SENATE BILL NO. 518
INTRODUCED BY M. COLE
A BILL FOR AN ACT ENTITLED: "AN ACT ENACTING A 4 PERCENT BUSINESS CONSUMPTION TAX; ALLOWING CERTAIN BUSINESS CONSUMPTION TAX EXEMPTIONS; PROVIDING FOR DISTRIBUTION OF BUSINESS CONSUMPTION TAX REVENUE; ALLOWING CREDITS AGAINST BUSINESS CONSUMPTION TAXES; SUBMITTING TO THE ELECTORATE THE QUESTION OF WHETHER OR NOT TO IMPOSE A 4 PERCENT STATEWIDE BUSINESS CONSUMPTION TAX; AMENDING SECTIONS 20-9-331, 20-9-333, AND 20-9-343, MCA; PROVIDING A CONTINGENT VOIDNESS PROVISION; AND PROVIDING EFFECTIVE DATES AND AN APPLICABILITY DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
NEW SECTION. Section 1. Short title. [Sections 1 through 20] may be cited as the "Business Consumption Tax Act".
NEW SECTION. Section 2. Definitions. For the purposes of [sections 1 through 20], unless the context requires otherwise, the following definitions apply:
(1) "Business activity" means any activity carried on continuously or regularly, whether or not for profit, that involves or is intended to involve the sale of property or services.
(2) "Casual sale" means the sale or other transfer by a person:
(a) who is not a registered person:
(i) of property that is not, in the hands of the person or a related person, stock in trade or other property of a kind that would properly be included in inventory if on hand at the close of the tax year or held primarily for sale to customers in the ordinary course of a trade or business or used in a trade or business; or
(ii) of services other than in the ordinary course of business; or
(b) who is a registered person, of property or services that are not related to a business activity of the registered person or a related person.
(3) "Consideration" means any payment made or any act or forbearance, voluntary or involuntary, in respect of, in response to, or for the inducement of, the supply of any property or services.
(4) "Employee" has the meaning provided in chapter 24 of the Internal Revenue Code as the term applies to withholding.
(5) "Exempt organization" means an organization described in section 501(c) or 501(d) of the Internal Revenue Code.
(6) "Financial institution" means a bank, industrial bank, trust company, building or loan association, savings and loan association, bank holding company as defined in 12 U.S.C. 1841, credit union, regulated investment company as defined in 26 U.S.C. 851, and any other association, joint stock company, or corporation at least 90% of whose assets consist of intangible personal property and at least 90% of whose gross income consists of dividends or interest or other charges resulting from the use of money or credit.
(7) "Financial instrument" means:
(a) a debt, equity, or security instrument;
(b) an insurance policy, guarantee, or indemnity; or
(c) a publicly traded option or contract.
(8) "Financial service" means a service provided by a financial institution that is related to the use of money or credit or a service related to a financial instrument.
(9) "Governmental entity" means the United States, a commonwealth or possession of the United States, the District of Columbia, a state or a political subdivision of a state, an Indian tribe, or any of their agencies or instrumentalities.
(10) "Insurance" has the meaning provided in 33-1-201.
(11) "Internal Revenue Code" means the Internal Revenue Code of 1986 (Title 26, U.S.C.), as revised or amended.
(12) "Medical service" means a service performed by a health care facility, as defined in 7-34-2201, or performed by or under the direction of a person licensed under Title 37, chapters 3 through 8, 10 through 17, 20 through 29, or 35, and includes the practice of acupuncture, chiropractic, certified counseling for chemical dependency, clinical laboratory science, dental hygiene, dentistry, denturitry, dietetic-nutrition, direct-entry midwifery, naturopathic medicine, medicine, pharmacy, professional or practical nursing, occupational therapy, optometry, osteopathy, certified physician assistance, physical therapy, podiatry, psychology, radiologic technology, respiratory care, or speech-language pathology and audiology or the selling, dispensing, or fitting of hearing aids.
