SENATE BILL NO. 407

INTRODUCED BY V. COCCHIARELLA

A BILL FOR AN ACT ENTITLED: "AN ACT ALLOCATING A PORTION OF THE PROCEEDS FROM THE LODGING FACILITY USE TAX TO THE DEPARTMENT OF COMMERCE FOR GRANTS TO LOCAL GOVERNMENTS TO DEVELOP AND IMPLEMENT GROWTH POLICIES; ESTABLISHING REQUIREMENTS FOR THE USE OF GRANT FUNDS; AMENDING SECTION 15-65-121, MCA; AND PROVIDING AN EFFECTIVE DATE."

WHEREAS, portions of Montana have experienced significant population growth since 1990 and more than 60% of Montana's population growth has been a result of the in-migration of residents from other states; and

WHEREAS, local government officials have expressed serious concerns about their ability to provide sufficient resources to plan for current and anticipated future growth; and

WHEREAS, the Montana lodging facility use tax, implemented in 1987, generates an estimated $9 million to $10 million annually, the majority of which is used by the Department of Commerce and others in the successful promotion of the state; and

WHEREAS, one of the functions of the Department of Commerce is to assist local governments in the preparation and implementation of local growth policies (master plans); and

WHEREAS, adequately funded and implemented local planning for future growth in Montana can maintain and enhance the value of the state's natural and human resources.

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

Section 1. Section 15-65-121, MCA, is amended to read:

"15-65-121. (Temporary) Distribution of tax proceeds -- general fund loan authority. (1) The proceeds of the tax imposed by 15-65-111 must, in accordance with the provisions of 15-1-501, be deposited in an account in the state special revenue fund to the credit of the department of revenue. The department may spend from that account in accordance with an expenditure appropriation by the legislature based on an estimate of the costs of collecting and disbursing the proceeds of the tax. Before allocating the balance of the tax proceeds in accordance with the provisions of 15-1-501 and as provided in subsections (1)(a) through (1)(e) of this section, the department shall determine the expenditures by state agencies for in-state lodging for each reporting period and deduct 4% of that amount from the tax proceeds received each reporting period. The amount deducted must be deposited in the general fund. The amount of $400,000 each year must be deposited in the Montana heritage preservation and development account provided for in 22-3-1004. On July 1, 1997, the amount of $45,000 is transferred to the department of commerce for purposes of a grant to the Fort Peck interpretive center. Except for the funds allocated under subsection (1)(d)(ii), the balance of the tax proceeds received each reporting period and not deducted pursuant to the expenditure appropriation or deposited in the Montana heritage preservation and development account or the general fund is statutorily appropriated, as provided in 17-7-502, and must be transferred to an account in the state special revenue fund to the credit of the department of commerce for grants to local governments for the development and implementation of growth policies and for tourism promotion and promotion of the state as a location for the production of motion pictures and television commercials, to the Montana historical society, to the university system, and to the department of fish, wildlife, and parks, as follows:

(a) 1% to the Montana historical society to be used for the installation or maintenance of roadside historical signs and historic sites;

(b) 2.5% to the university system for the establishment and maintenance of a Montana travel research program;

(c) 6.5% to the department of fish, wildlife, and parks for the maintenance of facilities in state parks that have both resident and nonresident use;

(d) (i) 67.5% to be used directly by the department of commerce;

(ii) $1 million each fiscal year of the amount allocated under subsection (1)(d)(i) to be used by the department of commerce for grants to eligible local governments for the development and implementation of growth policies as provided in [section 2]; and

(e) (i) except as provided in subsection (1)(e)(ii), 22.5% to be distributed by the department to regional nonprofit tourism corporations in the ratio of the proceeds collected in each tourism region to the total proceeds collected statewide; and

(ii) if 22.5% of the proceeds collected annually within the limits of a city or consolidated city-county exceeds $35,000, 50% of the amount available for distribution to the regional nonprofit tourism corporation in the region where the city or consolidated city-county is located, to be distributed to the nonprofit convention and visitors bureau in that city or consolidated city-county.

(2) If a city or consolidated city-county qualifies under this section for funds but fails to either recognize a nonprofit convention and visitors bureau or submit and gain approval for an annual marketing plan as required in 15-65-122, then those funds must be allocated to the regional nonprofit tourism corporation in the region in which the city or consolidated city-county is located.

(3) If a regional nonprofit tourism corporation fails to submit and gain approval for an annual marketing plan as required in 15-65-122, then those funds otherwise allocated to the regional nonprofit tourism corporation may be used by the department of commerce for tourism promotion and promotion of the state as a location for the production of motion pictures and television commercials. (Terminates July 1, 2001--sec. 23(3), Ch. 469, L. 1997.)

