HOUSE BILL NO. 678

INTRODUCED BY B. STORY, R. ERICKSON, K. GILLAN, M. GUGGENHEIM, M. HANSON,

C. HIBBARD, B. REHBEIN

BY REQUEST OF THE HOUSE TAXATION STANDING COMMITTEE

A BILL FOR AN ACT ENTITLED: "AN ACT PROVIDING FOR A REIMBURSEMENT TO LOCAL GOVERNMENTS, LOCAL TAXING JURISDICTIONS, AND SCHOOL DISTRICTS FOR REVENUE LOST BECAUSE OF TAX REDUCTIONS AND EXEMPTIONS; AMENDING SECTION 17-7-502, MCA; REPEALING SECTIONS 15-1-111 AND 15-1-112, MCA; AND PROVIDING AN EFFECTIVE DATE."

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

(Refer to Third Reading Bill)

Strike everything after the enacting clause and insert:

NEW SECTION. Section 1. Local government and school reimbursement. (1) Each taxing jurisdiction, including but not limited to cities, towns, counties, school districts, tax increment financing districts, special districts, authorities, or miscellaneous taxing districts, but not including the state of Montana, is entitled to reimbursement for loss of tax base as a result of the passage of [House Bill No. 128, House Bill No. 174, House Bill No. 658, Senate Bill No. 184, Senate Bill No. 200, Senate Bill No. 260, and Senate Bill No. 530] as provided in this section.

(2) (a) Each taxing jurisdiction's base reimbursement amount is determined by the formula, A * (1-((B + C) / (D + (E * 1.4)))), in which:

(i) A is the revenue raised in the jurisdiction from mill levies and motor vehicle taxes under 61-3-504 in tax year 1998 and from local government reimbursement under 15-1-111 and 15-1-112 in fiscal year 1998, except that:

(A) if a mill levy that existed in 1998 is eliminated, then the portion of the 1998 revenue allocated to that levy in factor "A" is removed from the calculation of "A"; and

(B) mill levies established after January 1, 1999, may not be used in the calculation of factor "A";

(ii) B is taxable value in the most recent completed tax year of the jurisdiction;

(iii) C is the total, in the most recent completed tax year, of all the motor vehicle manufacturer's suggested retail prices, depreciated in accordance with 61-3-503, for light vehicles in the jurisdiction;

(iv) D is the taxable value in tax year 1998 of the jurisdiction; and

(v) E is the total, in tax year 1998, of all the motor vehicle manufacturer's suggested retail prices, depreciated in accordance with 61-3-503, for light vehicles in the jurisdiction.

(b) A taxing jurisdiction is not entitled to any reimbursement if the calculated reimbursement amount is zero or a negative number.

(3) The total reimbursable amount for each fiscal year is the total of all taxing jurisdiction base reimbursement amounts for the state. Each taxing jurisdiction is entitled to reimbursement equal to base reimbursement amount, or if an insufficient amount of money has been appropriated for total reimbursement under this section, then all the base reimbursement amounts must be reduced proportionally.

(4) The reimbursement payment must be made annually in two payments on July 1 and January 1 by the department to each county treasurer. Upon receipt of the reimbursement from the department, the county treasurer shall distribute the reimbursement to each taxing jurisdiction to be allocated to mill levies in proportion to 1998 revenue from mill levies and motor vehicle taxes under 61-3-504.

(5) The governor shall include the total reimbursable amount for both years of the ensuing biennium, increased or decreased by the same percentage that the previous year's individual income tax collections have changed from the 1999 tax year's individual tax collections, in the present law base budget prepared for each session.

Section 2. Section 17-7-502, MCA, is amended to read:

"17-7-502. (Temporary) Statutory appropriations -- definition -- requisites for validity. (1) A statutory appropriation is an appropriation made by permanent law that authorizes spending by a state agency without the need for a biennial legislative appropriation or budget amendment.

