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North Dakota booms to third place

Tuesday, 9 Jul 2013 | 1:54 PM ET
Best of the Best Top States: Third Place
Tuesday, 9 Jul 2013 | 1:50 PM ET
CNBC's Scott Cohn reports the economy of North Dakota has boosted the state to third place this year. The state is still one of the worst for technology and innovation.

Yet again North Dakota is a top-five favorite in this year's America's Top States for Business. The state held strong for a second year in a row, taking the No. 3 spot, just two spots higher than its ranking in 2012. One of the main engines pushing the state higher in our rankings, and also nabbing it a No. 2 spot in our Economy category, is shale oil.

North Dakota's Bakken shale formation hit record oil production this April. Oil and gas also was the main reason why the state had the highest real GDP growth in America last year at 13.4 percent. An impressive rate when you consider the second-fast growing state last year was Texas at 4.08 percent.

(Read More: How Shale is 'Fracking' the Old Order)

Aside from the economic powerhouse that is shale, agriculture is actually the largest industry in the state and is looking to do well. The latest report from the U.S. Department of Agriculture said that warmer temperatures across the state are advancing the state's crops.

(Read More: Top States for Creating Manufacturing Jobs)

The Rough Rider State saw an impressive leap in its Infrastructure and Transportation ranking. A near 93 percent jump from 2012—from 28th to second this year. It has the lowest unemployment rate in the nation at just 3.2 percent. Positive low numbers continue to trend in the state, the top corporate tax rate is 4.53 percent and sales tax is at an even 5 percent. North Dakota's revenue plan appears to be working as the state is forecasting a $1.6 billion surplus.

North Dakota does need to work one area in particular that needs improvement if it wants to claim a No. 1 spot next year. It came in close to the bottom in our Technology and Innovation category at No. 46. It appears that the state is slowly turning that around. There has been an uptick in tech-driven companies because of the state's friendliness toward business. It also approved a 45 percent tax credit for equity investments in high-risk companies, one of the highest in the nation for similar credits.

(Read More: Which States Swagger to Top States 2013)

—By CNBC's Anthony Volastro.

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  • CNBC's senior correspondent and lead investigative reporter, Scott Cohn also appears on "NBC Nightly News with Brian Williams," the "Today" and on MSNBC.

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