Additional Bill Links PDF version
HOUSE BILL NO. 411
INTRODUCED BY T. RICHMOND, M. NOLAND, R. RIPLEY, S. STAFFANSON
AN ACT REVISING THE PRICE OF A BARREL OF CRUDE OIL IN RELATION TO THE IMPOSITION OF PRODUCTION TAX RATES; AMENDING SECTION 15-36-304, MCA; AND PROVIDING AN EFFECTIVE DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 15-36-304, MCA, is amended to read:
"15-36-304. Production tax rates imposed on oil and natural gas -- exemption. (1) The production of oil and natural gas is taxed as provided in this section. The tax is distributed as provided in 15-36-331 and 15-36-332.
(2) Natural gas is taxed on the gross taxable value of production based on the type of well and type of production according to the following schedule for working interest and nonworking interest owners:
60;& #160; Working 0; ; 160; 60; & #16 0; ; 160; 60; Non working
60;& #160; Interest & #16 0; ; 160; 60; & #16 0; ; 160; 60; Interest
(a) (i) first 12 months of qualifying production 60;& #160; 160; & #16 0; 0.5% 0; ; 160; 14.8%
(ii) after 12 months: 0; ; 160; 60; & #16 0; ; 160; 60; 0; ; 160; 60;
(A) pre-1999 wells 160; & #16 0; ; 160; 60; & #16 0; ; 160; 14.8% 160;& #160; 160; 14.8%
(B) post-1999 wells 160; & #16 0; ; 160; 60; & #16 0; ; 160; 9% ; 60; 0;& #160; 1 4.8%
(b) stripper natural gas pre-1999 wells 160; & #16 0; ; 160; 11% 160; & #16 0; 14.8%
(c) horizontally completed
well
production:
60;&
#160;
160;
&
#16
0;
p>
(i) first 18 months of
qualifying
production
60;&
#160;
160;
&
#16
0; 0.5%
0;
;
160;
14.8% (ii) after 18
months
0;
;
160;
60;
&
#16
0;
;
160;
60;
9%
60;&
#160;
160;
<
/spa
n>14.8% (3) The reduced tax rates
under
subsection (2)(a)(i) on production for the first 12 months of natural gas
production from a well begins following the last day of the calendar month immediately
preceding the month in
which natural gas is placed in a natural gas distribution system, provided that
notification has
been given to the
department. (4) The reduced tax rate
under
subsection (2)(c)(i) on production from a horizontally completed well for the
first 18 months of production begins following the last day of the calendar month
immediately
preceding the
month in which natural gas is placed in a natural gas distribution system, provided that
notification has been
given to the department. (5) Oil is taxed on the
gross
taxable value of production based on the type of well and type of production
according to the following schedule for working interest and nonworking interest
owners:
60;&
#160; Working
0;
;
160;
60;
&
#16
0;
;
160;
60;
Nonworking
60;&
#160; Interest
&
#16
0;
;
160;
60;
&
#16
0;
;
160;
60;
Interest (a) primary recovery
production:
60;&
#160;
160;
&
#16
0;
;
160;
160;
0;
;
160; (i) first 12 months of
qualifying
production
60;&
#160;
160;
&
#16
0; 0.5%
0;
;
160; 14.8% (ii) after 12
months:
0;
;
160;
60;
&
#16
0;
;
160;
60;
0;
;
160;
60;
(A) pre-1999
wells
160;
&
#16
0;
;
160;
60;
&
#16
0;
;
160; 12.5%
160;&
#160;
160;
14.8% (B) post-1999
wells
160;
&
#16
0;
;
160;
60;
&
#16
0;
;
160; 9%
;
60;
0;&
#160; 14.8% (b) stripper oil
production:
60;&
#160;
160;
&
#16
0;
;
160;
60;
0;
;
160;
60;
(i) first 1 through 10 barrels
a
day
production
60;&
#160;
160;
&
#16
0;5.5%
0;
;
160;14.8% (ii) more than 10 barrels a day
production
60;&
#160;
160;
&
#16
0; 9.0%
0;
;
160; 14.8% (c) (i) stripper well
exemption
production
60;&
#160;
160;
&
#16
0; 0.5%
0;
;
160; 14.8% (ii) stripper well bonus
production
60;&
#160;
160;
&
#16
0;
;
160; 6.0%
60;
160;
60;
14.8% (d) horizontally completed
well
production:
60;&
#160;
160;
&
#16
0; (i) first 18 months of
qualifying
production
60;&
#160;
160;
&
#16
0; 0.5%
0;
;
160; 14.8% (ii) after 18
months:
0;
;
160;
60;
&
#16
0;
;
160;
60;
0;
;
160;
60;
(A) pre-1999
wells
160;
&
#16
0;
;
160;
60;
&
#16
0;
;
160; 12.5%
160;&
#160;
160;
14.8% (B) post-1999
wells
160;
&
#16
0;
;
160;
60;
&
#16
0;
;
160; 9%
;
60;
0;&
#160; 14.8% (e) incremental
production:
60;&
#160;
160;
&
#16
0;
;
160;
60;
0;
;
160;
60;
(i) new or expanded
secondary
recovery
production
60;&
#160;
160;
8.5% &
#160;
&
#16
0; 14.8% (ii) new or expanded tertiary
production
60;&
#160;
160;
&
#16
0; 5.8%
0;
;
160; 14.8%<
/p>
(f) horizontally recompleted
well:
160;
&
#16
0;
;
160;
60;
0;
;
160;
60;
(i) first 18
months
0;
;
160;
60;
&
#16
0;
;
160;
60;
5.5% &
#160;
&
#16
0; 14.8% (ii) after 18
months:
0;
;
160;
60;
&
#16
0;
;
160;
60;
0;
;
160;
60;
(A) pre-1999
wells
160;
&
#16
0;
;
160;
60;
&
#16
0;
;
160; 12.5%
160;&
#160;
160;
14.8% (B) post-1999
wells
160;
&
#16
0;
;
160;
60;
&
#16
0;
;
160; 9%
;
60;
0;&
#160; 14.8% (6) (a) The reduced
tax
rates under subsection (5)(a)(i) for the first 12 months of oil production from a well
