BISMARCK, N.D. (KXNET) — In a hearing Wednesday at the Capitol, legislators gathered to discuss Senate Bill 2383.

The bill would remove the tax exemption for carbon pipelines that are getting the 45Q tax credit. 

District 8’s Senator Jeffry Magrum says the bill is proposed to get questions answered for North Dakotans.

Magrum does not believe the Summit Carbon Solutions project is clear on who is paying for what, and how much of the tax credit is being used.

“If these companies are getting the 45 to federal tax credit, are they also getting the state tax exemption which is a 10-year exemption? It is paid by the state treasury back to the local political sub but the state taxpayers are still paying for that exemption. So I didn’t have the answer and today we still didn’t get the answer. It was not clear at all how it works. I don’t know whether people are not being truthful and telling us or if they just don’t know themselves,” said District 8 Senator, Jeffery Magrum.

Ultimately, how is everything paying out? Although no one spoke in favor of the bill on Wednesday, he says whether the bill is passed or not, North Dakotans need more answers.

A handful of people did provide testimonies opposing SB 2383.

Those against the bill argue this will put the future of North Dakota thriving in a low carbon economy at risk, preventing the growth and value of ag and energy industries. Some mentioned that the bill contradicts past efforts and laws in our legislature.

“This bill removes an incentive for pipeline development enacted by prior legislatures,” said Summit Carbon Solutions’ Charlie Adams. “In fact, this bill is contradicting to the North Dakota state, legislators’ chapter 3822 in titled carbon dioxide underground storage which created a framework for new industries in the state.”

“In 2019 the North Dakota legislature exempted CO2 for geological storage from property taxes,” explained President of Lignite Energy Jason Bohrer. “This sells and uses taxes and incentivizes the use of CO2 for enhanced oil recovery, but the state legislature has been involved in this debate for how you can best quantify and utilize that CO2.”

There were no clear answers to representative Magrum questions as to how the project plans to pay and play out. He says he will continue to get those answers. 

Summit Carbon Solutions representative, Charlie Adams, says the tax credit would not be taken until full capture and sequestration is completed. There is currently a 12-year time period on that text credit.