_____________ bill NO. _____________

INTRODUCED BY _________________________________________________

By Request of the ****

A BILL FOR AN ACT ENTITLED: "AN ACT generally revising laws related to the coal tax trust; establishing a conservation DISTRICT fund within the coal tax trust; ALLOCATING COAL SEVERANCE TAX FUNDS TO THE conservation DISTRICT fund; REVISING THE ALLOCATION OF COAL SEVERANCE TAXES; PROVIDING FOR TRANSFERS; Transferring money from the general fund to the school facility fund; AMENDING SECTION 17-5-703, MCA; and PROVIDING AN EFFECTIVE DATE."

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

Section 1. Section 17-5-703, MCA, is amended to read:

"17-5-703. (Temporary) Coal severance tax trust funds. (1) The trust established under Article IX, section 5, of the Montana constitution is composed of the following funds:

(a)        a coal severance tax bond fund into which the constitutionally dedicated receipts from the coal severance tax must be deposited;

(b)        a Montana coal endowment fund;

(c)        a Montana coal endowment regional water system fund;

(d)        a coal severance tax permanent fund;

(e)        a coal severance tax income fund;

(f)         a big sky economic development fund; and

(g)        a school facilities fund; and

(h)        a conservation district fund.

(2)        (a) The state treasurer shall determine, on July 1 of each year, the amount necessary to meet all principal and interest payments on bonds payable from the coal severance tax bond fund during the next 12 months and retain that amount in the coal severance tax bond fund.

(b)        The amount in the coal severance tax bond fund in excess of the amount required in subsection (2)(a) must be transferred from that fund as provided in subsections (4) and (5) through (6).

(3)        (a) The state treasurer shall monthly transfer from the Montana coal endowment fund to the Montana coal endowment special revenue account the amount of earnings, excluding unrealized gains and losses, required to meet the obligations of the state that are payable from the account in accordance with 90-6-710. Earnings not transferred to the Montana coal endowment special revenue account must be retained in the Montana coal endowment fund.

(b)        The state treasurer shall monthly transfer from the Montana coal endowment regional water system fund to the Montana coal endowment regional water system special revenue account the amount of earnings, excluding unrealized gains and losses, required to meet the obligations of the state that are payable from the account for regional water systems authorized under 90-6-715. Earnings not transferred to the Montana coal endowment regional water system special revenue account must be retained in the Montana coal endowment regional water system fund.

(4)        (a) Starting July 1, 2017 2023, the state treasurer shall quarterly transfer to the school facilities fund provided for in 20-9-380(1) 75% 10% of the amount in the coal severance tax bond fund in excess of the amount that is specified in subsection (2) to be retained in the fund. The budget director shall certify to the state treasurer when the balance of the school facilities fund is $200 $300 million. Beginning with the quarter following this certification, the state treasurer shall instead transfer to the coal severance tax permanent fund 75% 10% of the amount in the coal severance tax bond fund that exceeds the amount that is specified in subsection (2) to be retained in the fund.

(b)        The state treasurer shall monthly transfer from the school facilities fund to the account established in 20-9-525 the amount of earnings, excluding unrealized gains and losses, required to meet the obligations of the state that are payable from the account. Earnings not transferred to the account established in 20-9-525 must be retained in the school facilities fund.

(5)        (a) Starting July 1, 2023, the state treasurer shall quarterly transfer to the conservation district fund provided for in [section 2] 65% of the amount in the coal severance tax bond fund in excess of the amount that is specified in subsection (2) to be retained in the fund. The budget director shall certify to the state treasurer when the balance of the conservation district fund is $100 million. Beginning with the quarter following this certification, the state treasurer shall instead transfer to the coal severance tax permanent fund 65% of the amount in the coal severance tax bond fund that exceeds the amount that is specified in subsection (2) to be retained in the fund.

(b)        The state treasurer shall monthly transfer from the conservation district fund to the account established in 76-15-106 the amount of earnings, excluding unrealized gains and losses, required to meet the obligations of the state that are payable from the account. Earnings not transferred to the account established in 76-15-106 must be retained in the conservation district fund.

(5)(6)    (a) From July 1, 2005, through June 30, 2025, the state treasurer shall quarterly transfer to the big sky economic development fund 25% of the amount in the coal severance tax bond fund in excess of the amount that is specified in subsection (2) to be retained in the fund.

(b)        The state treasurer shall monthly transfer from the big sky economic development fund to the economic development special revenue account, provided for in 90-1-205, the amount of earnings, excluding unrealized gains and losses, required to meet the obligations of the state that are payable from the account in accordance with 90-1-204. Earnings not transferred to the economic development special revenue account must be retained in the big sky economic development fund.

(6)(7)    Any amount in the coal severance tax bond fund in excess of the amount that is specified in subsection (2)(a) to be retained in the fund and that is not otherwise allocated under this section must be deposited in the coal severance tax permanent fund. (Terminates June 30, 2031--secs. 1 through 3, Ch. 305, L. 2015.)

