Two actions took place this week that could prolong the work of the Legislature. With 15 days to go before lawmakers hit the maximum number of days allowed, there’s a lot of work yet to do and yet we are seeing a lot of maneuvers making significant changes to bills as committees finish their work on bills. Many of these concepts have come at a surprise, with no prior conversation in committee or during testimony.

PROPERTY TAXES

First, the Senate Finance and Tax Committee took up one of the property tax relief/reform bills still waiting to be acted on. HB 1168 as introduced would have provided relief through the school funding formula by the state buying down additional school mills, it also capped local governments from increasing their levies by 3%. The Senate committee amended the bill moving to providing the relief utilizing the primary residence credit and increasing that amount to $1,650. HB 1168 now looks very similar to HB 1176. In addition, the committee made improvements to HB 1168 by addressing some technical concerns NDACo had with HB 1176. One of those amendments to HB 1168 now allows the primary residence credit to be applied to all taxes owed including voter approved levies as well as includes a provision that the credit can cover a max of 75% of the property taxes owed up to $1650 and minimum of $500. The Senate approved the amendment to HB 1168; Senate Appropriations will hear the bill early next week. It is uncertain at this time what the strategy is to have two nearly identical property tax bills still in the mix.

Meanwhile, the conference committees have been appointed for HB 1176. Representatives Headland, Bosch & Nathe along with Senators Weber, Bekkedahl & Erberle. These lawmakers will meet next week to go over the differences between the House and Senate versions of HB 1176 and try to come to a compromise.

ROAD FUNDING

A number of amendments were brought forward in SB 2012, the NDDOT Budget, that would restructure local road funding sources. These changes were discussed in the House Appropriations Government Operations sub-committee and will be forwarded to the full House Appropriations committee for their consideration. These amendments are a substantial change from the version of the bill as it was approved by the Senate. Some of the greatest changes proposed through the amendment would eliminate prairie dog buckets in the oil & gas revenue buckets and instead allocate funds for local roads in the SIIF bucket. The amendment also proposes a 5 cent gas tax increase. While this proposal could provide additional funds and greater certainty for local funding; the downside could be the loss of local control in determining how these dollars should be used as a great percentage of the local dollars would be allocated through a grant process. Again, lawmakers will have further opportunities to make changes to this amendment. Here is a summary of the amendment:

• Transfer $370M from SIIF to Flex Transportation Fund
  • Adding the use of these funds for “other infrastructure” in addition to road and bridge projects, so water/sewer projects for cities can be included for use of these funds
  • $159.1M is allocated for grants to counties, cities and townships in non-oil producing counties for road and bridge projects
  • $49.9M is allocated for grants to eligible counties for bridges/bridge maintenance
  • $42.5M is allocated for county formula distribution (same for cities)
  • $25.9M is allocated for township formula distribution
  • Non-oil producing county is defined as county that had average annual oil production of fewer than 10 million barrels (based on avg over a 3 year period)
• Removing Prairie Dog Bucket and including funding in the SIIF Bucket
• Under the Highway Tax Distribution Fund (direct distribution):
  • $205.9 distributed to counties/cities
  • $20M distributed to townships
• 100% of Motor Vehicle Excise Tax would be returned to the State’s General Fund
• Proposing a $0.05 fuel tax increase which would generate an additional $70M
• Proposing to bond the Hwy 85 Project of $155M

There is also a proposed amendment for additional criteria in the Flex Fund selection process to consider projects in counties, cities and townships that have a zoning ordinance or policy that are more restrictive than the state in the areas of agriculture or energy.

The Senate Finance & Tax Committee amended HB 1382 which seeks to increase the gas tax 3 cents to strike out the language that limited the funding to non-oil counties, so the share of the gas tax increase would go to all counties, cities and townships.

OTHER NOTABLE BILLS

• HB 1193: Back the Blue grants – $3.5 m to local law enforcement for retention bonuses. PASSED Senate – expect House to Concur.
• HB 1197: Study of jail infrastructure needs – FINAL Passage.
• HB 1361: Maximum penalties for Human Trafficking offenses – FINAL passage
• HB 1482: Requires bond elections to be on primary or general election, still includes a 60% threshold vote approval. PASSED Senate – expect to go to Conference Committee.
• HB 1298: Increases speed limit on interstate to 80 mph & changes speeding fees and point system. PASSED Senate.
• HB 1053: Repeals limitation that restricted DOT from adding road miles on state highway system – FINAL Passage
• The Senate concurred with House amendments to SB2267 putting septic system authority under DEQ while retaining inspections and permitting at the local level.
• HB1577 was introduced to address the more than 300 ND communities identified as having wastewater and stormwater needs by DEQ. This bill establishes a wastewater infrastructure grant program and consideration of a legislative management study to explore funding sources. Responding to a sudden loss of Federal funding grants already awarded, the Senate Appropriations Committee amended the bill authorizing BND to provide a line of credit. This is considered one-time funding and passed the Senate floor with an emergency clause attached.
• HB 1588: Related to where possess weapons. Public buildings amended out of bill. FINAL Passage
• HB 1591: $1.5 million grant for county fairs – FINAL Passage

DHHS BUDGET

The DHHS budget bill, HB1012, passed on the Senate floor as amended by the Senate Appropriations committee. The state’s largest budget includes funding from general funds, SIIF, CHTF (Community Health Trust Fund) and Federal funds. Some of the notable changes made from the House budget are:

• $5M from SIIF for a behavioral health facility in Grand Forks revised from the $12.96M House allocation
• $4.4M one-time funding from the community health trust fund for a licensed intermediate care facility in the south central human service region to provide services to children or young adults with medically and behaviorally complex conditions
• $585,000 general funds for crisis service grants serving young adults at risk of homelessness or experiencing other serious adverse life events; this reflects the same amount in the last biennium and was added on the Senate side
• Since construction for a new Community Cultural Center facility supporting Native American heritage will not ready this biennium, the Senate replaced $1M for the facility with $300,000 for a cultural program
• $500,000 reduced from $750,000 in the House for one-time funding from the community health trust fund for juvenile justice diversion services and programs
• $750,000 Statewide Health Strategies from CHTF removed

WHAT TO EXPECT FOR NEXT WEEK

Legislative leadership provided insight on the budget and remaining bills in closing comments this week:

• Currently, proposed bills are overspending in General Fund by $300 million and the SIIF by $200-$300 million
• Appropriations committees are looking for budget reductions
• There are 170 bills left to decide with 50 bills in conference committee
• Multiple floor sessions a day, starting at 8 a.m. Monday
• Conference Committees will meet several times a day at any time floor sessions are not scheduled.

Click to view a list of scheduled bills that have committee work or conference committee meetings. This list automatically updates multiple times a day.

Click to view a list of the high priority NDACo bills still active.