The "Water Severance Beneficial Use Act" proposes a new fee structure for hydroelectric generation facilities in Montana, introducing a water severance beneficial use fee calculated per megawatt-hour of electricity generated. This fee will act as a tax substitute for the transmission of certain electricity and will be based on the coal gross proceeds tax for an equivalent amount of electricity. The bill allows for the fee to be applied to electricity produced by federal hydroelectric facilities while exempting specific types of production, such as that regulated by the public service commission or generated within Montana Indian reservations. The revenue from this fee is primarily designated for public school funding, with 90% aimed at offsetting statewide mill levies to alleviate property tax burdens.

Additionally, the bill includes amendments to existing tax administration laws, specifying that interest on overpayments must match the rate charged on unpaid taxes, with certain exceptions. It assigns new administrative duties to the department, including the creation and distribution of necessary forms and rule adoption for enforcement. Key provisions also require county commissioners to levy specific annual taxes for school equalization, allowing for a reduction in mills when revenue from the new fee is available. Surplus funds from these levies are to be sent to the state general fund. The act will take effect for electricity generated from hydroelectric facilities after December 31, 2023, and includes clauses for codification, saving rights and duties, and severability to maintain the validity of the act's provisions.

Statutes affected:
Introduced: 20-9-331, 20-9-333, 20-9-360