1999 Montana Legislature

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SENATE BILL NO. 200

INTRODUCED BY M. TAYLOR, D. MOOD, K. OHS, B. DEPRATU, L. GROSFIELD,

J. TESTER, B. SIMON, C. TUSS, E. SWANSON

BY REQUEST OF THE JOINT SELECT COMMITTEE ON JOBS AND INCOME

Montana State Seal

AN ACT STIMULATING ECONOMIC GROWTH AND ENCOURAGING BUSINESS RETENTION; PROVIDING A PHASED-IN RATE REDUCTION AND A PROGRESSIVE EXEMPTION FROM TAXATION OF CLASS EIGHT PROPERTY; PROVIDING LIMITED REPORTING REQUIREMENTS FOR EXEMPT BUSINESS EQUIPMENT; PROVIDING EXEMPTIONS FOR CLASS SIX PROPERTY; REDUCING INCREMENTALLY THE TAX RATE ON CLASS SIX PROPERTY FROM 4 PERCENT TO 1 PERCENT BEGINNING IN TAX YEAR 2000; ELIMINATING THE PROPERTY TAX ON CLASS SIX PROPERTY IN 2003; REIMBURSING LOCAL TAXING JURISDICTIONS FOR THE PHASED-IN RATE REDUCTION AND ELIMINATION OF CLASS SIX PROPERTY; REIMBURSING LOCAL TAXING JURISDICTIONS FOR THE EXEMPTIONS AND PHASED-IN RATE REDUCTION FOR CLASS EIGHT PROPERTY; REVISING THE INDEBTEDNESS LIMITATIONS OF LOCAL TAXING JURISDICTIONS TO OFFSET CLASS SIX PROPERTY TAX RATE REDUCTIONS; PROVIDING A STATUTORY APPROPRIATION; AMENDING SECTIONS 7-7-107, 7-7-108, 7-7-2101, 7-7-2203, 7-14-2524, 7-14-2525, 7-16-2327, 15-1-101, 15-6-136, 15-6-138, 15-6-201, 15-6-207, 15-8-301, 15-24-301, 15-24-303, 15-24-902, 15-24-903, 15-24-904, 15-24-922, 17-7-502, 20-9-406, 81-7-303, AND 81-7-603, MCA; REPEALING SECTIONS 15-6-136, 15-6-138, 15-24-901, 15-24-920, 15-24-926, 15-24-927, AND 15-24-931, MCA; AND PROVIDING EFFECTIVE DATES AND APPLICABILITY DATES.



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



     Section 1.  Class six tax rate reduction and exemption reimbursement to local governments and schools. (1) By June 1 of 2000, 2001, and 2002 for all reimbursements in this section, the department shall determine a reimbursement amount associated with reducing the tax rate in 15-6-136 and provide that information to each county treasurer. The reimbursement amount must be determined for each taxing jurisdiction that levied mills on the taxable value of property described in 15-6-136 in the corresponding tax year.

     (2)  (a) The reimbursement amount for each taxing jurisdiction for the current tax year is equal to the lesser of the maximum reimbursement amount determined in subsection (2)(b) or the amount calculated using the formula RA = (1999 TV - Current Year TV) x 1999 ML, where:

     (i) RA is the reimbursement amount for the taxing jurisdiction;

     (ii) 1999 TV is the tax year 1999 taxable value of property described in 15-6-136 in the taxing jurisdiction;

     (iii) Current Year TV is the current year taxable value of property described in 15-6-136 in the taxing jurisdiction; and

     (iv) 1999 ML is the mill levy applied to property described in 15-6-136 in the taxing jurisdiction in tax year 1999.

     (b) The maximum reimbursement amount is calculated using the formula MRA = ((1999 TV x 1999 ML)/4) x Y, where:

     (i) MRA is the maximum reimbursement amount for the taxing jurisdiction;

     (ii) 1999 TV is the tax year 1999 taxable value of property described in 15-6-136 in the taxing jurisdiction;

     (iii) 1999 ML is the mill levy applied to property described in 15-6-136 in the taxing jurisdiction in tax year 1999; and

     (iv) (A) Y is 1 if the current tax year is 2000;

     (B) Y is 2 if the current tax year is 2001; and

     (C) Y is 3 if the current tax year is 2002.

     (c) The reimbursement to a taxing jurisdiction as provided in this section may not be less than zero.

     (d) Except as provided in subsection (2)(e), the reimbursement calculation must be based on the taxable valuations of property described in 15-6-136 in the taxing jurisdiction for tax years 1999, 2000, 2001, and 2002.

     (e) The reimbursement amount for each taxing jurisdiction for tax year 2003 and tax years beginning after tax year 2003 is the amount determined by multiplying the 1999 taxable value by the 1999 mill levy.

     (3)  Each fiscal year, beginning in the fiscal year beginning July 1, 2000, as reimbursement for loss of property tax revenue, the department shall biannually remit, as adjusted by the result of dissolved or combined taxing jurisdictions, to each county treasurer 50% of the amount of county property tax revenue lost because of the annual property tax rate reduction of livestock and business personal property taxed under 15-6-136, as determined under subsection (1). The payments must be made on or before November 30 and May 31 of each fiscal year.

     (4)  Upon receipt of the reimbursement from the department, the county treasurer shall distribute the reimbursement to each taxing jurisdiction as calculated by the department.

     (5)  (a) For the purposes of this section and subject to subsection (6), "taxing jurisdiction" means a jurisdiction levying mills against class six property and includes but is not limited to a county, city, consolidated county and city government, school district, community college district, tax increment financing district, and miscellaneous taxing district. The term includes countywide mills levied for equalization of retirement or transportation.

     (b) The term does not include county or state school equalization levies provided for in 20-9-331, 20-9-333, and 20-9-360 or the 6-mill university levy. It also does not include any state levy for welfare programs provided for in 53-2-813.

     (6)  The following apply to taxing jurisdictions that were altered after tax year 1999:

     (a)  A taxing jurisdiction that existed in tax year 1999 and that no longer exists is not entitled to reimbursement under this section.

     (b)  A taxing jurisdiction that existed in tax year 1999 and that is split into two or more taxing jurisdictions or that is annexed to or is consolidated with another taxing jurisdiction is entitled to reimbursement based on the portion of 1999 taxable value within each new taxing jurisdiction. The department shall determine the portion of 1999 taxable value located in each taxing jurisdiction.

     (c)  A taxing jurisdiction that did not exist in tax year 1999 is not entitled to reimbursement under this section unless the taxing jurisdiction was created as described in subsection (6)(b).

     (7)  The amounts necessary for the administration of this section are statutorily appropriated, as provided in 17-7-502, from the general fund to reimburse eligible taxing jurisdictions for reductions in tax rates on business personal property.



     Section 2.  Exemption for canola facilities and malting barley facilities. (1) The following property is exempt from property taxation:

     (a) machinery and equipment used in a canola seed oil processing facility; and

     (b)  machinery and equipment used in a malting barley facility.

     (2)  "Canola seed oil processing facility" means a facility that:

     (a)  extracts oil from canola seeds, refines the crude oil to produce edible oil, formulates and packages the edible oil into food products, or engages in any one or more of those processes; and

     (b)  employs at least 15 employees in a full-time capacity.

     (3)  "Malting barley facility" means a facility and integral machinery and equipment used principally to malt malting barley and includes machinery and equipment to mix, blend, transport, transfer, or process the barley and malt at the facility.



