BISMARCK — The North Dakota Legislature's Budget Section voted on Thursday, June 25, to send out $406 million in federal funds to 40 different state agencies and institutions of higher education as part of the state's response to the COVID-19 pandemic.
The 43-member interim Budget Section got an up-or-down vote on the distribution that was approved last week by the state's Emergency Commission.
The money approved for spending Thursday represents about a third of the coronavirus-focused funds received by the state through a massive federal aid package known as the CARES Act. The commission and Budget Section already approved the distribution of about $525 million of the state's $1.25 billion in CARES Act funding last month.
About three-quarters of the funding approved Thursday will go toward economic support for businesses and individuals in the state, while most of the remaining funds will go toward providing protective equipment, cleaning supplies and remote working equipment to state agencies.
The Industrial Commission's Oil and Gas Division secured about $33.2 million in funding as part of a two-part plan to fund the plugging and reclamation of oil wells abandoned by companies in western North Dakota. The plan, which entails taking on the companies' responsibility of returning the land used for oil wells to usable land for agriculture, is meant to keep about 1,000 workers employed during turbulent times in the Oil Patch. The project has now received more than $66 million in federal funds.
Senate Minority Leader Joan Heckaman, D-New Rockford, questioned whether the project is allowed under federal guidelines, which require that the funds be used for the state's response to COVID-19. Heckaman said the commission's project is seemingly unrelated to the pandemic. She said she wanted to make sure the state wouldn't have to repay the funds if it gets audited by the federal government.
State Mineral Resources Director Lynn Helms said the more than 400 wells the state is looking to plug and reclaim were "orphaned" by companies since the beginning of the year due to the economic hardship suffered by producers. The price of oil dropped off a cliff in March as demand for the product fell during the pandemic, and a price war between Saudi-led OPEC and Russia resulted in an over-supply in the market. In the end, Heckaman voted to approve the funding.
Job Service North Dakota got the largest chunk of the funding at $200 million, which will be used to keep its unemployment insurance fund above water until September. The state agency, which has paid out unemployment benefits to thousands of residents during the pandemic, received $110 million last month for the same purpose. Office of Management and Budget Director Joe Morrissette noted that the agency will likely ask for another sizable portion of the remaining federal money at a future meeting to restore what was paid out in unemployment claims.
The second biggest piece of the pie goes to the Department of Commerce, which will now receive nearly $69 million to implement a new grant program for businesses. The program will allow businesses in the state to apply for grants up to $50,000 to pay for protective equipment, cleaning supplies and other coronavirus-related costs.
Commerce Commissioner Michelle Kommer said last week that businesses can begin applying in late July and potentially receive grants as soon as September. Kommer said business owners keep telling her they don't need more loans, but rather the return of customers. She said the grants would help businesses reopen their workplaces to customers and employees.
The Budget Section approved more than $40 million in funding to the state's university system, including $19.8 million to North Dakota State University and $13.6 million to the University of North Dakota. Most of the funds would be used to buy equipment that would allow students to access their classes online, while the rest of the money would be used for protective equipment and cleaning supplies.
The university system initially submitted requests for another $33.6 million in funding that were deemed lower priority, questionably allowable or undeveloped as proposals, according to the Office of Management and Budget. The rejected requests included funding for faculty costs, security cameras and coronavirus testing and research.
The vote to approve the massive funding package was not unanimous Thursday. Sen. Tim Mathern, D-Fargo, was the lone holdout, saying he disagreed with how the funding was being allocated.
Mathern, who called for a special legislative session last week, said he felt the decisions on how to use the federal funds were not fair or democratic. Most of discretion on how to divvy up the money lies with the all-Republican Emergency Commission, which includes Gov. Doug Burgum, Secretary of State Al Jaeger and four legislative leaders.
Republican leaders, who hold the authority to call a special session, rejected the move as unnecessary.