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More Than $885 Million Yet To Be Distributed To Combat Oil Impacts During The 2011-2013 Biennium

BISMARCK, N.D. – Governor Jack Dalrymple today said the state is fully engaged in addressing the impacts created by rapid oil and gas development in western North Dakota.  The state has committed $1.2 billion to help meet the region’s needs.

A great majority of the funding, $885.3 million, remains to be distributed for:

  • Rebuilding and repairing county, township and state roadways
  • Extending city streets and utilities for residential growth
  • Addressing growing student enrollments
  • Expanding and upgrading municipal wastewater treatment systems
  • Developing water supply systems
  • Enhancing law enforcement, other emergency services and regulatory oversight

“The remarkable growth in western North Dakota’s oil and gas industry has created great benefits and opportunities for our state, but this growth brings its own challenges,” Dalrymple said.  Our progress is not without hardships, but we are fully committed to meeting the challenges of rapid economic growth.”

In the coming weeks, Dalrymple will again take a road tour through oil country and will visit with city and county leaders for updated briefings on conditions in the state’s oil-producing counties.

Additionally, state officials will participate in a series of community meetings throughout the oil and gas counties mostly to hear from area residents, but also to provide an update on the state’s progress in combating adverse oil impacts. State officials who will participate in the community meetings include Transportation Director Francis Ziegler, Department of Commerce Director Alan Anderson, State Engineer Todd Sando,

Lance Gaebe, director of the State Land Department and its Energy Impact Office and Mike Anderson, director of the state Housing Finance Agency. The Department of Commerce will provide more information about the community meetings when more details are available.

The state has dedicated $1.2 billion to address oil-impacts during the 2011-2013 biennium.  Current infrastructure funding for oil-producing counties represents a 186 percent increase over the 2009-11 biennium and a 281 percent increase over the 2007-09 biennium.

In the first four months of the current biennium, about $312 million flowed into North Dakota’s oil-producing counties to fund roadway projects and other needs. Another $885 million remains to be distributed.  Dalrymple also is leading state efforts to facilitate greater development of housing and enhance public safety.

State assistance in North Dakota’s oil country includes oil tax revenues which are allocated monthly to counties and cities; grants from the Energy Impact Fund; funding for county, township and state road improvement projects; tax credits for the development of low-income housing and financial assistance to deliver water to western North Dakota.  

“Meeting our challenges in western North Dakota goes beyond providing funding,” Dalrymple said. “It requires innovative solutions and a strong commitment from the state, our counties and cities and private industry.”

During the special session Dalrymple proposed and the Legislature agreed to provide $15 million for the state Housing Fund to facilitate greater development of low-income housing.  The Legislature also followed Dalrymple’s recommendation to enhance the Energy Impact Fund by providing an additional $35 million. Dalrymple also has directed the Highway Patrol to station an additional 13 troopers in western North Dakota.

Additionally, Dalrymple has created the Western North Dakota Energy Development Information Exchange Council to address energy development issues in western North Dakota. The council includes a diverse group of people including state officials, western North Dakota residents and representatives of the energy industry.

The following charts list funding sources and the status of funding allocations to address western North Dakota oil impacts.

 

Expenditure Report

Following is a summary of funding sources and the status of funding appropriations and expenditures for western North Dakota.

 

Oil and Gas Tax Distribution to Counties and Cities

Total Available Funds

2011-13 Biennium

Distributions through

Oct. 31, 2011

Remaining

2011-13 Biennium

$ 247,200,000

$ 46,315,883

$ 200,884,117

Oil and gas taxes are distributed monthly to oil-producing counties and cities. The legislative forecast provides for $247.2 million to be distributed to counties and cities during the 2011-13 biennium. However, due to higher than anticipated oil prices and production levels, oil tax collections were about 30 percent higher than anticipated during the first four months of the biennium. Through Oct. 31, 2011, $46.3 million has been distributed to counties and cities, leaving $200.9 million left to be distributed, based on the legislative forecast. If receipts continue at the current pace, an additional $75 million could become available by the end of the biennium.

 

Energy Infrastructure and Impact Grants

Total Appropriated/Estimated

2011-13 Biennium

Awards through

Oct. 31, 2011

Remaining

2011-13 Biennium

$ 135,000,000

$ 56,810,291

$ 78,189,709

The State Land Board awards impact grants to counties, cities, school districts, and emergency service providers adversely impacted by oil development. The 2011 Legislature appropriated a total of $135 million for impact grants during the 2011-13 biennium. Of the $135 million, $100 million is available throughout the biennium and $30 million will be available contingent upon oil revenues exceeding the original forecast and would be available after April 1, 2012. Another $5 million is available for qualifying counties that experience impacts from new oil and gas development. In the first four months of the biennium the Land Board has awarded $56.8 million, which is available to political subdivisions as soon as qualifying projects are completed.

