North Dakota Governor Signs Bill Ratifying Historic Oil Tax-Sharing Compact With MHA Nation

Gov. Doug Burgum signed legislation on Thursday, March 28, that ratifies the historic compact he signed last month with Mandan, Hidatsa and Arikara (MHA) Nation Chairman Mark Fox to change how the state and Tribe share tax revenue from new oil and gas activity on trust and fee lands.

Under the ratified compact, the current 50-50 tax revenue split will change, so that the Tribe will receive 80 percent of the production and extraction tax revenue from new wells on Tribal trust lands, and the state will receive 20 percent of the revenue. On fee land, 80 percent of the revenue will go to the state, and 20 percent to the Tribe.

The MHA Nation’s Fort Berthold Indian Reservation sits on the oil-rich Bakken shale formation, with the Three Forks beneath it. More than 2,000 wells dot the reservation, which accounts for roughly a fifth of North Dakota’s oil production. The Tribes will gain an additional $33 million in revenue over the next two-year budget cycle under the new legislation, the state Tax Department estimates.

“This historic legislation is the result of nearly two years of good-faith dialogue and collaboration between Tribal and legislative leaders, the Governor’s Office, industry representatives and the state tax department. Finalizing this agreement sends a clear signal that North Dakota supports a stable tax and regulatory environment, which will help us compete with shale oil plays in other states and help the tribe address infrastructure needs and other priorities,” said Burgum, whose five strategic initiatives include strengthening tribal partnerships. “We look forward to continued collaboration with all of the tribal nations in North Dakota based on mutual respect and understanding.”

Senate Bill 2312 was introduced by Sen. Jordan Kannianen and co-sponsored by House Majority Leader Chet Pollert and Senate Majority Leader Rich Wardner. The bill received wide bipartisan support, passing 40-5 in the Senate and 84-8 in the House of Representatives.

The same day, Burgum also signed Senate Bill 2257, which enables tax agreements to be signed by the governor and Tribes for the administration and collection of the alcoholic beverage wholesale tax, tobacco products wholesale tax, and alcoholic beverages gross receipts tax.

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