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ND legislator: Funnel more oil, gas production tax revenue back to extraction counties

DICKINSON, N.D. - State Rep. Shirley Meyer, D-Dickinson, is proposing legislation that funnels more of North Dakota's tax revenue from oil and natural gas production to counties hardest hit by the adverse effects of extraction.

DICKINSON, N.D. - State Rep. Shirley Meyer, D-Dickinson, is proposing legislation that funnels more of North Dakota's tax revenue from oil and natural gas production to counties hardest hit by the adverse effects of extraction.

"They (oil-producing counties) are desperately short of impact funds," Meyer said Tuesday.

Her legislation raises the amount of grant money set aside for oil-producing counties every two years from $6 million to $40 million. The money comes from the 5 percent state tax assessed on oil and natural gas gross production, said Meyer.

The current funding pot available to oil-producing counties is "grossly inadequate" she said, with local governments requesting $72 million over the last biennium, but receiving just $5 million.

"Our counties are hurting. While this oil is wonderful for the economy and fantastic for the state's general fund, some of the counties such as Dunn and Mountrail are rapidly reaching a breaking point," Meyer said in a written statement.

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Ambulance services are overburdened, water supplies are dwindling and roads are breaking apart in oil-producing areas, she said. Many of the roads were built decades ago to accommodate farm traffic, not oil production, Meyer said.

Dunn County Auditor Reinhart Hauck said heavy trucks associated with oil production are tearing up roads in his county. Roughly 700 to 800 truck trips are necessary to bring a single well into production, Hauck said.

The most recent estimates show Dunn County having 25 miles of roads that need to be rebuilt and 150 miles of road shoulders to be resurfaced, Hauck said. While those projects have a price tag of $6.25 million dollars, Dunn County is to receive a projected $2.85 million from the oil impact fund, Meyer said. The money is allocated based on a county's population, Meyer said.

Meyer's legislation accompanies two other proposals from legislators representing oil-producing areas. Rep. Kenton Onstad, D-Parshall, is sponsoring a bill that allows landowners to receive annual payments for damages caused by mining operations. The money is specifically for property owners who do not have the royalty rights to the minerals under their land.

Rep. Dorvan Solberg, D-Ray, has submitted legislation that extends the tax holiday for the first 75,000 barrels of oil from any new well in the Bakken formation, a news release issued by Meyer stated.

The oil-rich Bakken formation stretches across western and central North Dakota, eastern Montana, southern Saskatchewan and part of northwestern South Dakota. A portion of the formation sits under Meyer's District 36, which includes rural Stark County and parts of Dunn, Hettinger and Morton counties.

Meyer expects her bill to be discussed in interim meetings and to be taken up during the 2009 legislative session. She anticipates strong opposition from legislators in the eastern part of the state.

Rep. Darrell Nottestad, R-Grand Forks, said Meyer's proposal amounts to requiring all state tax money collected in one area of the state be spent in that same area.

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"That wouldn't be right," Nottestad said. "That revenue is for the entire state of North Dakota."

He pointed out local tax revenues are increasing in areas where oil is being extracted.

"These towns and counties are certainly benefiting from the oil boom," Nottestad said.

However, he said the situation facing oil-producing counties requires the Legislature's attention and must be addressed.

"We do need to take care of impact in these counties," Nottestad said.

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The Dickinson (N.D.) Press and the Herald are Forum Communications Co. newspapers.

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