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In North Dakota, oil wealth checks are illegal

Lydia Gilbertson | Shale Plays Media Google+

This year, residents of Alaska will all get a $1,900 check from the state oil wealth trust fund. But if Alaska produces far less oil than North Dakota, why aren’t residents of the Great Plains receiving the same check (maybe even a bigger one) in the mail? Eric Burgess of the Fargo Forum recently looked into this issue and the findings are pretty straight forward.

In North Dakota, it is unconstitutional for the state to give a direct payment to its residents unless it is for reasonable support of the poor. This language was put into place in order to prevent the state from investing into private enterprises.

The Fargo Forum reports:

“‘The state’s money is to be used for state purposes and not for donations for some private purpose, no matter how worthwhile it might be,’ [John] Walstad said, defining the purpose of the amendment.

If the law didn’t exist, ‘then anybody, any group, any organization in the state could come to the Legislature and say I’d like you to give me some money for this thing that I’m doing,’ Walstad said. “

The law could potentially be changed, but it would take a while. In order to change the North Dakota Constitution, either an amendment has to be passed on an election ballot or a civilian petition must be created and executed. The North Dakota Legacy Fund was put into place following the states’ oil boom in order to collect the excess gains and create a savings account of sorts, rather than just spending it all right away. Currently, the fund is on the road to having $5.8 billion dollars deposited by the time legislature is allowed to use the funds in 2017.

Read more: State law prohibits oil wealth checks

Related: No blank checks for local oil impacts

 

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