Montana/EZ Policies

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EZ Policies for Montana

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Policy Place Policy Type Active Implementing Sector Summary
Alternative Energy Investment Tax Credit (Montana) Montana Industry Recruitment/Support Yes State/Territory Commercial and net metering alternative energy investments of $5,000 or more are eligible for a tax credit of up to 35% against individual or corporate tax on income generated by the investment. The investment must be depreciable. The credit is applied only against taxes due as a consequence of taxable or net income produced by:


  • A manufacturing plant that is located in Montana and that produces alternative energy generating equipment;
  • A new business facility or the expanded portion of an existing business facility that supplies basic energy needed from the alternative energy generating equipment, on a direct contract sales basis; or
  • The alternative energy generating equipment itself.

This credit is available to taxpayers purchasing an existing facility as well as to those building a new facility. While net metered systems are eligible, the tax credit is only for any income generated by the system.

The tax credit must be taken the year the equipment is placed in service; however, any portion of the tax credit that exceeds the amount of tax to be paid may be carried over and applied against state tax liability for the following 7 years. If a project sized 5 megawatts (MW) or larger is installed on an Indian reservation in Montana, a credit may be extended through the 15th tax year succeeding the tax year of installation, provided that the installation meets other specified criteria.

Taxpayers may not take this credit in conjunction with any other state energy or state investment tax benefits, or with the property tax exemption for non-fossil energy property.
Alternative Energy Investment Tax Credit (Corporate) (Montana) Montana Corporate Tax Credit Yes State/Territory Commercial and net metering alternative energy investments of $5,000 or more are eligible for a tax credit of up to 35% against individual or corporate tax on income generated by the investment. The investment must be depreciable. The credit is applied only against taxes due as a consequence of taxable or net income produced by:


  • A manufacturing plant that is located in Montana and that produces alternative energy generating equipment;
  • A new business facility or the expanded portion of an existing business facility that supplies basic energy needed from the alternative energy generating equipment, on a direct contract sales basis; or
  • The alternative energy generating equipment itself.

This credit is available to taxpayers purchasing an existing facility as well as to those building a new facility. While net metered systems are eligible, the tax credit is only for any income generated by the system.

A "net metering system" means a facility for the production of electrical energy that:
(a) uses solar, wind, or hydropower for fuel;
(b) has a generating capacity of 50 kilowatts or less;
(c) is located on the customer-generator's premises;
(d) operates in parallel with the utility's distribution facilities; and
(e) is intended primarily to offset part or all of the customer-generator's requirements for electricity.

The tax credit must be taken the year the equipment is placed in service; however, any portion of the tax credit that exceeds the amount of tax to be paid may be carried over and applied against state tax liability for the following 7 years. If a project sized 5 megawatts (MW) or larger is installed on an Indian reservation in Montana, a credit may be extended through the 15th tax year succeeding the tax year of installation, provided that the installation meets other specified criteria.

Taxpayers may not take this credit in conjunction with any other state energy or state investment tax benefits, or with the property tax exemption for non-fossil energy property.
Alternative Energy Investment Tax Credit (Personal) (Montana) Montana Personal Tax Credit Yes State/Territory Commercial and net metering alternative energy investments of $5,000 or more are eligible for a tax credit of up to 35% against individual or corporate tax on income generated by the investment. The investment must be depreciable. The credit is applied only against taxes due as a consequence of taxable or net income produced by:


  • A manufacturing plant that is located in Montana and that produces alternative energy generating equipment;
  • A new business facility or the expanded portion of an existing business facility that supplies basic energy needed from the alternative energy generating equipment, on a direct contract sales basis; or
  • The alternative energy generating equipment itself.

This credit is available to taxpayers purchasing an existing facility as well as to those building a new facility. While net metered systems are eligible, the tax credit is only for any income generated by the system.

A "net metering system" means a facility for the production of electrical energy that:
(a) uses solar, wind, or hydropower for fuel;
(b) has a generating capacity of 50 kilowatts or less;
(c) is located on the customer-generator's premises;
(d) operates in parallel with the utility's distribution facilities; and
(e) is intended primarily to offset part or all of the customer-generator's requirements for electricity.

The tax credit must be taken the year the equipment is placed in service; however, any portion of the tax credit that exceeds the amount of tax to be paid may be carried over and applied against state tax liability for the following 7 years. If a project sized 5 megawatts (MW) or larger is installed on an Indian reservation in Montana, a credit may be extended through the 15th tax year succeeding the tax year of installation, provided that the installation meets other specified criteria.

Taxpayers may not take this credit in conjunction with any other state energy or state investment tax benefits, or with the property tax exemption for non-fossil energy property.
Alternative Energy Revolving Loan Program (Montana) Montana State Loan Program Yes State/Territory The Alternative Energy Revolving Loan Program (AERLP) provides loans to individuals, small businesses, local government agencies, units of the university system, and nonprofit organizations to install alternative energy systems that generate energy for their own use. The program is funded by air quality penalties collected by the Department of Environmental Quality (DEQ), and also used funding from The American Recovery and Reinvestment Act of 2009 (ARRA). The program is administered by DEQ, which is responsible for developing the rules.

Alternative energy systems are defined by the Montana Code as "the generation system or equipment used to convert energy sources into usable sources." Technologies included in this definition are fuel cells using non-fossil fuels, geothermal, low emissions wood or biomass, wind, photovoltaics, solar water heating, small hydropower (under 1 megawatt), and other recognized non-fossil forms of generation. DEQ provides a technical review and approval of systems proposed for the loan program.

In 2005, SB 50 added local government agencies, units of the university system, and nonprofit organizations to the list of eligible sectors, and allowed energy conservation measures to be financed when installed with an eligible renewable energy project. Energy conservation measures financed by the loan are limited to 20% of the total loan amount. Interest rates are set annually and are fixed for the term of the loan - the rate for 2014 is 3.25%. Some funding from ARRA temporarily boosted the loan amount in April 2010, but loan amounts have returned to previous levels; the maximum loan amount is $40,000, with a maximum loan term of 10 years. Approximately $1 million in funding is available for the period starting July 2013.

DEQ will accept and process loan applications throughout the year. Approved projects will be ranked according to criteria published in the Administrative Rules of Montana (ARM) Title 17, Chapter 85. This criteria includes items such as system reliability, return on investment and avoided fossil fuel consumption. Once a loan is approved, the applicant will be informed as to whether funds are currently available and when new funds are anticipated if funds are not currently available.
Big Sky Trust Fund (Montana) Montana Grant Program Yes State/Province The Big Sky Trust Fund reimburses expenses incurred in the purchase, leasing, or relocation of real assets for direct use of the assisted business or employee training costs. A local or tribal government on behalf of any business may apply. The funding limit of the program is $5,000 per new qualifying job created or $7,500 per qualifying job created in a high poverty county. A dollar for dollar match (or 50% match in a high poverty county) is required of businesses looking to qualify for program funds.
Clean Air Act of Montana (Montana) Montana Siting and Permitting Yes State/Province The purpose of the Clean Air Act of Montana is to achieve and maintain levels of air quality to "protect human health and safety and, to the greatest degree practicable, prevent injury to plant and animal life and property, foster the comfort and convenience of the people, promote the economic and social development of this state, and facilitate the enjoyment of the natural attractions of this state." It is also the purpose of the Act to achieve these goals without unduly compromising individual freedoms. The Act supports the establishment of local and regional air pollution control programs, and provides for a coordinated statewide program of air pollution prevention, abatement, and control. The Act addresses emissions from electricity generating facilities, fossil fuels, and small business stationary sources; ambient air quality standards, monitoring, and reporting; permitting and operating requirements for sources of air pollution; and local air pollution control programs.
Clean and Green Property Tax Incentives (Montana) Montana Property Tax Incentive Yes State/Province In 2007, the Montana Legislature passed House Bill 3 (May special session) that established property tax incentives to encourage energy projects with less environmental impact than conventional facilities. The “Clean and Green” incentives come in three forms.

First, certain facilities and equipment can be classified as either Class 14 or Class 15 Property (15-6-157 and 15-6-158, MCA). These classes are taxed at 3 percent of market value; previously, these facilities may have been taxed at a higher percent of their market value. To qualify for the 3% tax rate, the standard prevailing wages for heavy construction must be paid during construction and some other qualifications may also apply.

Second, high-voltage direct-current converter stations that are constructed in a location and manner so that the station can direct power to two different regional power grids can be classified as Class 16 property. Class 16 property is taxed at 2.25 percent of market value.

