Senate Bill No. 267

Introduced By _______________________________________________________________________________

A Bill for an Act entitled: "An Act revising the disposition of the metalliferous mines license taxes; limiting the uses of spendable revenue from the resource indemnity trust; eliminating the diversion of resource indemnity and ground water assessment tax proceeds; eliminating a statutory appropriation of interest income to Montana state university-northern; reallocating the interest income from the resource indemnity trust fund; creating a resource interest account; amending sections 7-6-2225, 7-6-2226, 15-37-117, 15-38-102, 15-38-106, 15-38-202, 17-7-502, 20-9-231, 75-10-621, 75-10-704, 82-11-161, 85-1-604, 85-1-615, and 85-2-905, MCA; repealing sections 15-38-203, 85-1-631, 90-2-1101, 90-2-1102, 90-2-1103, 90-2-1104, 90-2-1105, 90-2-1111, 90-2-1112, 90-2-1113, 90-2-1114, and 90-2-1121, MCA; and providing an effective date."

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

Section 1.  Section 7-6-2225, MCA, is amended to read:

"7-6-2225.   County hard-rock mine trust reserve account -- expenditure restrictions. (1) The governing body of a county receiving an allocation under 15-37-117(1)(f)(1)(d) shall establish a county hard-rock mine trust reserve account.

(2)  Money received by a county pursuant to 15-37-117 or 90-6-331 must remain in the account and may not be appropriated by the governing body until:

(a)  a mining operation has permanently ceased all mining related activity; or

(b)  the number of persons employed full-time in mining activities by the mining operation is less than one-half of the average number of persons employed full-time in mining activities by the mining operation during the immediately preceding 5-year period.

(3)  If the circumstances described in subsection (2)(a) or (2)(b) occur, the governing body of the county must shall allocate at least one-third of the funds proportionally to affected high school districts and elementary school districts in the county, and may use the remaining funds in the account to:

(a)  pay for outstanding capital project bonds or other expenses incurred prior to the end of mining activity or the reduction in the mining work force described in subsection (2)(b);

(b)  decrease property tax mill levies that are directly caused by the cessation or reduction of mining activity;

(c)  promote diversification and development of the economic base within the jurisdiction of a local government unit;

(d)  attract new industry to the impact area;

(e)  provide cash incentives for expanding the employment base of the area impacted by the changes in mining activity described in subsection (2); or

(f)  provide grants or loans to other local government jurisdictions to assist with impacts caused by the changes in mining activity described in subsection (2).

(4)  Except as provided in subsection (3)(b), money held in the account may not be considered as cash balance for the purpose of reducing mill levies.

(5)  Money in the reserve account must be invested as provided by law. Interest and income from the investment of funds in the account must be credited to the account."

Section 2.  Section 7-6-2226, MCA, is amended to read:

"7-6-2226.   Metal mines tax reserve account. (1) The governing body of a county receiving tax collections under 15-37-117(1)(f)(1)(d) may establish a metal mines tax reserve account to be used to hold the collections. The governing body may hold money in the account for any time period considered appropriate by the governing body. Money held in the account may not be considered as cash balance for the purpose of reducing mill levies.

(2)  Money may be expended from the account for any purpose provided by law.

(3)  Money in the account must be invested as provided by law. Interest and income from the investment of the metal mines tax reserve account must be credited to the account."

