North Dakota 2023-2024 Regular Session

North Dakota House Bill HB1286

Introduced
1/11/23  
Refer
1/11/23  
Report Pass
2/14/23  
Engrossed
2/17/23  
Refer
2/20/23  
Enrolled
3/24/23  

Caption

The removal of triggered oil extraction tax rate changes for wells located outside the exterior boundaries of a reservation; and to provide an effective date.

Impact

The passage of HB 1286 will significantly affect oil taxation in the state, aligning tax rates more uniformly for operations located outside of tribal jurisdiction. Supporters of the bill argue that it will simplify tax calculations for oil extraction companies, potentially attracting more investment and encouraging economic growth in the oil sector. Critics, however, express concerns that this change could lead to lower tax revenues intended for public services in areas traditionally benefiting from fluctuating oil taxes, especially if the oil industry sees a downturn in the future.

Summary

House Bill 1286 amends section 57-51.1-02 of the North Dakota Century Code, focusing on oil extraction taxes. Specifically, the bill proposes the removal of triggered tax rate changes for oil extraction outside the exterior boundaries of a reservation. Under current law, the tax rate could increase to six percent when oil prices exceed a certain threshold; HB1286 aims to eliminate these fluctuations for areas not located within reservation borders. This amendment intends to stabilize the tax structure for oil businesses operating outside reservation lands.

Sentiment

Sentiment surrounding HB 1286 appears mixed, with proponents viewing the bill as a positive deregulatory measure that could enhance profitability for oil companies. On the other hand, opponents argue that the bill may undercut funding sources for local government initiatives, as taxes generated from oil extraction are crucial for community services. This ongoing debate reflects a broader tension between supporting business interests and ensuring adequate tax revenues for public funding.

Contention

A point of contention surrounding the bill lies in the decision to exclude areas within tribal lands from experiencing these changes. Some feel that this could create an imbalance in how communities around reservations are funded based on oil activity while providing a blanket tax structure that favors businesses over local governance. The potential for economic disparities raised due to the altered tax landscape is a key concern among various stakeholders involved in the legislative process.

Companion Bills

No companion bills found.

Previously Filed As

ND HB1483

The oil extraction tax rate reduction for oil produced from a new well drilled and completed outside the Bakken and Three Forks formations; to provide for a legislative management study; and to provide an effective date.

ND HB1427

The definition and certification of a restimulation well; and to provide an effective date.

ND SB2397

The temporary exemption for oil and gas wells employing a system to avoid flaring, an exemption from gross production tax for gas produced from certain enhanced oil recovery projects, and the definition of development incentive well; to provide an effective date; and to provide an expiration date.

ND SB2377

State-tribal agreements for the administration and collection of alcoholic beverages wholesale tax and alcoholic beverages gross receipts tax within the exterior boundaries of a reservation in this state; and to provide for application.

ND SB2323

Oil and gas gross production tax allocations and the state share of oil and gas tax allocations; to provide for a legislative management report; to provide an exemption; and to provide an effective date.

ND SB2058

The jurisdiction of commission and adding wellhead and equipment located at or on oil or gas well sites.

ND HB1057

Statements of full consideration, notice of township and city equalization meetings, the definition of snuff, service of notice for sales and use tax purposes, and notice of the gas base rate adjustment and gas production tax rate; and to provide an effective date.

ND SB2012

Legacy fund definitions, a legacy earnings fund, the legacy earnings highway distribution fund, and legacy earnings township highway aid fund; to provide for a legislative management report; to provide for application; to provide an effective date; and to provide an exemption.

ND HB1279

The exemption from the coal conversion facilities tax and the imposition of a lignite research tax; to provide an effective date; to provide a contingent effective date; and to provide an expiration date.

ND HB485

Revise tax rates for stripper oil production

Similar Bills

No similar bills found.