Third, a subset of Class 14, 15, and 16 properties are eligible for a property tax abatement of 50 percent for up to 19 years (15-24-3101 et seq. MCA). This abatement applies to all mills levied against the qualifying facility or equipment. For qualifying clean advanced coal research and development equipment or for renewable energy research and development equipment, only the first $1 million of the value receives the abatement.

The Montana Department of Environmental Quality must certify that certain transmission lines, carbon dioxide pipelines and liquid fuel pipelines qualify as Class 14 or 15 property. The Department also certifies any facility or equipment seeking the property tax abatement. A taxpayer starts the process by filling out the appropriate application. Projects eligible for these property tax classifications and abatements are likely to have unique characteristics, so a follow-up interview or inspection may be necessary.
Climate Action Plan (Montana) Montana Climate Policies Yes State/Province Recognizing the profound implications that global warming and climate variation could have on the economy, environment and quality of life in Montana, the Climate Change Advisory Committee (CCAC) was established with the aim of formulating recommendations for specific actions for reducing or sequestering greenhouse gas emissions. The Committee also identified opportunities to promote energy efficient technologies and clean, renewable energy resources that will enhance economic growth. The Montana Department of Environmental Quality (DEQ) managed the CCAC, which was made up of 18 members representing a broad range of stakeholders including industry, environmental groups, local and tribal governments, transportation, and agriculture. The Center for Climate Strategies provided facilitation and technical support to the DEQ and the CCAC.
Coal Bed Methane Protection Act (Montana) Montana Environmental Regulations Yes State/Province The Coal Bed Methane Protection Act establishes a long-term coal bed methane protection account and a coal bed methane protection program for the purpose of compensating private landowners and water right holders for damage to land and to water quality and availability that is attributable to the development of coal bed methane wells. The Act aims to provide for the responsible development of coal bed methane resources while mitigating adverse environmental impacts. However, the provisions of this Act do not relieve coal bed methane developers or operators of their legal obligation to compensate landowners and water right holders for damages caused by the exploration for development of coal bed methane. The Coal Bed Methane Protection Program is administered by local Conservation Districts in the state.
Coal Severance Tax (Montana) Montana Fees Yes State/Province The Coal Severance Tax replaces and streamlines previous coal taxes to:

(a) allow the severance taxes on coal production to remain a constant percentage of the price of coal; (b) stabilize the flow of tax revenue from coal mines to local governments through the property taxation system; (c) simplify the structure of coal taxation in Montana, reducing tax overlap and improving the predictability of tax projections; (d) recognize the economic, transportation, and environmental advantages of electrical generation by modern electrical generation plants near coal mines; and (e) accomplish the purposes of this subsection by establishing categories of taxation that recognize the unique character of coal, as well as the variations found within the coal industry, and by encouraging the use of coal to produce electricity in modern generating plants near the coal mine.

Persons producing less than 50,000 tons of coal in a year are exempt from the severance tax. Persons producing in excess of 50,000 tons per year are exempt from the severance tax on the first 20,000 tons produced. The first 2 million tons of coal produced as "feed stock" for a coal enhancement facility is exempt.

Funds from the Coal Severance Tax are placed into a tax trust bond fund, which is used as a reserve fund to guarantee repayment of state bonds for renewable resource projects if the normal funding source is unavailable.
Community Development Block Grant/Economic Development Infrastructure Financing (United States) United States Grant Program
Loan Program
Yes Federal Community Development Block Grant/Economic Development Infrastructure Financing (CDBG/EDIF) provides public infrastructure financing to help communities grow jobs, enable new business startups and expansions for existing businesses. State programs help achieve the national objective of CDBG by funding projects in which at least 51 percent of the new jobs created are made available to low and moderate income individuals. The maximum amounts awarded under the program are $1 million for new businesses locating to the state and $500,000 for existing businesses expanding in the state.
Comprehensive Environmental Cleanup and Responsibility Act (Montana) Montana Environmental Regulations Yes State/Province The Comprehensive Environmental Cleanup and Responsibility Act contains general provisions (sections 705-729), along with the Voluntary Cleanup and Redevelopment Act (sections 730-738) and the Controlled Allocation of Liability Act (sections 742-751). Together, the three sections describe state regulations pertaining to remedial actions following the release of hazardous substances. Private parties are encouraged to clean up sites where such releases have occurred, and funding is allocated to study, plan, and undertake the rehabilitation, removal, and cleanup of sites within the state at which no voluntary action has been taken.
Conservation Districts (Montana) Montana Siting and Permitting Yes Local Local Conservation Districts in the state of Montana may be formed by approval of the Department of Natural Resources and Conservation and local referendum, to take place following a petition by 10% of qualified local electors. When formed, Conservation Districts function as governmental subdivisions of the state and may exercise public powers, such as by adopting and implementing regulations regarding local conservation, water and land use practices, and erosion control. The Department of Natural Resources and Conservation is tasked with encouraging the formation of Conservation Districts, offering assistance to Districts in carrying out policies and programs, and coordinating programs between Districts.
Corporate Property Tax Reduction for New/Expanded Generating Facilities (Montana) Montana Property Tax Incentive Yes State/Territory Montana generating plants producing one megawatt (MW) or more with an alternative renewable energy source are eligible for the new or expanded industry property tax reduction. This incentive reduces the local mill levy during the first nine years of operation, subject to approval by the local government. If approved, the facility is taxed at 50% of its taxable value in the first five years following the issuance of the construction permit. Each year thereafter, the tax reduction decreases and the taxable value percentage is increased in equal increments until the full taxable value is attained in the tenth year. The tax reduction applies only to taxes levied for the local high schools and elementary schools and for the local government offering the reduction.

The taxable value varies, depending on the property ownership. If owned by a utility, an exempt wholesale generator or certain other electricity producers, the property is class 13 property and would otherwise be taxed at 6% of assessed value. If owned by an electric cooperative, the property is class 5 and would otherwise be taxed at 3% of assessed value. Certain electric cooperatives fall under class 7 or class 9 and property owned by those cooperatives is taxed at 8% of assessed value and 12% of assessed value, respectively. If owned by any other business, the real property is class 4 and would otherwise be taxed at 2.47% of assessed value. Personal property is class 8 with a tax rate of up to 3% of assessed value. The assessed value of class 4 property is adjusted every six years, and the assessed value of the other classes is adjusted yearly.
Drainage Districts (Montana) Montana Environmental Regulations Yes State/Province A Drainage District may be created by petition of landowners who desire to construct one or more drains, ditches, levees, waste ditches, or other works across the lands of others or to straighten, widen, deepen, or otherwise alter any natural stream or watercourse not navigable. Such activities must be for the promotion of the public health or welfare and the drainage of the lands and removal of surface waters therefrom; or the desire to maintain and keep in repair any such drain, ditch, or levee heretofore constructed under any law of this state. This section provides information pertaining to the creation, dissolution, operation, and alteration of such districts. Districts are authorized to issue bonds and otherwise finance relevant projects, and to participate in flood control and planning, as well as development activities.
Electrical Energy Producer's License Tax (Montana) Montana Fees Yes State/Province Each person or other organization engaged in the generation, manufacture, or production of electricity and electrical energy in the state of Montana, either through waterpower or by any other means, is required to pay a quarterly license tax of $.0002 per kilowatt hour on all electricity and electrical energy generated, manufactured, or produced, as measured at the place of production. There is no production incentive; however, an interest differential credit is allowed to utility providers for low-interest loans provided to customers for energy efficiency improvements.
Electrical Generation Tax Reform Act (Montana) Montana Fees Yes State/Province This Act reforms taxes paid by electricity generators to reduce tax rates and imposes replacement taxes in response to the 1997 restructuring of the Montana electric utility industry that allows Montana customers to choose their supplier of electricity and related services in a competitive market. The Act reduces property taxes applied to electrical generation facilities while adding a wholesale energy transaction tax imposed on each kilowatt hour of electricity transmitted in the state.
Empowerment Zone Tax Credit (Montana) Montana Corporate Tax Incentive Yes State/Province The Empowerment Zone Tax Credit allows for eligible businesses located in such zones a $500 credit against income tax liability for each qualifying employee the first year, $1,000 for the second year and $1,500 for the third year of employment. If the credit exceeds the taxpayers' income tax liability, the credit may be carried forward 7 years and carried back 3 years. In addition to the income tax credits, the employer is also entitled to a credit against the taxes imposed by the insurance premium tax.
Exemption from Wholesale Energy Transaction Tax (Montana) Montana Corporate Tax Incentive
Personal Tax Incentives
Yes State/Province Electricity from wind generation on state lands is exempt from the wholesale energy transaction tax of $0.00015/kWh transmitted. Electricity from any source, including renewables, that is generated on a reservation is exempt if it is for delivery out of state. Electricity generated by a US government agency for delivery outside the state and electricity from any source delivered to members of a cooperative or municipal is exempt from the WET tax.
Exploration Incentive Tax Credit (Montana) Montana Personal Tax Incentives Yes State/Province The Mineral and Coal Exploration Incentive Tax Credit provides tax incentives to entities conducting exploration for minerals and coal. Expenditures related to the following activities are eligible for tax incentives:
    (a) surveying by geophysical or geochemical methods;
    (b) drilling exploration holes;
    (c) conducting underground exploration;
    (d) surface trenching and bulk sampling; or
    (e) performing other exploratory work, including aerial photographs, geological and geophysical logging, sample analysis, and metallurgical testing.
Some exceptions apply. The credit may not exceed 50% of the person's tax liability. A credit for each distinct mining operation may not exceed a total of $20 million for all exploration activities and accrues at the rate of 50% of the certified expenditures each year. The credit must be applied within 15 tax years after the taking of the credit. However, the tax year or years in which the credit is applied need not be the tax year in which the person first incurs liability for payment of tax based on the person's activity that is the basis of the claim for the credit; or consecutive tax years.
Flathead Basin Commission Act (Montana) Montana Environmental Regulations Yes Local This Act establishes the Flathead Basin Commission, the purpose of which is to protect the Flathead Lake aquatic environment, its waters, and surrounding lands and natural resources. The Commission will monitor the natural resources of the basin and make recommendations, and will provide for economic development and use of natural resources which does not compromise the environmental quality of the area.
Flood Plain and Floodway Management (Montana) Montana Siting and Permitting Yes State/Province The state regulates flood-prone lands and waters to prevent and alleviate flooding threats to life and health and reduce private and public economic losses. The purpose of 76-5 MCA, parts 1-4 is to manage and guide the development of state floodway areas and to coordinate federal, state, and local management activities.

