North Dakota 2025-2026 Regular Session

North Dakota Senate Bill SB2397

Introduced
1/27/25  
Refer
1/27/25  
Report Pass
2/3/25  
Engrossed
2/5/25  
Refer
2/18/25  
Report Pass
4/17/25  
Enrolled
5/2/25  

Caption

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.

Impact

The bill modifies sections of the North Dakota Century Code, including provisions around tax payment schedules, exemptions for gas associated with flaring avoidance systems, and classifications of wells that qualify for these exemptions. The goal is to spur growth in oil production through financial incentives, which proponents argue is vital for the economic development of the region. The proposed changes reflect a push for modernization within the regulatory framework governing oil extraction, potentially increasing output from new and existing wells.

Summary

SB2397 aims to amend existing laws regarding the taxation of oil and gas production in North Dakota, specifically focusing on providing temporary exemptions from gross production tax for certain development incentive wells and gas produced through specific enhanced oil recovery projects. The bill introduces criteria for classifying development incentive wells, which are intended to improve production capabilities and efficiency within the state's oil and gas sector. By doing so, it seeks to encourage innovation and investment into new drilling and completion techniques that would enhance the state's oil reserves.

Sentiment

General sentiment surrounding SB2397 appears to be cautiously optimistic among industry stakeholders, with oil producers and operators welcoming the opportunity for tax relief and increased production potential. However, some environmental advocacy groups worry about the implications of expanding exemptions, particularly as they could lead to increased production and associated environmental impacts. The debate highlights a division between economic growth interests and environmental stewardship, with advocates on both sides presenting strong views on the bill's potential outcomes.

Contention

Notable points of contention include the differentiation of incentives based on well classification, particularly concerning the types of recovery techniques eligible for tax exemptions. Opponents of the bill have raised concerns that such exemptions might lead to regulatory loopholes that could be exploited, reducing state revenue from oil and gas production. Additionally, discussions also touch on the necessity of balancing economic benefits with environmental protections, as the state continues to navigate its role in the national energy landscape.

Companion Bills

No companion bills found.

Previously Filed As

ND SB2006

The salary of the state tax commissioner, property assessment increase notices, and use tax exemptions; to provide an exemption; to provide for a transfer; to provide an effective date; and to provide an expiration date.

ND HB1427

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

ND HB1014

Fuel production facility loan guarantee reserve funding, the housing incentive fund, the powers of the North Dakota pipeline authority, definitions for the clean sustainable energy authority, a clean sustainable energy authority line of credit, and an appropriation from the state fiscal recovery fund; to provide a contingent appropriation; to provide for a transfer; to provide an exemption; to provide for a study; to provide for a report; to provide a statement of legislative intent; to provide an effective date; and to declare an emergency.

ND HB1455

Evaluation of economic development tax incentives and a sales and use tax exemption for raw materials, single-use product contact systems, and reagents used for biologic manufacturing; to provide for a legislative management report; to provide an effective date; and to provide an expiration date.

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 HB1286

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.

ND SB2015

A transfer of Bank of North Dakota profits to a water infrastructure revolving loan fund; to provide for a transfer; to provide an exemption; to provide for a legislative management study; to provide a report; to provide a penalty; to provide for application; to provide a retroactive effective date; to provide a contingent effective date; to provide an effective date; and to declare an emergency.

ND HB1168

Evaluation of economic development tax incentives; and to provide an effective date.

ND HB1282

A sales and use tax exemption for feminine hygiene products; and to provide an effective date.

ND HB1370

A sales tax exemption for sales of grain bins; to provide an effective date; and to provide an expiration date.

Similar Bills

CA SB285

California Tourism Recovery Act.

ND HB1427

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

HI SB652

Relating To Agriculture.

HI SB2988

Relating To The Department Of Agriculture.

HI HB2131

Relating To The Two-lined Spittlebug.

HI SB2411

Relating To The Two-lined Spittlebug.

HI HB1714

Relating To Two-lined Spittlebugs.

HI SB342

Relating To Invasive Species.