Gov. Doug Burgum today joined MHA Nation Chairman Mark Fox, legislative leaders and Tax Commissioner Ryan Rauschenberger for a press conference to highlight the bipartisan support and benefits of a bill that would change how the state and tribe share tax revenue from oil and gas production and extraction on trust and fee lands.
Senate Bill 2312, introduced by Sen. Jordan Kannianen and co-sponsored by the House and Senate majority leaders, is scheduled for its first hearing on Wednesday. The bill is a product of extensive dialogue between the Governor’s Office, legislative and tribal leaders, industry representatives and the state tax department.
The bill would change the current 50-50 tax revenue split so that 80 percent of the production and extraction tax revenue from new wells on trust lands would go to the tribe and 20 percent would go to the state. On fee land, 80 percent of the revenue would go to the state and 20 percent to the tribe.
“This agreement is critical for creating a stable tax and regulatory environment across North Dakota that will help us compete with shale plays in other areas of the country,” Burgum said. “We’re in a competition for capital investment and talent, and our state and tribal nations become stronger competitors when we work together as a team.”
Fox, chairman of the Mandan, Hidatsa and Arikara (MHA) Nation, thanked the Legislature for its foresight in creating the interim Tribal Taxation Issues Committee, which was chaired by Gov. Burgum and included legislative leadership, Lt. Gov. Brent Sanford, Rauschenberger and Indian Affairs Commission Executive Director Scott Davis as members.
“That committee has done an excellent job reaching out to the tribes, in particular our own, and I think we’re about to see the rewards of that process, and we’re very much looking forward to it,” Fox said.
Fox predicted the legislation will result in additional tax revenue that will create opportunities for MHA Nation to pursue further development of housing, environmental protection, water development, schools and infrastructure.
“Our nation supports and endorses continued energy development, and we want to maximize that opportunity,” he said. “And I think with this change, we can have an agreement that we’re both signed to, which we currently don’t have right now, and that’s going to bring that stability that’s going to create opportunities for continued energy development.”
Rauschenberger said the tax certainty created by the bill has the potential to spur increased drilling activity and oil tax revenues for the MHA Nation. While the bill’s fiscal note is expected to show a $33 million loss in revenue to the state, his office estimates just one new drilling rig would generate $16 million in increased tax revenue per biennium.
“So additional potential development could offset the negative that we have on the bill right now,” Rauschenberger said, adding he will urge support of the bill “because it provides a more stable tax environment not only for the state and the tribes but also the oil producers making investment in the region.”
Burgum expressed his gratitude for House Majority Leader Chet Pollert, Senate Majority Leader Rich Wardner, House Minority Leader Josh Boschee and Senate Minority Leader Joan Heckaman, all of whom spoke in support of the bill, as well as Sen. Dwight Cook, who chairs the Senate Finance and Taxation Committee and played a key role in crafting the legislation.
Video of the press conference is posted on Gov. Burgum’s Facebook page.