In an unexpected move, the Senate Appropriations Committee this week removed loan authority from the Clean Sustainable Energy Authority, which would leave it unable to support commercialization of low-emission energy projects. 

The loan authorization was part of HB 1014, the budget bill of the ND Industrial Commission, which also includes funding for the Department of Mineral Resources, the Bank of North Dakota and the ND Mill and Elevator. The governor's office had requested $250 million in loan authority on behalf of CSEA, but the amount was cut to zero by the committee, and the bill went on to pass the Senate on a 44-2 vote.

The opportunity for a low-interest loan from CSEA is viewed as crucial to Project Tundra, which would install equipment to capture carbon dioxide emissions from Milton R. Young Station, a coal-fired power plant near Center ND. NDIC Deputy Director Reice Haase told committee members that a big chunk of the loan authority was intended for Project Tundra, but there are also other projects on the drawing board.

Click here to listen to Haase's comments.

Project Tundra previously received a $100 million loan from CSEA, but Haase said an additional loan is crucial to getting the project to the finish line.

Click here to listen to Haase's comments.

In response to concerns about cutting the loan authority, Senate Appropriations Committee Chairman Brad Bekkedahl said it's not the committee's intent to kill Project Tundra or any other emission-reduction project. But Bekkedahl said members have the responsibility to balance the budget, and he expected the loan authority would be a topic when the bill goes to a House-Senate conference committee.

The Senate's action to remove the loan authority was the dominant topic during a weekly legislative Teams conference of the EmPower Commission. ND Petroleum Council President Ron Ness said it may have simply been the committee's intent to send a message to the House about the need to cut spending, but they picked a dangerous area in which to do it.

Click here to listen to Ness' comments.

The Senate committee reduced a couple other energy-related items in the bill. The House version had earmarked $3 million to support commercialization of rare earth mineral extraction from coal, but it was cut in half by the Senate. The committee also reduced a $20 million allocation for salt cavern development to $11.3 million, about half of which would come from unexpended federal coronavirus relief funds. Also removed from the bill was a $25 million grant aimed at improving resiliency of the electric grid.

North Dakota lawmakers continue to debate what is best for North Dakota's tax paying public as a conference committee tries to hash out disagreements over income and property tax relief proposals.

The original version of HB 1158 proposed to eliminate the state income tax for three out of five North Dakota income taxpayers. Those still paying income taxes would pay a flat tax of 1.5 percent, resulting in a 26-to-48 percent reduction.

While the House prioritized the income bill, the Senate approved a hybrid that included a property tax reduction with a school mill levy buydown and expanding eligibility for property tax refunds through the Homestead Tax Credit for those 65 and older. The Senate version also proposed a multi-bracket income tax system and raised the exemption for taxpayers in the lower income brackets.

Committee members previously heard concerns from the business community about SB 2066, the bill from which the mill levy buydown was crafted. Lobbyists for railroads and utilities said the language is unconstitutional because it establishes a different rate of property taxation for centrally assessed properties.

Tax Commissioner Brian Kroshus presented committee members with several scenarios comparing income tax and property tax relief through varying mill levy amounts, income tax savings in a three- and five-tier tax rate system, and anticipated property tax relief amounts for commercial, residential, agricultural, and centrally assessed properties. Kroshus also pointed out that 37.5 percent of North Dakotans do not own their own homes and would not see direct relief from the bill’s passage. 

Committee Chair Representative Craig Headland questioned Kroshus as to whether there is greater equity in income tax relief than in property tax relief. Kroshus said income tax relief would benefit more citizens because 82 percent of North Dakotans currently pay income tax.

Click here to listen to Kroshus' comments.

This week's meetings culminated in the question of how to most effectively use tax relief as a tool for workforce recruitment. Committee members discussed the 12 states currently on a path to zero income tax and the importance of being viewed among them as it relates to the competition among states for workers. Headland said the House's priority is transitioning to a flat rate in order to be seen as competitive to potential workers.

