Counties Urged to Explore Rural Health Transformation Grant Opportunities – Deadlines Quickly Approaching

North Dakota Health and Human Services (NDHHS) has announced several new RHTP grant opportunities. Counties are encouraged to check out these grant opportunities to explore if there are projects in their county that could be a fit for the funding. North Dakota was awarded $199 million year one of the five-year program. Future awards will be hinged on the success of the grant applications and awards in 2026. Below is a summary of the available grants. Further details can be found at: https://www.hhs.nd.gov/rural-health-transformation/funding.

Zero-Hour Physical Education (PE) Initiative (Make North Dakota Healthy Again)

• Deadline to apply: May 22, 2026, at 5:00pm CT
• Funding eligibility is restricted to North Dakota’s rural and tribal, public and private schools, regional education associations and/or school consortiums.
• Technical Assistance Conference Call: May 4 at 3:30pm CT 
• Approximately $700,000 in year one, estimated 10 awards of roughly $70,000 each

Community Gardens Project (Make North Dakota Healthy Again)

• Deadline to apply: May 22, 2026, at 5:00pm CT
• Funding eligibility is open to leaders of North Dakota’s rural and tribal communities, including but not limited to 4-H youth development programs, civic groups, municipalities, tribal councils, tribal colleges, tribal health departments, health care facilities, senior centers, worksites, public health units, schools, Head Start programs, cultural centers, after-school programs, Boys and Girls Clubs of America, communities of faith and nonprofit organizations.
• Technical Assistance Conference Call: May 5 at 3:00pm CT
• Approximately $300,000 in year one, estimated 10 awards of roughly $30,000 each

Community-Based Walking Program (Make North Dakota Healthy Again)

• Deadline to apply: May 22, 2026, at 5:00pm CT
• Funding eligibility is restricted to North Dakota’s rural and tribal communities.
• Groups that are encouraged to apply include, but are not limited to, tribal programs/tribal partners, hospitals, cultural centers, communities of faith, municipalities, chambers of commerce, Boys and Girls Clubs of America, parks and recreation, libraries, nonprofit organizations, public health units, civic groups and community centers. It is also conceivable that an entire community could join to apply for one of these grants with many of the groups listed above partnering together to deliver this program.
• Technical Assistance Conference Call: May 6 at 3:00pm CT
• Approximately $2,500,000 in year one, estimated 20 awards of roughly $125,000 each

Behavioral Health Promotion Community Grants (Make North Dakota Healthy Again)

• Deadline to apply: May 29, 2026, at 5:00pm CT
• Applicants may include hospitals, clinics and home care providers; tribes and tribal health organizations; other health care providers; local public health units; political subdivisions (including law enforcement agencies such as police and sheriff departments); nonprofit organizations; education systems (K-12 public and private schools, regional education associations, higher education institutions, Area Health Education Center, etc.); community organizations (faith-based entities, libraries, youth programs and coaches, etc.); child care providers.
• Technical Assistance Call: May 7, 2-2:45pm CT
• Approximately $1,600,000 is available in year one, estimated 10 awards of roughly $160,000 each

Expand Rural Health Care Rotations (Strengthen and Stabilize Rural Health Workforce)

• Deadline to apply: May 15, 2026, at 5:00pm CT
• Eligible applicants may include hospitals, clinics and home care providers; long-term care facilities; behavioral health providers; tribes and tribal health organizations, excluding Indian Health Services; emergency medical services providers; other health care providers; local public health; non-profit organizations; education systems.
• Technical Assistance Call: May 7, Noon-12:45pm CT
• Approximately $3,000,000 in year one, estimated 15 awards of roughly $200,000 each

Train In Place (Strengthen and Stabilize Rural Health Workforce)

• Deadline: May 15, 2026, at 5:00pm CT
• Eligible applicants may include hospitals, clinics, and home care providers; long-term care facilities; behavioral health providers; tribes and tribal health organizations, excluding Indian Health Services; emergency medical services providers; other health care providers; local public health; non-profit organizations; education systems.
• Technical Assistance Call: May 6, Noon-12:45pm CT
• Approximately $2,025,000 in year one, estimated 15 awards for roughly $135,000 each

Rightsizing Health Care Delivery Systems for the Future: Rural Federally Qualified Health Centers and Critical Access Hospitals (Bringing High Quality Care Closer to Home)

• Deadline: May 22, 2026, at 5:00pm CT
• Funding eligibility entities include rurally located critical access hospitals (CAHs) and their owned and operated clinics; rurally located federally qualified health centers (FQHCs) and their owned and operated clinics; one application per system can be submitted.
• Technical Assistance Call: May 7, 11-11:45am CT
• Approximately $2,310,000 in year one, estimating 42 awards of $40,000 each

