ND HB1134

Restricts flaring of natural gas from oil wells after one year of first production unless the well is capped, connected to a gas gathering line, equipped with an electrical generator consuming at least 75 percent of gas, equipped with a system intaking at least 75 percent of gas and liquids for beneficial consumption, or equipped with other commission-approved value-added processes reducing flare by more than 60 percent.

Requires producers operating wells in violation to pay royalties to royalty owners on the value of flared gas and pay gross production tax on flared gas at the standard rate.

Creates two-year and thirty-day temporary tax exemption from gross production tax for natural gas collected at well sites to power electrical generators or for beneficial consumption through compression, processing, or value-added processes.

Creates temporary exemption from extraction tax for liquids produced from natural gas collection systems utilizing absorption, adsorption, or refrigeration for two years and thirty days from first production.

Exempts sales of tangible personal property used to construct, expand, or build gas compression and processing systems from sales and use tax, with purchase certificate requirement; effective July 1, 2013.