Hello to the people of District 4,

The two biggest bills heard in the Senate Finance and Tax Committee were the bonding bill (HB 1431) and the Legacy Fund streams bill (HB 1380). The streams bill pays the bond payments created by the bonding bill, plus a number of other things. 

The size of the bonding bill is currently at $680 million, with our Majority Leader, Rich Wardner, introducing an amendment to increase it to $860 million. The amendment’s increase includes money for Townships, NDSU’s Harris Hall (the Ag research center), and other items. The largest item in the original bill is $510 million for water projects – the Fargo Diversion and rural water projects. Bonding for these projects would free up the Resources Trust Fund to complete other projects in a more timely manner, since the Fargo Diversion is the biggest drain on that fund. Rural water systems across the state would benefit from this. 

The overall support for bonding certain projects comes from the fact that completing infrastructure projects now when interest rates are low will be cheaper than completing it in several years (with cash) after applying inflation. I’m in favor of some limited bonding.   

The Legacy Fund streams bill is currently at a 6% biennial Percent of Market Value (POMV) – or 3% annual. Senator Sorvaag introduced an amendment to increase it to 8% (4% annual). Moving to a POMV calculation means that the amount available to be used each biennium is based on a % of the 5-year rolling average of the total value of the fund, since that’s a more consistent number than the biennial earnings. The 3% annual would mean approximately $425 million available per biennium, with the 4% annual being nearly $600 million. I will advocate for the more conservative 3% annual. Any annual earnings above these numbers would be reinvested into the principal of the fund, with the POMV stream used for the Highway Fund (instead of increasing the gas tax) and other infrastructure uses. 

There was good testimony from all parts of the state on these bills. Opposition to the bills came from one or two individuals who were a part of the creation of the Legacy Fund. They point to an Upper Great Plains study from 2015 which came to the opinion that 25% of the earnings should be utilized now, with the remaining reinvested back into the fund. The 3% annual stream would be roughly half of the earnings in the average year. 

Take care and have a great week.

Jordan Kannianen, District 4 Senator

701.421.8813 (cell), [email protected]