Under this statute, the Department of Natural Resources and Conservation will survey and designate flood plains and floodways for each watercourse and drainway in the state. The Department will also set minimum standards for use and development of floodplains and floodways. Upon receipt of the survey information, local governments are responsible for setting land use regulations that meet or exceed the standards set by the Department. Some open-space uses are allowed within designated areas, but permits from the Department are required for other projects, including the construction of structures. Additionally, the following uses are prohibited within designated floodways:

    (1) a building for living purposes or place of assembly or permanent use by human beings;
    (2) a structure or excavation that will cause water to be diverted from the established floodway, cause erosion, obstruct the natural flow of water, or reduce the carrying capacity of the floodway;
    (3) the construction or permanent storage of an object subject to flotation or movement during flood level periods.

Some exemptions apply (see section 76-5-4). Local governments may adopt the authority to issue permits by petitioning the Department.

The purpose of 76-5 MCA, part 11 is to describe the water conservation and flood control projects that may be initiated by local and municipal governments.
Forestry Policies (Montana) Montana Environmental Regulations Yes State/Province Montana has over 20 million acres of public and private forested lands, about a quarter of the state's land area. Montana's Forests are managed by the Department of Natural Resources and Conservation's Forestry Division. The DNRC's 2010 Statewide Forest Resource Strategy document specifies the promotion and facilitation of forest biomass for energy generation as a key strategic goal:

http://dnrc.mt.gov/Forestry/Assistance/Documents/SAResponseStrategy2010.pdf

The DNRC also offers financial assistance under its Woody Biomass Utilization program, with a mission to promote the beneficial use of forest biomass in the state. Current grants include a biomass utilization grant and energy assessment grant: http://dnrc.mt.gov/forestry/assistance/biomass/default.asp http://dnrc.mt.gov/Forestry/Assistance/Biomass/FinAsst/FinAsst.asp#resources

In 2009, the DNRC completed an inventory of forest biomass supply, "An Assessment of Forest-based Woody Biomass Supply and Use in Montana":

http://dnrc.mt.gov/forestry/Assistance/Biomass/Documents/MT_WoodyBiomassAssessment.pdf
Game Preserves and Closed Areas (Montana) Montana Environmental Regulations Yes State/Province Game preserves and closed areas exist within the state of Montana for the protection of all the game animals and birds. Construction and development is limited in these areas. Currently, only three such preserves are listed: the Sun River preserve, the Flathead Lake bird preserve, and the Gates of the Mountains game preserve (as described in pts. 403, 404, and 406).
Generation Facility Corporate Tax Exemptions (Montana) Montana Property Tax Incentive Yes State/Territory New electricity generating facilities built in Montana with a capacity of up to one megawatt (MW) that use an alternative renewable energy source are exempt from property taxes for five years after operation begins. The taxable value of the property varies depending on the property ownership and class. The assessed value of personal property is adjusted yearly based on a trend factor that reflects the relevant rate of inflation and on the Montana Department of Revenue’s depreciation schedule. State property tax exemption forms are available at the Department of Revenue’s county office.

"Alternative renewable energy source" includes energy sources such as solar energy, wind energy, geothermal energy, conversion of biomass, fuel cells that do not require hydrocarbon fuel, small hydroelectric generators, and methane from solid waste that is used to generate energy in a useful form, including electricity.
Geophysical Exploration (Montana) Montana Siting and Permitting Yes State/Province An exploration permit is required for any entity conducting geophysical exploration within the state of Montana. Such entities are also required to follow rules adopted by the Board of Oil and Gas Conservation, including those pertaining to:
 (a) Adequate identification of seismic exploration crews operating in this state;
 (b) Areas where seismic exploration and activities may not be allowed; and
(c) The plugging and abandonment of seismic shot holes.
Geothermal Resources on State Lands (Montana) Montana Leasing Program Yes State/Province This chapter authorizes the leasing of state-owned lands for the development of geothermal resources, and provides regulations pertaining to the nature of the resources, compensation, and water rights, as well as for the duration, extension, and operation of the lease.
Grass Conservation Act (Montana) Montana Siting and Permitting Yes State/Province The Grass Conservation Act provides for the conservation, protection, restoration, and proper utilization of grass, forage, and range resource of the state of Montana. The Act establishes the Montana Grass Conservation Commission to coordinate between the Department and Conservation Districts on issues pertaining to grass conservation, and act in an advisory capacity to the Department. Under the Act, property and livestock owners may petition the Commission to establish a Grazing District. Membership in Grazing Districts is limited to persons engaged in the livestock business and owners or leasers of forage lands. Grazing District Boards may set land use regulations and distribute permits for grazing rights on land in their jurisdiction.
Growth Through Agriculture (GTA) Program (Montana) Montana Grant Program Yes State/Province The Agriculture Development Council is tasked with enhancing the future development of agriculture in Montana through establishing policies and priorities, and awarding loans or grants that have a short-term or long-term ability to stimulate agriculture development and diversification in rural, urban, and tribal settings in Montana. The Council administers the Growth Through Agriculture (GTA) program, a grant and loan program established by the Montana Legislature to strengthen and diversify Montana's agricultural industry through the development of new agricultural products and processes.
Hydroelectric Resources on State Lands (Montana) Montana Leasing Program Yes State/Province This chapter authorizes the leasing of state lands for the development of hydroelectric resources. It provides regulations for the granting and duration of leases, as well as for the inspection of leased sites.
Industrial Development Projects (Montana) Montana Bond Program Yes State/Province This legislation authorizes municipalities and counties to issue bonds or interest coupons to finance industrial projects, including energy generation facilities.
Interconnection Standards (Montana) Montana Interconnection Yes State/Territory In July 2010, the Montana Public Service Commission (PSC) adopted interconnection rules, effective August 13, 2010. These rules apply to all electric utilities under the PSC's jurisdiction, including investor-owned utilities and co-ops. Small generators, or systems up to 10 megawatts (MW) located on the land of utility customers within good standing are allowed to interconnect. While there is no statewide standard interconnection agreement, the largest investor-owned utility in Montana, NorthWestern, does have a standard interconnection agreement for net-metered systems. The use of certain equipment may qualify a facility for an expedited interconnection review.

