# Title 57 — Taxation

## Chapter 57-51 — Oil and Gas Gross Production Tax

### § 57-51-01. Definitions.

As used in this chapter:
1. "Barrel of oil" means forty-two United States gallons of two hundred thirty-one cubic
inches per gallon computed at a temperature of sixty degrees Fahrenheit [158.99 liters
computed at a temperature of 15.56 degrees Celsius].
2. "Commissioner" means the state tax commissioner.
3. "Field" means the geographic area underlaid by one or more pools, as defined by the
industrial commission.
4. "Gas" means natural gas and casinghead gas.
5. "Hub city" means a city with a population of twelve thousand five hundred or more,
according to the last official decennial federal census, which is located in a county that
has oil and gas gross production tax or oil extraction tax revenue collections attributed
to it, as reported by the tax commissioner in certifications made to the state treasurer,
in any three consecutive months during the twenty-four month period preceding
September first of the most recent odd-numbered year.
6. "Hub city school district" means the school district with the highest student enrollment
within the city limits of a hub city.
7. "Oil" means petroleum, crude oil, mineral oil, and casinghead gasoline.
8. "Person" includes partnership, corporation, limited liability company, association,
fiduciary, trustee, and any combination of individuals.
9. "Posted price" means the price specified in publicly available posted price bulletins or
other public notices, net of any adjustments for quality and location.
10. "Shallow gas" means gas produced from a gas well completed in or producing from a
shallow gas zone, as certified to the tax commissioner by the industrial commission.
11. "Shallow gas zone" means a strata or formation, including lignite or coal strata or
seam, located above the depth of five thousand feet [1524 meters] below the surface,
or located more than five thousand feet [1524 meters] below the surface but above the
top of the Rierdon formation, from which gas is or may be produced.
12. "Transportation costs" means the costs incurred for transporting oil established in
accordance with the first applicable of the following methods:
a. Actual costs incurred under the arm's-length contract between the producer and
the transporter of oil.
b. An applicable common carrier rate established and filed with the North Dakota
public service commission, or the appropriate federal jurisdictional agency.
c. When no common carrier rate would be applicable, the transportation costs are
those reasonable costs associated with the actual operating and maintenance
expenses, overhead costs directly attributable and allocable to the operation and
maintenance, and either depreciation and a return on undepreciated capital
investment, or a cost equal to a return on the investment in the transportation
system, as determined by the commissioner.
### § 57-51-02. Gross production tax - Oil.

A tax of five percent of the gross value at the well is levied upon all oil produced within North
Dakota, less the value of any part thereof, the ownership or right to which is exempt from
taxation. The tax levied attaches to the whole production, including the royalty interest.
### § 57-51-02.1. Type of tax.

For purposes of interpreting chapter 785 of the 1987 Session Laws, relating to federal land
bank taxation and to the taxation of other governmental entities if their immunity from taxation
has been waived, the gross production tax is a real property tax on oil-producing and
gas-producing mineral estates and interests.

### § 57-51-02.2. Gross production tax - Gas.

A gross production tax is levied upon all gas produced within North Dakota except gas that
is exempt from taxation. The tax levied must attach to the whole production, including the
royalty interest. The tax on gas must be calculated by taking the taxable production in mcf times
the gas tax rate.
1. The gas tax rate is four cents times the gas base rate adjustment for each fiscal year
as calculated under subsection 2.
2. a. The tax department shall annually determine the gas base rate adjustment and
the resulting gas tax rate for each fiscal year beginning on July first.
b. The gas base rate adjustment for the fiscal year is a fraction, the numerator of
which is the annual average of the gas fuels producer price index, commodity
code 05-3, as calculated and published by the United States department of labor,
bureau of labor statistics, for the previous calendar year, and the denominator of
which is seventy-five and seven-tenths.
c. The tax department shall provide the gas base rate adjustment and the gas tax
rate for the fiscal year, as determined under this subsection, to affected producers
on or before June first by posting the notice on the tax department's website.
d. If the index used to determine the gas base rate adjustment is substantially
revised, or if the base year for the index is changed, the department by
administrative rule shall make appropriate adjustment to the method used to
determine the gas base rate adjustment to ensure a result which is reasonably
consistent with the result which would have been obtained had the index not
been revised or the base year changed.
e. If the gas fuels producer price index is discontinued, a comparable index must be
adopted by the department by an administrative rule.
### § 57-51-02.3. Valuation of oil - Alternatives - Exceptions.

