This bill amends several sections of the North Dakota Century Code to introduce a limited exemption for development incentive wells and to clarify existing provisions related to oil and gas production. Notably, it establishes a new definition for "development incentive well," which refers to wells spud after June 30, 2025, that utilize innovative drilling techniques and demonstrate the potential to enhance oil and gas recovery. The bill also provides a tax exemption for the first 250,000 barrels of oil produced from these wells within the first 36 months of completion, contingent upon certification by the industrial commission.

Additionally, the bill modifies the temporary exemption for oil and gas wells that employ systems to avoid flaring, and it clarifies the gross production tax payment process. It specifies that gas produced and utilized in certain operations, including enhanced oil recovery projects, will not be subject to the gross production tax under specific conditions. The effective date for the provisions related to development incentive wells is set for taxable events occurring after June 30, 2025, with an expiration date for certain sections established as June 30, 2031.

Statutes affected:
INTRODUCED: 24-02-37.3, 54-27-19.4, 57-51.1-07.7, 57-51.1-07.8
Prepared by the Legislative Council staff for Representative Dockter: 57-51-02.6, 57-51-05, 57-51.1-01
Adopted by the Conference Committee: 57-51-02.6, 57-51-05, 57-51.1-01
Enrollment: 57-51-02.6, 57-51-05, 57-51.1-01