The hearing schedule is getting shorter, but the issues are getting tougher and more significant. Tax relief, infrastructure, and NDPERS remain the most difficult as the legislature moves quickly towards the final weeks of the session.
Regarding Tax relief: After combining three separate bills into one comprehensive tax relief policy bill, the Senate Finance & Tax Committee forwarded the hog housed version of HB 1158 to appropriations with a 6-0 Do Pass out of committee. The hog housed version of HB 1158 changes the lowest income tax rate from 1.1% to 0% for individuals, estates, and trusts; expands the homestead property tax program credit by increasing both income and taxable valuation levels and removing the $500,000 asset threshold; and provides property tax relief for locally assessed properties with a buy down of 20 mills of school general fund levy. The bill carries a $564 million fiscal note, including $288 million for income tax relief, $71 million for an enhanced Homestead Credit program, and $204 million for property tax relief in school mill levy buy down. This appears to be the “Senate vision” of a tax relief package. We will be watching to see how the House responds as they also still hold a few tax policy bills in committee.
On the infrastructure front, the issue of state, county, and township roads remains very much in flux. Although SB2329 was defeated in the House, the talk of potentially using excise (sales) tax on vehicles for roads seems to be gaining support as a source of additional road funding, but how much of that will funnel down to local roads remains a question, as does the dedication of Legacy fund earnings for infrastructure. There remains strong support for donging “something” but the ultimate plan has not come into focus. SB2183, to provide snow removal grants however was passed by the House and was returned to the Senate for concurrence.
The House bill (HB1040) to close the NDPERS pension plan came out of the Senate State and Local Government Committee with a 4-2 Do Not Pass Recommendation, but it is also scheduled for an Appropriations Committee hearing next week, so there is obviously an expectation by some that it may not be defeated on the floor. The “Senate alternative”, SB 2239, to keep the pension plan open remains in the House Government and Veterans Affairs Committee.
While the issue of the base funding for Zones seems secure, the issue of “compensation equity” for staff is yet to be resolved. Bringing 48 employing counties for social services down to 19 “host counties” left us with some pay and benefit variations that the Legislature is hoping to address. How effective they will be at doing this is still up in the air. However, HB1046, redefining reimbursable indirect costs for human service zones was passed by the House in the same form as the Senate, so it goes to the Governor.
Law enforcement influence was able to turn around a Do Not Pass recommendation this week. HB 1307, also known as the “Back the Blue” initiative had an unfavorable recommendation as Senate appropriations members were supportive of similar language for the initiative that was included in the Attorney General budget. HB 1307 ended up passing with a vote of 27-18. It will have a hearing in Appropriations Monday. The Senate did defeat a bill to require only one license plate which law enforcement had opposed.
HB1192, as Secretary of State bill regarding elections was passed by the Senate with only one negative vote and is now on the Governor’s desk. Another election bill supported by counties, SB2292, to clarify the requirements of “election observers” was signed into law by the Governor on Thursday.
Despite passage of an 80 mph speed limit on interstate highways, the House Transportation Committee again returned a Do Not Pass recommendation (9-5) on primary seatbelt enforcement (SB2362), contrary to strong support to county and city law enforcement. This is on Friday’s house floor calendar.
The codification of the core functions of local public health was passed in the House and is also on the Governor’s desk as this report was prepared.
The House approved Senate Resolution 4019 to put a measure on the ballot to eliminate the 1-mill property tax for the medical school. As a Constitutional Measure, this does not need the Governor’s signature and now will go before the voters.
Lots of attention to property tax issues during this past week while the Appropriations Committee
HB1247, a mandatory study of exempting off-farm grain and potato storage, was passed by the Senate in the same form as the House and will be studied during the interim. However, SB2279 to implement this exemption was just heard in House Agriculture (not Finance &Tax) this Thursday and the sponsor proposed a hog-house amendment that clarifies but also expands the exemption to commercial storage not owned by a farmer but rented to a farmer. City and county officials urged studying rather than implementation. A broader study of restructuring the taxation of residential and commercial property that was HB1248 was defeated by the Senate.
The requirement for oil counties to levy 10 mills to get GPT revenues will be repealed with the Governor’s signature on SB2162 as all but 7 House members agreed with the Senate.
Political Subdivisions raised concerns with SB 2367 in House Finance and Tax which increases the state’s share of the oil and gas tax revenues by $170 million. Counties, cities, townships and airports all urged the committee to look at the bucket formula and help bring funding earlier to the Prairie Dog Buckets. The committee didn’t take action on the bill this week but committee members have indicated they are looking at possible amendments. Meanwhile, the same committee heard SB 2329 which sought to give a percentage of the motor vehicle excise tax to townships and counties. The committee gave the bill a Do Not Pass recommendation.
The Senate adopted SCR 4019 on a vote of 29-18 to put a Constitutional change on the ballot that would eliminate the 1-mill property tax levy for the UND Medical School. After a fairly spirited debate, the Constitutional amendment to prohibit all property taxes (HCR3024) was voted down quite soundly – 18 to 75 – with about the same support that Measure #2 received on the ballot in 2012.
An auditor-supported measure, SB 2292 was passed by the House. This addresses election observers along with offenses for causing a disturbance at a polling location,
In a bit of surprise, the House, with encouragement from counties and cities, overturned a Do Not Pass recommendation on SB2370 to expand local gov authority for joint purchasing. The bill passed in the House (75-28) in same form as in the Senate, so this one is also now up to the Governor.
