HOUSE BILL NO. 569

INTRODUCED BY R. ERICKSON

A BILL FOR AN ACT ENTITLED: "AN ACT CREATING TAX INCENTIVES FOR BUSINESSES THAT CONSERVE ENERGY AND FOSSIL FUELS BY ESTABLISHING TRANSPORTATION ALTERNATIVES FOR EMPLOYEES; AMENDING SECTIONS 15-32-102 AND 15-32-103, MCA; AND PROVIDING AN APPLICABILITY DATE."

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Section 15-32-102, MCA, is amended to read:

"15-32-102. Definitions. As used in this part, the following definitions apply:

(1) "Building" means:

(a) a single or multiple dwelling, including a mobile home or manufactured home; or

(b) a building used for commercial, industrial, or agricultural purposes that is enclosed with walls and a roof.

(2) "Capital investment" means any material or equipment purchased and installed in a building or land with or without improvements.

(3) "Energy conservation purpose" means one or both of the following results of an investment:

(a) reducing the waste or dissipation of energy; or

(b) reducing the amount of energy required to accomplish a given quantity of work.

(4) "Geothermal system" means a system that transfers energy either from the ground, by way of a closed loop, or from ground water, by way of an open loop, for the purpose of heating or cooling a residential building.

(5) "Low emission wood or biomass combustion device" means a noncatalytic stove or furnace that:

(a) (i) is specifically designed to burn wood pellets or other nonfossil biomass pellets; and

(ii) has a particulate emission rate of less than 4.1 grams per hour when tested in conformance with the standard method for measuring the emissions and efficiencies of residential wood stoves, as adopted by the department of environmental quality pursuant to 15-32-203; or

(iii) has an air-to-fuel ratio of 35 to 1 or greater when tested in conformance with the standard method for measuring the air-to-fuel ratio and minimum achievable burn rates for wood-fired appliances, as adopted by the department of environmental quality pursuant to 15-32-203; or

(b) burns wood or other nonfossil biomass and has a particulate emission rate of less than 4.1 grams per hour when tested in conformance with the standard method for measuring the emissions and efficiencies of residential wood stoves, as adopted by the department of environmental quality pursuant to 15-32-203.

(6) "Passive solar system" means a direct thermal energy system that uses the structure of a building and its operable components to provide heating or cooling during the appropriate times of the year by using the climate resources available at the site. It includes only those portions and components of a building that are expressly designed and required for the collection, storage, and distribution of solar energy and that are not standard components of a conventional building.

(7) "Recognized nonfossil forms of energy generation" means:

(a) a system that captures energy or converts energy sources into usable sources by using:

(i) solar energy, including passive solar systems;

(ii) wind;

(iii) solid waste; or

(iv) the decomposition of organic wastes;

(b) a system that produces electric power from solid wood wastes; or

(c) a small system that uses water power by means of an impoundment that is not over 20 acres in surface area.

(8) "Transportation alternatives" means:

(a) carpools;

(b) vanpools;

(c) transit passes;

(d) bicycle and pedestrian programs and amenities;

(e) preferential parking plans for carpools and vanpools;

(f) any other program that reduces the number of single-occupant motor vehicles commuting to a business employment site."

Section 2. Section 15-32-103, MCA, is amended to read:

"15-32-103. Deduction for energy-conserving investments. (1) In addition to all other deductions from gross corporate income allowed in computing net income under chapter 31, part 1, a taxpayer may deduct a portion of the taxpayer's expenditure for a capital investment in a building for an energy conservation purpose, in accordance with the following schedule:

If the installation or	If the installation or

investment is made in a	investment is made in a

residential building:	building not used

as a residence:

100% of first $1,000 expended	100% of first $2,000 expended

50% of next $1,000 expended	50% of next $2,000 expended

20% of next $1,000 expended	20% of next $2,000 expended

10% of next $1,000 expended	10% of next $2,000 expended

(2) In addition to all other deductions from gross corporate income allowed in computing net income under chapter 31, part 1, a taxpayer may deduct a portion of the taxpayer's expenditure for providing transportation alternatives, in accordance with the following schedule:

100% of the first $2,000 expended

50% of the next $2,000 expended

20% of the next $2,000 expended

10% of the next $2,000 expended

(3) The tax treatment in subsection (1) is subject to approval of the department as provided in 15-32-106 and may not be claimed for so much of the expenditure and capital investment as is financed by a state, federal, or private grant for energy conservation."

NEW SECTION. Section 3. Applicability. [This act] applies to tax periods beginning after December 31, 1999.

- END -