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New Energy Economics: N.D. Wind Energy Legislative Proposals

Cole Gustafson, NDSU Biofuels Economist Cole Gustafson, NDSU Biofuels Economist
Existing and potential wind energy owners should review the provisions of bills introduced in the North Dakota Legislature.

By Cole Gustafson, Biofuels Economist

NDSU Extension Service

Several wind energy bills have been proposed in the 2009 North Dakota Legislature. It is important that existing and potential wind energy owners review the provisions of these bills and convey their thoughts to local legislators.

House bill 1406 – Under this bill, the North Dakota Department of Commerce would receive an appropriation of approximately $180,000. The money would fund a full-time employee to market small wind turbines to private landowners. Supporters of this bill feel the decision to invest in wind energy is complicated, so potential investors may not be aware of various tax incentives, zoning regulations and local utility policies regarding the purchase of excess electricity.

Senate bill (SB) 2031 – Sets policy for the valuation of wind turbines for local tax assessments. Turbines constructed before Jan. 1, 2015, will be valued at 1.5 percent of assessed value. Specifically, this bill extends prior legislation from 2011 to the new deadline. As in SB 2033 mentioned later in this column, the extension is made to foster development of multiyear wind projects that may not be completed during the current bienium. This valuation guide does not affect state finances, but does impact local government budgeting. The lower initial valuation is intended to stimulate wind investment with the expectation that revenues generated through the project’s life will benefit local government finances.

SB 2032 - Removes the sunset clause of Jan. 1, 2011, on the sales and use tax exemption for wind-powered electrical generating facilities. It also includes plant expansions in the sales and use tax exemptions for power plants. The purpose of this legislation is to reduce the investment costs of new wind energy projects. Large wind farm projects often require several years for planning, development and construction. The existing sunset provision is viewed as a constraint because new wind projects undertaken during the next bienium most likely would not be finished by 2011. Therefore, items purchased after that date would not be eligible for a sales tax exemption.

SB 2033 – This bill extends the 3 percent tax credit for new investment in wind, geothermal, solar and biomass energy equipmennt if installed before 2015. This is a change from past legislation because it delays the sunset of this income tax credit from 2011 to 2015. A new twist is that devices installed after Sept. 30, 2008, are now eligible for a credit carryover for the succeeding 10 years. Previously, the carryover was restricted to five years. A limitation of any tax credit incentive is that the claimant must have taxable income. I checked with the North Dakota Tax Department late in 2008 and none of the money allocated to this program from the 2007 Legislature has been applied. Interestingly, the Legislative Council has stated that it cannot determine the fiscal impact of this bill.

I will provide updates throughout the session as additional wind legislation is deliberated. As always, your comments and questions are appreciated. You can reach me at

NDSU Agriculture Communication

Source:Cole Gustafson, (701) 231-7096,
Editor:Rich Mattern, (701) 231-6136,
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