North Dakota Legislative Council -- The Budget Section

NORTH DAKOTA LEGISLATIVE COUNCIL
Minutes of the
BUDGET SECTION
Wednesday, December 3, 2008
Senate Chamber, State Capitol
Bismarck, North Dakota
Senator Ray Holmberg, Chairman, called the
meeting to order at 11:15 a.m.
Members present: Senators Ray Holmberg, Bill
Bowman, Randel Christmann, Tom Fischer, Tony S.
Grindberg, Ralph L. Kilzer, Aaron Krauter, Karen K.
Krebsbach, Elroy N. Lindaas, Tim Mathern, Carolyn
Nelson, David O'Connell, Larry J. Robinson, Tom
Seymour, Bob Stenehjem, Rich Wardner, John
Warner; Representatives Larry Bellew, Merle
Boucher, Al Carlson, Jeff Delzer, Mark A. Dosch, Mary
Ekstrom, Eliot Glassheim, Kathy Hawken, Lee Kaldor,
Keith Kempenich, Matthew M. Klein, Gary Kreidt, Joe
Kroeber, Bob Martinson, Shirley Meyer, David
Monson, Jon Nelson, Kenton Onstad, Chet Pollert,
Bob Skarphol, Ken Svedjan, Blair Thoreson, Don
Vigesaa, Francis J. Wald, Alon C. Wieland, Clark
Williams
Members absent: Representatives Rick Berg,
James Kerzman, Ralph Metcalf
Others present: Jim W. Smith, Legislative
Council, Bismarck
See appendix for additional persons present.
STATUS OF THE STATE GENERAL FUND
Chairman Holmberg called on Ms. Pam Sharp,
Director, Office of Management and Budget, to report
on the status of the general fund. A copy of the
information presented is on file in the Legislative
Council office.
Ms. Sharp presented the following information on
the status of the state general fund for the 2007-09
biennium based on revenue collections through
October 2008:
Unobligated general fund
balance - July 1, 2007
$295,541,176
Add
General fund collections
through October 2008
$1,764,459,951
Forecasted general fund
revenue for the remainder
of the 2007-09 biennium
(based on the December
2008 revised forecast)
917,438,844
Total estimated general fund
revenue for the 2007-09
biennium
$2,681,898,795
Total available $2,977,439,971
Less
2007-09 biennium general
fund ongoing
appropriations
($2,317,447,307)
2007-09 biennium general
fund one-time
appropriations
(139,526,649)
Contingent appropriation
(Section 50 of Senate Bill
No. 2200)
(5,000,000)
Recommended
supplemental
appropriations
(22,532,907)1
Total appropriations ($2,484,506,863)
Estimated transfer to the
budget stabilization fund1
($111,092,167)2
Add
Estimated unspent
authority
10,000,000
Estimated general fund
balance - June 30, 2009
$391,840,941
1Recommended supplemental (deficiency) appropriations include:
Office of Management and Budget $5,000,000
Attorney General 99,000
University of North Dakota 1,310,955
North Dakota State University 527,842
Veterans Home 12,036,404
Adjutant General 3,422,553
Main Research Center 100,499
Central Grasslands Research Center 13,560
North Central Research Center 22,094
Total recommended supplemental
appropriations
$22,532,907
2The estimated transfer is based on the required balance in the
budget stabilization fund as determined by total appropriations in
the Governor's recommended 2009-11 budget.
Ms. Sharp said revenues for the biennium through
October 2008 exceed the legislative forecast by
$296.3 million or 20 percent. She said because the
$71 million statutory cap for the 2007-09 biennium has
been reached, no additional oil tax collections will be
deposited in the general fund during the 2007-09
biennium, and through October 2008 oil tax
collections totaling $343.6 million have been
transferred, or are available for transfer, to the
permanent oil tax trust fund.
Ms. Sharp presented the following information on
the status of the permanent oil tax trust fund for the
2007-09 biennium:
Budget Section 2 December 3, 2008
Beginning permanent oil tax trust fund
balance - July 1, 2007
$143,270,662
Add
Revenue collections through October 2008 343,619,952
Forecasted revenues for the remainder of
the 2007-09 biennium (based on December
2008 revised forecast)
221,365,074
Total estimated permanent oil tax trust funds
available for the 2007-09 biennium
$708,255,688
Less expenditures and transfers 145,716,541
Estimated permanent oil tax trust fund
balance - June 30, 2009
$562,539,147
TOBACCO SETTLEMENT PROCEEDS
Ms. Sharp presented information on the status of
tobacco settlement proceeds received by North
Dakota. She said the state received its tobacco
settlement payment in April 2008. She said the total
settlement payments received to date are
$233.2 million and the next payment is anticipated to
be received in April 2009. A copy of the report is on
file in the Legislative Council office.