Section 3.  Section 15-37-117, MCA, is amended to read:

"15-37-117.   (Temporary) Disposition of metalliferous mines license taxes. (1) Metalliferous mines license taxes collected under the provisions of this part must, in accordance with the provisions of 15-1-501, be allocated as follows:

(a)  to the credit of the general fund of the state, 58% of total collections each year;

(b)  to the state special revenue fund to the credit of a hard-rock mining impact trust account, 1.5% of total collections each year;

(c)  to the abandoned mines state special revenue account provided for in section 19, Chapter 584, Laws of 1995, 8.5% of total collections each year; and

(d)  to the ground water assessment account established in 85-2-905, 2.2% of total collections each year;

(e)  to the reclamation and development grants program state special revenue account, 4.8% of total collections each year; and

(f)(d)  to the county or counties identified as experiencing fiscal and economic impacts, resulting in increased employment or local government costs, under an impact plan for a large-scale mineral development prepared and approved pursuant to 90-6-307, in direct proportion to the fiscal and economic impacts determined in the plan, or, if an impact plan has not been prepared, to the county in which the mine is located, 25% of total collections each year, to be allocated by the county commissioners as follows:

(i)  not less than 40% to the county hard-rock mine trust reserve account established in 7-6-2225; and

(ii) all money not allocated to the account pursuant to subsection (1)(f)(i) (1)(d)(i), to be further allocated as follows:

(A)  33 1/3% is allocated to the county for planning or economic development activities;

(B)  33 1/3% is allocated to the elementary school districts within the county that have been affected by the development or operation of the metal mine; and

(C)  33 1/3% is allocated to the high school districts within the county that have been affected by the development or operation of the metal mine.

(2)  When an impact plan for a large-scale mineral development approved pursuant to 90-6-307 identifies a jurisdictional revenue disparity, the county shall distribute the proceeds allocated under subsection (1)(f) (1)(d) in a manner similar to that provided for property tax sharing under Title 90, chapter 6, part 4.

(3)  The department shall return to the county in which metals are produced the tax collections allocated under subsection (1)(f) (1)(d). The allocation to the county described by subsection (1)(f) (1)(d) is a statutory appropriation pursuant to 17-7-502. (Terminates June 30, 1997--sec. 27, Ch. 584, L. 1995.)

15-37-117.   (Effective July 1, 1997) Disposition of metalliferous mines license taxes. (1) Metalliferous mines license taxes collected under the provisions of this part must, in accordance with the provisions of 15-1-501, be allocated as follows:

(a)  to the credit of the general fund of the state, 58% of total collections each year;

(b)  to the state special revenue fund to the credit of a hard-rock mining impact trust account, 1.5% of total collections each year;

(c)  to the state resource indemnity trust fund, 15.5% of total collections each year; and

(d)  to the ground water assessment account established in 85-2-905, 2.2% of total collections each year;

(e)  to the reclamation and development grants program state special revenue account, 4.8% of total collections each year; and

(f)(d)  to the county or counties identified as experiencing fiscal and economic impacts, resulting in increased employment or local government costs, under an impact plan for a large-scale mineral development prepared and approved pursuant to 90-6-307, in direct proportion to the fiscal and economic impacts determined in the plan, or, if an impact plan has not been prepared, to the county in which the mine is located, 25% of total collections each year, to be allocated by the county commissioners as follows:

(i)  not less than 40% to the county hard-rock mine trust reserve account established in 7-6-2225; and

(ii) all money not allocated to the account pursuant to subsection (1)(f)(i) (1)(d)(i), to be further allocated as follows:

(A)  33 1/3% is allocated to the county for planning or economic development activities;

(B)  33 1/3% is allocated to the elementary school districts within the county that have been affected by the development or operation of the metal mine; and

(C)  33 1/3% is allocated to the high school districts within the county that have been affected by the development or operation of the metal mine.

(2)  When an impact plan for a large-scale mineral development approved pursuant to 90-6-307 identifies a jurisdictional revenue disparity, the county shall distribute the proceeds allocated under subsection (1)(f) (1)(d) in a manner similar to that provided for property tax sharing under Title 90, chapter 6, part 4.

(3)  The department shall return to the county in which metals are produced the tax collections allocated under subsection (1)(f) (1)(d). The allocation to the county described by subsection (1)(f) (1)(d) is a statutory appropriation pursuant to 17-7-502."

