mulberry westfield Legacy Fund proposal worth close consideration
Local lawmakers Sen. David Hogue, R Minot, and Rep. Roscoe Streyle, R Minot, must know they will face opposition to a bill they are proposing which would create a low interest loan fund for major construction projects.
That fine. Healthy debate is good. But the proposal by Hogue and Streyle is well worth consideration.
Local governments would gain access to a low interest, revolving loan fund for major construction projects if the two Minot lawmakers are successful in steering their investment plan for the Legacy Fund through the Legislature.
The 2009 Legislature placed a constitutional amendment creating the Legacy Fund on the November 2010 ballot. Voters approved establishing the trust fund by setting aside 30 percent of the state taxes on oil and gas production and extraction starting in 2011. Hogue and Streyle assert that the Legacy Fund could contain nearly $6 billion by the time the Legislature meets again in 2019.
The bill proposal to invest a portion of Legacy Fund principal in loans to build North Dakota infrastructure will accelerate construction and save money for taxpayers, Hogue and Streyle said. Minot taxpayers could save millions in interest payments and inflationary costs should the fund be used to speed up construction of the Northwest Area Water Supply Project and Mouse River Enhanced Flood Protection Project, they said.
Minot would not be the only beneficiaries of the change. Hogue and Streyle are joined on the bill by four co sponsors from Grand Forks, Fargo, Williston and Huff in Morton County.
As currently written, the proposed bill calls for establishing a revolving loan fund through the Bank of North Dakota. The state would transfer 15 percent of the principal of the Legacy Fund anticipated to be about $900 million into the revolving loan fund on Dec. 31, 2019. The state would continue to designate 15 percent of oil tax revenues coming into the Legacy Fund over the next 10 years to the loan fund. Political subdivisions would be able to borrow at an interest rate of 1.56 percent for a term up to 50 years. The minimum loan amount is $10 million for a new project or $1 million for refinancing existing debt. No more than 20 percent of the balance of the revolving loan fund could be used for refinancing. All interest earnings would be deposited in the Legacy Fund, and principal payments would go back into the loan fund.
These details could certainly change during the legislative process, but the plan itself is worth consideration. In the end it will save taxpayers money and investments bring a return to the Legacy Fund.