2009-11 EXECUTIVE BUDGET
REVENUE FORECAST
Ms. Sharp presented the executive budget
revenue forecast for the 2009-11 biennium; one-time
revenues, including beginning balance; and proposed
statutory changes affecting revenues. She said the
estimated June 30, 2009, general fund balance is
$391.8 million and 2009-11 general fund revenues are
estimated to total $2.8 billion, resulting in an estimated
$3.2 billion available for the 2009-11 biennium. She
said the recommended general fund appropriations for
the 2009-11 biennium total $3.1 billion, of which
$2.8 billion relates to ongoing appropriations and
$357 million to one-time appropriations. She said the
estimated June 30, 2011, general fund balance is
$65 million. She said the forecast is based on an
increase in the maximum amount of oil revenue that
can be deposited in the general fund from $71 million
to $110 million. She said for purposes of the forecast,
all transfers from the Bank of North Dakota, the Mill
and Elevator, the lands and minerals trust fund, and
gas tax are considered ongoing revenue. A copy of
the report is on file in the Legislative Council office.
Ms. Sharp said permanent oil tax trust fund
revenues for the 2009-11 biennium are estimated to
total $566 million based on oil prices that range from
$50 to $68 and production assumptions that range
from 185,000 barrels per day to 215,000 barrels per
day through fiscal year 2011. She said the revenues,
added to the estimated June 30, 2009, balance of
$563 million, would result in funds available in the
permanent oil tax trust fund of $1.129 billion. She
said a recommended continuing appropriation for
property tax relief of $300 million would result in an
estimated June 30, 2011, balance of $829 million in
the permanent oil tax trust fund.
Ms. Sharp said the Office of Management and
Budget will update the revenue forecast for
presentation to the 2009 Legislative Assembly on
February 9, 2009.
In response to a question from Senator Holmberg,
Ms. Sharp said estimated revenues are based on the
estimated price of North Dakota oil being discounted
by $10 per barrel for additional transportation costs
due to limited pipeline capacity. She said the
transportation discount has been applied for fiscal
years 2009 and 2010, but not fiscal year 2011.
Ms. Sharp presented information regarding
statutory changes affecting revenues that will be
proposed to the 2009 Legislative Assembly. She said
in addition to increasing the maximum amount of oil
revenue deposited in the general fund from
$71 million to $110 million, statutory changes include
a change in the allowable transfer from the budget
stabilization fund in the event of a revenue shortfall;
eliminating the $5 million transfer from the Mill and
Elevator to the general fund for the 2007-09 biennium;
an increase in energy impact grants from $6 million to
$20 million; a $1 million increase in the maximum
annual amount distributed to each oil and gas
producing county from the gross production tax; an
increase, from $3 million to $5 million, in the maximum
amount of oil and gas gross production tax and oil
extraction tax revenues deposited in the oil and gas
research fund; $300 million in property tax relief; and
a reduction in individual income tax. A copy of the
report is on file in the Legislative Council office.
APPROPRIATION BILL FORMAT FOR THE
2009 LEGISLATIVE SESSION
Ms. Sharp reviewed a sample of the appropriation
bill format for the 2009 legislative session. She
presented a three-column format that includes fulltime
equivalent (FTE) employee amounts. She said
the appropriation bill format will include a line item for
deferred maintenance and a section authorizing the
agency to transfer from the deferred maintenance line
item to the capital assets line item as necessary to
address extraordinary repair needs without
Emergency Commission approval. A copy of the
information presented is on file in the Legislative
Council office.
In response to a question from Representative
Svedjan, Ms. Sharp said the Office of Management
and Budget was not planning to identify one-time
funding in the appropriation bills. She said one-time
funding may be included in multiple line items of an
agency's budget.
