The House has approved a bill to remove a “trigger” on oil taxes.
The trigger was part of a compromise to lower oil taxes from 11 and a half percent to 10 percent. That mechanism was added so that if oil prices went above a target price, the tax would go back to 11 percent. That happened in 2022 – and lasted for about four months.
Rep. Craig Headland (R-Montpelier) chairs the House Finance and Taxation Committee. He told the House the COVID pandemic hit the industry pretty hard – and after that, the industry rebounded.
"But what we didn't see when oil prices went to $100/barrel, and when it triggered, was the investment into the oil patch that you would expect," Headlands said. "So the question is — why was there not investment put back into the patch when oil prices were high?"
Headland said he's not suggesting it was solely because of the oil tax trigger.
"But in the discussions that we had, we're led to believe that, in some way, it's affecting how capital would flow to North Dakota," Headland said.
Headland said the oil companies could send that capital to Texas, Oklahoma or New Mexico shale plays. He said North Dakota has become reliant on oil production — and it is necessary to keep that production going.
The bill – HB 1286 – passed 72 to 21 – and will now be considered in the Senate.
