§ 54-35-26 — Legislative interim committee review of economic development tax incentives

North Dakota § 54-35-26

• Jurisdiction: North Dakota
• Title 54: State Government
• Ch. 54-35: Legislative Management

Text

incentives.
The legislative assembly enacts economic development tax incentives with the intent to
encourage businesses to locate, grow, and remain in the state; to enhance employment
opportunities for citizens; and to foster the most advantageous direction, diversity, and growth of
the state economy. The legislative assembly requires systematic, detailed analysis of enacted
economic development tax incentives to assure that incentives are, and will continue, serving
the intended purposes in a cost-effective and equitable manner consistent with the intent of the
legislative assembly. To serve this intent and requirement:
1. During each interim, the legislative management shall assign to a legislative
management interim committee study responsibility that includes completing the
analysis of economic development tax incentives as provided in this section and
reporting its findings and any associated recommended legislation to the legislative
management.
2. The legislative management interim committee assigned the study responsibility under
this section shall analyze each incentive, applying considerations relevant to the
perceived goals of the incentive, including any or all of the following:
a. The extent of achievement of the goals of the incentive and whether unintended
consequences have developed in its application.
b. Whether the design and application of the incentive can be improved.
c. The extent of complementary or duplicative effect of other incentives or
governmental programs.
d. Whether the incentive has a positive influence on business behavior or rewards
business behavior that is likely to have occurred without the incentive.
e. The effect of the incentive on the state economy, including the extent of primary
sector operation of the recipient and any competitive disadvantage imposed or
benefit conferred on other state businesses, any benefit or burden created for
local government, and the extent of the incentive's benefit that flows to
out-of-state concerns.
f. The employment opportunities generated by the incentive and the extent those
represent career opportunities.
g. Whether the incentive is the most effective use of state resources to achieve
desired goals.
h. If the committee's analysis of the incentive is constrained by lack of data, whether
statutory or administrative changes should be made to improve collection and
availability of data.
3. The legislative management interim committee assigned the study responsibility under
this section may examine economic development tax incentives, shall complete
analysis of the incentives it designates for analysis during the interim, and shall
approve a plan to provide that each of the economic development tax incentives listed
in this subsection is subject to a complete analysis within each six-year period. The
interim committee may include in its recommendations any amendments to this
section, including amendments to add or remove incentives from the list of incentives
subject to analysis under this subsection. Analysis must be completed for economic
development tax incentives, including each of the following:
a. Renaissance zone credits and exemptions.
b. Research expense credit.
c. Agricultural commodity processing facility investment credit.
d. Biodiesel fuel production facility construction or retrofit credit, biodiesel fuel
blending credit, and biodiesel fuel equipment credit.

e. Seed capital investment credit.
f. Internship program credit.
g. Angel fund investment credit.
h. Workforce recruitment credit.
i. Soybean or canola crushing facility construction or retrofit credit.
j. Twenty-first century manufacturing and animal agricultural workforce incentive.
k. New or expanding business exemption.
l. Manufacturing and recycling equipment sales tax exemption.
m. Coal severance and conversion tax exemptions.
n. Oil and gas gross production and oil extraction tax exemptions.
o. Fuel tax refunds for certain users.
p. New jobs credit from income tax withholding.
q. Development or renewal area incentives.
r. Sales and use tax exemption for materials used to construct a fertilizer or
chemical processing facility.
s. Sales and use tax exemption for materials used in compressing, gathering,
collecting, storing, transporting, or injecting carbon dioxide for use in enhanced
recovery of oil or natural gas.
t. Sales and use tax exemption for enterprise information technology equipment
and computer software used in a qualified data center.
u. Sales and use tax exemption for raw materials, single-use product contact
systems, and reagents used for biologic manufacturing.
v. Sales and use tax exemption for materials used to construct or expand a coal
processing facility that utilizes coal as a feedstock.
4. By October first of each odd-numbered year, the interim committee assigned the study
responsibility under this section shall determine and approve:
a. The economic development tax incentives under subsection 3 which will be
designated for analysis during that interim and a plan to provide for analysis of
the remaining economic development tax incentives under subsection 3 within
the six-year period.
b. The perceived goals of the legislative assembly in creating or altering each
incentive designated for analysis, for use as a baseline for committee analysis of
the incentive.
c. The data and testimony that will be required to conduct an effective analysis of
each incentive designated for analysis.
5. The department of commerce, tax commissioner, economic development foundation,
and any other state agency or instrumentality shall provide data and analysis as
requested by the interim committee conducting the analysis under this section.
a. If data is not available, the entity requested to provide the information shall advise
the committee how the data could be obtained and the estimated cost of
obtaining the data.
b. If data is available but cannot be shared with the committee, the entity requested
to provide the information shall explain the reason and whether there are options
that could be used to obtain the data or an adequate substitute for the data.
6. The interim committee conducting the analysis under this section shall report its
findings and recommendations together with any legislation required to implement
those recommendations to the legislative management.