House Bill No. 518

Introduced By Ewer



A Bill for an Act entitled: An Act generally revising local government laws; allowing appointed municipal officials to reside outside city limits; increasing the period for municipal installment contracts from 5 years to 10 years; clarifying that amortization bonds are not preferred over serial bonds; allowing refunding bonds to be sold at less than par value; allowing multijurisdictional service districts to provide programs for the protection of human health and the environment; allowing money in a district reserve account to be used to pay the final principal and interest payment on bonds or warrants; allowing a vote on changing county water or sewer district boundaries to be held by mail ballot; allowing a fire service area to incur indebtedness in an amount not exceeding 18 percent of the area's taxable value; allowing a municipality to incur indebtedness for the repair and rehabilitation of certain facilities; regulating local government requirements for recordkeeping; amending sections 7-4-4111, 7-5-4302, 7-5-4306, 7-7-2209, 7-7-4208, 7-7-4251, 7-7-4626, 7-11-1102, 7-12-2171, 7-12-4169, 7-12-4203, 7-13-2208, 7-14-2526, 7-16-4104, and 7-33-2404, MCA; and providing effective dates.



Be it enacted by the Legislature of the State of Montana:



Section 1.  Section 7-4-4111, MCA, is amended to read:

"7-4-4111.   Determination of vacancy in municipal office. An office becomes vacant on the happening of any of the following events before the expiration of the term of the incumbent:

(1)  the death of the incumbent;

(2)  a determination pursuant to Title 53, chapter 21, part 1, that he the incumbent is mentally ill;

(3)  his the incumbent's resignation;

(4)  his the incumbent's removal from office;

(5)  his the incumbent's absence from the city or town continuously for 10 days without the consent of the council;

(6)  his the incumbent's open neglect or refusal to discharge his duties;

(7)  his the incumbent's ceasing to be a resident of the city or town or, in the case of an alderman a city council member, his ceasing to be a resident of his the city council member's ward;. This subsection does not apply to an appointed municipal officer who resides outside the city or town limits with the approval of the city or town governing body and within a distance of the city or town approved by the governing body.

(8)  his the incumbent's ceasing to discharge the duty of his office for a period of 3 consecutive months, except when prevented by illness or when absent from the city or town by permission of the governing body;

(9)  his the incumbent's conviction of a felony or of any offense involving moral turpitude or a violation of his official duties;

(10) his the incumbent's refusal or neglect to file his an official bond within the time prescribed;

(11) the decision of a competent tribunal declaring void his the incumbent's election or appointment."



Section 2.  Section 7-5-4302, MCA, is amended to read:

"7-5-4302.  Competitive, advertised bidding required for certain purchase and construction contracts. (1) Except as provided in 7-5-4303 or 7-5-4310, all contracts for the purchase of any automobile, truck, other vehicle, road machinery, other machinery, apparatus, appliances, or equipment;, for any or materials or supplies of any kind in excess of $20,000; or for construction, repair, or maintenance in excess of $25,000 must be let to the lowest responsible bidder after advertisement for bids.

(2)  The advertisement must be made in the official newspaper of the city or town if there is an official newspaper, and if not, it must be made in a daily newspaper of general circulation published in the city or town if there is a newspaper. If there is no newspaper, the advertisement must be made by posting in three of the most public places in the city or town. The advertisement, if by publication in a newspaper, must be made once each week for 2 consecutive weeks, and the second publication must be made not less than 5 days or more than 12 days before the consideration of bids. If the advertisement is made by posting, 15 days must elapse, including the day of posting, between the time of the posting of the advertisement and the day set for considering bids.

(3)  The council may postpone action on any contract until the next regular meeting after bids are received in response to the advertisement and may reject any bids and readvertise as provided in this section."



Section 3.  Section 7-5-4306, MCA, is amended to read:

"7-5-4306.  Use of installment purchase contract. (1) Subject to the requirements of subsection (2), when When the amount to be paid under an installment purchase contract exceeds $4,000, the council may provide for the payment of the amount in installments extending over a period of not more than 5 10 years, provided that if at the time of entering into the contract, there is an unexpended balance of appropriation in the budget for the then-current fiscal year available and sufficient to meet and take care of pay for the portion of the contract price payable during the then-current fiscal year. The budget for each following year in which any portion of the purchase price is to be paid must contain an appropriation for the purpose of paying that portion.

