The Williams County Commission approved a policy for taking applications and dispersing funds for oil tax dollars received by the county during its meeting Tuesday morning.

The policy approved was based on a plan recently approved in McKenzie County for the distribution of oil and gas tax dollars brought in.

A new law by the Legislature, H.B. 1304, passed earlier this year allocates more money to oil and gas producing counties, cities and townships in western North Dakota.

County Treasurer Kari Evenson explained the new policy and how the tax allocations coming into Williams County, under the legislation, would be distributed.

"What it does is it takes some of the school district money and puts it into an Infrastructure Fund," said Evenson. Evenson explained where the funds, as of July 1, 2009, were to be divided between.

The funds come from what is known as the Gross Production Tax.

A portion of the money taken in by the county will be placed in the new Infrastructure Fund. Out of the remaining money, 45 percent will go to the county's General Fund, 35 percent will be for allocations to schools and townships and 20 percent to cities.

Evenson said the policy before the commission would lay out how the 35 percent for schools and townships could be dealt with.

"It would be on a grant-like basis," said Evenson.

Evenson said under the plan, applications can be submitted to the Williams County Auditor through Nov. 30, with allocations being approved during the December commission meeting.

"What isn't allocated by the end of the year goes to the Road and Bridge Fund," said Evenson.

Under the policy, eligible projects can include infrastructure construction or maintenance to offset oil and gas development and the repair or replacement of school district vehicles due to damage or necessity due to roads impacted by oil activity. Applications are not limited to these kinds of projects.

If allocations are approved, the project would have to be completed within one year or the money would become available again the next year with the other monies.

After some brief discussion, the commission voted to approve the new policy unanimously by a four votes to none margin.