Background

Until August 2010, Montana had interconnection guidelines dictated by the net metering legislation, enacted in 1999. These guidelines required interconnected facilities to comply with all national safety, equipment and power-quality standards established by the National Electrical Code (NEC), the Institute of Electrical and Electronic Engineers (IEEE), the National Electrical Safety Code (NESC) and Underwriters Laboratories (UL). Net metering applies to systems up to 50 kilowatts (kW) in capacity that generate electricity using hydropower, wind or solar energy. The law does not set a limit on the aggregate capacity of systems interconnected to each utility's distribution system.
Interstate Oil and Gas Conservation Compact (Montana) Montana Environmental Regulations Yes State/Province This legislation authorizes the State to join the Interstate Compact for the Conservation of Oil and Gas. The Compact is an agreement that has been entered into by 30 oil- and gas-producing states, as well as eight associate states and 10 international affiliates (including seven Canadian provinces). Members participate in the Interstate Oil and Gas Compact Commission, which functions as a forum for governors, state appointees and key policy staff focusing on key oil and natural gas issues, and tracks, evaluates, and disseminates information on state activities and best practices.
Interstate Oil and Gas Conservation Compact (Multiple States) Alabama
Alaska
Arizona
Arkansas
California
Colorado
Florida
Georgia
Idaho
Illinois
Indiana
Kansas
Kentucky
Louisiana
Maryland
Michigan
Mississippi
Montana
Nebraska
Nevada
New Mexico
New York
North Dakota
Ohio
Oklahoma
Pennsylvania
South Dakota
Texas
Utah
Virginia
West Virginia
Wyoming
Environmental Regulations Yes State/Province The Interstate Oil and Gas Compact Commission assists member states efficiently maximize oil and natural gas resources through sound regulatory practices while protecting the nation's health, safety and the environment.

The Commission serves as the collective voice of member governors on oil and gas issues and advocates states' rights to govern petroleum resources within their borders.

The Commission formed the Geological CO2 Sequestration Task Force, which examines the technical, policy and regulatory issues related to safe and effective storage of CO2 in the subsurface (depleted oil and natural gas fields, saline formations and coal beds).

The Commission also funds research on hydraulic fracking, reusing water used in extracting oil and gas, and makes recommendations on national energy policies and statutes for individual states.

The Commission also has several associate states: North Carolina, South Carolina, Georgia, Tennessee, Missouri, Idaho, Oregon and Washington. In addition, it has international affiliations with the Canadian provinces of Alberta, British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, Saskatchewan, and the Yukon.
Lakeshore Management by Local Governments (Montana) Montana Siting and Permitting Yes State/Province This statute grants primary authority to local governments to establish laws and regulations to conserve and protect lakes in their jurisdiction, provided that this authority is used to maintain public health, welfare, and safety. For the purpose of these regulations, lakes are defined as water bodies with a water surface area of at least 160 acres. However, local governments may choose to redefine the minimum size of a lake to a water surface area of no less than 20 acres. Permits from the local governing body are required for any work that will alter or diminish the course, current, or cross-sectional area of a lake or its lakeshore. This statute sets some guidelines for local governments regarding permit issuance. The Department of Natural Resources and Conservation may set regulations for a given lake following petition by five owners or 30% of the owners of land abutting a lake, whichever is smaller.
Local Government Revenue Bonds (Montana) Montana Bond Program Yes Local Limited obligation local government bonds ("special revenue bonds") may be issued for qualified electric energy generation facilities, including those powered by renewables. These bonds generally are secured by the project itself. The taxing power or general credit of the government may not be used to secure the bonds. Local governments may not operate any project financed by the sale of revenue bonds as a business except to lease it to some other party.

These bonds are exempt from state taxes and may qualify for federal tax incentives. The tax-exemption feature allows funds to be borrowed at a significantly lower rate (1-2 percent) than possible with taxable bonds. There are various restrictions on how such bonds may be used. Because of the legal complexity of a bond issue, retaining bond counsel is important.

The total amount of special revenue bonds that can be issued by state and local governments combined is capped, which theoretically could limit a government’s ability to issue new bonds for a generation facility.
Local Water Quality Districts (Montana) Montana Siting and Permitting Yes State/Province This statute provides for the creation of local water quality districts to prevent and mitigate ground and surface water contamination. Each local water quality district may develop and implement a local water quality program, administer local ordinances, and construct and maintain facilities necessary to accomplish the purposes of the district.
Mandatory Utility Green Power Option (Montana) Montana Mandatory Utility Green Power Option Yes State/Territory In Montana, regulated electric utilities are required to offer customers the option of purchasing electricity generated by certified, environmentally-preferred resources that include, but are not limited to, wind, solar, geothermal and biomass. NorthWestern Energy implemented a green-power program ("E+ Green") in June 2003.
Microbusiness Loan Program (Montana) Montana Loan Program Yes State/Province Businesses producing energy using an alternative renewable energy source are eligible for microbusiness loans, which are capped at $100,000. A microbusiness is a Montana-based company with fewer than ten full-time employees and a gross annual revenue of less than $1 million. Application for a loan is made to a certified microbusiness development corporation; there currently are five located around the state.
Midwest Independent System Operator (Multiple States) Montana
North Dakota
South Dakota
Minnesota
Iowa
Missouri
Wisconsin
Illinois
Michigan
Indiana
Kentucky
Manitoba
Interconnection Yes Non-Profit Midwest Independent Transmission System Operator (MISO) is a Regional Transmission Organization, which administers wholesale electricity markets in all or parts of 11 U.S. states and the Canadian province of Manitoba. MISO administers electricity transmission grids across the Midwest and into Canada, and provides tools, transmission planning strategies, and integration for utilities in those markets. MISO is working with PJM Interconnection to develop complementing system operations and one robust, non-discriminatory wholesale electricity market to meet the needs of all customers and stakeholders in 23 states, the District of Columbia and the Canadian province of Manitoba. The market is being developed through an open stakeholder process and is being designed to serve residents regardless of whether they reside in states with bundled or unbundled retail rates.
Midwest Renewable Energy Tracking System (Multiple States) Illinois
Iowa
Minnesota
Montana
North Dakota
Ohio
South Dakota
Wisconsin
Manitoba
Green Power Purchasing Yes Non-Profit The Midwest Renewable Energy Tracking System (M-RETS®) tracks renewable energy generation in participating States and Provinces and assists in verifying compliance with individual state/provincial or voluntary Renewable Portfolio Standards (RPS) and objectives. M-RETS® is a tool to keep track of all relevant information about renewable energy produced and delivered in the region. Currently, several States and Provinces participate in M-RETS®: Illinois, Iowa, Manitoba, Minnesota, Montana, North Dakota, Ohio, South Dakota, and Wisconsin have policies in place requiring or strongly encouraging utility development of renewable resources. M-RETS® uses verifiable production data for all participating generators and creates a Renewable Energy Credit (REC) in the form of a tradable digital certificate for each MWh.
Mining (Montana) Montana Siting and Permitting Yes State/Province This section provides general rules and regulations pertaining to mining practices in the state of Montana. It addresses mining locations and claims, procedures for rights-of-way and eminent domain, land ownership, and landowner notification. The Montana Bureau of Mines and Geology is authorized to establish a sand and gravel deposit program under this statute.
Montana Beginning Farm/Ranch Loan Program (Montana) Montana Loan Program Yes State/Province Loans subsidized by tax-exempt bonds issued by the Montana Agricultural Loan Authority may be used for the production of energy using an alternative renewable energy source. The program is run through existing private agricultural lenders. The intent is to provide lower interest (1-2 percent below market) loans up to $477,000 to eligible beginning agricultural operators. To meet IRS regulations, the energy generated must be used within the agricultural operation.
Montana Clean Renewable Energy Bond Act (Montana) Montana Bond Program Yes Local This legislation gives local government bodies the authority to acquire, construct, and operate projects, as well as the authority to issue revenue bonds to finance in whole or in part the cost of the acquisition, purchase, construction, reconstruction, improvement, or extension of any renewable energy project.
Montana Coal Mining Code (Montana) Montana Environmental Regulations Yes State/Province The Department of Labor and Industry is authorized to adopt rules pertaining to safety standards for all coal mines in the state. The Code requires coal mine operators to make an accurate map or plan of each mine, which must be provided to the Department and updated on the basis of semiannual surveys. The Code lists other duties of the mine operator, including reporting of the amount of coal produced, providing and maintaining airways, and giving notice of certain occurrences, injuries, and fatalities. Part 4 of the Code lists rules for coal mine inspections, investigations, and compliance.
Montana Dam Safety Act (Montana) Montana Siting and Permitting Yes State/Province This Act establishes the state's interest in the construction of dams for water control and regulation and for hydropower generation purposes. It regulates dam construction, operation, and permitting in order to minimize inherent risks to public safety, and authorizes the Department of Natural Resources and Conservation to adopt rules to:
    (1) classify high-hazard dams and reservoirs;
    (2) review, approve, and issue permits;
    (3) govern inspections under this chapter;
    (4) establish safety standards for the design, construction, operation, and maintenance of high-hazard dams and reservoirs;
    (5) establish emergency preparedness and warning procedures; and
(6) establish fees commensurate with costs to cover inspections under this chapter.
Montana Electric Cooperatives - Net Metering (Montana) Montana Net Metering Yes Utility The Montana Electric Cooperatives' Association (MECA) adopted model interconnection guidelines in 2001 and a revised net-metering policy in September 2008. Net metering is available in whole or part by most of the 26 electric cooperatives in Montana. A map of the service areas of each of member cooperative is available on the MECA web site. To determine if a specific cooperative offers net metering, view the MECA map to obtain contact information for that cooperative.

