Legislators OK Funding For Oil Patch

BISMARCK — North Dakota lawmakers reached a compromise Wednesday, April 26, on distributing dollars to Oil Patch communities while agreeing to study the funding formula for the top oil cities.

The provisions in Senate Bill 2013 provide about $500 million for communities in western North Dakota from oil tax revenue and $16 million for townships in the rest of the state, said Rep. Jeff Delzer, R-Underwood.

“I think it was a pretty good compromise all the way around,” said Delzer, chairman of the House Appropriations Committee.

North Dakota’s gross production tax, which is collected in lieu of property taxes on oil and gas development, is the source of revenue communities use to offset impacts of oil development.

Western North Dakota community leaders raised concerns last week about a proposal to redirect some of their funding to townships in non-oil producing counties.

The final bill keeps the funding for townships in the top nine oil counties, which is primarily used to maintain roads that are heavily traveled by the oil industry.

The bill also adds $10,000 for each township in the rest of the state. Where there aren’t organized townships, the funding would go to the county.

The cities of Williston, Dickinson and Minot — dubbed “hub cities” of the Oil Patch — will receive less oil revenue in 2017-19 than they did in the previous two-year budget cycle, but legislators said the amount will be sufficient to meet their debt obligations.

The cities have considerable debt because they built wastewater treatment plants, fire stations and other infrastructure to keep up with the rapid growth that resulted from oil activity.

“Most, if not all, of our bond debt in Williston and Dickinson is related to oil industry expansion,” said Sen. Brad Bekkedahl, R-Williston.

Halliburton oil trucks drive near the company’s yard in Williston, N.D., on April 30, 2016. REUTERS/Andrew Cullen

Rep. Todd Porter, R-Mandan, was among House members to vote no on the bill, expressing concern that legislators keep moving “the goalposts” and changing how cities receive funding.

A legislative management study during the 2017-18 interim will examine oil tax revenue allocations to cities and schools in the hub cities.

The bill also includes $35 million for a new Williston airport and $5 million for the Dickinson airport.

The legislation needs a signature from Gov. Doug Burgum.