The gross value at the well for oil is the price paid for the oil under an arm's-length contract
between the producer and the purchaser less, when applicable, transportation costs associated
with moving the oil from the point of production to the point of sale under the contract. In the
absence of an arm's-length contract, the gross value at the well for oil is established by the first
applicable of the following methods:
1. The price paid under an arm's-length contract, to which the person paying the tax is a
party, for the purchase or sale of oil of like kind, character, and quality, in the same
field or, if none, in a nearby field, less, when applicable, transportation costs
associated with moving the oil from the point of production to the point of sale.
2. The price paid under an arm's-length contract, between parties other than the person
paying the tax, for the purchase or sale of oil of like kind, character, and quality, in the
same field or, if none, in a nearby field, less, when applicable, transportation costs
associated with moving the oil from the point of production to the point of sale.
3. The value determined by consideration of the posted price relevant in valuing oil of like
kind, character, and quality, in the same field or, if none, in a nearby field, less, when
applicable, adjustments for transportation costs to reflect the differential between the
value at the point of production and the value at the location reflected in the posted
price.
### § 57-51-02.4. Shallow gas - Gross production tax exemption.

Shallow gas produced during the first twenty-four months of production from and after the
date of first sales of gas from a well completed or recompleted in a shallow gas zone after
June 30, 2003, is exempted from the gross production tax levied under section 57-51-02.2. Gas
produced from such a well during testing prior to well completion or connection to a pipeline is
also exempt from the gross production tax.

### § 57-51-02.5. Exemption of gas for electrical generation at well site.

Gas burned at the well site to power an electrical generator that consumes at least
seventy-five percent of the gas from the well is exempt from the tax under section 57-51-02.2.
### § 57-51-02.6. Temporary exemption for oil and gas wells employing a system to avoid

flaring.
Gas is exempt from the tax under section 57-51-02.2 for a period of two years and thirty
days from the time of first production if the gas is:
1. Collected and used at the well site to power an electrical generator that consumes gas
from the well; or
2. Collected at the well site by a system that intakes at least seventy-five percent of the
gas and natural gas liquids volume from the well for beneficial consumption by means
of compression to liquid for use as fuel, transport to a processing facility, production of
petrochemicals or fertilizer, conversion to liquid fuels, separating and collecting over
fifty percent of the propane and heavier hydrocarbons, or other value-added processes
as approved by the industrial commission.
### § 57-51-03. Gross production tax to be in lieu of other taxes.

The payment of the taxes herein imposed must be in full, and in lieu of all ad valorem taxes
by the state, counties, cities, towns, townships, school districts, and other municipalities, upon
any property rights attached to or inherent in the right to producing oil or gas, upon producing oil
or gas leases, upon machinery, appliances, and equipment used in and around any well
producing oil or gas and actually used in the operation of such well, and also upon oil and gas
produced in the state upon which gross production taxes have been paid, and upon any
investment in any such property. Any interest in the land, other than that herein enumerated,
must be assessed and taxed as other property within the taxing district in which such property is
situated. It is expressly provided that the gross production tax is not in lieu of income taxes nor
excise taxes upon the sale of oil and gas products at retail.
### § 57-51-04. Equipment used in production exempt from ad valorem tax.

No equipment, material, or property is exempt from the payment of ad valorem tax by
reason of the payment of the gross production tax as herein provided except such equipment,
machinery, tools, material, or property as is actually necessary and being used at the site of a
producing well in the production of oil or gas; and it is expressly declared that no ice plants,
hospitals, office buildings, garages, residences, gasoline extraction or absorption plants, water
systems, fuel systems, roominghouses, and other buildings, nor any equipment or material used
in connection therewith is exempt from ad valorem tax, nor are drilling rigs exempt. The real
property is not exempt under this chapter except to the extent of the mineral interests therein.
### § 57-51-05. Payment of tax on monthly basis - When tax due - When delinquent -

Payment by purchaser - By producer - How casinghead gas taxed - Exemptions.
1. The gross production tax on oil or gas must be paid on a monthly basis. The tax on oil
is due and payable on the twenty-fifth day of the month succeeding the month of
production. The tax on gas is due and payable on the fifteenth day of the second
month succeeding the month of production. If the tax is not paid as required by this
section, it becomes delinquent and must be collected as provided in this chapter. The
penalty does not apply if ninety percent of the tax due has been paid with the monthly
return and the taxpayer files an amended monthly return and pays the total tax due
within sixty days from the original due date. The commissioner, upon request and a
proper showing of the necessity for an extension, may grant an extension of time, not
to exceed fifteen days, for paying the tax and when the request is granted the tax is
not delinquent until the extended period has expired. Any taxpayer who requests and
is granted an extension of time for filing a return shall pay, with the tax, interest at the
rate of twelve percent per annum from the date the tax was due to the date the tax is
paid.

