SENATE BILL NO. 459

INTRODUCED BY F. THOMAS, D. BERRY, B. DEPRATU, D. MOOD, M. TAYLOR

A BILL FOR AN ACT ENTITLED: "AN ACT CREATING THE COMMUNITY INFRASTRUCTURE GRANTS PROGRAM; PROVIDING FOR THE ADMINISTRATION OF THE COMMUNITY INFRASTRUCTURE GRANTS PROGRAM; PROVIDING ELIGIBILITY CRITERIA FOR COMMUNITY INFRASTRUCTURE GRANTS; PROVIDING EVALUATION CRITERIA FOR COMMUNITY INFRASTRUCTURE GRANTS; PROVIDING CERTAIN CONDITIONS FOR COMMUNITY INFRASTRUCTURE GRANTS; PROHIBITING CERTAIN COMPENSATION TO PUBLIC OFFICERS AND EMPLOYEES; PROVIDING PENALTIES; AND PROVIDING EFFECTIVE DATES AND A TERMINATION DATE."

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

NEW SECTION. Section 1. Short title. [Sections 1 through 10] may be cited as the "Community Infrastructure Grants Program Act".

NEW SECTION. Section 2. Policy and purpose. (1) The policy of the state of Montana expressed in [sections 1 through 10] is to provide and enhance a state capability to fund projects that enable, enhance, and promote orderly and well-conceived economic development throughout the state and that meet other crucial needs serving the public interest and the total environment of the citizens of Montana.

(2) The purposes of the community infrastructure grants program are to:

(a) enable communities to establish or enhance the infrastructure necessary to expand, diversify, and strengthen the local or regional economy and to attract enterprises that will create good-paying, permanent jobs; and

(b) develop and ensure economic opportunities for the benefit of all Montanans.

NEW SECTION. Section 3. Definitions. As used in [sections 1 through 10] the following definitions apply:

(1) "Community infrastructure grants account" means the community infrastructure grants account established in [section 4].

(2) "Department" means the department of commerce provided for in Title 2, chapter 15, part 18.

(3) "Enhance" means the development, augmentation, repair, or upgrading of existing community infrastructure.

(4) "Establish" means the purchase of land or improvements, the initial construction of improvements, or the initial development of land.

(5) "Financially feasible" means that adequate funds are available to complete the project as approved.

(6) "Infrastructure" means streets, roads, bridges, sewers and wastewater treatment facilities, the facilities associated with the provision of safe drinking water or water intended to be used in economic activity that does not necessarily require safe drinking water, solid waste disposal, and publicly owned utilities and similar facilities and services commonly known as public services or public works. As used in [sections 1 through 10], the term is intended to be liberally construed.

(7) "Project" means a planned and coordinated action or series of actions addressing an objective consistent with the policy and purpose of the community infrastructure grants program. A project may consist of problem analysis, feasibility or design studies, technology demonstration, research, construction, acquisition or enhancement of capital facilities, or other related actions.

(8) "Public benefits" means those benefits that accrue to citizens as a group and enhance the common well-being of the people of Montana.

(9) "Technically feasible" means that a project or activity can be designed, constructed, operated, or carried out to accomplish its objectives, using accepted business, financial, and other technical principles and concepts.

NEW SECTION. Section 4. Community infrastructure grants account -- statutory appropriation. (1) There is a community infrastructure grants account within the state special revenue fund established in 17-2-102.

(2) There must be paid into the community infrastructure grants account:

(a) $5 million from the general fund for the fiscal biennium ending June 30, 2001;

(b) all interest and income earned on funds in the community infrastructure grants account;

(c) grants, gifts, or donations received by the department for the purposes of the community infrastructure grants program;

(d) all fines received pursuant to [section 10]; and

(e) other appropriations to the community infrastructure grants account that the legislature considers appropriate.

(3) Expenditures may be made from the community infrastructure grants account for the following purposes:

(a) grants for designated projects; and

(b) administrative expenses, including the salaries and expenses of personnel, equipment, office space, and other expenses necessarily incurred in the administration of the community infrastructure grants program. These expenses may be funded before funding of projects.

(4) If any funds remain in the community infrastructure grants account after June 30, 2003, they must be transferred to the general fund as of July 1, 2003.

NEW SECTION. Section 5. Rules. (1) The department shall adopt rules to:

(a) prescribe the form and content of applications for grants;

(b) describe the terms and conditions of making grants;

(c) prescribe a monitoring program to evaluate the effectiveness of funded projects.

(2) The department may develop any other rules or procedures necessary to accomplish the objectives of the community infrastructure grants program.

NEW SECTION. Section 6. Community infrastructure grants. (1) Any department, agency, board, commission, or other division of state government or any class two or smaller city or town, county, or other political subdivision or a development corporation established under Title 32, chapter 4, or a tribal government within the state may apply, in accordance with the procedures established by the department, for a grant from the community infrastructure grants account for a project that is consistent with the policy and purpose of the community infrastructure grants program.

(2) The department shall evaluate applications under the eligibility criteria provided in [section 7] and the evaluation criteria provided in [section 8].

(3) The department shall solicit and consider in its evaluation of applications the views of interested persons and public agencies.

(4) Based on its evaluation of eligible applications, the department shall recommend to the governor projects to receive grants from the community infrastructure grants account.

(5) Within the amount of funds contained in the community infrastructure grants account, the governor may approve a grant for a project found to be consistent with the policies and purposes of the community infrastructure grants program.

