15.9498.

01000

Prepared by the Legislative Council staff

2015-17 BIENNIUM REVENUE FORECAST ADJUSTMENTS GENERAL FUND AND OIL TAX COLLECTIONS
This memorandum provides information on proposed revisions to estimated general fund and oil and gas tax
revenue collections and allocations for the 2013-15 and 2015-17 bienniums. The assumptions are based on
discussions with representatives of the Tax Department, the Oil and Gas Division of the Industrial Commission,
and the oil and gas industry.

SUMMARY OF PROPOSED REVENUE CHANGES

General Fund
The schedule below provides a summary of the estimated general fund revenue changes for the 2013-15 and
2015-17 bienniums.
General Fund Revenue
2013-15 Biennium
2015-17 Biennium
$5,785,666,883
$5,550,477,071
5,655,666,883
5,000,477,071

December 2014 revenue forecast

Proposed January 2015 revised revenue forecast

($130,000,000)1

Total adjustments
1

($550,000,000)

The amount shown for the total adjustment to 2013-15 biennium general fund revenues reflects the adjustment to the July 1, 2015,
general fund beginning balance as shown below.
July 1, 2015, Balance
$692,824,955
($130,000,000)

December 2014 revenue forecast

2013-15 biennium total revenue adjustment
Proposed January 2015 revised revenue forecast

$562,824,955

Oil and Gas Tax Revenue

The schedule below provides a summary of the estimated oil and gas tax revenue changes for the 2013-15
and 2015-17 bienniums.
December 2014 revenue forecast
Proposed January 2015 revised revenue forecast
Total adjustments

2013-15 Biennium
$6,800,540,000
6,038,970,000

2015-17 Biennium
$8,322,330,000
4,268,140,000

($761,570,000)

($4,054,190,000)

Budget Status Adjustment

The following is a motion for consideration by the Appropriations Committees affecting projected general fund
revenues that include adjustments resulting from the proposed January 2015 revised revenue forecast:
It was moved by _______ and seconded by ________ that the House (Senate) Appropriations
th
Committee of the 64 Legislative Assembly adopt, for Legislative Council budget status reporting
purposes, the following adjustments to the estimated July 1, 2015, general fund balance, 2015-17
biennium general fund revenues, and total oil and gas tax revenue for the 2013-15 and 2015-17
bienniums:
Adjustments
General fund adjustments
Adjustment to July 1, 2015, beginning balance
Adjustment to 2015-17 biennium general fund revenues

($130,000,000)
($550,000,000)

Total general fund adjustments

($680,000,000)
1

Oil and gas tax revenue adjustments

Adjustment to 2013-15 biennium oil and gas tax revenue
Adjustment to 2015-17 biennium oil and gas tax revenue

($761,570,000)
($4,054,190,000)

Total general fund adjustments

($4,815,760,000)

The adjustments to oil and gas tax revenue collections are based on the following estimated oil prices, oil production, and trigger
price provisions for the remainder of 2013-15 biennium and for the entire 2015-17 biennium:

Oil prices
Average daily oil production
$55.00 trigger price provisions effective (production months)
$52.59 trigger price provisions effective (production months)

North Dakota Legislative Council

2013-15 Biennium
$42 per barrel
1.18 million to 1.2 million barrels
February to May 2015
N/A

2015-17 Biennium
$45 to $65 per barrel
1.2 million barrels
N/A
June 2015 to March 2016

January 2015

15.9498.01000

DETAIL OF REVENUE CHANGES

2013-15 Biennium Estimated Revenues
General Fund Revenues
The schedule below compares the December 2014 revenue forecast to the January 2015 revised revenue
forecast by major tax type. The amounts shown for the January 2015 revised revenue forecast reflect the
following assumptions:
Sales tax reduction of $250,000 per oil well based on the average of 58 fewer oil wells (188 to 130)
per month for the last six months of the 2013-15 biennium.
Decrease in individual income tax collections based on a decrease in oil royalties of approximately
$1.2 billion at a tax rate of 2.52 percent.
Decrease in corporate income tax collections based on a decrease in corporate net income of 33.3 percent
of the 33.3 percent of corporate income taxes attributable to oil and gas-related companies for the last
six months of the 2013-15 biennium.

