The proposed bill amends subsection 4 of section 57-51.1-03 of the North Dakota Century Code, specifically addressing the oil extraction tax rate for oil produced from new wells drilled outside the Bakken and Three Forks formations. The bill reduces the tax rate for the first 300,000 barrels of oil produced during the first 36 months after completion of such wells, changing the previous threshold from 125,000 barrels. Additionally, the bill specifies that the tax rate reduction does not apply to wells located within reservation boundaries or on trust properties outside those boundaries unless a tribe opts in by providing written notice to the tax commissioner.

Furthermore, 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, with input from relevant stakeholders. The findings and recommendations from this study are to be reported to the seventieth legislative assembly. The effective date for the changes in the bill is set 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