This bill amends subsection 4 of section 57-51.1-03 of the North Dakota Century Code to adjust the oil extraction tax rate for oil produced from new wells drilled and completed outside the Bakken and Three Forks formations. The first three hundred thousand barrels of oil produced during the first eighteen months after completion will be subject to a reduced tax rate of two percent of the gross value at the well. The bill also specifies that this tax rate reduction does not apply to wells located within reservation boundaries, on trust properties outside reservation boundaries, or straddle wells on reservation trust land, unless a tribe opts in by providing written notice to the tax commissioner.

Additionally, the bill mandates a legislative management study during the 2025-26 interim to evaluate the oil extraction tax exemption for production from stripper wells. This study will assess the number of qualifying oil wells, the fiscal impact of the exemption, and alternative tax policies for stripper well properties. The findings and recommendations from this study will be reported to the seventieth legislative assembly. The provisions of this bill will take effect for taxable production beginning after June 30, 2025.

Statutes affected:
INTRODUCED: 57-51.1-03
Adopted by the House Finance and Taxation Committee: 57-51.1-03
FIRST ENGROSSMENT: 57-51.1-03
Prepared by the Legislative Council staff for Senator Walen: 57-51.1-03
Enrollment: 57-51.1-03