February 8, 2019 -- Future Policy Maker
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Williston 8th grader Gavin Baltes describes school overcrowding in testimony before the ND House Political Subdivisions Committee in support of HB 1437.
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Amended Prairie Dog Bill Advances
The ND House Finance and Taxation Committee, by a 9-5 vote, approved a legislative spending package this week that includes funding for oil-impacted communities and establishes infrastructure grant “buckets” for non-oil producing parts of the state.
HB 1066, commonly referred to as Operation Prairie Dog for its emphasis on infrastructure development, is now headed for the House Appropriations Committee which is expected to discuss the bill on Tuesday. An amendment approved by the committee shifts the order of the buckets in the bill. The change means the state’s Strategic Investment and Improvement Fund will receive $400 million in tax revenue before buckets earmarked for non-oil cities, counties and townships begin to fill. In his explanation of the amendment, Committee Chairman Craig Headland said he supports the plan to provide infrastructure grants to cities and counties, but the state has to ensure its priorities are addressed first.
“We have to make sure that our concerns are met before we can promise it (gross production tax revenue) to the political subdivisions,” Headland said.
Committee members who opposed the bill complained that it encouraged growth in government, would lead to urban sprawl, that cities/counties would become dependent on the revenue, and that the bill contained no assurance that it would lower taxes at the local level.
The amendment does
not affect the portion of the bill that provides GPT revenue to address oil industry impacts in western North Dakota. The legislation provides funding to western communities at roughly the same level as the current biennium.
Click
here to see the amendment to the bill.
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State/Tribal Leaders Support Tax Deal
North Dakota Governor Doug Burgum, MHA Nation Chairman Mark Fox, and other state and tribal leaders held a news conference this week to declare their support for legislation that would revise the agreement for sharing tax revenue from oil produced on the Fort Berthold Reservation.
SB 2312, introduced by Sen. Jordan Kannianen, R-Stanley, would change the current 50-50 tax split so that 80 percent of the tax from new wells on trust lands would go to the tribe and 20 percent would go to the state. It would be the opposite on fee land, with 80 percent going to the state and 20 percent to the tribe.
The bill is the product of extensive discussions among state, legislative and tribal leaders, industry representatives and the state tax department. Chairman Fox said additional tax revenue would be put to good use building roads to support oil industry development, and would help address other needs on the reservation such as housing, water projects, schools and environmental protection. Fox said the MHA Nation supports continued energy development, and wants to maximize that opportunity.
The bill had its first hearing before the Senate Finance and Taxation Committee on Wednesday. The bill’s fiscal note shows a $33 million loss in revenue to the state in the coming biennium, but state officials say the added certainty would likely mean additional industry activity on Ft. Berthold. Sen. Kannianen said just one new drilling rig would generate $16 million in increased tax revenue per biennium, so two more rigs would basically make the agreement a wash for the state.
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Extraction Tax Increase Dies in ND House
Following the same path as a companion bill in the Senate, House members decisively voted down a measure today to increase the oil extraction tax following a do-not-pass recommendation from the House Finance and Taxation Committee.
The legislation,
HB 1449, was defeated 76-12 in a near party-line vote with most Democrats supporting the bill, and Republicans voting to defeat the measure. Click
here to see the vote tally.
Rep. Pamela Anderson, D-Fargo, prime sponsor of the bill said production in the state is showing an “uptick” and a tax increase would add hundreds of millions of dollars to the state treasury.
Click
here for comments of Rep. Anderson.
Rep. Craig Headland, R-Montpelier, reminded fellow House members that the oil and gas industry is already a huge contributor to the tax base in the state.
Click
here for comments from Rep. Headland.
Making the case that other oil producing regions are competing for investment dollars, Rep. Keith Kempenich, R-Bowman, said equipment found on a drilling site can be moved quite quickly.
Click
here for comments from Rep. Kempenich.
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ND Senate Rejects Gas Tax Increase
Bills to increase taxes are usually a tough sell as was the case with the 26-18 vote rejecting a fuel tax increase this week.
SB 2288 would have raised fuel taxes from 23 cents to 27 cents per gallon. It was touted by supporters as a way to address road maintenance needs across the state.
In comments on the Senate floor, Sen. Jordan Kannianen, R-Stanley, cited statistics that show the overall condition of the state's roads has improved greatly in the past few years.
Click
here for comments from Sen. Kannianen.
In supporting the increase, Sen. Kyle Davison, R-Fargo, noted North Dakota’s tax is lower than surrounding states with South Dakota at 30 cents a gallon, Montana at 32 cents, Iowa at 30 cents; and, Nebraska at 29 cents. He said there is a demonstrated need for additional revenue.
Click
here for comments from Sen. Davison.
Davison said the tax would raise nearly $60 million in new revenue over the biennium. He said not a single constituent told him they were opposed to raising the gas tax.