Representative Svedjan suggested the Office of
Management and Budget exclude 2007-09 one-time
funding items from agencies' 2009-11 base funding
level and identify one-time items in a separate section
of the appropriation bill. Ms. Sharp said the Office of
Management and Budget may need additional time to
prepare the appropriation bills due to this request.
Budget Section 3 December 3, 2008
It was moved by Representative Svedjan,
seconded by Representative Skarphol, and carried
on a roll call vote that the Budget Section,
pursuant to North Dakota Century Code Section
54-44.1-07:
1. Request the Office of Management and
Budget to prepare the appropriation bills
for introduction to the 2009 Legislative
Assembly to reflect:
• The exclusion from the base level
funding column of any one-time
funding items approved by the 2007
Legislative Assembly; and
• The identification, using a two-column
format in a separate section of the bill,
of the one-time funding items approved
by the 2007 Legislative Assembly and
the one-time funding items
recommended in the 2009-11 executive
budget for each agency.
2. Allow the Office of Management and
Budget an extension of seven days,
until December 17, 2008, to submit
appropriation bills to the Legislative
Council.
Senators Holmberg, Bowman, Christmann,
Fischer, Grindberg, Kilzer, Krauter, Krebsbach,
Lindaas, Mathern, Nelson, O'Connell, Robinson,
Seymour, Wardner, and Warner and Representatives
Bellew, Dosch, Ekstrom, Glassheim, Hawken, Kaldor,
Kempenich, Klein, Kreidt, Kroeber, Martinson, Meyer,
Monson, Nelson, Onstad, Pollert, Skarphol, Svedjan,
Vigesaa, Wald, Wieland, and Williams voted "aye."
No negative votes were cast.
The Budget Section recessed for lunch at
12:30 p.m. and reconvened at 1:00 p.m.
ECONOMIC OUTLOOK FOR THE UNITED
STATES AND NORTH DAKOTA
Chairman Holmberg called on Mr. Steven G.
Cochrane, Managing Director, Economy.com, to
present information regarding the economic
assumptions included in the executive budget revenue
forecast for the 2009-11 biennium; the North Dakota
economic outlook, including oil prices and agriculture
commodity prices; and the impact of the state's oil
industry on state revenues. A copy of the information
presented is on file in the Legislative Council office.
Mr. Cochrane said two-thirds of the nation is in a
recession that began in December 2007 and he has
seen no positive indicators nationally. He said North
Dakota's economy is still growing, but that growth has
slowed. He said North Dakota's housing price index
has shown slow, continued growth. He said the state
did not experience the large changes in housing
values that is causing economic concerns in the
majority of other states. He said his company's latest
analysis of gross domestic product indicates a longer
and more gradual recovery than previous analyses.
Mr. Cochrane said that while increases in wealth
generate more spending, it is increasing income that
is sustaining the North Dakota economy. He said
North Dakota's per capita income has increased over
20 percent in the last year. He said the global
recession will most likely result in decreases in
demand for North Dakota's manufactured goods and
commodities and will slow the state's income growth.
He said oil prices are expected to increase during
2009 and 2010, and stabilize at approximately $70 per
barrel for West Texas intermediate crude oil through
2013.
AGENCY REQUESTS AUTHORIZED BY
THE EMERGENCY COMMISSION
Chairman Holmberg directed the committee to
consider agency requests which have been
authorized by the Emergency Commission and
forwarded to the Budget Section pursuant to North
Dakota Century Code (NDCC) Sections 54-16-04,
54-16-04.1, and 54-16-04.2. The information relating
to the requests is on file in the Legislative Council
office.
It was moved by Representative Svedjan,
seconded by Senator Robinson, and carried on a
roll call vote that, pursuant to NDCC Sections
54-16-04, 54-16-04.1, and 54-16-04.2, the Budget
Section approve the following requests, which
have been approved by the Emergency
Commission:
• Racing Commission (Request #1687) - To
increase special funds spending authority
by $76,089 for Attorney General legal fees
($45,634), a contingency for future legal fees
($12,000), and for settlement fees awarded
by a district court in a civil case ($18,455).
• Public Service Commission (Request
#1688) - To increase the operating expenses
line item by $100,000 of special funds for
expert assistance and other costs
associated with analyzing and deciding
public utility rate cases for regulated
investor-owned utilities.
