Legislative UpdateLegislative Update. Surge Funding.

Legislative Update

Surge Funding

Surge Funding: Summary

State DOT $ 450,000,000 Non Oil Townships $ 16,000,000 Top 10 Oil Counties $ 240,000,000 Counties Outside Top 10 $ 112,000,000 Cities in Top 10 Counties $ 100,000,000 Boundary Cities $ 10,000,000 Hub Cities $ 172,000,000

$ 1,100,000,000

Surge Funding: Top 10 Oil CountiesCounty Amount Billings $ 12,066,656 Bottineau $ 15,417,768 Bowman $ 12,475,404 Burke $ 12,704,740 Divide $ 9,869,243 Dunn $ 25,768,304 McKenzie $ 47,968,642 Mountrail $ 37,960,549 Stark $ 21,641,039 Williams $ 44,127,656

$240,000,000

Surge Funding: Counties Outside Top 10

County   Amount County   Amount County   Amount

Adams $ 2,203,815 Kidder $ 2,572,174 Richland $ 2,539,180

Barnes $ 3,899,171 LaMoure $ 3,105,730 Rolette $ 1,755,642

Benson $ 3,373,924 Logan $ 1,724,921 Sargent $ 2,595,623

Burleigh $ 3,776,247 McHenry $ 3,186,873 Sheridan $ 1,756,307

Cass $ 6,272,476 McIntosh $ 1,697,523 Sioux $ 1,128,328

Cavalier $ 2,957,575 McLean $ 3,627,880 Slope $ 1,942,587

Dickey $ 2,735,403 Mercer $ 2,696,799 Steele $ 1,678,886

Eddy $ 1,063,270 Morton $ 4,028,489 Stutsman $ 4,286,154

Emmons $ 2,169,558 Nelson $ 2,285,888 Towner $ 1,568,485

Foster $ 1,461,167 Oliver $ 1,379,586 Traill $ 2,555,677

Golden Valley $ 1,946,309 Pembina $ 2,223,409 Walsh $ 3,729,747

Grand Forks $ 4,587,116 Pierce $ 1,529,415 Ward $ 5,177,382

Grant $ 1,964,920 ramsey $ 2,395,811 Wells $ 2,140,392

Griggs $ 1,817,190 Ransom $ 2,099,010

Hettinger $ 2,321,315 Renville $ 2,042,646 $112,000,000

Surge Funding: Cities in Top 10 CountiesCity Amount City Amount City Amount

Medora $ 714,286 Portal $

821,168 Stanley $

6,636,121

Bottineau $ 3,350,000 Powers Lake $

1,824,818 White Earth $

364,122

Lansford $ 371,212 Crosby $

8,342,329 Belfield $

3,399,674

Maxbass $ 127,273 Noonan $

943,385 Gladstone $

1,015,653

Newberg $ 166,667 Dodge $

1,060,458 Richardton $

2,248,035

Souris $ 87,879 Dunn Center $

1,779,620 South Heart $

1,279,127

Westhope $ 650,000 Halliday $

2,291,565 Taylor $

628,940

Willow City $ 246,970 Killdeer $

9,154,071 Alamo $

523,544

Bowman $ 6,734,694 Alexander $

2,356,298 Epping $

918,499

Rhame $ 689,796 Arnegard $

1,215,131 Grenora $

2,241,136

Scranton $ 1,146,939 New Town $

8,761,682 Ray $

5,437,511

Bowbells $ 2,189,781 Palermo $

336,813 Tioga $

11,297,532

Columbus $ 866,788 Parshall $

4,110,025 Wildrose $

1,010,348

Flaxton $ 430,136 Plaza $

778,310

Lignite $ 1,010,167 Ross $

441,498

$100,000,000

Surge Funding: Boundary CitiesCity AmountHettinger $ 550,788.45Reeder $ 72,779.55Beach $ 457,792.35Golva $ 27,404.65Sentinal Butte $ 25,158.36Mott $ 323,913.92New England $ 269,553.89Regent $ 71,881.04Coleharbor $ 35,491.26Garrison $ 652,769.67Max $ 150,051.66Riverdale $ 92,097.58Underwood $ 349,521.54Washburn $ 559,773.57

