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Oil tax overhaul proposed by Republicans

State Sen. Dwight Cook (R-Mandan) has introduced a bill that re-structures the state’s oil tax.

Cook’s bill changes the so-called “stripper exemption” for low producing oil wells drilled after July First. It requires oil companies to withhold income taxes from non-resident oil royalty owners. It provides an incentive for companies to drill outside the Bakken and Three Forks formations. And, effective January first, 2017, it permanently lowers the oil tax rate from 11.5 percent to 9.5.

"Our desire here is to bring some predictability, some stability to this industry, bring some stability to the revenue stream that we get," said Cook. "We want to keep this a viable industry. But we certainly need to protect the revenue that comes to the state of North Dakota to meet infrastructure needs and to reduce property taxes. We've become addicted to this money, but it is very, very unpredictable."

Cook and the other sponsors say they believe North Dakota must remain competitive with other shale plays.

The two Democratic floor leaders -- Rep. Kenton Onstad (D-Parshall) and Sen. Mac Schneider (D-Grand Forks) -- issued a statement following the announcement of Cook's bill.

“This is a proposal that cries out for close scrutiny," said the two Democratic leaders. "We will continue to insist that oil companies pay their fair share to address the challenges that have arisen in western North Dakota due to the rapid development of our natural resources."

The bill is SB 2236.

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