     Section 3.  Section 7-7-107, MCA, is amended to read:

     "7-7-107.  Limitation on amount of bonds for city-county consolidated units. (1) Except as provided in 7-7-108, no a city-county consolidated local government may not issue bonds for any purpose which that, with all outstanding indebtedness, may exceed exceeds 39% of the taxable value of the property therein of the local government subject to taxation as ascertained by the last assessment for state and county taxes plus:

     (a) for bonds to be issued during fiscal year 2001, an additional 25% of the taxable value of class six property within the local government for tax year 1999, multiplied by 39%, and an additional 60% of the taxable value of class eight property within the local government for tax year 1999, multiplied by 39%;

     (b) for bonds to be issued during fiscal year 2002, an additional 50% of the taxable value of class six property within the local government for tax year 1999, multiplied by 39%, and an additional 60% of the taxable value of class eight property within the local government for tax year 1999, multiplied by 39%;

     (c) for bonds to be issued during fiscal year 2003, an additional 75% of the taxable value of class six property within the local government for tax year 1999, multiplied by 39%, and an additional 60% of the taxable value of class eight property within the local government for tax year 1999, multiplied by 39%;

     (d) for bonds to be issued during fiscal years in which the tax rate for class eight property is 2%, an additional 100% of the taxable value of class six property within the local government for tax year 1999, in each case of class six property, multiplied by 39%, and an additional 77% of the taxable value of class eight property within the local government for tax year 1999, multiplied by 39%;

     (e) for bonds to be issued during fiscal years in which the tax rate for class eight property is 1%, an additional 94% of the taxable value of former class eight property within the local government for tax year 1999, in each case of former class eight property, multiplied by 39%; and

     (f) for bonds to be issued during the fiscal year and succeeding fiscal years in which 15-6-138 is repealed, an additional 100% of the taxable value of class eight property within the local government for tax year 1999, in each case of former class eight property, multiplied by 39%.

     (2)  The issuing of bonds for the purpose of funding or refunding outstanding warrants or bonds is not the incurring of a new or additional indebtedness but is merely the changing of the evidence of outstanding indebtedness."



     Section 4.  Section 7-7-108, MCA, is amended to read:

     "7-7-108.  Authorization for additional indebtedness for water or sewer systems. (1) For the purpose of constructing a sewer system or procuring a water supply or constructing or acquiring a water system for a city-county consolidated government which shall own that owns and control controls such the water supply and water system and devote devotes the revenues therefrom revenue from the supply and system to the payment of the debt, a city-county consolidated government may incur an additional indebtedness by borrowing money or issuing bonds.

     (2)  The additional indebtedness which that may be incurred by borrowing money or issuing bonds for the construction of a sewer system or for the procurement of a water supply or for both such purposes may not in the aggregate exceed 10% over and above of the 39% debt limitation, as adjusted, referred to in 7-7-107 of the taxable value of the property therein of the consolidated government subject to taxation as ascertained by the last assessment for state and county taxes."



     Section 5.  Section 7-7-2101, MCA, is amended to read:

     "7-7-2101.  Limitation on amount of county indebtedness. (1) A county may not become indebted in any manner or for any purpose in an amount, including existing indebtedness, in the aggregate exceeding 23% of the total of the taxable value of the property in the county subject to taxation, plus:

     (a) the value provided by the department of revenue in 15-36-324(13), as ascertained by the last assessment for state and county taxes previous to the incurring of the indebtedness, plus,;

     (b) for indebtedness to be incurred during fiscal year 1997, an additional 11% of the taxable value of class eight property within the county for tax year 1995, for indebtedness to be incurred during fiscal year 1998, an additional 22% of the taxable value of class eight property within the county for tax year 1995, and for indebtedness to be incurred during fiscal years 1999 through 2008, an additional 33% of the taxable value of class eight property within the county for tax year 1995, in each case of class eight property, multiplied by 23%;

     (c) for indebtedness to be incurred during fiscal year 2001, an additional 25% of the taxable value of class six property within the county for tax year 1999, multiplied by 23%, and an additional 60% of the taxable value of class eight property within the county for tax year 1999, multiplied by 23%;

     (d) for indebtedness to be incurred during fiscal year 2002, an additional 50% of the taxable value of class six property within the county for tax year 1999, multiplied by 23%, and an additional 60% of the taxable value of class eight property within the county for tax year 1999, multiplied by 23%;

     (e) for indebtedness to be incurred during fiscal year 2003, an additional 75% of the taxable value of class six property within the county for tax year 1999, multiplied by 23%, and an additional 60% of the taxable value of class eight property within the county for tax year 1999, multiplied by 23%;

     (f) for indebtedness to be incurred during fiscal years in which the tax rate for class eight property is 2%, an additional 100% of the taxable value of class six property within the county for tax year 1999, in each case of class six property, multiplied by 23%, and an additional 77% of the taxable value of class eight property within the county for tax year 1999, multiplied by 23%;

     (g) for indebtedness to be incurred during fiscal years in which the tax rate for class eight property is 1%, an additional 94% of the taxable value of former class eight property within the county for tax year 1999, in each case of former class eight property, multiplied by 23%; and

     (h) for indebtedness to be incurred during the fiscal year and succeeding fiscal years in which 15-6-138 is repealed, an additional 100% of the taxable value of former class eight property within the county for tax year 1999, in each case of former class eight property, multiplied by 23%.

     (2)  A county may not incur indebtedness or liability for any single purpose to an amount exceeding $500,000 without the approval of a majority of the electors of the county voting at an election to be provided by law, except as provided in 7-7-2402, 7-21-3413, and 7-21-3414.

     (3)  This section does not apply to the acquisition of conservation easements as set forth in Title 76, chapter 6."



     Section 6.  Section 7-7-2203, MCA, is amended to read:

     "7-7-2203.  Limitation on amount of bonded indebtedness. (1) Except as provided in subsections (2) through (4) and (3), a county may not issue general obligation bonds for any purpose that, with all outstanding bonds and warrants except emergency bonds, will exceed 11.25% of the total of the taxable value of the property in the county, plus:

     (a) the value provided by the department of revenue under 15-36-324(13), to be ascertained by the last assessment for state and county taxes prior to the proposed issuance of bonds, plus,;

     (b) for general obligation bonds to be issued during fiscal year 1997, an additional 11% of the taxable value of class eight property within the county for tax year 1995, for general obligation bonds to be issued during fiscal year 1998, an additional 22% of the taxable value of class eight property within the county for tax year 1995, and for general obligation bonds to be issued during fiscal years 1999 through 2008, an additional 33% of the taxable value of class eight property within the county for tax year 1995, in each case of class eight property, multiplied by 11.25%;

     (c) for general obligation bonds to be issued during fiscal year 2001, an additional 25% of the taxable value of class six property within the county for tax year 1999, multiplied by 11.25%, and an additional 60% of the taxable value of class eight property within the county for tax year 1999, multiplied by 11.25%;

     (d) for general obligation bonds to be issued during fiscal year 2002, an additional 50% of the taxable value of class six property within the county for tax year 1999, multiplied by 11.25%, and an additional 60% of the taxable value of class eight property within the county for tax year 1999, multiplied by 11.25%;

     (e) for general obligation bonds to be issued during fiscal year 2003, an additional 75% of the taxable value of class six property within the county for tax year 1999, multiplied by 11.25%, and an additional 60% of the taxable value of class eight property within the county for tax year 1999, multiplied by 11.25%;

     (f) for general obligation bonds to be issued during fiscal years in which the tax rate for class eight property is 2%, an additional 100% of the taxable value of class six property within the county for tax year 1999, in each case of class six property, multiplied by 11.25%, and an additional 77% of the taxable value of class eight property within the county for tax year 1999, multiplied by 11.25%;

     (g) for general obligation bonds to be issued during fiscal years in which the tax rate for class eight property is 1%, an additional 94% of the taxable value of former class eight property within the county for tax year 1999, in each case of former class eight property, multiplied by 11.25%; and

     (h) for general obligation bonds to be issued during the fiscal year and succeeding fiscal years in which 15-6-138 is repealed, an additional 100% of the taxable value of former class eight property within the county for tax year 1999, in each case of former class eight property, multiplied by 11.25%.

     (2)  In addition to the bonds allowed by subsection (1), a county may issue bonds that, with all outstanding bonds and warrants, will not exceed 27.75% of the total of the taxable value of the property in the county subject to taxation, plus the value provided by the department of revenue under 15-36-324(13), when necessary to do so, to be ascertained by the last assessment for state and county taxes, plus, for bonds to be issued during fiscal year 1997, an additional 11% of the taxable value of class eight property within the county for tax year 1995, and for bonds to be issued during fiscal year 1998, an additional 22% of the taxable value of class eight property within the county for tax year 1995.

     (3)(2)  In addition to the bonds allowed by subsections subsection (1) and (2), a county may issue bonds for the construction or improvement of a jail detention center that will not exceed 12.5% of the taxable value of the property in the county subject to taxation, plus the adjustments permitted by 7-7-2101 subsection (1).

     (4)(3)  The limitation in subsection (1) does not apply to refunding bonds issued for the purpose of paying or retiring county bonds lawfully issued prior to January 1, 1932, or to bonds issued for the repayment of tax protests lost by the county."



