57-60 Coal Conversion Facilities Privilege Tax - North Dakota Statutes

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CHAPTER 57-60COAL CONVERSION FACILITIES PRIVILEGE TAX57-60-01. Definitions. As used in this chapter:1."Byproducts" means commercially usable products produced during the coal
gasification or coal beneficiation process other than the principal product of a coal
gasification plant or of a coal beneficiation plant.2."Carbon dioxide capture" means removal of carbon dioxide emissions from a coal
conversion facility.a.For electrical generating plants, carbon dioxide captured is measured using the
stack emissions of carbon dioxide from the facility as reported by the
continuous emission monitoring system, in compliance with environmental
protection agency rules in 40 CFR 75. The percentage reduction is determined
by:(1)Determining the total carbon dioxide produced from the facility before the
capture of carbon dioxide;(2)Subtracting the stack emissions of carbon dioxide from the facility; and(3)Dividing the result of paragraph 2 by the result of paragraph 1 and
multiplying by one hundred, which results in the percentage of carbon
dioxide captured.b.For coal gasification facilities, the carbon dioxide captured is determined by:(1)Determining the total carbon input to the facility by multiplying the
percentage of carbon content in the coal fed to the facility, determined
from the average of coal analysis for the taxing period, times the total
tons of coal fed to the facility for the taxing period.(2)Determining the amount of nonemissions carbon by multiplying the
percentage of carbon content in all hydrocarbon products, except carbon
dioxide, leaving the facility times the tons of hydrocarbon products
leaving the facility for the taxing period.(3)Subtracting the result under paragraph 2 from the result under
paragraph 1 and multiplying the result times 3.667 to convert the amount
of tons of carbon to tons of carbon dioxide, which results in the total tons
of carbon dioxide emissions without capture.(4)The amount of carbon dioxide captured for the taxing period measured
by a flow meter and converted to tons.(5)Dividing the result of paragraph 4 by the result from paragraph 3 and
multiplying by one hundred, which results in the percentage of carbon
dioxide captured.3."Coal beneficiation" means improving the physical, environmental, or combustion
qualities of coal but does not include crushing or treatment with dust suppressants or
freeze-proofing agents.4."Coal conversion facility" means any of the following:Page No. 1a.A plant, other than an electrical generating plant or a coal beneficiation plant,
with all additions thereto, which processes or converts coal from its natural or
beneficiated form into a form substantially different in chemical or physical
properties, including coal gasification, coal liquefaction, and the manufacture of
fertilizer and other products, and which uses or is designed to use over five
hundred thousand tons [453592.37 metric tons] of coal per year;b.An electrical generating plant, with all additions thereto, which processes or
converts coal from its natural or beneficiated form into electrical power and
which has at least one single electrical energy generation unit with a capacity of
ten thousand kilowatts or more;c.A plant, with all additions thereto, which is designed for coal beneficiation; ord.A gas-fired electrical generating facility, and all additions to the facility, which
generates electrical power through the consumption of gas produced by the
conversion of coal from its natural or beneficiated form into gas and has a
capacity of ten thousand kilowatts or more.5."Coal gasification" means the production of synthetic natural gas, methanol, or other
principal commercial gaseous or liquid product from coal.6."Commissioner" means the state tax commissioner.7."Design capacity of a coal beneficiation plant" means the number of tons a coal
beneficiation plant is designed to produce as certified by a registered professional
engineer.8."Gross receipts" means all revenue valued in money, whether received in money or
otherwise, derived by a coal conversion facility subject to the provisions of this
chapter from the production of products of a coal conversion facility, but not