(13) (a) "Medicine" means any substance or preparation that is:
(i) intended for the diagnosis, cure, mitigation, treatment, or prevention of physical or mental disease, ailment, or injury of the human body or mind or to affect the structure or any function of the human body or mind;
(ii) required by law or regulation to be prescribed by a person licensed to prescribe the medicine.
(b) The term includes insulin and a therapeutic, prosthetic, or other device prescribed by a licensed person.
(14) "Person" has the meaning provided under section 7701(a)(1) of the Internal Revenue Code.
(15) "Property" means any real property, including improvements, or tangible personal property.
(16) "Registered person" means a person who is registered or is required to register under [sections 1 through 20].
(17) "Related person" means a person specified in section 267(b) of the Internal Revenue Code, applying the constructive ownership rules of section 267(c) of the Internal Revenue Code.
(18) "Sale of services" means the performance of services, other than as an employee, for a consideration and includes:
(a) any exchange of services for property or services, regardless of whether other consideration is received;
(b) granting a right to use property pursuant to a lease or rental agreement or to another oral or written contract;
(c) granting a right to the performance of services or to reimbursement;
(d) agreeing to take or refrain from taking an action;
(e) granting a right to take or refrain from taking an action or a right to require taking or refraining from taking an action;
(f) the supply of electricity, gas, water, telecommunications, or other utilities;
(g) the licensing of patents, copyrights, trademarks, software, or other proprietary information;
(h) the sale of a right to participate in a gambling game, lottery, or other game of chance; and
(i) the performance of service by an employer for an employee as compensation unless excluded from the employee's gross income for the purposes of chapter 1 of the Internal Revenue Code.
(19) "Sale of property" means the transfer of ownership of property from a seller to a purchaser for a consideration.
(20) "Services" means anything that is not property or money.
(21) "Taxable transaction" means a sale of property or services in Montana that is not an untaxed transaction described in [section 6], by a registered person in connection with a business activity in Montana.
NEW SECTION. Section 3. Imposition of business consumption tax. Except as provided in [section 5], a tax in the amount of 4% of the taxable amount is imposed on each taxable transaction. For the purposes of [sections 1 through 20], the amount of any consideration received or accrued on a taxable transaction, divided by 26, is considered to be the amount of the tax.
NEW SECTION. Section 4. Imposition of business use tax. A tax in the amount of 4% is imposed on each purchase of property or services by a registered person for use in connection with a business activity in Montana from a nonresident unregistered person who is not subject to the tax imposed by [section 3]. For purposes of this section, the amount of any consideration paid or accrued, multiplied by 4%, is considered to be the amount of the tax.
NEW SECTION. Section 5. Zero-rated transactions. (1) A tax in the amount of 0% of the taxable amount is imposed on each taxable transaction with respect to:
(a) property that is exported from Montana for use or consumption in a business activity outside Montana if the exporter executes an export certificate;
(b) goods that are not located in Montana at the time of sale and that will not be imported into Montana;
(c) the initial sale of livestock, live poultry, unprocessed agricultural products, hides, or pelts by the grower, producer, or trapper; or
(d) the initial sale of natural resources mined, harvested, or extracted by the producer.
(2) A tax in the amount of 0% of the taxable amount is imposed on each taxable transaction with respect to services:
(a) supplied directly in connection with:
(i) real property or improvements that are located outside Montana; or
(ii) personal property that is located outside Montana when the services are performed;
(b) except as provided in subsection (2)(a), physically performed outside Montana;
(c) supplied directly in connection with the production of personal property, the initial use of which will not occur in Montana and that will be exported from Montana for use or consumption in a business activity outside Montana, if performed for a nonresident who does not:
(i) directly or through a related person perform any service in Montana related to the property; or
(ii) take delivery of the property in Montana; or
(d) supplied to a nonresident who is outside Montana when the services are performed and are not supplied in connection with real property or improvements located in Montana or, except as provided in subsection (2)(c), with personal property located in Montana when the services are performed.
