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Minot lawmaker proposes gradual oil tax reduction

A Minot lawmaker has introduced a bill to simplify – and potentially lower – oil taxes.

The bill – introduced by Republican Representative Roscoe Streyle  – would tie the rate of the oil extraction tax to production benchmarks. The current extraction tax is 6.5 percent. Streyle’s bill would reduce that to 6 percent – if production reaches 800,000 barrels a day. It would go down to 5.5 percent at 900,000 barrels, 5 percent at 1.1 million barrels, 4.5 percent at 1,250,000 barrels, and 4 percent at 1.5 million barrels.

"It makes us more competitive with Texas and the other shale plays," said Streyle. "Going forward, you could see rigs moving out of here. We've got housing issues, road issues, weather issues. So this would incentivize them to stay here and drill for the next 20 years."

Streyle says the bill also gets rid of some of the current tax exemptions on oil. And he says he believes the increased production will more than make up for the lower extraction tax rates.

The state Department of Mineral Resources predicts production to reach 850,000 barrels later this year.

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