USA: Stutsman County officials turned down 100 percent Cargill tax break for malt processing plant expansion

North Dakota Stutsman County Commission has turned down Cargill's request for a 100 percent, 10-year tax exemption for a project to expand its malt processing plant about 10 miles east of here, Grand Forks Herald posted July 06.

The tax break was rejected July 05 on a 3-2 vote.

Instead, commission Chairman Steve Cichos and Commissioners Craig Neys and Mark Klose voted to grant a 100 percent five-year tax exemption, with a decreasing percentage amount each year for five more years. Commissioners Denny Ova and Doug Kaiser supported the full 100 percent 10-year tax exemption.

Cargill plans to start work on expanding the Spiritwood plant in the next month or two. It is to be part of an energy park that includes a 100 million gallon ethanol plant and a steam plant that burns coal. The Cargill expansion is to be finished by early next year.

The concrete structures have an estimated taxable value of about $28,000 a year, besides the nearly $600,000 the company pays in annual taxes.

"Cargill is one of our best customers," said Noel Johnson, the county's tax director and chief operating officer.

As an agricultural processing plant, state law would have allowed a full 10-year exemption. The majority of commissioners decided to approve what had been granted to other county businesses through the years. The first five years is at 100 percent; during the second five years, the tax exemption drops by 20 percent each year.

Cargill's barley manager John Zietz, the expansion means an increase in the malting plant's production capacity and a full exemption would help keep the costs of production down.

"Malting is a very competitive business," Zietz said. "This is one of the ways we can be competitive."

The commissioners did not discuss their reasons behind their decision. Harold Newman, of the Newman Group, who plans to build the ethanol plant at Spiritwood, supported the full exemption. He said Great River Energy will seek an exemption for its steam plant, and he would support that as well.

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