• Department of Commerce (Request #1689) -
To increase federal funds spending
authority by $19,600,000 for the operating
expenses line item ($1,960,000) and grants
line item ($17,640,000) to provide financial
assistance for the redevelopment of
abandoned and foreclosed homes to benefit
low-income citizens.
• Mill and Elevator (Request #1690) - To
increase spending authority by $4 million of
other funds for the operating line item
($4 million) for higher than anticipated
interest expenses related to market factors
requiring a larger than anticipated operating
line of credit with the Bank of North Dakota.
• State Department of Health (Request
#1692) - To increase the women, infants, and
Budget Section 4 December 3, 2008
children (WIC) line item by $2,750,000 to
accept federal funds from the United States
Department of Agriculture WIC program for
increased costs of the program.
• Veterans Home (Request #1694) - To
transfer $300,000 from the salaries and
wages line item to the operating expenses
line item to provide for increased operating
expenses related to contract nursing and
other operating costs, including utilities,
travel, and supplies.
• Secretary of State (Request #1696) - To
increase special funds spending authority
by $165,520 for the salaries and wages line
item ($67,757) and for the operating
expenses line item ($97,763) for expenses
associated with the agency's data
processing information technology project.
Senators Holmberg, Bowman, Christmann,
Grindberg, Kilzer, Krebsbach, Lindaas, Mathern,
Nelson, O'Connell, Robinson, Seymour, Wardner, and
Warner and Representatives Boucher, Dosch,
Ekstrom, Glassheim, Hawken, Kaldor, Kempenich,
Klein, Kreidt, Kroeber, Martinson, Meyer, Monson,
Nelson, Onstad, Pollert, Skarphol, Svedjan, Vigesaa,
Wald, and Wieland voted "aye." No negative votes
were cast.
2009-11 EXECUTIVE BUDGET
RECOMMENDATIONS
Chairman Holmberg called on Ms. Sheila
Peterson, Director, Fiscal Management Division,
Office of Management and Budget, to present
information regarding the 2009-11 executive budget.
She directed the Budget Section members to the
detailed budget books provided to legislators. She
reported on the 2009-11 executive budget
recommendations for information technology, onetime
budget investments, state employee
compensation and benefits, capital projects, and
bonding for capital projects. She said the budget
includes funding to continue to pay the full cost of
health insurance premiums for state employees. She
said the budgeted cost for health insurance is $826
per month per employee, a 25.5 percent increase
compared to the 2007-09 biennium rate of $658. She
said the recommended state employee compensation
package provides a 5 percent average salary increase
with a $100 per month minimum, effective July 1,
2009, and a 5 percent average salary increase with a
$100 per month minimum, effective July 1, 2010. She
said the salary increases are to be based on merit and
equity and are not to be given across the board. She
said the compensation package also includes
$23 million, of which $13 million is from the general
fund, to address salary equity issues for certain
agencies. She said agencies will have flexibility to
use salary equity funding to address salary issues
relating to the competitive employment market, salary
issues in targeted occupations, and internal agency
and interagency salary equity issues.
Ms. Peterson said the executive recommendation
for capital projects totals $380.5 million, of which
$127.8 million is from the general fund. She said the
largest capital project is the $67 million prison
expansion project for the Department of Corrections
and Rehabilitation.
Ms. Peterson said none of the capital projects
recommended in the 2009-11 biennium require
bonding. Based on statutory bond payment
guidelines, the state could issue bonds of up to
$60 million for the 2009-11 biennium and still be within
statutory guidelines.
Ms. Peterson said the executive recommendation
includes $357.2 million in one-time funding
investments. She said the executive recommendation
also includes information technology projects that
were ranked by the Statewide Information Technology
Advisory Committee. She said information technology
projects to be paid from the general fund total
$12.5 million and are included as one-time
investments. A copy of the reports is on file in the
Legislative Council office.
Mr. Joe Morrissette, Office of Management and
Budget, presented information on the executive
budget recommendation for the Department of Public
Instruction. He said the North Dakota Commission on
Education Improvement recommends formula
changes to provide funding for regional education
associations, assessments, career advisors, tutors, a
state prekindergarten program, and one extra day in
the school calendar. He said the recommendation of
$837.1 million for state school aid is an increase of
$111 million or 15.3 percent from the 2007-09
biennium. He said the recommendation also includes
$38.5 million for transportation payments,
$15.5 million for special education contracts, and
$2.3 million for a new mentoring program to provide
training and support for new teachers.
