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Energy & Environment

Legislative interim committee to study oil tax distribution formula

An interim legislative committee will be taking a hard look at the oil tax distribution formula.

Under state law, 80 percent of the annual oil production tax revenue above $5 million is split between state and local governments. It used to be a 75-25 split, with the state getting the 75 percent. Some western North Dakota lawmakers pushed for a 60-40 split, with the counties getting 60 percent. Governor Dalrymple included that in his budget. But in the face of declining oil revenues, the 2015 Legislature decided on a 70-30 allocation, with the state getting the lion’s share.

Counties did receive $1.1 billion in so-called “surge” funding, for infrastructure projects.

"Personally, I'd like to get it settled," said Sen. Majority Leader Rich Wardner (R-Dickinson), who will chair the Energy Development and Transmission Committee. "We get it done, and we don't come in and deal with it again and again again -- that we have a plan for the future."

Oil patch counties will be watching the study closely.

"We no longer as counties can afford to sustain ourselves, and operate under a two year plan that is similar to what the surge money has done," said Dunn County Commissioner Daryl Dukart. "We need to have more stabilization."

McKenzie County Commissioner Ron Anderson favors the 60-40 plan.

"If we had about six years, or three sessions, of decent monies to get our infrastructure in shape, we could maintain with less after that," said Anderson.

The Committee plans to hold meetings in the Oil Patch to look at the needs.

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