All Roll Calls
Yes: 262 • No: 14
North DakotaSB 23972025 Regular SessionSenateWALLET
AN ACT to create and enact a new subsection to section 57-51.1-03 of the North Dakota Century Code, relating to a limited exemption for development incentive wells; to amend and reenact sections 57-51-02.6, 57-51-05, and 57-51.1-01 of the North Dakota Century Code, relating to the temporary exemption for oil and gas wells employing a system to avoid flaring, an exemption from gross production tax for gas produced from certain enhanced oil recovery projects, and the definition of development incentive well; to provide an effective date; and to provide an expiration date.
Sponsored By: Mark Enget (Republican)
Became Law
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 2 benefits, 0 costs, 1 mixed.
Tax break for innovative oil wells
Beginning July 1, 2025, a well spud after June 30, 2025 can be certified as a “development incentive well.” It must use a new technique for that operator in the target formation, show it can develop reserves otherwise left undeveloped, and be likely to boost new wells, production, or recovery. From July 1, 2025 to June 30, 2031, up to 250,000 barrels are exempt from gross‑production tax during the first 36 months after completion for a certified well. The well must be drilled and completed before July 1, 2028 and be certified by the Industrial Commission. Certifications are capped by operator size: 4 wells (40–99), 8 wells (100–149), or 12 wells (150+ Bakken or Three Forks wells drilled or acquired from July 1, 2023 to June 30, 2025). Wells on reservation or trust land are excluded unless a tribe opts in; the break starts the month after the tax commissioner receives the tribe’s notice.
Tax break for captured gas
Starting July 1, 2025, gas you capture to avoid flaring is exempt from the gross‑production tax for 2 years and 30 days from first production. You must capture at least 75% of the well’s gas. You can do this by running a generator at the well that uses at least 75% of the gas, or by a system that takes at least 75% of the gas plus natural gas liquids for value‑added uses. These uses include compression to liquid, transport, petrochemical or fertilizer production, converting to liquid fuels, or separating and collecting more than 50% of propane and heavier hydrocarbons. Other state‑approved value‑added processes also qualify.
New test for non-oil counties
Starting July 1, 2025, a county counts as non‑oil‑producing if its three‑year average annual oil output is under 10,000,000 barrels. The average uses the three fiscal years ending with the most recent even‑numbered fiscal year before each biennium. This replaces an allocation‑based test and can change which counties qualify under laws that use this term.
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Sponsors & Cosponsors
Sponsor
Mark Enget
Republican • Senate
Cosponsors
Keith Kempenich
Republican • House
Jonathan Sickler
Republican • Senate
Ronald Sorvaag
Republican • Senate
Roll Call Votes
Senate vote • 5/1/2025
Second reading, passed, yeas 42 nays 4
Yes: 42 • No: 4
House vote • 5/1/2025
Second reading, passed as amended, yeas 85 nays 5
Yes: 85 • No: 5
House vote • 4/21/2025
Second reading, passed as amended, yeas 89 nays 5
Yes: 89 • No: 5
Senate vote • 2/4/2025
Second reading, passed, yeas 46 nays 0, Emergency clause carried
Yes: 46 • No: 0
Actions Timeline
Filed with Secretary Of State 05/06
6/11/2025HouseSigned by Governor 05/05
5/17/2025SenateSent to Governor
5/2/2025SenateSigned by President
5/2/2025SenateSigned by Speaker
5/2/2025HouseSecond reading, passed as amended, yeas 85 nays 5
5/1/2025HouseConference committee report adopted
5/1/2025HouseReported back from conference committee, in place of, placed on calendar
5/1/2025HouseSecond reading, passed, yeas 42 nays 4
5/1/2025SenateConference committee report adopted
5/1/2025SenateReported back from conference committee, in place of, placed on calendar
4/29/2025SenateConference committee appointed Dockter Porter J. Olson
4/25/2025HouseConference committee appointed Patten Rummel Sickler
4/24/2025SenateRefused to concur
4/24/2025SenateReturned to Senate (12)
4/22/2025SenateSecond reading, passed as amended, yeas 89 nays 5
4/21/2025HouseAmendment adopted, placed on calendar
4/18/2025HouseReported back amended, do pass, amendment placed on calendar 14 0 0
4/17/2025HouseCommittee Hearing 10:30
3/11/2025HouseIntroduced, first reading, (emergency), referred Finance and Taxation Committee
2/18/2025HouseReceived from Senate
2/5/2025HouseSecond reading, passed, yeas 46 nays 0, Emergency clause carried
2/4/2025SenateReported back, do pass, place on calendar 5 0 1
2/3/2025SenateCommittee Hearing 10:30
2/3/2025SenateIntroduced, first reading, (emergency), referred Finance and Taxation Committee
1/27/2025Senate
Bill Text
Adopted by the Conference Committee
Enrollment
INTRODUCED
Prepared by the Legislative Council staff for Representative Dockter
SENATE BILL NO. 2397 with Conference Committee Amendments
SENATE BILL NO. 2397 with House Amendments
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