Dickinson Senator Dean Rummel proposed a gradual path to a flat tax by compressing a multi-bracket system over several bienniums in order to better assess the economic impact. Rummel proposed a possible option to do so, which he likened to a stepping stone toward the House's priority of achieving a flat tax rate.

Headland offered an option on behalf of the House which includes a 1.99 percent flat income tax rate, a property tax reduction through a 15-mill buy down, and a $40 million Homestead Tax Credit package for homeowners 65 years and older. Rummel's proposal also included the Homestead Tax Credit and the 15-mill buy down. Committee members ended the week agreeing to take both proposals to their body's leadership with further conference committee meetings to be held next week.

The North Dakota House of Representatives, after more than an hour of debate, gave final approval this week to a bill that will provide state financial support to non-public schools. 

HB 1532, introduced by Grand Forks Rep. Claire Cory, passed the House on a 51-to-41 vote. Because the House concurred with Senate amendments, the bill now goes to the governor for his signature.

The original bill would have appropriated $24 million, and authorized reimbursement to private schools of up to 30 percent of the current per pupil payment ($10,237) in the state school funding formula. The Senate amended the bill to include a means test, setting the eligibility limit at 500 percent of the poverty level, or $150,000 for a family of four. The amendment also reduced the appropriation to $10 million, and makes the program effective for just the 2024-25 school year.

House Education Committee Chairman Pat Heinert said a US Supreme Court decision and attorney general's opinion indicate that laws that fail to support private schools may unconstitutionally discriminate against students who attend parochial schools. 

Click here to listen to Heinert's comments.

Minot Rep. Dan Ruby also supported the bill. Ruby pointed out that the parents of children in private schools pay taxes like everyone else, so it's unfair they don't receive some share of the benefit for education.

Click here to listen to Ruby's comments.

House Majority Leader Mike Lefor said he appreciated the spirited debate on the bill. Lefor said opponents had good arguments that there is a lot of demand for state resources and the money could be spent elsewhere, but he said supporting the education of all North Dakota children is also important.

Click here to listen to Lefor's comments.

There were multiple hearings on the bill in the House and Senate Education and Appropriations Committees, most of which lasted several hours. In total, there were 492 piece of written testimony submitted either for or against the bill.

A House-Senate conference committee appointed to work out differences over a bill aimed at shoring up finances of the Western Area Water Supply Authority made little progress this week despite meeting three separate times.

SB 2196 previously passed the Senate on a unanimous 47-0 vote, but its intent was radically altered in the House Energy and Natural Resources Committee. The original bill would have forgiven $30 million of WAWS' current $77 million debt obligation, and transferred supervision of the project from the Industrial Commission to the State Water Commission. But instead of the loan forgiveness provision, the House amended the bill to refinance the full amount and place responsibility for its repayment partially on domestic users.

Western legislators made an unsuccessful effort on the House floor to restore the bill to its original form, arguing that it was unfair to place a large debt obligation on residential users, who were not given an opportunity to comment on the amendment. They also pointed out the $30 million loan forgiveness in the original bill was intended to put WAWS at roughly the same level of state support as other rural and municipal water systems.

House supporters of the amendment said the refinancing language would significantly reduce WAWS' monthly payment obligation, putting it on a more solid financial footing. But Watford City Senator Dale Patten, the conference committee's chairman who is a retired banker, said there are other factors that must be considered than the amount of the monthly payment.

Click here to listen to Patten's comments.

Patten is the prime sponsor of the legislation, but it's actually a product of the State Water Commission and its Strategic Government and Finance Study of the state's rural water systems.

The conference committee is scheduled to meet again Tuesday, April 18, at 10:30 a.m. in the Peace Garden Room at the Capitol.

Former Lt. Governor Brent Sanford will head up a new workforce recruitment initiative that is being launched by the North Dakota Petroleum Council.

NDPC is responding to the workforce needs of its oil and natural gas members with a new program called Bakken GROW (Global Recruitment of Oilfield Workers), which will bring a new approach to attracting workers to the Bakken region through immigration. 

