BEFORE THE DEPARTMENT OF REVENUE

OF THE STATE OF MONTANA

�

�

TO: All Concerned Persons

�

1. On December 17, 2007, at 10:00 a.m., a public hearing will be held in the Director's Office (Fourth Floor) Conference Room of the Sam W. Mitchell Building, at Helena, Montana, to consider the adoption of the above-stated rules.

Individuals planning to attend the hearing shall enter the building through the east doors of the Sam W. Mitchell Building, 125 North Roberts, Helena, Montana.

�

2. The Department of Revenue will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, contact the Department of Revenue no later than 5:00 p.m., December 5, 2007, to advise us of the nature of the accommodation that you need. Please contact Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-3696; or e-mail [email protected].

�

3. The proposed new rules do not replace or modify any section currently found in the Administrative Rules of Montana. The proposed new rules provide as follows:

�

NEW RULE I DEFINITIONS The following definitions apply to terms used in this subchapter:

(1) "Primarily" as referred to in 15-32-701, MCA, means the facility processes 51% or more of the oilseed crushed crop, as measured by weight, for biodiesel or biolubricant.

�

AUTH: 15-30-305, 15-31-501, MCA

IMP: 15-31-701, MCA

�

REASONABLE NECESSITY: The department is proposing New Rule I to clarify the term "primarily" because that term is used in proposed New Rules II through IV which will be placed in subchapter 25 of chapter 4.

�

NEW RULE II CARRYOVER AND RECAPTURE OF OILSEED CRUSH FACILITY TAX CREDIT (1) If any part of the credit earned in taxable years beginning after December 31, 2004, is not applied against the tax liability for the year earned, the unused portion of the credit can be carried forward to offset tax liability in the next seven periods. The credit cannot be carried forward to offset any tax year in which the facility is not primarily crushing oilseed for the production of biodiesel or biolubricant.

(2) The credit may be subject to recapture if the facility claiming the credit ceases primarily crushing oilseed for production of biodiesel or biolubricant for a period of 12 consecutive months. At the point the facility ceases primarily crushing oilseed for production of biodiesel or biolubricant, any credit claimed in the five years prior to the cease date must be recaptured.

�

AUTH: 15-30-305, 15-31-501, MCA

IMP: 15-32-701, MCA

�

REASONABLE NECESSITY: The department is proposing New Rule II because the 2007 Legislature amended 15-32-701, MCA, in House Bill 166 to modify the tax credits for property used for the production, blending, and storage of biodiesel and biolubricant. This rule will clarify the carryover and recapture of the oilseed crushing facility credit referred to in 15-32-701, MCA.

�

NEW RULE III CARRYOVER AND RECAPTURE OF BIODIESEL OR BIOLUBRICANT PRODUCTION FACILITY TAX CREDIT (1) If any part of the credit earned in taxable years beginning after December 31, 2004, is not applied against the tax liability for the year earned, the unused portion of the credit can be carried forward to offset tax liability in the next seven periods.

(2) The credit may be subject to recapture if the facility claiming the credit ceases production of biodiesel or biolubricant for a period of 12 consecutive months. At the point the facility ceases production of biodiesel or biolubricant, any credit claimed in the five years prior to the cease date must be recaptured.

�

AUTH: 15-30-305, 15-31-501, MCA

IMP: 15-32-701, 15-32-702, MCA

�

REASONABLE NECESSITY: The department is proposing New Rule III because the 2007 Legislature amended 15-32-701, MCA, in House Bill 166 to modify the tax credits for property used for the production, blending, and storage of biodiesel and biolubricant. This rule will clarify the carryover and recapture of the credit referred to in 15-32-702, MCA.

�

NEW RULE IV CARRYOVER AND RECAPTURE OF BIODIESEL BLENDING AND STORAGE TAX CREDIT (1) If any part of the credit earned in taxable years beginning after December 31, 2004, is not applied against the tax liability for the year earned, the unused portion of the credit can be carried forward to offset tax liability in the next seven periods.

(2) The credit may be subject to recapture if the facility claiming the credit ceases blending of biodiesel with petroleum diesel for sale for a period of 12 consecutive months. At the point the facility ceases blending of biodiesel with petroleum diesel, any credit claimed in the five years prior to the cease date must be recaptured.

�

AUTH: 15-30-305, 15-31-501, MCA

IMP: 15-32-703, MCA�

�

REASONABLE NECESSITY: The department is proposing New Rule IV because the 2007 Legislature amended 15-32-701, MCA, in House Bill 166 to modify the tax credits for property used for the production, blending, and storage of biodiesel and biolubricant. This rule will clarify the carryover and recapture of the credit referred to in 15-32-703, MCA.

�

4. Concerned persons may submit their data, views, or arguments, either orally or in writing, at the hearing. Written data, views, or arguments may also be submitted to: Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-3696; or e-mail [email protected] and must be received no later than December 21, 2007.

�

5. Cleo Anderson, Department of Revenue, Director's Office, has been designated to preside over and conduct the hearing.

�

6. An electronic copy of this Notice of Public Hearing is available through the department's site on the World Wide Web at www.mt.gov/revenue, under "for your reference"; "DOR administrative rules"; and "upcoming events and proposed rule changes." The department strives to make the electronic copy of this Notice of Public Hearing conform to the official version of the Notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the Notice and the electronic version of the Notice, only the official printed text will be considered. In addition, although the department strives to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.

�

7. The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notices regarding particular subject matter or matters. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the person in 4 above or faxed to the office at (406) 444-3696, or may be made by completing a request form at any rules hearing held by the Department of Revenue.

�

8. The bill sponsor notice requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsor, Representative Holly Raser, was notified on October 26, 2007, by electronic mail.

�

�

�

�

����������������� � /s/ Cleo Anderson��������������������� ��������������� /s/ Dan R. Bucks

������������������ CLEO ANDERSON�����������������������������������DAN R. BUCKS

������������������ Rule Reviewer�������������������������������������������� Director of Revenue

�

Certified to Secretary of State November 13, 2007