15-65-121. (Effective July 1, 2001) Distribution of tax proceeds -- general fund loan authority. (1) The proceeds of the tax imposed by 15-65-111 must, in accordance with the provisions of 15-1-501, be deposited in an account in the state special revenue fund to the credit of the department of revenue. The department may spend from that account in accordance with an expenditure appropriation by the legislature based on an estimate of the costs of collecting and disbursing the proceeds of the tax. Before allocating the balance of the tax proceeds in accordance with the provisions of 15-1-501 and as provided in subsections (1)(a) through (1)(e) of this section, the department shall determine the expenditures by state agencies for in-state lodging for each reporting period and deduct 4% of that amount from the tax proceeds received each reporting period. The amount deducted must be deposited in the general fund. Except for the funds allocated under subsection (1)(d)(ii), the balance of the tax proceeds received each reporting period and not deducted pursuant to the expenditure appropriation or deposited in the general fund is statutorily appropriated, as provided in 17-7-502, and must be transferred to an account in the state special revenue fund to the credit of the department of commerce for grants to eligible local governments for development and implementation of growth policies and for tourism promotion and promotion of the state as a location for the production of motion pictures and television commercials, to the Montana historical society, to the university system, and to the department of fish, wildlife, and parks, as follows:

(a) 1% to the Montana historical society to be used for the installation or maintenance of roadside historical signs and historic sites;

(b) 2.5% to the university system for the establishment and maintenance of a Montana travel research program;

(c) 6.5% to the department of fish, wildlife, and parks for the maintenance of facilities in state parks that have both resident and nonresident use;

(d) (i) 67.5% to be used directly by the department of commerce;

(ii) $1 million each fiscal year of the amount allocated under subsection (1)(d)(i) to be used by the department of commerce for grants to eligible local governments for the development and implementation of growth policies as provided in [section 2]; and

(e) (i) except as provided in subsection (1)(e)(ii), 22.5% to be distributed by the department to regional nonprofit tourism corporations in the ratio of the proceeds collected in each tourism region to the total proceeds collected statewide; and

(ii) if 22.5% of the proceeds collected annually within the limits of a city or consolidated city-county exceeds $35,000, 50% of the amount available for distribution to the regional nonprofit tourism corporation in the region where the city or consolidated city-county is located, to be distributed to the nonprofit convention and visitors bureau in that city or consolidated city-county.

(2) If a city or consolidated city-county qualifies under this section for funds but fails to either recognize a nonprofit convention and visitors bureau or submit and gain approval for an annual marketing plan as required in 15-65-122, then those funds must be allocated to the regional nonprofit tourism corporation in the region in which the city or consolidated city-county is located.

(3) If a regional nonprofit tourism corporation fails to submit and gain approval for an annual marketing plan as required in 15-65-122, then those funds otherwise allocated to the regional nonprofit tourism corporation may be used by the department of commerce for tourism promotion and promotion of the state as a location for the production of motion pictures and television commercials."

NEW SECTION. Section 2. Grants to local governments for development of growth policies. (1) Subject to appropriation of the funds allocated under 15-65-121(1)(d)(ii), the department of commerce shall make grants from the account established in 15-65-121 to eligible local governments for the development and implementation of growth policies that meet the requirements of 76-1-601.

(2) The department shall award grants to eligible local governments as long as funds are available. A grant may not exceed 50% of the eligible costs or $25,000, whichever is less.

(3) For the purposes of this section, "eligible local governments" means cities, towns, counties, and planning boards established pursuant to 76-1-101 that agree to:

(a) develop a growth policy that meets all of the requirements of 76-1-601 or carry out specific implementation activities described in a growth policy that meets all of the requirements of 76-1-601;

(b) contribute 50% of the eligible costs using cash or in-kind contributions;

(c) complete the growth policy or implementation activity within 1 year of the award of the grant; and

(d) refund the grant award if all activities agreed to under subsection (3)(a) are not completed within 1 year, unless the department grants an extension as provided in subsection (6).

(4) Any costs directly attributable to the activities described in subsection (3)(a) are eligible costs. Local governments are encouraged to solicit private donations to pay for their share of eligible costs.

(5) The department may adopt rules, if necessary, to administer this section including rules governing applications for grants, procedures for awarding grants, and monitoring use of granted funds.

(6) The department may authorize up to 1 additional year for completion of a growth policy or implementation activity if the department finds that the grant recipient is making reasonable progress toward completion of the policy or activity.

NEW SECTION. Section 3. Codification instruction. [Section 2] is intended to be codified as an integral part of Title 90, chapter 1, part 1, and the provisions of Title 90, chapter 1, part 1, apply to [section 2].

NEW SECTION. Section 4. Effective date. [This act] is effective July 1, 1999.

NEW SECTION. Section 5. Coordination instruction. (1) [This act] is void unless Senate Bill No. 97 is passed and approved and it includes a section that amends 76-1-601.

(2) If Senate Bill No. 97 is passed and approved and it does not amend Title 76, chapter 1, so that the term "master plan" is replaced with the term "growth policy", then the term "growth policy" must be replaced with the term "master plan" or the term that means "master plan" wherever it appears in [this act].

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