North Dakota's coal industry wants a larger chunk of state lignite tax collections to provide aid for new electric power and liquid fuel plants that may be built, a lobbyist says.

John Dwyer, president of the Lignite Energy Council, said Wednesday that state aid for projects could reap substantial investment, job and tax benefits beyond any subsidies the state contributes.

Dwyer is supporting legislation, which the House's Finance and Taxation Committee reviewed Wednesday, that would reserve 5 percent of North Dakota's coal conversion tax revenues for lignite projects for 10 years, beginning July 1, 2008.

The change should provide about $1.2 million annually that could be used for incentive payments to develop North Dakota's lignite industry, Dwyer said. Companies accepting state aid must provide investments of their own.

No one opposed the measure at Wednesday's hearing, and the committee will consider later whether to recommend that it be approved.

North Dakota's lignite research fund is financed by a 10-cents-per-ton tax on coal. North Dakota produced 30.3 million tons of lignite in 2006, a figure that has remained stable for years.

The coal conversion tax is assessed against North Dakota power plants, depending on their capacity to produce energy and their actual production. Its revenues are shared by the state and coal-producing counties, cities and school districts.

Dwyer said the $1.2 million for lignite incentives would be taken from the state's share of the coal conversion tax. The local share will not be affected, he said.

The state Industrial Commission controls payments from the lignite research fund. The commission has agreed to pay up to $26.9 million to develop four proposed energy projects - Power plants at Gascoyne and South Heart, an initiative near Underwood that would make diesel fuel from coal, and an ethanol factory and power plant near Spiritwood.

A number of other potential expansions of North Dakota power plants are on the drawing boards, each of which could qualify for $10 million in state aid, Dwyer said. He said it was unnecessary to raise enough money to cover each one.

"I would like to stand before you and tell you they're all going to go forward," he told committee members. "Realistically, the cost of capital is such that they're not going to all go forward … It's a win-win for the state of North Dakota, obviously, if they could get one or two."

The bill is HB1093.