A BILL for an Act to amend and reenact section 57-06-17.1 of the North Dakota Century Code, relating to the carbon dioxide pipeline tax exemption; and to provide an effective date.
SB 2320 would amend North Dakota’s property tax exemption for carbon dioxide pipelines. Under current law, qualifying CO2 pipelines and related equipment are exempt from property taxation during construction and for the first ten full taxable years after initial operation, so long as the pipeline was constructed after 1996 and is used to transport carbon dioxide for secure geologic storage or enhanced oil or natural gas recovery. The bill would narrow that exemption by excluding interstate pipelines and associated equipment that bring carbon dioxide into North Dakota for secure geologic storage.
The bill also sets an effective date for taxable years beginning after December 31, 2024. In practical terms, it would change how certain CO2 pipeline projects are taxed, potentially increasing the property tax burden on interstate pipeline infrastructure used for carbon dioxide storage projects while leaving the existing exemption in place for other qualifying in-state projects.
SB 2320 would amend section 57-06-17.1 of the North Dakota Century Code, limiting the scope of the carbon dioxide pipeline property tax exemption. The main legal effect is to remove tax-exempt status from interstate pipelines and necessary associated equipment that transport carbon dioxide into the state for secure geologic storage, while preserving the exemption for other qualifying pipelines and equipment. This would affect pipeline owners, carbon capture and storage projects, and local taxing jurisdictions by potentially increasing taxable property values for the excluded infrastructure beginning with taxable years after December 31, 2024.
The bill ultimately failed, and no committee transcripts or recorded votes are provided in the materials, so there is no detailed public discussion to gauge broad support or opposition. Based on the text alone, the measure appears targeted and policy-specific rather than expansive, suggesting the debate likely centered on the tax treatment of interstate carbon dioxide pipeline projects and their role in carbon capture and storage development. The failure indicates the proposal did not advance, but the available record does not show whether that was due to substantive opposition, procedural issues, or lack of support.
The likely point of contention is the bill’s decision to carve out interstate carbon dioxide pipelines from the existing property tax exemption. Supporters would likely view the change as a way to narrow a tax benefit and ensure interstate infrastructure contributing to in-state storage is taxed like other property, while opponents would likely argue that removing the exemption could discourage carbon capture and storage investment, raise project costs, and affect regional pipeline development. Because no committee testimony or vote breakdown is included, the specific positions of legislators, industry stakeholders, counties, or landowners are not documented in the provided record.