Click
here for more comments from Sen. Davison.
Even though the bill was rejected in the Senate, another measure raising the tax to 30 cents per gallon is still alive in the House (
HB 1301). Click
here for an article on the Senate vote from the Fargo Forum.
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SIRN 2020 Communication Bill Advances
First Responders Describe Need for Network
Emergency personnel from around North Dakota testified at a legislative hearing this week about the need for a statewide radio network to allow inter-jurisdiction communication during crisis situations.
The House Government and Veterans Affairs Committee responded by approving
HB 1435 on a 13-1 vote. The legislation, introduced by Rep. Glen Bosch, R-Bismarck, would provide $120 million through a direct appropriation and borrowing authority to support development of the Statewide Interoperable Radio Network (SIRN). The system would allow communication between all manner of first responders from different jurisdictions. The ND Department of Information Technology has awarded a $206 million contract to Motorola Solutions Inc. to develop the network. The balance of the cost would be borne by city and county governments.
The committee heard sometimes emotional testimony from first responders during the hearing. Gary Lorenz, fire chief in Grand Forks, played audio from a major fire in which firefighters were saved by radio communications that warned them before a boiler fell through a floor. Jason Stugelmeyer, deputy chief of the Bismarck Police Department, described his frustration sending officers into areas with no radio coverage during the Dakota Access Pipeline protest. Donnell Preskey Hushka, who was on loan to Morton County from the ND Association of Counties during the DAPL protest, said she witnessed the failure of the radio system firsthand.
“I can tell you the desperation I heard from the officer on a radio calling out to his guys in the field, and hearing nothing was heart-wrenching,” she said. “It is something our law enforcement nor any of our public safety entities should have to endure.”
The bill provides a $40 million appropriation form the Strategic Investment and Improvement Fund, and an $80 million line of credit from the Bank of North Dakota. The legislation would pay up to $1,500 per radio to local governments. The bill has been re-referred to the House Appropriations Committee.
Click
here to read Rep. Bosch's testimony which explains the history of the legislation. Click
here for an infographic about SIRN 2020. Click
here to read SIRN 2020 talking points.
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House Advances State Logo Contest
It wasn’t even close. On a vote of 78-14, the ND House resoundingly passed
HB 1457, a bill to create a contest for the development of a new state logo replacing one developed in Minnesota just last fall.
The House Industry, Business and Labor Committee provided a unanimous do-pass recommendation to the bill which opens up development to North Dakota designers. Rep. George Keiser, R-Bismarck, is chairman of the committee and thinks North Dakotans should have a chance in the development.
Click
here to listen to Keiser's comments.
Among the handful of lawmakers opposing the bill, Rep. Thomas Beadle, R-Fargo, remarked how other contractors must compete in a public bidding process for such work.
Click
here for comments from Rep. Beadle.
The bill offers $9,500 as first prize and requires the new logo be developed and ready for use in the 2020 North Dakota Travel Guide. The contest would be administered by the Department of Commerce which would establish criteria, requirements and submission rules. The legislation now moves to the Senate.
Click
here for a Bismarck Tribune article on passage of the bill.
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Legislature Considers School Sales Tax
The North Dakota House of Representatives heard testimony this week urging the state to restore the ability of school districts to capitalize on city sales tax revenue to help pay for school construction projects.
HB 1437, introduced by Rep. Pat Hatlestad, R-Williston, was heard today in the House Political Subdivisions Committee. The bill would allow school districts with 60 percent voter approval to use up to a one cent sales tax to fund school construction. Williston previously funded a middle school project using sales tax revenue, but that ability was taken away by the 2007 Legislature.
In addition to Rep. Hatlestad, Williston Senator Brad Bekkedahl and Williston Rep. Dave Richter testified in support of the bill, as did several others from the community. Joanna Baltes, president of the Williston District #1 School Board, described the reluctance of city voters to approve a bond issue because it would mean a big increase in property taxes. Voters in January narrowly defeated a $60 million plan to expand the existing high school and build two new elementary schools. Baltes told the committee that providing quality education facilities is essential to support continuing growth in the state’s oil industry.
“We know that a major factor that influences whether companies will continue to expand production in the Bakken is whether they can convince their employees to move their families to Williston,” Baltes said. “The perceived quality of education is one of the top three factors and our current school infrastructure does not paint a pretty picture.”
Williston District #1 currently uses more than 50 modular classrooms, some of which date back to the 1980s. Joanna Baltes’ 8th-grade son, Gavin, told the committee the situation is less than ideal.
“Temporary modulars are being overused and are run down,” he said. “They're so terrible they can get snow in the hallways because of the cracks in the floor.”
The younger Baltes urged the committee to give the measure a do pass recommendation.
