As an oil tax bill heads to his desk, North Dakota Gov. Jack Dalrymple said more than $12 million in grants are supporting development in the oil-rich state.

"These grants are an important part of our ongoing commitment to help the oil and gas region meet the challenges created by rapid growth," the governor said in a statement.

The state's Land Board awarded more than 130 grants totaling $12.3 million to fund developments in the west of the state where the boom in oil and natural gas is resulting in unprecedented growth.

North Dakota catapulted to the No. 2 spot in the nation, after Texas, as output from the Bakken shale reserve area in the west of the state grew. Production set a record in December at around 1.2 million barrels of oil per day, though activity in the exploration and production side of the sector has slowed because of a weak market for crude oil.

The state reported 84 active rigs in the state as of Tuesday, down more than 100 from this date in 2014.

Last week, the state House of Representatives voted in favor of lowering the tax rate on oil extraction from 6.5 percent to 5 percent by Jan. 1, though the bill contains a measure that would allow the rate of tax to increase should oil prices stay above the $90 per barrel mark for three straight months.

The price for Williston Basin Sweet, a North Dakota oil, is about $10 less than the U.S. benchmark of $56 per barrel, though it's increased along with other indices since the start of the year.

State data show oil production for February, the last full month for which data are available, was around 1.17 million barrels per day.

Last week, the North Dakota attorney general filed a challenge against federal regulations governing hydraulic fracturing. The state argued federal rules interfere with its own development rules and environmental standards.