authority may borrow money for any of its corporate purposes and issue bonds, including refunding bonds, for any of its corporate purposes. The bonds may be in the form and upon terms as it determines, payable out of any revenue of the authority, including revenue derived from:

(a) any port or transportation and storage facility;

(b) taxes levied pursuant to 7-14-1131 or 67-10-402;

(c) grants or contributions from the federal government; or

(d) other sources.

(2) The bonds may be issued by resolution of the authority, after approval at an election, if an election is required under Article VIII, section 17(3)(b), of the Montana constitution and without any limitation of amount, except that bonds may not be issued at any time if the total amount of principal and interest to become due in any year on the bonds and on any then outstanding bonds for which revenue from the same source is pledged exceeds the amount of revenue to be received in that year, as estimated in the resolution authorizing the issuance of the bonds. The authority shall take all action necessary and possible to impose, maintain, and collect rates, charges, and rentals and to request taxes, if any are pledged, sufficient to make the revenue from the pledged source in that year at least equal to the amount of principal and interest due in that year.

(3) The bonds may be sold at public or private sale and may bear interest as provided in 17-5-102. Except as otherwise provided in this part, any bonds issued pursuant to this part by an authority may be payable as to principal and interest solely from revenue of the authority or from particular port, transportation, storage, or other facilities of the authority. The bonds must state on their face the applicable limitations or restrictions regarding the source from which principal and interest are payable.

(4) Bonds issued by an authority, county, or municipality pursuant to the provisions of this part are declared to be issued for an essential public and governmental purpose by a political subdivision within the meaning of 15-30-111(2)(a).

(5) (a) For the security of bonds, the authority, county, or municipality may by resolution make and enter into any covenant, agreement, or indenture and may exercise any additional powers authorized to be exercised by a municipality under Title 7, chapter 7, parts 44 and 45. The sums required from time to time to pay principal and interest and to create and maintain a reserve for the bonds may be paid from any revenue referred to in this part, prior to the payment of current costs of operation and maintenance of the facilities.

(b) As further security for the bonds, the authority, with the approval of the governing body of the county or municipality that created the authority, may pledge, lease, sell, mortgage, or grant a security interest in all or any portion of its port, transportation, storage, or other facilities, whether or not the facilities are financed by the bonds. The instrument effecting the pledge, lease, sale, mortgage, or security interest may contain any agreements and provisions customarily contained in instruments securing bonds, as the commissioners of the authority consider advisable. The provisions must be consistent with this part and are subject to and must be in accordance with the laws of this state governing mortgages, trust indentures, security agreements, or instruments. The instrument may provide that in the event of a default in the payment of principal or interest on the bonds or in the performance of any agreement contained in the proceedings authorizing the bonds or instrument, the payment or performance may be enforced by mandamus or by the appointment of a receiver in equity. The receiver may collect charges, rental, or fees and may apply the revenue from the mortgaged property or collateral in accordance with the proceedings or the provisions of the instrument.

(6) Nothing in 7-14-1134 or this section may be construed to limit the use of port authority revenue, including federal and state money as described in 7-14-1136, to make grants and loans or to otherwise provide financial and other support to private development organizations, including corporations organized under the provisions of the development corporation act in Title 32, chapter 4. The credit of the state, county, or municipal governments or their agencies or authorities may not be pledged to provide financial support to the development organizations."

Section 42. Section 7-14-1636, MCA, is amended to read:

"7-14-1636. Bonds and obligations. (1) An authority may borrow money for any of its corporate purposes and issue bonds for its purposes, including refunding bonds, in a form and upon terms as it determines, payable out of any revenue of the authority, including revenue derived from:

(a) a railroad;

(b) taxes levied pursuant to 7-14-1632;

(c) grants or contributions from the federal government; or

(d) other sources.

(2) The bonds may be issued by resolution of the authority, after approval at an election, if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, and without any limitation of amount, except that bonds may not be issued at any time if the total amount of principal and interest to become due in a year on the bonds and on any then-outstanding bonds for which revenue from the same source is pledged exceeds the amount of the revenue to be received in that year, as estimated in the resolution authorizing the issuance of the bonds. The authority shall take all action necessary and possible to impose, maintain, and collect rates, charges, and rentals and to request taxes, if any are pledged, sufficient to make the revenue from the pledged source in the year at least equal to the amount of principal and interest due in that year.

(3) The bonds may be sold at public or private sale and may bear interest as provided in 17-5-102. Bonds issued by an authority pursuant to this part may be payable as to principal and interest solely from revenue of the authority and must state on their face the applicable limitations or restrictions regarding the source from which the principal and interest are payable.

(4) Bonds issued by an authority pursuant to the provisions of this part are declared to be issued for an essential public and governmental purpose by a political subdivision within the meaning of 15-30-111(2)(a).

(5) For the security of the bonds, the authority may by resolution make and enter into any covenant, agreement, or indenture and may exercise any additional powers authorized to be exercised by a municipality under Title 7, chapter 7, parts 44 and 45. The sums required from time to time to pay principal and interest and to create and maintain a reserve for the bonds may be paid from the revenue referred to in this part, prior to the payment of current costs of operation and maintenance of the facilities."

Section 43. Section 7-14-2522, MCA, is amended to read:

"7-14-2522. County road and bridge bonds authorized. (1) Each board may, upon the approval of the electorate if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, issue, negotiate, and sell coupon bonds on the credit of the county:

(a) to construct or improve or acquire rights-of-way for public highways or bridges;

(b) to refund, pay, and redeem optional, redeemable, or maturing highway or bridge bonds when there are not sufficient funds available and it is considered in the best interests of the county to refund the bonds.

