Click Here to View Schedule for Week 9 Starting March 1

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%)

Infrastructure:

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. 

Property Tax

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.

Law Enforcement

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.

Public Health

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.