LEGISLATIVE NEWSLETTER

February 27, 2009

FLOOD OF CONSTITUTIONAL AMENDMENTS INTRODUCED

Legislators have introduced a flood of proposed constitutional amendments. If passed by both houses, a proposed constitutional amendment is automatically placed on the ballot, bypassing the petitioning process.

Several resolutions pertain to the establishment of a permanent oil trust fund and the amount and manner by which the money can be accessed. These resolutions are various approaches to preserving oil revenue for the future. They are similar to Measure 1 that was defeated by the voters in November, but the formulas are more generous to the state’s general fund.

HCR3054 creates an oil trust called the “legacy fund.” The proposed constitutional amendment would create a graduated percentage of eligible oil and gas funds that go into the legacy fund. Of the first $100 million, 80% would go to the general fund and 20% to the legacy fund; of the second $100 million, 70% would go to the general fund and 30% to the legacy fund—this progression continues until eligible funds reach $400 million. Revenue exceeding $400 million would be divided with 40% going to the general fund and 60% to the legacy fund. The legislature could access up to 20% of the principal of the fund in a given biennium upon two-thirds vote of both the House and Senate.

HCR3059 simply says that 25% of eligible dollars over $100 million must be transferred to an oil and gas trust fund. This approach is simpler and puts more in the general fund but would grow the trust fund quite slowly. The principal of this trust fund (without limitation) could be expended upon a vote of two-thirds of the House and Senate.

SCR4030 places 25% of eligible oil and gas money in an oil trust fund. Interest earnings from this trust fund may be appropriated by the legislature for support of elementary and secondary education and higher education, including scholarships to institutions of higher education in North Dakota for graduates of North Dakota high schools. The principal of this trust fund may not be expended.

If the legislature plans to put a constitutional trust fund plan before the voters in 2010, they will have to agree on one measure in order to avoid conflicting trust fund plans being placed on the ballot.

Other constitutional amendment resolutions include the following:

HCR3019—If the legislative assembly determines revenues and fund balances warrant return of funds directly to citizens of the state, they may provide such payments directly. Currently the Constitution does not allow for such direct payments.

HCR3046—Abolishes all property taxes, but does not establish a way of replacing these revenues.

HCR3047—Requires candidates for Superintendent of Public Instruction to hold a current teaching license on the day of election.

HCR3049—Forbids the state and political subdivisions from increasing budget expenditures above the preceding year by more than the CPI. This is what has come to be known as a “Tabor Amendment”—the type of amendment that has caused states such as Colorado catastrophic budget problems.

HCR3055—Allows the legislature to submit laws to a vote of the people in the form of initiated or referral measures rather than making the decision themselves.

HCR3058—Allows more flexibility in the use of foundation aid stabilization funds. An amendment like this could have provided funds for the special education shortfall a couple years ago.

Several of these proposed constitutional amendments were heard this week and others will be heard next week. Depending on actions of the legislature, the ballot in 2010 could be very long.

After crossover it takes a week or so for the major bills to be scheduled for hearings. We expect to see many of our critical bills showing up on the hearing schedules the week of March 9.

Everyone has access to bill topics and texts, hearing schedules, and bill status reports at the Legislature’s Web site. NDSBA’s Web site includes this weekly Legislative Newsletter, hearing schedules for the upcoming week, and the list of bills NDSBA is tracking. Updated information will be posted Thursday or Friday each week depending on when information becomes available.

ADDITIONAL INFORMATION:

ND State Web site: www.nd.gov

ND Legislative Information Web site: www.legis.nd.gov

Legislature Toll Free # 1-888-635-3447

Bismarck Legislative # 328-3373