Legacy Fund

An interim legislative committee has started talking about what to do with the proceeds from the state’s Legacy Fund.

That fund gets oil tax money – and was set up for future needs, when the oil is depleted. But the proceeds now go into the state’s General Fund.

The 2019 Legislature considered a number of proposals for use of those dollars – but all failed.

What to do with the proceeds from the Legacy Fund.

That will be one of the interim studies state lawmakers will undertake.

Right now, the proceeds go into the state’s general fund. And the 2019 Legislature considered a number of options for that money – from reinvesting it in the Legacy Fund to an income tax buy-down.

The chairman of the Senate Finance and Taxation Committee is still hoping for an interim study to look at potential uses for the proceeds from the Legacy Fund.

This – after a House-Senate conference committee decided to return House Concurrent Resolution 3055 back to its original version – which was a proposed Constitutional amendment to reinvest the proceeds into the Legacy Fund. The proceeds now will go into the state’s general fund.  The Senate changed it to a study. But the House wouldn’t agree.

The North Dakota Senate has overwhelmingly endorsed a study of uses for the proceeds from the state’s Legacy Fund.

The proceeds, or earnings, can now go into the state’s general fund. But lawmakers want to put some parameters for the use of the money.

A study committee would include the floor leaders from both parties, the chairmen of the House and Senate Appropriations Committees and the chairmen of both Finance and Tax Committees.

It appears there will be an interim study on uses for the earnings from the state’s Legacy Fund.

Senate Majority Leader Rich Wardner (R-Dickinson) had been working on creating a series of “buckets,” or “silos,” to determine how that money would be spent. But he said he would like to have a special committee  appointed to study this issue.

Wardner said that committee would include the floor leaders and some of the “key players” in budgeting.

North Dakota Senate Majority Leader Rich Wardner (R-Dickinson) said there could likely be a proposal to define what the interest earnings on the state’s Legacy Fund can be used for.

This is the first biennium where the earnings from the fund flow into the state’s general fund. Wardner said the idea is to create another system of “buckets,” similar to those created for oil tax revenue.

We think there are certain things that have higher priorities than others," Wardner said. "If we did that, it would lock up money into certain areas, rather than put it in the general fund."

The North Dakota Senate has rejected a measure that would have taken half the earnings from the state’s Legacy Fund to reduce income tax rates.

The sponsor – Rep. Craig Headland (R-Montpelier), the chairman of the House Finance and Taxation Committee – said the intent is to eventually eliminate the state income tax.

The measure passed the House 61 to 31.

But Sen. Jessica Unruh (R-Hazen) told her Senate colleagues North Dakota already has a very low state income tax rate.

Some Legislative leaders believe Gov. Doug Burgum’s proposal to use $50 million from the proceeds of the Legacy Fund to build a Theodore Roosevelt Presidential Library and Museum in Medora will have a very tough go in the Legislature.

Burgum’s proposal is a “2-for-1” match – the $50 million investment would raise another $100 million from private investors.

Still, Legislative leaders on both sides of the aisle think this may be a non-starter.

A Minot REpublican state senator is skeptical about the new GOP leadership infrastructure plan.

That plan – rolled out last week – creates three new “buckets” -- $115 million for cities, $115 million for counties and townships, and $50 million for airports. The money would come from oil tax collections.

"What was rolled out was sort of a 'Here's some money for you -- you're not asking for it or applying for it, we're just going to give it to you,'" said sen. David Hogue (R-Minot). "I have a hard time with that."

North Dakota's Senate Majority Leader likes the idea of using the Legacy Fund for low interest loans to cities and counties for infrastructure.

Two Minot lawmakers -- State Representative Roscoe Streyle (R) and State Senator David Hogue (R) have drafted a bill for the 2019 session to allow that. And Fargo Mayor Tim Mahoney had suggested the idea as a source for capital to build the Red River Valley Water Supply Project – to bring Missouri River water to the Valley during droughts.