BISMARCK, N.D. (AP) - The Legislature may study the idea of starting an oil tax-supported nest egg for North Dakota newborns, a move the bill sponsor believes will eventually lead to better-educated and more productive adult residents.
“The bill combines common sense and vision and helps everyone get a fair start in life,” Sen. Oley Larsen, R-Minot, told the House Finance and Taxation Committee on Wednesday.
Larsen’s bill originally aimed to open a $5,000 account at the Bank of North Dakota for each child born after Jan. 1, 2017. The money - with interest - would be used to pay tuition at a state college or for a business, home or farm loan when the child became an adult. The measure’s fiscal note estimated its cost at more than $50 million annually, based on 10,000 babies born each year.
The Senate approved the bill but amended it to study the idea instead, and the House committee took no action on the legislation Wednesday. The full House will debate it later.
If approved, the study would take place over the next year and the bill could reappear in its original format in 2017, Larsen said.
Larsen wants money for the “government-created mutual fund” to come from the state’s Legacy Fund that North Dakota voters approved in 2010. Oil and gas revenue began gushing into the fund only since September 2011 and it holds nearly $3 billion at present. None of the money can be spent until 2017, and only then if the Legislature decides by a two-thirds vote to dip into it.
Some lawmakers already are mulling how to tap the fund to pay for highways and other infrastructure to keep pace with western North Dakota’s exploding growth due to oil development, Larsen said. But he thinks the money should be spent on residents instead, saying, “The North Dakota mind is an infrastructure.”
Rep. Craig Headland, R-Montpelier, the chairman of the House Finance and Tax Committee, was skeptical that the plan would simply be giving away “free money.”
Larsen said it’s “not a handout,” because an individual would have to get a high school education and stay out of legal trouble.
“You have to be an upstanding citizen to get this,” he said, “and that takes work for some people.”
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