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Initiative No. 163 (I-163)

BALLOT LANGUAGE FOR INITIATIVE NO. 163 (I-163)

INITIATIVE NO. 163

A law proposed by initiative petition

I-163 requires the Board of Crime Control to create a comprehensive plan to address alcohol and drug abuse. It redirects a share of existing beer, wine, and liquor tax revenues to provide an additional source of funding for certain alcohol and drug abuse programs. Approximately two-thirds of the revenues fund drug treatment courts, alcohol and drug monitoring programs, and the methamphetamine watch program. The Board also may fund education, prevention, and treatment of youth for drug and alcohol abuse.

I-163 redirects an estimated $6 million of existing beer, wine, and liquor tax revenues annually from the state’s general fund to a special fund for drug and alcohol abuse programs.

[ ] FOR requiring a state alcohol and drug abuse plan and redirecting existing beer, wine, and liquor tax revenues to fund alcohol and drug abuse programs.

[ ] AGAINST requiring a state alcohol and drug abuse plan and redirecting existing beer, wine, and liquor tax revenues to fund alcohol and drug abuse programs.

COMPLETE TEXT OF BALLOT ISSUE

WHEREAS, the hospitality/alcohol industry is an invaluable part of Montana’s economy and heritage – from the purchasing of raw products such as malt barley to real estate and operational investments; from the thousands of good paying jobs to the charitable and other contributions to local organizations.  This initiative should not be viewed as a challenge to the recognized import of this industry or its independent expenditures to promote the responsible use of its products; and

WHEREAS, according to a March 2009 report:

  • the societal cost of alcohol abuse in Montana exceeds $510.2 million annually;
  • Montana ranked 5 th in the nation in terms of per capita alcohol consumption by adults 21 years of age or older; and
  • deaths from alcohol-related motor vehicle accidents in Montana numbered 108 in 2006

(The Economic Cost of Alcohol Abuse in Montana available at http://www.bber.umt.edu/pubs/Health/costAlcoholAbuseMT.pdf); and

WHEREAS, according to a February 2009 report, the societal cost of methamphetamine use in Montana peaked at more than $300 million in 2005 and has remained over $200 million in 2008 (The Economic Cost of Methamphetamine Use in Montana available at http://www.methproject.com/documents/MT%20DOJ%20Cost%20of%20Meth%20in%20Montana%20Report.pdf); and

WHEREAS, according to the 2009 Youth Risk Behavior Survey, 76% of Montana high school students have reported trying alcohol, and 30% of Montana high school students have had a binge drinking episode in the preceding 30 days (available at http://www.opi.mt.gov/pdf/YRBS/09/Reports/09SummaryRpt.pdf); and

WHEREAS, even with the enactment of this ballot measure, less than 35% of all alcohol taxes and related licensure fees will be set aside for education, prevention and treatment of alcohol abuse and illegal drug use in Montana.

Be it enacted by the People of the State of Montana:

             NEW SECTION.    Section 1.  Short title. [Sections 1 through 4] may be cited as the "Montana Comprehensive Alcohol Abuse and Drug Free Plan Act".

             NEW SECTION.   Section 2.  Purpose and Definition. (1) The purpose of [sections 1 through 4] is to create and implement a comprehensive alcohol abuse and drug free plan and to direct the allocation of resources in accordance with the plan. (2) For purposes of sections 1 through 4, “drug” shall have the meaning as set forth in 46-1-1103, MCA.

             NEW SECTION.   Section 3.  Comprehensive alcohol abuse and drug free plan. (1) There is a comprehensive alcohol abuse and drug free plan. The board of crime control shall create the plan in collaboration with the department of justice, department of public health and human services, department of corrections, department of revenue, and the Montana Supreme Court Administrator.

             (2) The plan must provide a comprehensive approach to dealing with the societal costs of alcohol abuse and drug use in Montana. The plan must include but is not limited to:

             (a) educating Montana's youth on the dangers posed by the use of alcohol and drugs such as methamphetamine;

             (b) utilizing drug treatment courts under Title 46, chapter 1, part 11;

             (c) leveraging technology to prevent illegal behavior and to monitor compliance;

             (d) creating a mechanism for informing the public of treatment options and providers;

             (e) establishing success criteria to ensure that education, prevention, and treatment efforts are achieving desired results; and

             (f) implementing a data collection process to track alcohol and drug use associated with the operation of motor vehicles and related accidents.