NEW SECTION. Section 6. Untaxed transactions. The following are not taxable transactions:
(1) the sale of medicine or a medical service;
(2) the sale of a financial service or a financial instrument;
(3) the sale of a service related to a sale of a financial instrument;
(4) the sale of an insurance policy;
(5) the rental or lease of residential real property and improvements or of leasehold improvements, as defined in 15-1-101;
(6) the sale of property or services by an unregistered exempt organization;
(7) the sale of property or services by a governmental entity;
(8) the sale of all or substantially all of the property of a going concern by a registered person to a registered person;
(9) a casual sale;
(10) the transfer of possession of or a security interest in property or services by a debtor to a creditor or a representative of a creditor;
(11) the transfer of possession or incidents of ownership of property or services to a fiduciary who represents the interests of an owner under a legal disability; or
(12) the transfer of ownership of property or services by a debtor to a trustee in bankruptcy, a receiver, or another fiduciary appointed to marshal, manage, or liquidate a debtor's property for the benefit of creditors.
NEW SECTION. Section 7. Business input credit. (1) Except as provided in subsection (3), a registered person is allowed an input credit against the taxes imposed by [sections 3 and 4] during the reporting period. The amount of the credit is equal to the aggregate amount of the taxes imposed during the reporting period:
(a) by [section 3] that are payable by persons selling to the registered person for property or services used by the registered person in connection with business activities in Montana; and
(b) by [section 4] on the registered person.
(2) For purposes of subsection (1), the sum of the following, divided by 26, is considered to be the amount of the credit:
(a) the amount of any consideration paid or accrued by the registered person with respect to the purchases described in subsection (1)(a); and
(b) the amount of any consideration paid or accrued by the registered person with respect to the purchases described in subsection (1)(b), multiplied by 1.04.
(3) A credit is not allowed with respect to business activities that are related to untaxed transactions. If a registered person engages in both taxable transactions and untaxed transactions, credits must be apportioned as provided by rule.
(4) The burden of establishing entitlement to the credit allowed in subsection (1) is on the registered person.
NEW SECTION. Section 8. Taxable amount. (1) (a) Except as provided in subsection (2), the taxable amount is the price charged the purchaser if money is the only consideration. If money is not the only consideration, the taxable amount is the fair market value of the property or service sold. Separately stated charges for transportation or for other items payable to the seller with respect to the transaction are included in the taxable amount.
(b) The following are excluded from the taxable amount:
(i) separately stated sales or use taxes imposed on the purchaser;
(ii) any trade or quantity discount or other price allowance or cash rebate granted at the time of sale; and
(iii) with respect to an installment sale of property, any separately stated amount, in addition to the principal balance, agreed upon between the seller and purchaser, to be paid by the purchaser for the privilege of purchasing the property or services in one or more deferred installments.
(2) The taxable amount is the fair market value whenever the seller and purchaser are related persons.
NEW SECTION. Section 9. Registration. (1) A person who makes taxable sales of property or services in Montana is subject to the taxes imposed in [sections 1 through 20] and shall register at the earliest of the following dates:
(a) on or before June 1, 2000, if taxable sales exceeded $30,000 in the 12 calendar months before April 1, 2000;
(b) within 30 days after the end of any month in which the aggregate taxable sales for that month and the immediately preceding 11 months exceed $30,000; or
(c) within 30 days after the commencement of any month for which there are reasonable grounds for believing that the aggregate taxable sales for that month and the immediately succeeding 11 months will exceed $30,000.
(2) An exempt organization may register.
(3) A person who regularly and systematically solicits or exploits the consumer market in Montana and has taxable sales requiring registration as provided in subsection (1) is subject to the provisions of [sections 1 through 20]. Under the provisions of [sections 1 through 20], the state intends to fully exert its sovereign power with respect to the business activities and persons encompassed by it.
