AN ACT to provide an appropriation for defraying the expenses of the department of transportation; to create and enact a new section to chapter 24-02 and a new section to chapter 54-27 of the North Dakota Century Code, relating to rail passenger authority agreements and a legacy earnings fund; to amend and reenact section 6-09.4-10.1, subsection 1 of section 21-10-06, and sections 24-02-37.3, 54-27-19, and 57-40.3-10, section 57-51.1-07.5 as amended by Senate Bill No. 2323 as approved by the sixty-ninth legislative assembly, and sections 57-51.1-07.7 and 57-51.1-07.8 of the North Dakota Century Code, relating to funds invested by the state investment board, the flexible transportation fund, the highway tax distribution fund, motor vehicle excise tax collections, the state share of oil and gas taxes, the municipal infrastructure fund, and the county and township infrastructure fund; to repeal sections 21-10-12, 21-10-13, 54-27-19.3, and 54-27-19.4 of the North Dakota Century Code, relating to legacy fund definitions, a legacy earnings fund, the legacy earnings highway distribution fund, and legacy earnings township highway aid fund; to provide for a legislative management report; to provide for application; to provide an effective date; and to provide an exemption.

69th Legislative Assembly (2025-26)

North Dakota restructures oil and gas tax distribution and invests State Investment Board with expanded authority over highway, municipal, and township infrastructure funding, affecting statewide road maintenance and rural development.

Filed with Secretary Of State 05/13

Legislative bill overview

SB 2012 appropriates funds for North Dakota's Department of Transportation while restructuring how the state manages and distributes oil and gas tax revenues through its State Investment Board. The bill creates new mechanisms for rail passenger authority agreements, modifies the "legacy earnings fund" structure, and adjusts how revenue from motor vehicle excise taxes and oil and gas severance taxes are allocated across highway, municipal, and township infrastructure funds.

Why is this important

North Dakota derives substantial revenue from oil and gas extraction, and this bill fundamentally reshapes how those earnings are distributed and invested for transportation infrastructure. The changes affect funding for local roads, townships, and municipalities across the state, with ripple effects on rural infrastructure maintenance and urban transportation projects. The legislative management report provision suggests ongoing scrutiny of these fiscal mechanisms.

Potential points of contention

Revenue distribution shifts: Repealing sections 21-10-12 and 21-10-13 eliminates previous legacy fund definitions, potentially redirecting revenue away from some municipalities or townships to others

Investment board authority expansion: Granting the State Investment Board broader control over fund allocations concentrates fiscal decision-making and may reduce transparency or local input

Rail passenger viability: Creating new rail passenger authority agreements in a state with limited public transit ridership raises questions about cost-effectiveness and operational sustainability

Long-term fiscal sustainability: Restructuring oil and gas revenue distribution during commodity price volatility could create budgeting uncertainty for infrastructure planning