All Roll Calls
Yes: 262 • No: 14
North DakotaSB 23972025 Regular SessionSenate
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)
Signed by Governor
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 3 benefits, 0 costs, 0 mixed.
Gas operators get recovery project tax breaks
Beginning July 1, 2025, North Dakota exempts gas from qualifying enhanced oil recovery projects from gross production tax. The Industrial Commission must establish the project after June 30, 2025. Projects must use gas, alone or with other fluids, for temporary recovery tests or extended fieldwide recovery. Tests cover one or more drilling areas; fieldwide projects combine areas into one reservoir operation. The exemption covers gas produced after production first begins following the initial gas injection. It ends when all gas injected for the project has been recovered.
Oil operators get innovative well tax breaks
Beginning July 1, 2025, certified North Dakota development incentive wells receive an oil extraction tax exemption. It covers the first 250,000 barrels produced during the first 36 months after completion. Drilling must start after June 30, 2025, and drilling and completion must finish before July 1, 2028. The Industrial Commission must certify a new or innovative technique not previously used successfully by that operator in the target formation. The well must unlock otherwise undeveloped reserves and be projected to increase wells, production, or recovery. Certification caps depend on Bakken or Three Forks wells drilled or acquired from July 1, 2023, through June 30, 2025: 40–99 allows 4 certifications; 100–149 allows 8; and 150 or more allows 12. Reservation wells, specified outside-reservation trust-land wells, and qualifying wells crossing reservation trust-land boundaries are excluded unless the tribe irrevocably opts in through written notice to the Tax Commissioner. With timely notice, the exemption starts the following production month. The development incentive provisions expire after June 30, 2031.
Operators pay less tax on generator gas
Beginning July 1, 2025, North Dakota exempts gas collected and used to power an electrical generator at a well site. The gas tax exemption lasts two years and 30 days from the well's first production. There is no minimum share of the well's gas that the generator must consume. A separate qualifying-system pathway retains a 75% intake requirement for the gas and natural gas liquids volume for an approved beneficial use.
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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