15-35-102. (Temporary) Definitions. As used in this chapter, the following definitions apply:
     (1) "Agreement" means a signed contract that is valid under Montana law between a coal mine operator and a purchaser or broker for the sale of coal that is produced in Montana.
     (2) (a) "Base consumption level" for a purchaser, except as provided in subsection (2)(b), applies only for the term of an agreement in effect as of December 31, 1984, and means the lesser of:
     (i) the volume of coal purchased during calendar year 1986 from all Montana coal mine operators; or
     (ii) the greater of:
     (A) the arithmetic average volume of coal purchased during calendar years 1983 and 1984 from all Montana coal mine operators; or
     (B) 90% of the maximum tonnage provided for in any agreement executed prior to January 1, 1985, for which the highest scheduled minimum quantity of coal stipulated by the terms of the agreement as they existed on January 1, 1985, has not been purchased at any time during the term of the agreement, plus the arithmetic average volume of coal purchased during calendar years 1983 and 1984 from all Montana coal mine operators under all other agreements.
     (b) If the volume calculated in subsection (2)(a)(i) is less than one-third of the volume calculated in subsection (2)(a)(ii), the base consumption level is the volume calculated in subsection (2)(a)(ii).
     (3) (a) Except as provided in subsection (3)(b), "base production level" for a coal mine operator applies only for the term of an agreement in effect as of December 31, 1984, and means the lesser of:
     (i) the arithmetic average volume of coal produced in Montana and sold to a purchaser in calendar years 1983 and 1984; or
     (ii) the volume of coal produced in Montana and sold to a purchaser in 1986.
     (b) If the amount calculated in subsection (3)(a)(ii) is less than one-third of the amount calculated in subsection (3)(a)(i), the base production level is the amount calculated in subsection (3)(a)(i).
     (4) "Broker" means any person who resells Montana coal.
     (5) "Btu" means British thermal unit and is the amount of heat required to raise 1 pound of water 1 degree Fahrenheit.
     (6) "Coal enhancement facility" means a processing facility located at the site of the mine that produces a solid, liquid, or gaseous fuel from coal as its primary product and thermally or chemically alters the characteristics of coal by:
     (a) improving the Btu value per pound of the coal by at least 25%; or
     (b) reducing the sulfur content of the coal by at least 25% when based on pounds per million Btu.
     (7) "Contract sales price" means either the price of coal extracted and prepared for shipment f.o.b. mine, excluding that amount charged by the seller to pay taxes paid on production, or a price imputed by the department under 15-35-107. Contract sales price includes all royalties paid on production, no matter how the royalties are calculated. However, with respect to royalties paid to the government of the United States, the state of Montana, or a federally recognized Indian tribe, the contract sales price includes only 15 cents per ton.
     (8) "Department" means the department of revenue.
     (9) "Energy conversion process" includes any process by which coal in the solid state is transformed into slurry, gas, electrical energy, or any other form of energy.
     (10) "Feedstock" means raw coal processed by a coal enhancement facility.
     (11) "Incremental production" means that quantity of coal produced annually by a coal mine operator and sold to a qualified purchaser that exceeds the base production level of the coal mine operator for that purchaser, but only to the extent the quantity of coal exceeds that purchaser's base consumption level from all Montana producers.
     (12) "Produced" means severed from the earth.
     (13) "Purchaser" means a person who purchases or contracts to purchase Montana coal directly from a coal mine operator or indirectly from a broker and who utilizes that coal in any industrial, commercial, or energy conversion process. A coal broker or any other third party intermediary is not a purchaser under the provisions of this chapter.
     (14) "Qualified purchaser" means a purchaser whose purchases of Montana coal in any given year exceed the purchaser's base consumption level. A purchaser of Montana coal who enters into a coal agreement with another purchaser or a broker that causes a reduction in the base consumption level of a purchaser is not a qualified purchaser.
     (15) "Strip mining" is defined in 82-4-203 and includes "surface mining".
     (16) "Taxes paid on production" includes any tax paid to the federal, state, or local governments upon the quantity of coal produced as a function of either the volume or the value of production and does not include any tax upon the value of mining equipment, machinery, or buildings and lands, any tax upon a person's net income derived in whole or in part from the sale of coal, or any license fee.
     (17) "Ton" means 2,000 pounds.
     (18) "Underground mining" means a coal mining method utilizing shafts and tunnels and as further defined in 82-4-203. (Effective January 1, 2006)
     15-35-102. (Effective January 1, 2006) 15-35-102. Definitions. As used in this chapter, the following definitions apply:
     (1) "Agreement" means a signed contract that is valid under Montana law between a coal mine operator and a purchaser or broker for the sale of coal that is produced in Montana.
