Bill Summary – FastDemocracy

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68th Legislature 2023                                                                                              HB 569.1
                                                  HOUSE BILL NO. 569
                                             INTRODUCED BY T. MOORE
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  A BILL FOR AN ACT ENTITLED: “AN ACT GENERALLY REVISING PENSION LAWS; REVISING
  CONTRIBUTIONS IN THE JUDGES' RETIREMENT SYSTEM, THE HIGHWAY PATROL OFFICERS'
  RETIREMENT SYSTEM, THE SHERIFFS' RETIREMENT SYSTEM, AND THE GAME WARDENS' AND
  PEACE OFFICERS' RETIREMENT SYSTEM TO PROVIDE FOR AN ACTUARIALLY DETERMINED
  CONTRIBUTION; AMENDING SECTIONS 15-10-420, 17-7-502, 19-2-405, 19-2-409, 19-5-404, 19-6-404, 19-
  7-403, 19-7-404, AND 19-8-504, MCA; AND PROVIDING AN EFFECTIVE DATE.”
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  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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           Section 1. Section 15-10-420, MCA, is amended to read:
           "15-10-420.    Procedure for calculating levy. (1) (a) Subject to the provisions of this section, a
  governmental entity that is authorized to impose mills may impose a mill levy sufficient to generate the amount
  of property taxes actually assessed in the prior year plus one-half of the average rate of inflation for the prior 3
  years. The maximum number of mills that a governmental entity may impose is established by calculating the
  number of mills required to generate the amount of property tax actually assessed in the governmental unit in
  the prior year based on the current year taxable value, less the current year's newly taxable value, plus one-half
  of the average rate of inflation for the prior 3 years.
           (b)     A governmental entity that does not impose the maximum number of mills authorized under
  subsection (1)(a) may carry forward the authority to impose the number of mills equal to the difference between
  the actual number of mills imposed and the maximum number of mills authorized to be imposed. The mill
  authority carried forward may be imposed in a subsequent tax year.
           (c)     For the purposes of subsection (1)(a), the department shall calculate one-half of the average
  rate of inflation for the prior 3 years by using the consumer price index, U.S. city average, all urban consumers,
  using the 1982-84 base of 100, as published by the bureau of labor statistics of the United States department of
  labor.
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68th Legislature 2023                                                                                                HB 569.1
            (2)     A governmental entity may apply the levy calculated pursuant to subsection (1)(a) plus any
  additional levies authorized by the voters, as provided in 15-10-425, to all property in the governmental unit,
  including newly taxable property.
            (3)     (a) For purposes of this section, newly taxable property includes:
            (i)     annexation of real property and improvements into a taxing unit;
            (ii)    construction, expansion, or remodeling of improvements;
            (iii)   transfer of property into a taxing unit;
            (iv)    subdivision of real property; and
            (v)     transfer of property from tax-exempt to taxable status.
            (b)     Newly taxable property does not include an increase in value:
            (i)     that arises because of an increase in the incremental value within a tax increment financing
  district; or
            (ii)    caused by the termination of an exemption that occurs due to the American Rescue Plan Act,
  Public Law 117-2, and section 14, Chapter 506, Laws of 2021.
            (4)     (a) For the purposes of subsection (1), the taxable value of newly taxable property includes the
  release of taxable value from the incremental taxable value of a tax increment financing district because of:
            (i)     a change in the boundary of a tax increment financing district;
            (ii)    an increase in the base value of the tax increment financing district pursuant to 7-15-4287; or
            (iii)   the termination of a tax increment financing district.
            (b)     If a tax increment financing district terminates prior to the certification of taxable values as
  required in 15-10-202, the increment value is reported as newly taxable property in the year in which the tax
  increment financing district terminates. If a tax increment financing district terminates after the certification of
  taxable values as required in 15-10-202, the increment value is reported as newly taxable property in the
  following tax year.
            (c)     For the purpose of subsection (3)(a)(ii), the value of newly taxable class four property that was
  constructed, expanded, or remodeled property since the completion of the last reappraisal cycle is the current
  year market value of that property less the previous year market value of that property.
            (d)     For the purpose of subsection (3)(a)(iv), the subdivision of real property includes the first sale
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68th Legislature 2023                                                                                                HB 569.1
  of real property that results in the property being taxable as class four property under 15-6-134 or as
  nonqualified agricultural land as described in 15-6-133(1)(c).
          (5)      Subject to subsection (8), subsection (1)(a) does not apply to:
          (a)      school district levies established in Title 20; or
          (b)      a mill levy imposed for a newly created regional resource authority.
          (6)      For purposes of subsection (1)(a), taxes imposed do not include net or gross proceeds taxes
  received under 15-6-131 and 15-6-132.
          (7)      In determining the maximum number of mills in subsection (1)(a), the governmental entity:
          (a)      may increase the number of mills to account for a decrease in reimbursements; and
          (b)      may not increase the number of mills to account for a loss of tax base because of legislative
  action that is reimbursed under the provisions of 15-1-121(7).
