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Published January 14 2013

ND Oil-extraction tax exemption unfavorable

BISMARCK – Legislation providing a tax exemption for oil companies who have their oil refined in North Dakota got a cool reception Monday.

House Bill 1032 was drafted to create an incentive for oil companies to build a refinery in North Dakota by exempting them from paying the state a 6.5 percent extraction fee oil companies currently have to pay.

Bill Shalhoob, a registered lobbyist for the Greater North Dakota Chamber of Commerce, told the House Finance and Taxation Committee the bill doesn’t make sense since federal regulations are the biggest obstacle to building a refinery.

“The problem with refineries is not in tax code, it’s in the environmentals,” he said.

He also pointed out the bill would cost taxpayers $258 million.

There is one oil refinery in North Dakota, at Mandan, with others proposed near New Town and Williston.

No committee action was taken on the bill.