(2) The bonds must be issued as provided in 7-7-2201."

Section 44. Section 7-14-2732, MCA, is amended to read:

"7-14-2732. Payment of assessments -- bond issue. (1) The board shall provide for the payment of assessments either on the immediate payment plan or by installments.

(2) Upon approval by the electors of the district if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, the board shall issue local improvement district bonds and coupons for each installment."

Section 45. Section 7-14-4109, MCA, is amended to read:

"7-14-4109. Power to order certain improvements without creation of special improvement district. (1) Without the formation of a special improvement district, the city council may order sidewalks, curbs, or gutters constructed in front of any lot or parcel of land and may order alley approaches constructed or replaced adjacent to any lot or parcel of land.

(2) Whenever the council orders any sidewalk, curb, or gutter constructed or any alley approach constructed or replaced, the order must be entered upon the minutes of the council and must name the street along which the sidewalk, curb, or gutter is to be constructed or along which the alley approach is to be constructed or replaced.

(3) After the making of the order, written notice must be given to the owner or agent of the owner and to any purchaser under contract for deed of the property or the owners or agents of all adjacent owners having access to their properties by the alley approach, as appropriate, in a manner that the council may direct.

(4) If the owner or agent of the owner of the lot or parcel of land or if the owners or agents of all adjacent owners having access to their property by the alley approach fail or neglect for a period of 30 days after the date of service of the notice to cause the sidewalk, curb, or gutter to be constructed or to cause the alley approaches to be constructed or replaced, the city may construct or cause the sidewalk, curb, or gutter to be constructed or may construct or cause the alley approach to be constructed and shall assess the cost , including engineering costs and the costs enumerated in 7-12-4121 and 7-12-4169, against the property in front of which the same is constructed or against the lots or parcels of land having access via the constructed alley approaches. The collection of the assessed costs must be as provided in 7-12-4181 through 7-12-4191.

(5) When a sidewalk, curb, or gutter or an alley approach is constructed by or under direction of the city council, payment for the construction must be made by special warrants in a form that may be prescribed by ordinance and drawn against a fund to be known as the special sidewalk, curb, and gutter fund or the special alley approach fund, as appropriate . The bonds or warrants may be issued in the same manner and subject to the same conditions and benefits as bonds issued under Title 7, chapter 12, parts 41 and 42, treating the property to be assessed for the costs of improvements as comprising, for improvement purposes, the special improvement district referenced in the provisions, except to the extent the provisions are expressly inconsistent with section 7-14-4110 and this section.

"

Section 46. Section 7-14-4110, MCA, is amended to read:

"7-14-4110. Assessments for costs. (1) The payment of assessments to defray the cost of construction of the sidewalks, curbs, and gutters referred to in 7-14-4109 or any combination of sidewalks, curbs, and gutters or alley approaches may be spread over a term of not to exceed 20 years.

(2) The city council shall, annually before the first Monday of October, pass and adopt a resolution levying an assessment and tax against each lot or parcel of land in front of which sidewalks, curbs, and gutters or any combination of sidewalks, curbs, and gutters have been constructed under orders of the city council or each lot or parcel of land having access to the property via the alley approach that has been constructed under orders of the city council. The resolution levying the assessment must be in every manner prepared and certified the same as resolutions levying assessments for the making of improvements in special improvement districts."

Section 47. Section 7-14-4401, MCA, is amended to read:

"7-14-4401. Provision of bus service. Whenever a city or town is not being served by a bus company or operator operating on a regular schedule and under the jurisdiction of the public service commission or if service is likely to be discontinued in the immediate future, the city or town council of the incorporated city or town:

(1) may, if authorized by the electors of the city or town if authorization is required under Article VIII, section 17(3)(b), of the Montana constitution, contract an indebtedness by borrowing money or issuing bonds for the purchase, development, operation, or leasing of buses and buslines for the transportation of passengers within the corporate limits of the cities and towns and to operate the buses to any point or points beyond these limits not to exceed 8 miles measured along the route of the busline;

(2) contract for, enter into a lease for, or enter a lease and operating agreement with an independent carrier or independent carriers for the transportation of passengers by bus within the corporate limits of the city or town and to and from any point beyond the city or town limits not to exceed 8 miles measured along the route of the busline ."

Section 48. Section 7-14-4502, MCA, is amended to read:

"7-14-4502. Bond issue to finance parking areas. A city or town council may:

(1) if authorized by the electorate if authorization is required under Article VIII, section 17(3)(b), of the Montana constitution, issue bonds or other securities for the payment of the lots or lands and facilities referred to in 7-14-4501, payable in whole or in part from the revenue of any parking lots or areas or parking facilities or from other sources; and

(2) pledge, place a charge upon, or otherwise make available as additional security for the payment of the bonds or securities revenue from street parking meters owned or owned and controlled by the city or town."

Section 49. Section 7-14-4716, MCA, is amended to read:

"7-14-4716. Procedure to issue bonds. (1) When the governing body determines that improvement bonds are desirable, it shall submit the issue to the electorate if required by Article VIII, section 17(3)(b), of the Montana constitution. A description of the bonds, including the manner of repayment, must be inserted in all notices of the proceedings required to be published or posted. A description of the bonds must be included in the warrant.

(2) All other proceedings for the work, up to and including the approval of the assessment by the governing body and including delivery of the assessment to the contractor, demand of payment of the several assessments, and the return and record of the assessments must be in all respects as provided in chapter 12, parts 41 and 42, and this part."

