The bill introduces a new section to the North Dakota Century Code that establishes a nonrefundable income tax credit for primary sector businesses that purchase components or labor from prison industries. Specifically, the credit is set at ten percent of the costs incurred for these purchases within a calendar year, with a maximum aggregate credit limit of $45,000 per year. Taxpayers can carry forward any unused credit for up to five succeeding taxable years, and if the total credits claimed exceed the limit, the tax commissioner will prorate the credits among claimants. Additionally, the bill outlines the necessary documentation that taxpayers must provide to claim the credit and specifies that these purchases cannot be used for any other income tax deductions or credits.

Furthermore, the bill mandates a legislative management study during the 2025-26 interim to explore the alignment of prison industries with workforce development programs for incarcerated individuals. This study aims to assess how these industries can collaborate with the manufacturing sector and other private industries to enhance workforce development and support positive outcomes for individuals re-entering society. The provisions of the bill will take effect for taxable years beginning after December 31, 2024.