The House adopted amendments to SB2183 creating “snow removal grants.” The amendments lower the total available from $25M to $20 million, but make the eligibility a bit easier by changing the threshold to 150% of the average snow removal cost for the four lowest of the last five years. This bill was on Thursday’s floor calendar with a Do Pass recommendation, but due to the House’s Memorial Service, it was not reached – maybe Friday.
Tobacco was the topic in the Senate on Wednesday with mixed results for Public Health. HB1229 to allow “cigar bars” was narrowly passed (1 vote) in the Senate, so that is now up to the Governor (unless it comes back). On the other hand, HB1412 to regulate e-cigarettes like other tobacco products was passed 42-12. In other health news, SB2153, to establish in law the core functions of public health – and supported by Local Public Health – was given a Do Pass recommendation. Student loan repayment for public health professionals was added in to SB2344 on the Senate side but was removed in House.
SB2381, requested by the Recorders regarding the deposit of a will, was amended in the House but has not yet been voted on for final passage. Once passed, it will need to go back to the Senate for concurrence.
The House approved SB 2147 which will allow for law enforcement retirement income to be exempt if they have served 20 years. The House also approved a death benefit for the children of correctional officers killed in the line of duty; the children will receive free college education.
And……..If the Governor agrees with 30 Senators and 72 Representatives, the Curling will be the North Dakota State Sport.
Thank you to all our county officials who joined us for County Day at the Capitol this week! It was great to discuss legislative issues with you all. We know the weather impacted a lot of your plans, but thankfully we had a good group attending and were able to attend the evening legislative social to network with their area lawmaker. We had some wonderful discussions! We heard a great deal of feedback from legislators about the opportunity to hear directly from the “folks back home”.
Both houses of the Legislature got back to a full week of work on the Floor, but still dealt largely with the “easy” bills, as many had overwhelming votes for passage. A goodly number of the stickier and trickier ones had hearings and not the harder work will start.
A few if the bills resolved this week include:
HB1127 to clean up the bidding statutes for county bridges passed the Senate with no changes so it is on to the Governor.
HB1197 passed the Senate like it did the House and now (if the Governor agrees) newspapers may use their E-editions for public notices.
The Senate agreed with the House on the study of not taxing off-farm grain storage properties in HB1247, however the Senate Finance & Tax Committee is recommending that the Senate defeat a study of taxing property by square foot rather than value.
Retirement plans are a big issue this Session, the two major PERS related bills both had hearings this week. The Senate defeated the retirement plan for police dogs that was HB1388.
The House approved the Senate’s change to the estimated property tax notice adding last year’s specials – SB2121, goes to the Governor
Townships will be able to carry-over $500,000 in their road fund (legally) with the House’s agreement to SB2178.
Both bodies approved in SB2267, to expand the “rural attorney recruitment program” from 4 to 8 subsidies.
A bill to allow law enforcement to announce when a road is closed vs post it closed was passed along with a bill that increases the penalty for thefts during a riot.
NDACo testified on two resolutions for constitutional measures. HCR 3024 would put a measure on the ballot to change the constitution to abolish local property taxes. HCR 4019 would ask voters to remove the 1 mill on property taxes for the UND Medical School and replace the funding with state dollars.
The Primary Seatbelt bill had it’s hearing on the House side along with the proposal to remove the 10 mill requirement to levy for roads in order for a county to receive Gross Production Taxes.
A very short week was made even shorter by the winter weather. Wednesday morning hearings were postponed and the Legislature actually didn’t “gavel in” on Wednesday or Thursday, so there is very little to report for this week. Most of the hearings addressed those bills that crossed over with little or no opposition, so next week will begin hearings on the more contentious policy issues, and detailed funding proposals. As you can see by the schedule, next week will be intense.
Stay tuned and keep in contact with your legislators – AND SEE YOU AT COUNTY DAY AT THE CAPITOL!
Legislators in the House and Senate kicked it into high gear last week to reach their “crossover” mark earlier than expected. Crossover is the deadline when bills need to be acted on in the chamber of origin. In North Dakota, every bill introduced has a hearing and gets voted on by the committee and full chamber. Starting this week, bills that were passed from their chamber of origin will have hearings and be voted on by the other chamber’s committees and full chamber. The legislature has a short break before returning to Bismarck and holding hearings starting on Wednesday, March 1st. They will not be voting on the floor until Friday, March 3rd. See the link above for the bills scheduled for hearings this week.
The last week had intense appropriations committee work along with long floor sessions in order to get through a lot of the bills left to act on before crossover. Here are the highlights:
ND Public Employee Retirement System:
The House of Representatives killed two NDPERS retirement bills after passing one – HB1040. With the Senate’s passage of SB2239, there will be two competing proposals to address the unfunded liability of the pension plan. These will be contrasted further in our Crossover Report and discussed in materials and presentations at NDACo County Day at the Capital. In summary however:
HB1040 closes the plan to all (state & local) new hires after 12/31/2024,
New hires will be offered a 401(K)-type plan with up to a 7% employer contribution if the employee contributes 7%
It increases all current employee and employer contributions by 1% each,
Requires the State to fund the rest of the liability over the next 20.5 years (to reach 90% funded status), and
Requires a study of whether local government should share in the liability pay off.
SB2239 Retains the pension plan for new hires,
Allows all new hires the option of choosing a 401(K)-type plan instead of the pension (only unclassified state officials can now)
Increases employee contributions by 1%
Increases all (state and local) employer contributions by the percentage needed to pay off the liability in 20.5 years – (est. at 3.6%)
Regarding infrastructure legislation, there was also considerable collapsing of the initial legislation. Two House proposals for local road funding were killed, but not before they were incorporated in the HB1379 – the revised Streams Bill. As passed by the House, HB1379 directs Legacy Fund earnings, on an ongoing (biennial) basis, into three important areas.
