Montana Incentives and Laws
Listed below are the summaries of all current Montana incentives, laws, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:
State Incentives
Ethanol Production Incentive
Montana-based ethanol producers are eligible for a tax incentive of $0.20 per gallon of ethanol produced solely from Montana agricultural products, or ethanol produced from non-Montana agricultural products when Montana products are unavailable. If the producer uses non-Montana based agricultural products, the amount of the tax incentive for each gallon is reduced proportionately, based on the percentage of non-Montana based agricultural or wood products used in production. The tax incentive is available to a facility for the first six years from the date production begins. Ethanol eligible for the incentive must be blended with gasoline for sale as ethanol-blended gasoline in Montana, exported from Montana for sale as ethanol-blended gasoline, or used in the production of ethyl tertiary butyl ether for use in reformulated gasoline. An ethanol producer is not eligible to receive the tax incentive unless the entity uses at least 20% Montana products to produce the ethanol in the first year of production and 25% Montana products in the second year, and the producer must increase the amount of Montana product used each year thereafter by 10%. (Reference Montana Code Annotated 15-70-522)
Biodiesel Blending Tax Credit
Businesses and individuals are eligible for a tax credit of up to 15% of the cost of qualified equipment used for storing or blending biodiesel with petroleum diesel offered for sale. The credit may not exceed $52,500 for a special fuel distributor and $7,500 for an owner or operator of a motor fuel outlet. The credit can be claimed in the two tax years before the year in which the business or individual begins blending biodiesel for fuel or sale. (Reference Montana Code Annotated 15-32-703)
Biodiesel Production Facility Tax Credit
Businesses and individuals are eligible for a tax credit of up to 15% of the cost of constructing and equipping a facility to be used for biodiesel or bio-lubricant production. The producer must claim the credit in the tax year in which the facility begins production, and the facility must be in operation before January 1, 2015. Additionally, a tax credit is available for property used primarily to crush oilseed crops for purposes of biodiesel production. (Reference Montana Code Annotated 15-32-701 and 15-32-702)
Biodiesel Tax Refund
A licensed distributor who pays the special fuel tax on biodiesel may claim a refund equal to $0.02 per gallon of biodiesel sold during the previous quarter if the biodiesel is produced entirely from biodiesel components made in Montana. The owner or operator of a retail motor fuel outlet may claim a refund equal to $0.01 per gallon of biodiesel purchased from a licensed distributor if the biodiesel is created entirely from biodiesel components produced in Montana. (Reference Montana Code Annotated 15-70-369)
Alternative Fuel Vehicle (AFV) Conversion Tax Credit
Businesses or individuals are eligible for an income tax credit of up to 50% of the equipment and labor costs for converting vehicles to operate using alternative fuels. Qualified alternative fuels are compressed and liquefied natural gas, liquefied petroleum gas (propane), hydrogen, electricity, and fuel containing at least 85% ethanol or methanol. The maximum credit is $500 for the conversion of vehicles with a gross vehicle weight rating (GVWR) of 10,000 pounds (lbs.) or less, and $1,000 for vehicles with a GVWR of more than 10,000 lbs. The credit is only available during the year that the business or entity converts the vehicle. An alternative fuel seller may not receive a credit for converting its own vehicles to operate on the alternative fuel they sell. (Reference Montana Code Annotated 15-30-2320)
Alternative Fuel Production Property Tax Incentive
Property tax rate abatements are available for qualified biodiesel, biomass, biogas, and ethanol production facilities. These incentives are available during facility construction and for the first 15 years after the facility begins operation or the related equipment is purchased. The total time of the qualifying period may not exceed 19 years. (Reference Montana Code Annotated 15-24-3111)
Biodiesel Tax Exemption
Biodiesel producers that produce biodiesel from waste vegetable oil feedstock are exempt from the state special fuel tax. (Reference Montana Code Annotated 15-70-301 and 15-70-320)
Laws and Regulations
Ethanol Blend Mandate
Within one year after the Montana Department of Transportation has certified that ethanol producers in the state have produced a total of 40 million gallons and have maintained that level of production on an annualized basis for at least three months, all gasoline sold to consumers for use in motor vehicles operating on public roads must be blended with 10% agriculturally derived, denatured ethanol by volume. If the production of ethanol in Montana drops below 20 million gallons on an annualized basis, the 10% ethanol blend (E10) requirement will no longer apply. All gasoline sold as E10 may not contain more than trace amounts of the additive methyl tertiary butyl ether. (Reference Montana Code Annotated 82-15-121)
Fuel-Efficient Vehicle Acquisition Requirements
All vehicles purchased for state agency use must meet or exceed the current federal Corporate Average Fuel Economy standard, and agencies must develop and implement programs to reduce fuel consumption in agency vehicles. Certain state vehicles are exempt from these requirements. (Reference Montana Code Annotated 2-17-416)
Ethanol Fuel Blend Use Requirement
State government agencies and universities owning or operating motor vehicles capable of burning ethanol-blended gasoline must take all reasonable steps to ensure that the operators of those vehicles use ethanol-blended gasoline to operate the vehicles if it is commercially available within the operating area of the vehicle and competitively priced as compared to conventional gasoline. (Reference Montana Code Annotated 2-17-414)
Biofuels Promotion
In support of the "25 x 25" initiative to increase production of renewable energy by the agricultural community, the Montana legislature encourages the development of a broad spectrum of renewable energy resources, including biofuels, with the goal of agriculture providing 25% of the total energy consumed in the United States by the year 2025. (Reference House Joint Resolution 6, 2007)
Alternative Fuel Promotion
The state of Montana encourages the use of alternative fuels and fuel blends to the extent that doing so produces environmental and economic benefits to the citizens of Montana. The Montana Legislature recommends several guidelines for the development of a state alternative fuels policy, including the following: 1) encourage the use of self-sufficient markets; 2) any state alternative fuels program should have measurable benefits and state agencies must communicate these benefits to the public; 3) state and local governments are encouraged to set an example with their vehicle fleets by using alternative fuels and fuel blends. The state also encourages alternative fuel and fuel blend production. (Reference Montana Code Annotated 90-4-1011)
Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) Tax
Retail sales for CNG and LPG used to operate vehicles are subject to a modified tax based on energy content. (Reference Montana Code Annotated 15-70-711)
Compressed Natural Gas (CNG) or Liquefied Petroleum Gas (LPG) License
A person may not act as a CNG or LPG dealer unless the person holds a valid CNG or LPG dealer's license issued by the Montana Department of Transportation. (Reference Montana Code Annotated 15-70-702)
Low-Speed Electric Vehicle (EV) Access to Roadways
A low-speed EV may operate only on highways with posted speed limits up to 25 miles per hour (mph) and may not cross a highway with a posted speed limit greater than 45 mph. A low-speed EV may reach speeds of at least 20 mph but not more than 40 mph and may only be operated by a person with a low-speed restricted driver's license. A low-speed EV must be in compliance with Title 49 of the Code of Federal Regulations, section 565. (Reference House Bill 213, 2011, and Montana Code Annotated 61-1-101)
Medium-Speed Electric Vehicle (EV) Access to Roadways
A medium-speed EV may operate only on highways with posted speed limits up to 45 miles per hour (mph). A medium-speed EV must be treated as a light vehicle for purposes of titling and registration. A medium-speed vehicle is a vehicle that has a maximum speed of 45 mph, a gross vehicle weight rating of 5,000 pounds or less, and is in compliance with Title 49 of the Code of Federal Regulations, section 565. (Reference Montana Code Annotated 61-1-101 and 61-8-377)