begins following the last day of the calendar month immediately preceding the month in
which
oil is pumped or
flows, provided that notification has been given to the department. (b) (i) The reduced
tax
rates under subsection (5)(d)(i) on oil production from a horizontally completed well
for the first 18 months of production begins following the last day of the calendar month
immediately preceding
the month in which oil is pumped or flows if the well has been certified as a horizontally
completed well to the
department by the board. (ii) The reduced tax rate under
subsection (5)(f)(i) on oil production from a horizontally recompleted well for
the first 18 months of production begins following the last day of the calendar month
immediately preceding the
month in which oil is pumped or flows if the well has been certified as a horizontally
recompleted well to the
department by the board. (c) Incremental production
is
taxed as provided in subsection (5)(e) only if the average price for each barrel
of oil as reported in the Wall Street Journal for west Texas intermediate crude oil during
a
calendar quarter is
less than $30 a barrel. If the price of oil is equal to or greater than $30 a barrel in a
calendar
quarter as
determined in subsection (6)(e), then incremental production from pre-1999 wells and
from
post-1999 wells is
taxed at the rate imposed on primary recovery production under subsections (5)(a)(ii)(A)
and
(5)(a)(ii)(B),
respectively, for production occurring in that quarter, other than exempt stripper well
production. (d) (i) Stripper well
exemption production is taxed as provided in subsection (5)(c)(i) only if the average
price
for a barrel of oil as reported in the Wall Street Journal for west Texas intermediate
crude oil
during a calendar
quarter is less than $38 $54 a barrel. If the price of oil is equal to or
greater
than $38 $54 a barrel, there is no
stripper well exemption tax rate and oil produced from a well that produces 3 barrels a
day or
less is taxed as
stripper well bonus production. (ii) Stripper well bonus production
is
subject to taxation as provided in subsection (5)(c)(ii) only if the average
price for a barrel of oil as reported in the Wall Street Journal for west Texas
intermediate crude
oil during a
calendar quarter is equal to or greater than $38 $54 a
barrel. (e) For the purposes of
subsections (6)(c) and (6)(d), the average price for each barrel must be computed
by dividing the sum of the daily price for west Texas intermediate crude oil as reported
in the
Wall Street Journal
for the calendar quarter by the number of days on which the price was reported in the
quarter. (7) (a) The tax rates
imposed under subsections (2) and (5) on working interest owners and nonworking
interest owners must be adjusted to include the total of the privilege and license tax
adopted by
the board of oil
and gas conservation pursuant to 82-11-131 and the derived rate for the oil and gas
natural
resource distribution
account as determined under subsection (7)(b). (b) The total of the
privilege and
license tax and the tax for the oil and gas natural resource distribution
account established in 90-6-1001(1) may not exceed 0.3%. The base rate for the tax for
oil and
gas natural
resource distribution account funding is 0.08%, but when the rate adopted pursuant to
82-11-131
by the board
of oil and gas conservation for the privilege and license tax: (i) exceeds 0.22%, the rate
for
the tax to fund the oil and gas natural resource distribution account is equal
to the difference between the rate adopted by the board of oil and gas conservation and
0.3%;
or (ii) is less than 0.18%, the rate for
the
tax to fund the oil and gas natural resource distribution account is equal
to the difference between the rate adopted by the board of oil and gas conservation and
0.26%. (c) The board of oil and
gas
conservation shall give the department at least 90 days' notice of any change
in the rate adopted by the board. Any rate change of the tax to fund the oil and gas
natural
resource distribution
account is effective at the same time that the board of oil and gas conservation rate is
effective. (8) Any interest in
production
owned by the state or a local government is exempt from taxation under this
section." Section
2. Effective date. [This act] is effective July 1, 2015. - END - Latest
Version of HB 411 (HB0411.ENR) New
language in a bill appears underlined, deleted material appears stricken. Sponsor names are handwritten on introduced bills, hence do not appear on
the bill
until it is reprinted. See the
status of this bill for the bill's primary sponsor. Status of this Bill | 2015
Legislature | Leg. Branch
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