News Releases for April 2003
April 17, 2003
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Hoeven Signs Legislation To Expand Renaissance Zones And Simplify Corporate Tax Rate
BISMARCK, N.D. - Gov. John Hoeven today announced the recent signing of three new bills that will enhance Renaissance Zones and simplify the corporate tax rate to more accurately reflect North Dakota’s favorable business climate. The bills are examples of Hoeven’s Smart Growth plan, initiatives that create higher paying jobs and promote economic growth in North Dakota.
Hoeven was joined by Rep. Al Carlson, Sen. Tony Grindberg, Fargo Mayor Bruce Furness, Fargo Renaissance Zone Chair Roger Gilbertson, M.D.; and President Dave Anderson of the Downtown Community Partnership.
House Bill 1457 and Senate Bill 2259 expand and add flexibility to the state’s Renaissance Zones, which are designated areas of cities that are granted tax incentives to encourage community development. HB1457 allows cities to expand their Renaissance zones up to 35 blocks from the 20 currently allowed. SB2259 allows for a wider range of investments by Renaissance Fund organizations, providing more flexibility for investors and greater benefits to communities.
There are currently 82 Renaissance projects in North Dakota in 11 zones, including Fargo, West Fargo, Grand Forks, Casselton, Buffalo, Valley City, Jamestown, Carrington, Bismarck, Minot and Watford City. Cities working on or considering a zone include Grafton, Lisbon, Ellendale, Beach, Hazen, Dickinson, Beulah and Williston.
“Renaissance Zones are a growth initiative, and a showcase for North Dakota communities,” Hoeven said. “Renaissance zones are where great ideas and our North Dakota work ethic combine to create new businesses and revitalized communities. They represent just one way we have changed our approach to economic development in order to fuel growth and promote new business and better wages in North Dakota.”
Fargo Mayor Bruce Furness said, “Three years and 50 projects later, we are amazed at the quality of the improvements and the regeneration of property values in the core area – more than seven-fold increase in valuations.”
Roger Gilbertson, M.D., chair of Fargo’s Renaissance Zone Authority and the Fargo-Cass County Economic Development Authority, said, “The Renaissance Zone has been an extraordinary catalyst for the revitalization of downtown Fargo.”
Hoeven on Wednesday also signed House Bill 1471, which effectively changes the state’s corporate income tax rates. The new law, one of the Governor’s Smart Growth initiatives, decouples the state income tax from the federal income tax to more accurately reflect North Dakota’s favorable business tax climate. Over the past 12 years, no fewer than seven studies and pieces of legislation have been drafted to revise the corporate tax, but none have succeeded until the passage of HB1471. Hoeven was joined by bill sponsors Reps. Al Carlson and Mike Timm, and Sen. Rich Wardner.
Currently, North Dakota’s combined corporate tax rate is 10.5 percent and allows a federal tax deduction. The actual state tax, however, is closer to 7 percent after federal taxes are deducted. HB 1471 “decouples” the state and federal tax. Decoupling the tax is important because a state’s corporate income tax rate is a significant consideration when businesses select a new site. As many as 15 economic development Internet sites and other business resources currently list North Dakota’s corporate rate at 10.5 percent.
“The objective of these new laws – and all of our economic development work – is to attract more businesses and better paying jobs to our communities, and the fact is, our efforts are working,” Hoeven said. “These new laws will stimulate fresh ideas for our communities and make clear to any prospective business that North Dakota is among the most competitive states in the nation to do business.”
Hoeven cited U.S. Department of Housing and Urban Development (HUD) statistics; the most recent Creighton University’s Mid-America Business Conditions Survey; and a U.S. Bureau of Economic Analysis report, all of which show that North Dakota is making solid, steady economic progress.
“We’ve completely changed our approach to economic development over the past two years,” Hoeven said. “We’re marketing the state more aggressively. These laws – and a range of other economic development initiatives – are moving North Dakota forward. As a result, personal income is growing and the state is closing the gap with the national average.”
- Recently, the HUD released its fiscal year 2003 North Dakota median family income figures showing an increase of $5,200 to $51,800. The national average increased only $2,100 last year to $56,500, indicating North Dakota is closing the gap.
- The Mid-America survey, a monthly measure of economic growth in a nine-state region, shows that North Dakota’s business index rose from 54.1 in February to 60.6 in March – the highest in the upper Midwestern region. Index numbers above 50 indicate a growing economy and numbers below 50 indicate a shrinking economy.
- The most recent quarterly report from the U.S. Bureau of Economic Analysis showed that the personal income of North Dakota’s production workers continued to grow faster than the U.S. average over the past five years, with a pronounced increase since 2000.
“We’ve changed economic development in North Dakota to target the creation of higher paying jobs,” Hoeven said. “The new Renaissance Zone incentives, and the new income figures we’re seeing reflect the fact that we are making real progress.”
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