17-5-703. (Effective July 1, 2031) Coal severance tax trust funds. (1) The trust established under Article IX, section 5, of the Montana constitution is composed of the following funds:

(a)        a coal severance tax bond fund into which the constitutionally dedicated receipts from the coal severance tax must be deposited;

(b)        a Montana coal endowment fund;

(c)        a coal severance tax permanent fund;

(d)        a coal severance tax income fund;

(e)        a big sky economic development fund; and

(f)         a school facilities fund; and

(g)        a conservation district fund.

(2)        (a) The state treasurer shall determine, on July 1 of each year, the amount necessary to meet all principal and interest payments on bonds payable from the coal severance tax bond fund during the next 12 months and retain that amount in the coal severance tax bond fund.

(b)        The amount in the coal severance tax bond fund in excess of the amount required in subsection (2)(a) must be transferred from that fund as provided in subsections (4) and (5) through (6).

(3)        The state treasurer shall monthly transfer from the Montana coal endowment fund to the Montana coal endowment special revenue account the amount of earnings, excluding unrealized gains and losses, required to meet the obligations of the state that are payable from the account in accordance with 90-6-710. Earnings not transferred to the Montana coal endowment special revenue account must be retained in the Montana coal endowment fund.

(4)        (a) Starting July 1, 2017 2023, the state treasurer shall quarterly transfer to the school facilities fund provided for in 20-9-380(1) 75% 10% of the amount in the coal severance tax bond fund in excess of the amount that is specified in subsection (2) to be retained in the fund. The budget director shall certify to the state treasurer when the balance of the school facilities fund is $200 $300 million. Beginning with the quarter following this certification, the state treasurer shall instead transfer to the coal severance tax permanent fund 75% 10% of the amount in the coal severance tax bond fund that exceeds the amount that is specified in subsection (2) to be retained in the fund.

(b)        The state treasurer shall monthly transfer from the school facilities fund to the account established in 20-9-525 the amount of earnings, excluding unrealized gains and losses, required to meet the obligations of the state that are payable from the account. Earnings not transferred to the account established in 20-9-525 must be retained in the school facilities fund.

(5)        (a) Starting July 1, 2023, the state treasurer shall quarterly transfer to the conservation district fund provided for in [section 2] 65% of the amount in the coal severance tax bond fund in excess of the amount that is specified in subsection (2) to be retained in the fund. The budget director shall certify to the state treasurer when the balance of the conservation district fund is $100 million. Beginning with the quarter following this certification, the state treasurer shall instead transfer to the coal severance tax permanent fund 65% of the amount in the coal severance tax bond fund that exceeds the amount that is specified in subsection (2) to be retained in the fund.

(b)        The state treasurer shall monthly transfer from the conservation district fund to the account established in 76-15-106 the amount of earnings, excluding unrealized gains and losses, required to meet the obligations of the state that are payable from the account. Earnings not transferred to the account established in 76-15-106 must be retained in the conservation district fund.

(5)(6)    (a) From July 1, 2005, through June 30, 2025, the state treasurer shall quarterly transfer to the big sky economic development fund 25% of the amount in the coal severance tax bond fund in excess of the amount that is specified in subsection (2) to be retained in the fund.

(b)        The state treasurer shall monthly transfer from the big sky economic development fund to the economic development special revenue account, provided for in 90-1-205, the amount of earnings, excluding unrealized gains and losses, required to meet the obligations of the state that are payable from the account in accordance with 90-1-204. Earnings not transferred to the economic development special revenue account must be retained in the big sky economic development fund.

(6)(7)    Any amount in the coal severance tax bond fund in excess of the amount that is specified in subsection (2)(a) to be retained in the fund and that is not otherwise allocated under this section must be deposited in the coal severance tax permanent fund."

NEW SECTION. Section 2. Conservation district fund -- conservation district special revenue account. (1) There is a conservation district fund administered by the department of administration. Pursuant to 17-5-703, a percentage of coal severance taxes received by the state must be deposited into this fund. Earnings not transferred to the conservation district account as provided in subsection (2) must be retained in the conservation district fund.

(2)        The conservation district account established in 76-15-106 receives earnings from the conservation district fund as provided in 17-5-703.

NEW SECTION. Section 3. Transfer of funds. No later than August 15, 2023, there is transferred from the general fund to the school facilities fund established in 20-9-380 the amount necessary to bring the fund balance in the school facilities fund to $200 million.

NEW SECTION. Section 4. Codification instruction. [Section 2] is intended to be codified as an integral part of Title 76, chapter 15, part 1, and the provisions of Title 76, chapter 15, part 1, apply to [section 2].

NEW SECTION. Section 5. Effective date. [This act] is effective July 1, 2023.