Panel seeking ideas to spend oil tax money likely to remain

February 16, 2021 GMT

BISMARCK, N.D. (AP) — Politicians haven’t been short on ideas for spending earnings from North Dakota’s voter-approved oil tax savings account — from attempting to fund pet projects to using it to balance the state budget or cut taxes.

The largely disordered approach at targeting the state’s Legacy Fund in recent years has made some lawmakers fearful that without a good plan moving forward, voters might attempt to drain the oil bounty for themselves through a constitutional amendment.

That concern led to the establishment of a legislative panel two years ago to study potential uses of earnings from the fund that currently holds about $8 billion and is expected to earn about $500 million in the next two-year budget cycle.


The Legislature is set to continue the Legacy Fund Earnings Committee, with a unanimous endorsement already by the House and very likely the same action by the Senate, where it got a “do-pass” recommendation by a chamber committee on Wednesday.

The 11-member committee includes Senate and House majority and minority leaders. The committee held several meetings around the state but has not yet developed a concrete plan for Legacy Fund earnings use, said Beulah Republican Sen. Jessica Bell, a member who heads the Senate Finance and Taxation Committee.

“You name it, we heard it,” she said. Ideas including new schools and food pantries and donating to charity.

In each city where a hearing was held, residents wanted the money spent “on their pet projects,” Bells said.

Voters in 2010 endorsed a constitutional amendment that requires setting aside 30% of state tax revenues on oil and natural gas production. Earnings from the fund are now put into the general fund, which is spent on an assortment of programs and projects.

Republican majority leaders said the goal of the Legacy Fund Earnings Committee is to focus on specific goals for the fund, instead of targeting it in a shotgun approach.

“It will help us guide and shepherd this whole thing,” Senate Majority Leader Rich Wardner said.

The biggest proposed use of the earnings this session is to pay for bonds that would be used mainly on infrastructure projects. That proposal was not the result of the work by the Legacy Fund committee, said Wardner, who initially pitched the $1.1 billion proposal that has since been whittled to $680 million and still needs approval from both chambers of the Legislature.

Only a few lawmakers over the years have advocated not touching the earnings, but those ideas have been soundly thumped in Legislature.


One failed bill sought to require a two-thirds vote of the House and Senate to spend earnings, the same standard used for spending any of the Legacy Fund’s principal.

In 2015, then-Gov. Jack Dalrymple, a Republican, vetoed a bill that would have barred a governor from budgeting money from the fund. It also would have required the fund’s earnings to be invested back into the fund’s principal.

Dalrymple said at the time that doing so “would clearly contradict the will of voters.”