$60 Million into the State Highway Distribution Fund – benefiting NDDOT, counties, cities, townships, and transit
$100 Million into a new County & Township Bridge Fund
$15 Million into the Agriculture Infrastructure Fund
HB1379 has many, many more “streams,” and of note are; $79 million to address the NDPERS unfunded liability and $200 million into a new Tax Relief Fund to offset the income and/or property tax reductions that may ultimately pass.
In the Senate we unfortunately saw the defeat of SB2275, to remove or reduce the State SIIF bucket ahead of the Prairie Dog Bucket, but the Senate did pass SB2329 (by one vote) to dedicate 25% of the motor vehicle excise (sales) tax to county and township roads (half to each). The county share would go to all 53 counties based on their relative UGPTI study “need”, and the portion to townships (all organized and unorganized) would be based on certified road miles. The Senate did overwhelmingly support SB2367 which would increase the funds into the state buckets by $170 million. This would most certainly delay the distribution of state oil and gas revenues to non-oil counties, cities and townships. Also approved by the Senate was $25 million for snow removal for local governments experiencing costs of 150% or more over historical (Oct.-Dec.) – SB2183.
Although quite a number of property tax “reform” measures were defeated earlier, there was a lot of clean up done over the last 4 days of floor actively. The Senate “tax freeze” for everyone over 65 (SB2177) was defeated with only 12 favorable votes. And, only 2 senators voted for (SB2309) the residential property tax freeze, although this one would have been funded by the State. A valuation freeze for primary residences (SB2361) also received only 2 Senate votes. An even more aggressive property tax relief proposal (SB2346) to replace $426 million of school taxes with state money also failed, but did garner 19 votes. And finally, SB2387, introduced to roll all residential and ag land values back to 2019 levels and then limit their growth was amended into a study, but even the study failed on the Senate floor.
On the plus side, the House version of Homestead Property Tax Credit program improvement (HB1211) passed House unanimously. You may recall we have reported that the Senate’s version of this (SB2136) was also passed. As they take somewhat different approaches, reconciliation will be necessary.,
HB1245 introduced with major additions to the Estimated Property Tax Statement was passed but not before being amended to a study, although the bill retained the requirement that counties report ending fund balances to the state.
Rural ambulance district taxation was addressed in HB1365 and HB1477. Between the two, there was only one vote against the bills. HB1365 requires the removal of property from the a ambulance district tax if it is not served by that ambulance, while HB1477 provides for the annexation of areas served, but not currently taxed, but an ambulance district.
Both the Senate and the House introduced proposals to credit or reimburse school taxes to parents of children in non-public or home schools. The Senate version was defeated 23-24, while the House proposal (HB1532) was passed 54-40. The House plan is for parents to apply to the State (DPI) for funding after they certify where their child is going to school – so, this does not change property taxation at all.
The House passed HB1307 which would provide $5 million to local law enforcement for recruitment and retention bonuses. The House also voted down a bill (HB1483) which would have allowed for guns in county buildings and offices.
The Senate approved SB2107 which was introduced by the Attorney General and includes minimum sentences for violent crimes if drugs or a gun is involved and for fleeing or preventing arrest.
The public health division of the department of health and human services budget, HB1104, was approved and passed. The bill provides grant funding to local public health and includes $8 million in state aid as requested by the health units.
Environmental health professionals (EHP) from local public health units have been serving on an onsite wastewater recycling technical committee (OWRTC) as created in the last legislative session. Much good work has been done relating to septic codes but there is more to do. SB2253 and SB2256 were heard in the Senate Industry and Business Committee. The current OWRTC composition includes 4 installers and 3 EHPs. SB 2256 was brought forth by local public health and merely changed that make up to add one more EHP from local public health and add a voting member from the Department of Environmental Quality (DEQ). The installers submitted SB 2253 which contained a lot of changes including repeal of the OWRTC and establishment of a licensing board. Despite our best efforts, SB 2256 failed and SB 2253 passed. As amended and passed, SB 2253 will create issues with oversight of septic systems, especially in rural areas.
Social Service Zones
SB 2012, the DHHS budget bill contains a bunch of important items for county social service funding. SB 2012 specifically contains the line item to reimburse counties for delivering social services. Additionally, when the zone model was adopted certain inequities were identified from zone to zone. In response to this issue the legislature requested a full study of salaries between the zones with the idea of making budget adjustments this session. Although the report is mostly completed, the Senate did not have time to fully address the issue and simply dropped in a $1 Million “placeholder” to preserve the issue for the House appropriators to work on. SB 2012 passed 35-11.
SB 2367 “state bucket bill” is another vehicle that contains an important placeholder for county social services. In 2019 when the legislature funded county social services they funded it under the proposition of property tax relief. SB 2367 contains the oil property tax relief “bucket” that is earmarked for social service property tax relief and is increased from $200 Million to $250 Million which presumably will be used to offset any additional costs. SB 2367 passed 47-0.
HB1046 addressing indirect costs, was amended with language supported by zones and ultimately passed. Similarly, the “indigent burial bill”, SB2139, was amended as requested by zones and passed.
