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Bill would route sales‑tax on large ag construction to counties for road and infrastructure costs
Summary
Senate Bill 2,177 would let counties receive and redirect sales and use tax revenues generated by large new or expanded animal‑agricultural facilities to pay for local infrastructure costs; sponsors set a threshold for qualifying investment and included a sunset date.
Senate Bill 2,177, presented by Senator Paul Thomas, would create a mechanism to return sales and use tax revenue generated by large new or expanded animal‑agriculture facilities to the county or township where the facility is built for infrastructure and road maintenance.
Senator Paul Thomas (District 6) told the House Finance and Taxation Committee the bill is a follow‑up to measures passed the prior session and is intended to help political subdivisions absorb the road and infrastructure costs that arise from major livestock or dairy projects. “The sales tax from the new materials that went into that would be collected by the tax commissioner… and the state treasurer would redistribute those funds to the county where that facility was being built,” Thomas said.
Under the engrossed bill discussed at the hearing, an eligible project is a new development or expansion in a calendar year that exceeds a stated investment threshold (the bill as discussed set a $500,000 trigger in the current draft). Senator Thomas and witnesses said the threshold was meant to limit the program to substantial projects rather than routine repairs or small upgrades.
Senator Thomas said the bill, as amended in the Senate, includes a sunset of June 30, 2029. He also asked the committee for latitude to file technical amendments to fix unclear language the Senate Finance and Tax Committee had changed, including a phrase referring to distribution “on a prorated basis” that sponsors acknowledged was ambiguous.
Support testimony came from agricultural trade groups and local officials. Lance Gaby of the North Dakota Farmers Union and representatives of the Corn Growers, Soybean Growers, Stockmen’s Association and Farm Bureau stated the bill would help counties and townships that face increased maintenance costs from heavy truck traffic following development of livestock or dairy facilities. Larry Severson of the Township Officers Association supported directing funding to townships when primarily township roads are affected.
No formal opposition testimony was recorded in the committee transcript; committee members asked questions about the $500,000 threshold, whether the cap should be lower (for example, $250,000), how the funds would be distributed if multiple projects or counties were involved, and whether the program should be permanent or limited by sunset. Senator Thomas said one option would be to direct all funds to the impacted county and township, or to revert funds exceeding a stated maximum to the general fund.
The bill’s supporters framed it as a targeted, temporary fiscal tool to keep local roads and infrastructure serviceable after major animal‑agriculture investments; the sponsor described the program as analogous to existing road‑use agreements and county arrangements used today but designed to capture sales‑tax revenues directly tied to large construction projects.
Ending: Committee members did not record a vote on Senate Bill 2,177 in the transcript. The bill’s sponsor said he would bring technical amendments back to the committee.
