History and Purpose
Montana’s unique Hard-Rock Mining Impact Act (HRMIA) was enacted by the Montana Legislature in 1981 followed by the Property Tax Base Sharing Act in 1983.
The purpose of the HRMIA is to ensure that large-scale mineral development will not burden the local taxpayer. Large-scale mineral development can bring with it an influx of new people to a community which can place demands on local government entities. Further, there is a lag time between when the needs of local government units occur and the tax revenue stream from production of a mining property arrives. The HRMIA ensures that the needs of a host community are addressed as they occur.
In some cases, the development of a new hard-rock mine may result in little or no increased cost for local government units. In other cases, the increase in service and facility needs and costs may be substantial. In either situation, the construction and operation of the mine will bring increased employment to the impact area and, eventually, increased tax base and tax revenue to the affected local government
The purpose of the Property Tax Base Sharing Act is to address on-going increased costs in taxing jurisdictions that are not actually home to the mineral development.
Development of an Impact Plan
- Under the Impact Act, the developer of each proposed new large-scale hard-rock mine is required to prepare an impact plan that identifies the local government services and facilities that will be needed as a result of the mineral development. A mineral developer is considered “large-scale” if in the construction or operation of the mine and associated milling facility, the developer and its contractors and subcontractors at the site will employ more than 75 persons during any consecutive six-month period.
- The developer must identify and commit to pay all increased local government capital and net operating costs that will result from the development. Payment may be through grants or contributions, property tax pre-payments, facility impact bonds, or other financing mechanisms. The developer may also provide non-financial assistance to the affected local government units.
- Affected local government units assist with the preparation of the impact plan and share with the developer the legal responsibility for ensuring that the plan contains all required information, projections, and commitments. Affected local government units may include counties, incorporate cities and town, school districts, and the following independent special purpose districts: rural fire, public hospital, refuse disposal, county water and/or sewer, and county park districts.
- When the proposed plan is complete, the developer submits it to the Hard-Rock Mining Impact Board and the affected local government units for formal review. During the 90-day review period, the county holds a public hearing on the proposed plan and if an affected local government unit disagrees with any part of the plan, its governing body may file an objection with the Board. If the mineral developer and local government unit cannot resolve the objection through negotiation, the Board holds a contested case hearing, adjudicates the dispute, and amends the plan as needed.
- If the increase costs identified by the plan will occur in taxing jurisdictions in which the mine is not located, or in which an insufficient portion of the mine’s valuation is located, the plan may trigger property tax base sharing. Tax base sharing apportions the taxable valuation of the mineral development among counties and municipalities, high school districts, and elementary school districts affected by the new mineral development.
- The statutory requirements for hard-rock mining impact plans, impact plan waiver, and property tax base sharing are found in the Hard-Rock Mining Impact Act and the companion Property Tax Base Sharing Act, Part 3 and Part 4 of Title 90, Chapter 6 of the Montana Code Annotated. Regulatory requirements are contained in the Administrative Rules of Montana beginning with Section 8.104.101.
- Within 30 days of receiving the approved plan or notice that the plan has been approved, the developer provides the Board and the Montana Department of Environmental Quality with a written financial guarantee that it will meet the increased costs of public services and facilities as specified in the approved impact plan and according to the schedule in the plan.
- If the plan requires the developer to prepay taxes, the developer must guarantee to the Board, through a third-party financial institution, that the required prepayments will be made as needed. The financial guarantee must be acceptable to the Board.
Hard-Rock Mining Impact Board
The Hard-Rock Mining Impact Board is a five-member, quasi-judicial board appointed by the Governor. The Board is attached to the Montana Department of Commerce for administrative purposes only. As required by statue, the Board includes an elected county commissioner, an elected school district trustee, and representatives of a major financial institution, the mining industry, and the public-at-large. At least three members must reside in current or potential impact areas.
The Board administers the Act; adjudicates disputes about the local government impact plans; rules on impact plan waivers or conditional waivers for certain permittees; determines whether a mineral developer is complying with the requirements of the impact and tax base sharing statutes and with the approved impact plan and notifies the Montana Department of Environmental Quality, as necessary; determines when a jurisdictional revenue disparity among affected local government units exists, as identified in an approved plan, or ceases to exist and notifies the Department of Revenue to initiate or terminate tax base sharing and makes such other determinations as may be necessary for the performance of its duties and the implementation of the Impact Act.