36.22.1707    CERTIFICATION OF CARBON SEQUESTRATION EQUIPMENT

(1) For the purposes of this rule, "operator" means:

(a) the owner or operator of a carbon sequestration project approved by a state or federal agency; or

(b) the owner or operator of a closed-loop enhanced oil recovery operation located within an enhanced recovery project approved by the board.

(2) An operator who wishes to obtain a certificate of eligibility for classification of carbon sequestration equipment or equipment used in a closed-loop enhanced oil recovery project as class fifteen property under 15-6-158(4)(b), MCA (2015), must simultaneously file with the board a copy of the application for tax abatement under 15-24-3111, MCA, that is filed with the Department of Environmental Quality.

(3) Eligible equipment includes:

(a) equipment used to inject or retain carbon dioxide which is located within a carbon sequestration project authorized by the responsible state or federal agency; and

(b) equipment used to inject or maintain carbon dioxide in a closed-loop enhanced oil recovery operation that is downstream of the pipeline meter used to measure the amount of carbon dioxide delivered to the closed-loop enhanced oil recovery operation. Pipelines eligible for certification under ARM 17.80.204 are not considered enhanced oil recovery operation equipment.

(4) Within 30 days of receipt of an application pursuant to (2), board staff shall determine whether the application is complete and notify the applicant in writing of its determination.

(a) If the application is incomplete, the written notice shall identify deficiencies.

(b) The applicant may supplement the application to address the deficiencies or submit a new application.

(5) If the application is determined to be complete and eligible for certification under 15-6-158(4)(b), MCA (2015), within 60 days of the determination, board staff shall certify in writing to the applicant and the Department of Revenue that the equipment is eligible for certification.

(6) If an application is determined by board staff not to be eligible for certification, the operator may file a petition for hearing of the application, which must be filed in triplicate with the board. Upon receipt of the petition, the board will set a hearing date for the application, and cause notice of the hearing to be published as provided in 82-11-141, MCA.

(7) By January 31 of each subsequent calendar year, the operator of equipment certified under 15-6-158(4)(b), MCA (2015), must file with the board:

(a) a copy of the report submitted to the Department of Environmental Quality as required under ARM 17.80.225. For closed-loop enhanced recovery operations this report must include:

(i) changes in the numbers and locations of wells and equipment; and

(ii) a report disclosing the volume of the carbon dioxide injected and the volume retained during the previous tax year; and

(b) documentation to identify and describe any catastrophic or unforeseen occurrences that contributed to a carbon dioxide retention rate of less than 85 percent.

(8) The operator must remain in substantial compliance with any rules, laws, orders, and permit conditions applicable to the project.

(9) Carbon sequestration equipment as defined in 15-6-158(2)(c), MCA, which was placed in service after January 1, 2014, and certified by the Department of Environmental Quality before October 1, 2015, is exempt from the requirements of this rule and is already certified by the board.

History: 15-6-158, 82-11-111, MCA; IMP, 15-6-158, 82-11-141, MCA; NEW, 2015 MAR p. 2035, Eff. 11/13/15.