(2)  When the purchase price is extended over a term of 2 years, at least 40% of the amount must be paid the first year and the remainder the second year. When the amount is extended over a term of 3 years, at least one-third of the amount must be paid each year. If the amount is extended over a term of 4 years, at least one-fourth is to be paid each year. If the amount is extended over a term of 5 years, at least one-fifth is to be paid each year."



Section 4.  Section 7-7-2209, MCA, is amended to read:

"7-7-2209.  Types of bonds. (1) Except as provided in subsection (2), bonds issued by any county must be either amortization bonds or serial bonds. All things being equal, amortization bonds must be issued in preference to serial bonds; otherwise, serial bonds may be issued.

(2)  Citizen bonds may be amortization bonds, serial bonds, term bonds, capital appreciation bonds, or zero-coupon bonds, with no without preference for amortization bonds."



Section 5.  Section 7-7-4208, MCA, is amended to read:

"7-7-4208.  Types of general obligation bonds. (1) Except as provided in subsection (2), all bonds issued by any city or town shall must be either amortization bonds or serial bonds. All things being equal, amortization bonds shall be issued in preference to serial bonds; otherwise, serial bonds may be issued.

(2)  Citizen bonds may be amortization bonds, serial bonds, term bonds, capital appreciation bonds, or zero-coupon bonds, with no without preference for amortization bonds."



Section 6.  Section 7-7-4251, MCA, is amended to read:

"7-7-4251.  Form of notice of sale of bonds. (1) The notice of sale shall must state the purpose or purposes for which the bonds are to be issued and the amount proposed to be issued for each purpose and shall must be substantially in the following form:

NOTICE OF SALE OF (CITY OR TOWN) BONDS

Notice is hereby given by the council of the (city or town) of...., Montana, that the council will, on the.... day of...., 19...., at the hour of......m., at its council chamber in the (city or town) of...., Montana, sell to the highest and best bidder for cash either amortization or serial general obligation bonds of the said (city or town) in the total amount of.... dollars, ($....) for the purpose of.....

Amortization bonds will be the first choice and serial bonds will be the second choice of the council.

If amortization bonds are sold and issued, the entire issue may be put into one single bond or divided into several bonds as the council may determine at the time of sale, both principal and interest to be payable in semiannual installments during a period of.... years from the date of issue.

If serial The bonds are will be issued and sold, they will be in the aggregate principal amount of.... dollars ($....) each and will become due and payable according to the maturity schedule set forth below (set forth maturity schedule adopted by the city or town council).

The bonds, whether amortization or serial bonds, will must bear an original issue date of...., 19...., will bear must pay interest at a rate not exceeding....% per annum commencing on the.... day of.... (month), 19.., and are payable semiannually on the.... day of.... and on the.... day of.... in each year thereafter and will be redeemable (here insert the optional provisions, if any, recited in the bonds).

Said The bonds will be sold for not less than their par value $...., with accrued interest on the principal amount of the bonds to date of delivery, and all bidders must shall state the lowest rate or rates of interest at which they will purchase the bonds at par the purchase price specified for the bonds. (An interest rate may not exceed....% a year.) The council reserves the right to reject any and all bids and to sell said the bonds at private sale.

All bids other than by or on behalf of the board of investments of the state of Montana must be accompanied by a certified check (insert appropriate bid security as permitted by 18-1-203) in the sum of.... dollars ($....), payable to the order of the (city or town) clerk, which will be forfeited by the successful bidder in the event he that the bidder shall fail fails or refuse refuses to complete the purchase of said the bonds in accordance with the terms of his the bid.

All bids shall must be addressed to the council of the (city or town) of.... and delivered to the clerk of said the (city or town)

..............................

Mayor of the (city or town) of

....., Montana

ATTEST:

....................

(City or Town) Clerk

(2)  The form of notice required under this section may be modified to accommodate changes necessary to issue citizen bonds pursuant to 7-7-4211 through 7-7-4213."



Section 7.  Section 7-7-4626, MCA, is amended to read:

"7-7-4626.  Details relating to sales of refunding revenue bonds. If the governing body determines to sell any refunding bonds, such the refunding bonds shall may not be sold at not less than par, at less than 97% of the face value and must be sold at public or private sale, and in such a manner and upon such terms as that the governing body shall deem considers best for the interests of the municipality."



Section 8.  Section 7-11-1102, MCA, is amended to read:

"7-11-1102.  Services that may be provided. (1) A multijurisdictional service district may provide only those services that are authorized to be provided by local governments.

