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HB1358

HB1358. Oil & Gas Production Tax Distribution. Background. 17 Oil & Gas Producing Counties 85% of production from 4 counties Mountrail McKenzie Williams Dunn. Mountrail. Dunn. Williams. McKenzie. 184 Drilling Rigs May 11, 2013. ND Industrial Commission Website. Two Taxes.

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HB1358

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  1. HB1358 Oil & Gas Production Tax Distribution

  2. Background • 17 Oil & Gas Producing Counties • 85% of production from 4 counties • Mountrail • McKenzie • Williams • Dunn

  3. Mountrail Dunn Williams McKenzie

  4. 184 Drilling Rigs May 11, 2013 ND Industrial Commission Website

  5. Two Taxes • Gross Production Tax (GPT) - 5% • Extraction Tax (ET) – 6.5% Total = 11.5% • HB1358 relates to GPT only

  6. % of GPT back to local Government

  7. % of GPT & ET combined back to local government

  8. Hub cities & HUB CITY schools • Population 12,500 or more • More than 1% of employment engaged in mining • Williston – 40% • Dickinson – 17% • Minot – 4%

  9. Hub city allocations Williston $375,000 40 $15 Million/year Dickinson $375,000 17 $6.375 Million/year Minot $375,000 4 $1.5 Million/year

  10. Hub city SCHOOLS allocations Williston $125,000 40 $5 Million/year Dickinson $125,000 17 $2.125 Million/year Minot $125,000 4 $500,000/year

  11. Fiscal year • Fiscal Year 2013 (FY2013) – ends June 30, 2013 • Fiscal Year 2014 (FY2014) – begins July 1, 2013 • July 2013 Production • Reported to state in August 2013 • Paid to counties, cities, schools in September 2013

  12. Fiscal yeaR • Current Formula applies to all payments you receive through August 2013 • New formula applies to payment you receive in September 2013

  13. Current formula • 5 different tiers for split between state & county • First $2 Million – 0/100 • Third $1 Million – 25/75 • Fourth $1 Million – 50/50 • Next $14 Million – 75/25 • After $18 Million – 90/10

  14. Current formula • Distribution to Local Government • 45% General Fund • 35% Schools (cap based on population) • 20% Cities (no cap) • Infrastructure Fund

  15. Current formula • Infrastructure Fund • Grants to Townships for Impacted Roads and to Schools for Buses • Infrastructure Fund goes away with new formula

  16. New formula (hb1358) • Only 2 different tiers for split between state & county • First $5 Million – 0/100 • All $$ Over $5 Million - 75/25

  17. New formula (hb1358) • Two distribution formulas: • Counties less than $5 Million • Counties over $5 Million • State Treasurer will do ALL allocations to cities and schools

  18. New formula (hb1358) • 6 Counties Less than $5 Million • Bottineau • Golden Valley • McHenry • Renville • Slope • Ward

  19. New formula (hb1358) • Counties Less than $5 Million • 45% General Fund • 35% Schools • 20% Cities

  20. New formula (hb1358) • 9 Counties Over $5 Million • Billings • Bowman • Burke • Divide • Dunn • McKenzie • Mountrail • Stark • Williams

  21. New formula (hb1358) • Counties Over $5 Million • 60% General Fund • 5% Schools • 20% Cities • 3% Townships (allocated by miles) • 3% Townships (shared equally) • 9% Hub Cities

  22. New formula (hb1358) • Counties Over $5 Million • 9% to Hub Cities: • Williston – 60% • Dickinson – 30% • Minot – 10% • State Treasurer will do ALL allocations to cities and schools

  23. And more…. • HB1358 - Sections 5, 6 & 7 – County Road Funds • $160 Million for counties over $5 Million in GPT allocations in FY2013 • Allocated based on UGPTI study • July 2013 – June 2015

  24. And more…. • HB1358 - Sections 5, 6 & 7 – County Road Funds • $120 Million for counties that did not receive $5 Million in GPT allocations in FY2013 • Allocated based on the miles of road defined by NDDOT as county major collector roads in each county • July 2013 – June 2015

  25. And more…. • HB1358 - Section 8 • $2 Million Appropriation • Nursing Homes & Basic Care Facilities • Allocated by Dept. of Commerce in January 2014 and January 2015 • Based on number of FTE’s – determined by NDDHS

  26. And more…. • HB1358 - Section 10 • $9.6 Million Appropriation • Critical Access Hospitals • Allocated by ND Dept. of Human Services • One time funding • Max of $4.8 Million each year of biennium

  27. And more…. • HB1358 - Section 11 • $9.6 Million Appropriation • Attorney General’s Office • Grants to Law Enforcement agencies in oil impacted counties • Up to 10% may be used by AG’s office to offset added expense • Max of $4.8 Million each year of biennium • Development of uniform law enforcement & custody manual

  28. Thank you • NDAOGPC, Brady Pelton • NDACo, Mark, Terry & Aaron • Representative Bob Skarphol • Governor Dalrymple

  29. Oil & Gas Producing Counties Auditors and Treasurers Training Session State Treasurer’s Office StateTreasurer Kelly Schmidt June 12 – 1:00 p.m.

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