Under the model policy, customers who generate electricity using a renewable source including, but not limited to, wind, solar, geothermal, hydroelectric or fuel cells are eligible for net metering. Net metering is defined as the interconnection of member-owned generation from a renewable resource to the cooperative's facilities, in which the generation output of energy not used at the service is netted against the energy delivered by the cooperative within the following guidelines:

  • The cooperative will not purchase energy produced by the member.
  • The maximum individual system capacity is 10 kilowatts (kW).
  • Member generation is intended primarily to offset part or all of the member’s own electrical requirements.
  • Costs associated with interconnection and administering net metering are the responsibility of the customer-generator.
  • A standard meter may be allowed to turn the direction the power flows. Two meters may be required if needed for automated meter-reading systems.
  • Customer net excess generation (NEG) may be carried over to the next monthly billing period.
  • At the end of the 12 month billing period, any remaining unused kilowatt-hours (kWh) must be granted to the cooperative.
  • Owners of net-metered systems will be assessed monthly for cooperative costs and expenses, including distribution and transmission costs and expenses.
  • Customer-generators must sign an interconnection agreement with the cooperative.
Montana Environmental Policy Act (Montana) Montana Environmental Regulations Yes State/Province The Montana Environmental Policy Act aims to provide for the consideration of environmental impacts by the legislature when enacting laws, and for public transparency regarding the possible environmental impacts of potential state actions. The policy of the state is to support harmony between humans and their environment as well as efforts to prevent, mitigate, or eliminate environmental damage and to gain a greater understanding of the environment, without imposing undue government regulation on private property. The Act specifies that the planning and decision-making process for state-sponsored projects will include the creation and consideration of Environmental Impact Statements, which will address the potential environmental impacts and adverse effects of the proposed action, as well as reasonable alternatives. The Environmental Quality Council is tasked with monitoring environmental quality, reviewing and appraising state environmental programs, and making recommendations to the legislature regarding environmental policy.
Montana Ground Water Assessment Act (Montana) Montana Environmental Regulations Yes State/Province This statute establishes a program to systematically assess and monitor the state's ground water and to disseminate the information to interested persons in order to improve the quality of ground water management, protection, and development decisions within the public and private sectors. It also aims to improve coordination of ground water management, protection, development, and research functions among units of state, federal, and local government by establishing a ground water assessment steering committee.
Montana Hazardous Waste Act (Montana) Montana Siting and Permitting Yes State/Province This Act addresses the safe and proper management of hazardous wastes and used oil, the permitting of hazardous waste facilities, and the siting of facilities. The Department of Environmental Quality is authorized to enact regulations pertaining to all aspects of hazardous waste storage and disposal, and the Act addresses permitting requirements for disposal facilities; siting, monitoring, and reporting requirements; and hazardous waste remediation.
Montana Integrated Waste Management Act (Montana) Montana Industry Recruitment/Support Yes State/Province This legislation sets goals for the reduction of solid waste generated by households, businesses, and governments, through source reduction, reuse, recycling, and composting. The state aims to achieve recycling and composting rates of:
 (a) 17% of the state's solid waste by 2008;
 (b) 19% of the state's solid waste by 2011; and
 (c) 22% of the state's solid waste by 2015.
In addition, the Department of Environmental Quality is required to prepare, adopt, and implement a state solid waste management and resource recovery plan.
Montana Major Facility Siting Act (Montana) Montana Siting and Permitting Yes State/Province The Montana Major Facility Siting Act aims to protect the environment from unreasonable degradation caused by irresponsible siting of electric transmission, pipeline, and geothermal facilities. The Act encourages upgrades within existing corridors, when possible, versus the creation of new corridors for the transmission of electricity, pipelines, and geothermal resources. The Board of Environmental Review is authorized to adopt additional regulations to further the goals of this Act. Entities issued a certificate to construct or alter major facilities per this chapter may invoke eminent domain to acquire property to aid in that task. The remainder of chapter (parts 2-12) contains provisions for acquiring certifications for the construction or alteration of major facilities, legal responsibilities attached to such certifications, required notification prior to exploration for geothermal resources, and additional requirements for nuclear power facilities.
Montana Natural Areas Act (Montana) Montana Environmental Regulations Yes State/Province The Montana Natural Areas Act of 1974 provides for the designation and establishment of a system of natural areas in order to preserve the natural ecosystems of these areas. Designated natural areas are protected from development which may adversely affect the integrity of the area, unless the legislature specifically authorizes such development. Existing land uses at the time of designation may continue under appropriate leases or agreements, but will be subject to regulations established by the Board of Land Commissioners. State natural areas are managed by local managing entities.
Montana Oil and Natural Gas Production Tax Act (Montana) Montana Fees Yes State/Province The State of Montana imposes a quarterly tax on the gross taxable value of oil and natural gas production. This tax replaces several previous taxes, simplifying fees and rates as well as compliance procedures for oil and natural gas producers.
Montana Radon Control Act (Montana) Montana Environmental Regulations Yes State/Province The Radon Control Act regulates the emission of radon, the gaseous decay products of uranium or thorium. The Act addresses operator certification of radon-producing facilities, testing and monitoring requirements, voluntary disclosure of information to the Department of Environmental Quality, and mandatory disclosures during real estate transactions.
Montana Rangeland Resources Act (Montana) Montana Environmental Regulations Yes State/Province The Montana Rangeland Resources Act establishes a program of rangeland management, to preserve Montana rangeland for livestock, wildlife habitat, high-quality water production, pollution control, erosion control, recreation, and the natural beauty of the state. The Act also provides for the cooperation and coordination of range management activities. The program aims to promote and coordinate the adoption and implementation of sound range management plans to minimize conflicts between governmental agencies and private landowners, aid the development of zoning and planning regulations, and coordinate range management research. The Act further establishes a loan program to aid the conservation of rangeland resources.
Montana Solid Waste Management Act (Montana) Montana Environmental Regulations Yes State/Province It is the public policy of the state to control solid waste management systems to protect the public health and safety and to conserve natural resources whenever possible. The Department of Environmental Quality is authorized to adopt rules and regulations governing solid waste management systems. This statute contains provisions pertaining to groundwater monitoring, disposal of specific types of wastes, and licensing requirements.
Natural Gas Utility Restructuring and Customer Choice Act (Montana) Montana Generating Facility Rate-Making Yes State/Province These regulations apply to natural gas utilities that have restructured in order to acquire rate-based facilities. The regulations address customer choice offerings by natural gas utilities, which are intended to allow customers to choose their natural gas supplier.
Natural Streambed and Land Preservation Act (Montana) Montana Siting and Permitting Yes State/Province The Natural Streambed and Land Preservation Act of 1975 aims to prevent the environmental degradation of streams and land resources, and to provide reasonable remedies for the depletion of these resources. The Act establishes that streams and adjacent lands within the state are to be preserved, that soil erosion and sedimentation are to be kept to a minimum, and that unauthorized projects in these areas are prohibited. The Act sets procedures for project applications, permitting, maintenance, and operation.
Net Metering (Montana) Montana Net Metering Yes State/Territory Montana's net-metering law, enacted in July 1999, applies to all customers of investor-owned utilities. Systems up to 50 kilowatts (kW) in capacity that generate electricity using solar, wind or hydropower are eligible. No limit on enrollment or statewide installed capacity is specified. Utilities may not require customer-generators to comply with any additional standards or requirements beyond those established by the National Electric Code, National Electrical Safety Code, Institute of Electrical and Electronic Engineers (IEEE), and Underwriters Laboratories (UL).

Net excess generation (NEG) is credited to the customer's next monthly bill. The customer may choose to start the net metering period at the beginning of January, April, July or October to match seasonal farming cycles. At the beginning of the year -- either in January, April, July or October, depending on the customer's choice -- any remaining unused kilowatt-hour (kWh) credits accumulated during the previous year are granted to the utility.