SB2260 & HB1362 are parental rights bills. Although certainly no one objects to the concept of parental rights, these bills pose some unanswered questions on their legal impact to prosecution and social services in cases involving minors. Both bills contain provisions which provide either a cause of action or a legal defense if parents are denied a fundamental right to direct the upbringing of their child. Both bills passed and will require careful analysis after cross-over.
Other bills of interest
With a great deal of debate, HB1508, to restrict the State Auditor in conducting and charging for local audits, was heavily amended and passed. It now only requires that audits be conducted and reviewed by a CPA.
SB2124, regarding the state reimbursement for meals, was sent to the House with language letting OMB set the rate, on an ongoing basis, at 90% of the federal GSA rate.
The Senate defeated the judiciary proposal to make all clerks of court state employees. SB2277 went down with a 19-28 vote.
The House approved HB1371 which looses the state’s corporate farming laws for animal agriculture operations.
The Legislature will continue to debate tax relief as legislation to provide both property tax relief and income tax relief are both alive as bills crossover. The House approved two income tax relief proposals in HB1118 and HB1158. The Senate has given their approval to a property tax relief measure in SB 2066 which proposes to have the state assume a greater share of the local cost of education.
Make sure you are registered for County Day at the Capitol March 8th and 9th. The NDACo Legislative team along with legislative leaders will be addressing several of the county related priority items. Plus, you will have the opportunity to network with lawmakers during our Legislative Social on March 8th and sit with your Senate or House members during the floor session on March 9th.
The Senate will be taking action starting Monday morning on a number of bills that impact the Prairie Dog buckets and infrastructure funding. We encourage you to reach out to your Senators on these bills.
The below snapshot of the “General Fund Share” of oil and gas tax revenues and the associated buckets as of January 2023. This is a good reference as we walk through the “bucket” related bills.
SB 2275 seeks to remove the$400 million Strategic Investments & Improvements Fund (SIIF) bucket that sits immediately in front of the local buckets that flows funding to non-oil cities, counties, townships and airports for infrastructure. This bill will provide more certainty to the local governments in receiving the Prairie Dog funds in a timely manner.
Action: NDACo supports SB 2275. While the bill has a Do Not Pass recommendation, we urge you to ask your Senator to support the bill to keep the discussion on the need for local infrastructure funding alive. SB 2275 is scheduled to be voted on in the Senate during their 9 a.m. Floor Session MONDAY.
SB 2367 proposes to increase the state buckets an additional $170 million. An additional $60 million will be split into the two separate state general funds, an additional $60 million into the SIIF fund and $50 million into the Property Tax Relief fund which is used to fund the human service zones. SB 2367 would likely delay funds flowing into the “Prairie Dog” buckets that provides infrastructure funding to non-oil cities, counties, townships and airports.
Action: SB 2367 has a Do Pass recommendation. It is scheduled to be voted on in the Senate MONDAY morning at 9 a.m. Floor Session. NDACo has voiced concerns with increasing the SIIF and state general fund buckets and the potential delay of prairie dog funds.
SB 2329 was initially proposed to increase funding to townships and was expanded to counties. The bill changes how revenues from the Motor Vehicle Excise Tax would be distributed. Currently, 100% of the revenues go into the General Fund. Under SB 2329 25% of the motor vehicle excise tax revenues would go to townships and counties. SB 2329 is estimated to provide $42 million to counties each biennium.
Action: SB 2329 has a Do Pass recommendation; the bill will more than likely be voted on Monday or Tuesday.
Legislators are hoping to break for Crossover after next Wednesday’s floor session, which means a lot of floor votes and Appropriations Committee work needs to be done. The Appropriators in both Houses are anticipating the approval of spending beyond their target as there is plenty of duplication and differing priorities, so reconciliation will ultimately be challenging at the end of the Session.
The major infrastructure funding bills listed last week have seen virtually no formal action, but certainly much discussion. Similarly, the two major NDPERS retirement bills remain in their respective Appropriations Committee; and in a somewhat surprising move, the two less popular retirement bills were pulled back into committee.
Conversely, there was quite a bit of action this week on the property tax front.
A straight-up property tax cap at 5% for all taxing districts (HB1461) was voted down on a vote of 41-52.
The House Tax and Finance Committee amended HB 1245 which sought to revamp the property tax statement. The bill as introduced among many changes, would have include a color pie chart to clearly illustrate which taxing entity was taxing what in percentage of the total taxes paid. The committee approved changing the bill to a study.
The Senate however passed a major property tax reduction, budget limitation measure for schools. This bill, SB2066, would reduce the 60-mill general fund for schools to 40 mills by backfilling with state funds, but then limits future general fund levies to an annual 5% growth. Special and voted-on levies are unaffected by the limitation.
The Senate also passed a major expansion of the homestead credit program in SB2136. This measure removes the asset limitation entirely and raises the income threshold to $100,000 for a 100% credit (up to a $200,000 valued home). State funding for this would require an additional $123 million.
The House barely approved HB1225 with a vote of 48-42 to require the Tax Commission to develop an online portal for electronically accessible statewide property information and property tax information.
Also tax related, two income tax relief related bills received Do Pass recommendations from the House Tax and Finance Committee. HB 1158 would eliminate personal income tax for single filers making $44,725 or less and for married filers making $74,750 or less. Higher earners would pay a flat tax of 1.5%. HB 1118 would expand the most recent round of income tax credits provided by the state to give state residents tax credits worth $800 per person or $1,600 per couple and establish a 1.99% flat tax rate for all taxable income not covered by the credits. Both of these bills head to the full House for action.
Election related bills also had an active week.
