February 1, 2019 - Full Steam Ahead!

Arctic air blasted North Dakota this week, but work continues toward

February 22 crossover, the deadline for a bill to pass its house of origin.  

Senate Kills Extraction Tax Increase

A bill to raise the oil extraction tax in North Dakota from 5 percent to 6.5 percent was soundly defeated in the Senate this week on 36-10 party line vote.

SB 2336 was sponsored by Sen. Merrill Piepkorn,

D-Fargo. Speaking on the Senate floor, Piepkorn said the higher tax would raise an additional $450 to $550 million per biennium, money which could be used to fund projects that would benefit the state's future.

Click here to listen to Piepkorn’s comments. 

In opposing the measure, Sen. Dale Patten, R-Watford City, pointed out a recent study of oil and gas tax revenue (supported by WDEA) showed the industry paid $18 billion in taxes from 2008-to-2018.

Click here to listen to Patten’s comments from the Senate floor. 

In a different approach to opposing the bill, Sen. Dwight Cook said it amounts to bad tax policy that creates uncertainty in the state's economy. 

Click here for Cook’s comments from the Senate floor. 

Senate Majority Leader Rich Wardner, R-Dickinson, concluded the Senate floor session by noting how government actions can impact capital investment decisions made by the oil industry.

Click here to listen to Wardner’s comments. 

A similar tax increase proposal, HB 1449, is currently being considered in the House. The measure, sponsored by Rep. Pamela Anderson, D-Fargo, had a hearing in the House Finance and Taxation Committee but no action has been taken on the bill.  

Click here for an article from the Bismarck Tribune on the failure of oil tax increase.

Ethics: More Questions Than Answers

Specially-appointed House and Senate Ethics Committees met this week to attempt to unsnarl the many public policy questions created by the passage of Measure One, a constitutional amendment approved by North Dakota voters in 2018. 

Although promoted as an “anti-corruption" measure, its language has raised First Amendment concerns among North Dakota trade organizations and various national groups including the American Civil Liberties Union. The ACLU, which opposed the ballot measure, reasserted its concerns about the measure’s disclosure language in a statement issued this week.

“Requiring large or small advocacy groups and non-profit organizations to disclose their donors when they speak about controversial issues like gun rights, religious liberty or abortion would result in less speech about those issues,” said Heather Smith, executive director of the ACLU of North Dakota. “That is a clear harm to public discourse and a result directly opposed to the values embodied by the First Amendment.”

Those views were shared by several individuals and groups, including WDEA, who testified in support of HB 1521, an implementation bill introduced by House and Senate Republican leaders. The legislation's provisions are crafted in a way that would allow individual citizens to meet with public officials without having to worry about tracking and reporting their expenses.

Rep. Kim Koppelman, R-Fargo, a member of the House Ethics Committee, said transparency in government is a good thing, but if disclosure goes too far it infringes on the privacy rights of individuals.

Click here to listen to Koppelman’s comments.

The two Ethics Committees met a total of four hours on Wednesday, and are scheduled to meet again next week to hear additional testimony. Koppelman said it’s unfortunate the legislature has been put in a position to try to figure out what the language in the measure actually means. He said it’s the reason there are other bills under consideration aimed at reforming North Dakota’s ballot measure process.

Click here to listen to Koppelman’s comments.

The Senate version of an implementation bill, SB 2148, introduced by Senator Tim Mathern, D-Fargo, would defer most of the implementation questions to an interim study committee that would report its findings to the 2021 Legislature. Individuals opposed to Mathern’s bill say they need to know how to comply with the measure, and can not wait another two years to find out.

Click here to read the ethics measure, which is now Article XIV of the North Dakota Constitution.

Bitter Cold Impacts State's Oil Production

The frigid temperatures North Dakota experienced this week are more than just uncomfortable, they also put the skids on oil and natural gas production.

Lynn Helms, director of the Department of Mineral Resources, said on Thursday’s What’s on Your Mind radio show the bitter cold provides a significant challenge to North Dakota’s energy producers. He said it creates a competitive disadvantage.

