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2007
LEGISLATIVE SESSION
WEEK
THIRTEEN
(March 25,
2007 – March 31, 2007)
During Week Thirteen of the 2007 Legislative Session,
I attended hearings on the following proposed legislation:
SB 466: “AN ACT PROVIDING THAT ECONOMIC IMPACT STATEMENTS
REQUESTED BY AN ADMINISTRATIVE RULE REVIEW COMMITTEE CONSIDER THE POTENTIAL
IMPACT OF A RULE ON AFFECTED SMALL BUSINESSES; AND AMENDING SECTION 2-4-405,
MCA.”
This proposed legislation requires
that when an administrative rule is proposed by a state agency, the potential
impact of the rule on affected small businesses must be considered. I supported this proposed legislation.
HB 832: “AN ACT GENERALLY REVISING LAWS RELATING TO ECONOMIC
DEVELOPMENT; REVISING THE LAWS RELATING TO URBAN RENEWAL AREAS AND TAX
INCREMENT FINANCING; ESTABLISHING TARGETED ECONOMIC DEVELOPMENT DISTRICTS IN
PLACE OF INDUSTRIAL DISTRICTS, TECHNOLOGY DISTRICTS, AND AEROSPACE
TRANSPORTATION AND TECHNOLOGY DISTRICTS; ESTABLISHING PROCEDURES AND
REQUIREMENTS FOR THE CREATION OF DISTRICTS; CLARIFYING PURPOSES FOR WHICH TAX
INCREMENT BONDS AND REVENUE CAN BE EXPENDED; PROHIBITING THE USE OF A TARGETED
ECONOMIC DEVELOPMENT DISTRICT FOR THE PRIMARY PURPOSE OF CAPTURING THE GROWTH
IN INCREMENT OF A NATURAL RESOURCE EXTRACTION FACILITY, MAJOR INDUSTRIAL
FACILITY, OR ENERGY TRANSMISSION FACILITY; REQUIRING THAT THE DEPARTMENT OF
REVENUE REVIEW THE FORMATION OF A TAX INCREMENT DISTRICT; ESTABLISHING A FEE
PAYABLE TO THE DEPARTMENT OF REVENUE; PROVIDING A TRANSITION PROVISION FOR
EXISTING DISTRICTS; AMENDING SECTIONS 7-15-4215, 7-15-4237, 7-15-4282,
7-15-4283, 7-15-4284, 7-15-4285, 7-15-4286, 7-15-4287, 7-15-4288, 7-15-4290,
7-15-4291, 7-15-4292, 7-15-4293, 7-15-4294, 7-15-4301, 7-15-4302, AND
7-15-4304, MCA; REPEALING SECTIONS 7-15-4295, 7-15-4296, 7-15-4297, 7-15-4298,
AND 7-15-4299, MCA; AND PROVIDING AN EFFECTIVE DATE AND AN APPLICABILITY DATE.”
The purpose of this proposed
legislation is to revise the laws relating to urban renewal areas and tax
increment financing by establishing targeted economic development districts in
place of industrial districts, technology districts, and aerospace
transportation and technology districts. This proposed legislation would also
establish procedures and requirements for the creation of districts. I monitored this proposed legislation.
HJ 28: “A JOINT RESOLUTION OF THE SENATE AND THE HOUSE OF
REPRESENTATIVES OF THE STATE OF
This proposed legislation, in the
form of a House Joint Resolution, requests n interim study of business
infrastructure in
HJ 39: “A JOINT RESOLUTION OF THE SENATE AND THE HOUSE OF
REPRESENTATIVES OF THE STATE OF MONTANA REQUESTING AN INTERIM STUDY ON THE
ECONOMIC BENEFITS OF PURSUING COMMERCIALIZATION PROJECTS WITH EXISTING RESEARCH
UNITS WITHIN THE MONTANA UNIVERSITY SYSTEM.”