(6) The department shall administer and oversee the grants to approved projects and monitor the projects.

NEW SECTION. Section 7. Eligibility requirements. (1) Except as provided under subsection (2), to be eligible for funding under the community infrastructure grants program, the proposed project must provide benefits in one or more of the following categories:

(a) feasibility studies focusing on the impediments to economic development within the jurisdiction applying for the grant. Feasibility studies must include an examination of the steps or conditions considered to be necessary to overcome the impediments identified.

(b) establishment of an industrial or business park, including the acquisition of land or the establishment or enhancement of improvements that will become community infrastructure;

(c) establishment of new or enhancement of existing community infrastructure for necessary and adequate public facilities and services, consistent with the purposes of the community infrastructure grants program;

(d) research, demonstration, or technical assistance to promote the creation of good-paying, permanent jobs, including efforts to make processing of the state's natural resources more environmentally compatible while adding value; and

(e) research to assess existing and emerging opportunities for and impediments to the future growth of the jurisdiction's and the state's economy.

(2) If sufficient eligible and qualified applications satisfying the objectives provided for in subsection (1) are not received or if there is a crucial state need, the department may evaluate and the governor may approve funding for projects that:

(a) enhance Montana's economy through the development of community infrastructure; or

(b) develop, promote, protect, or further Montana's total economic environment and public interest, including the general health, safety, welfare, and public resources of Montana citizens and communities.

(3) To be eligible for funding under the community infrastructure grants program, a project must:

(a) be technically feasible and financially feasible;

(b) be the best cost-effective alternative to address a problem or attain an objective;

(c) comply with statutory and regulatory standards protecting environmental quality;

(d) be from an applicant able and willing to enter into a contract with the department for the implementation of the proposed project or activity; and

(e) have the capability of producing new jobs in the state that will pay at or above the average weekly wage and that are considered to be permanent.

(4) A proposed project is not eligible for funding under the community infrastructure grants program if there is a liable party who would be relieved of financial or legal responsibility and who can reasonably be expected to be held responsible.

NEW SECTION. Section 8. Evaluation criteria -- priority. (1) Except as provided in subsection (2), the department shall consider the following criteria in evaluating eligible applications and in selecting projects to be recommended to the governor for funding:

(a) the degree to which the project will provide benefits in its eligibility category or categories;

(b) the degree to which the project will provide public benefits;

(c) the degree to which the project will promote, enhance, or advance the policies and purposes of the community infrastructure grants program;

(d) the degree to which the project will provide for the diversification, expansion, and strengthening of the jurisdiction's and the state's economy, including the in-state processing of the state's natural resources that will add value to those resources;

(e) the degree of need and urgency for the project;

(f) the extent to which the project sponsor or local entity is contributing to the costs of the project or is generating additional nonstate funds;

(g) the degree to which the jobs created could fall generally within the category of manufacturing; and

(h) any other criteria that the department considers necessary to carry out the policies and purposes of the community infrastructure grants program.

(2) Subject to the conditions of [sections 1 through 10], the department shall give priority to grant requests from local economic development agencies or authorities, including development corporations created under Title 32, chapter 4.

NEW SECTION. Section 9. Conditions of grants. Disbursement of grant funds under [sections 1 through 10] is subject to the following conditions that must be met by project sponsors:

(1) A scope of work and budget for the project must be approved by the department. Reduction in the scope of work or budget may not affect priority activities or improvements.

(2) Other funds required for project completion must have been committed, and the commitment must be documented.

(3) An agreement between the department and the grant applicant must be executed in a timely manner, taking into consideration any changed conditions or circumstances that govern the administration and disbursement of funds.

(4) Any other specific requirements must be accomplished as considered necessary by the department to realize the purpose of the grant as evidenced from the application to the department.

(5) State funding for a project under [sections 1 through 10] is not intended to relieve a liable party from financial or legal responsibility.

(6) The amount of a grant may not exceed $500,000.

NEW SECTION. Section 10. Prohibited compensation to public officers or employees -- penalty. (1) An officer, attorney, or other employee of the department may not directly or indirectly be the beneficiary of or receive any fee, commission, gift, or other consideration in connection with any transaction or business under the community infrastructure grants program other than the salary, fee, or other compensation received as an officer, attorney, or employee.

(2) A person convicted of violating any provision of this section must be punished by a fine not to exceed $2,000 plus the value of any consideration illegally received or by imprisonment for a term not to exceed 2 years, or both. Any fines collected under this section must be deposited in the community infrastructure grants account.

NEW SECTION. Section 11. Notification to tribal governments. The secretary of state shall send a copy of [this act] to each tribal government located on the seven Montana reservations and to the Little Shell band of Chippewa.

NEW SECTION. Section 12. Codification instruction. [Sections 1 through 10] are intended to be codified as an integral part of Title 90, and the provisions of Title 90 apply to [sections 1 through 10].

NEW SECTION. Section 13. Coordination instruction. If the funds required to be deposited into the community infrastructure grants account provided for in [section 4] are not appropriated by the 56th or 57th legislature, then [this act] is void.

NEW SECTION. Section 14. Effective date. (1) Except as provided in subsection (2), [this act] is effective July 1, 1999.

(2) [Section 13] and this section are effective on passage and approval.

NEW SECTION. Section 15. Termination. [This act] terminates June 30, 2003.

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