April 26, 2019 -- Pack 'em up
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Lawmakers packed it up Friday night, ending the 66th Legislative Assembly.
Adjournment on the 76th day reserves four days to return to consider vetoes.
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Burgum Signs Bill to Support TR Library
In a ceremony at the Capitol today, Gov. Doug Burgum signed into law a bill that supports establishment of the Theodore Roosevelt Presidential Library and Museum at the national park entrance near Medora.
SB 2001 provides a total of $50 million to establish an endowment that will support continuing operation of the facility. The state's contribution launches what Gov. Burgum characterized as a "challenge" to raise $100 million in private donations to build the library. He said the project will be appreciated for generations to come.
Click
here to listen to Burgum's comments.
Burgum acknowledged the role of legislative leaders in the passage of the legislation, including Senate Majority Leader Rich Wardner, who has been engaged in the planning effort from the beginning.
Click
here to listen to Wardner's comments.
In addition to the endowment, the bill also provides funding to continue work to digitize Roosevelt's documents at Dickinson State University. It also reimburses the City of Dickinson $300,000 for prior costs incurred related to planning for the library.
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House Passes TR Library by Wide Margin Despite Earlier Doubts
The ND House of Representatives easily approved the bill to fund the Theodore Roosevelt Library despite earlier doubts that the lower chamber may not have the votes to pass the legislation.
The House voted 76-16 Wednesday to approve SB 2001 after nearly an hour of floor debate. Rep. Vicky Steiner, R-Dickinson, said discussion about the library began in the ND House more than a decade ago. She said current representatives have an opportunity to make history.
Click
here to listen to Steiner’s comments.
Critics of the bill suggested other needs in the state were going unmet. But Rep. Jon Nelson, R-Rugby, a member of the House Appropriations Committee, said the legislature has done a good job of meeting all the state’s needs.
Click
here to listen to Nelson’s comments.
Rep. Bob Martinson, R-Bismarck, the longest-serving member of the House who rarely speaks during floor debate, closed the discussion joking that he knew Theodore Roosevelt who he called “Ted,” and that the former president called him “Bobby.” Martinson urged his colleagues to support the bill because it invests in the state’s future.
Click
here to listen to Martinson’s comments.
Click
here to see conceptual drawings of the facility developed by JLG Architects.
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ND Legislature Okays Two Ethics Bills
As the 2019 Legislature drew to a close, its members passed two ethics bills, one to implement Measure One passed last November, and another to create an interim study to seek answers to the many unanswered questions created by the confusing language in the measure.
The final version of
HB 1521 is a 34-page bill that provides a definition for several of the terms in the measure, which is now
Article XIV of the state constitution. Phrases defined in the bill include “ultimate and true source of funds” and “influence state government action,” in an effort to clarify what is expected under new disclosure language in the measure. The bill also ensures due process for any public official who may be accused of an ethical violation, which would be heard by the yet-to-be-appointed ethics commission.
Rep. Jim Kasper, R-Fargo, who chaired a special House Ethics Committee to work on the bill, said the legislation is a good faith effort to reflect the will of the voters.
Click
here to listen to Kasper’s comments.
Senator David Hogue, R-Minot, who chaired the Senate Ethics Committee, echoed Kasper’s sentiment during Senate debate on the bill.
Click
here to listen to Hogue’s comments.
Senator Dick Dever, R-Bismarck, a member of the Senate Ethics Committee, said he considers the ethics bill to be a work in progress.
Click
here to listen to Dever's comments.
The legislature also approved
SB 2148, which provides for an interim study of the ethics measure. During floor remarks, Rep. Scott Louser, R-Minot, criticized the measure sponsoring committee for its failure to fully respond to questions during hearings on the bills. He pointed out the group called North Dakotans for Public Integrity also initially failed to properly file its required financial disclosure statements, and reported a contribution from Canada, even though the measure itself contained a provision banning foreign contributions from North Dakota elections. Louser said he hopes the study will clear up the confusion about the measure, and find answers to the questions that were posed during the hearing process.
Click
here to listen to Louser’s comments.
Click
here to read a transcript of Rep. Louser’s floor speech.
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NDIC Budget Funds Gas Storage, Recycling
Low-Interest Loans for Yellowstone Flood Victims
State to Study Lignite Promotion, New Development
The budget bill of the ND Industrial Commission approved by the 2019 Legislature contains several special appropriations, including sections to study the feasibility of produced natural gas storage, and possibilities for recycling produced water.
HB 1014 also uses two state funds to offer low interest loans to families affected by Yellowstone River flooding to repair property or replace damaged equipment.
