SENATE BILL NO. 249
INTRODUCED BY T. KEATING
A BILL FOR AN ACT ENTITLED: "AN ACT REPEALING THE RESOURCE INDEMNITY TRUST TAX WHEN THE BALANCE IN THE RESOURCE INDEMNITY TRUST TOTALS $100 MILLION; RENAMING THE RESOURCE INDEMNITY TRUST AND GROUND WATER ASSESSMENT ACT; ELIMINATING THE DIVERSION OF TRUST TAX PROCEEDS; AMENDING SECTIONS 15-36-304, 15-36-324, 15-38-101, 15-38-102, 15-38-103, 15-38-202, 75-10-743, 85-1-604, 85-2-905, AND 90-2-1104, MCA; REPEALING SECTIONS 15-36-320, 15-38-104, 15-38-105, 15-38-106, 15-38-107, 15-38-108, 15-38-109, 15-38-110, 15-38-111, 15-38-112, 15-38-113, 15-38-121, 15-38-125, 15-38-126, 15-38-127, 15-38-128, AND 15-38-129, MCA; AND PROVIDING EFFECTIVE DATES AND AN APPLICABILITY DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 15-36-304, MCA, is amended to read:
"15-36-304. Production tax rates imposed on oil and natural gas. (1) The production of oil and natural gas is taxed as provided in this section. The tax is distributed as provided in 15-36-324.
(2) Natural gas is taxed on the gross taxable value of production based on the type of well and type of production according to the following schedule for working interest and nonworking interest owners:
Working Nonworking
Interest Interest
(a) pre-1985 wells 18.55% 18.05% 14.8% 14.3%
(b) post-1985 wells
(i) first 12 months of qualifying
production 0.5% 0% 14.8% 14.3%
(ii) next 12 months of qualifying
production 12.5% 12% 14.8% 14.3%
(iii) after 24 months 15.15% 14.65% 14.8% 14.3%
(c) stripper natural gas pre-1985
and post-1985 wells 11% 10.5% 14.8% 14.3%
(3) The reduced tax rates under subsections (2)(b)(i) and (2)(b)(ii) on production for the first 24 months of natural gas production from a post-1985 well begin following the last day of the calendar month immediately preceding the month in which natural gas is placed in a natural gas distribution system, provided that notification has been given to the department.
(4) Oil is taxed on the gross taxable value of production based on the type of well and type of production according to the following schedule for working interest and nonworking interest owners:
Working Nonworking
Interest Interest
(a) primary recovery production
(i) pre-1985 wells 13.9% 13.4% 16.9% 16.4%
(ii) post-1985 wells
(A) first 12 months of qualifying
production 0.5% 0% 14.8% 14.3%
(B) next 12 months of qualifying
production 7.5% 7.0% 14.8% 14.3%
(C) after 24 months 12.5% 12% 14.8% 14.3%
(b) stripper oil production
(i) pre-1985 wells 10.5% 10% 16.9% 16.4%
(ii) post-1985 wells 10.5% 10% 14.8% 14.3%
(iii) stripper exemption production
(A) pre-1985 wells 5.5% 5% 16.9% 16.4%
(B) post-1985 wells 5.5% 5% 14.8% 14.3%
(c) horizontally completed well production
(i) first 18 months of qualifying
production 0.5% 0% 5.5% 5%
(ii) next 6 months of qualifying
production 7.5% 7% 12.5% 12%
(iii) after 24 months 12.5% 12% 12.5% 12%
(d) incremental production
(i) new or expanded secondary recovery production
(A) pre-1985 wells 8.5% 8% 16% 15.5%
(B) post-1985 wells 8.5% 8% 10.5% 10%
(ii) new or expanded tertiary production
(A) pre-1985 wells 5.8% 5.3% 15% 14.5%
(B) post-1985 wells 5.8% 5.3% 9.5% 9%
(e) horizontally recompleted well
(i) first 18 months 5.5% 5% 5.5% 5%
(ii) after 18 months 12.5% 12% 12.5% 12%
(5) (a) The reduced tax rates under subsections (4)(a)(ii)(A) and (4)(a)(ii)(B) for the first 24 months of oil production from a post-1985 well begin following the last day of the calendar month immediately preceding the month in which oil is pumped or flows, provided that notification has been given to the department.
(b) (i) The reduced tax rates under subsections (4)(c)(i) and (4)(c)(ii) on oil production from a horizontally completed well for the first 24 months of production begin following the last day of the calendar month immediately preceding the month in which oil is pumped or flows, provided that the well has been certified as a horizontally completed well to the department by the board.