including any revenue derived from transportation, transmission, distribution, or
other events which occur after completion of the process of production of the
products of the facility.For the purpose of computing the tax imposed by thischapter, "gross receipts" does not include:a.Any financial assistance, whether in the form of price guarantee payments or
otherwise, provided by the federal government or any agency of the federal
government;b.Any revenue derived from the sale of byproducts as herein defined to a
maximum of twenty percent of the gross receipts as defined in this subsection;c.Any revenue derived from the sale and transportation of carbon dioxide for use
in the enhanced recovery of oil or natural gas; ord.Prior to January 1, 2010, any revenue received by the operator of a coal
gasification plant to the extent the quotient of the gross receipts realized by the
operator divided by the synthetic natural gas produced and sold during a
month, in units of one thousand cubic feet [28316.85 liters] of synthetic gas,
exceeds the ceiling price. For calendar years 2001 and 2002, ceiling price
means $4.25 for each thousand cubic feet [28316.85 liters] of synthetic natural
gas produced and sold; and the ceiling price for 2003 is $4.35; for 2004, $4.45;
for 2005, $4.55; for 2006, $4.65; for 2007, $4.75; for 2008, $4.86; and for 2009,
$4.97.9."Installed capacity" means the number of kilowatts a power unit can produce
according to the nameplate assigned to the power unit generator by the
manufacturer.Page No. 210."Operator" means any person owning, holding, or leasing a coal conversion facility
and conducting the conversion of coal into the products of the facility.11."Person" means any individual, estate, trust, corporation, cooperative corporation,
limited liability company, or association.12."Repowering" means an investment of more than two hundred million dollars or one
million dollars per megawatt of installed nameplate capacity, whichever is less, in an
existing power plant that modifies or replaces the process used for converting coal in
its natural form or beneficiated coal into electric power.13."Synthetic natural gas" means methane and any admixed gaseous products
produced by coal gasification.57-60-02. Imposition of taxes. There is hereby imposed upon the operator of each coalconversion facility a tax paid monthly for the privilege of producing products of such coal
conversion facility. The rate of the tax must be computed as follows:1.For all coal conversion facilities, except as otherwise provided in this section, the tax
is measured by the gross receipts derived from such facility for the preceding month
and is in the amount of four and one-tenth percent of such gross receipts.Forpurposes of this subsection, "gross receipts" of a coal gasification plant do not
include any amount that is received by the operator of the plant for production of
synthetic natural gas in excess of one hundred ten million cubic feet per day. Gross
receipts derived from the sale of a capital asset are not subject to the tax imposed
by this subsection.2.For electrical generating plants, the tax is at a rate of sixty-five one-hundredths of
one mill times sixty percent of the installed capacity of each unit times the number of
hours in the taxable period.All electrical energy generating units that beginconstruction or complete repowering are exempt from eighty-five percent of the tax
imposed by this subsection for five years from the date of the first taxable production
or from the date of the first taxable production after repowering from the unit. The
board of county commissioners may, by resolution, grant to the operator of an
electrical generating plant located within the county partial or complete exemption
from the remaining fifteen percent of the tax imposed by this subsection for a period
not exceeding five years from the date of the first taxable production or from the date
of the first taxable production after repowering from the unit. If a board of county
commissioners grants a partial or complete exemption for a specific coal conversion
facility under this subsection, the provisions of subsection 2 of section 57-60-14 do
not apply as that subsection relates to revenue from the specific unit of the coal
conversion facility for which the partial or complete exemption has been granted.
