Summary of 2017 Legislative Issues
Western North Dakota interests introduced HB 1366 early in the legislative session to address oil industry impacts in the west. But the House killed the legislation, while promising that the needs of Bakken communities would be addressed before the legislature adjourns. Gross production tax (GPT) distribution changes were attached to SB 2013, the Lands Department budget, in an amendment by the House Appropriations Committee.
Oil-impacted townships in the top nine producing counties (Billings, Bowman, Burke, Divide, Dunn, McKenzie, Mountrail, Stark and Williams) received a modest allocation of GPT revenue from HB 1176 enacted in 2015. A total of $25 million was divided among more than 400 townships, which collectively maintain many hundreds of miles of industrial roads. But the House amendment has proposed cutting two-thirds of the revenue and “redistributing” the wealth to non-oil producing counties.
Under current law hub cities and schools will see about a 30% reduction in gross production tax revenue in the 2017-19 biennium. The “terrible amendment” attached to SB 2013 would further reduce Hub City money to the cities and school districts in Dickinson, Minot and Williston. Already facing a collective reduction of nearly $50 million from the current biennium, the House proposal would add insult to injury by grabbing another $6 million in the next biennium.
The 2015 Legislature made commitments to communities in the Bakken in the form of oil impact grants. Included in these promises are unfulfilled commitments of $39.6 million for the state’s share for the new Williston Airport, and $5 million to Dickinson to rehabilitate a runway damaged by heavy plane traffic. The oil impact grant bucket did not fill in the 2015-17 biennium because of lower oil prices, but the state of North Dakota has an obligation to make good on its previous financial commitments to these oil-impacted communities which have incurred debt to support the industry. Funding for the two airports is hanging in the balance as the legislature winds toward its conclusion this week.
North Dakota legislators approved a bill that will improve operation of WDEA’s Uniform Truck Permit System. HB 1320 will enhance the system’s uniformity by requiring townships in a participating county to also participate in the permit system. The provision is intended to address problems oilfield truckers have at times reaching township officials to act on road permit requests. The measure also enables counties to better enforce road restrictions, and sets up a notification procedure if permit fee changes are proposed. The bill will help facilitate WDEA’s efforts to expand the system to counties outside the oil-producing region.
A bill developed through the work of Vision West that would have given counties the right to appeal a decision of the State Board of Equalization fell just four votes short of passage in the House. HB 1368 was intended to address what some counties believe were errors by the state board in establishing property values for large industrial facilities. If those properties are undervalued, they are also undertaxed, and that burden is shifted to other property owners.
WDEA was engaged in negotiating a compromise on a bill that changes the procedure for siting gas and liquid transmission pipelines. SB 2286 would expand the Public Service Commission’s siting process to incorporate conditions required by local planning and zoning boards. It essentially consolidates the PSC hearing and county/township hearings into a single proceeding. The bill also requires an interim legislative study to monitor the new siting procedure.
One other interim study sure to generate some interest among oil producers is found in HCR 3027. The resolution asks legislators to study whether the state should offer financial incentives to encourage companies to re-frack Bakken wells.
SB 2045 will allow counties to continue receiving civil penalties when overweight trucks are cited on county roads. That ability was added to state law in 2013 as an incentive for overweight enforcement on county roads, but because it carried a “sunset” clause, the law was due to expire June 30, 2017.
Western interests closely followed action on HB 1151, commonly known as the “spill bill.” Passage of the legislation means producers will no longer be require to report spills of less than 10 barrels if the spill is contained to a well pad with an impermeable liner. Producers will still have to log smaller spills. That information will be available for review by the surface owner.
Legislators approved SB 2327, which creates a state Department of Environmental Quality (DEQ). The legislation carves out the Environmental Health unit from the state Health Department, making the DEQ a cabinet level position.
Drivers who’ve had a broken windshield were probably disappointed to see the legislature defeat SB 2341. The bill would have required trucks to have mudflaps covering their rear wheels. Those who opposed the legislation said mudflaps were standard industry practice, so a law wasn’t necessary.
For SB 2014, which involves HIF Authorization including $5 million in tax credits, and $500,000 for an ESW homeownership program was passed in the Senate and sent to the full appropriations committee. They killed the ESW program, and stripped out funding for HIF. They went further by sunsetting the program after December 31, 2018, and eliminated two more FTE’s from NDHFA. The House passed the bill but the Senate refused to concur, asking to restore the two FTE’s and associated salary, keep HIF going without the sunset and include $2.5 million. A conference committee was appointed, the sunset has been removed, two FTE’s restored, but no funding was given.
An amdended version of HB 1182, which removes the income tax portion of the incentive for Renaissance Zone projects, was passed in the House with an amendment but failed to pass in the Senate as there was a similar bill, SB 2166 which did pass. Our understanding of this bill is that it keeps the incentive alive until a legislative management study has been completed.