Section 50. Section 7-15-4301, MCA, is amended to read:

"7-15-4301. Authorization to issue urban renewal bonds, industrial infrastructure development bonds, and refunding bonds. (1) A municipality may:

(a) issue bonds to finance the undertaking of any urban renewal project or industrial infrastructure development project under part 42 and this part, including the payment of principal and interest upon any advances for surveys and plans for urban renewal projects and industrial infrastructure development projects; and

(b) issue refunding bonds for the payment or retirement of bonds previously issued by it.

(2) The bonds may not pledge the general credit of the municipality and must be made payable, as to both principal and interest, solely from the income, proceeds, revenue, and funds of the municipality derived from or held in connection with its undertaking and carrying out of urban renewal projects or industrial infrastructure development projects under part 42 and this part, including the tax increment received and pledged by the municipality pursuant to 7-15-4282 through 7-15-4292, and, if the income, proceeds, revenue, and funds of the municipality are insufficient for the payment, from other revenue of the municipality pledged to the payment. Payment of bonds, both as to principal and interest, may be further secured by a pledge of any loan, grant, or contribution from the federal government or other source in aid of any urban renewal projects or industrial infrastructure development projects of the municipality under part 42 and this part or by a mortgage on all or part of any projects.

(3) Bonds issued under this section must be authorized by resolution or ordinance of the local governing body and by the electors if authorization is required under Article VIII, section 17(3)(b), of the Montana constitution."

Section 51. Section 7-15-4302, MCA, is amended to read:

"7-15-4302. Authorization to issue general obligation bonds. (1) For the purpose of 7-15-4267 or for the purpose of aiding in the planning, undertaking, or carrying out of an urban renewal project or an industrial infrastructure development project of a municipality, the municipality, in addition to any authority to issue bonds pursuant to 7-15-4301, may issue and sell its general obligation bonds upon approval of the electorate if approval is required under Article VIII, section 17(3)(b), of the Montana constitution.

(2) Any bonds issued pursuant to this section must be issued in the manner and within the limitations prescribed by the laws of this state for the issuance and authorization of bonds by the municipality for public purposes generally.

(3) Aiding in the planning, undertaking, or carrying out of an approved urban renewal project or an industrial infrastructure development project is considered a single purpose for the issuance of general obligation bonds, and the proceeds of the bonds authorized for any project may be used to finance the exercise of any and all powers conferred upon the municipality by part 42 and this part that are necessary or proper to complete the project in accordance with the approved plan or industrial district ordinance and any modification of the plan or ordinance adopted by the local governing body."

Section 52. Section 7-15-4501, MCA, is amended to read:

"7-15-4501. Authorization to issue bonds. The authority may, upon the approval of the electors of the municipality if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, issue, from time to time , for any of its corporate purposes:

(1) bonds on which the principal and interest are payable:

(a) exclusively from the income and revenue of the housing project financed with the proceeds of the bonds or with the proceeds together with the proceeds of a grant from the federal government to aid in financing the construction of a housing project; or

(b) exclusively from the income and revenue of certain designated housing projects, whether or not they were financed in whole or in part with the proceeds of the bonds; provided, however, that the credit of the authority may not be pledged to the payment of the bonds, but the bonds are payable only (and the bonds must so state on their face) from the revenue of the designated housing project or projects and the funds received from the sale or disposal of the projects and, if the authority so determines, must be additionally secured by a trust indenture pledging the revenue or, in certain instances as provided in this part, by a mortgage of the property comprising the designated housing project or projects and the revenue from the projects;

(2) bonds for the payment of the principal and interest of which the credit of the authority is pledged and that may be additionally secured by a pledge of the revenue of the authority or any part of the revenue pursuant to a resolution or trust indenture of the authority or, in certain instances as provided in this part, may be additionally secured by a mortgage of the property and revenue of the authority or any part of the property and revenue."

Section 53. Section 7-34-2131, MCA, is amended to read:

"7-34-2131. Hospital district bonds and notes authorized. (1) (a) A hospital district may borrow money by the issuance of its bonds to provide funds for payment of part or all of the cost of acquisition, furnishing, equipment, improvement, extension, and betterment of hospital facilities and to provide an adequate working capital for a new hospital.

(b) The amount of bonds issued for the purpose of subsection (1) and outstanding at any time may not exceed 22.5% of the taxable value of the property in the district as ascertained by the last assessment for state and county taxes previous to the issuance of the bonds.

(c) The bonds must be authorized by the electors of the district if authorization is required by Article VIII, section 17(3)(b), of the Montana constitution, sold, and issued and provisions made for their payment in the manner and subject to the conditions and limitations prescribed for bonds of school districts by Title 20, chapter 9, part 4.

(2) (a) A hospital district may borrow money by the issuance of notes to provide funds to finance the costs described in subsection (1) and to finance the working capital requirements of the district. The notes must be authorized and in a form and terms prescribed by a resolution adopted by the board of trustees. The notes must mature over a term not to exceed 15 years.

(b) The principal and interest on the notes must be paid from the taxes levied pursuant to 7-34-2133 and 7-34-2134, exclusive of the taxes levied to pay bonds issued in accordance with subsection (1), and all other revenue of the district. The annual amount of principal and interest payable on notes in any fiscal year must be included in the district's budget for that year.

(c) The notes may be secured by a mortgage of or a security interest in all or part of the district's assets and by a pledge of the taxes and revenue of the district, or either of them.