(ii) The reduced tax rate under subsection (4)(e)(i) on oil production from a horizontally recompleted well for the first 18 months of production begins following the last day of the calendar month immediately preceding the month in which oil is pumped or flows, provided that the well has been certified as a horizontally recompleted well to the department by the board.
(c) Incremental production is taxed as provided in subsection (4)(d) if the average price per barrel of oil as reported in the Wall Street Journal for west Texas intermediate crude oil during a calendar quarter is less than $30 a barrel. If the price of oil is equal to or greater than $30 a barrel in a calendar quarter as determined in subsection (5)(d), then incremental production from pre-1985 wells and from post-1985 wells is taxed at the rate imposed on primary recovery production under subsections (4)(a)(i) and (4)(a)(ii)(C), respectively, for production occurring in that quarter.
(d) For the purposes of subsection (5)(c), the average price per barrel must be computed by dividing the sum of the daily price for west Texas intermediate crude oil as reported in the Wall Street Journal for the calendar quarter by the number of days on which the price was reported in the quarter.
(6) The tax rates imposed under subsections (2) and (4) on working interest owners and nonworking interest owners must be adjusted to include the privilege and license tax adopted by the board of oil and gas conservation pursuant to 82-11-131."
Section 2. Section 15-36-324, MCA, is amended to read:
"15-36-324. Distribution of taxes -- rules. (1) For each calendar quarter, the department of revenue shall determine the amount of tax, late payment interest, and penalty collected under this part. For purposes of distribution of the taxes to county and school taxing units, the department shall determine the amount of oil and natural gas production taxes paid on production from pre-1985 wells, post-1985 wells, and horizontally completed wells located in the taxing unit.
(2) Except as provided in subsections (3) through (5), oil production taxes must be distributed as follows:
(a) The amount equal to 39.3% 35.9% of the oil production taxes, including late payment interest and penalty, collected under
this part must be distributed as provided in subsection (8).
(b) The remaining 60.7% 64.1% of the oil production taxes, plus accumulated interest earned on the amount allocated under this
subsection (2)(b), must be deposited in the state special revenue fund in the state treasury and transferred to the county and school
taxing units for distribution as provided in subsection (11).
(3) (a) The amount equal to 100% of the oil production taxes, including late payment interest and penalty, collected from working interest owners on production from post-1985 wells occurring during the first 12 months of production must be distributed as provided in subsection (9).
(b) (i) The amount equal to 10.25% 3.8% of the oil production taxes, including late payment interest and penalty, collected from
working interest owners on production from post-1985 wells occurring during the next 12 months of production must be distributed
as provided in subsection (9).
(ii) The remaining 89.75% 96.2% of the oil production taxes, plus accumulated interest earned on the amount allocated under this
subsection (3)(b), must be deposited in the state special revenue fund in the state treasury and transferred to the county and school
taxing units for distribution as provided in subsection (11).
(4) (a) The amount equal to 100% of the oil production taxes, including late payment interest and penalty, collected under this part on production from horizontally completed wells occurring during the first 18 months of production must be distributed as provided in subsection (9).
(b) (i) The amount equal to 10.25% 3.8% of the oil production taxes, including late payment interest and penalty, collected from
working interest owners on production from horizontally completed wells occurring during the next 6 months of production must be
distributed as provided in subsection (9).
(ii) The remaining 89.75% 96.2% of the oil production taxes, plus accumulated interest earned on the amount allocated under this
subsection (4)(b), must be deposited in the state special revenue fund in the state treasury and transferred to the county and school
taxing units for distribution as provided in subsection (11).
(c) The amount equal to 100% of the oil production taxes, including late payment interest and penalty, collected under this part on the incremental production from horizontally recompleted wells occurring during the first 18 months of production must be distributed as provided in subsection (8).
(5) (a) The amount equal to 13.8% 5.2% of the oil production taxes, including late payment interest and penalty, collected from
working interest owners on stripper exemption production from pre-1985 wells and post-1985 wells must be distributed as provided
in subsection (9).
(b) The remaining 86.2% 94.8% of the oil production taxes, plus accumulated interest earned on the amount allocated under this
subsection (5)(b), must be deposited in the state special revenue fund in the state treasury and transferred to the county and school
taxing units for distribution as provided in subsection (11).
(6) Except as provided in subsection (7), natural gas production taxes must be allocated as follows:
(a) The amount equal to 14% 12% of the natural gas production taxes, including late payment interest and penalty, collected
under this part must be distributed as provided in subsection (10).
