SENATE BILL NO. 502
INTRODUCED BY L. GROSFIELD
AN ACT GENERALLY REVISING LAWS RELATING TO HARD-ROCK MINING IMPACTS; PROVIDING THAT A PAYMENT GUARANTEE FOR A FACILITY IMPACT BOND MUST BE MADE THROUGH A THIRD-PARTY FINANCIAL INSTITUTION; CLARIFYING THE MINIMUM ALLOCATION OF TAXABLE VALUATION OF GROSS PROCEEDS TO UNITS OF LOCAL GOVERNMENT; REVISING THE ALLOCATION OF THE METAL MINES LICENSE TAX; REVISING THE TIME AND MINIMUM DISTRIBUTION OF REVENUE TO TRUST ACCOUNTS; AMENDING SECTIONS 15-37-117, 90-6-302, 90-6-310, 90-6-331, AND 90-6-404, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 15-37-117, MCA, is amended to read:
"15-37-117. Disposition of metalliferous mines license taxes. (1) Metalliferous mines license taxes collected under the provisions of this part must, in accordance with the provisions of 15-1-501, be allocated as follows:
(a) to the credit of the general fund of the state, 58% of total collections each year;
(b) to the state special revenue fund to the credit of a hard-rock mining impact trust account, 1.5% 2.5% of total
collections each year;
(c) to the orphan share state special revenue account established in 75-10-743, 8.5% of total collections each year;
(d) to the ground water assessment account established in 85-2-905, 2.2% of total collections each year;
(e) to the reclamation and development grants program state special revenue account, 4.8% of total collections each year; and
(f) on or before June 1, to the county or counties identified as experiencing fiscal and economic impacts, resulting in
increased employment or local government costs, under an impact plan for a large-scale mineral development prepared and
approved pursuant to 90-6-307, in direct proportion to the fiscal and economic impacts determined in the plan, or, if an
impact plan has not been prepared, to the county in which the mine is located, 25% 24% of total collections each year, to be
allocated by the county commissioners as follows:
(i) not less than 40% 37.5% to the county hard-rock mine trust reserve account established in 7-6-2225; and
(ii) all money not allocated to the account pursuant to subsection (1)(f)(i) to be further allocated as follows:
(A) 33 1/3% is allocated to the county for planning or economic development activities;
(B) 33 1/3% is allocated to the elementary school districts within the county that have been affected by the development or operation of the metal mine; and
(C) 33 1/3% is allocated to the high school districts within the county that have been affected by the development or operation of the metal mine.
(2) When an impact plan for a large-scale mineral development approved pursuant to 90-6-307 identifies a jurisdictional revenue disparity, the county shall distribute the proceeds allocated under subsection (1)(f) in a manner similar to that provided for property tax sharing under Title 90, chapter 6, part 4.
(3) The department shall return to the county in which metals are produced the tax collections allocated under subsection (1)(f). The allocation to the county described by subsection (1)(f) is a statutory appropriation pursuant to 17-7-502."
Section 2. Section 90-6-302, MCA, is amended to read:
"90-6-302. Definitions. In this part, the following definitions apply:
(1) "Board" means the hard-rock mining impact board established in 2-15-1822.
(2) "Bonds" include bonds, notes, warrants, debentures, certificates of indebtedness, temporary bonds, temporary notes, interim receipts, interim certificates, and all instruments or obligations evidencing or representing indebtedness or evidencing or representing the borrowing of money or evidencing or representing a charge, lien, or encumbrance on specific revenues, special assessments, income, or property of a political subdivision, including all instruments or obligations payable from a special fund.
(3) "Facility" means a facility that is owned, operated, or maintained by a local government unit and that, under the impact plan submitted under the provisions of 90-6-307, can be expected to have increased capital and operating costs as a result of the large-scale mineral development.
(4) "Large-scale mineral development" means the construction or operation of a hard-rock mine and the associated
milling facility for which a permit is applied for under 82-4-335 on or after May 18, 1981, and for which the average
number of persons on the payroll of the mineral developer and of contractors at the mineral development exceeds or is
projected to exceed 75 for any consecutive 6-month period. A mining operation that would qualify as a large-scale mineral
development under this subsection is not a large-scale mineral development if the mine owner and operator are small
miners as defined in 82-4-303.
(5) "Local government unit" means a county, city, town, school district, or any of the following independent special districts:
(a) rural fire district;
(b) public hospital district;
(c) refuse disposal district;
(d) county water and sewer district;
(e) county water district;
(f) county sewer district; or
(g) park district.
(6) (a) "Property tax prepayment" means a potentially reimbursable impact payment made by the developer of a large-scale mineral development to the impact fund of an affected unit of local government pursuant to an approved impact plan to be expended for the purpose or purposes identified in the plan.
(b) The term does not mean a payment or prepayment of property taxes for general distribution among funds or accounts."
Section 3. Section 90-6-310, MCA, is amended to read:
"90-6-310. Local government facility impact bonds. (1) When the need for the construction, renovation, improvement, or acquisition of local government facilities as a result of the large-scale mineral development is determined under 90-6-307, the owners of a large-scale mineral development may enter into a written agreement with the local government unit having the burden for the increased capital and operating costs expected to be incurred by the facilities. The local government unit may execute a written agreement with the owner of a large-scale mineral development for the issuance of any special industrial local government facility impact bonds provided for in this section.
