BISMARCK, N.D. (AP) — With oil prices sinking enough that drillers may soon see a more favorable tax rate, North Dakota lawmakers approved a new framework Friday that cuts the price-triggered exemption in exchange for a lower tax rate.
North Dakota's House voted 66-26 after a contentious debate to shave the state's oil tax rate from 11.5 percent to 10 percent. Republicans believe the move offers better certainty for the state and industry, while Democrats say it could cost the state billions in future oil tax revenue.
"We're taking a real risk and probably something we can never get back," said Rep. Jerry Kelsh, D-Fullerton.
Fargo Rep. Al Carlson, North Dakota's House majority leader, and other GOP representatives said the new system will provide a stable and predictable tax policy that will help increase production, spur investment and boost the state's economy.
"We need to have what's fair, what's reasonable for both sides and what we can count on for future generations," Carlson said.
North Dakota produces about 1.1 million barrels of oil a month, making it second only to Texas among U.S. states. New technologies such as hydraulic fracturing have spurred the boom in the past decade, and high oil prices made the difficult extraction worthwhile. But oil prices have fallen globally, and North Dakota sweet crude was fetching about $55 a barrel this week, down from more than $100 several months ago.
The measure restructuring the state's tax framework now goes to GOP Gov. Jack Dalrymple, since the Senate endorsed it on Thursday. Dalrymple's spokesman Jeff Zent said the governor had not studied the bill.
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