(4) (a) Notwithstanding subsection (3), a remote seller, described in subsection (4)(b), is not liable for any tax imposed in [sections 1 through 20] with respect to taxable transactions occurring before a court having jurisdiction of the person or of a class of persons of which the person is a member issues a final judgment that the state of Montana has the power to require the person to register and pay the taxes imposed as provided in [sections 1 through 20].
(b) For the purposes of this subsection (4), the term "remote seller" means a person who does not, during any part of any of the time periods described in subsection (1), directly or through a representative:
(i) solicit any business in Montana except by United States mail, common carrier, or the display of information or access to a site on a computer server located outside Montana;
(ii) deliver any property into Montana except by United States mail or common carrier;
(iii) own an equitable interest in any real property or improvements or any personal property, tangible or intangible, located in Montana; or
(iv) maintain a commercial presence in Montana with a retail store, office, warehouse, or storage facility.
(5) Any person who fails to register as required in subsection (1) is, at the election of the department, considered to have registered on the earliest of those dates.
(6) Registration must be on forms provided by the department and must contain:
(a) the name, address, and taxpayer identification number of the registered person; and
(b) any other information the department determines is reasonably necessary to administer the taxes imposed by [sections 1 through 20].
NEW SECTION. Section 10. Assessment of tax. (1) The tax imposed by [section 3] is assessed to the seller at the time of the taxable transaction.
(2) The tax imposed by [section 4] is assessed to the purchaser at the time of the purchase.
NEW SECTION. Section 11. Reporting period. (1) If a registered person's aggregate taxable transactions exceed $30,000 a calendar month, the reporting period is the calendar month.
(2) If a registered person's aggregate taxable transactions do not exceed $30,000 a calendar month, unless the registered person elects a monthly reporting period, the reporting periods are the calendar quarters of January through March, April through June, July through August, and September through December.
(3) With the consent of the department, a registered person may elect a reporting period different from the periods prescribed in subsections (1) and (2).
NEW SECTION. Section 12. Returns and payment of tax. (1) Within 30 days after the close of each reporting period, a registered person shall file a return reporting the taxes imposed by [sections 3 and 4] and the credits allowed by [section 7] during the reporting period.
(2) If a taxpayer is unable to file the taxpayer's own return, the return must be filed by an authorized agent or by a guardian or other person charged with the care of the person or property of the taxpayer.
(3) If the taxes imposed exceed the credits allowed, the tax is due on the due date for filing the return and the registered person shall pay the balance when the return is filed.
(4) If the credits allowed exceed the taxes imposed, the department shall, at the registered person's request filed with the return, refund the excess credit within 30 days after the date that the request for refund is received by the department.
NEW SECTION. Section 13. Penalty and interest assessments for violation. (1) (a) A person who fails to file a tax return or other report required under [sections 1 through 20] with the department by the due date, including any extension of time for filing, must be assessed a late filing penalty of $50.
(b) A person who purposely fails to file a return, statement, or other report required under [sections 1 through 20] must be assessed an additional late filing penalty of $200.
(c) A person who fails to pay a tax when due must be assessed a late payment penalty of 2% of the tax due for each month or fraction of a month after the due date. The penalty for late payment may not exceed 24% of the tax due.
(d) A person who purposely fails to pay a tax when due must be assessed an additional penalty equal to 25% of the tax due or $200, whichever is greater, plus interest as provided in subsection (2).
(2) Interest on taxes not paid when due must be assessed at the rate of 1% of the unpaid tax for each month or fraction of a month from the original due date of the return until the tax is paid.
NEW SECTION. Section 14. Deficiencies, refunds, and credits. (1) As soon as practicable after a return required by [sections 1 through 20] is filed, the department shall examine the return and verify the tax.
(2) If the amount of tax is determined by the department to be greater than the amount paid, the additional tax determined to be due must be paid to the department within 60 days after notice of the amount of the tax as computed, with interest added as provided in [section 13]. A penalty pursuant to [section 13] may not be imposed solely because of the understatement, provided the deficiency is paid within 60 days after the first notice of the additional amount of tax due is mailed to the taxpayer.