Ensuring Safety Net Service Delivery (Bringing High Quality Care Closer to Home)

• Deadline: May 29, 2026, at 5:00pm CT
• Applicants must serve rural or tribal North Dakota residents and may include hospitals, clinics and home care providers; long-term care facilities; behavioral health providers; tribes and tribal health organizations; emergency medical services providers; other health care providers; transportation providers; local public health; nonprofit organizations; education systems; community organizations.
• Technical Assistance Call: May 8, Noon-12:45pm CT
• Approximately $15,000,000 in year one, estimated 50 awards roughly $300,000 each

Applicable to each grant opportunity:

• The technical assistance call will be recorded and posted on the RHTP webpage for later viewing. Additional resources related to this funding announcement, including Frequently Asked Questions (FAQs) will also be published on the RHTP webpage after the call.
• All funds must be fully expended by September 30, 2027.
• All application components must be submitted through Qualtrics.
• For RHTP funding opportunities, the entities within the cities of Grand Forks, Fargo, West Fargo and Bismarck are considered urban and do not qualify for RHTP funding opportunities unless the population served by the grant applicant is at least 50% ND rural citizens or the focus of the grant funding will be used for ND rural citizens.

The Federally created RHTP administered by CMS is a five-year program to improve rural health care access, quality, and sustainability. North Dakota’s application focused on four initiatives: Strengthen and Stabilize Rural Health Workforce; Make North Dakota Healthy Again; Bring High-Quality Health Care Closer to Home; and Connect Technology, Data and Providers for a Stronger ND. The first grant application was released on March 18, 2026, due April 30, 2026, and made available to the Critical Access Hospitals. The local public health units self-organized into 13 regional service groups and have small contracts currently under review.

Additionally, contracts to provide community coordination and technical assistance have been issued to North Dakota’s eight regional councils. Application notices for the Connecting Technology, Data and Providers for a Stronger ND pillar are coming soon.

With the first year of budgeting under the 3% cap in the rearview mirror, counties indicate while they may have been able to make ends meet for 2026, they are very concerned about future budget cycles. A tax reform package passed by lawmakers in the 2025 Legislative Session restricts political subdivisions by capping annual property tax increases to 3% each year. The North Dakota Association of Counties (NDACo) developed a survey for counties to complete with the goal of capturing the impacts of the restriction on county budgets. 51 of the 53 Counties responded. “This survey provides insight into how counties managed their 2026 budgets with the mandated limitations along with their outlook on how the 3% cap will impact the well-being of the county in the future,” said NDACo Government Relations Specialist Donnell Preskey during the Interim Tax Reform and Relief Advisory Committee meeting.

The survey highlights how a great majority, 90% of the counties, lack confidence that their county can meet the needs of citizens in the next five years. That’s because most counties tapped into their reserves to fund their 2026 budgets, which will deplete quickly in the cap environment. Counties reiterated that the use of reserves to fill the gap in budgets is unsustainable. In dollars, the allowed revenue calculated from the 3% cap limit varies significantly depending on the property tax base a county has. For example, in Slope County, the 3% cap equaled only $18,000 in revenue growth from property taxes compared to Cass County where the cap allowed an increase of $1.8 million.  

The legislation allows counties to carry forward unused percentages of the 3% cap for up to five years. 34 Counties had a portion of the 3% that was unused, while 17 counties reported they used the full 3% allowed. Of those 17 counties, 13 of them also dipped into their reserves to fund their budgets.

Counties Make Budget Cuts

There are real fiscal impacts as a result of the property tax limitation. Numerous counties reported a loss in funding where levies are tied to state grants, with road funding seeing the greatest impact. Counties also reported that they were forced to defer equipment purchases. Overall, counties prepared their 2026 budgets to the best of their abilities, but the comments and results of the survey illustrate a bleak outlook for budgeting and planning in the future. Counties indicated they made budget cuts in several areas including: salary increases, employee retirement benefits, road projects, equipment purchases and capital projects. These cuts highlight challenges counties see as they prepare for the next budget cycle and into the future. These challenges include depleting reserves, being unable to provide adequate and competitive salary increases, putting off large projects including maintaining or repairing county buildings. The financial pressures are only compounded by the fact that counties experience inflation costs greater than 3%.

The legislation allows local governments to exceed the 3% cap if voters approve it in the general election. NDACo is not aware of any counties bringing this issue to their voters in 2026.