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;

(2)  to support a variety of development programs that benefit the economy of the state and the lives of Montana citizens; and

(2) to protect and restore the environment from damages resulting from the production or release of a hazardous waste, as defined in 75-10-403, or a hazardous substance, as defined in 75-10-602;

(3)  to assess the state's ground water resources; and

(4) to develop and protect the state's renewable resources."

Section 5.  Section 15-38-106, MCA, is amended to read:

"15-38-106.   Payment of tax -- records -- collection of taxes -- refunds. (1) The tax imposed by this chapter must be paid by each person to which the tax applies, on or before March 31, on the value of product in the year preceding January 1 of the year in which the tax is paid. The tax must be paid to the department at the time that the statement of yield for the preceding calendar year is filed with the department.

(2)  The department shall, in accordance with the provisions of 15-1-501(6), deposit the proceeds of the tax in the resource indemnity trust fund of the nonexpendable trust fund type, except that:

(a)  14.1% of the proceeds must be deposited in the ground water assessment account established by 85-2-905;

(b)  10% of the proceeds must be deposited in the renewable resource grant and loan program state special revenue account established by 85-1-604; and

(c)  30% of the proceeds must be deposited in the reclamation and development grants account established by 90-2-1104.

(3)  Every Each person to whom the tax applies shall keep records in accordance with 15-38-105, and the records are subject to inspection by the department upon reasonable notice during normal business hours.

(4)  The department shall examine the statement and compute the taxes to be imposed, and the amount computed by the department is the tax imposed, assessed against, and payable by the taxpayer. If the tax found to be due is greater than the amount paid, the excess must be paid by the taxpayer to the department within 30 days after written notice of the amount of deficiency is mailed by the department to the taxpayer. If the tax imposed is less than the amount paid, the difference must be applied as a tax credit against tax liability for subsequent years or refunded if requested by the taxpayer."

Section 6.  Section 15-38-202, MCA, is amended to read:

"15-38-202.   Investment of resource indemnity trust fund -- expenditure -- minimum balance. (1) All money paid into the resource indemnity trust fund, 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. All the net earnings accruing to the resource indemnity trust fund must annually be added to the trust fund until it has reached the sum of $10 million. Thereafter, only the net earnings may be appropriated and expended until the fund reaches $100 million. Thereafter, all net earnings and all receipts must be appropriated by the legislature and expended, provided that the balance in the fund may never be less than $100 million.

(2)  (a) At the beginning of each fiscal year, there is allocated from the interest income of the resource indemnity trust fund $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.

(b)(a)  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;.

(b) At the beginning of each fiscal year, there is allocated from the interest income of the resource indemnity trust fund:

(ii)(i) an amount not to exceed $50,000 $600,000 to the oil and gas production damage mitigation account pursuant to the conditions of 82-11-161;

(ii) an amount not to exceed $666,000 to the ground water assessment account pursuant to the conditions of 85-2-905; and

(iii) beginning in fiscal year 1996, $2 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;

(iv) beginning in fiscal year 1996, $3 million to be deposited into the reclamation and development grants state special revenue account, created by 90-2-1104, for the purpose of making grants; and

(v)  beginning in fiscal year 1996, $500,000 to be deposited into the water storage state special revenue account created by 85-1-631.

(iii) an amount not to exceed $900,000 to the orphan share account pursuant to the conditions of [LC 0759].

(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 to the resource interest account created in [section 15].