Ukrainian workers are being recruited to North Dakota with the new “Uniting for Ukraine” (U4U) streamlined immigration process providing Ukrainian citizens, who have fled since Russia’s invasion, an opportunity if they want to come to the United States and work immediately. NDPC has hired Sanford to be the project manager, serving as a liaison between member companies and immigration recruitment agencies to assist with the process of bringing workers to North Dakota to work in the Bakken. 

“The Bakken GROW program is a humanitarian mission and a workforce solution,” said Sanford. “The NDPC staff and membership are excited to begin sharing the hospitality of North Dakota and the tremendous Bakken career opportunities with a wider group of individuals.”

“Our member companies have been struggling to find workers within North Dakota and across the country for the last few years, so we felt we needed to create an innovative way to respond to our industry’s challenges of finding workers through legal immigration,” said NDPC President Ron Ness.

The Petroleum Council plans to welcome the first 25 new workers to North Dakota by July 2023.

Heavy runoff in Spring Creek washed out a rural road in Dunn County, and high water forced temporary road closures in about a dozen other locations in the county.

County Road Superintendent David Lym said a road closure was already in place before the section washed away completely. The washout is on 92nd Avenue Southwest, a mile north of Highway 200 about midway between Dunn Centre and Halliday. Lym said the section of road had two, six-foot diameter culverts, but they weren't enough to withstand the heavy runoff associated with the warm weather this week.

"When you have a lot of snow and 80-degree temperatures, things are going to melt quickly," he said.

Lym said other county roads crossed by Spring Creek have concrete box culverts. He said he hadn't decided whether to put a box culvert in the 92nd Ave. section, or to put the original culverts back in place "if I can find them."

The Knife River flood gauge at Manning showed the river was at minor flood stage earlier this week, but Lym said with cooler temperatures, water levels are receding throughout the county.

Congressman Kelly Armstrong, Senator John Hoeven and Senator Kevin Cramer have reintroduced the North Dakota Trust Lands Completion Act.

The legislation would authorize the State of North Dakota to relinquish state-owned lands and minerals contained within tribal reservations to the U.S. Department of the Interior, and in exchange receive federal land and minerals of equal value within North Dakota. The state currently holds more than 130,000 acres of minerals and more than 31,000 surface acres within reservations alone, which are largely unavailable for development. At the same time, existing federal laws do not adequately allow for the state and federal government to exchange land and minerals, limiting the state’s ability to generate revenue from the land and minerals it owns.

“The comingling of federal, state, and tribal lands has long prevented North Dakota's resources from being fully utilized,” said Armstrong. “Our bill gives the state of North Dakota and tribes more control over lands within their jurisdiction. This will reduce the amount of duplicative regulations and benefit people across our state.”

“Our legislation will empower North Dakota to better utilize its mineral rights and develop the energy resources within the state, generating revenue for education and other important priorities,” said Hoeven. “As part of these equal-value exchanges, tribes will be able to regain the fragmented lands and minerals located within their reservations.”

“Fragmented land ownership and mineral rights in North Dakota have hampered our state’s resource development for far too long,” said Cramer. “Allowing the state to exchange land and minerals with the Department of the Interior and tribes is a common-sense solution to benefit all parties involved.”

“This legislation is a win/win as it will help the Land Board generate more revenue to support North Dakota K-12 public education, while also providing opportunities for North Dakota Indian tribes to further consolidate lands within their reservations,” said Land Commissioner Joe Heringer.

Click here to read the text of the bill, and here for a summary.

As part of ongoing efforts to address the state’s workforce challenges, Gov. Doug Burgum has signed legislation allowing state scholarship dollars for qualifying students to be used toward apprenticeship programs in North Dakota.

HB 1382 expands on existing law that provides scholarships for full-time students who attend a two-year or four-year college or university and meet certain requirements such as maintaining a grade point average of 2.75 or higher. The State Board of Higher Education and State Board for Career and Technical Education will establish eligibility requirements for the apprenticeship scholarship, including full-time enrollment, program progress and a minimum GPA or equivalent measure. Students who meet the requirements and are enrolled in qualifying registered apprenticeship programs will be eligible for a scholarship of $500 each term, up to $6,000.