(3) If the department determines that any return of a person is in any essential respect incorrect, it may revise the return.
(4) If a person does not file a return as required under [sections 1 through 20], the department may, at any time, audit the person or estimate the person's taxable transactions from any information in the department's possession or otherwise available to the department. If, based upon the audit or estimate, the department determines that taxes are due, it shall assess the person for the taxes and for any penalties and interest due.
(5) Except as provided in subsections (4) and (6), the amount of tax due under any return may be determined by the department within 5 years after the return was filed, regardless of whether the return was filed on or after the last day prescribed for filing. For the purposes of this section, a tax return required under [sections 1 through 20] and filed before the last day prescribed by law or rule is considered to be filed on the last day prescribed for filing.
(6) If a person, with intent to evade the tax, purposely or knowingly files a false or fraudulent return, the amount of tax due may be determined by the department at any time after the return is filed and the tax may be collected at any time after it becomes due.
(7) For the purpose of ascertaining the correctness of any return or for the purpose of making an estimate of taxable transactions of any person pursuant to [sections 1 through 20], the department may:
(a) examine or cause to have examined by any agent or representative designated by it for that purpose any books, papers, records, or memoranda bearing upon the matters required to be included in the return;
(b) require the attendance of the person rendering the return or any officer or employee of the person or the attendance of any person having knowledge;
(c) take testimony and require proof material for the department's information; and
(d) administer oaths.
NEW SECTION. Section 15. Application for revision -- appeal. A registered person may file with the department an application for revision within 5 years from the last day prescribed for filing the return, regardless of whether the return was filed on or after the last day prescribed for filing. If the department has revised a return, the registered person may revise the same return until the liability for the reporting period covered by the return is finally determined. The registered person may seek review of the determination of the department pursuant to 15-1-211.
NEW SECTION. Section 16. Credits and refunds -- period of limitations. (1) If the department discovers from the examination of a return, from a claim or an application for revision filed by a registered person, or upon final judgment of a court that the amount of business consumption tax collected is in excess of the amount due or that any penalty or interest was erroneously or illegally collected, the amount of the overpayment or erroneous or illegal collection must be credited against any business consumption tax, penalty, or interest then due from the registered person and the balance of the excess, if any, must be refunded.
(2) A credit or refund under the provisions of this section may be allowed only if, prior to the expiration of the period provided by [section 15], the registered person files a claim or the department determines that there has been an overpayment.
(3) Within 6 months after a claim for refund is filed, the department shall examine the claim and either approve or disapprove it. If the claim is approved, the credit or refund must be made to the registered person within 60 days after approval. If the claim is disapproved, the department shall notify the taxpayer within 7 days of disapproval. The registered person may seek review of the determination of the department pursuant to 15-1-211.
(4) Interest is allowed on overpayments at the same rate as that charged on delinquent taxes under [section 13]. Interest is payable from the due date of the return or from the date of the overpayment, whichever is later, to the date the department approves refunding or crediting of the overpayment. Interest does not accrue during any period during which the processing of a claim for refund is delayed more than 30 days by reason of failure of the registered person to furnish information requested by the department for the purpose of verifying the amount of the overpayment. Interest is not allowed if the amount of interest is less than $1.
(5) An overpayment that is not made incident to a bona fide and orderly discharge of an actual business consumption tax liability or that is reasonably assumed to be imposed by [sections 1 through 20] is not considered an overpayment with respect to interest allowable under this section.
NEW SECTION. Section 17. Tax-inclusive pricing -- invoices. (1) Except as provided in subsection (2), a registered person:
(a) shall include the tax imposed by [section 3] in the total cost of the property or services sold or offered for sale in a taxable transaction to the public; and
(b) may not separately state the amount of the tax in any advertisement or in any invoice or receipt provided.
(2) (a) A registered person engaged in interstate commerce is not required to include the tax in the total cost of property or services offered for sale in any advertisement or catalog prepared for multistate or national distribution and may, with respect to only that property or those services, separately state the tax in the invoice or receipt.
