§ 57-51-15 — Gross production tax allocation - Report

North Dakota § 57-51-15

• Jurisdiction: North Dakota
• Title 57: Taxation
• Ch. 57-51: Oil and Gas Gross Production Tax

Text

The gross production tax must be allocated monthly as follows:
1. The tax revenue collected under this chapter equal to one percent of the gross value
at the well of the oil and one-fifth of the tax on gas must be deposited with the state
treasurer. The state treasurer shall allocate the funding in the following order:
a. Eight percent of the amount available under this subsection to the North Dakota
outdoor heritage fund, but not in an amount exceeding twenty million dollars per
fiscal year.
b. Four percent of the amount available under this subsection to the abandoned oil
and gas well plugging and site reclamation fund, but not in an amount exceeding
seven million five hundred thousand dollars per fiscal year and not in an amount
that would bring the balance in the fund to more than one hundred million dollars
through June 30, 2027, or to more than fifty million dollars after June 30, 2027.
c. Any remaining revenues pursuant to subsection 3.
d. For purposes of this subsection, "fiscal year" means the period beginning
September first and ending August thirty-first of the following calendar year.
2. The tax revenue collected under this chapter equal to four percent of the gross value
at the well of the oil and four-fifths of the tax on gas must be deposited with the state
treasurer. The state treasurer shall allocate the funding in the following order:
a. The first five million dollars of collections received from a county each fiscal year
is allocated to the county.
b. The remaining revenue collections received from a county each fiscal year are
allocated thirty percent to the county and seventy percent as follows:
(1) Monthly amounts to the hub city funding pool to provide fifteen million four
hundred thousand dollars per fiscal year for the allocations under
paragraph 2 of subdivision a of subsection 5.
(2) Monthly amounts to the hub city school district funding pool to provide
two million one hundred thousand dollars per fiscal year for the allocations
under paragraph 3 of subdivision a of subsection 5.
(3) Monthly amounts to the supplemental school district funding pool to provide
seventy percent of the total amount needed for the allocations under
paragraph 4 of subdivision a of subsection 5.

(4) Monthly amounts to the hub city debt relief funding pool to provide seven
million three hundred fifty thousand dollars per fiscal year for the allocations
under paragraph 2 of subdivision a of subsection 5.
(5) Any remaining revenue collections to the state for the state's allocations
pursuant to subsection 3.
c. For purposes of this subsection, "fiscal year" means the period beginning
September first and ending August thirty-first of the following calendar year.
3. After the allocations under subsections 1 and 2, the amount remaining is allocated first
to provide for deposit of thirty percent of all revenue collected under this chapter in the
legacy fund as provided in section 26 of article X of the Constitution of North Dakota
and the remainder must be allocated to the state general fund. If the amount available
for a monthly allocation under this subsection is insufficient to deposit thirty percent of
all revenue collected under this chapter in the legacy fund, the state treasurer shall
transfer the amount of the shortfall from the state general fund share of oil extraction
tax collections and deposit that amount in the legacy fund.
4. For a county that received less than five million dollars of allocations under
subsection 2 in the most recently completed even-numbered fiscal year before the
start of the biennium, revenues allocated to that county must be distributed by the
state treasurer as follows:
a. Forty-five percent must be distributed to the county treasurer and credited to the
county general fund.
b. Thirty-five percent must be distributed proportionally to school districts within the
county on the average daily attendance distribution basis for kindergarten through
grade twelve students residing within the county, as certified to the state treasurer
by the county superintendent of schools. However, a hub city school district must
be omitted from distributions under this subdivision.
c. Twenty percent must be distributed to the incorporated cities of the county. A hub
city must be omitted from distributions under this subdivision. Distributions among
cities under this subsection must be proportional based upon the population of
each incorporated city according to the last official decennial federal census. In
determining the population of any city in which total employment increases by
more than two hundred percent seasonally due to tourism, the population of that
city for purposes of this subdivision must be increased by eight hundred percent.
d. For purposes of this subsection, "fiscal year" means the period beginning
September first and ending August thirty-first of the following calendar year.
5. For a county that received five million dollars or more of allocations under subsection 2
in the most recently completed even-numbered fiscal year before the start of the
biennium, revenues allocated to that county must be distributed by the state treasurer
as follows:
a. A portion of the revenues from each county must be distributed to a hub city
funding pool, a hub city school district funding pool, a supplemental school district
funding pool, and a hub city debt relief funding pool as follows:
(1) The amount distributed from each county to the funding pools under this
subdivision must be proportional to each county's monthly oil and gas gross
production tax revenue collections relative to the combined total monthly oil
and gas gross production tax revenue collections from all the counties that
receive allocations under this subsection.
(2) The state treasurer shall distribute, to the hub city funding pool, the monthly
amount needed from each county to provide six million six hundred
thousand dollars per fiscal year for the allocations under this paragraph.
(a) The state treasurer shall allocate monthly amounts from the hub city
funding pool to provide a combined total of twenty-two million dollars
per fiscal year to all the hub cities, which includes the fifteen million
four hundred thousand dollars under paragraph 1 of subdivision b of
subsection 2 and the six million six hundred thousand dollars under
this paragraph. The monthly allocation to each hub city must be