(d) Notes may not be issued unless the projected annual revenue of the district, including the taxes levied pursuant to 7-34-2133 and 7-34-2134 but exclusive of the taxes levied to pay bonds, is at least equal to the sum of the cost of operating and maintaining the hospital district plus the maximum amount of principal and interest due in any future fiscal year on the notes proposed to be issued and all notes outstanding upon the issuance of the proposed notes.

(3) This section may not be construed to preclude the provisions of Title 50, chapter 6, part 1, allowing the state to apply for and accept federal funds."

Section 54. Section 22-1-304, MCA, is amended to read:

"22-1-304. Tax levy -- special library fund -- bonds. (1) The governing body of any city or county that has established a public library may levy in the same manner and at the same time as other taxes are levied a special tax in the amount necessary to maintain adequate public library service, not to exceed 5 mills on the dollar upon all property in the county by the governing body of the county and not to exceed 7 mills on the dollar upon all property in the city by the governing body of the city.

(2) (a) The governing body of any city or county may by resolution submit the question of exceeding the maximum tax levy provided in subsection (1) to a vote of the qualified electors at the next general election. The resolution must be adopted at least 75 days prior to the general election at which the question will be voted on.

(b) Upon petition being filed with the governing body and signed by not less than 5% of the resident taxpayers of any city or county requesting an election for the purpose of exceeding the maximum mill levy, the governing body shall submit to a vote of the qualified electors at the next appropriate election the question of exceeding the maximum mill levy. The petition must be delivered to the governing body at least 90 days prior to the general election at which the question will be voted on.

(c) The question must be submitted by ballots upon which the words "FOR exceeding the ... mill maximum levy and authorizing an additional ... mill(s) for the library" and "AGAINST exceeding the ... mill maximum library levy" appear, with a square before each proposition and a direction to insert an "X" mark in the square before one or the other of the propositions.

(d) The votes cast for the adoption or rejection of the question must be canvassed, and:

(i) if a majority of the voters voting on the question vote to exceed the maximum mill levy, the governing body shall levy the additional tax for the year in which the vote was taken; or

(ii) if a majority of the voters voting on the question vote to not exceed the maximum mill levy, the maximum mill levy may not be exceeded.

(3) The municipal tax authorized in this section is in addition to all other taxes authorized by law and is not within the all-purpose mill levy established by 7-6-4451 through 7-6-4453.

(4) The proceeds of the tax must constitute a separate fund called the public library fund and may not be used for any purpose except those of the public library.

(5) Money may not be paid out of the public library fund by the treasurer of the city or county except by order or warrant of the board of library trustees.

(6) Bonds, authorized by the electors if authorization is required under Article VIII, section 17(3)(b), of the Montana constitution, may be issued by the governing body in the manner prescribed by law for the erection and equipment of public library buildings and the purchase of land for public libraries."

Section 55. Section 76-15-501, MCA, is amended to read:

"76-15-501. Financial management. A conservation district and the supervisors of the district may:

(1) borrow money and incur indebtedness and, upon the approval of the electorate if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, issue bonds or other evidence of indebtedness;

(2) refund or retire an indebtedness or lien that may exist against the district or property of the district;

(3) fix and revise as necessary and collect rates, fees, tolls, rents, or other charges for the use of or for services, facilities, and materials furnished or provided, and revenue from these sources may be expended in carrying out the purposes and provisions of this chapter;

(4) cause taxes to be levied in the same manner provided for in this part for the purpose of paying any obligation of the district and to accomplish the purposes of this chapter in the manner provided in this chapter;

(5) apply for and receive federal revenue sharing funds in order to carry out the purposes and provisions of this chapter;

(6) establish a conservation practice loan program as provided in this part."

Section 56. Section 76-15-506, MCA, is amended to read:

"76-15-506. Bonds authorized -- election. (1) Whenever a board of supervisors considers it necessary, it may submit to the electors of the district, if authorization is required under Article VIII, section 17(3)(b), of the Montana constitution, the question of issuing bonds payable from revenue, assessments, or both, or the district may use other financing as provided for by part 6 and this part for the cost of works.

(2) The board of supervisors may call a special election to vote upon the proposition of issuing the bonds or may submit the proposition as a special question at a regular or general election. If from the returns of the election it appears that the majority of votes cast at the election was in favor of and assented to the incurring of the indebtedness, then the board of supervisors may by resolution provide for the issuance of the bonds.

(3) The authorization of the undertaking, the form, and content must be carried out in accordance with 7-7-4426, 7-7-4427, and 7-7-4432 through 7-7-4435. Validity of such bonds, use of revenue, and refunding must be in accordance with the provisions of 7-7-4425, 7-7-4430, 7-7-4501(2) and (3), and 7-7-4502 through 7-7-4505.

(4) Any bonds issued under part 6 and this part have the same force, value, and use as bonds issued by a municipality and are exempt from taxation as property within the state of Montana."

Section 57. Section 85-7-1413, MCA, is amended to read:

"85-7-1413. Authority to issue revenue bonds. An irrigation district may:

(1) upon the approval of the electorate if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, issue its bonds to finance in whole or in part the acquisition, construction, or improvement of any undertaking; and

(2) pledge to the punctual payment of bonds issued under this part and interest on the bonds an amount of the revenue of the undertaking, including subsequent improvements or extensions, sufficient to pay the bonds and interest as they become due, and maintain reasonable reserves for the bonds."