(2) Except as provided in subsection (4), to be effective, a statutory appropriation must comply with both of the following provisions:

(a) The law containing the statutory authority must be listed in subsection (3).

(b) The law or portion of the law making a statutory appropriation must specifically state that a statutory appropriation is made as provided in this section.

(3) The following laws are the only laws containing statutory appropriations: 2-17-105; 3-5-901; 5-13-403; 10-3-203; 10-3-310; 10-3-312; 10-3-314; 10-4-301; 15-23-706; 15-30-195; 15-31-702; 15-36-324; 15-36-325; 15-37-117; 15-38-202; 15-65-121; 15-70-101; 16-1-404; 16-1-406; 16-1-411; 16-11-308; 17-3-106; 17-3-212; 17-3-222; 17-6-101; 17-7-304; 18-11-112; 19-3-319; 19-6-709; 19-9-702; 19-13-604; 19-17-301; 19-18-512; 19-19-305; 19-19-506; 20-8-107; 20-8-111; 20-26-1503; 22-3-1004; 23-5-136; 23-5-306; 23-5-409; 23-5-610; 23-5-612; 23-5-631; 23-7-301; 23-7-402; 37-43-204; 37-51-501; 39-71-503; 39-71-907; 39-71-2321; 42-2-105; 44-12-206; 44-13-102; 50-4-623; 53-6-703; 53-24-206; 67-3-205; 75-1-1101; 75-5-1108; 75-6-214; 75-11-313; 77-1-131; 80-2-103; 80-2-222; 80-4-416; 81-5-111; 82-11-161; 85-20-402; 87-1-513; 90-3-301; 90-4-215; 90-6-331; and 90-9-306.

(4) There is a statutory appropriation to pay the principal, interest, premiums, and costs of issuing, paying, and securing all bonds, notes, or other obligations, as due, that have been authorized and issued pursuant to the laws of Montana. Agencies that have entered into agreements authorized by the laws of Montana to pay the state treasurer, for deposit in accordance with 17-2-101 through 17-2-107, as determined by the state treasurer, an amount sufficient to pay the principal and interest as due on the bonds or notes have statutory appropriation authority for the payments. (In subsection (3): pursuant to sec. 7, Ch. 567, L. 1991, the inclusion of 19-6-709 terminates upon death of last recipient eligible for supplemental benefit; pursuant to sec. 7(2), Ch. 29, L. 1995, the inclusion of 15-30-195 terminates July 1, 2001; pursuant to sec. 5, Ch. 461, L. 1997, the inclusion of 77-1-131 terminates October 1, 2003; and pursuant to secs. 13, 16(1), Ch. 549, L. 1997, the inclusion of 90-3-301 terminates July 1, 1999.)

17-7-502. (Effective July 1, 2008) Statutory appropriations -- definition -- requisites for validity. (1) A statutory appropriation is an appropriation made by permanent law that authorizes spending by a state agency without the need for a biennial legislative appropriation or budget amendment.

(2) Except as provided in subsection (4), to be effective, a statutory appropriation must comply with both of the following provisions:

(a) The law containing the statutory authority must be listed in subsection (3).

(b) The law or portion of the law making a statutory appropriation must specifically state that a statutory appropriation is made as provided in this section.