Representative Skarphol asked the Legislative
Council staff to provide information on the estimated
cost to continue the recommended state aid to
schools payment level for the 2011-13 biennium.
Mr. Morrissette discussed the executive budget
recommendation for the Department of Career and
Technical Education. He said the recommendation
provides for $2 million, an increase of $800,000, to
continue the virtual area career and technical
education center initiative authorized by the 2007
Legislative Assembly. He said the recommendation
provides $1.6 million to increase career and technical
education program reimbursement rates and equalize
reimbursement rates among various programs.
Mr. Morrissette discussed the executive budget
recommendation for the Department of Corrections
and Rehabilitation. He said the recommendation
provides $5.6 million to maintain existing programs
and services at contract rates and population levels
anticipated for the 2009-11 biennium. He said the
recommendation provides an additional 32 FTE
Budget Section 5 December 3, 2008
positions, including 21 FTE positions that are currently
temporary positions and 11 new FTE positions. He
said the 2007 Legislative Assembly appropriated
$41 million for the proposed construction and
renovation project at the State Penitentiary and with
interest the funds available are anticipated to total
$44.5 million. He said the recommendation provides
an additional $22.5 million from the general fund for a
total project cost of $67 million.
Mr. Morrissette discussed the executive budget
recommendation for the State Historical Society. He
said the recommendation includes $30 million, of
which $18 million is from the general fund, for
construction of an addition to the Heritage Center.
Mr. Morrissette discussed the executive budget
recommendation for the Department of
Transportation. He said the recommendation includes
$7.5 million to replace the department's drivers
records computer system and a one-time $120 million
transfer from the general fund to the highway tax
distribution fund for infrastructure maintenance, repair,
and improvement projects for the state and political
subdivisions.
Senator O'Connell asked the Office of
Management and Budget to provide information
comparing the highway tax distribution fund
allocations under current law to the recommended
allocations. Mr. Morrissette said he would provide the
information.
Ms. Sandy Deis, Office of Management and
Budget, presented information on the executive
budget recommendation for the North Dakota
University System. She said the recommendation
includes $614.2 million from the general fund, which is
an increase of $145.6 million from the 2007-09
biennium.
Ms. Deis said the recommendation provides:
• $24 million for one-time investments such as
emergency preparedness, security, and
maintenance and repairs of buildings;
• $50 million for capital projects and the
development of campus master plans;
• $49 million for campus parity distributions;
• $10 million for equity payments;
• $40 million for student financial assistance
grants from the general fund, an increase of
$34 million;
• $2 million for the North Dakota Scholars
program;
• $600,000 for the University of North Dakota
School of Medicine and Health Sciences for a
new scholarship program to encourage
students to pursue family medicine careers in
rural areas;
• $1.335 million for security staff and coordinators
to develop a statewide plan for emergency
preparedness and campus security;
• $1.275 million to stabilize the operations of the
Bismarck and Minot Centers for Family
Medicine;
• $400,000 for the Space Grant Consortium; and
• $800,000 of additional general fund support for
the Experimental Program to Stimulate
Competitive Research.
Ms. Lori Laschkewitsch, Office of Management and
Budget, presented information on the executive
budget recommendation for the State Department of
Health. She said the recommendation includes
$321,910, of which $215,680 is from the general fund,
and two FTE positions to conduct life safety
inspections for construction and renovation projects of
basic care and long-term care facilities. She said the
recommendation increases funding for the medical
personnel loan program by $195,000 and the dental
loan repayment program by $200,000. She said the
recommendation also provides a special fund
appropriation of $18.6 million for the Comprehensive
Tobacco Control Advisory Committee.
Ms. Laschkewitsch presented information on the
executive budget recommendation for the Veterans
Home. She said the recommendation includes a
2007-09 supplemental appropriation to increase
funding for the completion of the new Veterans Home,
including furniture, fixtures, and equipment, by
$13.3 million, of which $12 million is from the general
fund. She said the recommendation includes
$110,088 in temporary salaries for a project manager
to oversee construction of the new facility, provides
$133,600 for e-charting software, and authorizes
14.8 additional FTE positions for the new building.
