Industry shows support for ‘clean and green’ plan
By MIKE DENNISON - IR State Bureau - 03/29/07
HELENA — Energy industry lobbyists lined up Wednesday to support Gov. Brian Schweitzer’s “clean and green” tax-incentive bill — including a power-line developer who said its project won’t go forward without the tax cuts in the bill.
In fact, a Canadian executive for the company behind the proposed $140 million Canada-to-Montana power line said a bank loan for the project is premised on the lower property-tax rate in the bill.
“I used the 3 percent (rate) because I was hopeful we would be able to achieve that,” said Johan Van’t Hof, chief executive officer for Tonbridge Power Inc. of Toronto, speaking before the Senate Taxation Committee.
When asked why he had that expectation, Van’t Hof said he had spoken to Schweitzer’s office last summer about the potential tax break and was told later it would be part of the bill.
Tonbridge owns Montana Alberta Tie Limited, which wants to build a power line to transport electricity to Canada from new wind-power projects in north-central Montana.
Schweitzer told the Lee Newspapers State Bureau Wednesday it’s been no secret that his office has been working on a proposal to offer tax breaks to “clean and green” energy developers. “We tell all of the developers that this is the way we want to go,” he said. “We’ve been talking about it for some time. I’ve been using it as a recruiting tool for some time.”
Under Senate Bill 562, power lines that move so-called “green energy,” such as wind power, from new projects to new markets would have their property-tax rates cut by three-fourths, from 12 percent to 3 percent.
The bill cuts property taxes for other green-energy projects, such as coal-fired power plants that “capture” carbon dioxide emissions and pipelines that transport carbon dioxide that will be “sequestered” in the ground.
It also has consumer-oriented tax breaks, such as waiving two years’ worth of car registration fees for new vehicles that get at least 35 miles per gallon.
The bill, which had its first hearing Wednesday, is one of Schweitzer’s energy proposals before the 2007 Legislature.
“With this bill, we can become the beacon of alternative energy for the entire country,” said the bill’s sponsor, Sen. Jesse Laslovich, D-Anaconda.
Laslovich apologized to the Senate Taxation Committee for bringing the bill forward so late in the Legislature — and said he’ll also be proposing amendments that make some substantial changes in the bill.
SB562 was introduced on Monday and has until next Tuesday to make it out of the Senate.
Evan Barrett, Schweitzer’s chief economic development officer, said the issue is complex and that the administration has been working with legislative drafters the past two weeks to craft the proper bill.
He said late Wednesday that his office and Laslovich may present the committee a new “gray bill,” which is a new version that contains extensive rewrites.
Barrett said much of the amendments address problems identifying when and if a power line is transporting “green” energy, and therefore eligible for the tax breaks.
“We’re thoroughly vetting all of that with the departments (that would oversee the tax breaks),” he said. “We want as much transparency in this process as possible.”
Lobbyists for oil, coal, power-line and labor interests testified in favor of the bill, saying Montana property taxes on pipelines, power lines and power plants are much higher than comparable taxes in neighboring, competing states, such as North Dakota and Wyoming.
“Incentives do work,” said Willie Duffield, executive director of the Montana Association of Oil, Gas and Coal Producing Counties. “If we’re going to be competitive in the energy markets, we’re going to have to provide incentives.”
John Alke, an attorney representing Montana Alberta Tie Limited, said the 230-kilovolt line will foster $1 billion of wind-power development in north-central Montana, but that it is not economically feasible without the tax break in SB562.
“If this bill is not enacted, this (project) fails economic muster and $1 billion of development is lost to the state,” he said. “It is essential for the project that you enact this bill.”
In fact, a Canadian executive for the company behind the proposed $140 million Canada-to-Montana power line said a bank loan for the project is premised on the lower property-tax rate in the bill.
“I used the 3 percent (rate) because I was hopeful we would be able to achieve that,” said Johan Van’t Hof, chief executive officer for Tonbridge Power Inc. of Toronto, speaking before the Senate Taxation Committee.
When asked why he had that expectation, Van’t Hof said he had spoken to Schweitzer’s office last summer about the potential tax break and was told later it would be part of the bill.
Tonbridge owns Montana Alberta Tie Limited, which wants to build a power line to transport electricity to Canada from new wind-power projects in north-central Montana.
Schweitzer told the Lee Newspapers State Bureau Wednesday it’s been no secret that his office has been working on a proposal to offer tax breaks to “clean and green” energy developers. “We tell all of the developers that this is the way we want to go,” he said. “We’ve been talking about it for some time. I’ve been using it as a recruiting tool for some time.”
Under Senate Bill 562, power lines that move so-called “green energy,” such as wind power, from new projects to new markets would have their property-tax rates cut by three-fourths, from 12 percent to 3 percent.
The bill cuts property taxes for other green-energy projects, such as coal-fired power plants that “capture” carbon dioxide emissions and pipelines that transport carbon dioxide that will be “sequestered” in the ground.
It also has consumer-oriented tax breaks, such as waiving two years’ worth of car registration fees for new vehicles that get at least 35 miles per gallon.
The bill, which had its first hearing Wednesday, is one of Schweitzer’s energy proposals before the 2007 Legislature.
“With this bill, we can become the beacon of alternative energy for the entire country,” said the bill’s sponsor, Sen. Jesse Laslovich, D-Anaconda.
Laslovich apologized to the Senate Taxation Committee for bringing the bill forward so late in the Legislature — and said he’ll also be proposing amendments that make some substantial changes in the bill.
SB562 was introduced on Monday and has until next Tuesday to make it out of the Senate.
Evan Barrett, Schweitzer’s chief economic development officer, said the issue is complex and that the administration has been working with legislative drafters the past two weeks to craft the proper bill.
He said late Wednesday that his office and Laslovich may present the committee a new “gray bill,” which is a new version that contains extensive rewrites.
Barrett said much of the amendments address problems identifying when and if a power line is transporting “green” energy, and therefore eligible for the tax breaks.
“We’re thoroughly vetting all of that with the departments (that would oversee the tax breaks),” he said. “We want as much transparency in this process as possible.”
Lobbyists for oil, coal, power-line and labor interests testified in favor of the bill, saying Montana property taxes on pipelines, power lines and power plants are much higher than comparable taxes in neighboring, competing states, such as North Dakota and Wyoming.
“Incentives do work,” said Willie Duffield, executive director of the Montana Association of Oil, Gas and Coal Producing Counties. “If we’re going to be competitive in the energy markets, we’re going to have to provide incentives.”
John Alke, an attorney representing Montana Alberta Tie Limited, said the 230-kilovolt line will foster $1 billion of wind-power development in north-central Montana, but that it is not economically feasible without the tax break in SB562.
“If this bill is not enacted, this (project) fails economic muster and $1 billion of development is lost to the state,” he said. “It is essential for the project that you enact this bill.”
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