     (2) (a) "Base consumption level" for a purchaser, except as provided in subsection (2)(b), applies only for the term of an agreement in effect as of December 31, 1984, and means the lesser of:
     (i) the volume of coal purchased during calendar year 1986 from all Montana coal mine operators; or
     (ii) the greater of:
     (A) the arithmetic average volume of coal purchased during calendar years 1983 and 1984 from all Montana coal mine operators; or
     (B) 90% of the maximum tonnage provided for in any agreement executed prior to January 1, 1985, for which the highest scheduled minimum quantity of coal stipulated by the terms of the agreement as they existed on January 1, 1985, has not been purchased at any time during the term of the agreement, plus the arithmetic average volume of coal purchased during calendar years 1983 and 1984 from all Montana coal mine operators under all other agreements.
     (b) If the volume calculated in subsection (2)(a)(i) is less than one-third of the volume calculated in subsection (2)(a)(ii), the base consumption level is the volume calculated in subsection (2)(a)(ii).
     (3) (a) Except as provided in subsection (3)(b), "base production level" for a coal mine operator applies only for the term of an agreement in effect as of December 31, 1984, and means the lesser of:
     (i) the arithmetic average volume of coal produced in Montana and sold to a purchaser in calendar years 1983 and 1984; or
     (ii) the volume of coal produced in Montana and sold to a purchaser in 1986.
     (b) If the amount calculated in subsection (3)(a)(ii) is less than one-third of the amount calculated in subsection (3)(a)(i), the base production level is the amount calculated in subsection (3)(a)(i).
     (4) "Broker" means any person who resells Montana coal.
     (5) "Contract sales price" means either the price of coal extracted and prepared for shipment f.o.b. mine, excluding that amount charged by the seller to pay taxes paid on production, or a price imputed by the department under 15-35-107. Contract sales price includes all royalties paid on production, no matter how the royalties are calculated. However, with respect to royalties paid to the government of the United States, the state of Montana, or a federally recognized Indian tribe, the contract sales price includes only:
     (a) for quarterly periods ending on and after September 30, 1984, 15 cents per ton plus 75% of the difference between 15 cents per ton and the amount of federal, state, and tribal government royalties actually paid;
     (b) for quarterly periods ending on and after September 30, 1985, 15 cents per ton plus 50% of the difference between 15 cents per ton and the amount of federal, state, and tribal government royalties actually paid;
     (c) for quarterly periods ending on and after September 30, 1986, 15 cents per ton plus 25% of the difference between 15 cents per ton and the amount of federal, state, and tribal government royalties actually paid; and
     (d) for quarterly periods ending on and after September 30, 1987, 15 cents per ton.
     (6) "Department" means the department of revenue.
     (7) "Energy conversion process" includes any process by which coal in the solid state is transformed into slurry, gas, electrical energy, or any other form of energy.
     (8) "Incremental production" means that quantity of coal produced annually by a coal mine operator and sold to a qualified purchaser that exceeds the base production level of the coal mine operator for that purchaser, but only to the extent the quantity of coal exceeds that purchaser's base consumption level from all Montana producers.
     (9) "Produced" means severed from the earth.
     (10) "Purchaser" means a person who purchases or contracts to purchase Montana coal directly from a coal mine operator or indirectly from a broker and who utilizes that coal in any industrial, commercial, or energy conversion process. A coal broker or any other third party intermediary is not a purchaser under the provisions of this chapter.
     (11) "Qualified purchaser" means a purchaser whose purchases of Montana coal in any given year exceed the purchaser's base consumption level. A purchaser of Montana coal who enters into a coal agreement with another purchaser or a broker that causes a reduction in the base consumption level of a purchaser is not a qualified purchaser.
     (12) "Strip mining" is defined in 82-4-203 and includes "surface mining".
     (13) "Taxes paid on production" includes any tax paid to the federal, state, or local governments upon the quantity of coal produced as a function of either the volume or the value of production and does not include any tax upon the value of mining equipment, machinery, or buildings and lands, any tax upon a person's net income derived in whole or in part from the sale of coal, or any license fee.
     (14) "Ton" means 2,000 pounds.
     (15) "Underground mining" means a coal mining method utilizing shafts and tunnels and as further defined in 82-4-203.

     History: En. 84-1313 by Sec. 2, Ch. 525, L. 1975; amd. Sec. 1, Ch. 156, L. 1977; R.C.M. 1947, 84-1313; amd. Sec. 1, Ch. 377, L. 1983; amd. Sec. 2, Ch. 636, L. 1985; amd. Sec. 51, Ch. 370, L. 1987; amd. Sec. 2, Ch. 608, L. 1987; amd. Sec. 1, Ch. 31, L. 1989; amd. Sec. 1, Ch. 580, L. 1993; amd. Sec. 1, Ch. 318, L. 1995; amd. Sec. 21, Ch. 7, L. 2001.