2. On oil or gas produced and sold, the gross production tax must be paid by the
purchaser, and the purchaser is authorized to deduct in making settlement with the
producer or royalty owner, the amount of tax paid; provided, in the event oil produced
is not sold but is retained by the producer, the tax on the oil not sold must be paid by
the producer, including the tax due on royalty oil not sold; provided further, that in
settlement with the royalty owner the producer has the right to deduct the amount of
the tax paid on royalty oil or to deduct therefrom royalty oil equivalent in value at the
time the tax becomes due with the amount of the tax paid.
3. Gas when produced and utilized in any manner must be considered for the purpose of
this chapter, as to the amount utilized, as gas actually produced and saved, except
gas:
a. Used for fuel or otherwise used in the operation of any lease or premises in the
drilling for or production of oil or gas from the lease or premises, including
repressuring on the lease or premises; and
b. Produced from an enhanced oil recovery project utilizing the injection of gas,
either alone or in combination with other fluids, for the purpose of testing the
feasibility of enhanced oil recovery operations on a temporary basis for one or
more spacing units or employing enhanced oil recovery operations for an
extended or indefinite period of time on a fieldwide basis through unitization of the
reservoir that produces oil and gas. The exemption under this subdivision applies
to all enhanced oil recovery projects created and established by the industrial
commission after June 30, 2025, and for any gas produced after the date of first
production following initial injection of gas until all gas injected as part of the
enhanced oil recovery project has been recovered from the reservoir being tested
or unitized.
4. All calculations of the gross production tax on oil or gas, including production,
distribution, and claims for credit or refund, are based on the month of production and
must be credited to that month.
### § 57-51-05.1. Reclamation of oil - Refiner to pay tax - Reports required.

On all oil reclaimed from tank bottoms, pit oil, and saltwater, the gross production tax shall
be paid by the operator of the reclaiming plant, unless taxes have already been paid thereon. If
tank bottom or pit oil material is removed from the lease by the operator of a treatment plant, the
gross value of oil reclaimed from the material is the purchase price paid by the operator of the
treatment plant for the material from which the oil is reclaimed. If the operator has not paid a
cash price for the material, the oil reclaimed has no value at the well. Every person, firm,
association, corporation, or limited liability company engaged in the sale, purchasing, and
refining of tank bottoms, pit oil, and saltwater shall report to the commissioner, upon forms
prescribed by the commissioner, information necessary to the enforcement of this section.
### § 57-51-06. Tax paid to commissioner - Statements by person paying tax - Statements

by producer.
1. The tax herein provided for must be paid to the commissioner and the person paying
the tax shall file with the commissioner at the time the tax is required to be paid a
statement on forms prescribed by the commissioner. The commissioner may require a
purchaser to file the statement or report by electronic data interchange or other
electronic media.
2. Any person engaged in the production, within this state, of oil shall on or before the
twenty-fifth day of the next succeeding month after production, and any person
engaged in the production of gas within this state shall, on or before the fifteenth of the
second succeeding month after production, file with the commissioner a statement
upon forms prescribed by the commissioner. The commissioner may waive the
requirement that a producer file a well production report. A waiver by the commissioner
of the requirement to file a well production report does not release the producer from
any obligation to remit the tax under this chapter. A waiver does not release the

producer from any duty or obligation under section 57-51-07 to maintain production
records for inspection by the commissioner.
3. Reports from either the purchaser or producer, as the case may be, are delinquent
after the last day fixed for their filing, and every person required to file a report is
subject to a penalty of twenty-five dollars per day for each property upon which the
person fails or refuses to file the reports. The penalties herein prescribed are for failure
to file reports and are in addition to the penalty imposed by section 57-51-10 and
likewise constitute a lien against the assets of the person failing or refusing to file the
reports. The penalties prescribed under this section must be collected in the same
manner as gross production taxes and must be apportioned as other gross production
tax penalties; provided, that the commissioner may, for good cause shown, waive any
penalties imposed under this section. When royalty is claimed to be exempt from
taxation by law, the facts on which the claims of exemption are based and other
relevant information must be furnished when requested by the commissioner.
4. The tax commissioner may prescribe alternative methods for signing, subscribing, or
verifying a return filed by electronic means, including telecommunications, that shall
have the same validity and consequence as the actual signature and written
declaration for a paper return.
### § 57-51-07. Powers of commissioner.

The commissioner has power to require any person engaged in such production and the
agent or employee of such person, or purchaser of such oil or gas, or the owner of any royalty
interest therein to furnish any additional information the commissioner deems to be necessary
for the purpose of correctly computing the amount of said tax, and to examine the books,
records, and files of such person, and has power to conduct hearings and compel the
attendance of witnesses, the production of books, records, and papers of any person, and full
authority to make any investigation or hold any inquest deemed necessary to a full and
complete disclosure of the true facts as to the amount of production from any oil or gas location,
or of any company or other producer thereof, and as to the rendition thereof for taxing purposes.
### § 57-51-08. State board of equalization may adjust rate of gross production tax to equal

the general ad valorem tax.
Repealed by S.L. 1981, ch. 611, § 2.
### § 57-51-09. Commissioner shall compute tax on incorrect returns.