(b) The remaining 86% 88% of the natural gas production taxes, plus accumulated interest earned on the amount allocated under
this subsection (6)(b), must be deposited in the state special revenue fund in the state treasury and transferred to the county and
school taxing units for distribution as provided in subsection (11).
(7) (a) The amount equal to 100% of the natural gas production taxes, including late payment interest and penalty, collected from working interest owners under this part on production from post-1985 wells occurring during the first 12 months of production must be distributed as provided in subsection (9).
(b) (i) The amount equal to 6.25% 2.3% of the natural gas production taxes, including late payment interest and penalty, collected
from working interest owners on production from post-1985 wells occurring during the next 12 months of production must be
distributed as provided in subsection (9).
(ii) The remaining 93.75% 97.7% of the oil production taxes, plus accumulated interest earned on the amount allocated under this
subsection (7)(b), must be deposited in the state special revenue fund in the state treasury and transferred to the county and school
taxing units for distribution as provided in subsection (11).
(8) The department shall, in accordance with the provisions of 15-1-501, distribute the state portion of oil production taxes specified in subsections (2)(a) and (4)(c), including late payment interest and penalty collected, as follows:
(a) 86.21% 94.3% to the state general fund; and
(b) 5.17% 5.7% to the state special revenue fund for the purpose of paying expenses of the board as provided in 82-11-135; and
(c) 8.62% to be distributed as provided by 15-38-106(2).
(9) The department shall distribute 100% of the state portion of oil and natural gas production taxes specified in subsections
(3)(a), (3)(b)(i), (4)(a), (4)(b)(i), (5)(a), (7)(a), and (7)(b)(i), including late payment interest and penalty collected, as follows:
(a) 37.5% to the state special revenue fund for the purpose of paying expenses of the board as provided in 82-11-135; and
(b) 62.5% to be distributed as provided by 15-38-106(2).
(10) The department shall, in accordance with the provisions of 15-1-501, distribute the state portion of natural gas production taxes specified in subsection (6)(a), including late payment interest and penalty collected, as follows:
(a) 76.8% 89.8% to the state general fund; and
(b) 8.7% 10.2% to the state special revenue fund for the purpose of paying expenses of the board as provided in 82-11-135; and
(c) 14.5% to be distributed as provided by 15-38-106(2).
(11) (a) For the purpose of distribution of the oil and natural gas production taxes from pre-1985 wells, the department shall each calendar quarter adjust the unit value determined under 15-36-323 according to the ratio that the oil and natural gas production taxes from pre-1985 wells collected during the calendar quarter for which the distribution occurs plus penalties and interest on delinquent oil and natural gas production taxes from pre-1985 wells bears to the total liability for the oil and natural gas production taxes from pre-1985 wells for the quarter for which the distribution occurs. The amount of oil and natural gas production taxes distributions must be calculated and distributed as follows:
(i) By the dates referred to in subsection (12), the department shall calculate and distribute to each eligible county the amount of oil and natural gas production taxes from pre-1985 wells for the quarter, determined by multiplying the unit value, as adjusted in this subsection (11)(a), by the units of production on which oil and natural gas production taxes from pre-1985 wells were owed for the calendar quarter for which the distribution occurs.
(ii) Any amount by which the total tax liability exceeds or is less than the total distributions determined in this subsection (11)(a) must be calculated and distributed in the following manner:
(A) The excess amount or shortage must be divided by the total distribution determined for that period to obtain an excess or shortage percentage.
(B) The excess percentage must be multiplied by the distribution to each taxing unit, and this amount must be added to the distribution to each respective taxing unit.
(C) The shortage percentage must be multiplied by the distribution to each taxing unit, and this amount must be subtracted from the distribution to each respective taxing unit.
(b) Except as provided in subsection (11)(c), the county treasurer shall distribute the money received under subsection (12) from pre-1985 wells to the taxing units that levied mills in fiscal year 1990 against calendar year 1988 production in the same manner that all other property tax proceeds were distributed during fiscal year 1990 in the taxing unit, except that a distribution may not be made to a municipal taxing unit.
(c) The board of county commissioners of a county may direct the county treasurer to reallocate the distribution of oil and natural gas production tax money that would have gone to a taxing unit, as provided in subsection (11)(b), to another taxing unit or taxing units, other than an elementary school or high school, within the county under the following conditions:
(i) The county treasurer shall first allocate the oil and natural gas production taxes to the taxing units within the county in the same proportion that all other property tax proceeds were distributed in the county in fiscal year 1990.