(3)  Any formal budget document prepared by the legislature or the executive branch that proposes to appropriate funds from the resource indemnity trust interest account 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 17-7-502, MCA, is amended to read:

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

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

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

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

(3)  The following laws are the only laws containing statutory appropriations: 2-9-202; 2-17-105; 2-18-812; 3-5-901; 5-13-403; 10-3-203; 10-3-310; 10-3-312; 10-3-314; 10-4-301; 15-1-111; 15-23-706; 15-30-195; 15-31-702; 15-37-117; 15-38-202; 15-65-121; 15-70-101; 16-1-404; 16-1-410; 16-1-411; 16-11-308; 17-3-106; 17-3-212; 17-5-404; 17-5-424; 17-5-804; 17-6-101; 17-6-201; 17-7-304; 18-11-112; 19-2-502; 19-6-709; 19-9-1007; 19-17-301; 19-18-512; 19-18-513; 19-18-606; 19-19-205; 19-19-305; 19-19-506; 20-8-107; 20-8-111; 20-9-361; 20-26-1503; 23-5-136; 23-5-306; 23-5-409; 23-5-610; 23-5-612; 23-5-631; 23-7-301; 23-7-402; 32-1-537; 37-43-204; 37-51-501; 39-71-503; 39-71-907; 39-71-2321; 39-71-2504; 44-12-206; 44-13-102; 50-4-623; 50-5-232; 50-40-206; 53-6-150; 53-6-703; 53-24-206; 60-2-220; 67-3-205; 75-1-1101; 75-5-1108; 75-6-214; 75-11-313; 76-12-123; 80-2-103; 80-2-222; 80-4-416; 81-5-111; 82-11-136; 82-11-161; 85-1-220; 85-20-402; 90-3-301; 90-4-215; 90-6-331; 90-7-220; 90-7-221; and 90-9-306.

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

Section 8.  Section 20-9-231, MCA, is amended to read:

"20-9-231.   Metal mines tax reserve fund. (1) The governing body of a local school district receiving tax collections under 15-37-117(1)(f)(1)(d) may establish a metal mines tax reserve fund to be used to hold the collections. The governing body may hold money in the fund for any time period considered appropriate by the governing body. Money held in the fund may not be considered as fund balance for the purpose of reducing mill levies.

(2)  Money may be expended from the fund for any purpose provided by law.

(3)  Money in the fund must be invested as provided by law. Interest and income from the investment of the metal mines tax reserve fund must be credited to the fund.

(4)  The fund must be financially administered as a nonbudgeted fund under the provisions of this title."

Section 9.  Section 75-10-621, MCA, is amended to read:

"75-10-621.   Hazardous waste/CERCLA special revenue account. (1) There is a hazardous waste/CERCLA special revenue account within the state special revenue fund established in 17-2-102.

(2)  There must be paid into the hazardous waste/CERCLA account:

(a)  revenue obtained from the interest income of the resource indemnity trust fund under the provisions of 15-38-202, together with interest accruing on that revenue;

(b)(a)  all proceeds of bonds or notes issued under 75-10-623 and all interest earned on proceeds of the bonds or notes; and

(c)(b)  revenue from penalties or damages collected under the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended in 1986 (CERCLA); and

(c) funds allocated by the legislature.

(3)  Appropriations may be made from the hazardous waste/CERCLA account only for the following purposes and subject to the following conditions:

(a)  funds Funds are statutorily appropriated, as provided in 17-7-502(4), to the CERCLA match debt service account necessary to make principal, interest, and premium payments due on CERCLA bonds;.

(b)  not more than one-half of the interest income received for any biennium from the resource indemnity trust fund may be appropriated on a biennial basis for:

(i)  implementation of the Montana Hazardous Waste Act, including regulation of underground storage tanks and the state share to obtain matching federal funds;

(ii) implementation of Title 75, chapter 10, part 6, pertaining to state assistance to and cooperation with the federal government for remedial action under CERCLA;

(iii) expenses of the department in administering and overseeing the implementation of Title 75, chapter 10, parts 4 and 6; and

(iv) state expenses relating to investigation and remedial action for any hazardous substance defined in 75-10-602; and

(c)(b)  to To the extent that funds are available after the appropriations in subsections subsection (3)(a) and (3)(b), the department may, as appropriate, seek authorization from the legislature or, when the legislature is not in session, through the budget amendment process provided for in Title 17, chapter 7, part 4, to spend funds for:

(i)  state participation in remedial action under section 104 of CERCLA;

(ii) state costs for maintenance of sites at which remedial action under CERCLA has been completed; and

(iii) the state share to obtain matching federal funds for underground storage tank corrective action.

