tieth
Legislative Assembly
HOUSE BILL NO. 1365
of North Dakota
Introduced by
Representatives Belter, Kerzman
Senators Christmann, O'Connell
A BILL for an Act to amend and reenact sections 57-39.2-04.2 and 57-40.2-04.2, subsections 3
and 11 of section 57-60-01, subsections 2, 3, and 5 of section 57-60-02, sections 57-60-06 and
57-60-07, and subsection 1 of section 57-60-14 of the North Dakota Century Code, relating to
the definition of power plant, repowering, and coal conversion facility for sales, use, and
privilege tax purposes, the imposition of taxes on coal conversion facilities, the powers of the
tax commissioner, and allocation of revenue from coal conversion facilities; and to declare an
emergency.
BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
SECTION 1. AMENDMENT. Section 57-39.2-04.2 of the North Dakota Century Code
is amended and reenacted as follows:
57-39.2-04.2. (Effective through June 30, 2007) Reduced rate and exemption for
power plant construction, production, environmental upgrade, and repowering
equipment.
1.
As used in this section, unless the context otherwise requires:
a.
"Environmental upgrade" means an investment greater than twenty-five
million dollars or one hundred thousand dollars per megawatt of installed
nameplate capacity, whichever is less, in machinery, equipment, and related
facilities for reducing emissions or increasing efficiency at an existing power
plant.
b.
"Operator" means any person owning, holding, or leasing a power plant.
c.
"Power plant" means:
(1)
An electrical generating plant, and all additions to the plant, which
processes or converts lignite coal from its natural form into electrical
Page No. 1
78303.0100
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23 Sixtieth
Legislative Assembly
power and which has at least one single electrical energy generation
unit with a capacity of one hundred twenty thousand kilowatts or more.
(2)
A wind-powered electrical generating facility, on which construction is
completed before January 1, 2011, and all additions to the facility,
which provides electrical power through wind generation and which has
at least one single electrical energy generation unit with a nameplate
capacity of one hundred kilowatts or more.
d.
"Production equipment" means machinery and attachment units, other than
replacement parts, directly and exclusively used in the generation,
transmission, or distribution of electrical energy for sale by a power plant.
e.
"Repowering" means an investment of more than two hundred million dollars
or one million dollars per megawatt of installed nameplate capacity, whichever
is less, in an existing power plant that modifies or replaces the process used
for converting lignite coal from its natural form into electrical power.
2.
Sales of production or environmental upgrade equipment that is delivered on or
after January 1, 2007, and used exclusively in power plants or repowering existing
power plants that begin construction after June 30, 1991, are exempt from the tax
imposed by this chapter.
3.
Sales of tangible personal property, other than production or environmental
upgrade equipment, which is used in the construction of new power plants or to
add environmental upgrades to existing power plants or repowering existing power
plants are exempt from the tax imposed by this chapter.
4.
To receive the reduced rate or exemption at the time of purchase, the operator
must receive from the commissioner a certificate that the tangible personal
property or production equipment the operator intends to purchase qualifies for the
reduced rate or exemption. If a certificate is not received prior to the purchase, the
operator shall pay the applicable tax imposed by this chapter and apply to the
commissioner for a refund.
5.
If the tangible personal property or production equipment is purchased or installed
by a contractor subject to the tax imposed by this chapter, the operator may apply
Page No. 2
78303.0100
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30 Sixtieth
Legislative Assembly
for a refund of the difference between the amount remitted by the contractor and
the reduced rate or exemption imposed or allowed by this section.
(Effective after June 30, 2007) Reduced rate and exemption for power plant
construction, production, environmental upgrade, and repowering equipment and oil
refinery or gas processing plant environmental upgrade equipment.
1.
As used in this section, unless the context otherwise requires:
a.
(1)
"Environmental upgrade" means an investment greater than twenty-five
million dollars or one hundred thousand dollars per megawatt of
installed nameplate capacity, whichever is less, in machinery,
equipment, and related facilities for reducing emissions or increasing
efficiency at an existing power plant.