Ms. Laschkewitsch presented information on the
executive budget recommendation for the Department
of Human Services. She said the recommendation
includes $40.1 million, of which $14.8 million is from
the general fund, to rebase payment rates for medical
assistance program providers. She said the
recommendation also increases the eligibility income
limits for the state children's health insurance program
at a cost of $1.1 million from the general fund,
provides $600,000 from the general fund to establish
an aging and disability resource center as a single
point of entry for long-term care services for the
elderly and disabled, and enhances the funding to
senior services providers by $900,000 to assist with
the costs of providing meals to the elderly.
Ms. Tammy Dolan, Office of Management and
Budget, presented information on the executive
budget recommendation for the Adjutant General.
She said the recommendation expands the veterans'
bonus program by $500,000 from the general fund to
address multiple deployments. She said the
recommendation also includes a $3.6 million
investment in State Radio, including $2.1 million from
the general fund, to develop a statewide seamless
base map; $1 million from the general fund to
enhance computer-aided dispatch; and $500,000 to
lease or purchase State Radio tower space in
selected areas of the state where radio reception is
not adequate.
Ms. Dolan presented information on the executive
budget recommendation for the Agricultural
Budget Section 6 December 3, 2008
Experiment Station and the Extension Service. She
said the recommendation includes $2.7 million from
the general fund and seven FTE positions to provide
for crop disease management; extension specialist
operating support; utilities for the new greenhouse; an
increase for extraordinary repairs; and pulse, oilseed,
and wheat quality and product evaluation. She said
the recommendation includes one-time funding from
the general fund for capital projects, including
$11.4 million to complete the greenhouse facility,
$2.6 million to complete construction of the beef
research facility, and $2.9 million for office building
additions and renovation projects at the North Central,
Williston, Langdon, and Dickinson Research Centers.
Ms. Dolan presented information on the executive
budget recommendation for the State Water
Commission. She said the recommendation includes
two FTE positions--one hydrologist to address the
increasing volume of water permits and an engineer
technician to operate the Northwest Area Water
Supply pipeline--and $433,990, of which $373,213 is
from the general fund, to address salary equity issues.
SPECIFIC EXEMPT
COMMODITIES AND SERVICES
Chairman Holmberg called on Ms. Sherry Neas,
State Procurement Manager, Office of Management
and Budget, to report on the specified commodities
and services exempted from the procurement
requirements of NDCC Chapter 54-44.4. She said the
Office of Management and Budget has exempted few
commodities and services from the state procurement
system. She said the administrative rules related to
state procurement--North Dakota Administrative Code
Article 4-12--that became effective in August 2004
identify commodities and services that are not
procurements, such as professional memberships and
grants, and identifies exemptions to the rules. She
said the list of exemptions also identifies commodities
and services that are subject to other statutes for the
procurement or selection process, such as
appointments of a special or an assistant attorney
general, public improvements, concessions, and
engineers. A copy of the information presented is on
file in the Legislative Council office.
DEPARTMENT OF HUMAN SERVICES
Chairman Holmberg called on Ms. Jennifer
Witham, Director, Information Technology Services,
Department of Human Services, to present
information regarding the status of the Medicaid
management information system project pursuant to
Section 3 of 2007 Senate Bill No. 2024. She said in
November 2008, the department agreed to a request
by ACS State Healthcare, LLC, for a 10-month delay
to the project schedule with the understanding that the
state will not be responsible for additional costs
resulting from the delay. She provided the following
project funding summary:
Description Budget
Spent
Through
October 2008 Remaining
General fund $3,643,133 $1,551,169 $2,091,964
Federal funds 55,218,418 19,720,674 35,497,744
Other funds 3,667,820 1,007,597 2,660,223
Total project $62,529,371 $22,279,440 $40,249,931
A copy of the report is on file in the Legislative
Council office.
VETERANS HOME PROJECT
Chairman Holmberg called on Mr. Mark B.
Johnson, Administrator, Veterans Home, to present
information regarding the status of the Veterans Home
construction project pursuant to Section 4 of 2007
Senate Bill No. 2418. He said construction of the new
Veterans Home was approved by the 2007 Legislative
Assembly with an appropriation of $21.1 million of
state and federal funds. He said subsequent to
legislative approval, the scope of the project was
changed to meet federal Department of Veterans
Affairs guidelines. He said the change increased the
size of the facility by 20,000 square feet and resulted
in increased construction costs. He said the Veterans
Home requested and received Emergency
Commission and Budget Section approval to increase
the project to $25.6 million in March 2008. He said
bids for the Veterans Home construction project were
received in September 2008 and totaled $30.8 million.