NDACo Offers Future Considerations

NDACo offered a list of future considerations for lawmakers as they prepare for the 2027-28 Legislative Session. Many of the suggestions were related to expanding exemptions for the 3% cap. The primary exemption suggested is for health care premiums, as NDPERS is set by the state and saw a 15% increase in rates from the last biennium. Other suggested exemptions include elections, corrections, and unfunded state mandates. NDACo also brought to lawmakers’ attention that under current law, prior voter approved levies are subject to the 3% cap, something that may have been an oversight. Other proposals NDACo highlighted were adjusting the 3% cap either to reflect inflation or to a higher percentage, creating a public safety levy authority, eliminating current mill rate limitations, providing a state appropriation for programming costs associated with tax statement requirements and providing additional state revenue sharing.

NDACo also flagged for the committee a list of technical items that should be addressed next session that have been identified by counties when implementing HB 1176, the property tax relief and reform legislation.

Several other local government associations provided similar testimonies to the committee including the League of Cities, School Boards Association and the Township Officers Association.

The legislature adjourned the three-day special session today after the passage of five bills setting the $199 million federal award to North Dakota for the Rural Health Transformation Program in motion.

“Our citizens who depend on rural health care stand to benefit greatly from this program, and the Legislature deserves a ton of credit for staying focused and quickly moving these bills across the finish line,” Armstrong said. “Now comes the challenge of deploying these dollars in ways that improve the health and well-being our citizens, and we’re excited to work with our partners across the state to make North Dakota the healthiest state in the nation.”

The program aims to strengthen rural health care by improving access, quality and health outcomes for North Dakotan’s in rural communities over the next five years. North Dakota has the opportunity to receive $1 billion over that time for this purpose but those future dollars hinge on how they are utilized in year one.

Lawmakers approved an appropriations bill authorizing total program expenditures of $398 million over the first two years which assumes the funding would remain constant in year 2, although that won’t be known until the award is announced in October 2026.

The ND Department of Health and Human Services will be promoting and overseeing the grant and application process. The grants will focus on four initiatives:

• Strengthening and stabilizing rural health workforce.
• Making ND healthy again with preventative care, activity, and nutrition.
• Bringing high-quality health care closer to home.
• Connecting technology, data and providers for a stronger ND.

There is an urgent timeline for these funds to be applied for, obligated and spent. The funds need to be obligated by October 1st, 2026 and spent by September 2027.

“We encourage our counties to start thinking and brainstorming about programs and projects they may want to apply for grant dollars. This is an incredible opportunity in our state to expand and improve the health of our citizens. Top of mind could be programs, equipment or improvements for public health, jails, NDSU Extension, county parks, county food banks, or projects to increase activity of residents,” said NDACo Executive Director Aaron Birst.

NDDHHS is expected to open the application process in February. NDACo will keep you informed on the applications and timeline when more information is released. You can sign up for updates on the program at the NDDHHS website that also includes more information on the program.

Four policy bills were also passed during the special session to enhance the Rural Health program that does the following:

• Require the Presidential Physical Fitness test in physical education courses, with criteria and exceptions established by the North Dakota Department of Public Instruction.
• Add nutrition education to the continuing education requirements for physicians.
• Allow North Dakota to join the physician assistant licensure compact.
• Expand the scope of practice for pharmacists to allow them to order certain laboratory tests and independently prescribe certain medications to patients.

Lawmakers Act on other bills unrelated to Rural Health Transformation Program

Legislative Management on Tuesday allowed for six bills and one resolution to be considered as well during the special session. Lawmakers defeated two bills that addressed school lunches. HB 1627 expanded the current eligibility for free school meals, HB 1624 would have provided free school meals to all students. These bills were submitted in hopes of heading off a proposed ballot measure that would put it in the state’s constitution for the state to cover the cost of school breakfasts and lunches.

The other bill of note relates to how the discount for paying property taxes early is applied to the primary residence credit (PRC) on tax bills. HB 1626 ensures those receiving the PRC get the full amount of the PRC. Starting in tax year 2026, the discount will be applied before the PRC. Click here to view the video from HB 1626’s hearing.

Listing of un-related bills acted on during special session:

• HB 1624 – School Meals – DEFEATED
• HB 1627 – School Meals – DEFEATED
• HB 1626 – Discount for early payment of property taxes – PASSED
• HB 1625 – Use of proceeds from sale of UND Golf Course land – PASSED
• SB 2403 – $5 million low interest loan for Jacobson Memorial Hospital in Elgin – PASSED
• SB 2404 – Emergency funding for PSC & ITD
• HCR 3038 – Recognizing 175th Anniversary of YMCA

North Dakota legislators begin a special session Wednesday (1/21) with hopes to complete their work Friday. Lawmakers were called into session to focus on the federal Rural Health Transformation program. Five bills have been introduced that relate to the $199 million of federal funding and authorizing next year’s funds.