          (8)      The department shall calculate, on a statewide basis, the number of mills to be imposed for
  purposes of 15-10-109, 20-9-331, 20-9-333, 20-9-360, and 20-25-439. However, the number of mills calculated
  by the department may not exceed the mill levy limits established in those sections. The mill calculation must
  be established in tenths of mills. If the mill levy calculation does not result in an even tenth of a mill, then the
  calculation must be rounded up to the nearest tenth of a mill.
          (9)      (a) The provisions of subsection (1) do not prevent or restrict:
          (i)      a judgment levy under 2-9-316, 7-6-4015, or 7-7-2202;
          (ii)     a levy to repay taxes paid under protest as provided in 15-1-402;
          (iii)    an emergency levy authorized under 10-3-405, 20-9-168, or 20-15-326;
          (iv)     a levy for the support of a study commission under 7-3-184;
          (v)      a levy for the support of a newly established regional resource authority;
          (vi)     the portion that is the amount in excess of the base contribution of a governmental entity's
  property tax levy for contributions for group benefits excluded under 2-9-212 or 2-18-703;
          (vii)    a levy for reimbursing a county for costs incurred in transferring property records to an
  adjoining county under 7-2-2807 upon relocation of a county boundary;
          (viii)   a levy used to fund the sheriffs' retirement system under 19-7-404(2)(b) 19-7-404(3)(b); or
          (ix)     a governmental entity from levying mills for the support of an airport authority in existence prior
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68th Legislature 2023                                                                                               HB 569.1
  to May 7, 2019, regardless of the amount of the levy imposed for the support of the airport authority in the past.
  The levy under this subsection (9)(a)(ix) is limited to the amount in the resolution creating the authority.
          (b)      A levy authorized under subsection (9)(a) may not be included in the amount of property taxes
  actually assessed in a subsequent year.
          (10)     A governmental entity may levy mills for the support of airports as authorized in 67-10-402, 67-
  11-301, or 67-11-302 even though the governmental entity has not imposed a levy for the airport or the airport
  authority in either of the previous 2 years and the airport or airport authority has not been appropriated
  operating funds by a county or municipality during that time.
          (11)     The department may adopt rules to implement this section. The rules may include a method for
  calculating the percentage of change in valuation for purposes of determining the elimination of property, new
  improvements, or newly taxable value in a governmental unit. (Subsection (3)(b)(ii) terminates December 31,
  2025--sec. 13(5), Ch. 506, L. 2021.)"
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          Section 2. Section 17-7-502, MCA, is amended to read:
          "17-7-502.   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; 5-11-120; 5-
  11-407; 5-13-403; 5-13-404; 7-4-2502; 7-4-2924; 7-32-236; 10-1-108; 10-1-1202; 10-1-1303; 10-2-603; 10-2-
  807; 10-3-203; 10-3-310; 10-3-312; 10-3-314; 10-3-802; 10-3-1304; 10-4-304; 10-4-310; 15-1-121; 15-1-218;
  15-31-165; 15-31-1004; 15-31-1005; 15-35-108; 15-36-332; 15-37-117; 15-39-110; 15-65-121; 15-70-101; 15-
  70-130; 15-70-433; 16-11-119; 16-11-509; 17-3-106; 17-3-212; 17-3-222; 17-3-241; 17-6-101; 17-7-215; 18-11-
  112; 19-3-319; 19-3-320; 19-6-404; 19-6-410; 19-9-702; 19-13-604; 19-17-301; 19-18-512; 19-19-305; 19-19-
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68th Legislature 2023                                                                                            HB 569.1
  506; 19-20-604; 19-20-607; 19-21-203; 20-8-107; 20-9-534; 20-9-622; [ 20-15-328]; 20-26-617; 20-26-1503;
  22-1-327; 22-3-116; 22-3-117; [ 22-3-1004]; 23-4-105; 23-5-306; 23-5-409; 23-5-612; 23-7-301; 23-7-402; 30-
  10-1004; 37-43-204; 37-50-209; 37-54-113; 39-71-503; 41-5-2011; 42-2-105; 44-4-1101; 44-12-213; 44-13-
  102; 46-32-108; 50-1-115; 53-1-109; 53-6-148; 53-9-113; 53-24-108; 53-24-206; 60-5-530; 60-11-115; 61-3-
  321; 61-3-415; 67-1-309; 69-3-870; 69-4-527; 75-1-1101; 75-5-1108; 75-6-214; 75-11-313; 75-26-308; 76-13-
  150; 76-13-151; 76-13-417; 76-17-103; 77-1-108; 77-2-362; 80-2-222; 80-4-416; 80-11-518; 80-11-1006; 81-1-
  112; 81-1-113; 81-7-106; 81-7-123; 81-10-103; 82-11-161; 85-2-526; 85-20-1504; 85-20-1505; [ 85-25-102];
  87-1-603; 87-5-909; 90-1-115; 90-1-205; 90-1-504; 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. 10, Ch. 360, L. 1999, the
  inclusion of 19-20-604 terminates contingently when the amortization period for the teachers' retirement
  system's unfunded liability is 10 years or less; pursuant to sec. 73, Ch. 44, L. 2007, the inclusion of 19-6-410
  terminates contingently upon the death of the last recipient eligible under 19-6-709(2) for the supplemental
  benefit provided by 19-6-709; pursuant to sec. 5, Ch. 383, L. 2015, the inclusion of 85-25-102 is effective on
  occurrence of contingency; pursuant to sec. 6, Ch. 423, L. 2015, the inclusion of 22-3-116 and 22-3-117
  terminates June 30, 2025; pursuant to sec. 12, Ch. 55, L. 2017, the inclusion of 37-54-113 terminates June 30,
  2023; pursuant to sec. 4, Ch. 122, L. 2017, the inclusion of 10-3-1304 terminates September 30, 2025;
  pursuant to sec. 1, Ch. 213, L. 2017, the inclusion of 90-6-331 terminates June 30, 2027; pursuant to secs. 5, 8,
  Ch. 284, L. 2017, the inclusion of 81-1-112, 81-1-113, and 81-7-106 terminates June 30, 2023; pursuant to sec.