1. The commissioner may ascertain and determine whether a return required to be filed
with the commissioner is a true and correct return of the gross products, and of the
value thereof, of that person. If any person has made an untrue or incorrect return of
the gross production or value thereof, as hereinbefore required, or has failed or
refused to make a return, the commissioner shall under rules adopted by the
commissioner, ascertain the correct amount of either, and compute the tax.
2. The time to assess additional tax found due is three years after the due date of the
original return or three years after the original return is filed, whichever period expires
later. However, if there is a change in tax liability on any return by an amount in excess
of twenty-five percent of the amount of tax liability reported on a return, any additional
tax determined to be due may be assessed anytime within six years after the due date
of the return or six years after the return was filed, whichever period expired later.
3. If a taxpayer files an amended return, the tax commissioner has two years after the
return is filed to audit the return and assess any additional tax attributable to the
changes or corrections even though other time periods prescribed in this section for
the assessment of tax may have expired. The provisions of this section do not limit or
restrict any other time period prescribed in this section for the assessment of tax that
has not expired as of the end of the two-year period prescribed in this section.
4. For periods in which the tax commissioner has waived the requirement that a producer
file a well production report required under section 57-51-06, the tax commissioner has

three years after the due date of the purchaser's return or three years after the
purchaser's return is filed, whichever period expires later, to assess the producer for
additional tax found due. However, if there is a change in tax liability on the
purchaser's return by an amount in excess of twenty-five percent of the amount of tax
liability reported on a purchaser's return, any additional tax determined to be due may
be assessed from the producer anytime within six years after the due date of the
purchaser's return or six years after the purchaser's return was filed, whichever period
expires later.
5. Any person who consents to an extension of time for assessment of tax must be
presumed to have consented to a similar extension for refund.
### § 57-51-10. Proceedings and penalty on delinquency.

When the tax provided for in this chapter becomes delinquent, there is hereby imposed a
penalty of five dollars, or a sum equal to five percent of the tax due, whichever is greater, with
interest at the rate of one percent per month on the tax due, for each calendar month or fraction
thereof during which such delinquency continues, excepting the month within which such tax
became due, which must be collected in the manner hereinafter provided. If any person fails to
make any report herein required, within the time prescribed by law for such report, it is the duty
of the commissioner to examine the books, records, and files of such person to ascertain the
amount and value of such production to compute the tax thereon as provided herein, and the
commissioner shall add thereto the amount of any penalties accrued thereon. The
commissioner, for good cause shown, may waive the penalty or the interest provided by this
section.
### § 57-51-11. Lien for tax - Preservation of lien - Satisfaction of lien.

1. The tax, penalty, and interest provided for in this chapter is, at all times, a first and
paramount lien against the purchaser's or producer's property as the case may be,
both real and personal. The provisions of this chapter making the purchaser liable to
pay the tax and requiring the producer to pay the royalty owner's tax do not release the
producer or purchaser from that liability. If the tax, penalty, and interest is not paid, it
may be recovered at the suit of the state, upon relation to the commissioner, in any
court of competent jurisdiction of the county where any such property, assets, and
effects are located.
2. Any judgment creditor, or lien claimant acquiring any interest in, or lien on, any
property situated in this state, prior to the commissioner filing in the central indexing
system maintained by the secretary of state, a notice of the lien provided for in this
section, takes free of, or has priority over, the lien. The commissioner shall index in the
central indexing system the following data:
a. The name of the taxpayer.
b. The name "State of North Dakota" as claimant.
c. The date and time the notice of lien was indexed.
d. The amount of the lien.
e. The internal revenue service taxpayer identification number or social security
number of the taxpayer.
The notice of lien is effective as of eight a.m. of the first day following the indexing of
the notice. A notice of lien filed by the commissioner before August 1, 1997, may be
indexed in the central indexing system without changing its original priority as to
property in the county where the lien was filed.
3. Upon the payment of tax, penalty, and interest, if applicable, or a penalty assessed
under section 57-51-06, as to which the commissioner has indexed a notice in the
central indexing system, the commissioner shall index a satisfaction of the lien in the
central indexing system.
4. The commissioner is exempt from the payment of the fees otherwise provided for by
law for the indexing of the lien or satisfaction.

### § 57-51-12. Delinquent taxes - Sale of property.

When any tax provided for in this chapter becomes delinquent, the commissioner shall
issue warrants directed to the sheriff of any county wherein the same, or any part thereof
accrued, for the collection of said tax, interest, and penalty; and the sheriff to whom said warrant
is directed, shall proceed to levy upon the property, assets, and effects of the person liable for
such tax, and shall sell the same and make return thereof, as upon execution. The state of
North Dakota, through the commissioner, is authorized to make bids at any such sale to the
amount of tax, penalty, and costs accrued.
### § 57-51-13. False report deemed perjury.