(ii) If the allocation in subsection (11)(c)(i) exceeds the total budget for a taxing unit, the commissioners may direct the county treasurer to allocate the excess to any taxing unit within the county.
(d) The board of trustees of an elementary or high school district may reallocate the oil and natural gas production taxes distributed to the district by the county treasurer under the following conditions:
(i) The district shall first allocate the oil and natural gas production taxes to the budgeted funds of the district in the same proportion that all other property tax proceeds were distributed in the district in fiscal year 1990.
(ii) If the allocation under subsection (11)(d)(i) exceeds the total budget for a fund, the trustees may allocate the excess to any budgeted fund of the school district.
(e) For all production from post-1985 wells and horizontally drilled wells completed after December 31, 1993, the county treasurer shall distribute oil and natural gas production taxes received under subsections (2)(b), (3)(b)(ii), (4)(b)(ii), (5)(b), (6)(b), and (7)(b)(ii) between county and school taxing units in the relative proportions required by the levies for state, county, and school district purposes in the same manner as property taxes were distributed in the preceding fiscal year.
(f) The allocation to the county in subsection (11)(e) must be distributed by the county treasurer in the relative proportions required by the levies for county taxing units and in the same manner as property taxes were distributed in the preceding fiscal year.
(g) The money distributed in subsection (11)(e) that is required for the county mill levies for school district retirement obligations and transportation schedules must be deposited to the funds established for these purposes.
(h) The oil and natural gas production taxes distributed under subsection (11)(b) that are required for the 6-mill university levy imposed under 20-25-423 and for the county equalization levies imposed under 20-9-331 and 20-9-333, as those sections read on July 1, 1989, must be remitted by the county treasurer to the state treasurer.
(i) The oil and natural gas production taxes distributed under subsection (11)(e) that are required for the 6-mill university levy imposed under 20-25-423, for the county equalization levies imposed under 20-9-331 and 20-9-333, and for the state equalization aid levy imposed under 20-9-360 must be remitted by the county treasurer to the state treasurer.
(j) The amount of oil and natural gas production taxes remaining after the treasurer has remitted the amounts determined in subsections (11)(h) and (11)(i) is for the exclusive use and benefit of the county and school taxing units.
(12) The department shall remit the amounts to be distributed in subsection (11) to the county treasurer by the following dates:
(a) On or before August 1 of each year, the department shall remit to the county treasurer oil and natural gas production tax payments received for the calendar quarter ending March 31 of the current year.
(b) On or before November 1 of each year, the department shall remit to the county treasurer oil and natural gas production tax payments received for the calendar quarter ending June 30 of the current year.
(c) On or before February 1 of each year, the department shall remit to the county treasurer oil and natural gas production tax payments received for the calendar quarter ending September 30 of the previous year.
(d) On or before May 1 of each year, the department shall remit to the county treasurer oil and natural gas production tax payments received for the calendar quarter ending December 31 of the previous calendar year.
(13) The department shall provide to each county by May 31 of each year the amount of gross taxable value represented by all types of production taxed under 15-36-304 for the previous calendar year multiplied by 60%. The resulting value must be treated as taxable value for county classification purposes and for county bonding purposes.
(14) (a) In the event that the board of oil and gas conservation revises the privilege and license tax pursuant to 82-11-131, the department shall, by rule, change the formula under this section for distribution of taxes collected under 15-36-304. The revised formula must provide for the distribution of taxes in an amount equal to the rate adopted by the board of oil and gas conservation for the expenses of the board.
(b) Before the department adopts a rule pursuant to subsection (14)(a), it shall present the proposed rule to the revenue oversight committee.
(15) The distribution to taxing units under this section is statutorily appropriated as provided in 17-7-502."
Section 3. Section 15-38-101, MCA, is amended to read:
"15-38-101. Short title. This chapter shall be known and may be cited as "The Montana Resource Indemnity Trust and Ground
Water Assessment Act"."
Section 4. Section 15-38-102, MCA, is amended to read:
"15-38-102. Legislative policy. It is the policy of the state of Montana to indemnify its citizens for the loss of long-term value
resulting from the depletion of its mineral resource base and for environmental damage caused by mineral development. This policy
of indemnification is achieved by establishing a permanent resource indemnity trust, as required by Article IX, section 2, of the
Montana constitution, by supporting ground water assessment programs from the proceeds of a tax levied on mineral extraction, and
by allocating spendable revenues revenue:
(1) to protect and restore the environment from damages resulting from mineral development; and
(2) to support a variety of development programs that benefit the economy of the state and the lives of Montana citizens; and
(3) to assess the state's ground water resources."