Sales and use tax

Motor vehicle excise tax
Individual income tax
Corporate income tax
Insurance premium tax
Business privilege tax
Cigarette and tobacco tax
Oil and gas production tax
Oil extraction tax
Coal conversion tax
Gaming tax
Wholesale liquor tax
Mineral leasing fees
Interest income
Departmental collections
Transfers
Total revenues and transfers

May 2013
Legislative Estimate
$2,472,947,500
323,123,500
797,654,355
377,739,645
73,352,976
0
57,953,000
133,834,000
166,166,000
39,300,000
8,174,696
19,142,000
19,000,000
32,666,716
74,394,098
881,384,560

December 2014
Revenue Forecast
$2,535,362,100
289,315,958
951,143,203
481,516,247
84,927,055
(4,871,446)
59,567,291
146,071,108
153,928,892
38,875,236
7,097,793
18,335,019
36,792,104
19,930,091
81,912,118
885,764,114

$5,476,833,046

$5,785,666,883

January 2015
January 2015 to
Revised Revenue
December 2014
Forecast
Increase (Decrease)
$2,448,362,100
($87,000,000)
289,315,958
0
921,143,203
(30,000,000)
468,516,247
(13,000,000)
84,927,055
0
(4,871,446)
0
59,567,291
0
146,071,108
0
153,928,892
0
38,875,236
0
7,097,793
0
18,335,019
0
36,792,104
0
19,930,091
0
81,912,118
0
885,764,114
0
$5,655,666,883

($130,000,000)

Balances for Selected Major Funds

The schedule below compares the December 2014 revenue forecast to the January 2015 revised revenue
forecast for estimated June 30, 2015, unobligated balances excluding any proposed recommended early
spending.
May 2013
December 2014
Legislative Estimate Revenue Forecast
General fund
$87,043,928
$692,824,955
Budget stabilization fund
$583,545,799
$583,545,799
Resources trust fund
$67,864,900
$572,270,341
Strategic investment and improvements fund
$735,119,493
$1,385,581,650

January 2015
January 2015 to
Revised Revenue
December 2014
Forecast
Increase (Decrease)
$562,824,955
($130,000,000)
$583,545,799
$0
$489,150,341
($83,120,000)
$1,189,661,650
($195,920,000)

Oil and Gas Tax Revenues

The schedule below provides information on estimated 2013-15 biennium total oil and gas tax revenue
collections and allocations. The amounts shown for the January 2015 revised revenue forecast reflect the
following assumptions:
Oil price of $42 for the remainder of the biennium.
Oil production ranging from 1.18 million to 1.2 million barrels of oil per day.
$55 trigger price provisions effective for oil production between February 2015 and May 2015, resulting in
an estimated total reduction of $46 million to oil extraction tax collections for the 2013-15 biennium.

North Dakota Legislative Council

January 2015

15.9498.01000

Legacy fund
Three Affiliated Tribes
Oil and gas research fund
Oil and gas impact grant fund
Political subdivisions
Abandoned well reclamation fund
North Dakota outdoor heritage fund
Foundation aid stabilization fund
Common schools trust fund
Resources trust fund
General fund
Property tax relief sustainability fund
Strategic investment and improvements fund
State disaster fund
Total allocations

May 2013
January 2015
December 2014
Legislative
Revised Revenue
Estimate
Revenue Forecast
Forecast
$1,713,260,000
$2,190,640,000
$1,906,300,000
272,400,000
516,380,000
484,880,000
10,000,000
10,000,000
10,000,000
240,000,000
240,000,000
240,000,000
592,890,000
719,330,000
657,670,000
10,000,000
10,000,000
10,000,000
17,620,000
21,210,000
18,700,000
282,160,000
332,080,000
285,670,000
282,160,000
332,080,000
285,670,000
564,320,000
664,170,000
571,350,000
300,000,000
300,000,000
300,000,000
341,790,000
341,790,000
341,790,000
633,230,000
1,100,860,000
904,940,000
22,000,000
22,000,000
22,000,000
$5,281,830,000

$6,800,540,000

$6,038,970,000

January 2015 to
December 2014
Increase
(Decrease)
($284,340,000)
(31,500,000)
0
0
(61,660,000)
0
(2,510,000)
(46,410,000)
(46,410,000)
(92,820,000)
0
0
(195,920,000)
0
($761,570,000)

