AN ACT to create and enact a new section to chapter 4.1-01 of the North Dakota Century Code, relating to a low-carbon fuels fund; to amend and reenact sections 39-04-39 and 54-44.5-09 of the North Dakota Century Code, relating to the distribution of certain vehicle registration fees and ethanol production incentives; to repeal chapter 17-02 of the North Dakota Century Code, relating to ethanol production incentives; to provide a continuing appropriation; to provide for a transfer; and to provide for a report.
SB2333 restructures North Dakota’s ethanol production incentive program into a broader low-carbon fuels fund. The bill creates a special fund in the state treasury, continuously appropriated to the agriculture commissioner, to pay incentives to ethanol production facilities for eligible capital projects that improve efficiency and reduce the carbon intensity of production. Eligible projects include carbon capture and storage infrastructure, beneficial use of carbon dioxide, energy-efficiency upgrades, and ethanol yield improvements. The bill caps incentives at 50% of project costs, with limits of $3 million per biennium, $10 million per facility over 10 years, and up to $1 million for developing a carbon-intensity verification process.
The bill also redirects a portion of farm vehicle registration fee revenue into the new fund by amending the vehicle fee distribution statute. It transfers 40% of certain farm vehicle registration collections annually from the highway tax distribution fund, subject to a $30 million cumulative transfer cap and a $7.5 million fund balance limit. In addition, it repeals the existing ethanol production incentive chapter, transfers any remaining balance from the old ethanol production incentive fund to the new low-carbon fuels fund on July 1, 2025, and updates the Office of Renewable Energy and Energy Efficiency statute to remove its role in managing the repealed incentive program.
The bill’s impact on state law is to replace a narrower ethanol production incentive structure with a new, continuing appropriation-based low-carbon fuels program tied to carbon reduction and verification. It changes how certain registration fee revenues are allocated, creates a new special fund, and shifts administrative responsibility for incentive payments to the commissioner under the new section rather than under the repealed chapter 17-02 framework. It also preserves a reporting requirement to legislative management on fund revenues, distributions, and balances.
The overall sentiment appears strongly favorable. The bill passed both chambers by wide margins, with a 42-2 Senate vote and a 65-25 House vote, indicating broad support for maintaining and modernizing support for ethanol-related investment and low-carbon fuel development. The vote totals suggest the measure was generally viewed as an economic development and energy policy bill rather than a controversial overhaul.
The main points of contention likely center on the use of public revenue from farm vehicle registration fees to subsidize private ethanol facility capital projects, the size and duration of the incentive commitments, and the policy shift from traditional ethanol production incentives to a carbon-intensity-based framework. Supporters likely emphasized competitiveness, emissions reduction, and investment in rural industry, while critics may have questioned the subsidy structure, the continuing appropriation, and whether the program sufficiently benefits taxpayers or the broader transportation system.
SB2333 amends North Dakota law by creating a new low-carbon fuels fund, repealing the existing ethanol production incentive chapter, and redirecting certain farm vehicle registration fee revenues into the new fund. It changes the administration of incentives for ethanol facilities, authorizes continuing appropriations for those payments, and updates related statutory references so the state’s renewable energy office no longer manages the repealed incentive program. The bill also imposes reporting requirements and caps on incentive awards and fund transfers.
The bill appears to have enjoyed broad bipartisan support, as reflected in the large margins of passage in both the Senate and House. The voting pattern suggests general agreement with supporting ethanol production and low-carbon fuel investments, along with a willingness to modernize the incentive structure to emphasize carbon intensity reduction and verification. There is no committee transcript available here indicating significant opposition, but the House vote shows somewhat more resistance than the Senate.
The likely areas of debate are the source and use of funding, especially the diversion of farm vehicle registration fee revenue to subsidize ethanol facility projects, and whether the state should continue using public funds for production incentives at all. Another possible point of contention is the transition from the existing ethanol production incentive program to a new low-carbon fuels framework, including the administrative shift, the continuing appropriation, and the limits on how much any one facility can receive. Supporters would be expected to favor the bill as an economic and emissions-reduction measure, while skeptics may view it as a targeted subsidy for a specific industry.