The economic downturn has prompted Columbia Falls Aluminum Co. to seek relief from its property tax payments through a relatively new provision of state law.

The company, shut down since October 2009, has asked Flathead County to waive collection of 95 percent of its property taxes for 2010.

The county commissioners and Columbia Falls School Board members will conduct a joint public hearing on the tax request May 9 at 7 p.m. at the school district administrative office in Columbia Falls. Because most of the company’s property taxes are distributed to the school district once the county has collected the money, the hearing is held before the two boards in accord with state law.

People will have an opportunity to speak at the May 9 hearing or they may submit written comments, Deputy Flathead County Attorney Tara Fugina said.

The aluminum company’s 2010 tax bill from Flathead County totals $462,140, County Treasurer Adele Krantz said. The first installment of tax payments has been billed and was due Nov. 30 but the second installment isn’t due until May 31.

Because the aluminum plant is closed, the Montana Department of Revenue already had adjusted the value of the plant for 2010 tax purposes, Krantz said. The state had directed the county to reduce the bill by $82,537 for the 2010 tax year, she said.

The aluminum company also has protested $185,322 of the first installment of its tax bill, Krantz said.

When tax bills are protested, the payer is required to pay the due amount, but the money is held in a separate account by the county while the state revenue department evaluates the protest request. The aluminum company’s appeal is pending before the state appeals board now, having advanced from an appeal before the county tax appeals board, Krantz said.

Because of the tax protest and the tax reduction directed by the state, the exact amount of taxes the county and school district might lose is not certain.

But the school district receives the largest share of taxes paid by CFAC, Flathead County Administrative Officer Mike Pence said.

In the past, School District 6 has received about $188,000 a year in property taxes from the aluminum plant, according to school district Business Manager Dustin Zuffelato. That amount is equal to the property taxes paid to the school district by 277 homes each with a market value of $200,000.

County commissioners and school board members have until July 15 to render their decisions on the CFAC request.

Local officials don’t have a lot of discretion in the amount of taxes they could agree to waive, Fugina said. “It’s 95 percent or nothing,” according to state law.

However, the local governing bodies can decline the company’s request if “they find it’s not in the best interest of the local governments,” she said.

If the two boards agree with the request, they must pass a joint resolution to that effect, according to the application procedures from the Montana Department of Revenue.

The state law allows companies to seek tax relief for three years — 2009, 2010 and 2011.

One of the conditions a business must prove before seeking a waiver is that it hasn’t operated for six months prior to requesting a hearing and won’t operate in the six months after the hearing.

Columbia Falls Aluminum is seeking a reduction of the taxable value of its property because the facility has been idle since Oct. 31, 2009.

In a March 15 letter to Flathead County commissioners, CFAC spokesman Haley Beaudry wrote that the aluminum plant is more than 50 years old, and, like all major plants, “was not intended to be idled and restarted intermittently. Going ‘dark’ or ‘cold’ is hard on equipment and facilities. The longer the plant stays out of operation, the more challenging and costly [it] will be to restart.

“We have been seeking a way to justify restarting production and returning to operational status,” Beaudry wrote. “Although we have been unsuccessful thus far, we are still working toward that end.”

He also wrote that he believes the plant “will restart when market conditions warrant. Right now, we need help to make that day more of a likelihood.”

Columbia Falls Aluminum Co. laid off 88 people when it closed. The closure came about after the company was unable to reach an agreement on the price of electricity with the Bonneville Power Administration. The two entities were negotiating after the 9th U.S. Circuit Court ruled that the aluminum company’s contract with Bonneville was void because it didn’t fit with the Northwest Power Act.

While there is no specific date identified to reopen the plant, Beaudry’s application offers an estimate of April 2012.

State law allows the governing bodies of a county, city or town — if the property is located in a city or town — and school districts to jointly reduce by 95 percent the taxable value of property that is taxed. Only commercial or industrial property taxed under two specific Montana laws is eligible for the property tax reduction.

In this case, if the county and school district approve the waiver, they could lift the tax reduction at any time, according to state law. No waiver can be granted for more than three years.

Separately, CFAC’s parent company, the Swiss-based commodities firm Glencore, last week launched a public share offering after four decades of private ownership.

When making the announcement, Glencore officials said their company controls 60 percent of the third-party zinc market, 50 percent of copper, 45 percent of lead, 38 percent of alumina and about 33 percent of thermal coal.

The company’s value has been estimated at between $60 billion and $70 billion. It’s expected to be only the third company, and the first in 25 years, to enter the FTSE 100 index on its first day of trading, which is expected to occur in May. The FTSE 100 represents the 100 largest blue-chip companies in the United Kingdom.

Analysts expect Glencore to more than double its profits in two years.

Reporter Shelley Ridenour may be reached at 758-4439 or by email at sridenour@dailyinterlake.com.