(b) A registered person is not required to include the tax in the total cost of property or services offered for sale to another registered person and may, with respect to only that property or those services, separately state the tax in the invoice or receipt.
(c) The department may, by rule, exempt classes of registered persons or transactions from the requirements set forth in subsection (1).
(3) For the purposes of this section, the total cost of the property or services sold or offered for sale in a taxable transaction may be calculated as the taxable amount multiplied by 1.04.
NEW SECTION. Section 18. Interpretation. (1) [Sections 1 through 20] may not be interpreted as authorizing the imposition of more than one tax or the allowance of more than one credit for the same transaction.
(2) For purposes of [sections 1 through 20]:
(a) a sale of property must be treated as occurring in Montana if the property is delivered to a place within Montana; and
(b) a sale of services must be treated as occurring in Montana if the service is provided from a place of business in Montana.
NEW SECTION. Section 19. Other taxes prohibited. Except for a resort tax imposed pursuant to Title 7, chapter 6, part 15, a county, city, town, municipal corporation, municipality, consolidated government, local government unit with self-government powers, or any other unit of government with taxing power may not enact or collect a business consumption tax, a business use tax, a gross receipts tax, a sales or use tax, or any other tax determined with reference to the taxes imposed in [sections 1 through 20].
NEW SECTION. Section 20. Rules. The department shall adopt rules that are necessary to implement and administer [sections 1 through 20], including, at a minimum, the form and substance of seller's permits, export certificates, and business consumption tax returns and instructions.
NEW SECTION. Section 21. Disposition of business consumption tax revenue -- appropriation required. (1) On or before August 15 in each fiscal year, the department of revenue shall determine:
(a) for the prior fiscal year, the total revenue collected pursuant to [sections 1 through 20]; and
(b) the amount, if any, by which the amount determined under subsection (1)(a) exceeded the final revenue estimate for business consumption tax collections for the prior fiscal year as adopted by the legislature.
(2) (a) If the amount determined under subsection (1)(a) exceeds the amount determined under subsection (1)(b), the excess amount is considered to be excess business consumption tax collections for the purposes of this section.
(b) If the department of revenue determines that excess business consumption taxes were collected in the prior fiscal year, it shall notify the department of administration of the excess amount collected.
(c) Immediately upon being notified of the excess business consumption tax collections, the department of administration shall transfer to the credit of the coal severance tax trust permanent fund described in 17-5-703 all of the excess collections up to but not exceeding 50% of the amount of interest deposited into the state general fund for the previous fiscal year from the coal severance tax trust fund interest account.
(d) (i) If excess collections remain after the transfer required under subsection (2)(c), the balance of excess business consumption tax collections, if any, must, for the current fiscal year, be applied to reduce, pro rata, the mill levies provided in 20-9-331 and 20-9-333 for the state support of public schools.
(ii) To accomplish the reduction in the mill levies:
(A) the department of revenue shall, on or before September 1, calculate and certify the amounts of the mill levy reductions and notify each of the affected taxing jurisdictions of the amounts to be levied under 20-9-331 and 20-9-333 for the fiscal year; and
(B) the department of administration shall transfer the funds remaining after the transfer required under subsection (2)(c) to the account used for state equalization aid, as provided in 20-9-343.
(3) This section provides for the disposition of business consumption tax revenue.
Section 22. Section 20-9-331, MCA, is amended to read:
"20-9-331. Basic county tax for elementary equalization and other revenue for county equalization of elementary BASE funding program. (1) The county commissioners of each county shall levy an annual basic county tax of 33 mills, adjusted as provided in [section 21], on the dollar of the taxable value of all taxable property within the county, except for property subject to a tax or fee under 23-2-517, 23-2-803, 61-3-504, 61-3-521, 61-3-527, 61-3-529, 61-3-537, and 67-3-204, for the purposes of elementary equalization and state BASE funding program support. The revenue collected from this levy must be apportioned to the support of the elementary BASE funding programs of the school districts in the county and to the state general fund in the following manner:
(a) In order to determine the amount of revenue raised by this levy that is retained by the county, the sum of the estimated revenue identified in subsection (2) must be subtracted from the total of the BASE funding programs of all elementary districts of the county.
