HOUSE BILL NO. 8
INTRODUCED BY WITT
BY REQUEST OF THE DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION AND THE OFFICE OF BUDGET AND PROGRAM PLANNING
AN ACT APPROVING RENEWABLE RESOURCE PROJECTS AND AUTHORIZING LOANS; REAUTHORIZING RENEWABLE RESOURCE PROJECTS AUTHORIZED BY THE 57TH LEGISLATURE; APPROPRIATING MONEY TO THE DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION FOR LOANS UNDER THE RENEWABLE RESOURCE GRANT AND LOAN PROGRAM; AUTHORIZING THE ISSUANCE OF COAL SEVERANCE TAX BONDS; AUTHORIZING THE CREATION OF A STATE DEBT AND APPROPRIATING COAL SEVERANCE TAXES FOR DEBT SERVICE; PLACING CERTAIN CONDITIONS UPON LOANS; AND PROVIDING AN EFFECTIVE DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Approval of renewable resource projects and authorization to provide loans. (1) The legislature finds that the renewable resource projects listed in this section meet the provisions of 17-5-702. The department of natural resources and conservation is authorized to make loans to the political subdivisions of state government and local governments listed below in amounts not to exceed the loan amounts listed for each project from the proceeds of the bonds authorized in [section 3].
(2) GROUP A: The interest rate for the projects in this group is 4.5% or the rate at which the state bonds are sold, whichever is lower, for up to 20 years.
Loan 0; &# 160; 0; &# 160; 0; &# 160; 0; &# 160; Amount
BUFFALO RAPIDS IRRIGATION DISTRICT
Refit of Glendive Pumping Plant 0; &# 160; 0; &# 160; 0; $1,315,000
MILL CREEK IRRIGATION DISTRICT
Mill Lake Dam Rehabilitation ; 60; & #160; 0; &# 160; 0; 572,000
DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION
North Fork of the Smith River
Dam Rehabilitation ; 60; & #160; 0; &# 160; 0; &# 160; 557,000
HILL COUNTY
Beaver Creek Dam Outlet Works Repair ; 60; & #160; 0; &# 160; 500,000
Section 2. Projects not completing requirements -- projects reauthorized. (1) The legislature finds that the following renewable resource projects that were approved by the 57th legislature in Chapter 266, Laws of 2001, may not complete the requirements necessary to obtain the loan funds prior to June 30, 2003. The projects described in this section are reauthorized. The department of natural resources and conservation is authorized to make loans to the political subdivisions of state government and local governments listed below in amounts not to exceed the loan amounts listed for each project from the proceeds of the bonds authorized in [section 3].
(2) GROUP A: The interest rate for the projects in this group may be 2% below the long-term bond rate at which the state bonds are sold for the first 5 years of an anticipated 20-year term and must be at the rate at which the state bonds are sold for the remaining 15 years.
Loan 0; &# 160; 0; &# 160; 0; &# 160; 0; &# 160; Amount
LOCKWOOD WATER AND SEWER DISTRICT
Wastewater Collection and Treatment Works ; 60; & #160; 0; &# 160; $3,300,000
(3) GROUP B: The interest rate for the project in this group is 2.25% or the rate at which the state bonds are sold, whichever is lower, for up to 20 years.
Loan 0; &# 160; 0; &# 160; 0; &# 160; 0; &# 160; Amount
DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION
Nevada Creek Dam Rehabilitation ; 60; & #160; 0; &# 160; 0; $494,041
(4) GROUP C: The interest rate for the projects in this group will be 4.5% on the first $250,000, 2.25% on the next increment of the loan up to $500,000, and 0% on the amount of the loan over $500,000. The department of natural resources and conservation will then determine an average rate for the full term of the loan, which may be up to 20 years.
Loan 0; &# 160; 0; &# 160; 0; &# 160; 0; &# 160; Amount
LOWER WILLOW CREEK DRAINAGE DISTRICT
Lower Willow Creek Dam Rehabilitation ; 60; & #160; 0; &# 160; $1,350,000
MALTA IRRIGATION DISTRICT
Repair and Modification of Dodson
Diversion Dam 0; &# 160; 0; &# 160; 0; &# 160; 2,274,950
(5) GROUP D: The interest rate for the project in this group is 4.5% or the rate at which the state bonds are sold, whichever is lower, for up to 20 years.