The legislation specifies that $6 million of gross production tax revenue earmarked for the Oil and Gas Research fund be used to study the underground storage of produced natural gas. It directs the Energy and Environmental Research Center to provide quarterly reports to Legislative Management on the work, which can include studies or actual demonstration projects.
The bill provides that $300,000 from the OGR fund be used to study the recycling of water used in oil and gas operations to include "the relevant, objective economic, regulatory, scientific, technological, and feasibility considerations."
The bill also provides $4.5 million from the Lignite Research Fund for a lignite marketing feasibility study of market-driven projects that will generate matching private industry investment with the potential to preserve existing lignite jobs or increased development of lignite to create jobs and economic growth.
Other provisions of the bill provide funds to continue the quest for a source of North Dakota frac sand, as well as the search for rare earth minerals in the state's coal deposits.
The lion's share of funding in the bill supports the operation of four state agencies - the Dept. of Mineral Resources, the Bank of North Dakota, the Housing Finance Agency and the state Mill and Elevator.
The House passed the bill 74-16, and it received unanimous 47-0 approval in the Senate. Click
here to listen to Senator Ron Sorvaag's explanation of the bill when it was presented on the Senate floor.
Click
here to learn more about the ND Industrial Commission.
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Green Light on Petrochemical Tax Incentive
The North Dakota legislature took a big step this week in attracting petrochemical processing to North Dakota by passing
HB 1205, a bill that provides a sales tax exemption for materials used to construct a straddle plant, a fractionator, or qualified associated infrastructure. The bill also provides a sales and use tax exemption for materials used to construct a fertilizer or a chemical processing facility.
With the volume of natural gas and natural gas liquids being produced in the state, lawmakers recognized an opportunity for petrochemical processing in the state as opposed to shipping the valuable commodity out of state for processing.
In recognizing the competitive nature of attracting such an industry, Rep. Jim Grueneich, R-Jamestown, said in floor discussion that a “gap and a big obstacle” exists to convince petrochemical companies to come here. The amendments made to the bill, he said, are designed to change that by extending the sales and use tax exemption for construction materials to in-state midstream assets built to serve petrochemical processing in the state.
Going one step further, Rep. Craig Headland, R-Montpelier, referred to what could be a multi-billion dollar prospective plant coming to North Dakota. Listen to his comments
here.
With Governor Burgum signing the bill on Tuesday, the incentive is available for yet another large energy-related industry to come to the state.
In providing a sense of history to the debate, Rep. Keith Kempenich, R-Bowman, remarked on how the legislature provided incentives back in 1995 to something called horizontal drilling.
Click
here for his remarks.
Other amendments to the bill extend the expiration of the incentives to June 30, 2023.
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Senate Kills Legacy Fund Reinvestment
It’s been called the state’s piggy bank. It’s the Legacy Fund which just this biennium had generated $415 million in earnings on the principal bringing total assets in the
fund to more than $6 billion.
Those who have followed the legislature this session are aware that numerous ideas about how to spend the money have been discussed. Among them was a bill that would have used the earnings to eventually eliminate state income taxes. Another directed the funds toward the Theodore Roosevelt Presidential Library at Medora, while yet another wanted to reinvest earnings in the fund rather than transfer them to the state's general fund.
Now, the legislature wants to pull back and study the best way to use these funds among all the competing ideas. Senate Majority Leader Rich Wardner, R-Dickinson, remarked in the floor discussion of
HCR 3055, that they need to step back and “really study” what to do with the money and not let special interests determine the projects.
Click
here for his comments.
HCR 3055 was the most recent action that would have reinvested Legacy Fund earnings back into the principal rather than the state’s general fund. But, the Senate decisively killed the resolution getting 42 no votes and only five yes. As Wardner described in his floor remarks, he wants to set up a study to “do this right.”
Click
here for his comments.
Sen. Dwight Cook, R-Mandan echoed Wardner’s comments saying using the Legacy Fund is “a very important issue.” He said, “I think we have to be very deliberative how we make that decision.”
For more information, click
here for an article in the Fargo Forum.
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Land Dept Gets Full-time Attorney
Impact Grant Fund Provides $2 Million
The budget of the ND Department of University and School Lands approved this week includes a first for the department – an attorney committed full-time to oil and gas leasing, litigation and other legal matters.
The attorney will still be attached to the office of the Attorney General, but he or she will devote their full attention to Land Department issues.
The legislation,
HB 1013, also includes a $2 million appropriation to the the oil and gas impact grant fund. That amount was cut in half by a conference committee from the $4 million amount previously added to the bill by the House Appropriations Committee.
