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 bill increases the threshold for the first barrels of oil subject to a reduced tax rate from seventy-five thousand to three hundred thousand barrels and extends the qualifying period from eighteen to thirty-six months after completion. Additionally, it clarifies that the reduced tax rate does not apply to wells located within reservation boundaries or on trust properties outside reservation 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 stripper wells. This study will assess the number of qualifying oil wells, the fiscal impact of the exemption, and alternative tax policies. The findings and recommendations from this study, along with any necessary legislation, 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