(2)  The services that a multijurisdictional service district may provide are:

(a)  recreation programs other than park and recreation programs in a county park district established under Title 7, chapter 16, part 24;

(b)  road, street, and highway maintenance;

(c)  libraries;

(d)  jails;

(e)  dog control programs;

(f)  ambulance service; and

(g)  dispatch service.; and

(h) protection of human health and the environment, including scenic concerns and recreational activities for areas requiring or involving environmental reclamation."



Section 9.  Section 7-12-2171, MCA, is amended to read:

"7-12-2171.  Details relating to rural improvement district bonds and warrants -- definitions of bond forms. (1) The bonds and warrants shall must be drawn against either the construction or maintenance fund created for the special improvement district and shall must bear interest from the date of registration until called for redemption or paid in full. The interest shall must be payable annually or semiannually, at the discretion of the board of county commissioners, on the dates that the board prescribes. The warrants or bonds shall must bear the signatures of the chairman presiding officer of the board and the county clerk and shall must bear the corporate seal of the county. They shall must be registered in the office of the county clerk and the county treasurer, and if interest coupons are attached to the warrants or bonds, they shall must also be registered and shall bear the signatures of the chairman of the board and the county clerk. The coupons may bear the facsimile signatures of the officers in the discretion of the board.

(2)  The bonds shall must be in denominations of $100 or fractions or multiples thereof of $100, may be issued in installments, and may extend over a period not to exceed 30 years;. except that However, if federal loans are available for improvements, repayment may extend over a period not to exceed 40 years. For the purposes of this subsection, the term of a bond issue commences on July 1 of the fiscal year in which the county first levies to pay principal and interest on the bonds.

(3)  All special improvement district bonds must be amortization bonds unless, in the judgment of the board, serial bonds will be more advantageous to the district and can be sold at a comparatively reasonable rate or rates of interest.

(4)(3)  As used in this part, unless the context clearly indicates otherwise, the following definitions apply:

(a)  "Amortization bonds" means the form of bonds on which:

(i)  a part of the principal must be paid each time that interest becomes payable;

(ii) the part payment of principal increases at each installment in the same amount that the interest decreases;

(iii) the combined interest and principal due on each due date remains the same until the bonds are paid;

(iv) the final payment may vary from prior payments in the amount resulting from disregarding fractional costs in prior payments; and

(v)  the initial payment may be larger than subsequent payments if the increase represents interest accrued over an additional period not greater than 6 months.

(b)  "Serial bonds" means a bond issue payable in annual installments commencing not more than 2 years from the date of issue, any one installment consisting of one or more bonds, with the principal amount of bonds maturing in each installment not exceeding five times the principal amount of the bonds maturing in the immediately preceding installment."



Section 10.  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 5% 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 5% 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.

(e)  Money in the district reserve account may be used to pay the final principal and interest payment on bonds or warrants 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 city or town council from requiring additional security from owners of real property in the district."



Section 11.  Section 7-12-4203, MCA, is amended to read:

"7-12-4203.  Details relating to special improvement district bonds and warrants -- definitions of bond forms. (1) The bonds and warrants shall must be drawn against the special improvement district fund created for the district and shall must bear interest from the date of registration until called for redemption or paid in full. The interest shall must be payable annually or semiannually, at the discretion of the governing body of the municipality, on the dates that the governing body prescribes. The warrants or bonds shall must bear the signatures of the mayor and clerk and shall must bear the corporate seal of the city. They shall The warrants or bonds must be registered in the office of the clerk and treasurer, and if interest coupons are attached to the warrants or bonds, they shall must also be registered and shall bear the signatures of the mayor and clerk.

(2)  The bonds shall must be in denominations of $100 or fractions or multiples thereof of $100, may be issued in installments, and may extend over a period not to exceed 20 years or, if refunding bonds are issued pursuant to 7-12-4194, over a period ending not later than 30 years after the date that the bonds to be refunded were issued. For the purposes of this subsection, the term of a bond issue commences on July 1 of the fiscal year in which the city first levies assessments to pay principal and interest on the bonds.

(3)  All special improvement district bonds must be amortization bonds unless, in the judgment of the city council, serial bonds will be more advantageous to the district and can be sold at a comparatively reasonable rate or rates of interest.