(3) The following laws are the only laws containing statutory appropriations: 2-17-105; 3-5-901; 5-13-403; 10-3-203; 10-3-310; 10-3-312; 10-3-314; 10-4-301; 15-23-706; 15-30-195; 15-31-702; 15-36-324; 15-36-325; 15-37-117; 15-38-202; 15-65-121; 15-70-101; 16-1-404; [16-1-406;] 16-1-411; 16-11-308; 17-3-106; 17-3-212; 17-3-222; 17-5-404; 17-5-804; 17-6-101; 17-7-304; 18-11-112; 19-3-319; 19-6-709; 19-9-702; 19-13-604; 19-17-301; 19-18-512; 19-19-205; 19-19-305; 19-19-506; 20-8-107; 20-9-361; 20-26-1503; 22-3-1004; 23-5-136; 23-5-306; 23-5-409; 23-5-610; 23-5-612; 23-5-631; 23-7-301; 23-7-402; 32-1-537; 37-43-204; 37-51-501; 39-71-503; 39-71-907; 39-71-2321; 42-2-105; 44-12-206; 44-13-102; 50-4-623; 50-5-232; 50-40-206; 53-6-150; 53-6-703; 53-24-206; 60-2-220; 67-3-205; 75-1-1101; 75-5-1108; 75-6-214; 75-5-1108; 75-6-214; 75-11-313; 77-1-505; 80-2-103; 80-2-222; 80-4-416; 81-5-111; 82-11-136; 82-11-161; 85-1-220; 85-20-402; 87-1-513; 90-4-215; 90-6-331; 90-7-220; 90-7-221; and 90-9-306.

(4) There is a statutory appropriation to pay the principal, interest, premiums, and costs of issuing, paying, and securing all bonds, notes, or other obligations, as due, that have been authorized and issued pursuant to the laws of Montana. Agencies that have entered into agreements authorized by the laws of Montana to pay the state treasurer, for deposit in accordance with 17-2-101 through 17-2-107, as determined by the state treasurer, an amount sufficient to pay the principal and interest as due on the bonds or notes have statutory appropriation authority for the payments. (In subsection (3): pursuant to sec. 7, Ch. 567, L. 1991, the inclusion of 19-6-709 terminates upon death of last recipient eligible for supplemental benefit; and pursuant to sec. 68(2), Ch. 422, L. 1997, this version becomes effective July 1, 2008.)"

NEW SECTION. Section 3. Repealer. Sections 15-1-111 and 15-1-112, MCA, are repealed.

NEW SECTION. Section 4. Coordination instruction. (1) If any of the following is passed and approved in a form that contains a reimbursement mechanism for local government, then:

(a) in House Bill No. 128:

(i) [sections 19 and 20], third reading copy, are void;

(ii) [section 18] must read as follows:

"NEW SECTION. Section 18. Distribution of retail telecommunications excise tax revenue. After retaining an allowance for refunds, retail telecommunications excise tax revenue collected by the department must be deposited in the state general fund."

(b) in House Bill No. 174, [section 15] of the second reading second house copy is void; and

(c) in Senate Bill No. 200, [sections 1 and 26] of the enrolled bill, are void; and

(d) in House Bill No. 658, Senate Bill No. 184, Senate Bill No. 260, or Senate Bill No. 530, any section that contains a reimbursement mechanism for local government is void.

(3) If Senate Bill No. 260 and [this act] are both passed and approved, then [section 3] of Senate Bill No. 260, amending 61-3-509, must read as follows:

"Section 3. Section 61-3-509, MCA, is amended to read:

"61-3-509. Disposition of taxes. (1) Except as provided in subsection (2), the county treasurer shall, after deducting the district court fee, credit all taxes on motor vehicles and fees in lieu of tax on motorcycles, quadricycles, motor homes, travel trailers, campers, trailers, pole trailers, semitrailers, buses, trucks having a manufacturer's rated capacity of more than 1 ton, and truck tractors collected under 61-3-504, 61-3-521, 61-3-527, 61-3-529, and 61-3-537, to a motor vehicle suspense fund. At some time between March 1 and March 10 of each year and every 60 days after that date, the county treasurer shall distribute the money in the motor vehicle suspense fund in the relative proportions required by the levies for state, county, school district, and municipal purposes in the same manner as personal property taxes are distributed.

(2) The county treasurer shall deduct as a district court fee 10% of the amount of the tax collected on light vehicles under 61-3-504(1). The county treasurer shall credit the fee for district courts to a separate suspense account and shall forward the amount in the account to the state treasurer at the time that the county treasurer distributes money from the motor vehicle suspense fund. The state treasurer shall credit amounts received under this subsection to the state special revenue fund to be used for purposes of state funding of district court expenses as provided in 3-5-901.""

