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State divvies up $400M in virus aid, including dollars for businesses' protective gear

State divvies up $400M in virus aid, including dollars for businesses' protective gear

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North Dakota state Capitol

The North Dakota state Capitol in Bismarck is offset by flowers in full bloom in June 2018.

State officials divvied up more than $400 million in federal coronavirus aid Thursday, dedicating grant money for businesses to purchase protective gear and funds to expand a new program to plug abandoned oil wells.

The bulk of the spending authorized by the North Dakota Emergency Commission comes from the Coronavirus Relief Fund, established by the federal CARES Act economic rescue package. It follows $524 million approved last month from the same fund. North Dakota is to receive $1.25 billion to spend through the end of 2020.

The largest portion of the money approved Thursday, $200 million, will go toward unemployment claims and should enable the state’s unemployment insurance trust fund to stay solvent through September, said Joe Morrissette, director of the North Dakota Office of Management and Budget.

Another large chunk, nearly $69 million, is to be funneled into a new program that will provide grants to businesses to spend on improvements related to COVID-19. The money could be used to purchase protective equipment and supplies to alleviate contact between workers and customers, ultimately helping to keep the virus from spreading.

North Dakota Democrats call for special session; Burgum says one not needed

The program stems from recent conversations with businesses, said Michelle Kommer, commissioner of the state Department of Commerce.

“When we have asked, ‘What do you need?’ businesses have responded to us, ‘Margins are thin, what we really need is not another loan, but we need customers to come back to the marketplace,’” she said. “We know that in order to bring customers back into the marketplace safely, we need to grow customer confidence.”

A business with a single location would be eligible for a grant up to $50,000, and a company with multiple locations could apply for up to $100,000.

“We believe that this money will go fast,” Kommer said.

Sen. Ray Holmberg, R-Grand Forks, noted that some small businesses’ expenses for protective gear might exceed those amounts, and he questioned how the state plans to go about balancing their needs with those of larger corporations also eligible for the funds. 

Kommer said the commerce department’s “chief concern” is making sure as many businesses as possible can take advantage of the grant program. She said the department is planning up to three application rounds and might give companies additional consideration for more dollars after the first one closes. She noted that large hospitals that have incurred substantial costs taking measures to prevent the spread of the virus also are eligible for federal dollars through a separate pool of money.

Another significant expense approved Thursday involves plugging and cleaning up abandoned oilfield wells. The commission authorized $33 million for reclamation work, doubling the amount previously designated for the program under development by the state Oil and Gas Division.

State Mineral Resources Director Lynn Helms said the state, after getting feedback from oil producers at a hearing earlier this month, has identified more than 300 wells and other oilfield sites to plug.

The money approved Thursday ensures that after plugging, the sites “will have been demolished and all the equipment removed, all the gravel and scoria surfacing gone, and topsoil will be put back down so we can return them to ag production,” he said. The program aims to employ up to 600 workers through the start of winter.

Helms said the program also will use $5 million from the state’s existing abandoned wells fund and $3 million in confiscated well bonds, a form of financial assurance required on oil wells.

The Emergency Commission approved smaller amounts for a number of other state agencies that, in combination with the larger items, total $406 million in spending through Coronavirus Relief Fund dollars. The spending authorized Thursday must go through one more step before it’s finalized. It requires the approval of the Budget Section, a body of 43 state lawmakers that next meets June 25.

The North Dakota Democratic-NPL Party on Thursday continued to push back against the process for allocating federal coronavirus aid. In a statement sent out after the meeting, the party described the commission’s actions as “a group of six Republicans” voting “without any official public input.” The commission is chaired by Gov. Doug Burgum and involves five other Republicans, including four legislative leaders.

Democrats have called for a special legislative session, an idea Republican state leaders have nixed.

“We need a leader who is listening, not a CEO telling us what he knows best,” Sen. Tim Mathern, D-Fargo, said in a statement Thursday.

Burgum said earlier this week that his administration has worked closely with legislators and other stakeholders as the state distributes federal aid.

The commission still has more than $300 million to distribute in the future. That figure could grow if money previously allocated is not spent. For example, some programs might not prove to be as popular as expected, as is the case with a Bank of North Dakota low-interest loan program designated last month to receive $200 million in aid, Morrissette said.

The money must be spent by the end of 2020. The commission plans to meet again before September to consider future needs.

The state so far has been designated to receive $4.7 billion total in federal coronavirus aid, with $1.9 billion going to small businesses through the Paycheck Protection Program. The aid includes $946 million through the Federal Reserve banking system and additional money from other federal programs.

Reach Amy R. Sisk at 701-250-8252 or amy.sisk@bismarcktribune.com.

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