(b) If the basic levy and other revenue prescribed by this section produce more revenue than is required to repay a state advance for county equalization, the county treasurer shall remit the surplus funds to the state treasurer for deposit to the state general fund immediately upon occurrence of a surplus balance and each subsequent month, with any final remittance due no later than June 20 of the fiscal year for which the levy has been set.
(2) The revenue realized from the county's portion of the levy prescribed by this section and the revenue from the following sources must be used for the equalization of the elementary BASE funding program of the county as prescribed in 20-9-335, and a separate accounting must be kept of the revenue by the county treasurer in accordance with 20-9-212(1):
(a) the portion of the federal Taylor Grazing Act funds distributed to a county and designated for the elementary county equalization fund under the provisions of 17-3-222;
(b) the portion of the federal flood control act funds distributed to a county and designated for expenditure for the benefit of the county common schools under the provisions of 17-3-232;
(c) all money paid into the county treasury as a result of fines for violations of law, except money paid to a justice's court, and the use of which is not otherwise specified by law;
(d) any money remaining at the end of the immediately preceding school fiscal year in the county treasurer's accounts for the various sources of revenue established or referred to in this section;
(e) any federal or state money distributed to the county as payment in lieu of property taxation, including federal forest reserve funds allocated under the provisions of 17-3-213;
(f) gross proceeds taxes from coal under 15-23-703;
(g) oil and natural gas production taxes;
(h) anticipated local government severance tax payments for calendar year 1995 production as provided in 15-36-325; and
(i) anticipated revenue from property taxes and fees imposed under 23-2-517, 23-2-803, 61-3-504, 61-3-521, 61-3-527, 61-3-529, 61-3-537, and 67-3-204."
Section 23. Section 20-9-333, MCA, is amended to read:
"20-9-333. Basic county tax for high school equalization and other revenue for county equalization of high school BASE funding program. (1) The county commissioners of each county shall levy an annual basic county tax of 22 mills, adjusted as provided in [section 21], on the dollar of the taxable value of all taxable property within the county, except for property subject to a tax or fee under 23-2-517, 23-2-803, 61-3-504, 61-3-521, 61-3-527, 61-3-529, 61-3-537, and 67-3-204, for the purposes of high school equalization and state BASE funding program support. The revenue collected from this levy must be apportioned to the support of the BASE funding programs of high school districts in the county and to the state general fund in the following manner:
(a) In order to determine the amount of revenue raised by this levy that is retained by the county, the sum of the estimated revenue identified in subsection (2) must be subtracted from the sum of the county's high school tuition obligation and the total of the BASE funding programs of all high school districts of the county.
(b) If the basic levy and other revenue prescribed by this section produce more revenue than is required to repay a state advance for county equalization, the county treasurer shall remit the surplus funds to the state treasurer for deposit to the state general fund immediately upon occurrence of a surplus balance and each subsequent month, with any final remittance due no later than June 20 of the fiscal year for which the levy has been set.
(2) The revenue realized from the county's portion of the levy prescribed in this section and the revenue from the following sources must be used for the equalization of the high school BASE funding program of the county as prescribed in 20-9-335, and a separate accounting must be kept of the revenue by the county treasurer in accordance with 20-9-212(1):
(a) any money remaining at the end of the immediately preceding school fiscal year in the county treasurer's accounts for the various sources of revenue established in this section;
(b) any federal or state money distributed to the county as payment in lieu of property taxation, including federal forest reserve funds allocated under the provisions of 17-3-213;
(c) gross proceeds taxes from coal under 15-23-703;
(d) oil and natural gas production taxes;
(e) anticipated local government severance tax payments for calendar year 1995 production as provided in 15-36-325; and
(f) anticipated revenue from property taxes and fees imposed under 23-2-517, 23-2-803, 61-3-504, 61-3-521, 61-3-527, 61-3-529, 61-3-537, and 67-3-204."