     Section 7.  Section 7-14-2524, MCA, is amended to read:

     "7-14-2524.  Limitation on amount of bonds issued -- excess void. (1) Except as otherwise provided in 7-7-2203, 7-7-2204, and this section, a county may not issue bonds that, with all outstanding bonds and warrants except emergency bonds, will exceed 11.25% of the total of the taxable value of the property in the county, plus:

     (a) the value provided by the department of revenue under 15-36-324(13). The taxable property and the amount of taxes levied on new production, production from horizontally completed wells, and incremental production must be ascertained by the last assessment for state and county taxes prior to the issuance of the bonds.

     (b) for fiscal year 2001, an additional 25% of the taxable value of class six property within the county for tax year 1999, multiplied by 11.25%, and an additional 60% of the taxable value of class eight property within the county for tax year 1999, multiplied by 11.25%;

     (c) for fiscal year 2002, an additional 50% of the taxable value of class six property within the county for tax year 1999, multiplied by 11.25%, and an additional 60% of the taxable value of class eight property within the county for tax year 1999, multiplied by 11.25%;

     (d) for fiscal year 2003, an additional 75% of the taxable value of class six property within the county for tax year 1999, multiplied by 11.25%, and an additional 60% of the taxable value of class eight property within the county for tax year 1999, multiplied by 11.25%;

     (e) for fiscal years in which the tax rate for class eight property is 2%, an additional 100% of the taxable value of class six property within the county for tax year 1999, in each case of class six property, multiplied by 11.25%, and an additional 77% of the taxable value of class eight property within the county for tax year 1999, multiplied by 11.25%;

     (f) for fiscal years in which the tax rate for class eight property is 1%, an additional 94% of the taxable value of former class eight property within the county for tax year 1999, in each case of former class eight property, multiplied by 11.25%; and

     (g) for the fiscal year and succeeding fiscal years in which 15-6-138 is repealed, an additional 100% of the taxable value of former class eight property within the county for tax year 1999, in each case of former class eight property, multiplied by 11.25%.

     (2)  A county may issue bonds that, with all outstanding bonds and warrants, will exceed exceeds 11.25% but will does not exceed 22.5% of the total of the taxable value of the property, plus the value provided by the department of revenue under 15-36-324(13) as adjusted in subsection (1), when necessary for the purpose of replacing, rebuilding, or repairing county buildings, bridges, or highways that have been destroyed or damaged by an act of God or by a disaster, catastrophe, or accident.

     (3)  The value of the bonds issued and all other outstanding indebtedness of the county may not exceed 22.5% of the total of the taxable value of the property within the county, plus the value provided by the department of revenue under 15-36-324(13), as ascertained by the last preceding general assessment as adjusted in this section."



     Section 8.  Section 7-14-2525, MCA, is amended to read:

     "7-14-2525.  Refunding agreements and refunding bonds authorized. (1) Whenever the total indebtedness of a county exceeds 22.5% of the total of the taxable value of the property in the county, plus the value provided by the department of revenue under 15-36-324(13) as adjusted in 7-14-2524, and the board determines that the county is unable to pay the indebtedness in full, the board may:

     (a)  negotiate with the bondholders for an agreement under which the bondholders agree to accept less than the full amount of the bonds and the accrued unpaid interest in satisfaction of the bonds;

     (b)  enter into the agreement;

     (c)  issue refunding bonds for the amount agreed upon.

     (2)  These bonds may be issued in more than one series, and each series may be either amortization or serial bonds.

     (3)  The plan agreed upon between the board and the bondholders must be embodied in full in the resolution providing for the issuance of the bonds."



     Section 9.  Section 7-16-2327, MCA, is amended to read:

     "7-16-2327.  Indebtedness for park purposes. (1) Subject to the provisions of subsection (2), a county park board, in addition to powers and duties now given under law, may contract an indebtedness in behalf of a county, upon the credit of the county, in order to carry out its powers and duties.

     (2)  (a) The total amount of indebtedness authorized to be contracted in any form, including the then-existing indebtedness, may not at any time exceed 13% of the total of the taxable value of the taxable property in the county, as ascertained by the last assessment for state and county taxes previous to the incurring of the indebtedness, plus:

     (i) the value provided by the department of revenue under 15-36-324(13), ascertained by the last assessment for state and county taxes previous to the incurring of the indebtedness;

     (ii) for fiscal year 2001, an additional 25% of the taxable value of class six property within the county for tax year 1999, multiplied by 13%, and an additional 60% of the taxable value of class eight property within the county for tax year 1999, multiplied by 13%;

     (iii) for fiscal year 2002, an additional 50% of the taxable value of class six property within the county for tax year 1999, multiplied by 13%, and an additional 60% of the taxable value of class eight property within the county for tax year 1999, multiplied by 13%;

     (iv) for fiscal year 2003, an additional 75% of the taxable value of class six property within the county for tax year 1999, multiplied by 13%, and an additional 60% of the taxable value of class eight property within the county for tax year 1999, multiplied by 13%;

     (v) for fiscal years in which the tax rate for class eight property is 2%, an additional 100% of the taxable value of class six property within the county for tax year 1999, in each case of class six property, multiplied by 13%, and an additional 77% of the taxable value of class eight property within the county for tax year 1999, multiplied by 13%;

     (vi) for fiscal years in which the tax rate for class eight property is 1%, an additional 94% of the taxable value of former class eight property within the county for tax year 1999, in each case of former class eight property, multiplied by 13%; and

     (vii) for the fiscal year and succeeding fiscal years in which 15-6-138 is repealed, an additional 100% of the taxable value of former class eight property within the county for tax year 1999, in each case of former class eight property, multiplied by 13%.

     (b)  Money may not be borrowed on bonds issued for the purchase of lands and improving the land for any purpose until the proposition has been submitted to the vote of those qualified under the provisions of the state constitution to vote at the election in the affected county and a majority vote is cast in favor of the bonds."



     Section 10.  Section 15-1-101, MCA, is amended to read:

     "15-1-101.  Definitions. (1) Except as otherwise specifically provided, when terms mentioned in this section are used in connection with taxation, they are defined in the following manner:

     (a)  The term "agricultural" refers to:

     (i)  the production of food, feed, and fiber commodities, livestock and poultry, bees, fruits and vegetables, and sod, ornamental, nursery, and horticultural crops that are raised, grown, or produced for commercial purposes; and

     (ii) the raising of domestic animals and wildlife in domestication or a captive environment.

     (b)  The term "assessed value" means the value of property as defined in 15-8-111.

     (c)  The term "average wholesale value" means the value to a dealer prior to reconditioning and the profit margin shown in national appraisal guides and manuals or the valuation schedules of the department.

     (d)  (i) The term "commercial", when used to describe property, means property used or owned by a business, a trade, or a corporation as defined in 35-2-114 or used for the production of income, except property described in subsection (1)(d)(ii).

     (ii) The following types of property are not commercial:

     (A)  agricultural lands;

     (B)  timberlands and forest lands;

     (C)  single-family residences and ancillary improvements and improvements necessary to the function of a bona fide farm, ranch, or stock operation;

     (D)  mobile homes and manufactured homes used exclusively as a residence except when held by a distributor or dealer as stock in trade; and

     (E)  all property described in 15-6-135; and

     (F)  all property described in 15-6-136.

     (e)  The term "comparable property" means property that:

     (i)  has similar use, function, and utility;

     (ii) is influenced by the same set of economic trends and physical, governmental, and social factors; and

     (iii) has the potential of a similar highest and best use.

     (f)  The term "credit" means solvent debts, secured or unsecured, owing to a person.

     (g)  (i) "Department", except as provided in subsection (1)(g)(ii), means the department of revenue provided for in 2-15-1301.

     (ii) In chapters 70 and 71, department means the department of transportation provided for in 2-15-2501.

     (h)  The terms "gas" and "natural gas" are synonymous and mean gas as defined in 82-1-111(2). The terms include all natural gases and all other fluid hydrocarbons, including methane gas or any other natural gas found in any coal formation.