The final version of the bill removed a provision that investments of the Land Department be under the direction of the State Investment Board, but does include language requiring the department to prepare annual reports on investment performance. The bill also provides $3.6 million complete an information technology project during the 2019-21 biennium.
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Lake Sakakawea Mineral Owners See Delay
The rightful owners of minerals underlying Lake Sakakawea may finally get paid the royalties owed for oil and gas that has been produced from formations under the lake.
Ownership of mineral rights under Sakakawea has been the subject of many lawsuits in recent years. In 2017 lawmakers enacted a study to determine the location of the historic channel of the Missouri River under an 83-mile stretch of the lake. However, the definition of the “ordinary high-water mark” wasn’t clearly identified prior to the legislative study and has prevented payment of longstanding claims.
The definition is crucial to determine boundaries of mineral ownership of the state, private mineral owners and Native American tribes. The state owns the minerals under the original river bed and minerals beyond the river's "high water mark." This lines were blurred when the Missouri River was dammed and the land flooded in 1954.
SB 2211, which received legislative approval this week, provides a clear definition along with the factors to be considered in determining the ordinary high-water mark. The bill includes s an emergency clause to expedite the payments to the mineral owners around the historic Missouri River channel.
The Department of University and School Lands now needs to finalize the boundaries of the historic Missouri River channel and determine ownership of the minerals using the clarified definition. Once completed, it will allow the department to distribute to the rightful private mineral owners the more than $200 million in royalties that have been held in escrow.
Rep. George Keiser, R-Bismarck, provided an explanation of SB 2211 in his floor discussion of the legislation. Click
here for his comments.
Keiser explainrf the challenge with the 2017 study. Click
here for his comments.
Unfortunately, it will probably be another two years before royalty payments can be made to mineral owners. Click
here for comments from Rep. Keiser.
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Funding Bill Helps Western Schools
A multi-part education funding bill that received final legislative approval this week contains several provisions that will help western school districts challenged by growing student numbers.
Key among the provisions in
SB 2265 is language that will allow districts that receive gross production tax revenue to keep 100% of the amount earmarked toward a sinking and interest fund that supports school construction. Districts lose 75% of all other GPT revenue because current law provides that amount be deducted from the district's state Foundation Aid payment.
Also included in the bill is $3 million for rapid enrollment grants. To be eligible for the $4,000 per student payment, a district must have at least a four percent enrollment increase or 150 students, and it must be at least 20 students. The bill also includes language targeted toward Williston High School that will double the tuition payments it receives for students that come from outside the Williston #1 district.
Of benefit to every district in the state, the bill increases the per/pupil state aid payment by 2% each year of the biennium, increasing from the current $9,646/per student, to $9,839 in the 2019-20 school year and $10,036 in the 2020-21 school year.
The bill includes a move toward "on-time" funding in the second year of the coming biennium. Currently, districts receive state aid payments based on the previous year's enrollment, which effectively penalizes districts with growing student populations. But the legislation provides only 50% of the funding, and would gradually move to full on-time funding with 10% increases each of the next five years.
A late amendment was proposed to the OMB budget bill by Senator Rich Wardner that would have provided 100% on-time funding immediately. It received unanimous support from Senate members of the conference committee, but failed due to opposition from House Majority Leader Chet Pollert and House Appropriations Committee Chairman Jeff Delzer.
Another section of SB 2265 is unpopular with many western school districts. The language requires districts to move toward a 60-mill property tax levy, effectively requiring districts below that level to impose large tax increases or lose funding formula revenue. Many districts are lower than 60 mills because they've seen steep increases in new construction and higher valuations of existing property.
The funding formula will get a look over the interim. The bill establishes a review committee to study the K-12 formula, including the components, adjustments and weighting factors in the formula.
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Manufacturing Automation Tax Credit Passes
The 2017 Legislature passed a bill providing a 20% tax credit for purchase of manufacturing machinery and equipment to automate manufacturing processes. It was revisited this session based on recommendations of the interim House Taxation Committee.
The new bill,
HB 1040, adds parameters to the bill including metrics to ensure the tax credit is doing what lawmakers intended.
New metrics include improved job quality measured by a 5% increase in average wages or a 5% increase in workplace safety. In addition, lawmakers want to see a 5% increase in output or a 5% increase in the number of units produced. Further, the purchased equipment must advance or upgrade a manufacturing process and the company completing the purchase must be a primary sector business.
Rep. Jim Grueneich, R-Jamestown, pitched the bill on the House floor. Click
here for his comments.