(4) If House Bill No. 90 and Senate Bill No. 260 are passed and approved and amend 20-9-141, then section 20-9-141 must read as follows:

"Section 20-9-141, MCA is amended to read:

"20-9-141. Computation of general fund net levy requirement by county superintendent. (1) The county superintendent shall compute the levy requirement for each district's general fund on the basis of the following procedure:

(a) Determine the funding required for the district's final general fund budget less the sum of direct state aid and the special education allowable cost payment for the district by totaling:

(i) the district's nonisolated school BASE budget requirement to be met by a district levy as provided in 20-9-303; and

(ii) any general fund budget amount adopted by the trustees of the district under the provisions of 20-9-308 and 20-9-353, including any additional funding for a general fund budget that exceeds the maximum general fund budget.

(b) Determine the money available for the reduction of the property tax on the district for the general fund by totaling:

(i) the general fund balance reappropriated, as established under the provisions of 20-9-104;

(ii)

anticipated tuition payments for out-of-district pupils under the provisions of 20-5-321 through 20-5-323, except the amount of tuition received for a pupil who is a child with disabilities in excess of the amount received for a pupil without disabilities, as calculated under 20-5-323(2);

(iii) anticipated revenue from taxes and fees imposed under 23-2-517, 23-2-803, 61-3-504, 61-3-521, 61-3-527, 61-3-529, 61-3-537, and 67-3-204;

(iv) anticipated oil and natural gas production taxes;

(v) pursuant to subsection (4), anticipated revenue from coal gross proceeds under 15-23-703;

(vi) anticipated interest earned by the investment of general fund cash in accordance with the provisions of 20-9-213(4);

(vii) anticipated revenue from corporation license taxes collected from financial institutions under the provisions of 15-31-702; and

(viii) any other revenue anticipated during the school fiscal year that may be used to finance the general fund, excluding any guaranteed tax base aid

.

(c) Notwithstanding the provisions of subsection (2), subtract the money available to reduce the property tax required to finance the general fund that has been determined in subsection (1)(b) from any general fund budget amount adopted by the trustees of the district, up to the BASE budget amount, to determine the general fund BASE budget levy requirement.

(d) Subtract any amount remaining after the determination in subsection (1)(c) from any additional funding requirement to be met by an over-BASE budget amount, a district levy as provided in 20-9-303, and any additional financing as provided in 20-9-353 to determine any additional general fund levy requirements.

(2) The county superintendent shall calculate the number of mills to be levied on the taxable property in the district to finance the general fund levy requirement for any amount that does not exceed the BASE budget amount for the district by dividing the amount determined in subsection (1)(c) by the sum of:

(a) the amount of guaranteed tax base aid that the district will receive for each mill levied, as certified by the superintendent of public instruction; and

(b) the current total taxable valuation of the district, as certified by the department of revenue under 15-10-202, divided by 1,000.

(3) The net general fund levy requirement determined in subsections (1)(c) and (1)(d) must be reported to the county commissioners on the fourth Monday of August by the county superintendent as the general fund net levy requirement for the district, and a levy must be set by the county commissioners in accordance with 20-9-142.

(4) For each school district, the department of revenue shall calculate and report to the county superintendent the amount of revenue anticipated for the ensuing fiscal year from revenue from coal gross proceeds under 15-23-703.""

NEW SECTION. Section 5. Allocation of reimbursement. There is allocated $80 million from the general fund to the department of revenue for reimbursement to taxing jurisdictions as provided in [section 1].

NEW SECTION. Section 6. Codification instruction. [Section 1] is intended to be codified as an integral part of Title 15, chapter 1, part 1, and the provisions of Title 15, chapter 1, part 1, apply to [section 1].

NEW SECTION. Section 7. Effective date. [This act] is effective July 1, 1999.

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