Rep. Rick Holman. January 14, 2015
Put into place in the 1980’s to spur development, the states oil tax structure is based on a 5% production tax and a 6.5% oil extraction for a total oil tax of 11.5%. The 6.5% oil extraction tax has built in triggers that may eliminate or reduce the tax depending on oil prices and production. The smaller trigger kicks in when the price of oil per barrel at West Texas Intermediate (WTI) Crude at Cushing, OK, averages less than $55 for a single calendar month – once triggered the tax of 6.5% is reduced to 2% on the first 75,000 barrels produced or the first $4.5 million of gross value during the first eighteen months after completion. It applies only to new wells completed after the incentives are triggered. The tax commissioner’s office estimated an impact of about $170,000 per well,••• based on 75,000 barrels at $50 per barrel and a tax rate reduction from 6.5% to 2%. The larger trigger is effective when the WTI price averages less than $52.59 for five consecutive months. It would drop the extraction tax rate to 0% for all wells during their first two years of production, even if they have been drilled prior to when the incentive is effective. The rate drops to 4% on older wells.
Two proposals (SB2103 – The Surge Funding Bill and SB2126 – Governor Dalrymple’ s jumpstart proposal), each designed to fast track more than $800 million for infrastructure and other needs in oil and non-oil producing counties will get their first hearing in the Senate Appropriations Committee. Both bills are designed to give local governments a head start in bidding roadwork and funding other projects for 2015. The two bills are going down the same track – only one will move forward, although one blended into the other as they move through the legislative process.
Health and Safety
The school bus accident in Larimore which claimed the life of two people brings to mind the tremendous responsibility that we have to keep our children safe. No matter how much due diligence is done, unexpected and unavoidable tragedies can happen. While mourning the loss of these two people, we also need to be concerned about the impact on the many whose lives have changed as a result of this tragedy. A second event involved an 18 year old Grand Forks youth. His unnecessary death was caused by a very strong drug called fentanyl. This event heightens the importance of behavioral health issues and what role the State can have in addressing these serious mental health issues. As we move into the third week of the session it’s time to study, listen, and consider the result of proposed changes to North Dakota law. Stay tuned.
Rep. Rick Holman.
Email: email@example.com Mobile phone or text: 701-238-1124