             (3) The plan must be administered by the board of crime control. In administering the plan, the board of crime control shall:

             (a) identify priorities for funding services and activities;

             (b) establish criteria for the receipt of state special revenue funds in the form of block grants;

             (c) monitor the expenditure of funds by organizations receiving funds under this section;

             (d) evaluate the effectiveness of services and activities funded under the plan; and

             (e) adopt rules necessary to implement [sections 1 through 4].

             NEW SECTION.   Section 4.  Special revenue account -- allocations. (1) There is an account in the state special revenue fund to the credit of the board of crime control. Money in the account must be used as provided in subsections (2) and (3). The amounts allocated under 16-1-401, 16-1-404, 16-1-406, 16-1-411, and 16-2-108, must be deposited in the account. Any interest or income earned on the account must be deposited in the account.

             (2) The money in the account:

             (a) must be used solely as an additional source of funding for programs organized to provide education on and prevent and treat alcohol abuse and the abuse of methamphetamine, prescription drugs, and other drugs, and to establish and maintain a reserve;

             (b) may be used to match available federal funds; and

             (c) must be allocated among the following programs in the form of block grants in the following percentages:

             (i) 25% to drug treatment courts under Title 46, chapter 1, part 11, to assist individuals in ending their addiction to drugs and in ceasing criminal behavior associated with drug use and addictions;

             (ii) 20% for alcohol and drug monitoring programs, with an emphasis on leveraging technology and proven programs in other jurisdictions;

             (iii) 20% to the methamphetamine watch program under Title 44, chapter 4, part 10; and

             (iv) up to 35% to qualified recipients, as determined by the board of crime control, for the purpose of education, prevention, and treatment of youth for drug and alcohol abuse and dependence; of this amount up to 10% shall be allocated to the highway patrol to assist with developing and maintaining a uniform system to collect and track information related to the use of alcohol and drugs while operating motor vehicles; of this amount up to 10% shall be allocated to implement related programs targeting prescription drug use.

             (3) The board of crime control's costs associated with administering each grant may not exceed 5% of the grant award.

             (4) Any balance must remain in the account and may be used only for the purposes stated in subsection (2).

             (5) The special revenue account does not affect and is not exclusive of any other sources of funding for the programs described in subsection (2).

             Section 5.   Section 16-1-306, MCA, is amended to read:
             "16-1-306.  Revenue to be paid to state treasurer. Except as provided in 16-1-404, 16-1-406, and 16-1-411, and 16-2-108, all fees, charges, taxes, and revenue collected by or under authority of the department must, in accordance with the provisions of 17-2-124, be deposited to the credit of the state general fund."

             Section 6.   Section 16-1-401 , MCA, is amended to read:
             "16-1-401.  Liquor excise tax. (1) The department shall collect at the time of the sale and delivery of any liquor as authorized under any provision of the laws of the state of Montana an excise tax at a rate that is the percent of the retail selling price determined in accordance with the following schedule based on all liquor sold and delivered in the state by a company that manufactured, distilled, rectified, bottled, or processed the liquor and sold the specified number of proof gallons of liquor nationwide in the calendar year preceding imposition of the tax pursuant to this section:

Nationwide production Tax rate
Less than 20,000 proof gallons 3%
20,000 to 50,000 proof gallons 8%
50,001 to 200,000 proof gallons 13.8%
Over 200,000 proof gallons 16%

             (2)  The department shall retain the amount of the excise tax received in a separate account and shall, in accordance with the provisions of 17-2-124 and not later than the 10th day of each month, deposit, :
             (a) 88% of the amount collected and received to the credit of the general fund, the amount collected and received not later than the 10th day of each month; and
             (b) 12% of the amount collected and received to the credit of the state special revenue account provided for in [section 4].”

