25.0895.01000
Sixty-ninth
Legislative Assembly
of North Dakota
Introduced by
Representatives Novak, Berg, Hagert, Headland, J. Olson, S. Olson, Porter, Tveit
Senators Boehm, Patten, Thomas
A BILL for an Act to amend and reenact sections 57-60-02, 57-60-02.2, 57-60-14, and 57-61-01
of the North Dakota Century Code, relating to an exemption from the coal conversion facilities
tax and the imposition of a lignite research tax, allocation of the coal conversion facilities
privilege tax and the lignite research tax, and an exemption from the coal severance tax; to
provide an effective date; and to provide an expiration date.
BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
SECTION 1. AMENDMENT. Section 57-60-02 of the North Dakota Century Code is
amended and reenacted as follows:
57-60-02. Imposition of taxes. (Effective through June 30, 20262036)
There is hereby imposed upon the operator of each coal conversion facility a tax paid
monthly for the privilege of producing products of such coal conversion facility. The rate of the
tax must be computed as follows:
1.For all coal conversion facilities, except as otherwise provided in this section, the tax is
measured by the gross receipts derived from the facility for the preceding month and is
in the amount of two percent of its gross receipts. Gross receipts derived from the sale
of a capital asset are not subject to the tax imposed by this subsection.
2.For electrical generating plants, the tax is at a rate of sixty-five one-hundredths of
one mill times sixty percent of the installed capacity of each unit times the number of
hours in the taxable period. All electrical energy generating units that begin
construction or complete repowering are exempt from eighty-five percent of the tax
imposed by this subsection for five years from the date of the first taxable production
or from the date of the first taxable production after repowering from the unit. If a unit
is incapable of generating electricity for eighteen consecutive months, the tax on that
unit for taxable periods beginning after the eighteenth month must be reduced by the
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HOUSE BILL NO. 1279
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ratio that the cost of repair of the unit bears to the original cost of the unit. This
reduced rate remains in effect until the unit is capable of generating electricity.
3.For electrical generating plants, in addition to the tax imposed by subsection 2, there is
a tax at the rate of twenty-five one-hundredths of one mill on each kilowatt hour of
electricity produced for the purpose of sale. For all electrical generating plants that
begin construction or complete repowering, the production from the plants is exempt
from the tax imposed by this subsection for five years from the date of the first taxable
production or from the date of the first taxable production after repowering from the
plant.
4.For coal gasification plants, the tax is the greater of either the amount provided in
subsection 1 or thirteen and one-half cents on each one thousand cubic feet
[28316.85 liters] of synthetic natural gas produced for the purpose of sale but not
including any amount of synthetic natural gas in excess of one hundred ten million
cubic feet per day.
5.For all coal conversion facilities, other than electrical generating plants, the production
from the facilities is exempt from eighty-five percent of the tax imposed by this section
for a period of five years from the date of first taxable production from the facility. The
operator of each facility applying for exemption under this subsection shall certify to
the tax commissioner the date of first taxable production of the facility.
6.For coal beneficiation plants, the tax is twenty cents on each ton of two thousand
pounds [907.18 kilograms] of beneficiated coal produced for the purpose of sale, or
one and one-quarter percent of the gross receipts derived from such facility for the
preceding month, whichever amount is greater. Any amount of beneficiated coal
produced in excess of eighty percent of the design capacity of the coal beneficiation
plant or produced for use within a coal conversion facility is exempt from such tax.
7.With the exception of the tax imposed under subsection 3, the board of county
commissioners, by resolution, may grant the operator of a plant or facility located
within the county a partial or complete exemption from up to fifteen percent of the tax
imposed under this section for a period not to extend past June 30, 20262036. If a
board of county commissioners grants a partial or complete exemption for a specific
plant or facility under this subsection, subsection 2 of section 57-60-14 does not apply.
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Notwithstanding section 57-60-14, any tax collected from a plant or facility subject to
the exemption provided by this subsection must be allocated entirely to the county for
allocation as provided in section 57-60-15.
Imposition of taxes. (Effective after June 30, 20262036) There is hereby imposed upon
the operator of each coal conversion facility a tax paid monthly for the privilege of producing
products of such coal conversion facility. The rate of the tax must be computed as follows:
1.For all coal conversion facilities, except as otherwise provided in this section, the tax is
measured by the gross receipts derived from the facility for the preceding month and is
in the amount of two percent of its gross receipts. Gross receipts derived from the sale
of a capital asset are not subject to the tax imposed by this subsection.