Montana's electric cooperative utilities developed a draft net-metering agreement in 2001; this agreement has been adopted by most of the state's cooperatives. Contact your electric cooperative to find out if net metering is available.
New Industrial Property Tax Credit (Montana) Montana Property Tax Incentive Yes State/Province Under the New Industrial Property Tax Credit, businesses are eligible for a reduced taxable valuation rate of 3% for the first three years of operation. All real and personal property of the new industry qualify.
New or Expanding Industries Tax Credit (Montana) Montana Property Tax Incentive Yes State/Province Under the New or Expanding Industries Tax Credit, property used by certain new or expanding industries is eligible for reduced taxable valuation (up to 50% of their taxable value for the first 5 years) during the first 9 years after construction or expansion. Industry includes firms that engage in a variety of activities, including the production of renewable energy.
NorthWestern Energy - E+ Business Partners Program (Montana) Montana Utility Grant Program No Utility The E+ Business Partners Program offers funding for local energy conservation and load management projects in new and retrofit applications including commercial, institutional, industrial, agricultural, and multi-family residential facilities/systems. It is not available for businesses already enrolled in the electric “Choice” programs.

NWE will examine the level of funding or advisory services it will invest in specific conservation or load management measures based on the life expectancy, reliability, and availability of the conservation resource, cost to NWE of administering the project, level of design assistance funding already attained, the projected payback to the entity owner, funding available from other sources, the value to the distribution system, and the renewable resource available.

Projects must demonstrate the cost-effectiveness of specific conservation and/or load management measures. These projects must also assure reliability and availability of equipment, while demonstrating the availability of qualified design services, contractors, and maintenance services. The deadline for proposals under this Request for Proposals (RFP) is December 31, 2011 and could be extended. Customers should call their Regulatory Support Services department at 1-888-700-6878 more information.
NorthWestern Energy - USB Renewable Energy Fund (Montana) Montana Utility Rebate Program Yes Utility NorthWestern Energy (NWE), formerly Montana Power Company, periodically provides funding to its customers for renewable energy projects. In 1997, Montana established the Universal System Benefits (USB) program. The USB legislation requires all electric and gas utilities to establish USB funds for low-income energy assistance, weatherization, energy efficiency activities, and development of renewable energy resources. A typical NorthWestern Energy residential customer pays approximately $1 per month in electric USB charges. About $9 million is collected annually by NorthWestern, and about $1.2 million is used for renewable energy projects.

Most renewable energy projects include a public education or demonstration component to increase awareness of renewable energy. Residential solar PV incentives are available at a fixed rate of $2,000 per customer. The smallest residential system size supported is 2 kilowatts (kW). Commercial solar PV incentives are $0.50/watt, with a maximum of $25,000 per customer. The largest commercial system size supported is fifty kW. The incentive for wind is $2/watt to a maximum of $10,000 per customer.


In order for a customer to receive the funds, the work must be completed by a NorthWestern Energy qualified dealer or installer, as directed by NorthWestern Energy's qualification requirements. Off-grid installations inside NWE's service territory are not eligible for USB funds.
Northwest Interstate Compact on Low-Level Radioactive Waste Management (Multiple States) Alaska
Hawaii
Idaho
Montana
Oregon
Utah
Washington
Wyoming
Siting and Permitting Yes State/Province The Northwest Interstate Compact on Low-Level Radioactive Waste Management, enacted in 1981, was ratified by Congress in 1985. The Compact is a cooperative effort of the party states to protect their citizens, and maintain and enhance economic viability, while sharing the responsibilities of low-level radioactive waste management. The member states of Alaska, Hawaii, Idaho, Montana, Oregon, Utah, Washington, and Wyoming have ratified the Compact.
Nuclear Regulation (Montana) Montana Siting and Permitting Yes State/Province This statute establishes a regulatory program for sources of ionizing radiation, to be administered by the Montana Department of Health and Human Services. These regulations address permitting and licensing of nuclear facilities for peaceful purposes, the control and disposal of radioactive substances, and inspection and enforcement procedures.
Oil and Gas Conservation (Montana) Montana Environmental Regulations Yes State/Province Parts 1 and 2 of this chapter contain a broad range of regulations pertaining to oil and gas conservation, including requirements for the regulation of oil and gas exploration and extraction by the Board of Oil and Gas, as well as well spacing and operation requirements. Specific regulations are also found in the Administrative Rules of Montana, 36.22.
Oil and Gas General Provisions (Montana) Montana Siting and Permitting Yes State/Province This chapter describes general provisions for the exploration and development of oil and gas resources in Montana. The chapter addresses royalty interests, regulations for the lease of local government land, underground gas storage reservoirs and the use of eminent domain, reclamation procedures for abandoned oil and gas wells, and disruption notice and compensation for landowners.
Opencut Mining Act (Montana) Montana Siting and Permitting Yes State/Province The policy of the state is to provide adequate remedies to protect the environmental life support system from degradation and to prevent unreasonable depletion and degradation of natural resources from strip and underground mining. This Act imposes permitting and operating restrictions on opencut mining activities. The Act contains permitting, siting, and procedural requirements; more specific regulations can be found in the Administrative Rules of Montana.
Pipeline Carriers (Montana) Montana Siting and Permitting Yes State/Province Pipeline carriers transporting crude petroleum, coal, the products of crude petroleum or coal, or carbon dioxide produced in the combustion or gasification of fossil fuels are required to abide by these regulations. The regulations address construction permits and the use of eminent domain by pipeline carriers, records and reporting, connection and interchange facilities, and the prohibition of discrimination in rates and service.
Property Tax Abatement for Production and Manufacturing Facilities (Montana) Montana Industry Recruitment/Support Yes State/Territory In May 2007, Montana enacted legislation (H.B. 3) that allows a property tax abatement for new renewable energy production facilities, new renewable energy manufacturing facilities, and renewable energy research and development equipment. Eligible facilities and equipment are assessed at 50% of their taxable value.

Qualifying renewable energy manufacturing facilities are those that (1) produce materials, components or systems to convert solar, wind, geothermal, biomass, biogas or waste heat resources into useful energy, and (2) whose annual production of renewable energy equipment makes up at least half of the facility's total production. Fuel cells and components of fuel cells that generate energy using non-fossil fuels are also eligible. Qualifying renewable energy production facilities include biomass gasification, biomass, biogas and geothermal facilities. Qualifying renewable energy research and development equipment is considered to be equipment used primarily for research and development of the efficient use of renewable energy sources.

Under this policy, these facilities are assessed at 50% of their taxable value* for the construction period and the first 15 years after the facility commences operation, not to exceed 19 years. To qualify for the tax abatement, facilities must begin construction after June 1, 2007. Additionally, all renewable energy research and development equipment up to $1 million in value may qualify for a 50% property tax abatement if it is placed into service after June 30, 2007. The portion of the equipment used for renewable energy research and development in excess of $1 million in value does not qualify for the abatement. All production facilities, manufacturing facilities, and research and development equipment must be approved by the Montana Department of Environmental Quality in order to qualify for the abatement.

For the purposes of this policy, "renewable energy" is defined as energy from solar, wind, geothermal, biomass, biogas, non petroleum-based fuel cells, and waste heat sources. "Biomass" means any renewable organic matter, including dedicated energy crops and trees, agricultural food and feed crops, agricultural crop wastes and residues, wood wastes and residues, aquatic plants, animal wastes, municipal wastes, and other organic waste materials.

*These types of facilities are categorized as “Class 14” property, which is taxed at 3% of the property’s market value. A facility that qualifies for the 50% property tax abatement is therefore subject to property tax equal to 1.5% of the property’s market value.
Protection of Forest Resources (Montana) Montana Environmental Regulations Yes State/Province This statute addresses the conservation and protection of forest resources by encouraging the use of land management best practices pertaining to soil erosion, timber sale planning, associated road construction and reconstruction, timber harvesting, site preparation, and related activities. The statute provides for the classification of forest lands for conservation purposes, and establishes permit requirements for land use and development in forested areas.
Qualifying RPS State Export Markets (Montana) Montana Renewables Portfolio Standards and Goals Yes State/Province This entry lists the states with Renewable Portfolio Standard (RPS) policies that accept generation located in Montana as eligible sources towards their RPS targets or goals. For specific information with regard to eligible technologies or other restrictions which may vary by state, see the RPS policy entries for the individual states, shown below in the Authority listings. Typically energy must be delivered to an in-state utility or Load Serving Entity, and often only a portion of compliance targets may be met by out-of-state generation. In addition to geographic and energy delivery requirements, ownership, registry, and other requirements may apply, such as resource eligibility, generator vintage and capacity limitations, as well as limits on Renewable Energy Certificate (REC) vintage. The listing applies to RPS Main Tiers only, and excludes solar or distributed generation that may require interconnection only within the RPS state. This assessment is based on energy delivery requirements and reasonable transmission availability. Acceptance of unbundled RECs varies. There may be additional sales opportunities in RPS states outside the Eastern Interconnection. REC prices in markets with voluntary goals (North Dakota, South Dakota) may be lower.
Renewable Energy Systems Exemption (Montana) Montana Property Tax Incentive Yes State/Territory Montana's property tax exemption for recognized non-fossil forms of energy generation and low emission wood or biomass combustion devices may be claimed for 10 years after installation of the property. The exemption is allowed for up to $20,000 in value for single-family residential dwellings and up to $100,000 in value for multi-family residential dwellings or non-residential structures. This property is class 4 property and otherwise would be taxed on 2.54% of assessed value in tax year 2013 and 2.47% in tax years after 2013.

