Guest column: Correcting tax inequities benefits both MHA Nation and North Dakota
All border well tax revenue has gone to the state — $30 million in the last two years alone — even though the wells extract reservation oil and gas. State representatives have broken their word to the MHA Nation and are now attempting to pass an unfair amendment that would delay equitable tax revenue sharing until July 1, 2023. It is time to correct this historic oversight by passing the original language in Senate Bill 2319.
This guest column is by Mark N. Fox, chairman of the Mandan, Hidatsa, and Arikara Nation in North Dakota.
There are currently 132 oil wellheads off the Fort Berthold Reservation that extract tribal oil and gas through the use of horizontal drilling. Over the last 12 years, those wells have generated over $200 million in tax revenue for the state of North Dakota. The North Dakota Legislature failed to correct this inequity and, as a result, the Mandan, Hidatsa, and Arikara Nation has been deprived of tax revenue from the oil and gas taken from beneath our lands.
I worked with state leadership to develop the original draft of Senate Bill 2319. We sought to correct this unfair oversight, and ensure a more equitable split in tax revenue that benefits both the MHA Nation and North Dakota. Unfortunately, the 11th hour, heavy-handed amendment of this bill on the floor of the North Dakota Senate, done with no consultation with the MHA Nation, now threatens to add to this history of inequality.
As the former tax director of the tribe, I know these taxation issues are not new. Despite many much-needed revisions to the oil and gas tax agreement, the issue of the state collecting taxes on border wells remains. All border well tax revenue has gone to the state — $30 million in the last two years alone — even though the wells extract reservation oil and gas. State representatives have broken their word to the MHA Nation and are now attempting to pass an unfair amendment that would delay equitable tax revenue sharing until July 1, 2023. It is time to correct this historic oversight by passing the original language in SB 2319.
A partnership of mutual respect with the MHA Nation is in the best interest of the state of North Dakota, especially when it comes to the oil and gas industry. The current federal moratorium preventing new drilling on federal lands could result in less production and less tax revenue. However, the MHA Nation has already ensured its reservation trust land is not included in this moratorium, and this also benefits North Dakota. When we work together, we can find ways to avoid production slowdowns — an action that is mutually beneficial to our economic partnership. And because the state of North Dakota shares tax revenue on Fort Berthold Reservation oil and gas production, this benefits the state’s fiscal situation as well.
Due to the existing inequity in tax sharing between North Dakota and MHA Nation, oil and gas operators may be pressured to locate their wellheads on one side of the reservation boundary or the other. These decisions should not be based on political pressure, but on geographical and technological considerations aimed at getting the best production results. Our oil and gas producers supported the original language of Senate Bill 2319 because it provided more stability. The amendment of this bill does nothing except continue the unjust tax treatment of the MHA Nation’s minerals and create more uncertainty for the oil and gas industry.
This is about fairness. The MHA Nation understands the importance of a stable oil and gas tax environment for the state, and that must include our nation. It is only right the MHA Nation receives a fair distribution of tax revenue from Reservation oil and gas. These funds enable us to build infrastructure and provide the essential governmental services on which our residents and the oil and gas industry rely. As the MHA Nation grows stronger, so does North Dakota.