“These students are receiving an education while also providing valuable contributions to our state’s workforce and economy,” Burgum said. “We’re grateful for the support from the legislature, Department of Public Instruction, CTE, Higher Ed and the private sector for expanding opportunities for our students.”

Burgum also signed the Job Service North Dakota budget bill, HB 1016, which includes support for programs aimed at meeting workforce needs. For the first time, the budget includes state general fund dollars to support the H2A Visa Program for temporary agricultural workers. It helps farmers and other agricultural employers who have a shortage of domestic workers by bringing non-immigrant foreign workers to the United States on a temporary or seasonal basis.

The Job Service budget also includes funding for a collaborative effort with the Department of Corrections and Rehabilitation and a nonprofit entity to create a job placement pilot program that will connect recently or soon-to-be released inmates with in-demand jobs in North Dakota. As of 2020, North Dakota averaged 1,400 prisoner releases each year.

Governor Doug Burgum has issued an executive order to restructure the membership and reduce the size of the Lignite Research Council.

The council was created to establish policies and practices related to lignite coal research. As recommended by LRC members, the governor’s order reduces the size of the panel from 30 to 26 voting members. 

The council makes recommendations to the North Dakota Industrial Commission for funding awards from the state’s Lignite Research, Development and Marketing Program, a state-industry partnership focused on research and development projects aimed at preserving and enhancing development of North Dakota’s lignite resources. Burgum chairs the Industrial Commission, which also includes the state ag commissioner and attorney general.

Anyone interested in applying to serve on the Lignite Research Council, including current members, is requested to submit an application through the Office of the Governor Boards and Commissions website. Applicants are encouraged to apply as soon as possible. The next meeting of the Lignite Research Council has been scheduled for 1:30 pm on May 11.

View the executive order here.

Construction got underway this week on state road and bridge repair work near Beach and in the City of Minot, and is scheduled to begin Monday on Interstate 94 near Gladstone.  

Work is underway on I-94 near Beach on a project that includes reconstruction of the westbound lanes from the Montana state line to the Camel Hump Dam. Traffic is reduced to one lane in each direction while crossovers and connection ramps are built. Then traffic will be head-to-head on the eastbound lanes for the duration of the project.

Work is set to begin Monday on I-94 between Richardton and Gladstone on a project that includes concrete pavement repair, milling, asphalt overlay, and guardrail work on the eastbound lanes from mile marker 71 to 80. Structural improvements will be made on the westbound lanes at the Green River Bridge and the Gladstone and Taylor interchanges. 

Traffic will be reduced to one lane in each direction and the speed limit will be reduced while work is taking place. Westbound lanes will have a 12-foot width restriction during the Green River Bridge and Gladstone interchange work and an 11-foot width restriction in place during the Taylor interchange work.

Construction also got underway this week in Minot on the East Burdick Expressway Bridge over the Canadian Pacific Railway. The bridge rehabilitation project includes concrete paving, bridge repairs, new pedestrian railing, and lighting improvements. Traffic will be head-to-head on the westbound lanes and both eastbound lanes will be closed. There will be a 10-foot width restriction in place.

For more information about construction projects and road conditions throughout North Dakota, call 511 or visit the ND Roads map at travel.dot.nd.gov.

County road managers and oil industry trucking interests will have an opportunity to discuss common concerns and share best practices at a Western Energy Roundtable set for May 11 at the Rough Rider Center in Watford City. 

The event is co-hosted by the Western Dakota Energy Association and the ND Local Technical Assistance Program. The event will get underway at 10:00 a.m. with an operations overview from NDDOT Director Ron Henke. The agenda also includes updates from the Department of Mineral Resources, MHA Nation, LoadPass Permits and WDEA. Also on the program is a review of transportation-related issues in the 2023 Legislature, and discussion of the outlook for the summer construction season.

Save the Date - May 11! Additional details and registration information will be posted in an upcoming WDEA newsletter.