Recognized forms of energy generation include solar photovoltaics, passive solar, wind, solid waste, decomposition of organic wastes, geothermal, small hydropower plants, low-emission wood or biomass combustion systems, and fuel cells that do not require hydrocarbon fuel.

Use Montana Department of Revenue Form AB-14 to claim this exemption.
Renewable Resource Grant and Loan Program (Montana) Montana Grant Program Yes State/Province The renewable resource grant and loan program is administered by the Department of Natural Resources and Conservation. Historically the program primarily has funded water projects, but it does offer grants to renewable energy projects of state, local, or tribal government entities. On a biennial basis, DNRC evaluates and recommends projects to the Legislature for funding.
Renewable Resource Standard (Montana) Montana Renewables Portfolio Standard Yes State/Territory Montana’s renewable portfolio standard (RPS), enacted in April 2005 as part of the Montana Renewable Power Production and Rural Economic Development Act, requires public utilities and competitive electricity suppliers to obtain a percentage of their retail electricity sales from eligible renewable resources according to the following schedule:
  • 5% for compliance years 2008-2009 (1/1/2008 - 12/31/2009)
  • 10% for compliance years 2010-2014 (1/1/2010 - 12/31/2014)
  • 15% for compliance year 2015 (1/1/2015 - 12/31/2015) and for each year thereafter

Eligible renewable resources include wind; solar; geothermal; existing hydroelectric projects (10 megawatts or less); certain new hydroelectric projects (up to 15 megawatts installed at an existing reservoir or on an existing irrigation system that did not have hydroelectric generation as of April 16, 2009); landfill or farm-based methane gas; wastewater-treatment gas; low-emission, non-toxic biomass; and fuel cells where hydrogen is produced with renewable fuels. Facilities using these resources must begin operation after January 1, 2005, and must either be located in Montana or located in another state and be delivering electricity into Montana. Two bills in 2013 expanded the RPS to include additional types of projects. SB 325 of 2013 allows wood pieces that have been treated with chemical preservatives, such as creosote, pentachlorophenol, or copper-chrome arsenic, and that are used at a facility that has a nameplate capacity of 5 megawatts or less to qualify. And SB 45 of 2013 allows expansions to existing hydroelectric projects that result in increased generation capacity to qualify. Construction on the expansion must commence on or after October 1, 2013.

Utilities and competitive suppliers can meet the standard by entering into long-term purchase contracts for electricity bundled with renewable-energy credits (RECs), by purchasing the RECs separately, or by a combination of both. The law includes cost caps that limit the additional cost utilities must pay for renewable energy and allows cost recovery from ratepayers for contracts pre-approved by the Montana Public Service Commission (PSC). RECs sold through voluntary utility green power programs may not be used for compliance. Before entering into a long-term contract to purchase RECs, with or without the associated electricity, a utility must petition the PSC to certify that the RECs were produced by an eligible renewable resource.

For utilities operating in Montana within the geographic boundaries of the Western Electricity Coordinating Council, all RECs used to comply with the standard must be tracked and verified through the Western Renewable Energy Generation Information System (WREGIS). For public utilities operating in Montana within the geographic boundaries of Midwest Reliability Organization, all RECs used to comply with the standard must be tracked and verified through the Midwest Renewable Energy Tracking System (MRETS).

A utility or competitive supplier unable to comply with the RPS during an annual period (there is a three-month grace period) must pay an administrative penalty of $10 per megawatt-hour (MWh) for RECs that the utility failed to procure. Penalty payments may not be recovered in electricity rates. Funds derived from penalties go into the universal low-income energy assistance fund. Alternatively, a utility may petition the PSC for a short-term waiver from full compliance. If a utility or competitive supplier exceeds the standard in any year, it may carry forward the amount by which the standard was exceeded to comply with the standard in either or both of the two subsequent compliance years.

Montana's RPS includes specific procurement requirements to stimulate rural economic development. The RPS includes provisions for community renewable energy projects, defined as renewable energy projects under 25 megawatts (MW) where local owners have a controlling interest. For compliance year 2012 through compliance year 2014, public utilities (not applicable to competitive suppliers) must purchase both the renewable-energy credits (RECs) and the electricity output from community renewable-energy projects totaling at least 50 MW in nameplate capacity. For compliance year 2015 and each following year, utilities must purchase both the RECs and the electricity output from community renewable-energy projects totaling at least 75 MW in nameplate capacity. In addition, public utilities must enter into contracts that include a preference for Montana workers.

While cooperative utilities and municipal utilities are generally exempt from these requirements, cooperative and municipal utilities with 5,000 or more customers must implement a renewable-energy standard that recognizes the "intent of the legislature to encourage new renewable-energy production and rural economic development, while taking into consideration the effect of the standard on rates, reliability and financial resources."

Background

Legislation (HB 681) enacted in 2007 made competitive electricity suppliers subject to the RPS. (The original law applied only to public utilities.) Legislation (SB 164) enacted in 2013 exempted public utilities serving 50 or fewer customers from the RPS requirements.
Research and Commercialization Grants (Montana) Montana Grant Program Yes State/Province The Board of Research and Commercialization Technology provides grants for renewable resource research and development projects, among other types, to be conducted at research and commercialization centers located in Montana.
Residential Alternative Energy System Tax Credit (Montana) Montana Personal Tax Credit Yes State/Territory Residential taxpayers who install an energy system using a recognized non-fossil form of energy on their home after December 31, 2001 are eligible for a tax credit equal to the amount of the cost of the system and installation of the system, not to exceed $500. This cap is for individual taxpayers, so married taxpayers filing jointly can get a tax credit of up to $1,000 per household. The tax credit may be carried over for the following four taxable years.

Recognized non-fossil forms of energy generation means:

1. A system that captures energy or converts energy sources into usable sources, including electricity, by using:


  • solar energy, including passive solar systems;
  • wind;
  • solid waste;
  • the decomposition of organic wastes;
  • geothermal;
  • fuel cells that do not require hydrocarbon fuel; or
  • an alternative energy system;