             Section 7.   Section 16-1-404 , MCA, is amended to read:
             "16-1-404.  License tax on liquor -- amount -- distribution of proceeds. (1) The department shall collect at the time of sale and delivery of any liquor under any provisions of the laws of the state of Montana a license tax of:
             (a)  10% of the retail selling price on all liquor sold and delivered in the state by a company that manufactured, distilled, rectified, bottled, or processed and that sold more than 200,000 proof gallons of liquor nationwide in the calendar year preceding imposition of the tax pursuant to this section;
             (b)  8.6% of the retail selling price on all liquor sold and delivered in the state by a company that manufactured, distilled, rectified, bottled, or processed and that sold more than 50,000 proof gallons but not more than 200,000 proof gallons of liquor nationwide in the calendar year preceding imposition of the tax pursuant to this section;
             (c)  2% of the retail selling price on all liquor sold and delivered in the state by a company that manufactured, distilled, rectified, bottled, or processed and that sold not more than 50,000 proof gallons of liquor nationwide in the calendar year preceding imposition of the tax pursuant to this section.
             (2)  The license tax must be charged and collected on all liquor produced in or brought into the state and taxed by the department. The retail selling price must be computed by adding to the cost of the liquor the state markup as designated by the department. The license tax must be figured in the same manner as the state excise tax and is in addition to the state excise tax. The department shall retain in a separate account the amount of the license tax received. The department, in accordance with the provisions of 17-2-124, shall allocate the revenue as follows:
             (a)   Thirty-four and one-half percent is allocated 19.5% to the state general fund.;
             (b)   Sixty-five and one-half percent must be deposited 65.5% in the state special revenue fund to the credit of the department of public health and human services for the treatment, rehabilitation, and prevention of alcoholism and chemical dependency; and
             (c) 15% in the state special revenue account provided in [section 4].
             (3)   On a quarterly basis Tthe license tax proceeds that are allocated to the board of crime control and the department of public health and human services for the treatment, rehabilitation, and prevention of alcoholism and chemical dependency must be credited quarterly to the department of public health and human services appropriate account. The legislature may appropriate a portion of the license tax proceeds to support alcohol and chemical dependency programs. The remainder must be distributed as provided in 53-24-206."

             Section 8.   Section 16-1-406 , MCA, is amended to read:
             "16-1-406.  Taxes on beer. (1) (a) A tax is imposed on each barrel of 31 gallons of beer sold in Montana by a wholesaler. A barrel of beer equals 31 gallons. The tax is based upon the total number of barrels of beer produced by a brewer in a year. A brewer who produces less than 20,000 barrels of beer a year is taxed on the following increments of production:
             (i)  up to 5,000 barrels, $1.30;
             (ii) 5,001 barrels to 10,000 barrels, $2.30; and
             (iii) 10,001 barrels to 20,000 barrels, $3.30.
             (b)  The tax on beer sold for a brewer who produces over 20,000 barrels is $4.30.
             (2)  The tax imposed pursuant to subsection (1) is due at the end of each month from the wholesaler upon beer sold by the wholesaler during that month. The department shall compute the tax due on beer sold in containers other than barrels or in barrels of more or less capacity than 31 gallons.
             (3)  Each quarter, in accordance with the provisions of 17-2-124, of the tax collected pursuant to subsection (1), an amount equal to:
             (a)  23.26% must be deposited in the state treasury to the credit of the department of public health and human services for the treatment, rehabilitation, and prevention of alcoholism and chemical dependency;
             (b) 15% must be deposited in the state special revenue account provided for in [section 4]; and
             (b)(c)   the balance must be deposited in the state general fund."

             Section 9.   Section 16-1-411, MCA, is amended to read:
             "16-1-411.  Tax on wine and hard cider -- penalty and interest. (1) (a) A tax of 27 cents per liter is imposed on table wine, except hard cider, imported by a table wine distributor or the department.
             (b)  A tax of 3.7 cents per liter is imposed on hard cider imported by a table wine distributor or the department.
             (2)  The tax imposed in subsection (1) must be paid by the table wine distributor by the 15th day of the month following sale of the table wine or hard cider from the table wine distributor's warehouse. Failure to file a tax return or failure to pay the tax required by this section subjects the table wine distributor to the penalties and interest provided for in 15-1-216.
             (3)  The tax paid by a table wine distributor in accordance with subsection (2) must, in accordance with the provisions of 17-2-124, be distributed as follows:
             (a)  69% 54% to the state general fund; and
             (b)  31% to the state special revenue fund to the credit of the department of public health and human services for the treatment, rehabilitation, and prevention of alcoholism and chemical dependency ; and
             (c) 15% to the state special revenue account provided for in [section 4].
             (4)  The tax computed and paid in accordance with this section is the only tax imposed by the state or any of its subdivisions, including cities and towns.
             (5)  For purposes of this section, "table wine" has the meaning assigned in 16-1-106, but does not include hard cider."

             Section 10.   Section 16-2-108, MCA, is amended to read:
             "16-2-108.  Disposition of money received. (1) The department may purchase liquor from money deposited to its account in the enterprise fund. The department shall pay from its account in the enterprise fund its administrative expenses associated with the sale of liquor, subject to the limits imposed by legislative appropriation. An obligation created or incurred by the department may not be a debt or claim against the state of Montana but must be payable by the department solely from funds derived from the operation of state liquor sales. The department shall pay into the state treasury to the credit of the enterprise fund the receipts from the sale of liquor and all taxes collected by it. Taxes and the net proceeds from the operation of state liquor sales must be transferred to the general fund.
             (2)  All liquor license fees and permit fees collected by the department must be deposited into the department's liquor enterprise fund.
             (3)  The department shall pay from its account in the liquor enterprise fund:
             (a)  expenses associated with administering liquor licensing and fee collection; and
             (b)  expenses associated with investigations pursuant to its agreement with the department of justice.
             (4)  The net proceeds of the liquor enterprise fund must be transferred as follows:
             (a) 15% to the state special revenue account provided for in [section 4]; and
             (b) 85% to the general fund."

