Tax Incentive Evaluation Law: North Dakota

Tax Incentive Evaluation Law: North Dakota

This page is no longer being updated. As of June 15, 2017, newer tax incentive evaluation fact sheets are available here.

To ensure that economic development tax incentives are achieving their goals effectively, many states have approved laws requiring regular, rigorous, independent evaluations of these programs. For a list of states that have passed evaluation laws since the start of 2012, click here.

North Dakota

S.B. 2057, enacted April 1, 2015

What it does

Requires evaluation of all major tax incentives

An evaluation of each tax incentive is required every six years.

The assessments are intended to determine whether programs are meeting desired goals, such as creating career opportunities.

Connects reviews to policymaking

A legislative committee conducts the evaluations and makes recommendations to legislative leadership.

Lawmakers compare the effectiveness of incentives with alternative policies for achieving desired goals.

Excerpt from North Dakota’s law: Evaluation criteria

The legislative management interim committee assigned the study responsibility under this section shall analyze each incentive, applying considerations relevant to the perceived goals of the incentive, including any or all of the following:

  1. The extent of achievement of the goals of the incentive and whether unintended consequences have developed in its application.
  2. Whether the design and application of the incentive can be improved.
  3. The extent of complementary or duplicative effect of other incentives or governmental programs.
  4. Whether the incentive has a positive influence on business behavior or rewards business behavior that is likely to have occurred without the incentive.
  5. The effect of the incentive on the state economy, including the extent of primary sector operation of the recipient and any competitive disadvantage imposed or benefit conferred on other state businesses, any benefit or burden created for local government, and the extent of the incentive's benefit that flows to out-of-state concerns.
  6. The employment opportunities generated by the incentive and the extent those represent career opportunities.
  7. Whether the incentive is the most effective use of state resources to achieve desired goals.
  8. If the committee's analysis of the incentive is constrained by lack of data, whether statutory or administrative changes should be made to improve collection and availability of data.
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Issue Brief

Tax Incentive Programs: Evaluate Today, Improve Tomorrow

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Issue Brief

This report advises states on how to design and implement tax incentive evaluation laws, so that these programs are studied regularly and rigorously and so that lawmakers can use the findings to improve economic development policy.