Section 58. Section 85-7-2014, MCA, is amended to read:

"85-7-2014. Procedure after petition filed. Upon the filing of the petition, the board of commissioners shall, if authorized by the electors of the district if authorization is required under Article VIII, section 17(3)(b), of the Montana constitution, by appropriate order or resolution, authorize and direct the issuance of the bonds of the district in the amount and for the purpose or purposes specified in the petition; fix the numbers, denominations, and maturity or maturities of the bonds; specify the rate of interest on the bonds and whether the bonds are payable annually or semiannually; designate the place and method of payment of the bonds and the interest on the bonds, within or outside the state of Montana; prescribe the form of the bonds; and provide for the levy of a special tax or assessment as provided in this chapter on all the lands in the district or for a levy on a subdistrict if the bonds are issued on behalf of the subdistrict, for the irrigation and benefit of which the district or subdistrict was organized and the bonds are issued or the contract is to be made, sufficient in amount to pay the interest on and principal of the bonds when due and all amounts to be paid to the United States under any contract between the district and the United States for which bonds of the district have not been deposited with the United States as provided in 85-7-1906."

Section 59. Section 85-8-502, MCA, is amended to read:

"85-8-502. Resolution for issuance of notes or bonds. Upon the approval of the electorate, if approval is required under Article VIII, section 17(3)(b), of the Montana constitution, and before the issuance of notes or bonds, the commissioners shall pass a resolution providing for the issuance of the notes or bonds. The resolution must fix the rate of interest that the notes or bonds bear, the time of payment, and, if redeemable before maturity, the date for redemption. The resolution must prescribe the denominations of the notes or bonds, not exceeding $1,000, and the form of the notes or bonds and may provide that both the principal and interest of the notes and bonds must be payable at some convenient banking house or trust company's office, to be named in the notes or bonds. The notes or bonds and the coupons attached to the notes or bonds must bear the signatures of the president and the secretary of the drainage district. The corporate seal of the drainage district must be affixed to each of the notes or bonds."

Section 60. Section 85-8-702, MCA, is amended to read:

"85-8-702. Additional powers. To the end that soil and water conservation measures may be improved, flood prevention and drainage programs strengthened, and the land and water economy of the state stabilized, the following additional powers are conferred upon drainage districts established under this chapter :

(1) to carry out necessary measures for the prevention of floodwater and sediment damages and for the conservation, development, utilization, and disposal of water and to adopt necessary regulations, policies, and procedures to accomplish these ends, subject to the approval of the district court and on proper notice to interested parties as is provided for in the general statutes pertaining to drainage districts;

(2) to cooperate and enter into agreements to carry out the purposes of this part with ,and to receive financial and other assistance from, state agencies and political subdivisions of the state, other organizations created under state laws, and the government of the United States and agencies of the United States and to enter into agreements with ,and to accept contributions from, private landowners for the purposes of this part;

(3) to construct, operate, and maintain works of improvement, including structures and related measures, that are needed to carry out their broadened purposes as set forth in this section, subject to the approval of the district court and on proper notice to interested parties as set forth in this chapter;

(4) to acquire lands, easements, and rights-of-way for sites for structures and for the flowage or impoundment of waters, the acquisitions for these purposes to be accomplished in the same manner and through the same powers and procedures as provided for under this chapter;

(5) to enlarge their boundaries to permit the construction of additional needed works of improvement or to construct additional needed works of improvement outside their boundaries, subject to approval of the district court and on proper notice to interested parties in the manner set forth in this chapter;

(6) to make assessments and, if authorized by the electors of the district if authorization is required under Article VIII, section 17(3)(b), of the Montana constitution, issue bonds for carrying out the purposes of this part and for constructing, maintaining, and operating any structures or improvements established as provided in this section, the assessments and bond issues to be made in the same manner and through the same procedures as under this chapter, including the right to extend annual installments for repayment of construction costs over a period of not more than 50 years and subject to the approval of the district court in the same manner and on the same notice to the interested parties as in the first instance of approving assessments, bond issues, and benefits."

Section 61. Section 85-9-406, MCA, is amended to read:

"85-9-406. Directors' powers over finance. On behalf of the district, the directors may:

(1) borrow money and incur indebtedness and, if authorized by the electors of the district if authorization is required under Article VIII, section 17(3)(b), of the Montana constitution, issue bonds to finance works as provided by this chapter;

(2) in addition to all voted indebtedness, borrow money as necessary, but the amount may not at any one time exceed 5% of the taxable valuation of real property in the district;

(3) mortgage property owned by the district if the terms of the mortgage are not inconsistent with the provisions of a resolution authorizing the sale of bonds;

(4) use any surplus funds to purchase outstanding bonds;

(5) refund bonded indebtedness incurred by the district as provided by this chapter;

(6) after a hearing held in accordance with 85-9-602, make assessments sufficient to meet the budgetary requirements for the coming year."

Section 62. Section 90-6-310, MCA, is amended to read:

"90-6-310. Local government facility impact bonds. (1) When the need for the construction, renovation, improvement, or acquisition of local government facilities as a result of the large-scale mineral development is determined under 90-6-307, the owners of a large-scale mineral development may enter into a written agreement with the local government unit having the burden for the increased capital and operating costs expected to be incurred by the facilities. The local government unit may execute a written agreement with the owner of a large-scale mineral development for the issuance of any special industrial local government facility impact bonds provided for in this section and approved by the electors of the local government unit if approval is required under Article VIII, section 17(3)(b), of the Montana constitution.