Notwithstanding section 57-60-14, any tax collected from a unit subject to the
exemption provided by this subsection must be allocated entirely to the county for
allocation as provided in section 57-60-15.If a unit is incapable of generatingelectricity for eighteen consecutive months, the tax on that unit for taxable periods
beginning after the eighteenth month must be reduced by the ratio that the cost of
repair of the unit bears to the original cost of the unit. This reduced rate remains in
effect until the unit is capable of generating electricity.3.For electrical generating plants, in addition to the tax imposed by subsection 2, there
is a tax at the rate of twenty-five one-hundredths of one mill on each kilowatt hour of
electricity produced for the purpose of sale. For all electrical generating plants that
begin construction or complete repowering, the production from the plants is exempt
from the tax imposed by this subsection for five years from the date of the first
taxable production or from the date of the first taxable production after repowering
from the plant.Page No. 34.For coal gasification plants, the tax is the greater of either the amount provided in
subsection 1 or thirteen and one-half cents on each one thousand cubic feet
[28316.85 liters] of synthetic natural gas produced for the purpose of sale but not
including any amount of synthetic natural gas in excess of one hundred ten million
cubic feet per day.5.a.For all coal conversion facilities, other than electrical generating plants, the
production from the facilities is exempt from eighty-five percent of the tax
imposed by this section for a period of five years from the date of first taxable
production from the facility. The operator of each facility applying for exemption
under this subsection shall certify to the tax commissioner the date of first
taxable production of the facility.b.The board of county commissioners may, by resolution, grant to the operator of
a coal conversion facility, other than an electrical generating plant, located
within the county a partial or complete exemption from the remaining fifteen
percent of tax imposed by this section for a period not exceeding five years
from the date of the first taxable production from the facility. Notwithstanding
the provisions of section 57-60-14, any tax collected which is based upon the
production of a facility subject to the exemption provided by this subsection
must be allocated entirely to the county for allocation as provided in section
57-60-15.6.For coal beneficiation plants, the tax is twenty cents on each ton of two thousand
pounds [907.18 kilograms] of beneficiated coal produced for the purpose of sale, or
one and one-quarter percent of the gross receipts derived from such facility for the
preceding month, whichever amount is greater. Any amount of beneficiated coal
produced in excess of eighty percent of the design capacity of the coal beneficiation
plant is exempt from such tax.57-60-02.1.Carbon dioxide capture credit - Reporting requirement.A coalconversion facility that achieves a twenty percent capture of carbon dioxide emissions during a
taxable period after December 31, 2009, is entitled to a twenty percent reduction in the state
general fund share of the tax imposed under section 57-60-02 during that taxable period. The
facility is entitled to an additional reduction of one percent of the state general fund share of the
tax imposed under section 57-60-02 for every additional two percentage points of its capture of
carbon dioxide emissions. A maximum fifty percent reduction of the state general fund share of
the tax imposed under section 57-60-02 is allowed for eighty percent or more capture of carbon
dioxide emissions. A coal conversion facility may receive the reduction in coal conversion tax
under this section for ten years from the date of first capture of carbon dioxide emission or for ten
years from the date the coal conversion facility is eligible to receive the credit.The operator of a coal conversion facility that receives a credit under this section shallreport annually to the legislative council. The report must include:1.An overview of the carbon dioxide capture project.2.A status report on the current state of the carbon dioxide capture project, including
data on the amount of carbon dioxide produced from the facility before the carbon
dioxide capture project and the current carbon dioxide produced and captured from
the facility.3.Any recent changes to enhance the carbon dioxide capture system.4.Information on the status of federal law and regulations related to the carbon dioxide
capture project, including any benefits from the project realized by the operator
under federal law and regulations.Page No. 457-60-03.Measurement and recording of synthetic natural gas, byproducts,beneficiated coal, or electricity produced and carbon dioxide capture. The production of
synthetic natural gas, byproducts, beneficiated coal, or electrical power and data necessary to
determine the amount of carbon dioxide captured must be measured at the place of production
or generation, and any person subject to the imposition of the taxes provided by this chapter shall
maintain devices to measure and record the cumulative periodic totals of synthetic natural gas,
byproducts, beneficiated coal, and electrical power generated and data necessary to determine
the amount of carbon dioxide captured. Any person subject to the taxes imposed by this chapter
shall maintain accurate records of the daily and monthly totals of synthetic natural gas,
beneficiated coal, and electrical power generated and subject to such taxes and data necessary
to determine the amount of carbon dioxide captured. On or before October first of each year, the
operator of any coal gasification plant shall file a report with the state health officer listing the
quantity of byproducts produced during the year ending June thirtieth of that year.Thecommissioner shall have access to such records at reasonable times and places.57-60-04.Payment of taxes for plants other than electrical generating plants -When taxes due - When delinquent. Repealed by S.L. 1983, ch. 648,