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House votes to extend oil tax

BISMARCK - House lawmakers voted 79-14 Monday to extend the oil extraction tax reduction known as the "small trigger" for two more years to entice oil companies to keep drilling despite low oil prices.

BISMARCK – House lawmakers voted 79-14 Monday to extend the oil extraction tax reduction known as the “small trigger” for two more years to entice oil companies to keep drilling despite low oil prices.

House Bill 1437 extends the tax cut that’s currently in place through June 30, 2017, which kicks in if the price of oil averages below $55 per barrel for a month.

The tax exemption lowers the oil extraction tax for new wells drilled from 6.5 percent to 2 percent on the first 75,000 barrels of oil production or the first $4.5 million of gross value during the first 18 months after the well is completed. The small trigger, which kicked in on Feb. 1, would expire June 30 if legislators don’t extend it.

Rep. Mark Owens, R-Grand Forks, who urged support for the bill, said the exemption is estimated to cost the state $170,000 per well in tax revenue. Legislators expect to get more information at the end of March about how many wells qualify for the exemption and may continue to qualify, Owens said.

The bill now moves to the Senate.

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