     (i)  The term "improvements" includes all buildings, structures, fences, and improvements situated upon, erected upon, or affixed to land. When the department determines that the permanency of location of a mobile home, manufactured home, or housetrailer has been established, the mobile home, manufactured home, or housetrailer is presumed to be an improvement to real property. A mobile home, manufactured home, or housetrailer may be determined to be permanently located only when it is attached to a foundation that cannot feasibly be relocated and only when the wheels are removed.

     (j)  The term "leasehold improvements" means improvements to mobile homes and mobile homes located on land owned by another person. This property is assessed under the appropriate classification, and the taxes are due and payable in two payments as provided in 15-24-202. Delinquent taxes on leasehold improvements are a lien only on the leasehold improvements.

     (k)  The term "livestock" means cattle, sheep, swine, goats, horses, mules, asses, llamas, alpacas, bison, ostriches, rheas, emus, and domestic ungulates.

     (l)  The term "manufactured home" means a residential dwelling built in a factory in accordance with the United States department of housing and urban development code and the federal Manufactured Home Construction and Safety Standards. A manufactured home does not include a mobile home, as defined in 61-1-501 and in subsection (1)(m) of this section, a housetrailer, as defined in 61-1-501, or a mobile home or housetrailer constructed before the federal Manufactured Home Construction and Safety Standards went into effect on June 15, 1976.

     (m)  The term "mobile home" means forms of housing known as "trailers", "housetrailers", or "trailer coaches" exceeding 8 feet in width or 45 feet in length, designed to be moved from one place to another by an independent power connected to them, or any trailer, housetrailer, or trailer coach up to 8 feet in width or 45 feet in length used as a principal residence.

     (n)  The term "personal property" includes everything that is the subject of ownership but that is not included within the meaning of the terms "real estate" and "improvements".

     (o)  The term "poultry" includes all chickens, turkeys, geese, ducks, and other birds raised in domestication to produce food or feathers.

     (p)  The term "property" includes money, credits, bonds, stocks, franchises, and all other matters and things, real, personal, and mixed, capable of private ownership. This definition may not be construed to authorize the taxation of the stocks of a company or corporation when the property of the company or corporation represented by the stocks is within the state and has been taxed.

     (q)  The term "real estate" includes:

     (i)  the possession of, claim to, ownership of, or right to the possession of land;

     (ii) all mines, minerals, and quarries in and under the land subject to the provisions of 15-23-501 and Title 15, chapter 23, part 8;

     (iii) all timber belonging to individuals or corporations growing or being on the lands of the United States; and

     (iv) all rights and privileges appertaining to mines, minerals, quarries, and timber.

     (r)  "Recreational" means hunting, fishing, swimming, boating, waterskiing, camping, biking, hiking, and winter sports, including but not limited to skiing, skating, and snowmobiling.

     (s)  "Research and development firm" means an entity incorporated under the laws of this state or a foreign corporation authorized to do business in this state whose principal purpose is to engage in theoretical analysis, exploration, and experimentation and the extension of investigative findings and theories of a scientific and technical nature into practical application for experimental and demonstration purposes, including the experimental production and testing of models, devices, equipment, materials, and processes.

     (t)  The term "stock in trade" means any mobile home, manufactured home, or housetrailer that is listed by the dealer as inventory and that is offered for sale, is unoccupied, and is not located on a permanent foundation. Inventory does not have to be located at the business location of a dealer or a distributor.

     (u)  The term "taxable value" means the percentage of market or assessed value as provided for in Title 15, chapter 6, part 1.

     (2)  The phrase "municipal corporation" or "municipality" or "taxing unit" includes a county, city, incorporated town, township, school district, irrigation district, or drainage district or a person, persons, or organized body authorized by law to establish tax levies for the purpose of raising public revenue.

     (3)  The term "state board" or "board" when used without other qualification means the state tax appeal board."



     Section 11.  Section 15-6-136, MCA, is amended to read:

     "15-6-136.  Class six property -- description -- taxable percentage. (1) Class six property includes:

     (a)  livestock and other species of domestic animals and wildlife raised in domestication or a captive environment, except for cats, dogs, and other household pets not raised for profit;

     (b)  items of personal property intended for rent or lease in the ordinary course of business if each item of personal property satisfies all of the following:

     (i)  the acquired cost of the personal property is less than $15,000;

     (ii) the personal property is owned by a business whose primary business income is from rental or lease of personal property to individuals wherein no one customer of the business accounts for more than 10% of the total rentals or leases during a calendar year;

     (iii) the lease of the personal property is generally on an hourly, daily, or weekly basis; and

     (c)  machinery and equipment used in canola seed oil processing facilities if:

     (i)  the operators of those facilities employ a minimum of 15 full-time employees; and

     (ii) a canola seed oil processing facility locates in the state of Montana after July 25, 1989; and

     (d)  machinery and equipment used in a malting barley facility.

     (2)  "Canola seed oil processing facility" means a facility that:

     (a)  extracts oil from canola seeds, refines the crude oil to produce edible oil, formulates and packages the edible oil into food products, or engages in any one or more of those processes; and

     (b)  employs at least 15 employees in a full-time capacity.

     (3)  "Malting barley facility" means a facility and integral machinery and equipment used principally to malt malting barley and includes machinery and equipment to mix, blend, transport, transfer, or process the barley and malt at the facility.

     (4)  Class six property is taxed at:

     (a) 4% of its market value for tax years ending on or before December 31, 1999;

     (b) 3% of its market value for tax year 2000;

     (c) 2% of its market value for tax year 2001; and

     (d) 1% of its market value for tax year 2002."



     Section 12.  Section 15-6-138, MCA, is amended to read:

     "15-6-138.  Class eight property -- description -- taxable percentage. (1) Class eight property includes:

     (a)  all agricultural implements and equipment;

     (b)  all mining machinery, fixtures, equipment, tools that are not exempt under 15-6-201(1)(r), and supplies except those included in class five;

     (c)  all manufacturing machinery, fixtures, equipment, tools that are not exempt under 15-6-201(1)(r), and supplies except those included in class five;

     (d)  all goods and equipment that are intended for rent or lease, except goods and equipment that are specifically included and taxed in another class;

     (e)  special mobile equipment as defined in 61-1-104;

     (f)  furniture, fixtures, and equipment, except that specifically included in another class, used in commercial establishments as defined in this section;

     (g)  x-ray and medical and dental equipment;

     (h)  citizens' band radios and mobile telephones;

     (i)  radio and television broadcasting and transmitting equipment;

     (j)  cable television systems;

     (k)  coal and ore haulers;

     (l)  theater projectors and sound equipment; and

     (m)  all other property that is not included in any other class in this part, except that property that is subject to a fee in lieu of a property tax.

     (2)  As used in this section, "coal and ore haulers" means nonhighway vehicles that exceed 18,000 pounds per axle and that are primarily designed and used to transport coal, ore, or other earthen material in a mining or quarrying environment.

     (3)  "Commercial establishment" includes any hotel; motel; office; petroleum marketing station; or service, wholesale, retail, or food-handling business.

     (4)  Class eight property is taxed at:

     (a)  7% of its market value for tax year 1997; and

     (b)  6% of its market value for tax years beginning after December 31, 1997; and

     (b) 3% of its market value for tax years beginning after December 31, 1999.

     (5)  (a) If, in any year beginning with tax year 2004, the percentage growth in inflation-adjusted Montana wage and salary income, in the last full year for which data is available, is at least 2.85% from the prior year, then the tax rate for class eight property will be reduced by 1% each year until the tax rate reaches zero.

     (b) The department shall calculate the percentage growth in subsection (5)(a) by using the formula (W/CPI) - 1, where:

     (i) W is the Montana wage and salary income for the most current available year divided by the Montana wage and salary income for the year prior to the most current available year; and

     (ii) CPI is the consumer price index for the most current available year used in subsection (5)(b)(i) divided by the consumer price index for the year prior to the most current available year as used in subsection (5)(b)(i).

     (c) For purposes of determining the percentage growth in subsection (5)(a), the department shall use the wage and salary data series referred to as the bureau of economic analysis of the United States department of commerce Montana wage and salary disbursements. Inflation must be measured by the consumer price index, U.S. city average, all urban consumers (CPI-U), using the 1982-84 base of 100, as published by the bureau of labor statistics of the United States department of labor.

     (6)  Beginning with tax year 2000, the class eight property of a person or business entity that owns an aggregate of $5,000 or less in market value of class eight property is exempt from taxation."