             Section 11.   Section 44-4-301, MCA, is amended to read:
             "44-4-301.  Functions. (1) As designated by the governor as the state planning agency under the Omnibus Crime Control and Safe Streets Act of 1968, as amended, the board of crime control shall perform the functions assigned to it under that act. The board shall also provide to criminal justice agencies technical assistance and supportive services that are approved by the board or assigned by the governor or legislature.
             (2)  The board shall consider all appeals brought from decisions of the Montana public safety officer standards and training council pursuant to 44-4-403. A board member designated as a member of the Montana public safety officer standards and training council, as provided in 44-4-402, may not participate in appeals brought to the board from decisions of the council. The board shall promulgate rules governing the manner and method of the appeals.
             (3) The board shall administer the Montana Comprehensive Alcohol Abuse and Drug Free Plan Act for the purposes provided in [sections 1 through 4].

             Section 12.   Section 53-24-108, MCA, is amended to read:
             "53-24-108.  Use of funds generated by taxation on alcoholic beverages. (1) Revenue generated by 16-1-404, 16-1-406, and 16-1-411 and allocated to the department to be used in state-approved private or public programs whose function is the treatment, rehabilitation, and prevention of alcoholism, which for the purposes of this section includes chemical dependency, must be distributed as follows:
             (a)  20% is statutorily appropriated, as provided in 17-7-502, to be allocated as provided in 53-24-206(3)(b), and must be distributed as grants to state-approved private or public alcoholism programs;
             (b)  6.6% is statutorily appropriated, as provided in 17-7-502, to be distributed to state-approved private or public alcoholism programs that provide services for treatment and rehabilitation for persons with co-occurring serious mental illness and chemical dependency; and
             (c)  the remainder of funds not statutorily appropriated in subsections (1)(a) and (1)(b) may be distributed:
             (i)  as payment of fees for alcoholism services provided by state-approved private or public alcoholism programs and licensed hospitals for detoxification services; or
             (ii) as matching funds for the Montana medicaid program administered by the department that are used for alcoholism and chemical dependency programs.
             (2)  A person operating a state-approved alcoholism program may not be required to provide matching funds as a condition of receiving a grant under subsection (1)(a).
             (3)  In addition to funding received under this section, a person operating a state-approved alcoholism program may accept gifts, bequests, or the donation of services or money for the treatment, rehabilitation, or prevention of alcoholism.
             (4)  A person receiving funding under this section to support operation of a state-approved alcoholism program may not refuse alcoholism treatment, rehabilitation, or prevention services to a person solely because of that person's inability to pay for those services.
             (5)  A grant made under this section is subject to the following conditions:
             (a)  The grant application must contain an estimate of all program income, including income from earned fees, gifts, bequests, donations, and grants from other than state sources during the period for which grant support is sought.
             (b)  Whenever, during the period of grant support, program income exceeds the amount estimated in the grant application, the amount of the excess must be reported to the grantor.
             (c)  The excess must be used by the grantee under the terms of the grant in accordance with one or a combination of the following options:
             (i)  use for any purpose that furthers the objectives of the legislation under which the grant was made; or
             (ii) to allow program growth through the expansion of services or for capital expenditures necessary to improve facilities where services are provided.
             (6)  Revenue generated by 16-1-404 (2)(b), 16-1-406 (3)(a), and 16-1-411 (3)(b) for the treatment, rehabilitation, and prevention of alcoholism that has not been encumbered for those purposes by the counties of Montana or the department must be returned to the state special revenue fund for the treatment, rehabilitation, and prevention of alcoholism within 30 days after the close of each fiscal year and must be distributed by the department the following year as provided in 53-24-206(3)(b)."

             NEW SECTION.   Section 13.   Codification instruction. [Sections 1 through 4] are intended to be codified as an integral part of Title 44, chapter 4, and the provisions of Title 44, chapter 4, apply to [sections 1 through 4].

             NEW SECTION.   Section 14.   Severability. If a part of [this act] is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.

             NEW SECTION. Section 15. Applicability. (This act) applies to taxes, license and permit fees imposed or collected on or after the effective date.

             NEW SECTION.   Section 16.   Effective date. [This act] is effective on January 1, 2011.

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