Local Infrastructure Investment in Rural America by unknow

Author:unknow
Language: eng
Format: epub
Tags: Political Science, General
ISBN: 9780429693007
Google: qtlGEAAAQBAJ
Goodreads: 59316406
Publisher: Routledge
Published: 2021-11-28T00:00:00+00:00

STATE TAXATION POLICIES

The energy taxation package adopted in 1975 included a severance tax on the extraction of lignite coal and a coal conversion tax that applied to coal-fired power plants and synfuel facilities. The severance tax rate was specified on a per-ton (rather than percent-of-value) basis but was adjusted for inflation using the Wholesale Price Index. The base rate for this tax was initially established at $0.50 per ton in 1975 and was subsequently increased in 1977 and 1979. The effect of these changes was that during the early 1980s, the severance tax rate was slightly more than $1.00 per ton. (For a more detailed discussion of the North Dakota severance tax, see Leistritz and Maki, 1981 or Keller and Luptak, 1983.)

A key feature of the severance tax legislation was the distribution of the proceeds. Since the 1977 Legislative Session severance tax revenues have been apportioned between state and local governments with 30 percent accruing to the state general fund, 15 percent to a state trust fund, 35 percent to a Coal Impact Fund, and 20 percent being returned to the county where the coal was mined. The county’s share is further subdivided (by statute) with 40 percent accruing to the county general fund, 30 percent being divided among the incorporated municipalities (in proportion to their population), and 30 percent being divided among the school districts (in proportion to enrollment). The state trust fund was to be administered as a source of loans (at below-market interest rates) for impacted local governments, while the Coal Impact Fund would provide grants (awarded on the basis of need) to the same entities.

The coal conversion facility privilege tax is applied to electrical generating plants and other coal conversion facilities (e.g., coal gasification and liquefaction plants). The tax is in lieu of all ad valorem (i.e., property) taxes except for taxes on the land on which the facility is located. The tax rate for electrical generating plants is 0.25 mill on each kilowatt hour of electricity produced for sale. For coal gasification plants, the rate is 2.5 percent of the gross receipts of the facility or $0.10 per one thousand cubic feet of synthetic natural gas, whichever is greater. For other coal conversion facilities, the rate is 2.5 percent of gross receipts. The revenue from this tax is divided between state and local governments with 65 percent accruing to the state general fund and 35 percent to the county where the facility is located. The county’s share is further allocated, by statute, with 30 percent being distributed to the municipalities, 30 percent being divided among the school districts, and 40 percent accruing to the county general fund.

In summary, the taxation program developed by the state of North Dakota was designed to alleviate the most serious fiscal problems typically encountered by local governments facing rapid growth situations. Problems related to revenue shortfalls and needs for infrastructure financing during the early years of project development were addressed by the Coal Impact Fund grants and trust fund loans.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.