“Having more schools will give us smaller class sizes and happier and less-stressed teachers for the generations that will be growing up in Williston,” he said.
Williston #1 voters will consider another bond issue April 9. Click
here for details.
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Bill Allows School District Dissolution
In order to provide school districts more options to handle increasing student enrollments, a group of Republican lawmakers from both the House and the Senate introduced
HB 1434. The legislation was previously heard in the House Education Committee where it received a unanimous do-pass recommendation. Following a discussion on the House floor this week, the bill passed decisively 73 to 19.
It’s no secret that the bill is pointed at Williston School Districts #1and #8. District 1 is completely surrounded by District 8, and while it has a much smaller footprint with less taxable value, District #1 hosts the overwhelming majority of students in the area.
District 1 has had two unsuccessful bond elections in the past year to fund construction projects to handle its rapidly growing student population. Rep. Denton Zubke, R-Watford City, explained during floor debate how merging the two school districts could help solve the dilemma.
Click
here to listen to Zubke's comments.
While District #1 will continue to explore its options, Zubke said the bill's proponents want to provide a potential tool for the district to use to solve the problem.
Click
here to listen to Zubke's comments.
HR 1434 now moves to the Senate for consideration.
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Senate Approves Tax Certainty Bill
The ND Senate unanimously approved a bill this week aimed at improving the accuracy and reliability of the value of centrally-assessed property.
McKenzie County Auditor/Treasurer Erica Johnsrud explained the need for the bill in testimony before the Senate Finance and Taxation Committee. She said the legislation,
SB 2350, would set October 1 as the deadline for any adjustments by the state Tax Department to the value of centrally-assessed property including utility infrastructure, oil and gas pipelines and railroads.
Because of the high dollar value of the properties, Johnsrud said late adjustments can have serious implications for political subdivisions. Case in point were errors corrected in early last year, which resulted in a tax refund to the affected company.
"McKenzie County alone lost over $500,000 in taxable value as a result," Johnsrud said. "I had to explain to the (Alexander) school superintendent why they would be short nearly $23,000, a significant impact on a small school district."
If the October 1 deadline provided by the legislation had been in place, the adjustment to the assessment would have been applied to the following taxable year, Johnsrud said.
The bill now moves to the House. Click
here to read Erica Johnsrud's written testimony.
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U.S. to be Energy Exporter by 2020
EIA Releases Energy "Crystal Ball" to 2050
The U.S. has been a net energy importer since 1953, but the tables are expected to turn in 2020 when the nation starts to export more than it imports. The turnabout is primarily due to large increases in crude oil, natural gas, and natural gas liquids production coupled with slow growth in U.S. energy consumption.
The
Annual Energy Outlook 2019 published by the U.S. Energy Information Administration is a treasure trove of interesting projections through 2050 and is the closest thing energy professionals will get to the proverbial “crystal ball.”
Natural gas experiences the largest production increase of all fossil fuels during the period, driven by continued development of lower-cost shale gas and tight oil resources like those found in North Dakota. U.S. crude oil production continues to set annual records through 2027 and remains greater than 14 million barrels per day through 2040. Energy consumption in the United States is expected to remain relatively flat even as the economy expands due to increasing energy efficiency across end-use sectors.
Although export will increase, the nation will still import what some would consider large volumes of oil and natural gas. Jude Clemente, a contributor to Forbes Magazine,
writes that the new EIA report shows that oil and gas will still supply the bulk of U.S. energy through 2050 even though “the midstream infrastructure to pipe this new supply around the country has simply not kept up.” Clemente writes that pipeline constraints help explain our import problem since too many areas of the country do not have access to our own domestic production surge.
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Road Train Bill Rolls on to the House
North Dakotans may someday soon get their first look at a road train if the House of Representatives agrees to study the concept.
By a vote of 42-4, the Senate approved
SB 2176 that would establish a road train pilot program, sending the bill on to the House for its consideration.
Semi-trucks pulling more than one trailer are a common sight in North Dakota, but the pilot project would look at the pros and cons of trucks that would tow several more trailers.
The bill's sponsor, Senator Larry Luick, R-Fairmount, said road trains are common in Australia and some European countries. Luick believes road trains would improve the efficiency of truck transportation and help alleviate the shortage of truck drivers.
Some Senators were concerned about the difficulty passing a lengthy vehicle. Others wondered if the trucks would be allowed on two-lane roads, or whether they would be allowed when visibility is poor. Luick said that's what the study is intended to find out.
Click
here to listen to Luick's comments.
Luick said the trailers in the road train are equipped with steering axles so the lengthy vehicle can navigate its way around intersections or curves in the road.
Click
here to see a YouTube video of road trains in Australia.
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Annual Lignite Education Seminar
Enrollment Now Open to Teachers
The Lignite Energy Council’s 34th Annual Lignite Education Seminar: Energy, Economics and Environment is scheduled for June 10-13 at Bismarck State College’s National Energy Center of Excellence.
