On February 5th, Governor Burgum called a press conference to highlight what he called a “historic” measure to address the oil tax sharing between the Fort Berthold Reservation and the State of North Dakota. One week later, the measure is in jeopardy and may be defeated in the Legislature. An amendment and alleged other demands are to blame.
First a little history. In 2013, the State of North Dakota and the Mandan Hidatsa and Arikara Nation (MHA) entered into an agreement on oil production and extraction taxes collected from oil activity on the Fort Berthold Reservation. The agreement avoided tax confusion on the industry and showed cooperation between two sovereign governments.
In the final days of the 2015 session, the Legislature pushed through HB 1476. That bill lowered the oil extraction tax rate from 6.5% to 5%. The MHA Nation was understandably upset at this move by the Republicans because it altered the tax rate they had jointly agreed upon only two years prior. That oil tax cut has cost the state and the tribe millions of dollars. Only one of them acted to make this change. It was the North Dakota Legislature.
Make note the disagreement came to a head and led to discussions of pulling out of the 2013 agreement after the Legislature and Governor Jack Dalrymple unilaterally cut the oil extraction tax by 23%. Then again in the 2017 session, another unilateral oil tax policy change was attempted by the Legislature. The move spearheaded by former Rep. Al Carlson would have eliminated a new “trigger” created at $90 per barrel. That trigger would raise the oil extraction tax to 6%. It failed and the trigger stayed.
That leads us to now. What is potentially blowing up the “historic” measure Burgum and Legislative leaders were touting is another unilateral amendment to eliminate that $90 trigger. That policy change was not a part of the agreed upon measure in SB 2312 to change the current 50-50 split of oil revenue to 80-20 on trust lands going to Fort Berthold. Yet, Senator Dwight Cook found it necessary to use this vehicle to try and sneak it by everyone through amendment the Senate Finance and Tax Committee adopted.
Though the Committee adopted the amendment, it now goes to the full Senate for final adoption. Senate Majority Leader Rich Wardner is on the bill. He needs to persuade his members to reject Cook’s amendment as it jeopardizes the bill’s passage and is a policy change that needs to stand on its own merits following a public hearing and debate.
It will be “historic” if an agreement is reached after all of the unilateral tax changes done by the State since the original 2013 agreement. Yet, there are other things that may bring this “historic” bill down. The House of Representatives is said to have demands they want added. The MHA Nation may want some amendments added as well. The bill is far from completed and passed. It begs the question as to why Governor Burgum called for a press conference to declare this the breakthrough many of us hope it is before the measure’s final passage?