HB1204, the proposal to divide House legislative seats so candidates of the same party would not be effectively running against each other was soundly defeated in the House (9-81),
The Senate narrowly defeated SB2339 on a 20-27 vote, which called for random audits of election equipment by the State Auditor following election certification by the Secretary of State.
Passing in the House was HB1273, a prohibition on ranked-choice voting and approval voting (currently used in Fargo).
SB2157, related to proof of citizenship for voting was defeated 3-43 in the Senate.
SB2308 to repeal mail ballot voting was defeated 8-38 in the Senate.
The local decertification of election equipment (SB2316) died with only 1 vote in the Senate.
A bill addressing elections and property tax, HB1515, was a problematic proposal regarding local government bond votes. It would require that to pass a bond it would need favorable votes equal to at least 30% of the number of names in the poll book. The bill died in the House 10-80.
In the category of random, but interesting:
HB1253, mandatory tarping of gravel trucks, was defeated in the House,
A rewrite of the “loose dog” statute, HB1364, received a fair amount debate in the House and passed 56-34,
HB1070 was passed unanimously in the House to create a revolving loan fund for hazard mitigation investments, and,
Riding a bicycle or a horse under the influence will no longer trigger a DUI offense and loss of driver’s license if the Senate agrees with the House’s passage of HB1506.
Vaccine related bills:
HB 1200 moves to the Senate after a 78-13 vote in the House. The bill bans colleges and universities from requiring and promoting COVID-19 and emergency-use authorized vaccinations. The bill also extends the ban on government entities from requiring COVID-19 vaccination documentation through August 1, 2025.
HB 1207 requires NDHHS to publish vaccine adverse events data on their website; NDHHS already links to VAERS on website. The bill passed 86-5.
As amended, HB 1502 removed all sections of the bill except access to care based on COVID-19 vaccination status and passed the House 87-4.
Also relating to COVID-19 vaccines and vaccines under emergency use authorization, SB 2274 prohibits government entities from requiring vaccination status documentation and moves to the House receiving 24 votes required.
HB 1406 failed 32-59. The bill would have required the state Department of Health and Human Services to cover the costs of a person’s treatment and diagnostics if they suffered any physical injury after receiving a messenger RNA or COVID-19 vaccine.
House Bill 1505, banning and criminalizing all vaccination requirements with a misdemeanor failed 31-60.
Local public health seeks representation on the environmental review advisory council in HB 1358 which was formed when the Department of Environmental Quality was established. The House initially voted to defeat the bill but after reconsideration, HB 1358 passed 53 -37.
You will notice on the schedule for next week it is heavy with Appropriations hearings. Most of these are bills that have already had hearings in a policy committee but because they have a fiscal effect are referred to the Appropriations committee for their review as well. Both House and Senate Appropriations reported on Thursday they have 70+ bills to act on before crossover which is two weeks away. Next week we will see committees also conducting a lot of committee work. This means they will be acting on bills they have already heard and giving them a recommendation for the full House or Senate to vote on.
Among these “fiscal effect” bills, those addressing NDPERS retirement are among most significant. On the House side, the Government and Veteran’s Affairs Committee chose to advance HB1040, and therefore recommended the defeat of both HB1039 and HB1486. HB1040, was the interim committee bill to close the Defined Benefit (DP) or pension plan to new state and local government employees on December 31, 2024. The House amended the bill before sending it on to their Appropriations Committee. The immediate fiscal effect for counties remains the same – 1% increase for both employer and employee, HOWEVER, a required study of future political subdivision contributions was added. The county cost for this increase is estimated to be $3.9 million for the first full biennium. The lone Senate bill addressing NDPERS retirement (SB2239) proposes keeping the DB plan open, but increases both the State and Local government contributions to make the fund solvent in 20.5 years, and would require a 4.6% increase in employer contributions or an estimated $17.8 million in the first full biennium.
Likewise, infrastructure funding saw a lot of action. As there are seven different bills that could greatly impact local road funding, it may be simpler to put them in table with some comments.
We encourage county folks to reach out to their Senators to encourage them to vote “Green” on SB2275 to keep the bill alive for further discussion. We expect it to be on the Senate floor early next week.
On the property tax front, the Homestead Property Tax Credit program for homeowners 65 and older or disabled was addressed by committees in both chambers. The House Tax Committee amended and approved HB1211 which would entirely eliminate the asset limitation, increase the income and the value thresholds, and then give the tax commissioner the authority to increase the income thresholds based on CPI going forward. As this increases the State revenue replacement obligation by $36 million/biennium, House Appropriations will have the next look. The Senate’s approach is contained in SB2136, which was amended and approved by the Senate Tax Committee to also eliminate the asset limitation, but it then collapses the eligibility categories down to a single one – 100% tax reduction of tax up to $200,000 in value for those with incomes below $100,000. This is estimated to have an even larger fiscal effect – $123 million/biennium, so it too needs Appropriations Committee review.
Also this week, the Senate Human Services Committee received a preliminary report on the compensation equity study of human service zone employees. This was prompted by 2021 legislation and is to inform the DHHS budget for the next biennium, as the consolidation of county human services into zones has resulted in broad variation in the compensation for similar roles. A more detailed report is expected next week. This committee also reported out SB2139 regarding indigent burials. As this bill would set a statewide reimbursement rate of $3500, it has a $612,000 fiscal note and must be considered by the Appropriations Committee.