     Section 13.  Section 15-6-201, MCA, is amended to read:

     "15-6-201.  Exempt categories. (1) The following categories of property are exempt from taxation:

     (a)  except as provided in 15-24-1203, the property of:

     (i)  the United States, except:

     (A)  if congress passes legislation that allows the state to tax property owned by the federal government or an agency created by congress; or

     (B)  as provided in 15-24-1103;

     (ii) the state, counties, cities, towns, and school districts;

     (iii) irrigation districts organized under the laws of Montana and not operating for profit;

     (iv) municipal corporations;

     (v)  public libraries; and

     (vi) rural fire districts and other entities providing fire protection under Title 7, chapter 33;

     (b)  buildings, with land that they occupy and furnishings in the buildings, that are owned by a church and used for actual religious worship or for residences of the clergy, together with adjacent land reasonably necessary for convenient use of the buildings;

     (c)  property used exclusively for agricultural and horticultural societies, for educational purposes, and for nonprofit health care facilities, as defined in 50-5-101, licensed by the department of public health and human services and organized under Title 35, chapter 2 or 3. A health care facility that is not licensed by the department of public health and human services and organized under Title 35, chapter 2 or 3, is not exempt.

     (d)  property that is:

     (i)  owned and held by an association or corporation organized under Title 35, chapter 2, 3, 20, or 21;

     (ii) devoted exclusively to use in connection with a cemetery or cemeteries for which a permanent care and improvement fund has been established as provided for in Title 35, chapter 20, part 3; and

     (iii) not maintained and operated for private or corporate profit;

     (e)  property that is owned or property that is leased from a federal, state, or local governmental entity by institutions of purely public charity if the property is directly used for purely public charitable purposes;

     (f)  evidence of debt secured by mortgages of record upon real or personal property in the state of Montana;

     (g)  public museums, art galleries, zoos, and observatories that are not used or held for private or corporate profit;

     (h)  all household goods and furniture, including but not limited to clocks, musical instruments, sewing machines, and wearing apparel of members of the family, used by the owner for personal and domestic purposes or for furnishing or equipping the family residence;

     (i)  truck canopy covers or toppers and campers;

     (j)  a bicycle, as defined in 61-1-123, used by the owner for personal transportation purposes;

     (k)  motor homes;

     (l)  all watercraft;

     (m)  motor vehicles, land, fixtures, buildings, and improvements owned by a cooperative association or nonprofit corporation organized to furnish potable water to its members or customers for uses other than the irrigation of agricultural land;

     (n)  the right of entry that is a property right reserved in land or received by mesne conveyance (exclusive of leasehold interests), devise, or succession to enter land with a surface title that is held by another to explore, prospect, or dig for oil, gas, coal, or minerals;

     (o)  (i) property that is owned and used by a corporation or association organized and operated exclusively for the care of persons with developmental disabilities, persons with mental illness, or persons with physical or mental impairments that constitute or result in substantial impediments to employment and that is not operated for gain or profit; and

     (ii) property that is owned and used by an organization owning and operating facilities that are for the care of the retired, aged, or chronically ill and that are not operated for gain or profit;

     (p)  all farm buildings with a market value of less than $500 and all agricultural implements and machinery with a market value of less than $100;

     (q)  property owned by a nonprofit corporation that is organized to provide facilities primarily for training and practice for or competition in international sports and athletic events and that is not held or used for private or corporate gain or profit. For purposes of this subsection (1)(q), "nonprofit corporation" means an organization that is exempt from taxation under section 501(c) of the Internal Revenue Code and incorporated and admitted under the Montana Nonprofit Corporation Act.

     (r)  the first $15,000 or less of market value of tools owned by the taxpayer that are customarily hand-held and that are used to:

     (i)  construct, repair, and maintain improvements to real property; or

     (ii) repair and maintain machinery, equipment, appliances, or other personal property;

     (s)  harness, saddlery, and other tack equipment;

     (t)  a title plant owned by a title insurer or a title insurance producer, as those terms are defined in 33-25-105;

     (u)  timber as defined in 15-44-102;

     (v)  all trailers as defined in 61-1-111, semitrailers as defined in 61-1-112, pole trailers as defined in 61-1-114, and travel trailers as defined in 61-1-131;

     (w)  all vehicles registered under 61-3-456;

     (x)  (i) buses, trucks having a manufacturer's rated capacity of more than 1 ton, and truck tractors, including buses, trucks, and truck tractors apportioned under Title 61, chapter 3, part 7; and

     (ii) personal property that is attached to a bus, truck, or truck tractor that is exempt under subsection (1)(x)(i); and

     (y)  motorcycles and quadricycles;

     (z)  items of personal property intended for rent or lease in the ordinary course of business if each item of personal property satisfies all of the following:

     (i)  the acquired cost of the personal property is less than $15,000;

     (ii) the personal property is owned by a business whose primary business income is from rental or lease of personal property to individuals and no one customer of the business accounts for more than 10% of the total rentals or leases during a calendar year; and

     (iii) the lease of the personal property is generally on an hourly, daily, or weekly basis;

     (aa) all agricultural implements and equipment;

(bb)  all mining machinery, fixtures, equipment, tools that are not exempt under 15-6-201(1)(r), and supplies except those included in class five;

(cc)  all manufacturing machinery, fixtures, equipment, tools that are not exempt under 15-6-201(1)(r), and supplies except those included in class five;

(dd)  all goods and equipment that are intended for rent or lease, except goods and equipment that are specifically included and taxed in another class;

(ee)  special mobile equipment as defined in 61-1-104;

(ff)  furniture, fixtures, and equipment, except that specifically included in another class, used in commercial establishments as defined in this section;

(gg)  x-ray and medical and dental equipment;

(hh)  citizens' band radios and mobile telephones;

(ii)  radio and television broadcasting and transmitting equipment;

(jj)  cable television systems;

(kk)  coal and ore haulers; and

(ll)  theater projectors and sound equipment.

     (2)  (a) For the purposes of subsection (1)(e), the term "institutions of purely public charity" includes any organization that meets the following requirements:

     (i)  The organization qualifies as a tax-exempt organization under the provisions of section 501(c)(3), Internal Revenue Code, as amended.

     (ii) The organization accomplishes its activities through absolute gratuity or grants. However, the organization may solicit or raise funds by the sale of merchandise, memberships, or tickets to public performances or entertainment or by other similar types of fundraising activities.

     (b)  For the purposes of subsection (1)(g), the term "public museums, art galleries, zoos, and observatories" means governmental entities or nonprofit organizations whose principal purpose is to hold property for public display or for use as a museum, art gallery, zoo, or observatory. The exempt property includes all real and personal property reasonably necessary for use in connection with the public display or observatory use. Unless the property is leased for a profit to a governmental entity or nonprofit organization by an individual or for-profit organization, real and personal property owned by other persons is exempt if it is:

     (i)  actually used by the governmental entity or nonprofit organization as a part of its public display;

     (ii) held for future display; or

     (iii) used to house or store a public display.

     (3)  The following portions of the appraised value of a capital investment in a recognized nonfossil form of energy generation or low emission wood or biomass combustion devices, as defined in 15-32-102, are exempt from taxation for a period of 10 years following installation of the property:

     (a)  $20,000 in the case of a single-family residential dwelling;

     (b)  $100,000 in the case of a multifamily residential dwelling or a nonresidential structure."



     Section 14.  Section 15-6-207, MCA, is amended to read:

     "15-6-207.  Agricultural exemptions. (1) The following agricultural products are exempt from taxation:

     (a)  all unprocessed agricultural products on the farm or in storage and owned by the producer;

     (b)  all producer-held grain in storage;

     (c)  all unprocessed agricultural products, except livestock;

     (d)  except as provided in subsection (1)(e), all livestock that have not attained the age of 24 months as of February 1 or as of the last day of any month of the prior tax year if assessed on the average inventory basis as provided in 15-24-902(2) and the unprocessed products of livestock;

     (e) swine that have not attained the age of 6 months as of January 1;

     (f)(e)  poultry and the unprocessed products of poultry; and

     (g)(f)  bees and the unprocessed product of bees.