(4)(3)  As used in part 41 and this part, unless the context clearly indicates otherwise, the following definitions apply:

(a)  "Amortization bonds" means the form of bonds on which:

(i)  a part of the principal must be paid each time that interest becomes payable;

(ii) the part payment of principal increases at each installment in the same amount that the interest decreases;

(iii) the combined interest and principal due on each due date remains the same until the bonds are paid;

(iv) the final payment may vary from prior payments in the amount resulting from disregarding fractional costs in prior payments; and

(v)  the initial payment may be larger than subsequent payments if the increase represents interest accrued over an additional period not greater than 6 months.

(b)  "Serial bonds" means a bond issue payable in annual installments commencing not more than 2 years from the date of issue, any one installment consisting of one or more bonds, with the principal amount of bonds maturing in each installment not exceeding five times the principal amount of the bonds maturing in the immediately preceding installment."



Section 12.  Section 7-13-2208, MCA, is amended to read:

"7-13-2208.  Decision on petition -- election required. (1) On the final hearing provided for in 7-13-2206, the board of county commissioners shall make any changes in the proposed boundaries within the county that are considered advisable and shall define and establish the boundaries. The board of county commissioners may not modify the boundaries in a manner that would exclude from the proposed district any territory that would be benefited by the formation of the district. Land that will not, in the judgment of the board of county commissioners, be benefited by the district may not be included within the proposed district.

(2)  Upon the final determination of the boundaries of the district, the board of county commissioners of each county in which the district lies shall give notice of an election to be held in the proposed district for the purpose of determining whether or not the district is to be incorporated. The election must may be held in conjunction with a regular or primary election or may be held by mail ballot election as provided in Title 13, chapter 19."



Section 13.  Section 7-14-2526, MCA, is amended to read:

"7-14-2526.  Choice of form of bonds. All bonds issued by any a county shall must be either amortization bonds or serial bonds. Amortization bonds shall be issued in preference to serial bonds."



Section 14.  Section 7-16-4104, MCA, is amended to read:

"7-16-4104.  Authorization for municipal indebtedness for various cultural, social, and recreational purposes. (1) A city or town council or commission may contract an indebtedness on behalf of the city or town, upon the credit thereof of the city or town, by borrowing money or issuing bonds:

(a)  for the purpose of purchasing and improving lands for public parks and grounds;

(b)  for procuring by purchase, construction, or otherwise swimming pools pool facilities, athletic fields, skating rinks, playgrounds, museums, a golf course, a site and building for a civic center, a youth center, or combination thereof of these facilities; and

(c)  for furnishing, and equipping, repairing, or rehabilitating the same a swimming pool facility, athletic field, skating rink, playground, museum, golf course, civic center, or youth center.

(2)  The total amount of indebtedness authorized to be contracted in any form, including the then-existing indebtedness, may not at any time exceed 16.5% of the taxable value of the taxable property of the city or town as ascertained by the last assessment for state and county taxes previous to the incurring of such the indebtedness. No money Money may not be borrowed for any purpose on bonds issued for the purchase of lands and improving the same land for any such purpose until the proposition has been submitted to the vote of the qualified electors of the city or town and a majority vote is cast in favor thereof of the proposition."



Section 15.  Section 7-33-2404, MCA, is amended to read:

"7-33-2404.  Financing of fire service area -- fee on structures. (1) In the resolution creating the fire service area and by resolution as necessary thereafter after creation of the fire service area, the board of county commissioners shall establish a schedule of rates to be charged owners of structures that are benefited by the services offered by the fire service area.

(2)  The rates must be applied on a fair and equal basis to all classes of structures benefited by the fire service area.

(3)  The board of county commissioners shall collect the funds necessary to operate the fire service area by charging the area rate as a special assessment on the owners of structures and shall collect the assessments with the general taxes of the county. The assessments are a lien on the assessed property so assessed.

(4)  The board of county commissioners or the trustees, if the fire service area is governed by trustees under 7-33-2403, may pledge the income of the fire service area to secure financing necessary to procure equipment and buildings to house the equipment. The outstanding amount of such the indebtedness may not exceed 7% 18% of the taxable valuation of the area."



Section 16.  Recordkeeping. A city, town, or county that has the authority to require a private entity to keep records may prescribe the form and content of the records but may not prescribe the method of keeping the required records.



Section 17.  Codification instruction. [Section 16] is intended to be codified as an integral part of Title 7, chapter 5, part 1, and the provisions of Title 7, chapter 5, part 1, apply to [section 16].



Section 18.  Effective dates. (1) Except as provided in subsection (2), [this act] is effective October 1, 1997.

(2) [Sections 8 and 16 and this section] are effective on passage and approval.

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