(2) The agreement with the owners of a large-scale mineral development must provide for a payment guarantee, in addition to the taxes imposed by the local government unit on property owners generally, of the principal and interest on the bonds provided for in this section. Payment will then be made by an annual special tax levy on the property of the large-scale mineral development sufficient to retire the principal and interest on these special impact bonds. The bonds may not be an obligation of the local government unit, but must be special obligations limited to the revenue derived from the special tax levy. A local government unit shall establish a levy and, to the extent bonds are issued as provided in this section, shall pledge the special fund and all revenue of the special tax levy to the repayment of the bonds.

(3) The debt limits set forth in 7-7-2203, 7-7-4201, and 20-9-406 do not apply to bonds issued in accordance with this section. The interest on the bonds may not be subject to state taxes.

(4) The impact bonds must be authorized by the governing body of the local government unit by a resolution that states:

(a) the facility for which the bonds are issued;

(b) the amount of the bonds;

(c) the rate of interest the bonds bear;

(d) the date of the bonds and the maturity date or dates of the bonds;

(e) the dates interest is payable on the bonds;

(f) the redemption options, if any, with respect to the bonds; and

(g) the manner of execution of the bonds.

(5) The impact bonds must be:

(a) in registered form as to principal and interest;

(b) payable in installments and at times not exceeding 30 years from their date of issuance; and

(c) payable at a place or places and be evidenced in a manner the governing body determines is in the best interest of the local government unit.

(6) Any impact bonds issued under the authority of this section may be sold at public or private sale in a manner, at a time or times, and at a price above or below par as may be determined by the governing body of the local government unit. All expenses, premiums, and commissions that the local government unit considers necessary or advantageous in connection with the authorization, sale, and issuance of the bonds may be paid by the governing body of the local government unit from the proceeds of the sale of the bonds.

(7) If more than one local government unit adopts a resolution to issue impact bonds and the bonds are authorized by the electors in each unit, the local government units may enter into an interlocal agreement under 7-11-101 through 7-11-105, 7-11-107, and 7-11-108, providing for the issue of impact bonds of the local government units to be combined in a single offering, if the governing body of each local government unit authorizing the bonds determines that the pooling of bonds:

(a) is in the best interest of the local government units;

(b) will facilitate the sale of the bonds under more advantageous terms;

(c) will lower the interest rates; or

(d) will lower the cost of issuance.

(8) In addition to the specific requirements of 7-11-105, the interlocal agreement must provide:

(a) that the bond titles must denote that impact bonds of different local government units have been pooled and must refer to each local government unit executing the interlocal agreement;

(b) for a single debt service fund, to be held by a qualified trust company, to which each local government unit shall pledge and pay the annual special tax levies levied against the large-scale mineral development; and

(c) that the bonds are payable solely from and against the debt service funds under the interlocal agreement."

NEW SECTION. Section 63. Elections on bonds. (1) When bonds are proposed to be issued under the provisions of 7-12-2169 and 7-12-2171 through 7-12-2174, the board of county commissioners shall submit the question of the issuance of the bonds to the voters of the district as provided in this section and, if the revolving fund is to be pledged as security for the bonds, to the voters of the county as provided in this section or, if the bonds are to be general obligation bonds of the county, to the voters of the county, as provided in [section 22].

(2) An individual is entitled to vote at any election in a rural special improvement district under the provisions of this part unless the individual possesses all the qualifications required of electors under the general election laws of the state and is the owner of real property located within the district. An individual need not possess the qualifications required of an elector in 13-1-111(1)(c) if the individual is registered to vote in any state of the United States and files proof of registration with the election administrator.

(3) When a corporation, limited liability company, partnership, or other legal entity owns real property within the boundaries of the district, the authorized representative of the entity, as certified to the election administrator, is entitled to vote on behalf of the entity.

(4) A voter owning real property within the district need not reside within the district in order to vote.

(5) Voting by owners of real property in the district must be proportional based on the proposed assessment of costs under 7-12-2151, as determined by the board of county commissioners, in accordance with the assessment method or methods adopted in the resolution of intention to create the district.

(6) If from the returns of the election it appears that not less than the owners of property to be assessed with more than one-half of the costs of the improvements to be undertaken in the district or for the benefit of the district are in favor of the issuance of the bonds, then the board of county commissioners may by resolution, at the time or times that it considers proper, provide for the sale and issuance of the bonds or any part of the bonds, subject to any further election that may be required under subsection (1).

NEW SECTION. Section 64. Issuance of bonds as general obligations without pledge of taxing power. (1) In addition to the powers granted to a county in this part to finance improvements, a county may borrow money by the issuance of its general obligation bonds under this section for a term of up to 30 years to provide funds for payment of part or all of the cost of acquisition, construction, improvement, or betterment of any improvements or to refund any bonds outstanding and issued for those purposes. The county may not pledge the taxing power of the county to the payment of bonds issued under this section.

(2) The bonds may be authorized by a resolution adopted by the board of county commissioners, which must establish the terms, covenants, and conditions of the bonds. It is not necessary to submit to the electors of the county the question of issuing the bonds. The bonds may be sold at public or private sale, on terms and at prices that the board of county commissioners determines to be advantageous. If the board determines to conduct a public sale of the bonds, the provisions of 7-7-4251, 7-7-4252, and 7-7-4254, which relate to the notice of sale, publication of notice, and manner and method of selling bonds by cities and towns, to the extent that they are applicable and not in conflict with the provisions of this section and 7-12-2173, apply to, govern, and control the form of notice of sale, publication of notice, and manner and method of selling bonds. The principal amount of the bonds may not exceed the principal amount of special assessments that the board of county commissioners covenants to levy to pay the costs of the improvements financed by the bonds.