Registration is now open for the four-day seminar that provides a first-hand look at lignite mining and related energy production. The teachers will hear from a wide variety of presenters and spend a day touring an active lignite mine and power plant.
The educational seminar remains popular with teachers. The Lignite Energy Council provides two professional development graduate credits for teachers who attend and complete a lesson plan.
Click
here for more information and the online application.
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Gravel Roads Workshop
A funny name but totally “must attend” training for anyone that works with gravel roads. This includes motor grade operators, county road superintendents, county and township officers, contractors, and gravel suppliers.
The workshop is being held in three different locations on three different days.
Pick the time and location that fits for you.
April 30: Stanley * May 1: Grand Forks * May 2: Jamestown
Click
here for more information.
The registration deadline is one week prior to the training. Class limit is 30 people. Click
here to register.
The event is sponsored by the Upper Great Plains Transportation Institute as part of the North Dakota Local Technical Assistance Program.
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WDEA Exec to Host Energy Matters Radio Show
WDEA Executive Director Geoff Simon will fill in as guest host next week on the radio program,
Energy Matters.
The tentative list of guests Simon will interview includes MHA Nation Chairman Mark Fox, who will discuss the proposed changes to the way in which the state and tribe share tax revenue from oil produced on the Ft. Berthold Reservation (see story above).
Simon will also interview Senator Dale Patten, R-Watford City, who will describe
SB 2268, otherwise known as the Corridors of Commerce bill, aimed at supporting improvements to Highway 85 and other congested two-lane roads in the state.
The program will also include an interview with Kari Cutting, vice president of the ND Petroleum Council, who will talk about the launch of “ONE BASIN - One Way,” a standardized contractor safety orientation program. Also tentatively scheduled to be on the air is a guest who will discuss the SIRN 2020 project, a multi-year effort to improve the radio network for the state’s emergency responders (see story above).
Energy Matters is broadcast on KFYR and and KLTC Radio, and is rebroadcast Saturday on WZFG and KTGO Radio.
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Write it Down!
WDEA Annual Meeting
Get this on your calendar! The Annual Meeting of the Western Dakota Energy Association will be held:
October 30 - 31, 2019
Grand Hotel
Minot, ND
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Quick Connect
- Pipeline activists tampering Enbridge Pipeline face felony charges in Minnesota -- Fargo Forum
- Ray expanding enrollment drives renovation and new construction talk -- Journal Tribune
- Bill would allow legislative assembly not higher ed to set college tuition and fees -- KXMB-TV
- Burgum: Proposal using Legacy Fund to reduce income taxes isn't 'good policy' -- Fargo Forum
- Senate approves change to wind tax favoring general fund over counties -- Bismarck Tribune
- Legislative battles: Higher ed plan, professional licensing meet resistance -- Minot Daily News
- Forest Service extends deadline for Grassland oil leasing comment period -- Bismarck Tribune
- Closing gaps: City assesses next moves in economic development planning -- Minot Daily News
- Opinion: Higher oil taxes would also hurt royalty owners and families -- Bismarck Tribune
- Two Watford City natives launch online program to track value of mineral rights -- KFYR-TV
- Three things to know about Williston's API Chili Cook-off other than great food -- Williston Herald
- North Dakota secretary of state rolls out long-awaited online business hub -- Bismarck Tribune
- TrainND will be part of effort to standardize safety for Bakken Oil Patch -- Williston Herald
- Produced water overflow spilled on ag land in Stark County on Sunday -- Bismarck Tribune
- Trump to nominate David Bernhardt, a former lobbyist, as next Interior secretary -- Fargo Forum
- Anti-pipeline activists declare that Minnesota wild rice plants have rights -- Inside Sources
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Factoid of the Week
According to
EIA's Annual Energy Outlook 2019
, the level of energy used per highway vehicle-mile traveled will decline by 32 percent from 2018 to 2050 due to increasingly stringent fuel economy and energy efficiency standards for light- and heavy-duty vehicles.
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February 9
Williston
February 12-13
Bismarck
February 14
Bismarck
February 16
Dickinson
February 19
Capitol
February 25-26
Dickinson
February 25 - Fargo; February 27 - Williston
February 26 - Bismarck; February 28 - Minot
March 5
Capitol
March 14
Fargo
March 27
Watford City
April 3 - 4
Bismarck
April 30 - Stanley; May 1 - Grand Forks; May 2 - Jamestown
July 16-17
Bismarck
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Oil prices and rig count
February 8, 2019
WTI Crude: $52.72
Brent Crude: $62.10
Natural Gas: $2.73
North Dakota Active Rigs: 63 (down 1)
2/8
/2018
-- 57 rigs
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Geoff Simon
Editor/Executive Director
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