Loan 0; &# 160; 0; &# 160; 0; &# 160; 0; &# 160; Amount
CANYON CREEK IRRIGATION DISTRICT
Canyon Lake Dam and Wyant Lake Dam
Restoration Project 0; &# 160; 0; &# 160; 0; &# 160; $300,000
Section 3. Coal severance tax bonds authorized. (1) The legislature finds that Title 17, chapter 5, part 7, provides for the issuance of coal severance tax bonds for financing specific approved renewable resource projects as part of the state renewable resource grant and loan program. Available funds from previous sales of coal severance tax bonds, plus any additional principal amount on bonds as may be necessary, pursuant to the conditions in 85-1-605, to fund emergency loans, as authorized and approved in accordance with 85-1-605(4), may also be used for the projects approved in [sections 1 through 7]. The board of examiners is authorized to issue coal severance tax bonds in an amount not to exceed $11,729,290, of which $10,662,991 is to be used to finance the projects approved in [sections 1 and 2] and up to $1,066,299 is to be used to establish a reserve for the bonds. Proceeds of the bonds are appropriated to the department of natural resources and conservation for financing the projects identified in [sections 1 and 2] and may be used as authorized in 85-1-605(4). Loans made under 85-1-605(4) must bear interest at the rate borne by the state bonds unless the legislature in a subsequent session provides for a lower interest rate, in which case the rate must be reduced to the rate specified by the legislature.
(2) In connection with the issuance of coal severance tax bonds, the board of examiners may pay the principal and interest on the bonds when due from the debt service account and in all other respects manage and use the funds within each special bond account for the benefit of the bonds. The board of examiners shall exercise its discretion to enhance the marketability of the bonds and to secure the most advantageous financial arrangements for the state.
(3) Earnings on bond proceeds prior to the completion of any loan must be allocated to the debt service account to pay the debt service on the bonds during this period. Earnings in excess of debt service, if any, must be allocated to the renewable resource grant and loan state special revenue account.
(4) Loan repayments from loans financed with coal severance tax bonds are pledged, dedicated, and appropriated to the debt service account in the state treasury for the benefit of bonds approved for loans under this section.
Section 4. Condition of loans. (1) Disbursement of funds under [sections 1 through 7] for loans is subject to the following conditions that must be met by project sponsors:
(a) approval of a scope of work and budget for the project by the department of natural resources and conservation. Reductions in a scope of work or budget may not affect priority activities or improvements.
(b) documented commitment of other funds required for project completion;
(c) satisfactory completion of conditions described in the recommendations section of the project narrative in the renewable resource grant and loan program project evaluations and recommendations report for the biennium;
(d) execution of a loan agreement with the department; and
(e) accomplishment of other specific requirements considered necessary by the department to accomplish the purpose of the loan as evidenced from the application to the department or from the proposal to the legislature.
(2) Each sponsor authorized for a loan from coal severance tax bond proceeds may be required to pay to the department a pro rata share of the bond issuance costs and the administrative costs incurred by the department to complete the loan transaction.
Section 5. Private and discount purchase of loans. Loans to political subdivisions and local government entities and bonds, warrants, and notes issued in evidence of the loans may be made, purchased by, and sold to the department of natural resources and conservation at a discount and at a private negotiated sale, notwithstanding the provisions of any other law applicable to political subdivisions or local government entities.
Section 6. Appropriation established. For any entity of state government that receives a loan under [sections 1 through 7], an appropriation is established for the amount of the loan upon award of the loan by the department of natural resources and conservation.
Section 7. Creation of state debt -- appropriation of coal severance tax -- bonding provisions. (1) Because [section 3] authorizes the creation of a state debt, a vote of two-thirds of the members of each house is required for enactment of [section 3].
(2) The legislature, through the enactment of [sections 1 through 7] by a vote of three-fourths of the members of each house of the legislature, as required by Article IX, section 5, of the Montana constitution, pledges, dedicates, and appropriates from the coal severance tax bond fund all money necessary for the payment of principal and interest not otherwise provided for on the coal severance tax bonds authorized by [section 3] to be issued pursuant to Title 17, chapter 5, part 7, and pursuant to the provisions of [sections 1 through 7] and the general resolution for this bond program that has been adopted by the board of examiners under the authority provided in Title 17, chapter 5, part 7.
Section 8. Severability. If a part of [this act] is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.
Section 9. Effective date. [This act] is effective July 1, 2003.
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