Section 5. Section 15-38-103, MCA, is amended to read:
"15-38-103. Definitions. As used in this chapter, the following definitions apply:
(1) "Department" means department of revenue.
(2) "Gross value of product" means, except as provided in 15-38-125 through 15-38-129, the market value of any merchantable
mineral extracted or produced during the taxable year.
(3)(1) "Mineral" means any precious stones or gems, gold, silver, copper, coal, lead, petroleum, natural gas, oil, uranium, talc,
vermiculite, limestone, or other nonrenewable merchantable products extracted from the surface or subsurface of the state of
Montana.
(4)(2) "Total environment" means air, water, soil, flora, and fauna and the social, economic, and cultural conditions that influence
communities and individual citizens."
Section 6. Section 15-38-202, MCA, is amended to read:
"15-38-202. (Temporary) Investment of resource indemnity trust fund -- expenditure -- minimum balance. (1) All money
paid into the resource indemnity trust fund on or before January 1 of the year following the date on which the fund reaches the sum of
$100 million, as certified by the governor through executive order, including money payable into the fund under the provisions of
15-36-324 and 15-37-117, must be invested at the discretion of the board of investments. Only the net earnings may be appropriated
and expended until the fund reaches $100 million, as certified by the governor through executive order. If the fund balance exceeds
$100 million on January 1 of the year following the date of the executive order, the excess must remain in the fund. Thereafter, all net
earnings and all receipts interest income may be appropriated by the legislature and expended, provided that the balance in the fund
may never be less than $100 million. If the fund balance is below $100 million on or after January 1 of the year following the date of
the executive order, interest income earned from the fund must be deposited in the fund until the fund reaches $100 million.
(2) (a) At the beginning of each fiscal year, there is allocated from the interest income of the resource indemnity trust fund:
(i) $240,000, which is statutorily appropriated, as provided in 17-7-502, from the renewable resource grant and loan program state special revenue account to support the operations of the environmental science-water quality instructional programs at Montana state university-northern, to be used for support costs, for matching funds necessary to attract additional funds to further expand statewide impact, and for enhancement of the facilities related to the programs;
(ii) $1 million to be deposited into the renewable resource grant and loan program state special revenue account, created by 85-1-604, for the purpose of making grants; and
(iii) $1.5 million to be deposited into the reclamation and development grants special revenue account, created by 90-2-1104, for the purpose of making grants.
(b) At the beginning of each biennium, there is allocated from the interest income of the resource indemnity trust fund:
(i) an amount not to exceed $175,000 to the environmental contingency account pursuant to the conditions of 75-1-1101;
(ii) an amount not to exceed $50,000 to the oil and gas production damage mitigation account pursuant to the conditions of 82-11-161; and
(iii) $500,000 to be deposited into the water storage state special revenue account created by 85-1-631.
(c) The remainder of the interest income is allocated as follows:
(i) Thirty-six percent of the interest income of the resource indemnity trust fund must be allocated to the renewable resource grant and loan program state special revenue account created by 85-1-604.
(ii) Eighteen percent of the interest income of the resource indemnity trust fund must be allocated to the hazardous waste/CERCLA special revenue account provided for in 75-10-621.
(iii) Forty percent of the interest income from the resource indemnity trust fund must be allocated to the reclamation and development grants account provided for in 90-2-1104.
(iv) Six percent of the interest income of the resource indemnity trust fund must be allocated to the environmental quality protection fund provided for in 75-10-704.
(3) Any formal budget document prepared by the legislature or the executive branch that proposes to appropriate funds other than as provided for by the allocations in subsection (2) must specify the amount of money from each allocation that is proposed to be diverted and the proposed use of the diverted funds. A formal budget document includes a printed and publicly distributed budget proposal or recommendation, an introduced bill, or a bill developed during the legislative appropriation process or otherwise during a legislative session.
15-38-202. (Effective July 1, 1999) Investment of resource indemnity trust fund -- expenditure -- minimum balance. (1) All
money paid into the resource indemnity trust fund on or before January 1 of the year following the date on which the fund reaches the
sum of $100 million, as certified by the governor through executive order, including money payable into the fund under the
provisions of 15-36-324 and 15-37-117, must be invested at the discretion of the board of investments. Only the net earnings may be
appropriated and expended until the fund reaches $100 million, as certified by the governor through executive order. If the fund
balance exceeds $100 million on January 1 of the year following the date of the executive order, the excess must remain in the fund.