proportional to each hub city's impact percentage score, including
fractional percentage points rounded to the nearest tenth of a percent,
relative to the combined total of all the hub cities' impact percentage
scores.
(b) The state treasurer shall calculate the impact percentage score for
each hub city by summing the following:
[1] The percentage of mining, quarrying, and oil and gas extraction
employment relative to the total employment of all industries in
the county in which the hub city is located, based on the most
recent annual data for all ownership types compiled by
job service North Dakota in the quarterly census of employment
and wages, multiplied by forty-five hundredths;
[2] The average of the percentage of mining, quarrying, and oil and
gas extraction employment relative to the total employment of all
industries in each county for all the counties in the human service
region in which the hub city is located, based on the most recent
annual data for all ownership types compiled by job service North
Dakota in the quarterly census of employment and wages,
multiplied by fifteen hundredths;
[3] The percentage of establishments engaged in mining, quarrying,
and oil and gas extraction relative to the total establishments of
all industries in the county in which the hub city is located, based
on the most recent annual data for all ownership types complied
by job service North Dakota in the quarterly census of
employment and wages, multiplied by one-tenth;
[4] The percentage of oil production in the human service region in
which the hub city is located relative to the total oil production in
all the human service regions with hub cities, based on the most
recently available calendar year data compiled by the industrial
commission in a report on the historical barrels of oil produced by
county, multiplied by one-tenth;
[5] The percentage change in population from five years prior for the
hub city, based on the most recent actual or estimated census
data published by the United States census bureau, multiplied by
one-tenth; and
[6] The percentage change in population from five years prior for the
county in which the hub city is located, based on the most recent
actual or estimated census data published by the United States
census bureau, multiplied by one-tenth.
(c) For purposes of this paragraph, "human service region" means the
areas designated by the governor's executive order 1978-12 dated
October 5, 1978.
(3) The state treasurer shall distribute, to the hub city school district funding
pool, the monthly amount needed from each county to provide nine hundred
thousand dollars per fiscal year for the allocations under this paragraph.
(a) The state treasurer shall allocate monthly amounts from the hub city
school district funding pool to provide a combined total of three million
dollars per fiscal year to all the hub city school districts, which includes
the two million one hundred thousand dollars under paragraph 2 of
subdivision b of subsection 2 and the nine hundred thousand dollars
under this paragraph. The monthly allocation to each hub city school
districts must be proportional to each hub city school district's impact
percentage score, including fractional percentage points rounded to
the nearest tenth of a percent, relative to the combined total of all the
hub cities' impact percentage scores.

