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Agriculturally-Based Fuel Production Wage and Salary Tax Credit

New ethanol, biodiesel, green diesel, and biogas producers may be eligible for an income tax credit equal to a percentage of wages and salaries paid each year. A corporation involved in processing an agricultural product, including ethanol, biodiesel, and biogas feedstocks, may claim an income tax credit equal to 1% of wages and salaries paid during the tax year for each of the first three years of operation and 0.5% of wages and salaries paid during the tax year for the fourth and fifth years. Only corporations doing business in North Dakota for the first time are eligible. A corporation created from the reorganization or acquisition of an existing business does not qualify, nor does a business that receives a property or income tax exemption under North Dakota Century Code 40-57.1. (Reference North Dakota Century Code 57-38-30.1)

Alternative Fuel Labeling Requirement

Alternative fuel retailers must label retail dispensing units with the price, name, and main components of the alternative fuel or alternative fuel blend being sold. The labeling must follow established labeling specifications for petroleum-based fuels. An alternative fuel producer may provide the retailer with a label promoting the benefits of the alternative fuel if the label meets the specified requirements. Alternative fuel is defined as a fuel used in an engine or vehicle other than a petroleum-based fuel, including biodiesel and green diesel. Alcohol fuel blends containing at least 1% of alcohol by volume must also be clearly labeled at the dispenser and on any price advertisements. (Reference Senate Bills 2034 and 2127, 2011, and North Dakota Century Code 19-10-03.1 and 19-10-03.3)

Alternative Fuel Tax Rates

A special excise tax rate of 2% is imposed on the sale of propane (liquefied petroleum gas) and a tax of $0.04 per gallon is imposed on all special fuels sales, including compressed natural gas. Retailers must obtain a license from the Office of the State Tax Commissioner to sell special fuels. Exceptions apply. (Reference Senate Bill 2197, 2011, and North Dakota Century Code 57-43.2-02 through 57-43.2-05)

2015 Session - Proposed Legislation

HB-1133

Amends motor fuel tax to apply current 23 cent rate (applies to gasoline and diesel) to LNG on each 1.7 gallons. Currently imposed per gallon. CNG tax imposed on each 120 cu. ft.; this is not changed. Reference - HB1133 Bill History, Reference - HB1133 Bill Text Passed Senate 3/26/15; to House for concurrence; Signed by Governor 04/09

HB-1446

Creates a cost share program to fund natural gas fueling stations with up to $250K provided by program. Also provides up to $7,500 for non-commercial NGVs and $15,000 for commercial motor vehicles that are NGVs; conversions also qualify. Provides $3 million for fueling station grants and $1 million for NGV grants to be available from July 1, 2015 to June 30, 2017. Amended version provides up to 2,500 lb. weight exemption for CNG or LNG vehicles. Reengrossed version 2/23/2015 drops vehicle incentive and lowers station amount to $50,000 with maximum of $200,000 provided. Reference - HB1446 Bill History, Reference - HB1446 Bill Text Failed to pass House 2/24/15

2014 Session - Proposed Legislation

North Dakota had 2014 proposed NGV Legislation

2013 Session - Proposed Legislation

HB-1208

Amends the excise tax on motor fuels for all fuels and CNG (LNG currently not covered by excise tax in ND) from $0.23 to $0.11; CNG rate is per 120 cubic feet. It says the retailers have to pass along the reduced tax to the customer. Reference - HB1208 Bill History, Reference - HB1208 Bill Text NOTE: This bill was defeated in the House on February 4th, 2013.

HB-1410

Relating to sales tax exemptions for materials used to construct a processing facility to produce liquefied natural gas and for liquified natural gas used for railroad purposes; to amend and reenact subsection 4 of section 57-40.2-03.3, subsection 5 of section 57-40.2-04, and section 57-43.2-02.3 of the North Dakota Century Code, relating to exemption from sales and use and special fuels taxes for liquified natural gas used for railroad purposes and materials used to liquify natural gas; and to provide an effective date. Reference - HB1410 Bill History, Reference - HB1410 Bill TextSigned by Governor 4/29/2013

HCR-3016

Resolution in support of using natural gas to increased demand for natural gas and reduced flaring of natural gas; calls for a Legislative Management study on use of natural gas in motor vehicles. 2/18/2013 amendment includes review of the potential of converting natural gas to diesel fuel. Reference - HCR3016 Bill History, Reference - HCR3016 Bill Text Passed on April 23 2013