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The west wins more oil tax revenue

North Dakota Senate Majority Leader Sen. Rich Wardner (R-Dickinson), center, along with Sen. Dwight Cook (R-Mandan), left, and House Majority Leader Rep. Al Carlson (R-Fargo) and Rep. Craig Headland (R-Montpelier), back right, announce on April 17 a bill to restructure the state's oil tax formula in the state capitol in Bismarck. (Forum News Service file photo)

BISMARCK – Senate and House lawmakers gave final approval Wednesday to a bill designed to send a greater share of oil tax revenue to areas of western North Dakota strained by the impacts of oil development.

House Bill 1176 will send about $630.8 million in oil production tax revenue to political subdivisions in the 2015-17 biennium, or nearly $133 million more than under current law.

The bill changes the funding formula to send 30 percent of oil revenue to counties, cities, schools and townships while sending 70 percent to the state, a 5 percent increase for the local share.

Gov. Jack Dalrymple proposed in December to send 60 percent of oil revenue to the local areas, but legislators reduced that after low crude prices significantly reduced anticipated oil revenues.

Rep. Keith Kempenich, R-Bowman, said while the bill won’t cover all of western North Dakota’s needs, the region still comes out ahead at a time when revenue projections are down. It received a 91-1 vote in the House and a 46-1 vote in the Senate.

The bill provides $72.9 million for Williston, $41.6 million for Dickinson and $13.1 million for Minot, all considered “hub cities” in the Oil Patch. School districts will receive nearly $15.8 million in Williston, nearly $9.6 million in Dickinson and $2.9 million in Minot.

The amended bill provides about $8.6 million for another six hub cities identified as having at least 12,500 people and more than 1 percent of employment working for the oil and gas industry. Mandan, which is home to the Tesoro refinery, receives $4.3 million; Bismarck and West Fargo each receive about $1.4 million; and Jamestown, Fargo and Grand Forks each receive $960,000.

House Minority Leader Kenton Onstad, D-Parshall, said he thinks adding those communities was a mistake and took away funding from the western North Dakota communities with greater impacts. He anticipates the bill will bring frustration in the west.

“They’re tired of coming back here every time and begging for money,” Onstad said.

The bill also provides $292 million for counties, $98 million for cities other than the hub cities, $46.2 million for schools outside of hub cities and $28.5 million for townships. The funding includes $112 million for roads and bridges in non oil-producing counties.

The bill also provides $140 million in energy impact grants, down from the $240 million under current law.

Sen. Brad Bekkedahl, R-Williston, who also serves as a Williston city commissioner, said he thinks the oil tax formula may need to be revisited again next session.

“This is an improvement, but the needs will still be there,” Bekkedahl said.

But overall, Bekkedahl said he was happy with the final bill.

“The bill brings us the financial stability we were hoping to get this session,” he said.