(b) For the purpose of determining the impact percentage score for each
hub city school district, the state treasurer shall use the same impact
percentage score as the corresponding score calculated for each hub
city in paragraph 2.
(4) The state treasurer shall distribute, to the supplemental school district
funding pool, the monthly amount needed from each county to provide for
thirty percent of the total allocations under this paragraph. To each county
that received more than five million dollars but less than thirty million dollars
of total allocations under subsection 2 in the most recently completed
even-numbered fiscal year before the start of the biennium, the state
treasurer shall allocate a monthly amount from the supplemental school
district funding pool which will be added to the distributions to school
districts under paragraph 2 of subdivision b, as follows:
(a) To each county that received more than five million dollars but not
exceeding ten million dollars of total allocations under subsection 2 in
the most recently completed even-numbered fiscal year before the
start of the biennium, the state treasurer shall allocate a monthly
amount that will provide a total allocation of one million five hundred
thousand dollars per fiscal year. The allocation must be distributed to
school districts within the county pursuant to paragraph 2 of
subdivision b.
(b) To each county that received more than ten million dollars but not
exceeding fifteen million dollars of total allocations under subsection 2
in the most recently completed even-numbered fiscal year before the
start of the biennium, the state treasurer shall allocate a monthly
amount that will provide a total allocation of one million two hundred
fifty thousand dollars per fiscal year. The allocation must be distributed
to school districts within the county pursuant to paragraph 2 of
subdivision b.
(c) To each county that received more than fifteen million dollars but not
exceeding twenty million dollars of total allocations under subsection 2
in the most recently completed even-numbered fiscal year before the
start of the biennium, the state treasurer shall allocate a monthly
amount that will provide a total allocation of one million dollars per
fiscal year. The allocation must be distributed to school districts within
the county pursuant to paragraph 2 of subdivision b.
(d) To each county that received more than twenty million dollars but not
exceeding twenty-five million dollars of total allocations under
subsection 2 in the most recently completed even-numbered fiscal
year before the start of the biennium, the state treasurer shall allocate
a monthly amount that will provide a total allocation of seven hundred
fifty thousand dollars per fiscal year. The allocation must be distributed
to school districts within the county pursuant to paragraph 2 of
subdivision b.
(e) To each county that received more than twenty-five million dollars but
not exceeding thirty million dollars of total allocations under
subsection 2 in the most recently completed even-numbered fiscal
year before the start of the biennium, the state treasurer shall allocate
a monthly amount that will provide a total allocation of five hundred
thousand dollars per fiscal year. The allocation must be distributed to
school districts within the county pursuant to paragraph 2 of
subdivision b.
(5) The state treasurer shall distribute, to the hub city debt relief funding pool,
the monthly amount needed from each county to provide three million
one hundred fifty thousand dollars per fiscal year for the allocations under
this paragraph. At least once per interim, each hub city shall provide a report

to the budget section regarding the use of the funding received under this
section and information on the hub city's outstanding debt, including maturity
dates, interest rates, and annual repayment amounts.
(a) The state treasurer shall allocate monthly amounts from the hub city
debt relief funding pool to provide a combined total of ten million five
hundred thousand dollars per fiscal year to all the hub cities, which
includes the seven million three hundred fifty thousand dollars under
paragraph 4 of subdivision b of subsection 2 and the three million
one hundred fifty thousand dollars under this paragraph. The monthly
allocation to hub cities under this paragraph is:
[1] Seventy and thirteen hundredths percent to Williston;
[2] Nineteen and ninety-four hundredths to Dickinson; and
[3] Nine and ninety-three hundredths to Minot.
(b) A hub city shall use the funding allocated under this paragraph for
debt repayments related to debt incurred between July 1, 2012, and
December 31, 2025, to address impacts from oil and gas
development.
b. After the distributions in subdivision a, each county's remaining revenues must be
distributed as follows:
(1) Sixty percent must be distributed to the county treasurer and credited to the
county general fund.
(2) Five percent must be distributed proportionally to school districts within the
county on the average daily attendance distribution basis for kindergarten
through grade twelve students residing within the county, as certified to the
state treasurer by the county superintendent of schools. However, a hub city
school district must be omitted from distributions under this subdivision.
(3) Twenty percent must be distributed to the incorporated cities of the county. A
hub city must be omitted from distributions under this subdivision.
Distributions among cities under this subsection must be proportional based
upon the population of each incorporated city according to the last official
decennial federal census. In determining the population of any city in which
total employment increases by more than two hundred percent seasonally
due to tourism, the population of that city for purposes of this subdivision
must be increased by eight hundred percent.
(4) Four percent must be allocated among the organized and unorganized
townships of the county. The state treasurer shall allocate the funds
available under this subdivision among townships in proportion to each
township's road miles relative to the total township road miles in the county.
The amount allocated to unorganized townships under this subdivision must
be distributed to the county treasurer and credited to a special fund for
unorganized township roads, which the board of county commissioners shall
use for the maintenance and improvement of roads in unorganized
townships.
(5) Nine percent must be distributed among hub cities. The state treasurer shall
distribute the funds available under this subdivision in proportion to the
amounts the hub cities receive under paragraph 2 of subdivision a.
(6) Two percent must be distributed among hub city school districts. The state
treasurer shall distribute the funds available under this subdivision in
proportion to the amounts the hub city school districts receive under
paragraph 3 of subdivision a.
(7) For purposes of this subsection, "fiscal year" means the period beginning
September first and ending August thirty-first of the following calendar year.