Outdoor Heritage Fund projected to fall well short of $30 million cap
FARGO -- A glitch in the funding formula for North Dakota's new Outdoor Heritage Fund means the conservation initiative is projected to have only a little more than half of the $30 million authorized for the next biennium.
The fund is projected to raise $17.62 million during the 2013-15 budget, well short of the $30 million cap allowed by the law to fund conservation projects.
The Outdoor Heritage Fund sets aside 4 percent of the first 1 percent of the oil and gas gross production tax, limited to $15 million a year and $30 million in a biennium.
Gov. Jack Dalrymple proposed the fund after a more ambitious outdoor heritage fund plan, estimated to raise at least $100 million per biennium, failed last year because of fraudulent ballot petition signatures.
North Dakota's need for natural resource conservation has been heightened, many agree, by unprecedented oil and gas development, as well as conversion of conservation acres to cropland because of high crop prices.
Mike McEnroe, a wildlife habitat advocate who was involved in the legislative debate concerning the Outdoor Heritage Fund, said a "glitch" in the funding formula is to blame for the much lower revenue, at least in the first biennium.
The revenue gap became known when a fiscal note was drawn up for the fund in mid-January. Conservation groups supporting the initiative were told efforts to modify the formula could backfire and defeat the proposal, which narrowly passed the House by a 48-44 vote, McEnroe said.
"It was sold as, 'We're putting $30 million into the budget for conservation,' " McEnroe said. Still, he added, "It is a beginning."
In the end, legislators decided to leave the formula alone because there is the very real possibility that oil and gas production will exceed the levels used in the fund's revenue forecast, Dalrymple said.
"We know the collection is going to be growing, basically every month," the governor said. "There was talk of adjusting the percentage. There's a lot of people who think the production levels are about to jump again."
Dalrymple will appoint members of the fund's 12-member advisory group, representatives of agriculture, energy and conservation interests. The group will screen project proposals.
By law, the fund cannot be used to acquire land or secure conservation easements lasting longer than 20 years, and cannot "interfere, disrupt, or prevent activities" associated with mining or oil and gas drilling activities.
As the Outdoor Heritage Fund takes effect, and if there is recognition of its accomplishments, there could be public support to enlarge the fund, Dalrymple said.
"I think there's a very good chance that it can be enhanced and the percentage can be increased," he said, referring to oil revenues set aside for conservation.
Even if the fund's revenues for the next biennium fall short of the $30 million cap, a key supporter of the original outdoor heritage proposal said it nonetheless marks an important start.
The Legislature has now recognized the need to do more for conservation, and has created a special fund and a revenue source to address the issue, said Stephen Adair, director of Ducks Unlimited's Great Plains office in Bismarck.
"Now the debate is about how much, how fast," he said. "I would say that North Dakota has started on the conservation journey, but we still have a long ways to go."