Montana 2025 Regular Session

Montana House Bill HB326

Introduced
1/28/25  
Refer
1/29/25  

Caption

Establish a tax on electrical energy not produced by coal to match coal severance tax rate

Impact

The implications of HB 326 on state laws are significant, as it modifies existing tax structures related to energy production in Montana. The revenue generated from the new electrical energy production tax will be allocated to local government infrastructure projects that historically relied on coal funding. This will potentially support local economies but also raises concerns over fairness and equity in taxing energy sources. The creation of a trust account to manage funds from this tax is designed to facilitate the distribution of these revenues for state and local initiatives.

Summary

House Bill 326 establishes a new taxation framework for the production of electrical energy in Montana, particularly focusing on imposing a severance tax on electrical energy that is generated without the use of coal. The bill creates the State Energy Resource Severance Act, which outlines a tax rate of 2% based on the sale price of electricity for energy producers, while exempting coal-generated energy from this tax. In addition, the bill reduces the severance tax rate on coal to match the rate applied to electrical energy production.

Sentiment

Sentiment around HB 326 appears mixed among legislators and stakeholders. Proponents of the bill argue that it reflects a necessary adaptation to the evolving energy landscape, encouraging greater reliance on renewable energy sources by levying a tax on non-coal production. However, opponents are concerned about the potential economic impact on coal-producers and the communities that depend on coal revenues, fearing that this shift could undermine local economies reliant on coal sales and production.

Contention

Key points of contention in the discussions surrounding HB 326 include the balance of taxation between traditional coal energy and newer electrical energy production methods. Concerns were raised about the ramifications of taxing electrical energy while exempting coal, especially in light of environmental impacts and the energy transition policies. Additionally, discussions about the establishment of a state energy authority, which is contingent upon the passage of this bill, have sparked debates about state versus local control over energy resources and fiscal management.

Companion Bills

No companion bills found.

Previously Filed As

MT SB539

Establish the Water Severance Beneficial Use Act

MT HB454

Provide for a renewable resource electrical production tax

MT SB346

Provide for general fund transfer to coal severance tax trust fund

MT SB97

Implement renewable portfolio standard production tax for property tax relief

MT HB430

Establish a rent local program funded with tax on short-term rentals

MT SB449

Provide limitations on collections of taxes

MT SB510

Provide property tax incentives for alternative fuel production

MT HB485

Revise tax rates for stripper oil production

MT SB387

Revise laws related to coal, coal tax, and coal-fired unit remediation

MT HB55

An act establishing a tax on electric vehicle charging stations

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