Western N.D. legislators propose $800M 'surge' fund

BISMARCK -- A group of western North Dakota Republican legislators on Wednesday proposed an $800 million "surge" fund for the state and, in a preview of a proposal to come next week, said it'd be the last such bill needed if a new oil tax formula...

Sen. Rich Wardner
Sen. Rich Wardner, R-Dickinson, shows a document that details a proposal he and a group of western North Dakota legislators plan to make in the 2015 legislative session to provide an an $800 million “surge” fund for the state out of oil-impact funds. To his left are Rep. Mike Schatz, R-New England, Sen. Kelly Armstrong, R-Dickinson, and to Wardner's right is Sen. John Andrist, R-Crosby.

BISMARCK -- A group of western North Dakota Republican legislators on Wednesday proposed an $800 million "surge" fund for the state and, in a preview of a proposal to come next week, said it'd be the last such bill needed if a new oil tax formula is adopted this session.

The funding breaks down into $475 million for oil-producing political subdivisions; a separate $140 million for hub cities Williston, Dickinson and Minot; $35 million for oil county schools and $150 million to non-oil political subdivisions.

The funds will come from the Strategic Investment and Improvement Fund, which Sen. Rich Wardner, R-Dickinson, estimated would sit at at least $1.2 billion by the start of the 2015 legislative session.

"One could hardly imagine a better use for it to help the area get going," Wardner said.

Wardner, fellow Sens. John Andrist of Crosby and Kelly Armstong of Dickinson, and Rep. Mike Schatz of New England, hope the funding could be a light at the end of the tunnel for western oil communities struggling to keep up with oil development by building roads, affordable housing and the city services necessitated by new private developments. Next Wednesday, Wardner will propose a new formula for distributing oil gross production tax, 25 percent of which currently goes to political subdivisions.


"That will take care of the ongoing needs so that we will not have to be doing this again," Wardner said.

Some out west have called for 60 percent of the revenue to go to political subdivisions.

"We think that you're going to see good things happen when we get both these issues out in the public," Wardner said.

Schatz said he thinks the proposal will be well-received in his chamber, especially with the release Wednesday of a KLJ study of five-year projections for oil production and impact.

Andrist said he and the other legislators proposing the funding are guilty of underestimating oil's impact.

"We're focused on the fact that despite the best efforts, we're just not keeping up," he said.

With the funding, which the group hopes to have signed by the governor by the end of January, cities and counties can know they have the money early enough to plan for the 2015 construction season, even if they won't spend out the money until the summer, Wardner said. Otherwise, they might miss it.

Wardner said there's no restrictions on the money and he isn't worried about it being misspent because the existing need is so big.


Armstrong called the bill "a big ask," and said he expects debate to accompany it on the floor. He was, however, confident it would pass in some form.

To sell the proposal to other legislators who may balk at the amount of money in the bill, Wardner said he plans to show what the political subdivisions have already said they need the money for, and "how organized they are."

"They've identified their needs," he said.

The group has been meeting with city and county commissioners since June to plan what to propose. Local leaders were ready with spreadsheets outlining their needs, Wardner said.

Tentative figures include $50 million each to McKenzie, Williams and Mountrail counties; $40 million to Dunn County, and $15 million to Stark County.

Legislators repeatedly mentioned the study presented by KLJ earlier in the day at the Capitol, which showed housing to be a severe need to retain workers and keep the oil boom going.

Cities aren't able to allow much-needed housing projects to begin because the necessary services, like water, aren't ready, Wardner said.

Similarly to last biennium, when the Legislature appropriated $100 million for non-oil areas of the state as a part of a similar measure, this bill would set aside $150 million for the eastern part of the state. Cities and counties that feel a need would have to show cause, a process that's yet to be ironed out by the group proposing the bill.


"They will have to come in and give their case for those dollars," Wardner said.

Wardner said with past boom-and-bust cycles, state legislators were rightfully cautious about committing too many funds to this boom.

"But now we know it's here to stay," he said.

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