Rep. Rick Becker, R-Bismarck, opposed the bill, calling it “corporate welfare.”
Both the House and Senate passed the bill on Monday; the House 68-24, and the Senate 46-0.
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Minot’s Pioneer Village Slated to Move
The ND House voted 80-12 this week to approve
SB 2146, a bill that would reserve state funds to help move the Pioneer Village from the state fairgrounds in Minot to Burlington.
The bill would allocate $150,000 in state funding for the move. The language in the bill stipulates that the North Dakota State Fair Association provide no less than $100,000 to support the move. All Pioneer Village buildings located on the fairgrounds must be removed by June 15, 2019.
The original bill provided $2 million for the move but the amount was reduced as it moved through the legislative process.
The Pioneer Village museum was the subject of a lawsuit last year over its location on the fairgrounds. The State Fair Association had served an eviction notice on the Pioneer Village which was upheld by a district court judge.
The Pioneer Village museum is operated by the Ward County Historical Society which now wants to focus on a new beginning for the museum in Burlington, eight miles west of Minot. For information on the fundraising campaign and for more information on the relocation project, click
here.
Click
here for an article on the bill in the Minot Daily News.
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WDEA 2019 North Dakota Legislative Report
For additional details about the 2019 Legislature, click
here to view the archive of WDEA’s weekly legislative reports.
The Week 17 report covering action occurring the final week of the session will be published tomorrow, April 27. A final legislative report summarizing all the issues important to WDEA members will be published on the WDEA website next week.
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Meridian Energy CEO on Davis Refinery
In a webcast this week, Meridian Energy CEO William Prentice provided an update and description of the Davis Refinery under construction near Belfield.
Prentice talked about how the new refinery is a single source refinery meaning it's being built to process only Bakken crude.
“Because you are focusing only a single crude, there is no need for excessive complexity in the refinery, it can be a very simple design which is what we’ve done at Davis,” he said. Prentice said Bakken oil is the “best crude in North America.”
Click
here for his comments.
Meridian Energy is using its experience in constructing the Davis Refinery to broaden its portfolio into a group of refineries to address the opportunities available in North America with oil production from shale plays. He said they want to build on strategically positioned sites featuring refineries “that are smaller, sleeker, cleaner ... located right next to the crude and serving local markets.”
Click
here for his comments.
Regarding pollution controls being designed into the Davis Refinery, Prentice was clear in describing the economics of proper control equipment calling refinery pollution simply “bad engineering.”
Click
here for his comments.
All permits have been acquired including the siting permit, water supply permits, and the air quality permit. Earth work on the site began last July.
Click
here to listen to the full shareholder update and informational webinar.
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NDPC Tree Planting Fundraiser Announced
ND Petroleum Foundation "Planting for the Future"
To acknowledge Earth Day this week, the North Dakota Petroleum Foundation announced a fundraising campaign for its Planting for the Future Program.
Planting for the Future’s goal is to work with wildlife groups, private landowners and industry to create large-scale tree and shrub plantings on private land that will serve as habitat for future generations. Trees and forests are an important resource, providing watershed protection, wildlife habitat, recreational opportunities, and protection for crops, soil and livestock.
The North Dakota Petroleum Foundation has partnered with the Outdoor Heritage Fund and many of the Petroleum Council’s premier partners to launch the program.
For more information or to donate to Planting for the Future, click
here.
For more information about volunteering during the planting, send a message
here.
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ND Students Rock Advanced Placement Exams
Advanced Placement test pass rates for North Dakota students jumped 55% over three years, the highest increase in the nation. Credits earned by students represent $4.4 million in college tuition savings.
State School Superintendent Kirsten Baesler attributes the results to the North Dakota Legislature’s support of Advanced Placement test-takers that began in 2016, and by the efforts of the National Math and Science Initiative, which has encouraged AP instruction in North Dakota high schools since the 2016-17 school year.
Lawmakers provided funds for any North Dakota high school student to take at least one AP exam in English, math, science and computer science at no charge during their high school career. In addition, students eligible for free or reduced-price school meals may qualify for as many as four free AP exams. The normal exam fee in about $90.
For more information, click
here.
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McKenzie County Population Growth
With a 7.1% population increase from 2017 to 2018, and a whopping 113% increase from 2010 census statistics, McKenzie County leads the state in population growth.
Community and civic leaders are preparing for the 2020 census because even though the numbers show robust growth, they feel actual numbers are not being fully captured. Community leaders are formulating plans to get as complete of a count as possible.