Listen to Helms’ comments here. 

Helms said winter weather typically slows production in the Bakken as producers cut back operations deemed unsafe or uneconomic in extreme cold.

Listen to Helms’ comments here.

Click here and advance to the 29:46 mark to listen to the full interview. 

Bills Aim to Help with School Construction

Nearly a dozen bills are under consideration by the 2019 North Dakota Legislature to address the need for rapidly-growing school districts to add classroom space.

Rep. Mark Owens, R-Grand Forks, who chairs the House Education Committee, said his members are working closely with the Senate Education Committee to put different components together to meet the funding needs. One of the most helpful would be HB 1365, which would allow districts to keep 100 percent of in-lieu-of property tax revenue earmarked for a sinking and interest fund for school construction. Owens is sponsor of the bill, and said he’s received positive comments about it.

Click here to listen to Owens’ comments.

Another proposal that could assist rapidly growing districts is SB 2214, which would establishes a $250 million school construction assistance revolving loan fund that would provide low interest loans (2%) from the Bank of North Dakota. Its prime sponsor is Senator Don Schaible, R-Mott, who chairs the Senate Education Committee.

The top priority of the two chairmen is increasing the per pupil payment provided to districts through the Foundation Aid formula. Owens said the starting point is a 2% increase each year of the biennium.

Click here to listen to Owens’ comments.

Owens said three bills – HB 1350, HB 1353 and HB 1525 – that would tap the Common Schools Trust Fund to pay for construction, received do not pass recommendations from the House committee because of concerns they would reduce the fund’s contribution to the Foundation Aid formula. 

Yet to be heard is HB 1437, sponsored by Rep. Pat Hatlestad, R-Williston, that would allow school districts, with the approval of 60 percent of voters, to impose up to a 1 percent sales tax to fund school construction projects. The bill is scheduled for its first hearing next Friday, Feb. 8, at 8:30 a.m. in the House Political Subdivisions Committee.

Click here for a story by Ian Woessner in the Dickinson Press about the hearing on HB 1525. Click here for coverage of the same hearing by Jill Schramm in the Minot Daily news.

Corridors of Commerce Legislation Advances

A bill aimed at facilitating improvements to North Dakota’s “corridors of commerce” received unanimous approval this week in the Senate Transportation Committee.

SB 2268, sponsored by Senator Dale Patten, R-Watford City, would tap earnings from the Legacy Fund to meet debt service requirements for loans issued for the corridors program. Patten said it’s intended to improve the busier highways in the state.

Click here to listen to Patten’s comments.

The legislation doesn’t specifically name Highway 85 which runs north/south through western North Dakota, but Patten said the highway would be high on the list of construction project because it’s handling more large truck traffic than the state’s interstate highways.

Click here to listen to Patten’s comments.

Plans are being developed to widen Highway 85 to four lanes between Watford City and Belfield. The first phase of the work, a $39 million project to replace the Long X bridge over the Little Missouri River, could go to bids as early as April. Phase Two would be four-laning the highway between the bridge and Watford City, which is expected to cost $104.5 million. Other parts of the project would four-lane Hwy 85 between the bridge and Highway 200 (est. $170 million), and Highway 200 to Belfield (est. $165 million). 

Click here to view a document from the Theodore Roosevelt Expressway Assn. promoting the bill.

Women's Prison Move Under Discussion

A proposal to close the women’s prison in New England, move the inmates to a renovated Missouri River Correctional Center in Bismarck, and move male inmates to a new prison in Jamestown, is being discussed by members of the ND Legislature’s Appropriations Committees.

Rep. Mike Schatz, R-New England, serves on the House Appropriations Committee, and is understandably opposed to the plan. Schatz believes the prison is a good facility for female inmates. But he said officials from the Department of Corrections and Rehabilitation (DOCR) continue to work on the proposal, and he expects the discussion will continue until the 2019 session concludes.

Click here to listen to Schatz’s comments.

Legislators were surprised when the prison closing and relocation plan was announced by Governor Doug Burgum during his budget speech in December. Schatz said if officials at the prison in New England had been made aware of concerns at the facility, the problems could have been addressed.