HB1374, to create a new PSC responsibility to investigate and adjudicate all complaints that state and local government was in competition with private business had vigorous debate, but was ultimately defeated 14-79 in the House. Another bill with significant debate, and ultimate defeat in the House, was HB1467, which would have directed the State Auditor to conduct random audits after certification of an election. An even closer vote in the House (54-40), overturned a Do Not Pass recommendation on Rep. O’Brien’s bill (HB1508) to force lower audit fees by the state auditor and prohibit press releases before agencies and political subdivisions could respond to audit results.
Two more bills regarding vaccinations were introduced this week. HB 1505 was amended and received a Do Not Pass from the House Human Services Committee. The bill related to vaccination prohibition and provided a penalty. Also providing a penalty was SB 2384 prohibiting vaccines developed using messenger ribonucleic acid technology (mRNA) technology. The bill further included language prohibiting mRNA vaccines for mammals in the state. Veterinarians, a beef rancher and various associations along with medical personnel testified in opposition. A proposal to change the bill into a study was passed on the Senate floor.
Senate Human Services heard testimony from local public health administrators Sherry Adams, Southwestern District Health Unit, and Erin Ourada, Custer Health on the workforce challenges facing public health. The Committee increased the requested public health loan repayment slots from 2 to 5 and the amount from $24,000 to $60,000 by giving SB 2344 a Do Pass as amended and rereferred to Appropriations.
The House Human Services Committee worked on previously introduced vaccine related bills. HB 1200 relating to COVID-19 vaccinations and vaccinations under Emergency Use Authorization came out of Committee with a Do Pass recommendation as amended. Directing the NDHHS to create and maintain a database on adverse vaccine related deaths, HB 1406 received a Do Not Pass from Committee.
The Governor signed HB1279, which expands worker’s compensation presumptive coverage of cardiac events for law enforcement and fire fighters to include 5-years of professional service regardless of where that service took place.
Receiving very little debate in the Senate was SB2362, which would permit primary enforcement of our seatbelt laws – it passed 31-14.
Law enforcement and State’s Attorneys weighed in heavily on HB 2385 which related to searches on private property and would have impacted the seizure of evidence was killed in the House.
Several election bills Auditors voiced opposition to last week, were given an DNP recommendation by the Senate State and Local Government committee. Those bills would have dramatically changed the current election process by eliminating pollbooks being used on Election Day, eliminate vote by mail, and forced manual counting of ballots.
The discussion of “buckets” was a hot topic again this week, and will undoubtedly be hot to the bitter end. SB2367, sponsored by the majority leaders and the appropriations chairs, was heard Monday by the Senate Finance & Taxation Committee. It was characterized as being in competition to Senator Wanzek’s bucket bill (SB2275) heard last week. SB2275 simply eliminates the $400 million strategic Infrastructure and improvements fund (SIIF) which currently sits ahead of the Prairie Dog bucket and was strongly supported by counties, cities, townships and airports. SB2367, by contrast, keeps the current buckets in place and increases the total dollars by $150 million in four of the seven buckets that sit ahead of the prairie dog bucket – clearly a change in direction. SB2367 adds $30 million into the two $200 million state general fund buckets, $30 million to the $200 million tax relief fund bucket, and $60 million to the $400 million SIIF. While a proposed $30 million increase in the tax relief bucket is possibly a plus, since this bucket was created to fund the human service zones, there is no requirement that the funds be used in this manner. The committee voted to recommend a Do Pass and Rereferral of SB2367 to the Appropriations Committee, but retained SB2275 for further consideration as there is certainly interest in the committee for addressing counties and township infrastructure. Clearly a complex discussion that will take the next three months to resolve.
Several property tax bills were heard this week that proposed a freeze or cap on valuations, mills or budgets. SB 2357 provides a refundable income tax credit up to a maximum of $1000 per household. The credit is calculated using 10% of the property tax on a primary residence. NDACo opposed SB 2361 which freezes the valuation of a primary residence until the claimant no longer owns the property. Freezing valuations for one class of property shifts the tax burden to the other property classes and conflicts with the constitutional requirement to equalize property taxes across all property classes. SB 2387 rolls property values back to 2019 for primary residences and ag land, and limits their value increases to 2% or the consumer price index, whichever is less, unless the property has been improved or sold. NDACo expressed opposition to the value caps proposed in this 16 page bill. HB 1461 proposes a 5% cap on dollars levied over the previous budget year unless approved by 65% of the voters. Voter approval would be authorized for just one year at a time. NDACo opposed the 5% levy cap which prohibits local government from the ability to decide how to adequately fund the needs in their communities. Annual elections would be difficult to administer if not impossible given the current budget and property tax calendar constraints.
The hearing on SB 2277, the bill to move clerks of court to state employment, was continued from last week to allow Chief Justice Jon Jenson testify in support. NDACo Executive Director, Aaron Birst provided opposing testimony, urging an interim study before implementation. The Committee did not take action, but as it includes a $12 million appropriation to make this move, the bill must be addressed and rereferred to Appropriations.
There was a lot of activity on election related legislation in the House this week. A bill worked on by the previous and current Secretaries of State to clarify voting statutes and supported by county auditors, (HB1192) was passed. Two election related bills county auditors opposed were defeated in the House. They include: HB 1314, prohibiting county use of ballot drop boxes and HB1405, requiring counties to only use printed pollbooks on election day. The House passed HB1431 to require voters without adequate documentation of citizenship to cast a provisional ballot that will be counted if proof can be provided before canvassing. The Senate passed unanimously an County Auditor requested bill (SB2292) that provides better guidance for the behavior of “election observers.”