Repealed by S.L. 1975, ch. 106, § 673.
### § 57-51-14. Duties of commissioner and state treasurer.

It is the duty of the commissioner to deposit with the state treasurer all moneys collected by
the commissioner under this chapter and to accompany each remittance, when possible, with a
certificate showing the county where produced. The state treasurer, no less than quarterly, shall
pay over to the county treasurers and city auditors of the several counties the moneys to which
they are entitled hereunder. For purposes of distributions and allocations made by the state
treasurer under this chapter and chapters 57-51.1 and 57-51.2, all revenue collected by the
commissioner under this chapter must be considered revenue collections for the period in which
the revenue was received by the commissioner.
### § 57-51-15. Gross production tax allocation - Report.

The gross production tax must be allocated monthly as follows:
1. The tax revenue collected under this chapter equal to one percent of the gross value
at the well of the oil and one-fifth of the tax on gas must be deposited with the state
treasurer. The state treasurer shall allocate the funding in the following order:
a. Eight percent of the amount available under this subsection to the North Dakota
outdoor heritage fund, but not in an amount exceeding twenty million dollars per
fiscal year.
b. Four percent of the amount available under this subsection to the abandoned oil
and gas well plugging and site reclamation fund, but not in an amount exceeding
seven million five hundred thousand dollars per fiscal year and not in an amount
that would bring the balance in the fund to more than one hundred million dollars
through June 30, 2027, or to more than fifty million dollars after June 30, 2027.
c. Any remaining revenues pursuant to subsection 3.
d. For purposes of this subsection, "fiscal year" means the period beginning
September first and ending August thirty-first of the following calendar year.
2. The tax revenue collected under this chapter equal to four percent of the gross value
at the well of the oil and four-fifths of the tax on gas must be deposited with the state
treasurer. The state treasurer shall allocate the funding in the following order:
a. The first five million dollars of collections received from a county each fiscal year
is allocated to the county.
b. The remaining revenue collections received from a county each fiscal year are
allocated thirty percent to the county and seventy percent as follows:
(1) Monthly amounts to the hub city funding pool to provide fifteen million four
hundred thousand dollars per fiscal year for the allocations under
paragraph 2 of subdivision a of subsection 5.
(2) Monthly amounts to the hub city school district funding pool to provide
two million one hundred thousand dollars per fiscal year for the allocations
under paragraph 3 of subdivision a of subsection 5.
(3) Monthly amounts to the supplemental school district funding pool to provide
seventy percent of the total amount needed for the allocations under
paragraph 4 of subdivision a of subsection 5.

(4) Monthly amounts to the hub city debt relief funding pool to provide seven
million three hundred fifty thousand dollars per fiscal year for the allocations
under paragraph 2 of subdivision a of subsection 5.
(5) Any remaining revenue collections to the state for the state's allocations
pursuant to subsection 3.
c. For purposes of this subsection, "fiscal year" means the period beginning
September first and ending August thirty-first of the following calendar year.
3. After the allocations under subsections 1 and 2, the amount remaining is allocated first
to provide for deposit of thirty percent of all revenue collected under this chapter in the
legacy fund as provided in section 26 of article X of the Constitution of North Dakota
and the remainder must be allocated to the state general fund. If the amount available
for a monthly allocation under this subsection is insufficient to deposit thirty percent of
all revenue collected under this chapter in the legacy fund, the state treasurer shall
transfer the amount of the shortfall from the state general fund share of oil extraction
tax collections and deposit that amount in the legacy fund.
4. For a county that received less than five million dollars of allocations under
subsection 2 in the most recently completed even-numbered fiscal year before the
start of the biennium, revenues allocated to that county must be distributed by the
state treasurer as follows:
a. Forty-five percent must be distributed to the county treasurer and credited to the
county general fund.
b. Thirty-five percent must be distributed proportionally to school districts within the
county on the average daily attendance distribution basis for kindergarten through
grade twelve students residing within the county, as certified to the state treasurer
by the county superintendent of schools. However, a hub city school district must
be omitted from distributions under this subdivision.
c. Twenty percent must be distributed to the incorporated cities of the county. A hub
city must be omitted from distributions under this subdivision. Distributions among
cities under this subsection must be proportional based upon the population of
each incorporated city according to the last official decennial federal census. In
determining the population of any city in which total employment increases by
more than two hundred percent seasonally due to tourism, the population of that
city for purposes of this subdivision must be increased by eight hundred percent.
d. For purposes of this subsection, "fiscal year" means the period beginning
September first and ending August thirty-first of the following calendar year.
5. For a county that received five million dollars or more of allocations under subsection 2
in the most recently completed even-numbered fiscal year before the start of the
biennium, revenues allocated to that county must be distributed by the state treasurer
as follows:
a. A portion of the revenues from each county must be distributed to a hub city
funding pool, a hub city school district funding pool, a supplemental school district
funding pool, and a hub city debt relief funding pool as follows:
(1) The amount distributed from each county to the funding pools under this
subdivision must be proportional to each county's monthly oil and gas gross
production tax revenue collections relative to the combined total monthly oil
and gas gross production tax revenue collections from all the counties that
receive allocations under this subsection.
(2) The state treasurer shall distribute, to the hub city funding pool, the monthly
amount needed from each county to provide six million six hundred
thousand dollars per fiscal year for the allocations under this paragraph.
(a) The state treasurer shall allocate monthly amounts from the hub city
funding pool to provide a combined total of twenty-two million dollars
per fiscal year to all the hub cities, which includes the fifteen million
four hundred thousand dollars under paragraph 1 of subdivision b of
subsection 2 and the six million six hundred thousand dollars under
this paragraph. The monthly allocation to each hub city must be

