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ND Legislature approves $1.1B oil-impact measure

James Macpherson, Associated Press

BISMARCK, N.D. (AP) -- Lawmakers agreed Thursday to provide more than $1.1 billion in state aid to help western North Dakota communities deal with exploding energy development in the region.

North Dakota's Senate approved it Thursday, one day after an endorsement by the House.

The measure provides funding from oil and gas production taxes for such things as road repair and other infrastructure improvements, law enforcement, emergency medical services, dust control, schools, hospitals and nursing homes.

Lawmakers called the more than $1 billion measure landmark legislation but some said the record appropriation still may not be enough to meet the swelling demands in the booming oil patch.

"Most things we want are in here," Sen. John Warner said of the bill. But the Democrat from Ryder, located in North Dakota's oil-producing region, said challenges in the region will continue.

Officials from oil-producing communities have pleaded with lawmakers this session for a bigger cut of oil revenues to keep pace with the state's unprecedented oil boom.

The funding comes from oil and gas production taxes and is nearly triple the amount oil-impacted communities received in the current two-year budget that ends June 30. The appropriation also dwarfs the $739 million recommended by Gov. Jack Dalrymple in his executive budget.

North Dakota trails only Texas in oil production. North Dakota's output has risen from about 261,000 barrels daily in 2010 to more than 778,000 barrels daily at present. About 8,500 wells pumping oil in western North Dakota, compared to 4,655 in 2010. North Dakota's Department of Mineral Resources expects the total to rise past 20,000 in the next 10 to 20 years.

North Dakota is slated to collect more than $3.8 billion in oil taxes for the current two-year budget cycle. The state is forecast to collect another $5.2 billion in oil taxes in the upcoming budget cycle.

Sen. John Andrist, a Republican from Crosby in western North Dakota, thanked fellow lawmakers for funneling more state support to the region but said the demand is greater. He said only 16.5 percent of the oil production tax is returned to oil-producing counties, or less than half the amount the state collects from coal taxes and returns to coal-producing counties in the state.

"I thank you for being sensitive to the needs out west where this boom has brought a mixed blessing," he said. "There are only a few people in a boom that do really well. There are all kinds of people who get left behind."