Tuesday, lawmakers met to hear pitches from fellow legislators on 19 bill drafts they were hoping could be advanced for the special session, 7 bills were approved to advance. A bill that proposes a change in how the early payment discount on property taxes is applied is the only bill of county importance. Here is a summary of the other bills that will be considered:

• $10 million emergency loan program for hospital in Elgin, ND
• Property Tax discount clarification
• Universal free school meals
• Expansion eligibility of free and reduced-price school meals
• Emergency funding for state agencies for PSC & ITD
• Use of proceeds from sale of UND golf course land
• Resolution recognizing YMCA’s 175th Anniversary

House and Senate members will organize in joint committees to hear the bills in order to streamline the process. There is one Appropriations Committee and one Policy Committee. Hearings on the bills are scheduled to begin Wednesday morning. Lawmakers will accept testimony in person and online.

Click for Special Session bill hearing schedule.

The five bills introduced for the Federal Rural Health Transformation program are:

• Appropriation for Federal Rural Health Grant Funds
• Requirement for schools to use Presidential Physical Fitness Test in physical education classes
• Physician continuing education requirements related to nutrition and metabolic health
• Physician assistant licensure compact
• Pharmacist scope of practice relating to laboratory testing and prescriptive authority

Governor Armstrong Delivers State of the State

Governor Armstrong welcomed lawmakers back to the capitol. He highlighted the great opportunity North Dakota has to improve rural health care service and revitalization. The state received double what was first anticipated. The plan is built around transforming rural health program will focus on four strategic initatives.

• Strengthening and stabilizing the rural health workforce
• Making North Dakota healthy again with preventive care and healthy eating
• Bringing high-quality health care closer to home
• Connecting technology, data and providers for a stronger North Dakota

The $199 million will need to be obligated in the next 9 months. North Dakota could receive $1 billion over the next five years.

Governor Armstrong has called the North Dakota Legislature in for a special session starting January 21st to address the funding awarded to North Dakota to support the first year of a statewide Rural Health Transformation Program. North Dakota has been awarded $199 million in federal funds to strengthen rural health care by improving access, quality and health outcomes for North Dakotan’s over the next five years. As a kick off to the special session, Armstrong will deliver a State of the State address. The address will begin at 10 a.m. CT and will be livestreamed on the Governor’s Office website at www.governor.nd.gov.

The special session will primarily focus on acting on the Rural Health Transformation Program funds, although lawmakers may propose addressing other urgent issues they deem have an immediate need to be addressed prior to the 2027 Legislative Session. The special session is expected to run from Wednesday to Friday.

INTERIM SESSION PROGRESS

North Dakota lawmakers continue to work even in non-legislative years. During the interim they tackle studies assigned through legislative action. NDACo monitors numerous interim committees and has been tapped several times this year to testify on various topics.

INTERIM TAX REFORM AND RELIEF ADVISORY COMMITTEE

NDACo has testified twice before the interim tax committee which is tasked primarily with studying property tax reform and relief. While this seems broad, the committee so far has dialed in on the implementation of the primary residence credit (PRC) including bringing mobile homes on the same application timeline and the PRC success rate. The Tax Department reports that 145,264 North Dakotan’s applied for the $1600 PRC in 2025 and about one third of the applicants or 50,000 homeowners will owe zero taxes after the credit. The homestead and disabled veteran credits were also expanded during the last session so the total number of North Dakotan’s paying zero property taxes will be even greater.  

The committee has requested information from NDACo on tools counties use to inform citizens of property tax and budget information. NDACo highlighted the transparency portals used by two counties along with the information shared on county websites along with the property tax portal that serves as one location linking property tax information for all but seven counties.

Several legislators on the interim committee indicated a desire to dive into revamping the property tax statement. NDACo has encouraged using a subcommittee to develop a proposal with input from county auditors and programmers. For example, lawmakers have pushed to have color pie charts on the tax statement for the past several sessions, but this change would come at an increased cost to counties to print thousands of tax statements in color. “It’s important to balance the desire of what lawmakers would like to see on the tax statement with what is attainable to put on the tax statement without increasing programming and printing costs.” said NDACo Government Affairs Specialist Donnell Preskey.  “Instead of making changes every session to the property tax statement, it’s important to be thoughtful and deliberate to make sure changes meet the needs of citizens and the desire to provide information in the most transparent way.”