2.For electrical generating plants, the tax is at a rate of sixty-five one-hundredths of one
mill times sixty percent of the installed capacity of each unit times the number of hours
in the taxable period. All electrical energy generating units that begin construction or
complete repowering are exempt from eighty-five percent of the tax imposed by this
subsection for five years from the date of the first taxable production or from the date
of the first taxable production after repowering from the unit. The board of county
commissioners may, by resolution, grant to the operator of an electrical generating
plant located within the county partial or complete exemption from the remaining
fifteen percent of the tax imposed by this subsection for a period not exceeding five
years from the date of the first taxable production or from the date of the first taxable
production after repowering from the unit. If a board of county commissioners grants a
partial or complete exemption for a specific coal conversion facility under this
subsection, the provisions of subsection 2 of section 57-60-14 do not apply as that
subsection relates to revenue from the specific unit of the coal conversion facility for
which the partial or complete exemption has been granted. Notwithstanding section
57-60-14, any tax collected from a unit subject to the exemption provided by this
subsection must be allocated entirely to the county for allocation as provided in section
57-60-15. If a unit is incapable of generating electricity for eighteen consecutive
months, the tax on that unit for taxable periods beginning after the eighteenth month
must be reduced by the ratio that the cost of repair of the unit bears to the original cost
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of the unit. This reduced rate remains in effect until the unit is capable of generating
electricity.
3.For electrical generating plants, in addition to the tax imposed by subsection 2, there is
a tax at the rate of twenty-five one-hundredths of one mill on each kilowatt hour of
electricity produced for the purpose of sale. For all electrical generating plants that
begin construction or complete repowering, the production from the plants is exempt
from the tax imposed by this subsection for five years from the date of the first taxable
production or from the date of the first taxable production after repowering from the
plant.
4.For coal gasification plants, the tax is the greater of either the amount provided in
subsection 1 or thirteen and one-half cents on each one thousand cubic feet
[28316.85 liters] of synthetic natural gas produced for the purpose of sale but not
including any amount of synthetic natural gas in excess of one hundred ten million
cubic feet per day.
5.a.For all coal conversion facilities, other than electrical generating plants, the
production from the facilities is exempt from eighty-five percent of the tax
imposed by this section for a period of five years from the date of first taxable
production from the facility. The operator of each facility applying for exemption
under this subsection shall certify to the tax commissioner the date of first taxable
production of the facility.
b.The board of county commissioners may, by resolution, grant to the operator of a
coal conversion facility, other than an electrical generating plant, located within
the county a partial or complete exemption from the remaining fifteen percent of
tax imposed by this section for a period not exceeding five years from the date of
the first taxable production from the facility. Notwithstanding the provisions of
section 57-60-14, any tax collected which is based upon the production of a
facility subject to the exemption provided by this subsection must be allocated
entirely to the county for allocation as provided in section 57-60-15.
6.For coal beneficiation plants, the tax is twenty cents on each ton of two thousand
pounds [907.18 kilograms] of beneficiated coal produced for the purpose of sale, or
one and one-quarter percent of the gross receipts derived from such facility for the
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preceding month, whichever amount is greater. Any amount of beneficiated coal
produced in excess of eighty percent of the design capacity of the coal beneficiation
plant or produced for use within a coal conversion facility is exempt from such tax.
SECTION 2. AMENDMENT. Section 57-60-02.2 of the North Dakota Century Code is
amended and reenacted as follows:
57-60-02.2. Coal conversion facility tax - Exemption - Lignite research tax -
Imposition. (Effective through June 30, 20262036)
1.Excluding the generation tax imposed under subsection 3 of section 57-60-02, a coal
conversion facility is exempt from eighty-five percent of the tax imposed under section
57-60-02 and instead shall pay a lignite research tax equal to eighty-five percent of the
tax imposed under section 57-60-02 multiplied by five percent.
2.An electrical generating plant is exempt from the generation tax imposed under
subsection 3 of section 57-60-02 and instead shall pay a lignite research tax equal to
the tax imposed under subsection 3 of section 57-60-02 multiplied by five percent.
SECTION 3. AMENDMENT. Section 57-60-14 of the North Dakota Century Code is
amended and reenacted as follows:
57-60-14. Allocation of revenue - Continuing appropriation. (Effective through
June 30, 20262036)
1.At least quarterly, the state treasurer shall allocate:
a.The lignite research tax collections under section 57-60-02.2 to the lignite
research fund for the purposes under section 57-61-01.5.
b.The remaining coal conversion tax collections under section 57-60-02 to the
county.