(4)  For the purposes of subsection (3)(c) (3)(b), the legislature finds that a need for state special revenue to obtain matching federal funds for underground storage tank corrective action or for remedial action under section 104 of CERCLA constitutes a serious unforeseen and unanticipated circumstance for the purpose of meeting the definition of "emergency" in 17-7-102. The legislature further finds that the inability of the department to match the federal funds as the funds become available would seriously impair the functions of the department in carrying out its responsibilities under Title 75, chapter 10, parts 4 and 6.

(5)  There is no dollar limit to the hazardous waste/CERCLA account. Unused balances remain in the account until appropriated by the legislature for the purposes specified in this section."

Section 10.  Section 75-10-704, MCA, is amended to read:

"75-10-704.   Environmental quality protection fund. (1) There is in the state special revenue fund an environmental quality protection fund to be administered as a revolving fund by the department. The department is authorized to expend amounts from the fund necessary to carry out the purposes of this part.

(2)  The fund may be used by the department only to carry out the provisions of this part and for remedial actions taken by the department pursuant to this part in response to a release of hazardous or deleterious substances.

(3)  The department shall:

(a)  except as provided in subsection (7), establish and implement a system for prioritizing sites for remedial action based on potential effects on human health and the environment; and

(b)  investigate, negotiate, and take legal action, as appropriate, to identify liable persons, to obtain the participation and financial contribution of liable persons for the remedial action, to achieve remedial action, and to recover costs and damages incurred by the state.

(4)  There must be deposited in the fund:

(a)  all penalties, forfeited financial assurance, natural resource damages, and remedial action costs recovered pursuant to 75-10-715;

(b)  all administrative penalties assessed pursuant to 75-10-714 and all civil penalties assessed pursuant to 75-10-711(5); and

(c)  funds appropriated allocated to the fund by the legislature; and

(d)  funds received from the interest income of the resource indemnity trust fund pursuant to 15-38-202.

(5)  Whenever a legislative appropriation is insufficient to carry out the provisions of this part and additional money remains in the fund, the department shall seek additional authority to spend money from the fund through the budget amendment process provided for in Title 17, chapter 7, part 4.

(6)  Whenever the amount of money in the fund is insufficient to carry out remedial action, the department may apply to the governor for a grant from the environmental contingency account established pursuant to 75-1-1101.

(7)  (a) There is established a state special revenue account for all funds donated or granted from private parties to remediate a specific release at a specific facility. There must be deposited into the account the interest income earned on the account. A person is not liable under 75-10-715 solely as a result of contributing to this account.

(b)  Funds donated or granted for a specific project pursuant to this subsection (7) must be accumulated in the fund until the balance of the donated or granted funds is sufficient, as determined by the department, to remediate the facility pursuant to the requirements of 75-10-721 for which the funds are donated.

(c)  If the balance of the fund created in this subsection (7), as determined by the department pursuant to the requirements of 75-10-721, is not sufficient to remediate the facility within 1 year from the date of the initial contribution, all donated or granted funds, including any interest on those donated or granted funds, must be returned to the grantor.

(d)  If the balance for a specific project is determined by the department to be sufficient to remediate the facility pursuant to the requirements of 75-10-721, the department shall give that site high priority for remedial action, using the funds donated under this subsection (7).

(e)  This subsection (7) is not intended to interfere with or to diminish the authority or actions of the department to investigate, negotiate, and take legal action, as appropriate, to identify liable persons, to obtain the participation and financial contribution of liable persons for the remedial action, to achieve remedial action, and to recover costs and damages incurred by the state. Subsections (7) and (8) do not pertain to facilities where the department has initiated actions under this part.