(2)
"Environmental upgrade" for purposes of a process unit means an
investment greater than one hundred thousand dollars in machinery,
equipment, and related facilities for reducing emissions, increasing
efficiency, or enhancing reliability of the equipment at a new or existing
process unit.
b.
"Operator" means any person owning, holding, or leasing a power plant or
process unit.
c.
"Power plant" means:
(1)
An electrical generating plant, and all additions to the plant, which
processes or converts lignite coal from its natural form into electrical
power and which has at least one single electrical energy generation
unit with a capacity of one hundred twenty thousand kilowatts or more.
(2)
A wind-powered electrical generating facility, on which construction is
completed before January 1, 2011, and all additions to the facility,
which provides electrical power through wind generation and which has
at least one single electrical energy generation unit with a nameplate
capacity of one hundred kilowatts or more.
d.
"Process unit" means an oil refinery or gas processing plant and all adjacent
units that are utilized in the processing of crude oil or natural gas.
Page No. 3
78303.0100
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30 Sixtieth
Legislative Assembly
e.
"Production equipment" means machinery and attachment units, other than
replacement parts, directly and exclusively used in the generation,
transmission, or distribution of electrical energy for sale by a power plant.
f.
"Repowering" means an investment of more than two hundred million dollars
or one million dollars per megawatt of installed nameplate capacity, whichever
is less, in an existing power plant that modifies or replaces the process used
for converting lignite coal from its natural form into electrical power.
2.
Sales of production or environmental upgrade equipment that is delivered on or
after January 1, 2007, and used exclusively in power plants or repowering existing
power plants or in processing units that begin construction after June 30, 1991, are
exempt from the tax imposed by this chapter.
3.
Sales of tangible personal property, other than production or environmental
upgrade equipment, which is used in the construction of new power plants or to
add environmental upgrades to existing power plants or repowering existing power
plants or to add environmental upgrades to existing process units are exempt from
the tax imposed by this chapter.
4.
To receive the reduced rate or exemption at the time of purchase, the operator
must receive from the commissioner a certificate that the tangible personal
property or production equipment the operator intends to purchase qualifies for the
reduced rate or exemption. If a certificate is not received prior to the purchase, the
operator shall pay the applicable tax imposed by this chapter and apply to the
commissioner for a refund.
5.
If the tangible personal property or production equipment is purchased or installed
by a contractor subject to the tax imposed by this chapter, the operator may apply
for a refund of the difference between the amount remitted by the contractor and
the reduced rate or exemption imposed or allowed by this section.
SECTION 2. AMENDMENT. Section 57-40.2-04.2 of the North Dakota Century Code
is amended and reenacted as follows:
57-40.2-04.2. (Effective through June 30, 2007) Reduced rate and exemption for
power plant construction, production, environmental upgrade, and repowering
equipment.
Page No. 4
78303.0100
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31 Sixtieth
Legislative Assembly
1.
As used in this section, unless the context otherwise requires:
a.
"Environmental upgrade" means an investment greater than twenty-five
million dollars or one hundred thousand dollars per megawatt of installed
nameplate capacity, whichever is less, in machinery, equipment, and related
facilities for reducing emissions or increasing efficiency at an existing power
plant.
b.
"Operator" means any person owning, holding, or leasing a power plant.
c.
"Power plant" means:
(1)
An electrical generating plant, and all additions to the plant, which
processes or converts lignite coal from its natural form into electrical
power and which has at least one single electrical energy generation
unit with a capacity of one hundred twenty thousand kilowatts or more.
(2)
A wind-powered electrical generating facility, on which construction is
completed before January 1, 2011, and all additions to the facility,
which provides electrical power through wind generation and which has
at least one single electrical energy generation unit with a nameplate
capacity of one hundred kilowatts or more.
d.
"Production equipment" means machinery and attachment units, other than
replacement parts, directly and exclusively used in the generation,
transmission, or distribution of electrical energy for sale by a power plant.
e.
"Repowering" means an inve