  1, Ch. 340, L. 2017, the inclusion of 22-1-327 terminates July 1, 2023; pursuant to sec. 10, Ch. 374, L. 2017,
  the inclusion of 76-17-103 terminates June 30, 2027; pursuant to sec. 5, Ch, 50, L. 2019, the inclusion of 37-50-
  209 terminates September 30, 2023; pursuant to sec. 1, Ch. 408, L. 2019, the inclusion of 17-7-215 terminates
  June 30, 2029; pursuant to secs. 11, 12, and 14, Ch. 343, L. 2019, the inclusion of 15-35-108 terminates June
  30, 2027; pursuant to sec. 7, Ch. 465, L. 2019, the inclusion of 85-2-526 terminates July 1, 2023; pursuant to
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68th Legislature 2023                                                                                              HB 569.1
  sec. 5, Ch. 477, L. 2019, the inclusion of 10-3-802 terminates June 30, 2023; pursuant to secs. 1, 2, 3, Ch. 139,
  L. 2021, the inclusion of 53-9-113 terminates June 30, 2027; pursuant to sec. 8, Ch. 200, L. 2021, the inclusion
  of 10-4-310 terminates July 1, 2031; pursuant to secs. 3, 4, Ch. 404, L. 2021, the inclusion of 30-10-1004
  terminates June 30, 2027; pursuant to sec. 5, Ch. 548, L. 2021, the inclusion of 50-1-115 terminates June 30,
  2025; pursuant to secs. 5 and 12, Ch. 563, L. 2021, the inclusion of 22-3-1004 is effective July 1, 2027; and
  pursuant to sec. 15, Ch. 574, L. 2021, the inclusion of 46-32-108 terminates June 30, 2023.)"
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          Section 3. Section 19-2-405, MCA, is amended to read:
          "19-2-405.    Employment of actuary -- annual investigation and valuation. (1) The board shall
  retain a competent actuary who is an enrolled member of the American academy of actuaries and who is
  familiar with public systems of pensions. The actuary is the technical adviser of the board on matters regarding
  the operation of the retirement systems.
          (2)      The board shall require the actuary to make and report on an annual actuarial investigation into
  the suitability of the actuarial tables used by the retirement systems and an actuarial valuation of the assets and
  liabilities of each defined benefit plan that is a part of the retirement systems.
          (3)      The normal cost contribution rate, which is funded by required employee contributions and a
  portion of the required employer contributions to each defined benefit retirement plan, must be calculated as the
  level percentage of members' salaries that will actuarially fund benefits payable under a retirement plan as
  those benefits accrue in the future.
          (4)      (a) The unfunded liability contribution rate, which is entirely funded by a portion of the required
  employer contributions to the retirement plan, must be calculated as the level percentage of current and future
  defined benefit plan members' salaries that will amortize the unfunded actuarial liabilities of the retirement plan
  over a reasonable period of time, not to exceed 30 years, as determined by the board, except as provided in
  19-5-404, 19-6-404, 19-7-404, and 19-8-504.
          (b)   In determining the amortization period under subsection (4)(a) for the public employees' retirement
  system's defined benefit plan, the actuary shall take into account the plan choice rate contributions to be made
  to the defined benefit plan pursuant to 19-3-2117 and 19-21-214.
          (5)      The board shall require the actuary to conduct and report on a periodic actuarial investigation
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68th Legislature 2023                                                                                                HB 569.1
  into the actuarial experience of the retirement systems and plans.
           (6)      The board may require the actuary to conduct any valuation necessary to administer the
  retirement systems and the plans subject to this chapter.
           (7)      The board shall provide copies of the reports required pursuant to subsections (2) and (5) to
  the state administration and veterans' affairs interim committee and to the legislature pursuant to 5-11-210.
           (8)      The board shall require the actuary to prepare for each employer participating in a retirement
  system the disclosures or the inform