Thereafter, all net earnings and all receipts interest income may be appropriated by the legislature and expended, provided that the
balance in the fund may never be less than $100 million. If the fund balance is below $100 million on or after January 1 of the year
following the date of the executive order, interest income earned from the fund must be deposited in the fund until the fund reaches
$100 million.
(2) (a) At the beginning of each fiscal year, there is allocated from the interest income of the resource indemnity trust fund:
(i) $240,000, which is statutorily appropriated, as provided in 17-7-502, from the renewable resource grant and loan program state special revenue account to support the operations of the environmental science-water quality instructional programs at Montana state university-northern, to be used for support costs, for matching funds necessary to attract additional funds to further expand statewide impact, and for enhancement of the facilities related to the programs;
(ii) $1 million to be deposited into the renewable resource grant and loan program state special revenue account, created by 85-1-604, for the purpose of making grants; and
(iii) $1.5 million to be deposited into the reclamation and development grants special revenue account, created by 90-2-1104, for the purpose of making grants.
(b) At the beginning of each biennium, there is allocated from the interest income of the resource indemnity trust fund:
(i) an amount not to exceed $175,000 to the environmental contingency account pursuant to the conditions of 75-1-1101;
(ii) an amount not to exceed $50,000 to the oil and gas production damage mitigation account pursuant to the conditions of 82-11-161; and
(iii) $500,000 to be deposited into the water storage state special revenue account created by 85-1-631.
(c) At the beginning of each fiscal year, there is allocated from the interest income of the resource indemnity trust fund up to $200,000 to be deposited in the orphan share account established in 75-10-743.
(d) The remainder of the interest income is allocated as follows:
(i) Thirty-six percent of the interest income of the resource indemnity trust fund must be allocated to the renewable resource grant and loan program state special revenue account created by 85-1-604.
(ii) Eighteen percent of the interest income of the resource indemnity trust fund must be allocated to the hazardous waste/CERCLA special revenue account provided for in 75-10-621.
(iii) Forty percent of the interest income from the resource indemnity trust fund must be allocated to the reclamation and development grants account provided for in 90-2-1104.
(iv) Six percent of the interest income of the resource indemnity trust fund must be allocated to the environmental quality protection fund provided for in 75-10-704.
(3) Any formal budget document prepared by the legislature or the executive branch that proposes to appropriate funds other than as provided for by the allocations in subsection (2) must specify the amount of money from each allocation that is proposed to be diverted and the proposed use of the diverted funds. A formal budget document includes a printed and publicly distributed budget proposal or recommendation, an introduced bill, or a bill developed during the legislative appropriation process or otherwise during a legislative session."
Section 7. Section 75-10-743, MCA, is amended to read:
"75-10-743. (Temporary) Orphan share state special revenue account -- reimbursement of claims -- payment of department costs. (1) There is an orphan share account in the state special revenue fund established in 17-2-102 that is to be administered by the department. Money in the account is available to the department by appropriation and must be used to reimburse remedial action costs claimed pursuant to 75-10-742 through 75-10-752 and to pay costs incurred by the department in defending the orphan share.
(2) There must be deposited in the orphan share account:
(a) money allocated from the metalliferous mines license tax pursuant to 15-37-117;
(b) all penalties assessed pursuant to 75-10-750(12);
(c) funds received from the interest income of the resource indemnity trust fund pursuant to 15-38-202;
(d) funds allocated from the resource indemnity and ground water assessment tax proceeds provided for in 15-38-106;
(e)(d) unencumbered funds remaining in the abandoned mines state special revenue account provided in section 19, Chapter 584,
Laws of 1995, as of [the termination date of section 19, Chapter 584, Laws of 1995, as may be amended];
(f)(e) interest income on the account;
(g)(f) funds received from settlements pursuant to 75-10-719(7); and
(h)(g) funds received from reimbursement of the department's orphan share defense costs pursuant to subsection (6).
(3) If the orphan share fund contains sufficient money, valid claims must be reimbursed subsequently in the order in which they were received by the department. If the orphan share fund does not contain sufficient money to reimburse claims for completed remedial actions, a reimbursement may not be made and the orphan share fund, the department, and the state are not liable for making any reimbursement for the costs. The department and the state are not liable for any penalties if the orphan share fund does not contain sufficient money to reimburse claims, and interest may not accrue on outstanding claims.
