Energy Development andEnergy Development andTransmission CommitteeTransmission Committee
Presentation on behalf of western North Dakotaschool districts impacted, or will soon be impacted,by oil production in North Dakota. January 26
th
, 2012Roughrider RoomState Capital BuildingBismarck, ND
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il and Gas Production Tax Formula
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il and Gas Production Tax Formula ² ²History of School District FundingHistory of School District Funding
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1957 -Gross Production Tax was established based on 4/5 of the 5% production tax to be distributed to counties with thefollowing distribution (15% cities, 45% school districts, 40%road and bridge funds) ²No county caps (maximums)
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1981-Gross Production Tax distribution formula within thecounty was changed (20% cities, 35% school districts, 45%county general fund). New caps were implemented.
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1983 ²The Gross Production Tax caps were increased to 3.9million (county population under 3,000); 4.1 million(population between 3,000 and 6,000); and 4.6 million(population greater than 6,000)
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1989 ²A portion of the 1/5 that goes to the state generalfund reallocated to the
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il & Gas Impact Grant fund.
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il and Gas Production Tax
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il and Gas Production Tax ² ² History of School District FundingHistory of School District Funding
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2007 ²SB 2200 was passed. The education bill introducedthe imputation factor for school districts.
Districts above 150% of the state average imputed taxablevaluation per student will receive their payment reduced by 75%of the valuation exceeding the state average.
60% of the tuition and county revenue is considered in imputedtaxable valuation the first year. The percentage was increased to70% the second year.
The effects of the imputation factor on the county revenue (oiland gas production tax) for individual school districts dependson the district taxable valuation, student average dailymembership (ADM), and the current state average imputedfactor.
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il and Gas production tax is used as a ´taxablevaluationµ or ´property taxµ value to determine school districtwealth. This reinforces the original intent of the grossproduction tax to provide in lieu of funding for school districtsthat lost taxing authority with the loss of taxable valuationdollars.
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