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North Dakota Governor Rejects Special Session on Oil/Gas Funding

North Dakota Gov. Jack Dalrymple has rejected a request by state house minority Democrats for a special legislative session to address possible funding problems tied to keeping up with the Williston Basin oil boom. Dalrymple expressed confidence that the state could provide the financial assistance needed to help communities affected until lawmakers reconvene in January.

Dalrymple announced his decision after a series of meetings over the past few months in communities impacted by the Bakken/Three Forks energy boom.

"Since 2011, the state has directly invested nearly $4 billion to help our oil and gas counties meet the needs that are part of rapid growth, and we know that we will need to do even more as we work to provide a comprehensive funding package during the next legislative session," Dalrymple said.

Democrats sent a letter to the governor in February expressing the need for funding before the start of the 2014 legislative session. "If the present state funding levels do not change, many local leaders and residents fear that western North Dakota may never catch up to the pace of oil/gas development,” they wrote in a letter signed by Democratic Minority Leader Mac Schneider, House Minority Leader Kenton Onstad and state Sen. John Warner. Local government leaders in western North Dakota also had expressed a need for additional funding for water supply grants, and the state positively responded.

Based on current oil and gas tax distributions, appropriations and additional funding provided following the 2013 legislative session, North Dakota for the 2013-2015 biennium provided about $2.76 billion to support energy growth. Nearly $1 billion remains to be distributed over the next 15 months in affected counties. The commitment was more than double the $1.2 billion earmarked for the previous two-year funding package.

This past winter the governor and other state officials began meeting with the energy-rich communities to identify needs and to develop a supplemental assistance package, including $32 million in water supply grants and a loan program for political subdivisions in the oil-producing region. Local officials had reported difficulties in securing financing for public infrastructure projects, largely because of a sunset clause that increased the region’s share of oil and gas tax distributions. In response, the state Industrial Commission, chaired by Dalrymple, established a loan program at the Bank of North Dakota. Watford City is using the program to finance more than $35 million in improvement projects and the bank is working on similar funding packages.         

In December, the State Water Commission began expanding a grant program. The commission, also chaired by Dalrymple, voted unanimously to tap available funding within the state's Resources Trust Fund to provide $32 million in additional grants for county projects in Dickinson, Watford City and Williston. The grants were above and beyond the $130 million in awards set in the 2013. The state is also providing $54 million in energy impact grant funds specifically for water and sewer projects in the oil and gas region.

A revised tax revenue forecast shows that the state's oil and gas counties will receive about $120 million more in gross production taxes during the current biennium, revenue above the legislative forecast of $585 million.

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