proportional to each hub city's impact percentage score, including
fractional percentage points rounded to the nearest tenth of a percent,
relative to the combined total of all the hub cities' impact percentage
scores.
(b) The state treasurer shall calculate the impact percentage score for
each hub city by summing the following:
[1] The percentage of mining, quarrying, and oil and gas extraction
employment relative to the total employment of all industries in
the county in which the hub city is located, based on the most
recent annual data for all ownership types compiled by
job service North Dakota in the quarterly census of employment
and wages, multiplied by forty-five hundredths;
[2] The average of the percentage of mining, quarrying, and oil and
gas extraction employment relative to the total employment of all
industries in each county for all the counties in the human service
region in which the hub city is located, based on the most recent
annual data for all ownership types compiled by job service North
Dakota in the quarterly census of employment and wages,
multiplied by fifteen hundredths;
[3] The percentage of establishments engaged in mining, quarrying,
and oil and gas extraction relative to the total establishments of
all industries in the county in which the hub city is located, based
on the most recent annual data for all ownership types complied
by job service North Dakota in the quarterly census of
employment and wages, multiplied by one-tenth;
[4] The percentage of oil production in the human service region in
which the hub city is located relative to the total oil production in
all the human service regions with hub cities, based on the most
recently available calendar year data compiled by the industrial
commission in a report on the historical barrels of oil produced by
county, multiplied by one-tenth;
[5] The percentage change in population from five years prior for the
hub city, based on the most recent actual or estimated census
data published by the United States census bureau, multiplied by
one-tenth; and
[6] The percentage change in population from five years prior for the
county in which the hub city is located, based on the most recent
actual or estimated census data published by the United States
census bureau, multiplied by one-tenth.
(c) For purposes of this paragraph, "human service region" means the
areas designated by the governor's executive order 1978-12 dated
October 5, 1978.
(3) The state treasurer shall distribute, to the hub city school district funding
pool, the monthly amount needed from each county to provide nine hundred
thousand dollars per fiscal year for the allocations under this paragraph.
(a) The state treasurer shall allocate monthly amounts from the hub city
school district funding pool to provide a combined total of three million
dollars per fiscal year to all the hub city school districts, which includes
the two million one hundred thousand dollars under paragraph 2 of
subdivision b of subsection 2 and the nine hundred thousand dollars
under this paragraph. The monthly allocation to each hub city school
districts must be proportional to each hub city school district's impact
percentage score, including fractional percentage points rounded to
the nearest tenth of a percent, relative to the combined total of all the
hub cities' impact percentage scores.

