KFYR-TV The Fort Berthold Reservation provides one third of the North Dakota's oil production.
The tribal chairman says changing the oil tax formula is bad news.
"The proposed reduction that North Dakota has passed on the houseside is too dramatic," said Mark Fox, tribal chairman of the MHA Nation. "It's too much of a decrease and the losses we would face would be too dramatic."
House Bill 1476 would get rid of the oil tax incentive, which is expected to trigger on June 1st. That trigger, based on low oil prices, would have knocked the overall tax rate down to 6 percent.
This bill locks in the tax rate at 9.5 percent, regardless of price.
Fox says the change could prompt the tribes from abandoning the tax agreement they have with the state.
"We will have to sit down and determine whether or not it's in the best interest to stay in the agreement," Fox said. "It is going to be a difficult decision but it's something we have to do for our people."
"This is really not a new concept," said state tax commissioner Ryan Rauschenberger. "We've had bills like this a lot of times before."
Any revenue generated from oil taxes on the reservation is split 50/50 with the state, and the dollars add up.
"Last summer. one month where $25 million was distributed to Three Affiliated Tribes from that agreement, $25 million came to the state," Rauschenberger said. "So it's a huge agreement and very important."
Fox says he has drawn up several amendments that he would like to have included.
"It's not over," Fox said. "We now have an opportunity to seek amendment on the senate side."
If any changes are made and the full Senate approves, the bill would then have to go back to the House.