COMMITTEE ASSIGNED JAIL RELATED STUDIES

During the last legislative session, lawmakers were made abundantly aware of the ripple effects of how the overcrowding situation at the state prison system was impacting local jails. The Interim Government Finance Committee is assigned to study the impacts of deferred admission and prioritization of inmates sentenced to NDDOCR. County facilities are holding 346 state sentenced inmates due to lack of bed space at the state level. Of the 19 county and regional jail facilities, all but three contract with the state and twelve of them contract with federal agencies. The Burleigh-Morton County Jail will also have a 120-bed pod available to lease to NDDOCR beginning in 2026. According to a recent jail study, the average inmate population at the local level has been on a steady increase over the past few years, climbing from 1312 in 2022 to 1735 in November 2025. Two facilities, Grand Forks County and Cass County jails, have recently opened expansions. Three other facilities, Lake Region, Walsh County and Richland County have indicated they need new facilities due to the condition and age of existing facilities.

The Interim Judiciary Committee is also studying truth-in-sentencing and at their most recent meeting heard from the Attorney General’s Office along with Cass County Sheriff Jesse Jahner, Burleigh County Assistant State’s Attorney Dennis Ingold and Mandan Police Chief Jason Ziegler. Those individuals described how current sentencing practices are not transparent, that in most cases, inmates are serving a small fraction of their sentences, even on violent offenses. Bills to require truth-in-sentencing, requiring mandatory minimums for violent offenders, have failed in the past two legislative sessions.

*A new tab has been added to the right side of the menu on the blog site: NDACo Interim Committee Tracking List. This list includes the committees, links to the committees and the studies that impact counties. As you can see by the list there are many committees with studies and reports that will be important to follow and participate in during the interim.

Most recently, NDACo provided testimony to the Tax Reform and Relief Advisory Committee which is studying the impacts of HB 1176 which was the major property tax relief bill that included budget limitations for local taxing districts. The committee will spend time looking at the relief provided, the impacts of the 3% cap on local government and the implementation of the various elements of this legislation. You can hear the committee discussion here: Tax Reform & Relief Advisory Committee Meeting 9-23.

It’s also important to highlight the creation of a new interim committee that will be fast-tracked to provide input to the Department of Health and Human Services regarding the state’s application for a federal rural health transformation grant. The state could be eligible for $100 million per year for five years but first has to apply for the money. The interim committee will work on legislation and possibly identify programs to invest those dollars in. It is very likely a special session will be held at the beginning of 2026 to appropriate the federal funds. The Rural Health Transformation Committee is made up of 34 members and hold their first meeting on October 14th & 15th.

This week more than 400 county officials and employees participated in the NDACo Legislative Wrap Up report online. The good news is if you missed it – you aren’t missing out on the information. We have included those resources here for you to review when you have time. Included in this blog post is a list of the NDACo Priority Bills, the presentation slides provided and a recording of the wrap up report.

In all 1,089 bills were introduced during the 69th Legislative Session. Of those, NDACo tracked over 600 bills that had some relation or impact to county government.

Again, we appreciate our county folks’ involvement during the session through legislative committees, contacting legislators and providing testimony. Your engagement makes a difference!

View the Recording of the NDACo Legislative Wrap Up Report here

View NDACo Wrap Up Presentation Slides here

View list of NDACo Priority Bills here

Up Next… NDACo is teaming up with our political subdivision partners in providing a training on implementing Caps (HB 1176) June 16th 1-4:30. The training will be held in Bismarck at the BPS Career Academy, virtually and will be recorded as well. More information coming soon.

Lawmakers pushed through to wrap up their action on all bills at 4 a.m. Saturday morning. In the end, about 600 bills were passed a budget of $20.3 Billion. There were many hang-ups that drew out Day 74 Friday night and forced legislators to work into the early morning. In particular, a conference committee report on campaign finance was rejected, new conferees appointed, several additional meetings were held and after all that the Senate defeated HB 1377 – which was their final bill to act on. Before that, lawmakers gave final action on important budget bills and property tax relief.

PROPERTY TAX RELIEF

The Property Tax Relief bill, HB 1176, will provide more than triple the amount of relief to North Dakota property taxpayers. Governor Armstrong signed the bill into law Saturday which provides a primary residence credit of up to $1600. The $403 million in relief is funded by Legacy Fund earnings. HB 1176 was expected to be one of the first bills passed this session; but was finalized on the last day. The conference committee met 13 times, deadlocked over the provision that required taxpayers to pay at least 25% of their taxes due. That amendment was removed in the final version. Below are some highlights of what is included in the bill, click to View HB 1176.