     (2)  Any beet digger, beet topper, beet defoliator, beet thinner, beet cultivator, beet planter, or beet top saver designed exclusively to plant, cultivate, and harvest sugar beets is exempt from taxation if the implement has not been used to plant, cultivate, or harvest sugar beets for the 2 years immediately preceding the current assessment date and there are no available sugar beet contracts in the sugar beet grower's marketing area."



     Section 15.  Section 15-8-301, MCA, is amended to read:

     "15-8-301.  Statement -- what to contain. (1) The department may require from a person a statement under oath setting forth specifically all the real and personal property owned by, in possession of, or under the control of the person at midnight on January 1. The statement must be in writing, showing separately:

     (a)  all property belonging to, claimed by, or in the possession or under the control or management of the person;

     (b)  all property belonging to, claimed by, or in the possession or under the control or management of any firm of which the person is a member;

     (c)  all property belonging to, claimed by, or in the possession or under the control or management of any corporation of which the person is president, secretary, cashier, or managing agent;

     (d)  the county in which the property is situated or in which the property is liable to taxation and, if liable to taxation in the county in which the statement is made, also the city, town, school district, road district, or other revenue districts in which the property is situated;

     (e)  an exact description of all lands, improvements, and personal property;

     (f)  all depots, shops, stations, buildings, and other structures erected on the space covered by the right-of-way and all other property owned by any person owning or operating any railroad within the county.

     (2)  The department shall notify the taxpayer in the statement for reporting personal property owned by a business or used in a business that the statement is for reporting business equipment and other business personal property described in Title 15, chapter 6, part 1. A taxpayer owning exempt business equipment is subject to limited reporting requirements; however, all new businesses shall report their class eight property so that the department can determine the market value of the property. The department shall by rule develop reporting requirements for business equipment to limit the annual reporting of exempt business equipment to the extent feasible.

     (3)  Whenever one member of a firm or one of the proper officers of a corporation has made a statement showing the property of the firm or corporation, another member of the firm or another officer is not required to include the property in that person's statement but the statement must show the name of the person or officer who made the statement in which the property is included.

     (4)  The fact that a statement is not required or that a person has not made a statement, under oath or otherwise, does not relieve the person's property from taxation."



     Section 16.  Section 15-24-301, MCA, is amended to read:

     "15-24-301.  Personal property brought into the state -- assessment -- exceptions -- custom combine equipment. (1) Except as provided in subsections (2) through (5), property in the following cases is subject to taxation and assessment for all taxes levied that year in the county in which it is located:

     (a)  any personal property, (including excluding livestock), brought, driven, or coming into this state at any time during the year that is used in the state for hire, compensation, or profit;

     (b)  property whose owner or user is engaged in gainful occupation or business enterprise in the state; or

     (c)  property which comes to rest and that becomes a part of the general property of the state.

     (2)  The taxes on this property are levied in the same manner and to the same extent, except as otherwise provided, as though the property had been in the county on the regular assessment date, provided that the property has not been regularly assessed for the year in some other county of the state.

     (3)  Nothing in this This section shall be construed to does not levy a tax against a merchant or dealer within this state on goods, wares, or merchandise brought into the county to replenish the stock of the merchant or dealer.

     (4)  Any A motor vehicle not subject to a fee in lieu of tax brought, driven, or coming into this state by any nonresident person temporarily employed in Montana and used exclusively for transportation of such the person is subject to taxation and assessment for taxes as follows:

     (a)  The motor vehicle is taxed by the county in which it is located.

     (b)  One-fourth of the annual tax liability of the motor vehicle must be paid for each quarter or portion of a quarter of the year that the motor vehicle is located in Montana.

     (c)  The quarterly taxes are due the first day of the quarter.

     (5)  Agricultural harvesting machinery classified under class eight, licensed in other states another state, and operated on the lands land of persons a person other than the owner of the machinery under contracts a contract for hire shall be is subject to a fee in lieu of taxation of $35 per for each machine for the calendar year in which the fee is collected. The machines machinery shall be is subject to taxation under class eight only if they are the machinery is sold in Montana."



     Section 17.  Section 15-24-303, MCA, is amended to read:

     "15-24-303.  Proration of tax on personal property -- refund. (1) The tax on personal property brought, driven, coming into, or otherwise located in the state on or after the assessment date must be prorated according to the ratio that the remaining number of months in the year bears to the total number of months in the year. This section does not apply to motor vehicles taxed under Title 61, chapter 3, part 5, or to livestock assessed subject to the per capita levy under 15-24-902(2) 15-24-921.

     (2)  If property upon which taxes have been paid is removed from the state, the taxpayer may obtain a refund of a prorated portion of the taxes, subject to the requirements of 15-16-613."



     Section 18.  Section 15-24-902, MCA, is amended to read:

     "15-24-902.  Assessment of livestock -- election for assessment on average inventory basis. (1) Except as provided in subsection (2), the The department of revenue shall assess all nonexempt livestock for the purposes of the per capita levy imposed under 15-24-921 in each county where they are located on February 1 of each year. The livestock must be assessed to the person by whom they were owned or claimed or in whose possession or control they were at midnight of February 1 in that year.

     (2)  An owner of livestock may elect to have nonexempt livestock assessed on the average inventory basis as provided in 15-24-927. The owner shall file an election with the department on the statement required under 15-24-903. An owner of livestock making an election to have nonexempt livestock assessed on the average inventory basis is bound by that election for 6 years. After 6 years, the election to have nonexempt livestock assessed on the average inventory basis remains in effect unless the owner otherwise notifies the department before February 1."



     Section 19.  Section 15-24-903, MCA, is amended to read:

     "15-24-903.  Duty of owner to assist in assessment. (1) (a) Except as provided in subsection (1)(b), the The owner of livestock, as defined in 15-24-901 15-24-921, or the owner's agent shall at the time of assessment make and deliver to the department of revenue for the county or counties where the owner's livestock were located on February 1 a written statement, under oath, listing the owner's different kinds of livestock within the county or counties, together with a listing of their marks and brands.

     (b)  If the owner of livestock is assessed on the average inventory basis, as provided in 15-24-927, the owner or the owner's agent shall, in the manner and timeframe provided in subsection (1)(a), report to the department the county or counties where the livestock were located in the prior tax year and show the months during the prior tax year that the livestock were within the county or counties.

     (2)  As used in this section, "agent" means any person, persons, company, or corporation, including a feedlot operator or owner of grazing land, who has charge of livestock on the assessment date."



     Section 20.  Section 15-24-904, MCA, is amended to read:

     "15-24-904.  Penalty for violation of law. If any a person, persons, company, or corporation who is the owner or is in charge of any livestock within this state fails to make the statement or statements as provided in 15-24-903, the department may, after 10 days' notice to the person who failed to file the report, increase the assessment per capita levy, as provided in 15-24-921, by 10% as a penalty."



     Section 21.  Section 15-24-922, MCA, is amended to read:

     "15-24-922.  Board of livestock to prescribe per capita levy -- refunds -- per capita levy on average inventory. (1) The board of livestock shall annually prescribe the amount of the per capita levy to be made against livestock of all classes for the purpose indicated in 15-24-921.

     (2)  The per capita tax levy must be calculated each year to provide not more than 110% of the average annual revenue that was generated in the 3 previous years. The calculation must apply a reasonable factor for nonpayment and late payment of taxes and for reimbursement to the counties pursuant to 15-24-925 for collection of the levy.

     (3)  (a)  A livestock owner taxed under 15-24-920 who moves livestock between states is entitled to a refund of the per capita levy collected under 15-24-921 based on the number of months that the livestock have taxable situs in the state Montana. The amount of the refund is equal to the ratio of the number of months that the livestock do not have taxable situs in the state to the number of months in the tax year, multiplied by the original per capita levy due. A taxpayer shall apply to the board of livestock on a form prescribed by the board for a refund allowed under this subsection by January 31 following the taxable year. The application must include a statement showing the date when the livestock were moved out of the state.

     (b)  Except as provided in subsection (3)(c), for For the purposes of 15-24-921 and this section, the per capita levy may not be prorated.

     (c)  A taxpayer whose livestock are taxed on the average inventory basis for property tax purposes must also be taxed on an average inventory basis for the purposes of 15-24-921 and this section. All other livestock subject to the per capita tax levy must be reported on February 1 of each year."