The purpose of this proposed
legislation, in the form of a House Joint Resolution, is self-explanatory in
the title of the bill. I monitored this
proposed legislation.
HB 426: "AN ACT REMOVING THE $500,000 LIMIT ON A
COUNTY'S ROAD AND BRIDGE CAPITAL IMPROVEMENT FUND; AMENDING SECTION 7-14-2506,
MCA; AND PROVIDING AN EFFECTIVE DATE."
This proposed legislation would
allow the
SB 561: "AN ACT REVISING THE TAXATION OF QUALIFYING OIL
AND NATURAL GAS PRODUCTION; PROVIDING THAT QUALIFYING PRIMARY OIL PRODUCTION
AND QUALIFYING OIL PRODUCTION FROM HORIZONTALLY COMPLETED WELLS ARE TAXED AT A
HIGHER RATE DURING A CALENDAR QUARTER IF THE PRICE OF A BARREL OF OIL EXCEEDS A
CERTAIN AMOUNT; PROVIDING THAT QUALIFYING NATURAL GAS PRODUCTION AND QUALIFYING
NATURAL GAS PRODUCTION FROM HORIZONTALLY COMPLETED WELLS ARE TAXED AT A HIGHER
RATE DURING A CALENDAR QUARTER IF THE PRICE OF A MILLION BRITISH THERMAL UNITS
EXCEEDS A CERTAIN AMOUNT; AMENDING SECTION 15-36-304, MCA; AND PROVIDING A
DELAYED EFFECTIVE DATE AND AN APPLICABILITY DATE."
This proposed legislation revises
the taxes on certain oil and gas production if certain criteria are met as
outlined in the text of the proposed legislation. This proposed legislation was
introduced and scheduled for a hearing in a very short time frame to meet the
legislative requirement that all revenue bills needed to be heard and transmitted
to the other legislative body, in this case the House of Representatives, by
March 29. This bill was heard by the
Senate Taxation Committee on March 28, but was not acted on and therefore
missed the deadline for revenue bill transmittal. At this time, SB 561 is dead.
SB 321: "AN ACT PROVIDING FOR THE CREATION AND FUNCTIONS
OF BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS."
This proposed legislation is quite complicated and,
would, among other things, possibly allow the State of
HB 778: "AN ACT PROVIDING AN EXEMPTION FROM TAXATION
FOR OIL AND GAS WELLS, WORKING INTERESTS, AND NONWORKING INTERESTS OWNED BY THE
STATE OR A LOCAL GOVERNMENT; AMENDING SECTION 15-36-304, MCA; AND PROVIDING AN
IMMEDIATE EFFECTIVE DATE AND A RETROACTIVE APPLICABILITY DATE."
This proposed legislation exempts
state and local governments from the oil and natural gas production tax. The state and local governments are not
paying these taxes currently, but could be required to under the existing
law. This bill changes the law, so the
law will reflect what is actually being done.
This proposed legislation really only applies to two local governments. They are the towns of
HB 843: "AN ACT ALLOWING A PROPERTY TAX EXEMPTION,
UNDER CERTAIN CONDITIONS, FOR LAND OWNED BY THE TAXPAYER THAT INCLUDES LAND
ADJACENT TO CERTAIN TRANSMISSION LINES; AND PROVIDING A DELAYED EFFECTIVE
DATE."
This proposed legislation would allow
for an exemption from property taxes for the portion of contiguous or
noncontiguous parcels of land under one ownership land that is within 660 feet
on either side of the midpoint of a transmission line right-of-way or easement,
excluding the property in the right-of-way or transmission line easement. For
the purposes of this proposed legislation, a "transmission line"
means an electric line with a design capacity of 30 megavoltamperes or greater
that is constructed after January 1, 2007. I monitored this proposed
legislation.