Click here to listen to Schatz’s comments.

Click here for an article in the New England Extra about the community’s response to the plan.

Legislation Would Provide Quality of Life Loans

Legislation that would allow the Bank of North Dakota to lend money to projects aimed at improving the quality of life in the state’s communities was heard in the Senate Finance and Taxation Committee this week.

SB 2276, introduced by Senate Minority Leader Joan Heckaman, D-New Rockford, would expand an existing revolving loan program that invests Legacy Fund assets. Heckaman’s legislation would provide loans for recreational, arts, science and other projects. An amendment proposed by the Bank of North Dakota would add behavioral health facilities to the bill. 

Click here to listen to Heckaman’s comments.

Heckaman said she is in total agreement with the bank’s suggested amendment.

Click here to listen to Heckaman’s comments.

The Bank of North Dakota’s amendment specifies that the interest rate for quality of life loans would be one quarter percent about the treasury rate for the life of the loan. 

Tribal Tax Deal Among Bills Next Week

Action on Prairie Dog Bill Expected Monday

Legislative committee calendars are becoming a little less congested as North Dakota lawmakers wade through the pile of more than 950 bills and resolutions introduced this session. But there are still plenty of heavyweight bills yet to be heard.

Topping the list is SB 2312, sponsored by Sen. Jordan Kannianen, R-Stanley, that would revise the current agreement for sharing tax revenue generated by oil production on the Ft. Berthold Reservation. Instead of the current 50-50 split between the state and the MHA Nation, the bill would direct 80% of revenue produced on tribal trust land to MHA and 20% would go to the state. The 80-20 split would favor the state on private fee land. The bill is scheduled for a hearing Wednesday, February 6, at 10 a.m. in the Senate Finance and Taxation Committee.

SIRN 2020 legislation ( HB 1435) described in the January 25 issue of this newsletter, will be heard Thursday, Feb. 7, at 8:00 a.m. in the House Government and Veterans Affairs Committee.

HB 1500, that would implement Governor Doug Burgum’s plan for three higher education governing boards – one for NDSU, one for UND and another for all the rest – will receive its first hearing Tuesday, Feb. 5, at 8:30 a.m. in the House Education Committee. Sponsors of the bill are Rep. Shannon Roers-Jones, R-Fargo, and Sen. Brad Bekkedahl, R-Williston.

Although it doesn't appear on the committee schedule, the House Finance and Taxation Committee is expected to vote Monday on HB 1066, commonly known as Operation Prairie Dog. It's expected the committee will consider several proposed amendments before voting on the legislation.

Click here to see the schedule of committee hearings on bills that WDEA is tracking.

Bakken -- A Geopolitical Capital of the World

Is North Dakota a player in the world’s energy market? If you listen to Mike Sommers, the newly selected head of the American Petroleum Institute, the answer is a resounding "yes.” 

Sommers was named the 15th chief executive of the API since its founding almost a century ago. API, based in Washington, D.C. 

is the largest national trade association representing all aspects of America’s oil and natural gas industry. He was named to post in May 2018 bringing two decades of political experience to his position.

Scott Hennen, host of the What’s On Your Mind radio show, interviewed Sommers on Wednesday and asked him about the Bakken’s role in world energy production. 

Click here for Sommers' comments. 

Asked about challenges facing the energy industry, Sommers explained that producers need to do a better job of telling their story so consumers can understand the significance of their contribution to not only America’s economy but the world economy. 

Click here for more of Sommers' comments.  

Sommers said the Bakken plays a prominent role in America’s expanding leadership position, calling it one of the new geopolitical capitals of the world. Click here to listen to Sommers' comments.

Click here and advance to the 27:40 mark to listen to the full interview. 

Seventh Annual Reclamation Workshop

Event Scheduled February 25-26 in Dickinson

Timely and effective reclamation throughout western North Dakota during expanding energy development is more important than ever. 

With this focus, NDSU Extension, Dickinson State University, Society for Range Management, USDA-ARS, North Dakota Department of Health and BKS Environmental Associates, Inc. are ready to host another reclamation workshop with the theme “Reflecting on Reclamation.” 