     Section 22.  Section 17-7-502, MCA, is amended to read:

     "17-7-502.  (Temporary) 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: 2-17-105; 3-5-901; 5-13-403; 10-3-203; 10-3-310; 10-3-312; 10-3-314; 10-4-301; 15-1-111; [section 1]; [section 26]; 15-23-706; 15-30-195; 15-31-702; 15-36-324; 15-36-325; 15-37-117; 15-38-202; 15-65-121; 15-70-101; 16-1-404; 16-1-406; 16-1-411; 16-11-308; 17-3-106; 17-3-212; 17-3-222; 17-6-101; 17-7-304; 18-11-112; 19-3-319; 19-6-709; 19-9-702; 19-13-604; 19-17-301; 19-18-512; 19-19-305; 19-19-506; 20-8-107; 20-8-111; 20-26-1503; 22-3-1004; 23-5-136; 23-5-306; 23-5-409; 23-5-610; 23-5-612; 23-5-631; 23-7-301; 23-7-402; 37-43-204; 37-51-501; 39-71-503; 39-71-907; 39-71-2321; 42-2-105; 44-12-206; 44-13-102; 50-4-623; 53-6-703; 53-24-206; 67-3-205; 75-1-1101; 75-5-1108; 75-6-214; 75-11-313; 77-1-131; 80-2-103; 80-2-222; 80-4-416; 81-5-111; 82-11-161; 85-20-402; 87-1-513; 90-3-301; 90-4-215; 90-6-331; 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; pursuant to sec. 7(2), Ch. 29, L. 1995, the inclusion of 15-30-195 terminates July 1, 2001; pursuant to sec. 5, Ch. 461, L. 1997, the inclusion of 77-1-131 terminates October 1, 2003; and pursuant to secs. 13, 16(1), Ch. 549, L. 1997, the inclusion of 90-3-301 terminates July 1, 1999.)

     17-7-502.  (Effective July 1, 2008) 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: 2-17-105; 3-5-901; 5-13-403; 10-3-203; 10-3-310; 10-3-312; 10-3-314; 10-4-301; [section 1]; [section 26]; 15-23-706; 15-30-195; 15-31-702; 15-36-324; 15-36-325; 15-37-117; 15-38-202; 15-65-121; 15-70-101; 16-1-404; [16-1-406;] 16-1-411; 16-11-308; 17-3-106; 17-3-212; 17-3-222; 17-5-404; 17-5-804; 17-6-101; 17-7-304; 18-11-112; 19-3-319; 19-6-709; 19-9-702; 19-13-604; 19-17-301; 19-18-512; 19-19-205; 19-19-305; 19-19-506; 20-8-107; 20-9-361; 20-26-1503; 22-3-1004; 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; 42-2-105; 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; 75-5-1108; 75-6-214; 75-11-313; 77-1-505; 80-2-103; 80-2-222; 80-4-416; 81-5-111; 82-11-136; 82-11-161; 85-1-220; 85-20-402; 87-1-513; 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. 68(2), Ch. 422, L. 1997, this version becomes effective July 1, 2008.)"



     Section 23.  Section 20-9-406, MCA, is amended to read:

     "20-9-406.  Limitations on amount of bond issue. (1)  (a)  Except as provided in subsection (1)(c) (1)(d), the maximum amount for which an elementary district or a high school district may become indebted by the issuance of bonds, including all indebtedness represented by outstanding bonds of previous issues and registered warrants, is 45% of the taxable value of the property subject to taxation to be ascertained by the last-completed assessment for state, county, and school taxes previous to the incurring of the indebtedness, plus,:

     (i) for bonds to be issued during fiscal year 1997, an additional 11% of the taxable value of class eight property within the district for tax year 1995, for bonds to be issued during fiscal year 1998, an additional 22% of the taxable value of class eight property within the district for tax year 1995, and for bonds to be issued during fiscal years 1999 through 2008, an additional 33% of the taxable value of class eight property within the district for tax year 1995, in each case of class eight property, multiplied by 45%;

     (ii) for bonds to be issued during fiscal year 2001, an additional 25% of the taxable value of class six property within the district for tax year 1999, multiplied by 45%, and an additional 60% of the taxable value of class eight property within the district for tax year 1999, multiplied by 45%;

     (iii) for bonds to be issued during fiscal year 2002, an additional 50% of the taxable value of class six property within the district for tax year 1999, multiplied by 45%, and an additional 60% of the taxable value of class eight property within the district for tax year 1999, multiplied by 45%;

     (iv) for bonds to be issued during fiscal year 2003, an additional 75% of the taxable value of class six property within the district for tax year 1999, multiplied by 45%, and an additional 60% of the taxable value of class eight property within the district for tax year 1999, multiplied by 45%;

     (v) for bonds to be issued during fiscal years in which the tax rate for class eight property is 2%, an additional 100% of the taxable value of class six property within the district for tax year 1999, in each case of class six property, multiplied by 45%, and an additional 77% of the taxable value of class eight property within the district for tax year 1999, multiplied by 45%;

     (vi) for bonds to be issued during fiscal years in which the tax rate for class eight property is 1%, an additional 94% of the taxable value of former class eight property within the district for tax year 1999, in each case of former class eight property, multiplied by 45%; and

     (vii) for bonds to be issued during the fiscal year and succeeding fiscal years in which 15-6-138 is repealed, an additional 100% of the taxable value of former class eight property within the district for tax year 1999, in each case of former class eight property, multiplied by 45%.

     (b)  Except as provided in subsection (1)(c) (1)(d), the maximum amount for which a K-12 school district, as formed pursuant to 20-6-701, may become indebted by the issuance of bonds, including all indebtedness represented by outstanding bonds of previous issues and registered warrants, is up to 90% of the taxable value of the property subject to taxation to be ascertained by the last-completed assessment for state, county, and school taxes previous to the incurring of the indebtedness, plus,:

     (i) for bonds to be issued during fiscal year 1997, an additional 11% of the taxable value of class eight property within the district for tax year 1995, for bonds to be issued during fiscal year 1998, an additional 22% of the taxable value of class eight property within the district for tax year 1995, and for bonds to be issued during fiscal years 1999 through 2008, an additional 33% of the taxable value of class eight property within the district for tax year 1995, in each case of class eight property, multiplied by 90%;

     (ii) for bonds to be issued during fiscal year 2001, an additional 25% of the taxable value of class six property within the district for tax year 1999, multiplied by 90%, and an additional 60% of the taxable value of class eight property within the district for tax year 1999, multiplied by 90%;

     (iii) for bonds to be issued during fiscal year 2002, an additional 50% of the taxable value of class six property within the district for tax year 1999, multiplied by 90%, and an additional 60% of the taxable value of class eight property within the district for tax year 1999, multiplied by 90%;

     (iv) for bonds to be issued during fiscal year 2003, an additional 75% of the taxable value of class six property within the district for tax year 1999, multiplied by 90%, and an additional 60% of the taxable value of class eight property within the district for tax year 1999, multiplied by 90%;

     (v) for bonds to be issued during fiscal years in which the tax rate for class eight property is 2%, an additional 100% of the taxable value of class six property within the district for tax year 1999, in each case of class six property, multiplied by 90%, and an additional 77% of the taxable value of class eight property within the district for tax year 1999, multiplied by 90%;

     (vi) for bonds to be issued during fiscal years in which the tax rate for class eight property is 1%, an additional 94% of the taxable value of former class eight property within the district for tax year 1999, in each case of former class eight property, multiplied by 90%; and

     (vii) for bonds to be issued during the fiscal year and succeeding fiscal years in which 15-6-138 is repealed, an additional 100% of the taxable value of former class eight property within the district for tax year 1999, in each case of former class eight property, multiplied by 90%.

     (c) The total indebtedness of the high school district with an attached elementary district must be limited to the sum of 45% of the taxable value of the property for elementary school program purposes and 45% of the taxable value of the property for high school program purposes, adjusted as provided in this section.

     (c)(d)  (i) The maximum amount for which an elementary district or a high school district with a district mill value per elementary ANB or per high school ANB that is less than the corresponding statewide mill value per elementary ANB or per high school ANB may become indebted by the issuance of bonds, including all indebtedness represented by outstanding bonds of previous issues and registered warrants, is 45% of the corresponding statewide mill value per ANB times 1,000 times the ANB of the district. For a K-12 district, the maximum amount for which the district may become indebted is 45% of the sum of the statewide mill value per elementary ANB times 1,000 times the elementary ANB of the district and the statewide mill value per high school ANB times 1,000 times the high school ANB of the district.

