HB 1420 Summary

• Amends North Dakota oil extraction tax law effective after June 30, 2011, modifying tax rates and exemptions for various well types and recovery projects.

• Changes the reduced tax rate from 4.5% to 4 and one-half percent for new wells drilled after April 27, 1987, and secondary or tertiary recovery projects certified before July 1, 1991.

• Modifies trigger price provisions so that when crude oil exceeds the trigger price for five consecutive months, the tax rate increases to 6.5% for all taxable wells until prices drop below trigger price again for another five-month period.

• Adds new exemptions and modifies existing exemptions for two-year inactive wells (10-year exemption), horizontal reentry wells (9-month exemption), and Indian lands (60-month exemption).

• Updates certification filing requirements requiring the industrial commission to submit qualifying well status certifications to the tax commissioner within 18 months of the qualifying event for producers to receive exemptions or rate reductions.