The Montana Department of Environmental Quality and Montana Renewables have settled a case regarding the company’s pollution control certification.

The case was pending before the Montana Tax Appeal Board, but was settled in May.

Montana Renewables, a subsidiary of Calumet Montana Refining, refuted the DEQ’s decision to certify eight percent of the facility as pollution control equipment, and thereby tax exempt under state law, as opposed to the company’s request to have the entire facility certified as tax exempt.

Hearings are set for Calumet, Montana Renewables tax protests, appeals

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

Previously, DEQ had approved $24,579,241 of Montana Renewable’s biomass plant as pollution control.

Through the settlement, DEQ has now approved an additional $42,900,000, bringing 50 percent of the No. 4 hydrogen plant constructed capital cost as pollution control, making it tax exempt.

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The effective date for the 50 percent tax exempt certification is December 2022, according to a letter DEQ sent to Cascade County Commissioners, who discussed the settlement during the June 11 compensation board meeting.

Trista Besich, county finance officer, said the settlement will impact the county budget and that property classification and appraisals from the Montana Department of Revenue have been delayed and won’t be mailed until July 25.

Besich said that it’s been difficult to project newly taxable revenue in recent years. Last year, the county’s came in around $6 million, until DOR adjusted those values down about $4 million.

That drop was related to Calumet, Commissioner Joe Briggs said during the June 11 meeting.

City, county officials discussing Calumet abatement request

Briggs said the county will also have to pay back the overcharges for the last few years since DEQ backdated the tax exempt pollution control certification.

Briggs said those funds were held in escrow during the dispute so will be able to return those funds.

It’s an “ongoing problem we are having with certain types of property,” Briggs said, refineries being one.

Diane Heikkila, county treasurer, said her office hasn’t been notified yet how much will have to be returned to Montana Renewables.

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Calumet has three pending tax appeals before the Montana Tax Appeal Board, one for the 2022 tax year, one for the 2023 tax year and in November, the company filed a protest directly to the state rather than the Cascade County Tax Appeal Board asking that its value be dropped from the state’s $222,000,000 valuation to its own assessment of $100,000,000.

Hearings for all three of those appeals have been set for May 2026.

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The Montana Renewables settlement and Calumet appeals, coupled with recent legislative changes, Briggs said have left the county with a lot of uncertainty.

“We have an even worse ability to project” what newly taxable will be, Briggs said. “We honestly do not have a good feel for what the newly taxable is going to look like.”

Great Falls City Manager Greg Doyon said that the city had been notified of the settlement but don’t know how the change will impact tax revenues for the next fiscal year, which begins July 1, until DOR issues their new taxable valuations in August.

He said even then the city won’t necessarily know how much is directly related to Calumet as “it is very hard to obtain breakouts from DOR.”