A BILL for an Act to create and enact a new section to chapter 57-51.2 of the North Dakota Century Code, relating to tribal oil and gas tax revenue allocation withholding.

69th Legislative Assembly (2025-26) Introduced by Richard Marcellais and 1 co-sponsor

Withholds tribal oil and gas tax allocations into escrow until a new state-tribal agreement is signed and all required BIA audits are submitted.

Withdrawn from further consideration

Main purpose

To suspend disbursement of oil and gas tax allocation payments governed by chapter 57‑51.2 and hold those funds in escrow until specified conditions are met: (1) a new agreement between a tribal governing body and the Governor is executed under the chapter, and (2) the tribal governing body has submitted all required audit reports and responses to audit findings to the U.S. Bureau of Indian Affairs (BIA).

Key provisions

State treasurer duty: Beginning with allocations in August 2025, the State Treasurer must withhold all oil and gas tax revenue allocations made under chapter 57‑51.2.

Escrow: Withheld revenues are to be deposited in an escrow account at the Bank of North Dakota.

Conditions for release: Funds in escrow may be allocated (released) only after both:

A tribal governing body and the Governor enter a new agreement under chapter 57‑51.2; and
The tribal governing body has submitted to the BIA all required audit reports and responses to audit findings.

Form: The provision is enacted as a new section in chapter 57‑51.2.

Who is affected

Tribal governments that currently receive oil and gas tax allocations under chapter 57‑51.2 (their disbursements would be withheld).

State Treasurer and Bank of North Dakota (responsible for withholding and escrow).

Governor’s office (party to any new agreement required for release).

U.S. Bureau of Indian Affairs (receives audit materials required as a release condition).

Local governments, service providers, or programs that rely on those tribal allocations could experience delayed cash flows while funds are withheld.

Timeline and procedural status

Withholding to begin with allocations in August 2025 (per bill text).

The bill text was introduced in the Sixty‑Ninth Legislative Assembly (Senators Walen and Marcellais are listed as sponsors).

Current status: Withdrawn from further consideration (bill is not advancing in the legislative process).

Potential impacts and considerations

Fiscal: Could immediately suspend distribution of potentially significant oil and gas revenues to tribes and any local recipients depending on those funds; exact dollar impact depends on allocation amounts in chapter 57‑51.2 (not specified in the bill text).

Negotiation leverage: The withholding mechanism is designed to encourage renegotiation of agreement(s) between tribes and the State and to ensure audit compliance.

Administrative: Requires the State Treasurer and Bank of North Dakota to manage escrow accounting and recordkeeping.

Legal and sovereign relations: May raise legal questions or political disputes over state authority to withhold funds payable to tribal governments; could prompt negotiation or litigation.

Compliance dependency: Release depends on both a new state‑tribal agreement and BIA receipt of audits and responses — two distinct triggers.

Note: Source material included text from multiple jurisdictions; this summary focuses solely on the North Dakota SB 2304 provision creating an oil and gas tax allocation withholding and escrow requirement.

Bill