• RELIEF:
• $1600 in property tax relief for primary residences, known as the PRC ($403 million total / biennium)
• The Primary Residence Credit may not: reduce liability for special assessments, exceed the amount of taxes due on the primary residence
• Increases renter refund to $600
• Increases disabled veteran’s credit
• Removed the expansion of homestead tax credit that was approved in prior versions
• RESTRICTIONS:
• Caps local government at 3% growth in dollars levied by property taxes
• Political subdivisions can carry over unused percentage to use once within 5 years
• Counties, cities & schools can go to a vote in general election to get approval to exceed 3% limitation, good for four years. Townships can vote at annual meetings to exceed cap.
• ADMINISTRATION:
• Creates primary residential property as new class of property
• Assessment notices to all property owners and include date, time & location for local board of equalization meetings
• Budget hearing notices to replace estimated tax notices
• PRC can be applied to voter approved levies (this was a technical correction NDACo worked to get in final bill)
• Interim study to look at implementation of HB 1176, impact of levy limitations, feasibility of revising tax statement & analysis of tax-exempt property

The House defeated HB 1168 which was another property tax relief bill still alive, and the Senate killed HB 1575 which also was still being held by the Senate as a backup vehicle in the event lawmakers ran into issues coming to an agreement on HB 1176.

TRANSPORTATION FUNDING

Major changes came late Friday on the NDDOT Budget SB 2012, which at initial analysis appear to be more favorable to local funding for roads. After negotiations, lawmakers settled on keeping the Prairie Dog buckets in the oil & gas revenue stream and in fact moved the buckets up ahead of the Strategic Investment Improvement Fund (SIIF) bucket. This provides more assurance Prairie Dog buckets will fill as these funds are dependent on oil prices and production. However, the Prairie Dog funding is decreased from $230 million to $160 million to cities, counties and townships. The survival of Prairie Dog may be a result in the direct message NDACo provided to lawmakers Wednesday urging lawmakers to resist the House proposal to eliminate the Prairie Dog funding. Here are other highlights of the DOT Budget:

• Total DOT Budget $2.7B
• Adjusts allocations of state share of oil & gas tax collections to municipal, county & township infrastructure funds (Prairie Dog)
• 50% of Motor Vehicle Excise tax will go towards roads with 25% into highway tax distribution fund and 25% into the flexible transportation fund, the other 50% goes to the General Fund.
• Adjusted the Highway Tax Distribution fund: 60% state, 35% counties/cities, 3.4% townships, 1.6% transits
• No gas tax increase (House proposed 5-cent increase which would have raised $70 million in funding for infrastructure)

STATE HOSPITAL & PRISON EXPANSIONS

The OMB Budget, HB 1015, included $300 million for a new State Hospital to be built in Jamestown. It also included 3% salary increases for state employees for each year in the biennium. The bill also increased funding for guardianship grants.

SB 2015, the DOCR Budget includes several one-time appropriations as well to address the overcrowding of the prison system including: Funding to construct the Heart River Correctional Center (new women’s prison), temporary housing at the Missouri River Correctional Center and $20 million to plan and design a new minimum security male correctional facility. In addition, the budget includes an increase in the rate DOCR pays counties for housing state inmates from $110 to $115 a day. SB 2015 also includes a study related to sentencing practices, correctional and parole systems. This study was added following the defeat of SB 2128 which sought to increase sentences for violent crimes.

NDDHHS BUDGET

The ND Health and Human Services budget, HB1012, passed keeping State Aid funding for local public health units level at $8 million for the 2025-27 biennium. Also funded in the state’s largest budget were behavioral health facility grants: $1.5 million added to the previous biennium’s funding and matching funds for CHI Williston to complete 10 patient behavioral health beds by the end of calendar year 2025 along with $12.9 million one-time funding and matching funds to help in completion of 24 behavioral health beds at Altru Health in Grand Forks to serve the northeast region.

OTHER BILLS THAT RECEIVED FINAL ACTION

SB2267 was signed by Governor Armstrong surrounded by bill sponsors and supporters. The bill puts rule making and installer licensure for onsite wastewater treatment systems (septic systems) under the Department of Environmental Quality (DEQ). Permitting will continue to be done by local public health units with DEQ adopting rules and providing technical assistance and guidance as needed. Passage of this bill comes from years in the making over several sessions.

A conference committee removed a provision in HB 1022 to add $50 million to the infrastructure revolving fund for political subdivisions. This additional funding was added as a last attempt to provide financial assistance counties with jail expansions or new builds. Two other bills that sought to provide low interest loans or grants were defeated and the Legislature voted to study local jail needs instead.

