Nick Smith | Williston Herald This rig, located along 12th Avenue East near the U.S. Corps of Engineers office, is one of the many rigs that ultimately leads to oil and gas tax allocations that give a boost to Williams County and other oil-producing counties.
Williams County Treasurer Kari Evenson said the previous policy for allocations was replaced when the Legislature created a more expanded system during its last session. The new law, H.B. 1304, allocates more money to oil and gas producing counties, cities, schools and townships in western North Dakota.
"The Legislature removed the caps on how much counties could receive, which was a big objective for the new formula," said Evenson.
Evenson said the new policy has a kind of tiered system now built into it, where a percentage of money allocated to schools goes to a new Infrastructure Fund. The percentage of school allocations put into the infrastructure fund increases with each million dollars in funds coming to the county to be dispersed.
"The main difference is when you get to the second million, part of the money starts going into the new Infrastructure Fund," said Evenson. Under the previous policy, the money coming from what is known as the Gross Production Tax would come to the counties and be distributed between the county, cities, and schools.
The funding would be split between the three, with 45 percent going to the county's General Fund, 35 percent going to schools and 20 percent going to cities.
With the new formula, the 35 percent is now for schools and townships. Once the county reaches its second million, a percentage is moved to the new Infrastructure Fund.
When the second million is reached, 25 percent of the funds going to schools and townships will go to the Infrastructure Fund. When the third million is reached, one-third of the school and township share goes to the new fund; with the fourth million, the fund gets half of the funds.
Once the county reaches $5.35 million or more in allocations, all of it goes to the infrastructure fund.
The money that goes into the infrastructure fund is available for the schools and townships to apply to the County Commission for funds for infrastructure improvement projects.
A policy for taking applications and dispersing these funds to schools and townships was passed by the commission on Tuesday by a unanimous vote.
The policy was based on a similar plan which was recently approved in McKenzie County.
"It's up to the County Commission to approve applications from the schools. Whatever funds aren't used by the end of the year go into the County Road and Bridge Fund," said Evenson.
Schools can apply for projects, but they must either be completed in the current year or be planned for the coming year. The wording of the allocation policy states:
"Eligible projects include, but are not limited to, infrastructure construction or maintenance to offset oil and gas development impact in townships and repair or replacement of school district vehicles necessitated by damage or deterioration attributable to travel on oil and gas development impacted roads."
Evenson said the language for this is quite straightforward.
"It basically refers to school buses and roads," said Evenson.
Other projects are possible, but Evenson didn't know what other specific things schools or townships would apply for funds for.
Evenson said policy under the new legislation is more complex, and it also takes money from school districts to achieve this.
"I would assume they might be being reimbursed on this somehow, but I'm not really sure. I would think the Legislature accounted for that somehow," said Evenson.
The new policy is tougher to understand and will require more work for her to make sure the money is coming to and be dispersed to the proper funds and entities.
Evenson said the county treasurers and auditors in the oil-producing counties in the region have generally been in touch on oil-related issues and have been getting up to speed on the new policy.
"It'll take some time to get used to, but overall I think it seems to be a positive thing and should work out."
The new legislation went into effect on July 1.
Funds from the new Infrastructure Fund are available to schools and townships wishing to apply for funds for projects.
Applications must be submitted to County Auditor Beth Innis by the end of business Nov. 30.
Allocations are to be made at the December County Commission meeting.
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