     (ii) If mutually agreed upon by the affected districts, for the purpose of calculating its maximum bonded indebtedness under this subsection (1)(c) (1)(d), a district may include the ANB of the district plus the number of students residing within the district for which the district or county pays tuition for attendance at a school in an adjacent district. The receiving district may not use out-of-district ANB for the purpose of calculating its maximum indebtedness if the out-of-district ANB has been included in the ANB of the sending district pursuant to the mutual agreement.

     (2)  The maximum amounts determined in subsection (1), however, may not pertain to indebtedness imposed by special improvement district obligations or assessments against the school district or to bonds issued for the repayment of tax protests lost by the district. All bonds issued in excess of the amount are void, except as provided in this section.

     (3)  When the total indebtedness of a school district has reached the limitations prescribed in this section, the school district may pay all reasonable and necessary expenses of the school district on a cash basis in accordance with the financial administration provisions of this chapter.

     (4)  Whenever bonds are issued for the purpose of refunding bonds, any money to the credit of the debt service fund for the payment of the bonds to be refunded is applied toward the payment of the bonds and the refunding bond issue is decreased accordingly."



     Section 24.  Section 81-7-303, MCA, is amended to read:

     "81-7-303.  County commissioners permitted to require per capita license fee on sheep. (1) To defray the expense of protection, the board of county commissioners of any a county may require all owners or persons in possession of any a sheep 1 year old of age or older in the county on the regular assessment date of each year as provided in 15-24-903 to pay a per capita license fee in an amount to be determined by the board. All owners or persons in possession of any a sheep 1 year old of age or older coming into the county after the regular assessment date and subject to taxation the per capita levy under the provisions of 15-24-301 Title 15, chapter 24, part 9, are subject to payment of the license fee.

     (2)  Upon the order of the board of county commissioners, the license fees may be imposed by entering the name of the licensee upon the property tax assessment record of the county by the department of revenue. The license fees are payable to and must be collected by the county treasurer. When levied, the fees are a lien upon the property, both real and personal, of the licensee. If the person against whom the license fee is levied does not own real estate against which the license fee is or may become a lien, then the license fee is payable immediately upon its levy and the treasurer shall collect the fee in the manner provided by law for the collection of personal property taxes that are not a lien upon real estate.

     (3)  When collected, the fees must be placed in the predatory animal control fund and the fund may be expended on order of the board of county commissioners of the county for predatory animal control only."



     Section 25.  Section 81-7-603, MCA, is amended to read:

     "81-7-603.  County commissioners permitted to levy per capita license fee on cattle. (1) To defray the expense of protection, the board of county commissioners may require all owners or persons in possession of any cattle 9 months old or older in the county on the regular assessment date of each year as provided in 15-24-903 to pay a per capita license fee in an amount to be determined by the board. All owners or persons in possession of cattle 9 months old or older coming into the county after the regular assessment date and subject to taxation the per capita levy under the provisions of 15-24-301 Title 15, chapter 24, part 9, are subject to payment of the license fee.

     (2)  Upon the order of the board of county commissioners, the license fee may be imposed by entering the name of the licensee upon the property tax assessment record of the county by the department of revenue. The license fee is payable to the county treasurer. When levied, the fee is a lien upon the property, both real and personal, of the licensee. If the person against whom the license fee is levied does not own real estate against which the license fee is or may become a lien, then the license fee is payable immediately upon its levy and the treasurer shall collect the fee in the manner provided by law for the collection of personal property taxes that are not a lien upon real estate.

     (3)  The fees must be placed in a predatory animal control fund separate from the fund provided for in 81-7-303. The money in the predatory animal control fund may be expended by the board of county commissioners only for the predatory animal control program."



     Section 26.  Reimbursement for class eight exemption and rate reduction. (1) Except as otherwise provided in this section, a local government taxing jurisdiction must be reimbursed for losses of revenue due to the progressive tax exemption granted by 15-6-138. The reimbursement provided in this section is in addition to other statutory reimbursements.

     (2) On or before June 1 of each tax year, the department of revenue shall determine a reimbursement amount associated with the loss in revenue caused by the exemption and tax rate reduction of class eight property and provide that information to each county treasurer. The department of revenue shall determine the reimbursement amount for each local government taxing jurisdiction that levied mills on the taxable value of property described in 15-6-138 in the corresponding tax year. However, the reimbursement does not apply to property described in 15-6-138 that has a reduced tax rate under 15-24-1402.

     (3)  (a) The department shall calculate the reimbursement amount for each year by subtracting the estimated taxes that would have been assessed against class eight property for the corresponding tax year from the total taxes assessed against class eight property by a local government taxing jurisdiction for the 1999 tax year.

     (b) The estimated taxes that would have been assessed against class eight property of a local government taxing jurisdiction for any given tax year are calculated as follows:

     (i) For each taxpayer who reported class eight property in the local government taxing jurisdiction for the 1999 tax year, subtract the taxpayer's progressive exemption applicable to the corresponding tax year from the total market value of class eight property reported in the local government taxing jurisdiction during the 1999 tax year.

     (ii) Multiply the amount determined in subsection (3)(b)(i) by the tax rate provided in 15-6-138 for the current tax year and the mills levied by each local government taxing jurisdiction for the 1999 tax year.

     (4)  (a) For purposes of this section, "local government taxing jurisdiction" means a local government rather than a state taxing jurisdiction that levied mills against property described in 15-6-138, including county governments, incorporated city and town governments, consolidated county and city governments, local elementary and high school districts, local community college districts, miscellaneous districts, and special districts. For purposes of calculating the reimbursement, the local government shall include countywide mills levied for equalization of school retirement or transportation, but may not include tax increment financing districts or county or state school equalization levies provided for in 20-9-331, 20-9-333, and 20-9-360 or the university levy provided for in [section 1 of Senate Bill No. 79]. It also may not include any state levy for welfare programs provided for in 53-2-813.

     (b) Tax increment financing districts may not receive a reimbursement under this section.

     (c) The county treasurer shall use any reimbursement funds received under this section to reimburse each local government taxing jurisdiction in the amount determined by the department under subsection (2). The reimbursement must be distributed to funds within local government taxing jurisdictions in the same manner as taxes on property described in 15-6-138 are distributed.

      (d) Each local government taxing jurisdiction receiving reimbursements shall consider the amount of reimbursement that will be received and lower the mill levy otherwise necessary to fund the budget by the amount that would otherwise have to be raised by the mill levy.

     (5) A local government taxing jurisdiction that ceases to exist after December 31, 1999, will no longer be considered for revenue loss or reimbursement purposes. A local government taxing jurisdiction that is created after January 1, 2000, will not be considered for revenue loss or reimbursement purposes. If a local government taxing jurisdiction that existed prior to January 2000 is split between two or more taxing jurisdictions or is annexed to or is consolidated with another taxing jurisdiction, the department shall determine how much of the revenue loss and reimbursement is attributed to the new jurisdictions.

     (6) The reimbursement in this section is statutorily appropriated as provided in 17-7-502.



     Section 27.  Repealer. (1) Sections 15-6-136, 15-24-901, 15-24-920, 15-24-926, 15-24-927, and 15-24-931, MCA, are repealed.

     (2) Section 15-6-138, MCA, is repealed.



     Section 28.  Codification instruction. [Sections 1 and 26] are intended to be codified as an integral part of Title 15, chapter 1, part 1, and the provisions of Title 15, chapter 1, part 1, apply to [sections 1 and 26].



     Section 29.  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].



     Section 30.  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 31.  Effective dates. (1) [Sections 1, 11, 12, 15, 22, 26, 28 through 30, and 32 and this section] are effective on passage and approval.

     (2) [Sections 3 through 9 and 23] are effective July 1, 2000.

     (3) [Sections 2, 10, 13, 14, 16 through 21, 24, 25, and 27(1)] are effective January 1, 2003.

     (4) [Sections 13(1)(aa) through (1)(ll) and 27(2)] are effective if the tax rate in [section 12], amending 15-6-138, reaches zero.



     Section 32.  Coordination. If [LC 1924] is passed and approved, then [sections 1 and 26 of this act] are void.

- END -




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