NDACo organized a demonstration of election equipment and an explanation of the election process to lawmakers as there are 35 election related bills being heard this legislative session. McKenzie County Auditor/Treasurer and Burleigh County Election Manager Erika White provided the educational session to the Senate State and Local Government Committee. We brought in election equipment to show the committee and explain the checks and balances in place illustrate the integrity of the election process.
Public safety issues also saw considerable action. The House approved HB 1279 to change the WSI presumptive coverage of law enforcement cardiac events after five years of employment regardless of where that employment occurred. This bill is being fast tracked and had a hearing in the Senate Thursday afternoon as well. The Senate unanimously passed SB2169 to increase the traffic fines for those convicted of those traffic offense three or more times prior. The Senate also approved SB 2168 which increases the fines for excessive speeds. SB 2107, which increases penalties for violent crimes and drug crimes where a firearm is involved. The Senate Judiciary Committee gave the Attorney General’s bill a Do Not Pass recommendation in the Senate Judiciary committee and will be voted on in the Senate next week.
NDACo’s Donnell Preskey and Golden Valley County Sheriff Dey Muckle testified to House Appropriations on the importance of HB 1307 which will provide $5 million to local law enforcement for recruitment and retention. Amendments were presented that would allow for the funding to be directly distributed to Sheriff and Police agencies for them to utilize for hiring or retention bonuses. If approved, this would be one-time funding.
HB1164 which sought to expand the medical marijuana program to permit edible products was quite soundly defeated in the House 20-72, while drinking when pedaling a pedal-bar was supported by House 85-7. Allowing the riding of a horse (or pedaling your own bike) while intoxicated (HB1506) was heard this week as well, but no action to report at this time.
All 94 House members supported HB1292 to add recreational projects to the list of eligible activities for the infrastructure loan program.
The Senate addressed the state rates for meal reimbursement while traveling on government business. SB2124 was introduced at a fixed amount, moving the total from $35/day to $42/day. The State and Local Government Committee amended the bill to index the rate to 90% of the federal GSA rate for ND (like lodging). The amendment failed on the Senate floor, so the bill goes to Appropriations in its original form as this will obviously have considerable impact on every agency budget.
On the agriculture front, the return of the beehive setback bill (SB2134) wasn’t considered very sweet, as it garnered only 2 votes on the Senate floor. While the House turned the issue of property tax exemptions for potato/grain storage buildings in cities into a study, the Senate approved (on a very strong 42-5 vote) this exemption in an amended version of SB2279. The annual application to the county was removed, and the list of “family members” allowed to store farm products was expanded in the amendments. The “model feedlot zoning” bill, HB1423, received considerable testimony, both for and against. NDIRFCEO Brennan Quintus spoke against singling out NDIRF coverage in the bill, and there seemed to be a bit of disagreement between the Ag Dept. and the Dept. of Environmental Quality regarding roles. If this bill is to pass, it appears to need some work..
Public health hearings this week heard topics from past legislative sessions including onsite septic systems. The 2021 Legislature created an Onsite Wastewater Recycling Technical Committee (OWRTC) which met frequently throughout the interim. While the Committee has made good progress, the Committee composition continues to be debated as it was established with gubernatorial appointments of four installers, three local public health representatives and a licensed environmental health practitioner nominated from a professional onsite wastewater recycling association. SB 2256 seeks to balance the Committee by adding an additional licensed environmental health practitioner from the local public health units and one representative from the Department of Environmental Quality. Local public health units provided testimony supporting this bill. The subject was also part of SB 2253 introduced earlier in the week which included several changes to the OWRTC responsibilities as established. Replacement of Committee members to five licensees effective August 1, 2024 was among many of the revisions. Senate Industry and Business Chair Doug Larsen requested that installers and local public health representatives meet with Dave Glatt, Director of the Department of Environmental Quality, to discuss the possibility of combining the bills. Further hearings regarding the issue are expected next week.
The House passed HB 1412, which will label electronic nicotine delivery systems as tobacco products in North Dakota statute. The bill would also require retailers selling these products to have a tobacco retailer license, allowing the establishment of compliance check regulations. HB 1357 restricting tobacco products from internet sales failed in the House.
Finally! The end of “regular” bill introduction was reached on Monday. Resolutions can still come in for a week, and of course, the Delayed Bills Committee can always authorize a few more; but, by and large, we are now dealing with 538 House bills and 391 Senate Bills – probably not a record, but plenty. Of those 929 bills, 531 of them are of county interest and are included in our tracking lists. With the frenzy of bill writing dying down, the committee and floor activity is picking up.
NDACo along with our partners from cities, townships and airports testified in support of SB 2275 to remove the $400 million Strategic Investment & Improvement Fund (SIIF) bucket that sits in front of the local infrastructure buckets, otherwise known as the Prairie Dog funds. Morton County Engineer John Saiki, emphasized that removal of the SIIF bucket will increase certainty for political subs and aid them in addressing the mounting road and bridge needs. Interestingly, another bill was filed this week that also addresses the buckets but counters our proposal. SB 2367, which is sponsored by the two majority leaders and appropriations chairs, increases the amount of oil and gas tax revenue that would go into the state general fund, tax relief fund an the SIIF buckets. This bill could delay allocations going to cities, counties, townships and airports. No hearing has been set yet for SB 2367.