(b) For the purpose of determining the impact percentage score for each
hub city school district, the state treasurer shall use the same impact
percentage score as the corresponding score calculated for each hub
city in paragraph 2.
(4) The state treasurer shall distribute, to the supplemental school district
funding pool, the monthly amount needed from each county to provide for
thirty percent of the total allocations under this paragraph. To each county
that received more than five million dollars but less than thirty million dollars
of total allocations under subsection 2 in the most recently completed
even-numbered fiscal year before the start of the biennium, the state
treasurer shall allocate a monthly amount from the supplemental school
district funding pool which will be added to the distributions to school
districts under paragraph 2 of subdivision b, as follows:
(a) To each county that received more than five million dollars but not
exceeding ten million dollars of total allocations under subsection 2 in
the most recently completed even-numbered fiscal year before the
start of the biennium, the state treasurer shall allocate a monthly
amount that will provide a total allocation of one million five hundred
thousand dollars per fiscal year. The allocation must be distributed to
school districts within the county pursuant to paragraph 2 of
subdivision b.
(b) To each county that received more than ten million dollars but not
exceeding fifteen million dollars of total allocations under subsection 2
in the most recently completed even-numbered fiscal year before the
start of the biennium, the state treasurer shall allocate a monthly
amount that will provide a total allocation of one million two hundred
fifty thousand dollars per fiscal year. The allocation must be distributed
to school districts within the county pursuant to paragraph 2 of
subdivision b.
(c) To each county that received more than fifteen million dollars but not
exceeding twenty million dollars of total allocations under subsection 2
in the most recently completed even-numbered fiscal year before the
start of the biennium, the state treasurer shall allocate a monthly
amount that will provide a total allocation of one million dollars per
fiscal year. The allocation must be distributed to school districts within
the county pursuant to paragraph 2 of subdivision b.
(d) To each county that received more than twenty million dollars but not
exceeding twenty-five million dollars of total allocations under
subsection 2 in the most recently completed even-numbered fiscal
year before the start of the biennium, the state treasurer shall allocate
a monthly amount that will provide a total allocation of seven hundred
fifty thousand dollars per fiscal year. The allocation must be distributed
to school districts within the county pursuant to paragraph 2 of
subdivision b.
(e) To each county that received more than twenty-five million dollars but
not exceeding thirty million dollars of total allocations under
subsection 2 in the most recently completed even-numbered fiscal
year before the start of the biennium, the state treasurer shall allocate
a monthly amount that will provide a total allocation of five hundred
thousand dollars per fiscal year. The allocation must be distributed to
school districts within the county pursuant to paragraph 2 of
subdivision b.
(5) The state treasurer shall distribute, to the hub city debt relief funding pool,
the monthly amount needed from each county to provide three million
one hundred fifty thousand dollars per fiscal year for the allocations under
this paragraph. At least once per interim, each hub city shall provide a report

to the budget section regarding the use of the funding received under this
section and information on the hub city's outstanding debt, including maturity
dates, interest rates, and annual repayment amounts.
(a) The state treasurer shall allocate monthly amounts from the hub city
debt relief funding pool to provide a combined total of ten million five
hundred thousand dollars per fiscal year to all the hub cities, which
includes the seven million three hundred fifty thousand dollars under
paragraph 4 of subdivision b of subsection 2 and the three million
one hundred fifty thousand dollars under this paragraph. The monthly
allocation to hub cities under this paragraph is:
[1] Seventy and thirteen hundredths percent to Williston;
[2] Nineteen and ninety-four hundredths to Dickinson; and
[3] Nine and ninety-three hundredths to Minot.
(b) A hub city shall use the funding allocated under this paragraph for
debt repayments related to debt incurred between July 1, 2012, and
December 31, 2025, to address impacts from oil and gas
development.
b. After the distributions in subdivision a, each county's remaining revenues must be
distributed as follows:
(1) Sixty percent must be distributed to the county treasurer and credited to the
county general fund.
(2) Five percent must be distributed proportionally to school districts within the
county on the average daily attendance distribution basis for kindergarten
through grade twelve students residing within the county, as certified to the
state treasurer by the county superintendent of schools. However, a hub city
school district must be omitted from distributions under this subdivision.
(3) Twenty percent must be distributed to the incorporated cities of the county. A
hub city must be omitted from distributions under this subdivision.
Distributions among cities under this subsection must be proportional based
upon the population of each incorporated city according to the last official
decennial federal census. In determining the population of any city in which
total employment increases by more than two hundred percent seasonally
due to tourism, the population of that city for purposes of this subdivision
must be increased by eight hundred percent.
(4) Four percent must be allocated among the organized and unorganized
townships of the county. The state treasurer shall allocate the funds
available under this subdivision among townships in proportion to each
township's road miles relative to the total township road miles in the county.
The amount allocated to unorganized townships under this subdivision must
be distributed to the county treasurer and credited to a special fund for
unorganized township roads, which the board of county commissioners shall
use for the maintenance and improvement of roads in unorganized
townships.
(5) Nine percent must be distributed among hub cities. The state treasurer shall
distribute the funds available under this subdivision in proportion to the
amounts the hub cities receive under paragraph 2 of subdivision a.
(6) Two percent must be distributed among hub city school districts. The state
treasurer shall distribute the funds available under this subdivision in
proportion to the amounts the hub city school districts receive under
paragraph 3 of subdivision a.
(7) For purposes of this subsection, "fiscal year" means the period beginning
September first and ending August thirty-first of the following calendar year.
### § 57-51-15.1. Energy impact fund.

Repealed by S.L. 2019, ch. 13, 7.

