AN ACT CLARIFYING THAT FEES RECEIVED BY AN OIL PRODUCER OR OPERATOR TO ADMINISTER ROYALTY PAYMENTS DOES NOT CONSTITUTE VALUE OF OIL PRODUCTION FOR TAX PURPOSES; AMENDING SECTION 15-36-305, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE AND A RETROACTIVE APPLICABILITY DATE.

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

Section 1. Section 15-36-305, MCA, is amended to read:

"15-36-305. Determination of gross value of product. (1) The total gross value of all oil or natural gas produced and sold each quarter must be determined by taking the total number of barrels or cubic feet of oil or natural gas produced and sold each month at the average value at the mouth of the well during the month that the oil or natural gas is produced and sold, as determined by the department. However, in computing the total number of barrels of oil or cubic feet of gas produced and sold, there must be deducted the amount of oil or gas used by the person in connection with the operation of the well from which the oil or gas is produced or for pumping the oil or gas from the well to a tank or pipeline.

(2) For the purposes of determining average value at the mouth of a well, a fee of up to 25 cents a barrel paid to the operator or producer to administer royalty payments, whether or not the fee is payable on a per barrel basis, may not be considered a part of the value of the oil."

Section 2. Effective date. [This act] is effective on passage and approval.

Section 3. Retroactive applicability. [This act] applies retroactively, within the meaning of 1-2-109, to tax years beginning after December 31, 1998.

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I hereby certify that the within bill,

SB 0430, originated in the Senate.

Secretary of the Senate

President of the Senate

Signed this	day

of	, .

Speaker of the House

Signed this	day

of	, .

SENATE BILL NO. 430

INTRODUCED BY G. ROUSH, R. BROWN, E. CLARK, G. DEVLIN, P. EKEGREN, J. ELLINGSON, D. HEDGES, R. HOLDEN, G. JERGESON, C. JUNEAU, T. KEATING, R. LENHART, W. MCNUTT, L. NELSON, S. ROSE, F. SMITH, D. TOEWS, J. WITT

AN ACT CLARIFYING THAT FEES RECEIVED BY AN OIL PRODUCER OR OPERATOR TO ADMINISTER ROYALTY PAYMENTS DOES NOT CONSTITUTE VALUE OF OIL PRODUCTION FOR TAX PURPOSES; AMENDING SECTION 15-36-305, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE AND A RETROACTIVE APPLICABILITY DATE.