(4) Except as provided in subsection (8), claims may not be submitted and remedial action costs may not be reimbursed from the orphan share fund until all remedial actions, except for operation and maintenance, are completed at a facility.
(5) Reimbursement from the orphan share fund must be limited to actual documented remedial action costs incurred after the date of petition provided in 75-10-745. Reimbursement may not be made for attorney fees, legal costs, or operation and maintenance costs.
(6) (a) The department's costs incurred in defending the orphan share must be paid by the persons participating in the allocation under 75-10-742 through 75-10-752 in proportion to their allocated shares. The orphan share fund is responsible for a portion of the department's costs incurred in defending the orphan share in proportion to the orphan share's allocated share, as follows:
(i) If sufficient funds are available in the orphan share fund, the orphan share fund must pay the department's costs incurred in defending the orphan share in proportion to the share of liability allocated to the orphan share.
(ii) If sufficient funds are not available in the orphan share fund, persons participating in the allocation under 75-10-742 through 75-10-752 shall pay all the orphan share's allocated share of the department's costs incurred in defending the orphan share in proportion to each person's allocated share of liability.
(b) A person who pays the orphan share's proportional share of costs has a claim against the orphan share fund and must be reimbursed as provided in subsection (3).
(7) If any money remains in the orphan share fund after June 30, 2005, and after outstanding claims are paid, the money must be deposited in the general fund.
(8) If the lead liable person under 75-10-746 presents evidence to the department that the person cannot complete the remedial actions without partial reimbursement and that a delay in reimbursement will cause undue financial hardship on the person, the department may allow the submission of claims and may reimburse the claims prior to the completion of all remedial actions. A person is not eligible for early reimbursement unless the person is in substantial compliance with all department-approved remedial action plans.
(9) A person participating in the allocation process who received funds under the mixed funding pilot program provided for in sections 14 through 20, Chapter 584, Laws of 1995, may not claim or receive reimbursement from the orphan share fund for the amount of funds received under the mixed funding pilot program that are later attributed to the orphan share under the allocation process. (Terminates June 30, 2005--sec. 30, Ch. 415, L. 1997.)"
Section 8. Section 85-1-604, MCA, is amended to read:
"85-1-604. Renewable resource grant and loan program state special revenue account created -- revenue allocated -- limitations on appropriations from account. (1) There is a renewable resource grant and loan program state special revenue account within the state special revenue fund established in 17-2-102.
(2) Except to the extent that they are required to be credited to the renewable resource loan debt service fund pursuant to 85-1-603, there must be paid into the renewable resource grant and loan program state special revenue account:
(a) all revenue of the works and other money as provided in 85-1-332;
(b) the interest income of the resource indemnity trust fund as provided in and subject to the conditions of 15-38-202;
(c) the excess of the coal severance tax proceeds allocated by 85-1-603 to the renewable resource loan debt service fund above debt service requirements as provided in and subject to the conditions of 85-1-619; and
(d) any fees or charges collected by the department pursuant to 85-1-616 for the servicing of loans, including arrangements for
obtaining security interests; and
(e) the resource indemnity and ground water assessment tax proceeds as provided in 15-38-106(2)(b).
(3) Appropriations may be made from the renewable resource grant and loan program state special revenue account for the following purposes and subject to the following conditions:
(a) The amount of resource indemnity trust fund interest earnings allocated to the special revenue account under 15-38-202(2)(a)(ii) must be used for renewable resource grants.
(b) An amount less than or equal to that paid into the account under 85-1-332 and only that amount may be appropriated for the operation and maintenance of state-owned projects and works. If the amount of money available for appropriation under this subsection (3)(b) is greater than that necessary for operation and maintenance expenses, the excess may be appropriated as provided in subsection (3)(c).
(c) An amount less than or equal to that paid into the account from the resource indemnity trust account plus any excess from subsection (3)(b) and only that amount may be appropriated from the account for expenditures that meet the policies and objectives of the renewable resource grant and loan program. If the amount of money available for appropriation under this subsection (3)(c) is greater than that necessary for operation and maintenance expenses, the excess may be appropriated as provided in subsection (3)(d).
(d) An amount less than or equal to that paid into the account from the sources provided for in subsections (2)(c) and (2)(d) and any excess from subsection (3)(c) and only that amount may be appropriated from the account for loans and grants for renewable resource projects; for purchase of liens and operation of property as provided in 85-1-615; for administrative expenses, including but not limited to the salaries and expenses of personnel, equipment, and office space; for the servicing of loans, including arrangements for obtaining security interests; and for other necessities incurred in administering the loans and grants."