 

Regular ND Dept. of Transportation Road Program

Total Appropriated/Estimated

2011-13 Biennium

Expenditures through

Oct. 31, 2011

Remaining

2011-13 Biennium

$ 295,138,000

$ 119,737,487

$ 175,400,513

The state Department of Transportation’s (DOT) Transportation Improvement Program provides for $295.1 million in regular state, local and federal funds for oil producing counties in the 2011-13 biennium. Through Oct. 31, 2011, $119.7 million has been spent on regular road projects in oil-producing counties, with $175.4 million remaining to be expended throughout the biennium. These projects included the recently completed Super 2 design on Highway 85 between Watford City and Williston, which provides turning and passing lanes to improve safety and decrease traffic congestion. Plans are for Highway 85 to eventually become an undivided, four-lane highway between Watford City and Williston. The remaining federal aid will be used for projects on Highway 2 north of Williston, and ND Highways 5, 22, 23, 40, 50 and 1804. Additionally, a number of other roadways will get preventive maintenance treatments such as rut filling and seal coating of the surface.

 

Special State Highway Maintenance Program                

Total Available Funds

2011-13 Biennium

Expenditures through

Oct. 31, 2011

Remaining

2011-13 Biennium

$ 228,600,000

$ 59,842,000

$ 168,758,000

Following Dalrymple’s recommendation, the Legislature appropriated $228.6 million to rebuild and repair state highways impacted by increased traffic due to oil and gas development. Through Oct.31, 2011, $59.8 million has been spent, leaving $168.8 million yet to be invested in improvement projects including:

  • ND Highway 2 through Williston
  • ND Highway 22 from Dickinson north to Highway 23
  • ND Highway 23 east and west of New Town
  • ND Highway 8 north and south of Stanley
  • Other state highway projects in oil-producing counties.

A truck-reliever route is planned for Williston, with additional routes under consideration for Dickinson, Alexander, New Town and Watford City.  Construction of a temporary truck reliever route for Williston is expected to be completed by July 2012. The construction costs for all of the truck reliever routes will likely require a combination of regular DOT funds and special State Highway Maintenance funding.

 

County and Township Road Reconstruction Program  

Total Appropriated/Estimated

2011-13 Biennium

Expenditures through

Oct. 31, 2011

Remaining

2011-13 Biennium

$ 142,000,000

$ 19,527,214

$ 122,472,786

In addition to investments in state highways, $142.0 million in state general fund dollars were appropriated for reconstruction and repair projects on county and township roads within the state’s oil and gas counties. The funding was based on a study conducted by the Upper Great Plains Transportation Institute.  The study is a 20-year strategic plan that is regularly updated to prioritize road improvements in oil and gas counties. Through Oct. 31, 2011, $19.5 million has been expended by counties and townships, leaving $122.5 million yet to be used on projects for both paved and unpaved roads.

 

Western Area Water Supply Project           

Total Appropriated/Estimated

2011-13 Biennium

Expenditures through

Oct. 31, 2011

Remaining

2011-13 Biennium

$ 110,000,000

$ 5,853,708

$ 104,146,292

The state of North Dakota has committed $110 million to the Western Area Water Supply Authority. The water supply system will transfer water from the Missouri River to communities and industrial users in western North Dakota. Of that funding, $5.9 million has been expended through October 31, 2011, which leaves $104.1 million to advance the project throughout the rest of the biennium.

 

Southwest Water Pipeline Project

Total Appropriated/Estimated

2011-13 Biennium

Expenditures through

Oct. 31, 2011

Remaining

2011-13 Biennium

$ 22,369,199

$ 1,058,409

$ 21,310,790

The Southwest Pipeline project currently provides water to 28 communities, about 4,000 rural customers, and more than 30 businesses and industrial customers in southwestern North Dakota.  When completed, the project will also serve the cities of Hazen, Stanton, Center and Zap. Other users will include more than 1,000 additional rural users and industrial customers. The State Water Commission has allocated $22.4 million in funding for the 2011-13 biennium. Through Oct. 31, 2011, $1.1 million has been expended on the project, leaving $21.3 million to be used to advance the project through the rest of the 2011-13 biennium. Federal funds totaling $10 million also have been allocated to advance the project during the 2011-13 biennium.

 

Housing Incentive Fund

Total Appropriated/Estimated

2011-13 Biennium

Committed through

Oct. 31, 2011

Remaining

2011-13 Biennium

$ 13,500,000

$ 464,000

$ 13,036,000

Following Dalrymple’s recommendation, the 2011 Legislative Assembly expanded the Housing Incentive Fund (HIF) to provide for $15 million in tax credits for the development of low-income housing during the 2011-13 biennium. Ninety percent of the fund, or $13.5 million, is targeted to projects in the 17 oil producing counties and federal disaster areas. The Housing Finance Agency has issued two conditional commitments for allocations under the HIF program totaling $464,000.

 

Federal Low-Income Housing Tax Credits

Total Appropriated/

Estimated 2011-13

Committed through

Oct. 31, 2011

Remaining

2011-13 Biennium

$ 3,415,184

$ 2,364,842

$ 1,050,342

In 2011, The Housing Finance Agency committed $1,764,876 in federal low-income housing tax credits to projects in Dickinson, Minot and Williston for the construction or rehabilitation of 178 units serving low income or elderly citizens.  The agency has committed another $599,966 to develop a 30-unit housing project in Minot next year, leaving $1,050,342 in credits still available. In the past five years, $5,368,789 in tax credits have been allocated in oil-producing counties to facilitate the building of  394 housing units, which are limited to incomes of 60 percent of area median income or less.

 

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