N. Dakota's oil industry seeks reduced late royalty payments
BISMARCK (AP) — North Dakota’s oil industry is seeking relief on the amount of interest and penalties the state can charge companies for unpaid oil and gas royalties.
The trade group representing the state’s oil industry, North Dakota Petroleum Council, is asking lawmakers to reduce late royalty payments, according to the Bismarck Tribune. The state currently can charge interest and penalties on unpaid royalties at a maximum rate of 30%.
During a hearing Wednesday, the council’s president, Ron Ness, told the House Finance and Taxation Committee that such a level is “unnecessarily punitive.”
The council has been fighting the Land Board’s effort to collect unpaid royalties over the past year. The board has twice delayed the April 30 deadline after pushback from oil and gas companies amid the industry downturn brought on by the coronavirus pandemic.
The bill, sponsored by Bismarck Republican Rep. Jason Dockter, aims to reduce the maximum amount of interest and penalties the state can charge for late royalties to a base interest rate set by the Bank of North Dakota plus 4%. The base rate is now 3.25% but can fluctuate.
The committee did not vote on the bill during Wednesday’s hearing.