Section 9. Section 85-2-905, MCA, is amended to read:
"85-2-905. Ground water assessment account. (1) There is a ground water assessment account within the special revenue fund established in 17-2-102. The Montana bureau of mines and geology is authorized to expend amounts from the account necessary to carry out the purposes of this part.
(2) The account may be used by the Montana bureau of mines and geology only to carry out the provisions of this part.
(3) Subject to the direction of the ground water assessment steering committee, the Montana bureau of mines and geology shall investigate opportunities for the participation and financial contribution of agencies of federal and local governments to accomplish the purposes of this part.
(4) There must be deposited in the account:
(a) at the beginning of each fiscal year, 14.1% of the proceeds from the resource indemnity and ground water assessment tax, as
authorized by 15-38-106, and 2.2% of the proceeds from the metalliferous mines license taxes, as authorized by 15-37-117, unless at
the beginning of the fiscal year the unobligated cash balance in the ground water assessment account:
(i) equals or exceeds $666,000, in which case an allocation may not be made and the proceeds must be deposited in the resource indemnity trust fund established by 15-38-201; or
(ii) is less than $666,000, in which case an amount equal to the difference between the unobligated cash balance and $666,000 must be allocated to the ground water assessment account and any remaining amount must be deposited in the resource indemnity trust fund established by 15-38-201;
(b) funds provided by state government agencies and by local governments to carry out the purposes of this part; and
(c) proceeds allocated to the account as provided in 15-36-324 and 15-38-106; and
(d)(c) funds provided by any other public or private sector organization or person in the form of gifts, grants, or contracts
specifically designated to carry out the purposes of this part."
Section 10. Section 90-2-1104, MCA, is amended to read:
"90-2-1104. Reclamation and development grants account. (1) There is a reclamation and development grants special revenue account within the state special revenue fund established in 17-2-102.
(2) There must be paid into the reclamation and development grants account money allocated from:
(a) the interest income of the resource indemnity trust fund under the provisions of 15-38-202; and
(b) the resource indemnity and ground water assessment tax under the provisions of 15-38-106;
(c)(b) the the metal mines license tax proceeds as provided in 15-37-117(1)(e); and
(d) the oil and gas production tax as provided in 15-36-324 and 15-38-106.
(3) Appropriations may be made from the reclamation and development 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 grants program. These expenses may be funded before funding of projects."
NEW SECTION. Section 11. Repealer. Sections 15-36-320, 15-38-104, 15-38-105, 15-38-106, 15-38-107, 15-38-108, 15-38-109, 15-38-110, 15-38-111, 15-38-112, 15-38-113, 15-38-121, 15-38-125, 15-38-126, 15-38-127, 15-38-128, and 15-38-129, MCA, are repealed.
NEW SECTION. Section 12. 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 13. Effective dates. (1) [Sections 6 and 12 and this section] are effective July 1, 1999.
(2) [Sections 1 through 5, 7 through 11, and 14] are effective January 1 of the year following the date that the governor by executive order certifies to the secretary of state that the resource indemnity trust fund has reached $100 million. The secretary of state shall notify the department of revenue and the legislative services division of this certification.
NEW SECTION. Section 14. Applicability. (1) Taxes owed for the previous calendar year's production must be paid pursuant to 15-38-106 as it read prior to [the effective date of this section].
(2) Taxes owed or refunds issued for production occurring in the calendar year immediately preceding [the effective date of this section] must be distributed pursuant to 15-38-106 as that section read prior to [the effective date of this section].
(3) [This act] does not affect any taxes, interest, or penalty that was incurred prior to [the effective date of this section].
(4) The department of revenue may audit any taxpayer who was subject to the resource indemnity trust tax prior to [the effective date of this section] and assess any tax, interest, or penalty due. The department may also undertake any action to collect the tax, interest, or penalty for any tax that was incurred under Title 15, chapter 38, as that law read prior to [the effective date of this section], subject only to the statute of limitations under 15-38-112 as that section read prior to [the effective date of this section]. Any additional taxes, interest, or penalty collected after [the effective date of this section] must be deposited into the state resource indemnity trust fund.
(5) The department shall issue tax refunds pursuant to 15-38-111 subject only to the statute of limitations provision of 15-38-112 as those sections read prior to [the effective date of this section]. Refunds must be paid from the state resource indemnity trust fund.
- END -
Latest Version of SB 249 (SB0249.01)
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Status of this Bill
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