HOUSE BILL NO. 643
INTRODUCED BY C. JUNEAU, SMITH
AN ACT REVISING LAWS RELATED TO ELECTRIC ENERGY; CLARIFYING THE DEFINITION OF "PROJECT" UNDER THE ECONOMIC DEVELOPMENT BOND LAWS TO ALLOW ELECTRIC GENERATION FACILITIES AND TRANSMISSION LINES TO BE FINANCED UNDER THE LAWS; MODIFYING THE CREDIT LIMITATION AND CARRYOVER PROVISIONS FOR WIND-GENERATED ELECTRICITY ON MONTANA RESERVATION LANDS; EXEMPTING ELECTRICITY GENERATED ON MONTANA RESERVATION LANDS FROM THE WHOLESALE ENERGY TAX FOR OUT-OF-STATE DISTRIBUTION; AMENDING SECTIONS 15-32-403, 15-32-404, 15-72-104, AND 90-5-101, MCA; AND PROVIDING EFFECTIVE DATES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 15-32-403, MCA, is amended to read:
"15-32-403. Limitation on credit. (1) Except as provided in subsection
(2), Whenever whenever any federal wind energy tax credits for a system that
generates electricity by means of wind power are allowed or allowable under
section 48(a) of the Internal Revenue Code (26 U.S.C. 48(a)) or any other
federal law, the state credit allowed by 15-32-402 must be reduced by the
amount of federal credits so that the effective credit does not exceed 60% of
the eligible costs.
(2) An individual, corporation, partnership, or small business corporation, as defined in 15-31-201, is exempt from the provisions of subsection (1) of this section if the individual, corporation, partnership, or small business corporation:
(a) invests in a commercial system located within the exterior boundaries of a Montana Indian reservation, which commercial system is 5 megawatts or larger in size;
(b) signs an employment agreement with the tribal government of the reservation where the commercial system would be constructed regarding the training and employment of tribal members in the construction, operation, and maintenance of the commercial system; and
(c) offers contracts with a duration of at least 5 years to sell at least 33% of that commercial system's net generating output at the cost of production plus a reasonable rate of return as designated by the public service commission to customers for use within the state of Montana.
(3) The cost of production must be determined by dividing the cost and operation of the commercial system over an appropriate time period by the kilowatt output of the system."
Section 2. Section 15-32-404, MCA, is amended to read:
"15-32-404. Carryover of credit. (1) The tax credit allowed under
15-32-402 is to be deducted from that portion of the taxpayer's tax liability as
set forth in 15-32-402(1) for the taxable tax year in which the equipment
invested in by the taxpayer is placed in service. If the amount of the tax credit
exceeds the taxpayer's tax liability for the taxable tax year, the amount that
exceeds the tax liability may be carried over for credit against the taxpayer's
tax liability in the next succeeding taxable tax year or years until the total
amount of the tax credit, subject to the limitation of 15-32-403, has been
deducted from tax liability. However, except as provided in subsection (2), no
a credit may not be carried beyond the seventh taxable tax year succeeding the
taxable tax year in which the equipment was placed in service.
(2) A credit may be extended through the 15th tax year succeeding the tax year in which the equipment was placed in service if an individual, corporation, partnership, or small business corporation, as defined in 15-31-201:
(a) invests in a commercial system located within the exterior boundaries of a Montana Indian reservation, which commercial system is 5 megawatts or larger in size; and
(b) signs an employment agreement with the tribal government of the reservation where the commercial system would be constructed regarding the training and employment of tribal members in the construction, operation, and maintenance of the commercial system."
Section 3. Section 15-72-104, MCA, is amended to read:
"15-72-104. Wholesale energy transaction tax -- rate of tax -- exemptions -- cost recovery. (1) (a) Except as provided in subsection (3), a wholesale energy transaction tax is imposed upon electricity transmitted within the state as provided in this section. The tax is imposed at a rate of 0.015 cent per kilowatt hour of electricity transmitted by a transmission services provider in the state.
(b) For electricity produced in the state for delivery outside of the state, the taxpayer is the person owning or operating the electrical generation facility producing the electricity. The transmission services provider shall collect the tax from the person based upon the kilowatt hours introduced onto transmission lines from the electrical generation facility. The amount of kilowatt hours subject to tax must be reduced by 5% to compensate for transmission line losses.
(c) For electricity produced in the state for delivery within the state, the taxpayer is the distribution services provider. The transmission services provider shall collect the tax based upon the amount of kilowatt hours of electricity delivered to the distribution services provider. The taxpayer may apply for a refund for overpayment of taxes pursuant to 15-72-116.
(d) For electricity produced outside the state for delivery inside the state, the taxpayer is the distribution services provider. The transmission services provider shall collect the tax based upon the amount of kilowatt hours of electricity delivered to the distribution services provider.
(e) For electricity delivered to a distribution services provider that is a rural electric cooperative for delivery to purchasers that have opted for customer choice under the provisions of Title 69, chapter 8, part 3, the taxpayer is the distribution services provider. The transmission services provider shall collect the tax based on the amount of kilowatt hours of electricity delivered to the distribution services provider that is attributable to customers that have opted for customer choice.