(f)  The department shall expend the funds in a manner that maximizes the application of the funds to physically remediating the specific release.

(8)  (a) A person may donate in-kind services to remediate a specific release at a specific facility pursuant to subsection (7). A person that donates in-kind services is not liable under 75-10-715 solely as a result of the contribution of in-kind services.

(b)  A person who that donates in-kind services with respect to remediating a specific release at a specific facility is not liable under this part to any person for injuries, costs, damages, expenses, or other liability that results from the release or threatened release, including but not limited to claims for indemnification or contribution and claims by third parties for death, personal injury, illness, loss of or damage to property, or economic loss.

(c)  Immunity from liability, pursuant to subsection (8)(b), does not apply in the case of a release that is caused by conduct of the entity providing in-kind services that is negligent or grossly negligent or that constitutes intentional misconduct.

(d)  This subsection does not minimize the liability, lessen the standard of liability, or otherwise shield from liability a potentially liable person under 75-10-715 or section 107 of CERCLA for costs or damages incurred as a result of a release or threatened release of a hazardous or deleterious substance.

(e)  Any donated in-kind services that are employed as part of a remedial action pursuant to this subsection (8) must be approved by the department as appropriate remedial action."

Section 11.  Section 82-11-161, MCA, is amended to read:

"82-11-161.   Oil and gas production damage mitigation account -- statutory appropriation. (1) There is an oil and gas production damage mitigation account within the state special revenue fund established in 17-2-102. The oil and gas production damage mitigation account is controlled by the board.

(2)  At the beginning of each biennium fiscal year, there must be allocated to the oil and gas production damage mitigation account $50,000 $600,000 from the interest income of the resource indemnity trust fund, except if at the beginning of a biennium the unobligated cash balance in the oil and gas production damage mitigation account:

(a)  equals or exceeds $200,000 $1,200,000, no allocation will be made; or

(b)  is less than $200,000 $1,200,000, then an amount less than or equal to the difference between the unobligated cash balance and $200,000 $1,200,000, but not more than $50,000, must be allocated to the oil and gas production damage mitigation account from the interest income of the resource indemnity trust fund.

(3)  In addition to the allocation provided in subsection (2), there must be deposited in the oil and gas production damage mitigation account:

(a)  all funds received by the board pursuant to 82-11-136; and

(b)  all fees received by the board from owners of producing wells pursuant to 82-11-162.

(4)  If a sufficient balance exists in the account, funds are statutorily appropriated, as provided in 17-7-502, from the oil and gas production damage mitigation account, upon the authorization of the board, to pay the reasonable costs of properly plugging a well and either reclaiming or restoring, or both, a drill site or other drilling or producing area damaged by oil and gas operations if the board determines that the well, sump, hole, drill site, or drilling or producing area has been abandoned and the responsible person cannot be identified or located or if the responsible person fails or refuses to properly plug, reclaim, or restore the well, drill site, or drilling or producing area within a reasonable time after demand by the board. The responsible person shall, however, pay costs to the extent of that person's available resources and is subsequently liable to fully reimburse the account or is subject to a lien on property as provided in 82-11-164 for costs expended from the account to properly plug, reclaim, or restore the well, drill site, or drilling or producing area and to mitigate any damage for which the person is responsible.

(5)  Interest from funds in the oil and gas production damage mitigation account accrues to that account."

Section 12.  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 created 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)(b)  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;

(d)(c)  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 tax proceeds as provided in 15-38-106(2)(b).

(d) any funds allocated by the legislature.

(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 under 15-38-202(2)(b)(iii) must be used for renewable resource grants.

(b)(a)  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 (b) (3)(a) is greater than that necessary for operation and maintenance expenses, the excess may be appropriated as provided in subsection (3)(c) (3)(b).

(c)(b)  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) (3)(a) 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 (c) (3)(b) is greater than that necessary for operation and maintenance expenses, the excess may be appropriated as provided in subsection (3)(d) (3)(c).

