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'Trigger on the trigger' oil tax bill introduced by GOP Legislative Leaders

Dave Thompson
/
Prairie Public

The Republican majorities in the state House and Senate are introducing what they describe as a “monumental” bill to overhaul oil taxes.

“The bill itself has a unique name," said House Majority Leader Al Carlson (R-Fargo). "It;'s a 'trigger on the trigger.'”                     

Carlson of Fargo says the bill would take effect – if the so-called “large trigger” fires June First.

Under state law, if oil prices remain below $55 for five consecutive months, the oil extraction tax would drop to zero on new wells. The production tax remains at 5 percent. Carlson says under the new delayed bill, if that trigger happens, the extraction tax would drop to 4.5 percent – and would remain there, eliminating further triggers.

Carlson says both the industry and the state would benefit from stability in oil tax policy.

“Our oil tax policy is kind of liike being on the 'Wheel of Fortune,'" said Carlson. "Sometimes you can hit the big trip to Hawaii, and the next slot can be bankruptcy.”

The Democratic floor leaders say this is a bad deal.

“We're talking tens of billions of dollars in lost revenue," said Senate Minority Leader Mac Schneider (D-Grand Forks). "That dwarfs any kind of short-term lost caused by the triggering of these incentives."

Schneider says the latest forecast from Moody’s Analytics predicts oil prices will go up again – and the triggered tax cuts will end.

House and Senate Finance and Taxation Committees will hold a joint hearing on the bill Monday.