• HB 1454: Prohibits government entities from requiring vaccines – PASSED
• HB 1298: Increases speed limit on interstate to 80 mph and changes speeding fine schedule – PASSED
• HB 1229: Assumes vehicle owner is responsible in fleeing incidents, sets penalties – PASSED
• SB 2180: Requirement for public comment at regular meetings (city, county, township, school district, park district, water resource district) – PASSED
• SB 2093: House added income tax relief to Senate bill to provide income tax exemption for retired law enforcement benefits paid to surviving spouses – FAILED

Special thanks to all our county members who communicated with your lawmakers on bills. Your involvement makes all the difference!

Stay tuned for a more detailed report summarizing the entire 69th Legislative Session and county-related bills. Make sure to register for the ND Legislative Wrap Up – May 14th!

*The following message was sent to ND Legislators in NDACo’s Common Ground. We encourage you to emphasize the importance of Prairie Dog funding for your county with your lawmakers.

The ND Department of Transportation budget is one of the most contentious bills being sorted out in conference committee as the Legislature finishes their work. There are huge differences between the House and Senate versions of SB 2012 regarding funding sources.

The House version revamps the funding system for local infrastructure which includes eliminating the Municipal, County/Township Infrastructure buckets commonly known as “Prairie Dog” in the state’s oil and gas revenue distribution. Instead, the House proposes to use Strategic Investments and Improvement Fund (SIIF) dollars to go to local infrastructure. This in turn eliminates $230 million in direct distribution dedicated to county, city and township infrastructure, opting instead to provide additional money based on grants from the DOT.

PRAIRIE DOG HAS PROVIDED STABLE AND DEDICATED FUNDING FOR POLITICAL SUBDIVISIONS

The Prairie Dog funding is a dedicated source of funding to counties, cities, and townships for important infrastructure projects. Counties and townships can use the funds for road and bridge projects associated with the construction of new unpaved and paved roads and bridges or associated with the maintenance, repair or replacement of existing unpaved and paved roads and bridges.

While Prairie Dog funds are not certain, and many lawmakers forecast the buckets won’t fully fill this biennium, it’s the fact that when these dollars are provided, they are committed to local government. NDACo continues to support efforts to move the Prairie Dog buckets up to increase the dependability of the buckets filling.

Another appeal of Prairie Dog funds is that they can be banked and used for major projects. This has proven to be an efficient way for local government to tackle large, expensive projects that in the past have been difficult to take on within limited budget authority. The dollars are distributed to counties based on road and bridge infrastructure needs as identified by the Upper Great Plains Transportation Institute.

The House proposal eliminates Prairie Dog funding that was established in 2019. It is one of the buckets created to distribute oil and gas production revenues with non-oil counties, cities and townships. Since inception, Prairie Dog has provided $460 million in funding with distributions being made in 2023 and 2025.

The proposal to eliminate Prairie Dog is a major policy shift that was devised and passed out of the House without a hearing, with no opportunity for input or time for political subdivisions to address concerns with the Appropriations Committee.

GRANTS vs DIRECT DISTRIBUTIONS

Direct distributions provide all political subdivisions monies that can be used for local priority projects as determined by elected officials the voters have approved. Grant dollars, while certainly helpful in many instances, also create uncertainty to the local political subdivision who then have to rely on another entity’s decision on the value of the project. Grants also create additional paperwork for the subdivisions which in many cases the subdivision has neither the time or expertise to handle.

MOTOR VEHICLE EXCISE TAX

NDACo is supportive of the use of Motor Vehicle Excise (MVE) tax for funding roads and bridges. In 2023 the Legislature approved 50% of the MVE tax to be one of the funding sources for the FLEX fund which generated $170 million a biennium. The Senate version of SB 2012 included 100% of the MVE to local infrastructure, while the House version moves 100% of the MVE tax to the General Fund.

GAS TAX

NDACo continues to support gas tax increases that are dedicated exclusively to road infrastructure. Earlier this Session the House passed a $.03 gas tax increase which would be the first increase in 20 years. The Senate proceeded to kill that bill (HB 1382) leaving significant questions about the viability of any gas tax increase. The House’s current plan for the DOT budget includes a $.05 gas tax increase to help cover the loss of Prairie Dog funds, which again inserts uncertainty into local road funding.

AVOID SACRIFICING TRUSTED FUNDING SOURCES

The ND Legislature revised the infrastructure funding plan in the 2023 Session. Counties urge lawmakers to let the current funding model plan work for another biennium. This is especially important with the proposal of a 3% cap on local government’s ability to raise taxes. This budget cap, which seems inevitable, goes into effect this year. This creates a lot of uncertainty with the ability to address funding local needs.

Bottom line: state funding for roads and bridges reduces local property tax dollars required to address needs.