Beulah $1,402,129.48

Golden Valley $ 81,764.68

Hazen $1,083,157.37

Pick City $ 55,258.55Stanton $ 164,427.87

City   Amount

Zap $106,473.79

Glen Ullin $362,549.98

Hebron $335,594.59

Glenburn $170,717.46

Mohall $351,767.82

Sherwood $108,720.07

Marmarth $61,098.88

Berthold $203,962.44

Burlington $476,211.87

Carpio $70,533.27Des Lacs $91,648.32Donnybrook $26,506.13Douglas $28,752.41

Kenmare $492,385.10

Makoti $69,185.50Ryder $38,186.80

Sawyer $160,384.56

Surrey $419,605.55

$ 10,000,000

Surge Funding: Hub Cities

City Amount

Williston $ 64,000,000

Dickinson $ 44,000,000

Minot $ 32,000,000

Watford City $ 32,000,000

$ 172,000,000

Funding Formula

Oil and Gas Tax Overview

Extraction Tax

- 1980 Initiated measure creating the 6.5% Oil Extraction

Tax

- Formula for distributions changes throughout the years

- All funds are for various state funds

- Foundation Aid Stabilization Fund

- Common Schools Trust Fund

- Resources Trust Fund

Gross Production Tax (GPT)

- Imposed in “lieu” of property tax on oil and gas

producing properties

- 5% rate currently

- Formula changed throughout the years

Extraction Tax

6.5%

Gross Production Tax5 %Legacy Fund 30% of All Collections

11.5% Total O&G Tax

Tribal Share 50% of All Tribal Production

Oil & Gas Research Fund $10 M

Constitutional & Statutory Distributions- Foundation Aid Stabilization

- Common Schools Trust Fund- Resources Trust Fund- Energy Conservation Fund- Renewable Energy Fund

Oil & Gas Communities Distributions

- Counties- Cities - Townships- Schools- Hub Cities- Hub City Schools

State Distributions

- General Fund- Property Tax Relief- General Fund- Strategic Investment Fund (SIF)- State Disaster Relief Fund

Remaining Funds

- Legacy Fund- Strategic Investment Fund (SIF)

1/5 4/5

Impact Grant Fund

Hub Cities Distributions- Hub Cities ($375k/1%

O&G)- Hub City Schools- ($125k/1% O&G)

O&G Communities

$10M

75% 25%

Statutory Distributions

- O & G Stabilization Fund

- Outdoor Heritage Fund- Abandoned Well & Site

Reclamation fund

Extraction Tax Distribution

Gross Production Tax (GPT) Distribution

Total Revenue From O&G

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

-

200

400

600

800

1,000

1,200

$ 0

$ 500,000

$ 1,000,000

$ 1,500,000

$ 2,000,000

$ 2,500,000

$ 3,000,000

$ 3,500,000

66095602

391823087

967833393

1660802631

2169890000

3255987696

Daily Oil Production (Thousands) Total Revenue (Millions)

Millions

O&G Tax Distributions % to O&G Counties

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014$ 0

$ 500

$ 1,000

$ 1,500

$ 2,000

$ 2,500

$ 3,000

$ 3,500

11% 17% 16% 11% 12% 12% 17% 12% 9% 14%

Total Distibutions Total Revenue

Millions

• Change Impacts only the Gross Production Tax• GPT Equals 43% of the Oil and Gas Tax

• Change Impacts 4/5 (80%) of the GPT• 35% of Oil and Gas Tax is effected by the

formula

• 60% Equals approximately 25% of all Oil and Gas Tax

Formula Change - What Does it Mean?

