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County Infrastructure Fund intended to minimize impact from oil activity

Posted 11/25/09 (Wed)

By Tina Foreman
Farmer Staff Writer

Changes to state laws regarding oil and gas production tax have the potential to do great things for McKenzie County. House Bill 1304 changed the tax distribution formula allowing more income for McKenzie County and adding a new Infrastructure Fund which will benefit townships and schools.
“If oil production and prices stay at the current level or go up, House Bill 1304 will have a positive affect on McKenzie County,” says Linda Svihovec, McKenzie County treasurer. “Because the tax is based on price and production, we can only estimate potential benefits based on current numbers.  Using current price and production numbers McKenzie County could potentially realize up to an additional $2 million under the new formula in the current 12-month state fiscal period.”
The additional $2 million would be shared between the County General Fund, schools, cities and the new Infrastructure Fund.
“Beginning with the second million dollars of oil and gas production tax revenue for the county, a portion will be set aside in the Infrastructure Fund,” comments Svihovec. “The Infrastructure Funds are accessible by townships for road maintenance and schools in the county for buses through an application process.”
Infrastructure Fund applications may be for projects completed in the current year or planned for the coming year.  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.
Applications for Infrastructure funds are due in the McKenzie County Auditor’s office by November 20 each year and will be reviewed at the December commissioner meeting.  According to Svihovec, an estimated $90,000 will be available for application in November 2009 and she is expecting around $900,000 available for 2010.
“The dollar amounts vary so much for 2009 and 2010 because the tax is distributed based on the state’s fiscal year, July 1 through June 30,” states Svihovec. “The first distribution for the current state fiscal year is based on July production and received by the counties and cities in September.  So, the County will receive only four months of distribution tax in 2009 and a full 12 months of tax in 2010.”
Although the fund is much smaller than it should be on an average year, McKenzie County Public School District No. 1 is taking advantage of the funds available. The district has submitted an application for the 2009 Infrastructure Fund asking for $75,000 to help fund the purchase of a new school bus.
“The lifespan of our busses has been shortened due to rougher roads,” says Steve Holen, McKenzie County School District No. 1 superintendent. “We’re purchasing this bus to get an 11-year-old bus off the route. Without the Infrastructure Fund we wouldn’t have been able to do that right now.”
The Board of Commissioners will prioritize applications on the basis of oil and gas development impact and fund the most urgent as funds are available.
For more information on the Infrastructure Fund including applications, go to www.4eyes.net under McKenzie County Auditor and county finances or contact the Auditor’s Office at 444-3616.