Dependable and dedicated infrastructure funding for local roads and bridges is a top priority for NDACo. We understand this is a difficult time in the process, but we urge lawmakers to keep the funding stream of Prairie Dog intact. While Prairie Dog is uncertain in filling because it is dependent on oil prices and activity, it provides a source of dollars that is dedicated to address local road and bridge needs. We urge lawmakers to SAVE PRAIRIE DOG.  

It’s the Legislature’s goal to end the session Friday, or work through the weekend until they do. Monday is day 71 of the 80-day limited Legislative Session. Lawmakers spent most of their days this week in conference committees working out the differences between the House and Senate versions of bills even meeting Saturday.

Legislators met six times on HB 1176, which is the property tax relief bill that also restricts local government’s ability to increase taxes. The conference committee started working off proposed amendments brought in by the House. Many of these amendments are pretty similar to what the Senate was working on to improve the property tax relief/reform package prior to the conference committee meeting, so it appears there aren’t many differences. Building off the version of the bill the House passed the amendments proposed would:

• Increases the Primary Residence Credit to $1650
• Use Legacy Earnings to fund the property tax relief
• Includes changes to the disabled veterans’ credit by increasing the credit
• Removes the proposed expansion of the homestead tax credit
• Removes the provision stating that the PRC may not be applied to voter approved levies (this was a major priority for NDACo)
• Removes language related to levy limitation and township levies (this was determined not to be needed as townships vote yearly on their budgets)
• Adds an exemption to the levy limitation section related to borrowing
• Includes intent language for the legislature to provide property tax relief to additional property classes in the future
• Adds a study on various property tax relief and reform topics including the content on a tax statement
• Appropriation: $438.2 million

The bill still contains a 3% cap restricting the growth of tax levies for local government but allows the political subdivision the ability to exceed the cap with a vote during the general or primary election, emergency levies are also exempt from the cap. The committee discussions have been focused on the challenges related to capping school districts due to the current school funding formula. The Senate has also emphasized their support for a provision to ensure property owners are paying at least 25% of their tax liability. The 75% threshold may be the greatest difference at this point between the House and Senate stance on HB 1176.

The Senate also finally acted on HB 1168 which was introduced to provide property tax relief by buying down school mills. The Senate “hog-housed” the bill to mirror their changes to HB 1176 and passed it unanimously. Senate leaders have indicated they have kept the bill alive as a backup in the event the conference committee can’t agree on HB 1176. The Senate Finance & Tax committee has not acted on HB 1575 which is highly unusual at this point in the session. This property tax relief/reform bill sought to reduce property tax rates and restricted local government by capping taxable valuation growth.

TRANSPORTATION FUNDING

The House approved their version of the ND Department of Transportation budget which includes a drastically different proposal for infrastructure funding for counties, cities and townships. The House version includes a 5-cent increase in the gas tax which would generate $70 million. House members debated that portion of the bill separately, that aspect of the bill passed narrowly with a vote of 47-42. The House then moved to approve the entirety of SB 2012. The conference committee met for the first time on this bill Saturday. The greatest differences between the House and Senate versions are:

• The House version eliminates the prairie dog buckets and instead includes that funding inside the SIIF bucket in the oil & gas tax distribution revenue streams.
• The House version has all of the motor vehicle excise tax going to the General Fund. The Senate version has 100% of the MVE going to counties, cities & townships for road funding.
• The House version has more focus on local dollars for infrastructure being distributed through grants versus direct distributions.

The Senate killed HB 1382 which proposed a 3-cent increase in gas tax with a vote of 0-45. Which may indicate that a gas tax increase may be difficult to get approved in SB 2012.

Other Conference Committees:

The DHHS budget, HB1012, conference committee has met seven times and is still reviewing changes made by the Senate. A few items have been agreed upon but there are still quite a few discussion points. Members on both sides are thoughtfully considering the differences.

The DOCR budget, SB 2015, is another big budget with funding for add prison space. It also includes an increase in the daily rate to county jails when NDDOCR contracts with them for beds.

Here is a link to the conference committee schedules which updates during the day:

https://www.ndlegis.gov/legend/committee/conference/public-schedule/

Bills worth noting that received final action this week:

• HB 1193: Back the Blue Grants of $3.5 million to local law enforcement for retention bonuses – PASSED
• SB 2180: Public Comment – PASSED
• SB 2160: Related to NDPERS Health Insurance – PASSED
• HB 1613: Law Enforcement use of Robots – PASSED
• HB 1582: False information to Law Enforcement – PASSED
• HB 1307: Prohibits home rule cities/counties from superseding state law on elections – PASSED
• HB 1482: Requires bond elections to be on primary or general ballot – PASSED