• Change the GPT formula split from 75/25 to 40/60

• Provide for GPT dollars for school construction to not be deducted from the Foundation Aid funding formula

• Increase the Hub City Funding from $375,000 to $500,000 and Hub City School District Funding from $125,000 to $150,000 per percentage point of employment

• Change employment category from mining to Job Service category of Oil and Gas Related Employment

• Create $120 million Grant Fund for Non Oil Counties

• $139 million for Impact Grant Fund

Formula Change – House Bill 1176

Extraction Tax

6.5%

Gross Production Tax5 %Legacy Fund 30% of All Collections

11.5% Total O&G Tax

Tribal Share 50% of All Tribal Production

Oil & Gas Research Fund $10 M

Constitutional & Statutory Distributions- Foundation Aid Stabilization

- Common Schools Trust Fund- Resources Trust Fund- Energy Conservation Fund- Renewable Energy Fund

Oil & Gas Communities Distributions

- Counties- Cities - Townships- Schools- Hub Cities- Hub City Schools

State Distributions

- General Fund- Property Tax Relief- General Fund- Strategic Investment Fund (SIF)- State Disaster Relief Fund

Remaining Funds

- Legacy Fund- Strategic Investment Fund (SIF)

1/5 4/5

Impact Grant Fund

Hub Cities Distributions- Hub Cities ($375k/1%

O&G)- Hub City Schools- ($125k/1% O&G)

O&G Communities

$10M

75% 25%

Statutory Distributions

- O & G Stabilization Fund

- Outdoor Heritage Fund- Abandoned Well & Site

Reclamation fund

Extraction Tax Distribution

Gross Production Tax (GPT) Distribution

40% 60%

O&G Tax Distributions % to O&G Counties

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014$ 0

$ 500

$ 1,000

$ 1,500

$ 2,000

$ 2,500

$ 3,000

$ 3,500

11% 17% 16% 11% 12% 12% 17% 12% 9% 14% 26%

Total Distibutions Total Revenue

Millions

• Change the GPT formula split from 75/25 to 70/30

• Removed the school construction funding section

• Change employment category from mining to Job Service category of Oil and Gas Related Employment

• Floor of 7.5% for city to be considered a Hub City

• Changed distribution of funds to local political subs

• Create $112 million Grant Fund for Non Oil Counties

• $140 million for Impact Grant Fund

Formula Change – House Bill 1176 Amended

Extraction Tax

6.5%

Gross Production Tax5 %Legacy Fund 30% of All Collections

11.5% Total O&G Tax

Tribal Share 50% of All Tribal Production

Oil & Gas Research Fund $10 M

Constitutional & Statutory Distributions- Foundation Aid Stabilization

- Common Schools Trust Fund- Resources Trust Fund- Energy Conservation Fund- Renewable Energy Fund

Oil & Gas Communities Distributions

- Counties- Cities - Townships- Schools- Hub Cities- Hub City Schools

State Distributions

- General Fund- Property Tax Relief- General Fund- Strategic Investment Fund (SIF)- State Disaster Relief Fund

Remaining Funds

- Legacy Fund- Strategic Investment Fund (SIF)

1/5 4/5

Impact Grant Fund

Hub Cities Distributions- Hub Cities ($375k/1%

O&G)- Hub City Schools- ($125k/1% O&G)

O&G Communities

$10M

75% 25%

Statutory Distributions

- O & G Stabilization Fund

- Outdoor Heritage Fund- Abandoned Well & Site

Reclamation fund

Extraction Tax Distribution

Gross Production Tax (GPT) Distribution

70% 30%

O&G Tax Distributions % to O&G Counties

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014$ 0

$ 500

$ 1,000

$ 1,500

$ 2,000

$ 2,500

$ 3,000

$ 3,500

11% 17% 16% 11% 12% 12% 17% 12% 9% 14% 15%

Total Distibutions Total Revenue

Millions

Strategy

Action Items - What is Next?

House Bill 1176

Hearing in front of Senate Appropriations TBD

Will be scheduled after March 18

Western Legislators and the NDAOGPC will work on amendments to the bill to submit to committee

Action Items - What Can I Do?

• Talk to Legislators about the importance of proper funding for Western North Dakota

• Provide letters of support for committee

hearing

• Be present at hearing to show support

• Be supportive of community leaders

• Work with NDPC, NDAOPGC, GNDC, NDACo, League of Cities and others to keep the message strong

?

Contact Information

Brent BogarJadestone Consulting

Research and Communications Consultant to NDAOGPC

[email protected]

701-390-9694