(f) For electricity delivered to a distribution services provider that prior to May 2, 1999, was owned by a public utility as defined in 69-3-101, the tax is imposed on the successor distribution services provider. The transmission services provider shall collect the tax based upon the amount of kilowatt hours of electricity delivered to the distribution services provider.
(2) (a) If more than one transmission services provider transmits electricity, the last transmission services provider transmitting or delivering the electricity shall collect the tax.
(b) If the transmission services provider is an agency of the United States government, the distribution services provider receiving the electricity shall self-assess the tax subject to the provisions of this part.
(c) If an electrical generation facility located within the state produces electricity for sale inside and outside the state, sales within the state are considered to have come from electricity produced within the state for purposes of the tax imposed by this section.
(3) (a) Electricity transmitted through the state that is not produced or delivered in the state is exempt from the tax imposed by this section.
(b) Electricity produced in the state by an agency of the of the United
States government or electricity produced from an electric energy generation
facility as defined in 90-5-101(3) constructed after [the effective date of
section 4] that is within the exterior boundaries of a Montana Indian
reservation for delivery outside of the state is exempt from the tax imposed by
this section.
(c) Electricity delivered to a distribution services provider that is a municipal utility described in 69-8-103(5)(b) or a rural electric cooperative organized under the provisions of Title 35, chapter 18, is exempt from the tax imposed by this section.
(d) Electricity delivered to a purchaser that receives its power directly from a transmission or distribution facility owned by an entity of the United States government on or before May 2, 1997, or electricity that is transmitted exclusively on transmission or distribution facilities owned by an entity of the United States government on or before May 2, 1997, is exempt from the tax imposed by this section.
[(e) Electricity delivered by a distribution services provider to a customer with loads of 1,000 kilowatts or greater that was first served by a public utility after December 31, 1996, is exempt from the tax imposed by this section, provided that the customer purchases the electricity pursuant to a contract or contracts that establish the purchase price or prices of electricity. The exemption allowed by this subsection (3)(e) does not apply to electricity purchased under a renewal or extension of an existing contract or existing contracts.]
(4) A distribution services provider is allowed to recover the tax imposed by this section and the administrative costs to comply with this part in its rates. (Bracketed language terminates January 1, 2003--sec. 40, Ch. 556, L. 1999.)"
Section 4. Section 90-5-101, MCA, is amended to read:
"90-5-101. Definition of terms. As used in this part, unless the context otherwise requires, the following definitions apply:
(1) "Agricultural enterprises" include includes but are is not limited to
producing, warehousing, storing, fattening, treating, handling, distributing, or
selling farm products or livestock.
(2) "Bonds" means bonds, refunding bonds, notes, or other obligations issued by a municipality or county under the authority of this part, including without limitation short-term bonds or notes issued in anticipation of the issuance of long-term bonds or notes.
(3) "Electric energy generation facility" means any combination of a physically connected generator or generators, associated prime movers, and other associated property and transmission facilities and upgrades and improvements of transmission facilities, including appurtenant land and improvements and personal property, that are normally operated together to produce and transfer electric power. The term includes but is not limited to generating facilities that produce and transfer electricity from coal-fired steam turbines, oil or gas turbines, wind turbines, solar power sources, fuel cells, or turbine generators that are driven by falling water.
(3)(4) "Governing body" means the board or body in which the general
legislative powers of the municipality or county are vested.
(4)(5) "Higher education facilities" means any real or personal properties
required or useful for the operation of an institution of higher education.
(5)(6) "Institution of higher education" means any private, nonprofit
corporation or institution within the state of Montana:
(a) authorized to provide or operate educational facilities; and
(b) providing a program of education beyond the high school level.
(6)(7) "Mortgage" means a mortgage or deed of trust or other security
device.
(7)(8) "Municipality" means any incorporated city or town in the state.
(8)(9) "Project" means any land; any building or other improvement; and
any other real or personal properties considered necessary in connection with
the improvement, whether or not now in existence, which that must be
suitable for use for commercial, manufacturing, agricultural, or industrial
enterprises; recreation or tourist facilities; local, state, and federal
governmental facilities; multifamily housing, hospitals, long-term care
facilities, community-based facilities for individuals who are persons with
developmental disabilities as defined in 53-20-102, or medical facilities;
higher education facilities; small-scale hydroelectric production facilities with
a capacity of 50 megawatts or less; electric energy generation facilities; and
any combination of these projects."
Section 5. Notification to tribal governments. The secretary of state shall send a copy of [this act] to each tribal government located on the seven Montana reservations and to the Little Shell band of Chippewa.
Section 6. Effective dates. (1) [Sections 4 and 5 and this section] are effective on passage and approval.
(2) [Sections 1 through 3] are effective January 1, 2002.
- END -
Latest Version of HB 643 (HB0643.ENR)
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