(3) A county that issues general obligation bonds under this section to finance the costs of an improvement shall levy special assessments against property in the district as provided in this part in an amount not less than the original principal amount of the bonds. The collections of the special assessments must be applied to the payment of principal of or interest on the general obligation bonds or to reimburse the county for the application of any of its funds, including amounts in the general fund, that were applied to pay principal of or interest on the bonds.

(4) General obligation bonds of a county issued under this section may not be secured by the revolving fund, but may be secured by a district reserve account as provided in 7-12-2153.

(5) A county may issue its rural special improvement district bonds as general obligation bonds under this section only if:

(a) the aggregate principal amount of the bonds does not exceed 10% of the valuation of the district; and

(b) at the time the bonds are to be issued, the debt service in the current or any future fiscal year on the bonds and any other bonds issued pursuant to this section or similar general obligations of the county issued pursuant to other law and then outstanding does not exceed 10% of the revenue deposited in the general fund of the county in each of the 2 immediately preceding fiscal years.

(6) The general obligation bonds issued under this section may not constitute indebtedness of the county for the purpose of any other statutory debt limitation and may not be taken into account as indebtedness under any other statutory debt limitation.

(7) The general obligation bonds must clearly state that they are not secured by a pledge of the taxing power of the county, but are payable primarily from collections of special assessments levied against property in the district and, if the collections are insufficient for the payment of principal and interest, from the available revenue in the general fund in any fiscal year pledged to the payment of the bonds.

(8) In order to secure the payment of principal of and interest on any general obligation bonds issued pursuant to this section and payment of related charges, including the fees and expenses of registrars and paying agents and amounts, if any, that must be rebated to the federal government under section 148 of the Internal Revenue Code of 1986, as amended, the county may grant a first lien on all revenue collected and deposited in the general fund, subject to or on a parity with any prior pledges of the revenue, and may establish other funds and accounts for bonds issued under this section that may be necessary to provide for the priority and segregation of revenue deposited in the general fund and pledged to the payment of the obligations.

(9) All bonds issued under this section are legal and valid obligations of the county, and the general credit of the county must be irrevocably pledged for the prompt payment of both principal of and interest on the bonds as they become due. However, the county may not be obligated to levy taxes for the payment of any bond or interest on the bonds.

(10) General obligation bonds of the county may not be secured by the revolving fund, but may be secured by a district reserve account as provided in 7-12-2153.

NEW SECTION. Section 65. Elections on bonds. (1) When bonds are proposed to be issued under the provisions of 7-12-4201, the city or town council shall submit the question of the issuance of the bonds to the voters of the district as provided in this section and, if the revolving fund is to be pledged as security for the bonds, to the voters of the city or town as provided in this section or, if the bonds are to be general obligation bonds of the city or town, to the voters of the city or town as provided in [section 66].

(2) An individual is not entitled to vote at any election in a special improvement district under the provisions of this part unless the individual possesses all the qualifications required of electors under the general election laws of the state and is the owner of real property located within the district. An individual need not possess the qualifications required of an elector in 13-1-111(1)(c) if the individual is registered to vote in any state of the United States and files proof of registration with the election administrator.

(3) When a corporation, limited liability company, partnership, or other legal entity owns real property within the boundaries of the district, the authorized representative of the entity, as certified to the election administrator, is entitled to vote on behalf of the entity.

(4) A voter owning real property within the district need not reside within the district in order to vote.

(5) Voting by owners of real property in the district must be proportional based on the proposed assessment of costs under 7-12-4161 through 7-12-4165, as determined by the city or town council, in accordance with the assessment method or methods adopted in the resolution of intention to create the district.

(6) If from the returns of the election it appears that not less than the owners of property to be assessed with more than one-half of the costs of the improvements to be undertaken in or for the benefit of the district are in favor of the issuance of the bonds, then the city or town council may by resolution, at the time or times that it considers proper, provide for the sale and issuance of the bonds or any part of the bonds, subject to any further election that may be required under subsection (1).

NEW SECTION. Section 66. Issuance of bonds as general obligations without pledge of taxing power. (1) In addition to the powers granted to a city or town in this part to finance improvements, a city or town may borrow money by the issuance of its general obligation bonds under this section for a term of up to 30 years to provide funds for payment of part or all of the cost of acquisition, construction, improvement, or betterment of any improvements or to refund any bonds outstanding and issued for those purposes. The city or town may not pledge the taxing power of the city or town to the payment of bonds issued under this section.

(2) The bonds may be authorized by a resolution adopted by the city or town council, which shall establish the terms, covenants, and conditions of the bonds. It is not necessary to submit to the electors of the city or town the question of issuing the bonds. The bonds may be sold at public or private sale, on terms and at prices that the city or town council determines to be advantageous. The principal amount of the bonds may not exceed the principal amount of special assessments that the city or town council covenants to levy to pay the costs of the improvements financed by the bonds.

(3) A city or town that issues general obligation bonds under this section to finance the costs of an improvement shall levy special assessments against property in the district as provided in this part in an amount not less than the original principal amount of the bonds. The collections of the special assessments must be applied to the payment of principal of or interest on the general obligation bonds or to reimburse the city or town for the application of any of its funds, including amounts in the general fund, that were applied to pay principal of or interest on the bonds.