HB 842: "AN ACT CREATING CERTAIN TAX INCENTIVES FOR
INVENTORS OF QUALIFIED PRODUCTS DEVELOPED AND MANUFACTURED IN THIS STATE AND TO
IN-STATE MANUFACTURERS OF THOSE PRODUCTS."
The purpose of this proposed
legislation is explained in the title of the bill. I monitored this proposed
legislation.
SB 567: "AN ACT CREATING THE LARGE-SCALE ENERGY
DEVELOPMENT INFRASTRUCTURE IMPACT ACT OF 2007; CREATING THE ENERGY DEVELOPMENT
IMPACT BOARD AND ATTACHING THE BOARD FOR ADMINISTRATIVE PURPOSES TO THE
DEPARTMENT OF COMMERCE; ESTABLISHING THE BOARD'S MEMBERSHIP AND POWERS;
REQUIRING THE SUBMISSION OF IMPACT PLANS TO THE BOARD; AUTHORIZING THE BOARD TO
ASSESS AND COLLECT IMPACT PLAN APPLICATION FEES; CREATING THE ENERGY
DEVELOPMENT IMPACT ACCOUNT WITHIN THE AGENCY FUND TYPE AND THE ENERGY
DEVELOPMENT IMPACT TRUST ACCOUNT WITHIN THE STATE SPECIAL REVENUE FUND;
CREATING A RESERVE AMOUNT WITHIN THE ENERGY DEVELOPMENT IMPACT TRUST ACCOUNT;
AUTHORIZING THE USE OF THE RESERVE AMOUNT BY THE BOARD FOR CERTAIN PURPOSES;
ALLOCATING AND TRANSFERRING FUNDS FROM THE OIL AND NATURAL GAS PRODUCTION TAX
TO THE ENERGY DEVELOPMENT IMPACT TRUST ACCOUNT; AUTHORIZING THE ISSUANCE OF
FACILITY IMPACT BONDS BY LOCAL GOVERNMENTS OIL, GAS, AND COAL NATURAL RESOURCE
ACCOUNT; AMENDING SECTIONS 15-16-201 AND SECTION 15-36-331, MCA; PROVIDING A
CONTINGENT VOIDNESS PROVISION; AND PROVIDING AN EFFECTIVE DATE."
This is a very complicated bill. As outlined in the title, this proposed
legislation would do the following:
1.
Create the
large-scale energy development infrastructure impact act of 2007;
A. Create the energy development impact board and attach
the board for administrative purposes to the department of commerce;
B. Establish the board's membership and powers;
requiring the submission of impact plans to the board;
C. Authorize the board to assess and collect impact plan
application fees;
D. Create the energy development impact account within
the agency fund type and the energy development impact trust account within the
state special revenue fund;
E. Create a reserve amount within the energy development
impact trust account;
F. Authorize the use of the reserve amount by the board
for certain purposes;
G. Allocate and transfer funds from the oil and natural
gas production tax to the energy development impact trust account;
H. Authorize the issuance of facility impact bonds by
local governments oil, gas, and coal natural resource account;
I.
Amend Section
15-16-201 and Section 15-36-331, MCA;
2.
Provide a
contingent voidness provision; and providing an effective date."
The main impact of this proposed legislation to
Richland County, as described in the original bill, is outlined in Section 15,
15-36-331, Distribution of Taxes, (3)(b), that stated, “If a county's
allocation under subsection (3)(a), exceeds $2.5 million in a calendar quarter,
then 90% of the county’s allocation must be distributed to the county as
required in subsection (3)(c) and 10% of the allocation must be deposited in
the energy development impact trust account to be used by the energy
development impact board . . . .” As
explained by a proponent of this proposed legislation, this would only impact
two counties in
In addition to the sponsor, there were only two
proponents for the bill. They were the
League of Cities and Towns and the Department of Commerce. While supporting concept of the bill, the
League of Cities and Towns did state that they thought that the source of
revenue for the program,
NOTE: This proposed legislation has been considerably
amended in an effort to equalize the funding for the program. However,