The proposed bill aims to revise the taxation framework for stripper oil wells in Montana by establishing a uniform tax rate for both pre-1999 and post-1999 stripper wells. It increases the threshold price of oil at which a reduced tax rate applies, raising it from $30 to $54 per barrel. The bill amends existing definitions and tax rates in Sections 15-36-303 and 15-36-304 of the Montana Code Annotated (MCA), specifically adjusting the classification of stripper wells and the corresponding tax rates. Notably, the definition of pre-1999 stripper wells is updated to reflect a production range of 15 barrels per day instead of the previous 10 barrels, and the average price calculation for oil is clarified.

Additionally, the bill introduces new provisions regarding the taxation of stripper well exemption and bonus production, stipulating that these will only apply if the average price of oil is below $54 per barrel. If the price meets or exceeds this threshold, the exemption will not apply, and the production will be taxed as bonus production. The bill is set to take effect immediately upon passage and will apply to oil production occurring on or after July 1, 2025.

Statutes affected:
LC Text: 15-36-303, 15-36-304