### § 57-51-16. Distribution of proceeds in certain cases.

If gross production tax is paid to the commissioner and the reports accompanying such tax
are insufficient to enable the commissioner to determine the source, by county, from which it is
produced, the state treasurer shall allocate those revenues under this section. In the first
distribution to counties under section 57-51-15 which occurs after June gross production tax
revenues are received by the state treasurer for allocation, the revenue under this section must
be allocated among counties in the same proportions that revenue was allocated among
counties that received distributions under section 57-51-15 during the year ended June thirtieth.
Revenue received by the county under this section must be allocated within the county as
provided in section 57-51-15.
### § 57-51-17. Reports by carriers of oil and gas transported - Reports of refiners -

Reports by persons purchasing or storing oil.
It is the duty of every railroad company, pipeline company, or transportation company to
furnish to the commissioner, upon request, any and all information relative to the transportation
of oil or gas subject to gross production tax, that may be required to properly enforce the
provisions of this chapter. The commissioner may require any pipeline or transportation
company to install suitable measuring devices to enable the company to provide information
concerning the quantity of oil or gas transported within, into, out of, or across the state of North
Dakota. It is the duty of every person engaged in the operation of a refinery for the processing of
oil or gas, in the state of North Dakota, to furnish to the commissioner, upon request, any and all
information, relative to oil or gas subject to gross production tax that has been processed by it
that may be required to properly enforce the provisions of this chapter. It is the duty of every
person engaged in the purchase or storing of oil or gas subject to gross production tax in the
state of North Dakota to furnish to the commissioner, upon request, showing the amount of oil or
gas in storage, and giving, along with information required, the location, identity, character, and
capacity of the storage receptacle in which the oil or gas is stored. Information requested under
this section must be provided within forty-five days of the request.
The failure of any person to comply with the provisions of this section makes that person
subject to a penalty of twenty-five dollars for each day that person fails or refuses to furnish the
information or comply with the provisions of this chapter. Any penalty may be recovered at the
suit of the state, on relation of the commissioner. The penalty so collected must be apportioned
to the state general fund. The commissioner may, for good cause shown, excuse any or all
penalties imposed under this section.
### § 57-51-18. Payment where ownership is in dispute - Assignment as security.

Repealed by S.L. 1991, ch. 689, § 8.
### § 57-51-19. Claim for credit or refund.

In all cases of overpayment, duplicate payment, or payment made in error, the
commissioner may issue a certificate stating therein the facts and the amount of the refund to
which the taxpayer may be entitled. Upon presentation of the certificate to the office of
management and budget, a warrant shall be issued to the taxpayer for the purpose of refunding
any overpayment, duplicate payment, or payment made in error out of the unapportioned gross
production tax in the state treasury and a pro rata share thereof must be charged against the
county entitled to share in the tax. Interest arising from refunds of overpayments, duplicate
payments, and erroneous payments must be allowed and paid at the rate of ten percent per
annum and accrues for payment from sixty days after the due date of the return or after the
return was filed or after the tax was fully paid, whichever comes later.
A taxpayer may file a claim for credit or refund of an overpayment of tax within three years
of the due date of the return or three years after the return was filed. However, if there is a
change in tax liability on any return by an amount in excess of twenty-five percent of the amount
of tax liability reported on a return, a claim for refund of tax may be filed within six years after the
due date of the return or six years after the return was filed, whichever period expires last.

### § 57-51-19.1. Minimum refunds and collections.

1. A refund may not be made by the tax commissioner to any taxpayer unless the amount
to be refunded, including interest, is at least five dollars. The tax commissioner shall
transfer any amount that is not refunded to a taxpayer under this subsection to the
state treasurer for deposit in the same manner as other revenue under this chapter.
2. A remittance of tax need not be made and any assessment or collection of tax may not
be made unless the amount is at least five dollars, including penalties and interest.
### § 57-51-20. Statements as to tax on settlements - Acceptance of deductions.

Repealed by S.L. 1989, ch. 732, § 5.
### § 57-51-21. Rules and regulations - Bond - Reports - Actions.

The commissioner may prescribe all necessary rules for making and filing of all reports
required hereunder and otherwise necessary to the enforcement of this chapter. The
commissioner may require a sufficient bond from any person charged with the making and filing
of reports and the payment of the taxes imposed under this chapter. The bond must run to the
state of North Dakota and must be conditioned upon the making and filing of reports as required
by law, upon compliance with the rules and regulations of the commissioner, and for the prompt
payment, by the principal therein, of all taxes justly due the state under this chapter. When any
reports required have not been filed, or may be insufficient to furnish all the information required
by the commissioner, the commissioner shall institute, in the name of the state of North Dakota
upon relation of the commissioner, any necessary action or proceedings in the courts having
jurisdiction, to enjoin such person from continuing operations until such reports have been filed
as required, and in all proper cases, injunction must issue without bond from the state of North
Dakota. Upon showing that the state is in danger of losing its claims or the property is being
mismanaged, dissipated, or concealed, a receiver must be appointed at the suit of the state.
### § 57-51-22. Penalty.

Any person intentionally violating any of the provisions of this chapter is guilty of a class A
misdemeanor.
### § 57-51-23. Application of chapter.

Omitted.
