The North Dakota Senate has rejected a legislative proposal that sought to require carbon dioxide pipeline developers, including Summit Carbon Solutions, to pay property taxes during the initial decade of operation. The bill, sponsored by Republican Senator Jeff Magrum, aimed to eliminate the tax exemption for interstate CO2 pipelines like the Summit project. Under current state law, North Dakota compensates counties for the first ten years of lost property tax revenue from such pipelines. This decision reflects ongoing debates over the balance between economic incentives and local financial impacts.

Summit Carbon Solutions plans to construct an extensive 2,500-mile pipeline network spanning five states, with a significant portion—approximately 333 miles—running through North Dakota. The company estimates that about $800 million of its $9 billion investment will be allocated to the North Dakota segment, which is designed to collect carbon emissions from ethanol plants for permanent underground storage. During last week's testimony, Summit officials highlighted the substantial financial commitment they are making to this region.

Opponents of the bill, including Republican Senator Dale Patten, argued that removing the tax exemption at this stage would constitute an unfair shift in policy. They emphasized that companies have already made considerable investments based on existing tax incentives. Proponents, however, contended that out-of-state firms should contribute more to local tax revenues, especially given the benefits they receive from state research institutions and other tax breaks. Senator Magrum stressed the importance of reducing property taxes for residents, questioning why external entities should not bear some of the burden.

This legislation is part of a broader set of proposals related to carbon dioxide management being considered in the 2025 session. The outcome of this vote underscores the complex interplay between environmental goals, economic development, and fiscal policies in North Dakota. It also highlights the challenges faced by policymakers as they seek to balance these competing interests.