Keynote speaker, Graeme Spiers, Laurentian University from Sudbury, Ontario, Canada, will present “The Sudbury Protocol – 40 Years of Landscape Healing” during the Monday session.

Held at the Astoria Hotel & Event Center in Dickinson on February 25-26, the event will draw people from all over the upper Midwest. Registration is due by Feb. 15.

Click here for the agenda and registration information.  

Land Board Awards Township Road Grant

The ND Board of University & School Lands awarded three contingency impact grants this week for projects in Mountrail County and the City of Portal.

The Land Board awarded $408,488 to Mountrail County for repairs to 96th Avenue. The road runs between Debing Township and unorganized Ratlake Township, according to Charlie Sorenson, chairman of the Debing Township board. Sorenson said most of the road was built in 1983. Today it no longer serves residences, but is vital to accessing agricultural land and serves as a conduit for oil activity in the townships.  

“There are 87 oil wells, primarily owned by Oasis and Hess, along with a salt water disposal well and compressor station that use this road as the quickest and most direct route to Highway 1804,” he said. 

Increased industry activity in 2018 put additional stress on the road. Sorenson said increased truck traffic caused the road bed to lose its integrity, which led to several potentially serious accidents. He said it prompted the township to restrict traffic to only trucks below 80,000 pounds until the road is rebuilt. 

Sorenson said in 2018 the oil wells in Debing township paid nearly $24 million in gross production and extraction taxes, but only a small fraction comes back to the township to address road impacts. 

The Land Board also awarded a $539,089 grant to the City of Portal to build a fire station. Mayor Lisa Smith said the old station is in bad shape, with mold problems, cracking floors, roof problems, and is not adequate to meet the community’s needs. The Land Board also approved a $60,000 grant to the City of Stanley for civil warning sirens. 

Click here to the read the announcement for another round of contingency grants due April 30.

Roads Roundtable February 5 in Williston

A roundtable discussion between oil industry representatives and western North Dakota road and bridge superintendents is scheduled next Tuesday in Williston.

The event, similar to a first-of-its-kind roundtable held in Watford City last December, will begin at 1:00 p.m. Feb. 5 at the Williams Co. Highway Department, 5218 141st Ave NW, in Williston. The gathering is jointly organized by WDEA and the ND Local Technical Assistance Project. WDEA consultant Brent Bogar will serve as facilitator/moderator at the event.

Topics on the agenda include the use of brine water on roads for deicing and dust control; development of a footprint or guidelines for road closures in periods of inclement weather; county project plans for 2019; and the latest updates about LoadPass Permits, the oversize truck permitting system operated by WDEA for counties throughout North Dakota.

Write it Down!

WDEA Annual Meeting

Get this on your calendar! The Annual Meeting of the Western Dakota Energy Association will be held:

October 30 - 31, 2019

Grand Hotel

Minot, ND

Quick Connect

Factoid of the Week

Rugby was the cold spot in North Dakota on Wednesday at -49°F, not far from the state’s all-time record low of -60°F in Parshall on Feb. 15, 1936. The coldest temperature recorded on Earth was -128.6°F on July 31, 1983, in Antarctica. If it makes you feel any better, the temperature in outer space is near absolute zero, or -459.67°F.

Sources: Bismarck Tribune and  KXMB-TV

Upcoming Events

February 5 

Williams County: Annual Road Information & Frost Law Meeting 

Williston

February 5

WDEA/LTAP Roads Roundtable

Williston

February 9

38th Annual API Chili Cook-Off

Williston

February 12-13

KFYR Agri International

Bismarck

February 16

22nd Annual API Gumbo Cookoff

Dickinson

February 25-26

ND Reclamation Conference

Dickinson

March 5

ND Petroleum Council "Energy Day"

Capitol

March 14

North Dakota Cyber Security Conference

Fargo

March 27

NW North Dakota Semi-Annual Job Fair

Watford City

July 16-17

Bakken Conference & Expo

Bismarck