Section 24. Section 20-9-343, MCA, is amended to read:
"20-9-343. Definition of and revenue for state equalization aid. (1) As used in this title, the term "state equalization aid" means revenue as required in this section for:
(a) distribution to the public schools for the purposes of payment of systems development and other related costs resulting from the enactment of legislation that requires changes to the automated system used to administer the BASE funding program, guaranteed tax base aid, BASE aid, state reimbursement for school facilities, matching funds for the systemic initiative for Montana mathematics and science grant, and grants for school technology purchases;
(b) negotiated payments authorized under 20-7-420(3) up to $500,000 per biennium; and
(c) the Montana educational telecommunications network as provided in 20-32-101.
(2) The superintendent of public instruction may spend throughout the biennium funds appropriated for the purposes of systems development and other related costs resulting from the enactment of legislation that requires changes to the automated system used to administer the BASE funding program, guaranteed tax base aid, BASE aid for the BASE funding program, state reimbursement for school facilities, negotiated payments authorized under 20-7-420(3), the Montana educational telecommunications network, and school technology purchases.
(3) The following must be paid into the state general fund for the public schools of the state:
(a) (i) subject to subsection (3)(a)(ii), interest and income money described in 20-9-341 and 20-9-342; and
(ii) an amount of money equal to the income money attributable to the difference between the average sale value of 18 million board feet and the total income produced from the annual timber harvest on common school trust lands during the fiscal year to be appropriated for purposes of 20-9-533;
(b) investment income earned by investing interest and income money described in 20-9-341 and 20-9-342; and
(c) excess business consumption tax revenue as provided in [section 21(2)(d)]."
NEW SECTION. Section 25. Submission to electorate. This act shall be submitted to the qualified electors of Montana at the tax election to be held in 1999 by printing on the ballot the full title of this act and the following:
SHALL A NEW TAX, DESCRIBED AS FOLLOWS, BE IMPOSED? THE TAX IS A STATEWIDE BUSINESS CONSUMPTION TAX AT THE RATE OF 4% OF THE TAXABLE AMOUNT OF ALL TAXABLE TRANSACTIONS.
[] FOR imposing a 4% statewide business consumption tax.
[] AGAINST imposing a 4% statewide business consumption tax.
NEW SECTION. Section 26. Election. Pursuant to Article III, sections 5 and 6, of the Montana constitution, this act shall be submitted to the qualified electors of Montana for their approval or disapproval at the election to be held November 2, 1999.
NEW SECTION. Section 27. Contingent voidness. (1) If Constitutional Initiative No. 75, enacting Article VIII, section 17, of the Montana constitution is declared invalid prior to the date on which the election on this act is to be held as provided in section 25, then section 25 is void.
(2) If Constitutional Initiative No. 75, enacting Article VIII, section 17, of the Montana constitution remains valid on the date of the statewide tax election to be held in 1999, then section 26 is void.
NEW SECTION. Section 28. Codification instruction. (1) Sections 1 through 20 are intended to be codified as an integral part of Title 15, and the provisions of Title 15 apply to sections 1 through 20.
(2) Section 21 is intended to be codified as an integral part of Title 17, and the provisions of Title 17 apply to section 21.
NEW SECTION. Section 29. Coordination instruction. If LC 1303, LC 1304, LC 1305, and LC 1306 are not passed and approved, then this act is void.
NEW SECTION. Section 30. Effective date -- applicability. (1) Except as provided in subsection (2), this act is effective on approval by the electorate and applies to transactions occurring after May 30, 2000.
(2) Sections 25, 26, 27, and 29 and this section are effective on passage and approval.
- END -
Latest Version of SB 518 (SB0518.01)
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