2.Notwithstanding any other provision of law, the allocation under this section to each
county may not be less in each calendar year than the amount certified to the state
treasurer for each county under this section in the immediately preceding calendar
year. For a county that has received less in a calendar year than the amount certified
to the state treasurer for that county in the immediately preceding calendar year, not
later than January tenth of the following year, the county auditor shall calculate the
amount that is due under this subsection and submit a statement of the amount to the
state treasurer. The state treasurer shall verify the stated amount and make the
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required payment under this subsection to the county, from collections received under
section 57-60-02, not later than March first of the following year. The funds needed to
make the distribution to counties under this subsection are appropriated on a
continuing basis for making these payments. Money received by a county under this
subsection must be distributed pursuant to section 57-60-15.
3.Notwithstanding any other provision of law, for a county in which is located a coal
conversion facility that was not a coal conversion facility under this chapter before
January 1, 2002, for years after 2002, subsection 2 applies to allocations to that
county under this section, except that for a county described in this subsection,
amounts received for any calendar year must be allocated by the county in the same
manner property taxes for the facility were allocated for taxable year 2001.
Allocation of revenue - Continuing appropriation. (Effective after June 30, 20262036)
1.The state treasurer shall no less than quarterly allocate all moneys received from all
coal conversion facilities in each county pursuant to the provisions of this chapter,
fifteen percent to the county and eighty-five percent to the state general fund, except
moneys received from the tax imposed by subsection 3 of section 57-60-02, which
must be deposited in the state general fund. Five percent of all funds allocated to the
state general fund pursuant to this chapter must be allocated to the lignite research
fund, for the purposes defined in section 57-61-01.5.
2.Notwithstanding any other provision of law, the allocation under this section to each
county may not be less in each calendar year than the amount certified to the state
treasurer for each county under this section in the immediately preceding calendar
year. For a county that has received less in a calendar year than the amount certified
to the state treasurer for that county in the immediately preceding calendar year, not
later than January tenth of the following year, the county auditor shall calculate the
amount that is due under this subsection and submit a statement of the amount to the
state treasurer. The state treasurer shall verify the stated amount and make the
required payment under this subsection to the county, from collections received under
section 57-60-02, not later than March first of the following year. The funds needed to
make the distribution to counties under this subsection are appropriated on a
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continuing basis for making these payments. Money received by a county under this
subsection must be distributed pursuant to section 57-60-15.
3.Notwithstanding any other provision of law, for a county in which is located a coal
conversion facility that was not a coal conversion facility under this chapter before
January 1, 2002, for years after 2002, subsection 2 applies to allocations to that
county under this section, except that for a county described in this subsection,
amounts received for any calendar year must be allocated by the county in the same
manner property taxes for the facility were allocated for taxable year 2001.
SECTION 4. AMENDMENT. Section 57-61-01 of the North Dakota Century Code is
amended and reenacted as follows:
57-61-01. Severance tax upon coal - Imposition - In lieu of sales and use taxes -
Payment to the tax commissioner. (Effective through June 30, 20262036)
1.There is hereby imposed upon all coal severed for sale or for industrial purposes by
coal mines within the state a tax of thirty-seven and one-half cents per ton of two
thousand pounds [907.18 kilograms]. The severance tax is in lieu of any sales or use
taxes imposed by law. Each coal mine owner or operator shall remit the tax for each
month, within twenty-five days after the end of each month, to the tax commissioner
on reports and forms as the tax commissioner deems necessary. For the purposes of
this chapter, commercial leonardite is taxed in the same manner as coal.
2.The board of county commissioners, by resolution, may grant to the operator of a mine
from which the coal or commercial leonardite is mined a partial or complete exemption
from up to seventy percent of the tax imposed under this section for a period not to
extend past June 30, 20262036. Any tax revenue exceeding thirty percent of the tax
imposed under this subsection must be allocated to the county under subsection 3 of
section 57-62-02.
Severance tax upon coal - Imposition - In lieu of sales and use taxes - Payment to the
tax commissioner. (Effective after June 30, 20262036) There is hereby imposed upon all
coal severed for sale or for industrial purposes by coal mines within the state a tax of
thirty-seven and one-half cents per ton of two thousand pounds [907.18 kilograms]. The
severance tax is in lieu of any sales or use taxes imposed by law. Each coal mine owner or
operator shall remit the tax for each month, within twenty-five days after the end of each month,
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to the tax commissioner on reports and forms as the tax commissioner deems necessary. For
the purposes of this chapter, commercial leonardite is taxed in the same manner as coal.
SECTION 5. EFFECTIVE DATE. This Act is effective for taxable production beginning after
June 30, 2025.
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