He said the Veterans Home has rejected all of the
bids and is rebidding the project. He said the new
bids will be opened January 27, 2009. He said a
separate appropriation bill totaling $13.3 million, of
which $12 million is from the general fund, will be
introduced to the 2009 Legislative Assembly to
increase funding for completion of the new Veterans
Home and that the funding must be approved by both
the House of Representatives and the Senate by
March 1, 2009, to qualify for federal Department of
Veterans Affairs funds.
INDUSTRIAL COMMISSION
Chairman Holmberg called on Mr. Lynn Helms,
Director, Department of Mineral Resources, Industrial
Commission, to present information regarding
revenues and expenditures of the abandoned oil and
gas well plugging and site reclamation fund; the
geophysical, geothermal, subsurface minerals, and
coal exploration fund; and the geologic data
preservation fund to date for the biennium beginning
July 1, 2007, and ending June 30, 2009, pursuant to
Section 7 of 2007 House Bill No. 1060. A copy of the
report is on file in the Legislative Council office.
Mr. Helms presented revenue and balance
information for the abandoned oil and gas well
plugging and site reclamation fund. He said revenue
deposited in the fund for the 2007-09 biennium
through October 2008 was $239,625, $134,625 more
than the anticipated revenue of $105,000. He said the
fund balance was $458,350 on October 31, 2008. He
Budget Section 7 December 3, 2008
said the increased revenue is due to higher than
anticipated drilling activity. He said the fund's
outstanding liabilities for the plugging and reclamation
of four oil and gas wells in Grenora Field total
$250,000. He said possible liabilities include the
plugging and reclaiming of three oil and gas wells and
one saltwater disposal well in Tioga Field, the cost of
which could total an additional $250,000. He said it is
likely those wells will be transferred to a new operator
interested in returning them to production.
Senator Krauter asked for information on the status
of gas production in the state. Mr. Helms said he
would provide the information.
Mr. Helms presented revenue and balance
information for the geophysical, geothermal,
subsurface minerals, and coal exploration fund. He
said revenue for the 2007-09 biennium through
October 2008 totaled $11,680. He said the fund
balance on October 31, 2008, was $12,565. He said
the fund has no outstanding liabilities. He said the
maximum potential liability, calculated based on
percentages and historical costs, would be $498,500
extended over a long period of time.
Mr. Helms presented revenue and balance
information for the geologic data preservation fund.
He said there has been no activity in the fund and the
fund balance is zero as of October 31, 2008. He said
federal revenue of $100,000 was anticipated, but the
funds were never appropriated by Congress. He said
the fund will focus on potential private sector
contributions and on developing a subscription service
website where oil and gas companies can pay to
access information.
GAME AND FISH DEPARTMENT
Chairman Holmberg called on Mr. Roger Rostvet,
Deputy Director, Game and Fish Department, to
present information regarding a report on the
recruitment and retention of hunters in North Dakota
pursuant to Section 7 of 2007 Senate Bill No. 2017.
He said the department contracted for the study that
included telephone surveys of North Dakota residents
18 years of age and older and a separate children's
survey. He said the study confirmed youth education
and recruitment efforts are working and North Dakota
is second only to Montana for active participation in
hunting activity. He said data sources examined by
researchers indicated that hunting participation in
North Dakota has increased, including a substantial
increase in out-of-state hunters. He said researchers
concluded that women should not be the highest
priority for hunting recruitment as they generally
showed less interest in hunting and were less
responsive to various motivators. He said copies of
the full report are available from the department. A
copy of the report is on file in the Legislative Council
office.
COMMITTEE DISCUSSION AND
STAFF DIRECTIVES
It was moved by Senator Robinson, seconded
by Senator Nelson, and carried on a voice vote
that the Budget Section meeting be adjourned
subject to the call of the chair.
Chairman Holmberg adjourned the meeting at
4:45 p.m.
___________________________________________
Sheila M. Sandness
Fiscal Analyst
___________________________________________
Allen H. Knudson
Legislative Budget Analyst and Auditor
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