2. A system that produces electric power from biomass or solid wood wastes; or

3. A small system that uses water power by means of an impoundment that is not over 20 acres in surface area.
State Lands (Montana) Montana Siting and Permitting Yes State/Province This chapter authorizes and regulates prospecting permits and mining leases for the exploration and development of rock, mineral, oil, coal, and gas resources on state lands.
Septage Disposal, Licensure (Montana) Montana Siting and Permitting Yes State/Province This statute describes licensing requirements for septage disposal, and addresses land disposal and processing facilities.
Small Power Production Facilities (Montana) Montana Interconnection Yes State/Province For the purpose of these regulations, a small power production facility is defined as a facility that:
(a) produces electricity by the use, as a primary energy source, of biomass, waste, water, wind, or other renewable resource, or any combination of those sources; or
(b) produces electricity and useful forms of thermal energy, such as heat or steam, used for industrial, commercial, heating, or cooling purposes through the sequential use of energy known as cogeneration; and
(c) has a power production capacity that together with any other facilities located at the same site is not greater than 80 megawatts; and
(d) is owned by a person not primarily engaged in the generation or sale of electricity other than electric power from a small power production facility.
The State of Montana encourages the development of small power production facilities and their interconnection to the main utility electric grid. These regulations stipulate that if a small power production facility and a utility are unable to mutually agree to a contract or price for the sale of electricity to be purchased by the utility, the commission shall require the utility to purchase the electricity under rates and conditions established by the commission, following provisions outlined in these regulations.
Special Improvement Districts (Montana) Montana Fees Yes Local A city or town council may create a special improvement district for the purchase, installation, maintenance, and management of alternative energy production facilities. Under certain conditions, abutting property in the county can be included in a district. Property owners in the district are assessed a fee to pay for the investment and operation of the facilities.
State Energy Policy Goal and Development (Montana) Montana Generation Disclosure Yes State/Province This statute establishes the state of Montana's support for the development and implementation of renewable energy technologies as well as environmentally-friendly modifications to existing technologies. The state aims to develop a reliable mix of energy sources, promote the development of new technologies and the continued exploration for oil, gas, and coal reserves, build new transmission lines and increase the capacity of existing lines, promote large-scale utility wind generation and small-scale distributed generation, facilitate the incorporation of new energy sources into the electric grid, and develop best management practices for energy resources. The Montana Energy and Telecommunications Interim Committee, of the Montana State Legislature, is responsible for reviewing this policy and proposing revisions.
State Solid Waste Management and Resource Recovery Plan (Montana) Montana Environmental Regulations Yes Local The State supports the "good management of solid waste and the conservation of natural resources through the promotion or development of systems to collect, separate, reclaim, recycle, and dispose of solid waste for energy production purposes when economically feasible and to provide a coordinated state solid waste management and resource recovery plan." This statute grants the primary responsibility for implementing adequate solid waste management systems to local governments. The statute limits the ability of the Department of Environmental Quality to enact regulations that are more stringent than comparable federal laws.
Streamside Management Zones (Montana) Montana Environmental Regulations Yes State/Province This chapter sets streamside management zones as encompassing a strip at least 50 feet wide on each side of a stream, lake, or other body of water, measured from the ordinary high-water mark, and extending beyond the high-water mark to include wetlands and areas that provide additional protection in zones with steep slopes or erosive soils. This legislation is designed to maintain the integrity of forest streams by limiting development and land use in streamside management zones. The Department of Natural Resources and Conservation is responsible for publishing regulations pertaining to streamside zone management and land use.
Strip and Underground Mine Reclamation Act (Montana) Montana Siting and Permitting Yes State/Province The policy of the state is to provide adequate remedies to protect the environmental life support system from degradation and to prevent unreasonable depletion and degradation of natural resources from strip and underground mining. This Act imposes permitting and operating restrictions on strip and underground mining activities for coal and uranium, and authorizes the Department of Environmental Quality to administer a reclamation program. The Act contains permitting, siting, and procedural requirements; more specific regulations can be found in the Administrative Rules of Montana.
Strip and Underground Mine Siting Act (Montana) Montana Siting and Permitting Yes State/Province The policy of the state is to provide adequate remedies to protect the environmental life support system from degradation and to prevent unreasonable depletion and degradation of natural resources from strip and underground mining. This Act grants the Department of Environmental Quality the authority to review and approve or disapprove new strip-mine and new underground-mine site locations and reclamation plans and to adopt relevant rules and regulations. The Act contains permitting and procedural requirements; more specific regulations can be found in the Administrative Rules of Montana.
Uniform Transboundary Pollution Reciprocal Access Act (Montana) Montana Environmental Regulations Yes State/Province This Act allows any entity in a Reciprocating Jurisdiction harmed by pollution originating in the state of Montana to bring an action or other proceeding against the source of that pollution in the state of Montana. Such an entity has the same rights in the state of Montana as they would if the harm had occurred within the state.
Universal System Benefits Program (Montana) Montana Public Benefits Fund Yes State/Territory Montana established the Universal System Benefits Program (USBP) in 1997 as part of its restructuring legislation. The USBP supports cost-effective energy conservation, low-income customer weatherization, renewable-energy projects and applications, research and development programs related to energy conservation and renewables, market transformation designed to encourage competitive markets for public purpose programs, and low-income energy assistance.

Beginning January 1, 1999, all electric utilities -- including electric cooperatives -- must contribute revenue generated from a surcharge on customers' electricity use. In 1997, the surcharge was set through electricity restructuring legislation and was based on 2.4% of electric utilities' 1995 revenues. This surcharge is determined by the Montana Public Service Commission (PSC) and by individual electric cooperatives. However, the surcharge rate has not been adjusted since that time, so annual collections have increased slightly as utility loads have increased over time. In 2011, approximately $9.4 million was collected from utilities regulated by the PSC via a non-bypassable surcharge on customers' electricity use. The amount collected annually varies, depending on weather and economic conditions. Utilities may spend all or a portion of the funds on internal programs, or may opt to contract or fund eligible programs externally. Large-scale electricity users with a load exceeding one megawatt (MW) may choose to fund qualifying internal energy programs with monies that otherwise would be remitted to the USBP. The most recent report, covering 2011 collections, is available here.

The USBP was set to expire December 31, 2009, but H.B. 27 removed the expiration date and extended the program indefinitely.
Utility Lines and Facilities (Montana) Montana Siting and Permitting Yes State/Province These regulations apply to the construction of utility and power lines and facilities. They address the use of public right-of-ways for such construction, underground power lines, and construction and relocation standards.
Water Quality (Montana) Montana Environmental Regulations Yes State/Province The Water Quality Act establishes water conservation and protection, as well as the prevention, abatement, and control of water pollution, as the policy of the state of Montana. The Act establishes a comprehensive state water quality program, which is administered by the Department of Environmental Quality: http://www.deq.mt.gov/wqinfo/default.mcpx The Act sets limitations on the state's ability to set regulations that are more stringent than federal regulations (section 75-5-203), establishes a Water Pollution Control Advisory Council in the Department of Environmental Protection, establishes classifications and standards for state waters, addresses the cooperation of the department and local water quality districts in establishing local water quality programs, and sets permitting, monitoring, and reporting requirements.
Water Resources (Montana) Montana Environmental Regulations Yes State/Province The state policy of Montana requires that water resources of the state be put to optimum beneficial use and not wasted. The state must promote the conservation, development, and beneficial use of the state's water resources to secure maximum economic and social prosperity for its citizens, and this chapter authorizes the Department of Natural Resources and Conservation to coordinate the development and use of the water resources of the state so as to effect full utilization, conservation, and protection of its water resources. This chapter addresses regulations pertaining to public ways, navigable waters, project financing, water storage, and land leasing, as well as Department duties and property acquisition. Part 5 of this chapter contains rules specific to power generation at water projects.
Water Use Act (Montana) Montana Environmental Regulations Yes State/Province Any use of water in the state of Montana is established as a public use, and the waters within the state are established as property of the people of the state. This chapter provides for the administration, control, and regulation of water rights by the state and establishes a system of centralized records of all water rights. The chapter addresses the powers and duties of the Department of Natural Resources and Conservation, water rights records, costs and fees for environmental impact statements, water measurement and leasing, the adjudication of water rights, as well as relevant permits, appropriations, and certificates. The chapter has sections pertaining to the utilization of water, groundwater, water use and diversion from the Yellowstone River Basin, and Indian and Federal water rights.
Western Interstate Nuclear Compact State Nuclear Policy (Multiple States) Arizona
California
Colorado
Idaho
Montana
Nevada
New Mexico
Oregon
Utah
Washington
Wyoming
Alberta
British Columbia
Saskatchewan
Siting and Permitting Yes State/Province Legislation authorizes states' entrance into the Western Interstate Nuclear Compact, which aims to undertake the cooperation of participating states in deriving the optimum benefit from nuclear and related scientific or technological resources, facilities, and skills. The Compact is the legal basis for the Western Interstate Energy Board, which provides the instruments and framework for cooperative state efforts to "enhance the economy of the West and contribute to the well-being of the region's people." While originally intended to oversee nuclear issues, the Board's purview extends beyond nuclear power to state cooperation on general energy, electricity, and climate issues. The western states of Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming, along with associate members Alberta, British Columbia, and Saskatchewan, comprise the membership of the Board and are party to the Compact.
Workforce Training Grant (WTG) Program (Montana) Montana Training/Technical Assistance
Workforce development
Yes State/Province The Workforce Training Grant (WTG) Program reimburses $5,000 per full time employee meeting wage requirements (lower of county or state average weekly wage) for new and existing employee training costs. The term of the program is 24 months. Business must demonstrate 50% sales from outside Montana and meet other eligibility criteria. Additionally, a $1 of match for every $3 WTG Funds is required of participating businesses.
Yellowstone River Compact (North Dakota) North Dakota Siting and Permitting Yes State/Province The Yellowstone River Compact, agreed to by the States of Montana, North Dakota, and Wyoming, provides for an equitable division and apportionment of the waters of the Yellowstone River, as well as for the conservation, development, and beneficial use of water in the Yellowstone River Basin. This chapter provides more specific information on regulations governing the basin.