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TOM STROMME/Tribune

Governor sounds out oil patch leaders on special session

By Nick Smith

Prior to his planned April decision whether or not to call a special session to deal with oil patch needs, Gov. Jack Dalrymple says the key issue is determining the timeline in which they need to be addressed.

Following a formal call in February by Democratic-NPL Party leaders for a special session, Dalrymple has been meeting with city and county leaders from oil patch counties. Democratic leaders say dealing with the infrastructure needs in western North Dakota now can alleviate issues in the long run.

“I want them to be able to tell me directly … what we can deal with immediately,” Dalrymple said. “It’s more of a matter of the timeline more than anything.”

Dalrymple said he’s held half of his meetings with local leaders and intends to reserve judgment until he’s through.

Dalrymple said options are limited in creating a short-term fix until next session if no special session is called. Executive action could be taken such as providing dollars for infrastructure through various state funds.

If a special session were called, Dalrymple said some legwork would need to be done beforehand in order to have a specific plan to put in place.

In 2015 Dalrymple said a few options could help with funding during the session.

The first is to quickly pass a funding bill with an emergency clause in place making funds available immediately. He pointed to a bill last session that made about $720 million in road funds available in early 2013.

“People I’ve spoken to have admitted they’re in pretty good shape for 2014 but they’re very concerned about what they’ll be doing in 2015,” Dalrymple said.

Dalrymple said several communities have said their bonding ability has been severely impaired due to a sunset clause attached to a bill last session that outlines the funding formula for oil tax distributions.

“I think the sunset clause can be lifted. I will ask the leadership to remove it and not do it again,” Dalrymple said.

Efforts to send additional funds already have been fast tracked in recent weeks. Last month the State Water Commission approved roughly $32 million between the cities of Dickinson, Williston and Watford City.

Another option is through a program launched in January to provide loans through the Bank of North Dakota. The first two loans through the program were approved by the North Dakota Industrial Commission earlier this month.

The first was for $36 million to Watford City for infrastructure; the second to the McKenzie County School District for $10 million to $15 million for a new school.

Bank of North Dakota president Eric Hardmeyer said the loan program is available to political subdivisions that receive part of the state’s 5 percent gross production tax for oil. Hardmeyer said it leverages future gross production tax dollars for the applicant in order to speed up the timeline of high-priority projects.

“It’s intended to help some of these communities in western North Dakota … move things up a bit,” Hardmeyer said.

Hardmeyer said discussions regarding similar loans to Dickinson and Williston are “very preliminary.”

Senate Minority Leader Mac Schneider, D-Grand Forks, said a targeted, short session of one week or less could help western communities finally get caught up on infrastructure.

Schneider called it a “moral obligation” to assist the region whose energy boom has been the primary source of the state’s lush economy.

“For legislators east and west it’s time the state of North Dakota needs to understand that we’re one community with really large streets (so to speak). It’s not about geography,” Schneider said.

He said he’d be much more proud of helping address the immediate needs of the western North Dakota in order to preserve the region long-term rather than see the state “bragging about having a sizeable budget surplus” for another biennium.

Schneider said a starting point for a special session should be a bill being drafted by House Minority Leader Kenton Onstad, D-Parshall.

Onstad’s bill would amend the formula that divvies up gross production tax revenues in order to give the oil-producing counties more than half of the dollars for a two-year period. It’s based on a failed bill he introduced in 2013 that would have provided the oil-producing counties 80 percent of the revenues for two years.

The state receives 75 percent and the counties 25 percent.

Williston Mayor Ward Koeser met with Dalrymple last week. He said the meeting was productive but can still see the merits of a special session.

“None of the communities out here can take a year (2015) off,” Koeser said.

Koeser said he doesn’t see the loan option from the Bank of North Dakota as being very appealing. He said for the oil-producing counties to be producing an enormous share of the state’s wealth it’s unfair to have the state turn around and offer a share back as a loan.

“We feel there’s a direct correlation between oil production and the needs,” Koeser said. “They need to remember that.”

Koeser said he’d prefer assistance prior to the 2015 session come through grants rather than loans. He said during the next session the city’s priorities would include elimination of the sunset clause on oil tax distribution formula and a bill passing funding for the west with an emergency clause.

Reach Nick Smith at 250-8255 or 223-8482 or at nick.smith@bismarcktribune.com.

Copyright 2014 Bismarck Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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