Williams County had the next largest population increase with 5.9% growth followed by Stark County with a 2.2% increase.
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Pick Up the Patch Dates Announced
The North Dakota Petroleum Council is encouraging its members to take the lead or help communities with annual spring clean up plans. Below is a summary of some of the events already on the calendar. Anyone planning other clean-up activities is encouraged to notify NDPC to help coordinate the effort.
DICKINSON
Monday, May 6 – Sunday, May 12
MINOT
Friday, May 3
Hazardous Waste Collection -- May 17 - 18
NEW TOWN
Wednesday, May 15: 10 a.m. -- Focus on areas outside of the New Town city limits.
WILLISTON
Aafedt Stadium Parking Lot -- Saturday, April 27: 8:30 a.m. – 12 noon.
WATFORD CITY and MCKENZIE COUNTY
Monday, May 6 - 11
Community Clean-Up Day: Saturday, May 11 at 9 a.m.
TRENTON
Clean-up of Highway 1804 on Friday, May 3. In case of bad weather, the event will be rescheduled for Wednesday, May 8.
For additional details and contact information for each event, click
here. Contact
Tessa Sandstrom at the NDPC about any other “pick up the patch” events.
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WDEA Offering Energy Scholarships
The Western Dakota Energy Association will award five $1,000 scholarships this fall to students in an energy-related field at a North Dakota college, university or technical school.
WDEA President Gary Wilz said the association is offering the scholarships to help the industry and western communities meet the workforce challenges now being experienced with the surge in oil industry activity.
“We recognize that North Dakota will see benefits from higher oil prices only if the industry is able to attract the workforce it needs,” said Wilz, who is Superintendent of the Killdeer Public School District. “We want to do everything we can to encourage young people to explore the many opportunities for a rewarding career in the energy industry.”
Funding for the scholarship program is generated by sponsorships of WDEA’s annual meeting, as well as royalties from advertising in Basin Bits magazine.
Click
here to learn more about the selection criteria and how to apply.
Click
here to view or download an application form.
The application deadline is August 31, 2019. Scholarships will be awarded in September.
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Quick Connect
- Vapor standards bill heads to Washington governor's desk -- S&P Global
- UTTC offers tuition waiver for active ND National Guard members -- KXMB-TV
- Legislature finalizes ethics bill, but 'safeguard' looms over implementation -- Fargo Forum
- Deadline approaching to apply for North Dakota Ethics Commission -- Fargo Forum
- University of Mary to break ground on School of Engineering facility -- Bismarck Tribune
- DOT Meeting: Public discusses sidewalk improvement project in Hettinger -- KXMB-TV
- Veterans advocate for bill to display POW/MIA flag at state Capitol -- Bismarck Tribune
- Bizarre conspiracy theories highlight the climate hustle in California -- The Daily Signal
- U.S. needs more oil & natural gas pipelines, mostly in New England states -- RealClear Energy
- Williston Chamber of Commerce moving to Landmark Building in early May -- Williston Herald
- FERC. greenlights two LNG export projects, located in Louisiana and Texas -- OilPrice.com
- Ideological biases against free market undermines Earth Day goals -- Inside Sources
- Legacy Fund income tax proposal taken off the table in ND House -- Bismarck Tribune
- Business Accelerator Fund proposed to spin off from MAGIC Fund -- Minot Daily News
- ONEOK announces Bakken NGL pipeline to support third-party NGL volume -- Oil & Gas 360
- Train crash with semi pulling ammonia tank near Hebron results in no injuries -- Dickinson Press
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Factoid of the Week
Unemployment in McKenzie County remains remarkably low at 1.6% compared to the state rate of 3%. Taxable sales and purchases in 3Q 2018 are up nearly $30 million over the same period in 2017. Apartment occupancy rate stands at 100% in April 2019 compared to 92% in April 2018. Watford City issued 24 building permits in March 2019 compared to seven permits in March 2018.
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April 30
Bismarck
April 30 - Stanley; May 1 - Grand Forks; May 2 - Jamestown
April 30-May 1 and May 2-3
Bismarck
May 5-7
Oklahoma City
May 7-8
Williston
May 9
Dickinson
May 27-29
Regina
June 17-20
Bismarck
July 16-17
Bismarck
July 16
Bowman
July 17
New Town
July 18
Van Hook
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Oil prices and rig count
April 26, 2019
WTI Crude: $63.30
Brent Crude: $72.15
Natural Gas: $2.57
North Dakota Active Rigs: 64 (up 1)
4/26
/2018
-- 63 rigs
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Geoff Simon
Editor/Executive Director
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