(d)(c)  An amount less than or equal to that paid into the account from the sources provided for in subsections (2)(c) (2)(b) and (2)(d) (2)(c) and any excess from subsection (3)(c) (3)(b) 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 13.  Section 85-1-615, MCA, is amended to read:

"85-1-615.   Security interests -- purchase, operation, and resale of encumbered property. (1) The state has a lien upon a project constructed with money from the renewable resource grant and loan state special revenue account or the renewable resource loan proceeds account for the amount of the loan and interest due the state. This lien may attach to any project facilities, equipment, easements, real property, and property of any kind or nature owned by the debtor, including all water rights. The department shall file with the county clerk and recorder of each county in which a part of the project is located either a financing statement or a real estate mortgage covering the loan, its amount, terms, and a description of the security. The county clerk and recorder shall record and index the lien as other liens are required by law to be recorded and indexed. The lien is valid until paid in full or otherwise discharged. The lien must be foreclosed in accordance with applicable state law governing foreclosure of mortgages and liens.

(2)  From the funds available under 85-1-604(3)(d)(3)(c) or 85-1-617, the state may:

(a)  purchase a lien that is prior to the state's lien if:

(i)  the director of the department determines that the loan is in default and the prospects for collecting the loan may be materially increased by purchasing the prior lien; and

(ii) the amount to be paid for the prior lien does not exceed the appraised value of the property;

(b)  operate property that is subject to the state's lien if the director of the department determines that the loan is in default and the prospects for collecting the loan may be materially increased by operating the property that is subject to the state's lien; or

(c)  purchase a prior lien as provided in subsection (2)(a) and operate property as provided in subsection (2)(b).

(3)  Any property acquired under the provisions of this section must be resold as expeditiously as possible to recover funds used under this section and funds loaned to the borrower."

Section 14.  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 state 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, $666,000 from the interest income of the resource indemnity trust fund 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 no allocation will be made and the funds 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 federal or state government agencies and by local governments to carry out the purposes of this part; and

(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."

NEW SECTION. Section 15.  Resource interest account. (1) There is a resource interest account within the state special revenue fund established in 17-2-102.

(2) There must be paid into the resource interest account the remaining resource indemnity trust interest income pursuant to 15-38-202(2)(c).

(3) Appropriations may be made from the resource interest account but are limited to the following purposes and subject to the following conditions:

(a) to protect and restore the environment from damages resulting from mineral development;

(b) to protect and restore the environment from damages resulting from the production or release of a hazardous waste, as defined in 75-10-403, or a hazardous substance, as defined in 75-10-602;

(c)  to assess the state's ground water resources; and

(d) to develop and protect the state's renewable resources.

(4) Appropriations from the resource interest account may not be made to fund general operating expenses of state government.

NEW SECTION. Section 16.  Repealer. Sections 15-38-203, 85-1-631, 90-2-1101, 90-2-1102, 90-2-1103, 90-2-1104, 90-2-1105, 90-2-1111, 90-2-1112, 90-2-1113, 90-2-1114, and 90-2-1121, MCA, are repealed.

NEW SECTION. Section 17.  Codification instruction. [Section 15] is intended to be codified as an integral part of Title 15, chapter 38, part 2, and the provisions of Title 15, chapter 38, part 2, apply to [section 15].

NEW SECTION. Section 18.  Coordination instruction. (1) If [this act] is passed and approved and if it includes an amendment to 15-37-117, then Senate Bill No. 7 is void.

(2) If __ Bill No. __ [LC 0759] is passed and approved and does not include provisions for an orphan share fund, then 15-38-202(2)(b)(iii) of [this act] is void.

(3) If __ Bill No. __ [LC 0759] is not passed and approved, then 15-38-202(2)(b)(iii) of [this act] is void.

NEW SECTION. Section 19.  Effective date. [This act] is effective July 1, 1997.

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