2015-17 Biennium Estimated Revenues

General Fund Revenues
The schedule below compares the December 2014 revenue forecast to the January 2015 revised revenue
forecast for major general fund revenues. The amounts shown for the January 2015 revised revenue forecast
reflect the following assumptions:
Sales tax reduction of $250,000 per oil well based on an average of 53 fewer oil wells per month (188 to
135) for the entire biennium and an estimated decrease of $35 million related to fewer workers and less
spendable income.
Decrease in individual income tax collections based on a decrease in oil royalties of approximately
$4.9 billion at a tax rate of 2.52 percent and an estimated decrease of $16 million related to fewer workers
and lower taxable income.
Decrease in corporate income tax collections based on a decrease in corporate net income of 33.3 percent
of the 33.3 percent of corporate income taxes attributable to oil and gas-related companies for the entire
biennium.
December 2014
Revenue Forecast
Sales and use tax
Motor vehicle excise tax
Individual income tax
Corporate income tax
Insurance premium tax
Business privilege tax
Cigarette and tobacco tax
Oil and gas production tax
Oil extraction tax
Coal conversion tax
Gaming tax
Wholesale liquor tax
Mineral leasing fees
Interest income
Departmental collections
Transfers
Total revenues and transfers

January 2015 Revised

Revenue Forecast

$3,028,960,000
329,314,000
973,379,000
525,714,000
91,897,243
0
61,560,000
70,000,000
230,000,000
39,578,000
7,106,250
19,188,000
38,535,944
21,008,000
87,888,938
26,347,696

$2,675,960,000
329,314,000
834,379,000
467,714,000
91,897,243
0
61,560,000
70,000,000
230,000,000
39,578,000
7,106,250
19,188,000
38,535,944
21,008,000
87,888,938
26,347,696

Increase (Decrease)
($353,000,000)
0
(139,000,000)
(58,000,000)
0
0
0
0
0
0
0
0
0
0
0
0

$5,550,477,071

$5,000,477,071

($550,000,000)

Oil and Gas Tax Revenues

The schedules below provide information on estimated 2015-17 biennium total oil and gas tax revenue
collections and allocations based on executive budget formula tax allocation changes and based on current law
formula tax allocations. The amounts shown for the January 2015 revised revenue forecast reflect the following
assumptions:
Oil prices ranging from $45 to $65.
Oil production remaining constant at 1.2 million barrels of oil per day.
North Dakota Legislative Council

January 2015

15.9498.01000

$52.59 trigger price provisions effective for oil production between June 2015 and March 2016, resulting in
an estimated total reduction of $883 million to oil extraction tax collections for the 2015-17 biennium.
Allocations Based on Current Law Formula Tax Allocations
December 2014
January 2015 Revised
Revenue Forecast
Revenue Forecast

Increase (Decrease)

Legacy fund
Three Affiliated Tribes
Oil and gas research fund
Oil and gas impact grant fund
Political subdivisions
Abandoned well reclamation fund
North Dakota outdoor heritage fund
Foundation aid stabilization fund
Common schools trust fund
Resources trust fund
General fund
Property tax relief sustainability fund
Strategic investment and improvements fund
State disaster fund

$2,806,960,000
607,880,000
10,000,000
240,000,000
839,120,000
10,000,000
26,980,000
409,930,000
409,930,000
819,870,000
300,000,000
341,790,000
1,477,870,000
22,000,000

$1,326,690,000
314,050,000
10,000,000
240,000,000
574,530,000
10,000,000
16,720,000
172,760,000
172,760,000
345,520,000
300,000,000
341,790,000
421,320,000
22,000,000

($1,480,270,000)
(293,830,000)
0
0
(264,590,000)
0
(10,260,000)
(237,170,000)
(237,170,000)
(474,350,000)
0
0
(1,056,550,000)
0

Total allocations

$8,322,330,000

$4,268,140,000

($4,054,190,000)

NOTE: The allocation amounts reflected in these schedules are estimates. The actual amounts for the
2013-15 and 2015-17 bienniums may differ significantly from these amounts based on actual oil price and oil
production.

North Dakota Legislative Council

January 2015