Calumet Montana Refining filed an application with Cascade County for a new tax abatement allowed under a section of state law that was amended by the 2023 Legislature.

The new abatement statute includes renewable fuels as an eligible abatement.

Calumet filed an application on Dec. 19 for an abatement on equipment installed in 2024 totallying $6.1 million.

The city and county approved tax abatements for Calumet in 2022.

Under the law changes, only the county has the authority to make the decision though it will impact city and state tax revenues; the abatement cannot be denied and county commissioners are only able to determine whether the abatement is 80, 90 or 100 percent.

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Great Falls Public Schools will receive a set dollar amount, as they do annually, but if Calumet’s taxes are abatement or reduced through appeals, that tax burden shifts to remaining tax payers to reach that set dollar amount set under state school funding formulas, according to county and school officials.

The statute under which Calumet was granted abatements by the city and county several years ago allowed a maximum of a 50 percent abatement in the first year.

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Under the new abatement statute Calumet is seeking, after the first five years, the abatement reduces by 20 percent of whatever the commission approves each year until it’s reduced to zero by the 10th year and then the equipment is taxed normally.

County Commissioner Joe Briggs told The Electric that the county has to publish a hearing noticed on the abatement request within 60 days of receipt and must take action within 120 days of receipt or it is automatically granted at 100 percent.

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Briggs said they notified city officials as a courtesy and offered them a chance to comment.

He said a hearing date hasn’t yet been set on the abatement request and that the city had requested a joint commission meeting before the hearing, but he wasn’t sure that would be possible under the legal timeline.

During the City Commission’s Feb. 4 meeting, Commissioner Susan Wolff said that they need to get information from staff on what the abatement levels mean and what they’ll cost the city.

She said perhaps they should have Calumet at the table to talk about local government’s expectations in exchange for the abatements.

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Wolff said that when she was working at a community college in The Dalles, Oregon and Google asked for a tax abatement, that community leaders met with them to discuss their expectations and that Google became a community partner.

“I need to see that from this entity,” Wolff said of Calumet.

Calumet currently have several pending tax appeals at the Montana Tax Appeal Board.

Last fall, county property tax bills were delayed due to changes in Calumet’s tax valuation for 2024 that lowered the taxable values of the city, county and school district jurisdictions by about $4 million.

Calumet has two pending appeals before the Montana Tax Appeal Board for 2022 and 2023 taxes and said in Oct. 18 filings that it is still considering whether to protest its 2024 taxes.

Calumet considers appeal of 2024 taxes

Rina Sanderson, administration/legal assistant for the board, told The Electric on Jan. 14 that the board hasn’t yet scheduled a hearing as Calumet and the Montana Department of Revenue are in discussion on the cases, but was expecting an update in a few weeks.

She told The Electric on Feb. 10 that Montana Renewables had requested, and the board granted, to vacate the hearing scheduled for May.

They’re scheduled to have a conference call on Feb. 13 to set a new hearing date, she said.

Montana Renewables, Calumet’s subsidiary, has a pending appeal before the board of a Montana Department of Environmental Quality in which it refutes DEQ’s decision to certify eight percent of the facility as pollution control equipment, and thereby tax exempt under state law, as opposed to its request to have the entire facility certified as tax exempt.

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Under state law, air and water pollution and carbon capture equipment certified as such by DEQ is tax exempt.

Calumet announced on Jan. 10 that it had closed on its $1.44 billion guaranteed loan with the U.S. Department of Energy.

Initial loan proceeds of $782 million were expected to be funded in January for eligible expenses previously incurred by Montana Renewables, according to a company release.

In a Jan. 28 release, Calumet said that it had been informed by the U.S. Department of Energy that the funding “will undergo a tactical delay to confirm alignment with White House priorities. The company was informed that the delay should be days or weeks.”

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“We are well aligned with White House priorities to support domestic agriculture, energy security, technical innovation and energy independence, all of which play a role in the tremendous bipartisan support this loan has received since its inception,” Todd Borgmann, Calumet CEO said in the Jan. 28 release. “The recently issued executive order specifically highlights the importance of biofuels to our nation’s domestic energy policy and energy independence, and we look forward to a quick review confirming that we are aligned with the Administration’s goals.”

On Jan. 31, Calumet said they had not further updates beyond the press release.

The loan will fund the construction and expansion of the renewable fuels facility owned by Montana Renewables, an unrestricted subsidiary of Calumet.

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Calumet is planning to make another $150 million equity investment with funds it currently holds and the balance of the guaranteed loan proceeds is held in a delayed draw for construction.

Montana Renewables expects the next batch of loan funds to be disbursed during construction beginning in 2025 through the planned completion of the sustainable aviation fuel facility in 2028, according to Calumet.

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The DOE loan guarantee will allow the company to expand it’s sustainable aviation fuel capacity to 300 million gallons per year and 330 million gallons of combines SAF and renewable diesel, according to Calumet.

The planned expansion includes a second renewable fuels reactor, which will allow about half of the 300-million-gallon SAF capability to be online by 2026, according to Calumet; debottlenecking of existing units, installation of SAF blending and logistics assets, increased renewable hydrogen production, cogeneration for renewable electricity and steam, and on-site water treatment and recycling capabilities.