(2) The agreement with the owners of a large-scale mineral development shall must provide for a payment guarantee
through a third-party financial institution, in addition to the taxes imposed by the local government unit on property owners
generally, of the principal and interest on the bonds provided for in this section. Payment will then be made by an annual
special tax levy on the property of the large-scale mineral development sufficient to retire the principal and interest on these
special impact bonds. The bonds shall may not be an obligation of the local government unit, but shall must be special
obligations limited to the revenue derived from the special tax levy. A local government unit shall establish a levy and, to
the extent bonds are issued as provided in this section, shall pledge the special fund and all revenues revenue of the special
tax levy to the repayment of the bonds.
(3) The debt limits set forth in 7-7-2203, 7-7-4201, and 20-9-406 do not apply to bonds issued in accordance with this
section. The interest on such the bonds shall is not be subject to state taxes.
(4) The impact bonds shall must be authorized by the governing body of the local government unit by a resolution that
states:
(a) the facility for which the bonds are issued;
(b) the amount of the bonds;
(c) the rate of interest the bonds bear;
(d) the date of the bonds and the maturity date or dates of the bonds;
(e) the dates interest is payable on the bonds;
(f) the redemption options, if any, with respect to the bonds; and
(g) the manner of execution of the bonds.
(5) The impact bonds shall must be:
(a) in registered form as to principal and interest;
(b) payable in installments and at times not exceeding 30 years from their date of issuance; and
(c) payable at a place or places and be evidenced in a manner the governing body determines is in the best interest of the local government unit.
(6) Any impact bonds issued under the authority of this section may be sold at public or private sale in a manner, at a time or times, and at a price above or below par as may be determined by the governing body of the local government unit. All expenses, premiums, and commissions that the local government unit considers necessary or advantageous in connection with the authorization, sale, and issuance of the bonds may be paid by the governing body of the local government unit from the proceeds of the sale of the bonds.
(7) If more than one local government unit adopts a resolution to issue impact bonds, the local government units may enter into an interlocal agreement under 7-11-101 through 7-11-105, 7-11-107, and 7-11-108, providing for the issue of impact bonds of the local government units to be combined in a single offering, if the governing body of each local government unit authorizing the bonds determines that the pooling of bonds:
(a) is in the best interest of the local government units;
(b) will facilitate the sale of the bonds under more advantageous terms;
(c) will lower the interest rates; or
(d) will lower the cost of issuance.
(8) In addition to the specific requirements of 7-11-105, the interlocal agreement shall must provide:
(a) that the bond titles shall must denote that impact bonds of different local government units have been pooled and
shall must refer to each local government unit executing the interlocal agreement;
(b) for a single debt service fund, to be held by a qualified trust company, to which each local government unit shall pledge and pay the annual special tax levies levied against the large-scale mineral development; and
(c) that the bonds are payable solely from and against the debt service funds under the interlocal agreement."
Section 4. Section 90-6-331, MCA, is amended to read:
"90-6-331. Fund transfer. (1) On July 1, 1990, and prior Prior to each October 1 thereafter 31, all money segregated
by county in the hard-rock mining impact trust account following allocation to the hard-rock mining impact trust reserve
account established in 90-6-304(2) as of September 1 30 immediately preceding must be transferred to the county for which
the funds have been held in deposit. The funds so transferred must be deposited in the county hard-rock mine trust reserve
account established in 7-6-2225.
(2) The transfer of funds required by this section is a statutory appropriation pursuant to 17-7-502."
Section 5. Section 90-6-404, MCA, is amended to read:
"90-6-404. Allocation of taxable valuation for local taxation purposes. When property of a large-scale mineral development is subject to the provisions of 90-6-403, the increase in taxable valuation must be allocated by the department of revenue as follows:
(1) If the board determines that the The local government unit in which the ore body or the mineral deposit being mined
is located is not affected by the development and if this determination is shown on the impact plan, must be allocated 20%
of the total increase in taxable valuation of the gross proceeds must be allocated to that local government unit. This
provision is intended to establish a minimum allocation for the units and does not prohibit proof by a unit that actual direct
impacts would exceed 20% of the total impacts of the development.
(2) The remaining increase in taxable valuation of the mineral development must be allocated between affected counties and affected municipalities according to the following formula based on the place of residence of mineral development employees:
(a) A portion, not to exceed 20%, to affected municipalities, based on that percentage of the total number of mineral development employees that reside within municipal boundaries. The taxable valuation allocated to affected municipalities must be distributed to each municipality according to its percentage of the total number of mineral development employees who reside within municipal boundaries. That portion of the taxable valuation distributed to a municipality pursuant to this section is subject to the same county mill levy as other taxable properties located in the municipality.
(b) The remaining portion of the taxable valuation must be distributed to each affected county according to its percentage of the total number of mineral development employees that reside within the county.
(3) The increase in taxable valuation equal to that subject to subsection (2) must be distributed pro rata among each affected high school district according to the percentage of the total number of mineral development high school students that reside within each district.
(4) The increase in taxable valuation equal to that subject to subsection (2) must be distributed pro rata among each affected elementary school district according to the percentage of the total number of mineral development elementary school students that reside within each district.
(5) The distribution formula specified in subsections (2) through (4) may be modified by an impact plan approved as provided in 90-6-307 or amended as provided in 90-6-311, if the modification is needed in order to ensure a reasonable correspondence between the occurrence of increased costs resulting from the mineral development and the allocation of taxable valuation resulting from the mineral development."
Section 6. Effective date. [This act] is effective on passage and approval.
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