HB 1486 which would close the PERS defined benefit retirement plan for new employees was heard in the house government and veterans affair committee on Thursday morning. Although a number of similar bills are floating around this session this bill specifically requires political subdivisions to “pony up” for a bigger portion of the unfunded liability. Specifically this bill would requires counties collectively to pay approximately $90 million over the next two bienniums. NDACo is opposed to this specific approach. HB 1040 is the other main PERS bill which was heard earlier this session. That proposes to close the DB plan for new employees and move them to a DC plan. That plan would require a 1% employer increase from the political subs. On Friday, SB2239 will be heard at 9:45 by Senate State and Local Government. This bill keeps the pension program as it is, with new employees having the option of the defined benefit (pension) OR a defined contribution plan. This bill requires the state and local government participants to buy down the liability over the next 20.5 years. The fiscal note estimates this requirement increases the employer contribution by 4.6% of salaries. The other main PERS bill that was heard earlier is HB 1040
The subdivisions of the two Appropriations Committees began taking public testimony on the big agency budgets. McKenzie-Mountrail Zone Director, Desiree Sorenson, addressed the Senate Approps, Human Resources Division, speaking to the Zone support in SB2012 (DHHS Budget). Good questions were asked, and education of the committee will continue.
The policy (Transportation) Committee in the House increased the separate general fund appropriation requested by NDDOT from $35 million to $70 million before passing the bill (HB1103) on to the Appropriations Committee. This money is specifically for matching federal funding that may be secured in the coming biennium.
NDACo also supported an emergency bill being fast-tracked to provide relief for exorbitant snow removal costs to counties, cities, townships and the state. ND DES is working with counties to collect snow removal costs. The committee discussed changing the threshold from 200% of the 5 year average to 150%. SB 2183 includes $35 million for snow removal.
The bill to eliminate liability for local government to transfer ownership of bridges on closed section lines (HB1206) was defeated on the House floor 6-85. Also seeing defeat in the House was HB1208 to allow farm “guest workers” to drive semi’s without CDLs.
NDACo’s Linda Svihovec testified in opposition to HB 1367, which sets the preliminary budget deadline for July 10 and provides for citizen referral of the budget by petition. The committee voted a DO NOT PASS 11-1-2 and the House supported that recommendation for DNP 76-16.
The House Finance & Tax Committee passed HB 1408 which provides an exemption for a portion of the true and full valuation of land enrolled in the state’s PLOTS program. The original bill called for a 50% exemption and the amended version passed with a 10% exemption 9-3-2. NDACo supported the merits of the PLOTS program but opposed using local property taxes to incentivize a state program.
The tax value freeze for all seniors (without a funding source) was defeated on the House floor 25-67. This was HB1380. However there is another, similar bill, yet to be addressed that would have the state pay the property taxes for all seniors.
HB1267, supported by counties, to restore excess receipts from foreclosure sales to the county general fund was narrowly passed in the House (52-41).
An increase to maximum township official annual salary from $2,000 to $4,000 (HB1236) found favor in the House on a 88-4 vote.
HB1247 as introduced would have exempted potato warehouses and elevators located in cities from property tax if used exclusively for the owner-farmer. The bill was amended into a required interim study and passed by the House. A study (HB1248) of moving away from property taxation based solely on square footage (rather than value) was also passed in the House.
It appears this will be another heavy session for election related bills to be discussed. There were several bills with proposals that would change the current election process in North Dakota. County Auditors opposed the following bills on Thursday: SB 2226 to include the full text of constitutional measurers on ballots. HB 1314, which seeks to restrict the use of secure ballot drop boxes. Currently, all counties utilize ballot drop boxes as an option for voters to return their completed ballots. HB 1405, would require pollbooks to be disconnected, making it impossible to identify if an individual votes more than once in addition, the bill would limit counties use of vote centers. SB 2308, would eliminate vote by mail ballots. SB 2316 would result in the manual counting of ballots at the close of polls.
A number of bills seek to address citizenship in relation to voting. Auditors are supportive of HB 1431 which has been worked on by the Secretary of State’s Office and Rep. Scott Louser.
SB 2292 was initiated by county auditors and will provide protections for election officials and poll workers who may encounter individuals looking to disrupt election processes. The bill also addresses election observers and voter privacy.
A complicated bill, SB 2144, sought to require school bond elections to include future operation and maintenance costs on the ballot itself was voted down by the Senate 4-42.
Before unanimous House passage, HB1302 was amended to require the Ag Commissioner to give county commissioners 45 days for zoning review of an anhydrous ammonia facility siting by that office.
HB1361 was given a favorable committee recommendation from House Human Services. This bill makes it clear that a person charged with murdering their spouse cannot control the disposition of the deceased.
SB2133 to remove funds donated to rural fire departments from audit consideration was an attempt to address the audit exceptions that several departments had this past year. The State Auditor opposed, but offered options within current law that would possibly be workable. The Bill was killed in the Senate 9-38.
Jason Benson, Cass Co. Engineer, gave opposition testimony on SB 2251, which requires permission from landowners to survey and opposition to SB 2313, 33% increase for eminent domain litigation. Both bills would cause major delays in county road/bridge projects and increase project/admin costs due to the time constraints and potential litigation on eminent domain issues.
Several firearm related bills were heard this week as well. ND Sheriffs & Deputies Association opposed HB 1483 which would allow guns in public buildings. We emphasized that this would allow for guns in county buildings including law enforcement centers, jails, social service offices, state’s attorneys offices, etc. if they are not included in the courthouse.
Last Friday, while we were all on our phone calls, SB2153, to codify the core function of public health units was passed in the Senate 34-12.
The Senate, with considerable debate, approved doubling speeding fines for those found driving 21 MPH over the posted limit. This bill, SB2168, passed 34-13.