The North Dakota House has approved a bill that would give oil companies a lower flat tax rate if oil continues its slide over concerns that the volatile market is making it hard to predict revenues.

The House voted 57-32 to approve the measure, which supporters say could improve the creation of budgets in this uncertain climate, but opponents argue could cost the states billions of dollars, according to an Associated Press report.

The Republican-controlled legislature restructured taxes to deal with the falling oil prices, arguing that it creates a stable environment, according to House Majority Leader Rep. Al Carson (Fargo). However, Senate Minority Leader Mac Schneider (Grand Forks) called the bill “artificial” and that it will cost residents of the state in the long run.

Under the terms of the bill, the tax rate would be permanently lowered by more than 30 percent. The bill would eliminate a tax exemption that would have kicked in temporarily until oil prices rise again.

Getting rid of hte exemption would increase revenues by as much as as $120 million in the next two years, and the oil industry has certainly been in favor of it, with the president of the North Dakota Petroleum Council Ron Ness offering an ultimately unsuccessful amendment imposing a 9 percent flat tax.

The state currently has two oil taxes: a 5 percent product tax and a 6.5 percent extraction tax, which had been enacted in 1980, when oil prices were booming. An exemption kicks in allowing the extraction tax to be forgiven if the five-month average price has fallen below $55.09, a trigger that was likely to kick in on June 1.