(4) General obligation bonds of a city or town issued under this section may not be secured by the revolving fund, but may be secured by a district reserve account as provided in 7-12-4169.

(5) A city or town may issue its special improvement district bonds as general obligation bonds under this section only if:

(a) the aggregate principal amount of the bonds does not exceed 10% of the valuation of the district; and

(b) at the time the bonds are to be issued, the debt service in the current or any future fiscal year on the bonds and any other bonds issued pursuant to this section or similar general obligations of the city or town issued pursuant to other law and then outstanding does not exceed 10% of the revenue deposited in the general fund of the city or town in each of the 2 immediately preceding fiscal years.

(6) The general obligation bonds issued under this section may not constitute indebtedness of the city or town for the purpose of any other statutory debt limitation and may not be taken into account as indebtedness under any other statutory debt limitation.

(7) The general obligation bonds must clearly state that they are not secured by a pledge of the taxing power of the city or town, but are payable primarily from collections of special assessments levied against property in the district and, if the collections are insufficient for the payment of principal and interest, from the available revenue in the general fund in any fiscal year pledged to the payment of the bonds.

(8) In order to secure the payment of principal of and interest on any general obligation bonds issued pursuant to this section and payment of related charges, including the fees and expenses of registrars and paying agents and amounts, if any, that must be rebated to the federal government under section 148 of the Internal Revenue Code of 1986, as amended, the city or town may grant a first lien on all revenue collected and deposited in the general fund, subject to or on a parity with any prior pledges of the revenue, and may establish other funds and accounts for bonds issued under this section that may be necessary to provide for the priority and segregation of revenue deposited in the general fund and pledged to the payment of the obligations.

(9) All bonds issued under this section are legal and valid obligations of the city or town, and the general credit of the city or town must be irrevocably pledged for the prompt payment of both principal of and interest on the bonds as the payments become due. However, the city or town may not be obligated to levy taxes for the payment of any bond or interest on the bond.

(10) General obligation bonds of the city or town may not be secured by the revolving fund, but may be secured by a district reserve account as provided in 7-12-4169.

NEW SECTION. Section 67. Taxes dedicated to payment of bonds. The legislature finds, determines, and declares that if the rates and charges or the assessments for a solid waste system or improvement or service charges levied for a solid waste system or improvement constitute taxes within the meaning of Article VIII, section 17, of the Montana constitution, any of the rates, charges, or assessments constitute specific taxes dedicated to payment of public debt within the meaning of Article VIII, section 17(3)(b), of the Montana constitution and the rates, charges, or assessments are:

(1) pledged to the payment of general obligation bonds issued pursuant to this part;

(2) pledged to the payment of revenue bonds issued pursuant to this part, whether the revenue bonds are net revenue bonds or gross revenue bonds;

(3) pledged to restore a reserve for revenue bonds or to pay operating, maintenance, and replacement costs of the system or improvement; or

(4) the subject of a covenant to increase rates and charges to provide net revenue in excess of the annual debt service payable on the revenue bonds and the board of directors determines that the covenant is required to market the bonds on favorable terms and if the general obligation bonds or revenue bonds are authorized by the voters of the district as provided in this part, any and all of the rates, charges, and special assessments constitute specific taxes dedicated to payment of public debt within the meaning of Article VIII, section 17(3)(b), of the Montana constitution.

NEW SECTION. Section 68. Form of ballot proposition. If an election is to be conducted on the issuance of bonds of the district constituting revenue bonds, the ballot proposition may be prepared in substantially the following form, with changes in the form that the board of directors considers appropriate:

Shall the board of directors of the [district] be authorized to issue and sell revenue bonds of the district in an aggregate principal amount not to exceed _______ dollars ($________), payable over a period not to exceed ______ (__) years, for the purpose of ________________________________________, pledging to the payment of the bonds the revenue of the district's [system or improvement] [and] [special assessments to be levied against property located in the district and benefitted by the [system or improvement] in an aggregate principal amount estimated not to exceed $___________]. The revenue bonds will be [gross revenue bonds, but secured by a covenant that rates and charges of the [system or improvement] must be increased, if necessary, to pay operating, maintenance, and replacement costs of the [system or improvement]] [net revenue bonds, secured by the revenue of the [system or improvement] after payment of operating and maintenance costs of the [system or improvement] and the establishment of necessary reserves] [and by a covenant to increase rates and charges to the extent necessary so that net revenues are not less than ____% of the debt service payable on bonds and other outstanding bonds of the district]?

NEW SECTION. Section 69. Codification instruction. (1) [Sections 19, 20, 22, 63, and 64] are intended to be codified as an integral part of Title 7, chapter 12, part 21, and the provisions of Title 7, chapter 12, part 21, apply to [sections 19, 20, 22, 63, and 64].

(2) [Sections 27, 28, 30, 65, and 66] are intended to be codified as an integral part of Title 7, chapter 12, part 41, and the provisions of Title 7, chapter 12, part 41, apply to [sections 27, 28, 30, 65, and 66].

(3) [Section 67 and 68] are intended to be codified as an integral part of Title 7, chapter 13, part 2, and the provisions of Title 7, chapter 13, part 2, apply to [sections 67 and 68].

NEW SECTION. Section 70. Repealer. Section 7-7-2222, MCA, is repealed.

NEW SECTION. Section 71. Contingent voidness. If Constitutional Initiative No. 75, enacting Article VIII, section 17, of the Montana constitution, is declared invalid, then [this act] is void.

NEW SECTION. Section 72. 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 73. Effective date. [This act] is effective on passage and approval.

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