§ 57-51.1-07.10 — Straddle well distribution

North Dakota § 57-51.1-07.10

• Jurisdiction: North Dakota
• Title 57: Taxation
• Ch. 57-51.1: Oil Extraction Tax

Text

1. By August 1, 2021, and on or before April thirtieth of each subsequent fiscal year, the
industrial commission shall certify to the tax commissioner the on-reservation trust
lands acreage ratio and the on-reservation nontrust lands acreage ratio for each
reservation with on-reservation spacing unit acreage. For each reservation, the
on-reservation trust lands acreage ratio is calculated by dividing the on-reservation
spacing unit acreage consisting of trust lands by the total spacing unit acreage. For
each reservation, the on-reservation nontrust lands acreage ratio is calculated by
dividing the on-reservation spacing unit acreage consisting of nontrust lands by the
total spacing unit acreage. The on-reservation acreage ratios for each reservation are

effective for taxable production each fiscal year beginning July first. By August 1, 2021,
and on or before June first of each subsequent fiscal year, the tax commissioner shall
publish the on-reservation acreage ratios for each reservation.
2. The tax commissioner shall certify to the state treasurer the total oil and gas gross
production and oil extraction taxes attributable to production from straddle wells drilled
before July 1, 2019, by reservation, and the total oil and gas gross production and oil
extraction taxes attributable to production from straddle wells drilled on or after July 1,
2019, by reservation. Before allocation of the state's share of oil and gas tax revenues
under section 57-51.1-07.5, the state treasurer shall allocate monthly to the governing
body of a tribe associated with a reservation that has on-reservation spacing unit
acreage, an amount equal to:
a. Fifty percent of the taxes certified under this section for wells drilled before July 1,
2019, multiplied by the on-reservation trust lands acreage ratio calculated under
subsection 1 for that reservation;
b. Fifty percent of the taxes certified under this section for wells drilled before July 1,
2019, multiplied by the on-reservation nontrust lands acreage ratio calculated
under subsection 1 for that reservation;
c. Eighty percent of the taxes certified under this section for wells drilled on or after
July 1, 2019, multiplied by the on-reservation trust lands acreage ratio calculated
under subsection 1 for that reservation; and
d. Twenty percent of the taxes certified under this section for wells drilled on or after
July 1, 2019, multiplied by the on-reservation nontrust lands acreage ratio
calculated under subsection 1 for that reservation.
3. For purposes of this section:
a. "On-reservation spacing unit acreage" means the mineral acreage located within
the exterior boundaries of a reservation in this state from all spacing units with
one or more straddle wells.
b. "Straddle well" means an oil and gas well located outside the exterior boundaries
of a reservation which has one or more laterals penetrating a reservation
boundary.
c. "Total spacing unit acreage" means the total mineral acreage from all spacing
units with one or more straddle wells.
4. Upon accepting a payment under this section, if a tribe assesses any tax or fee or
imposes any regulation on any current or future straddle well, or assesses an
additional tax on any well subject to an agreement under chapter 57-51.2, the
agreement under chapter 57-51.2 is void and the state treasurer may not distribute
any funds to the tribe under this section or chapter 57-51.2.