Property Tax Relief bills continue to be worked on… The week started off with a hearing on HB 1176 the property tax relief bill that provides $1450 in relief through the primary residence credit and restricts local government spending by limiting levies to a 3% growth rate. Several testified expressing concerns with the 3% cap but after two and a half hours of testimony, the committee acted right away on the bill without discussion on the items brought forward. The Senate Finance & Tax committee gave the bill a Do Pass recommendation and referred the bill to Appropriations. The Appropriations hearing is scheduled for Monday, March 24th at 2:00. NDACo has heard there may be amendments proposed that in our opinion will make it even more restrictive for local government. This bill could move fast depending on what the Appropriations Committee decides to do. Be on the lookout for a call to action. We expect this bill could be voted on in the full Senate this week. Here is the latest information on what the 3% cap means in additional revenue for each county. Feel free to connect with your Senator about the cap and the concerns in restricting local budgets.

Because the finance and tax committee did not make changes to address some technical issues discussed with HB 1176, we hope to work with the committee to bring forward amendments and tack them onto one of the other tax relief policy bills that have been heard but not acted on. One of those bills is HB 1168, which uses the school funding formula to buy-down mills to provide relief. The bill also includes a 3% cap. Rep. Louser brought forward amendments for the committee to consider in expanding the amount of relief. Related to the limitations, his suggestions also change the vote threshold to exceed the cap from 60% to a majority vote. The committee didn’t take action on his new proposals. With only one hearing on the Senate Finance and Tax committees schedule this week, we expect them to spend the rest of the week working on the bills. For a refresher, here is a look at the tax relief / reform bills that are still active.

Amendments were brought forward during the hearing on HB 1572 to study changes to the tax statement versus have them be implemented. The committee did not act on the amendments or the bill.

The Senate Appropriations committee took testimony on HB 1213 which sought to provide a $200 million low-interest loan to counties for jail improvement projects. The committee amended the bill to $20 million and removed language that would have dedicated dollars for correctional facilities, they then gave the bill a Do Not Pass recommendation. We expect HB 1213 to be voted on the Senate floor Tuesday. We ask you to contact your Senator and encourage a Do Pass. At least if it survives it may go to conference committee or provide $20 million in additional funding into the infrastructure revolving loan fund.

HB 1193 seeks to provide $3.5 million in local law enforcement grants for retention and recruitment bonuses for local law enforcement officers and corrections officers. This is similar to a bill that passed last session that was termed “Back the Blue” grants and was greatly appreciated by law enforcement. The funds were distributed to 1,260 officers in Sheriffs Offices and Jails. According to a recent study, 93% of the funds were used for retention bonuses. The committee did not take action on the bill.

Other bills that saw action:

• SB 2039: Exempts ag storage from paying property taxes – received a Do Not Pass committee recommendation.
• HB 1371: Study insurance plan for retired peace officers not eligible for Medicare – received Do Pass recommendation. (Scheduled to be voted on Senate Floor Monday)
• HB 1602: Allows political subdivisions to opt out of the NDPERS defined contribution plan to move into independent plan – received Do Pass recommendation. (Scheduled to be voted on in the Senate Monday)
• HB 1419: Allows 911 dispatchers & EMS to be in Public Safety NDPERS plan if county offers – received Do Pass recommendation.
• SB 2183: Increases fee for speeding in construction zones to a minimum of $150 when workers are present – PASSED House, goes to Senate for consideration of amended version.
• HB 1344: Clarifies NDDOCR to pay counties when over-capacity and housing state sentenced inmates in county facilities – FINAL PASSAGE

Bills of importance to watch this week:

• HB 1176: Property Tax Relief / Reform – Scheduled Monday in Senate Appropriations at 2 p.m.
• HB 1382: Increases Gas Tax 3 cents to be dedicated to road funding – Monday at 9 a.m.
• HB 2128: Attorney General’s Truth in Sentencing bill – Monday at 9 a.m.

View Schedule of County-Related Bills for Week of 3/24-3/28

As NDACo analyzes the first period of the 69^th Legislative Session, the word “challenging” comes to mind. There seems to be a strong sentiment to restrict local government this session. It has been a challenge for county officials and NDACo legislative staff to navigate explaining the importance of local control and the difficulty counties will have in responding to local needs when revenues are restricted.

A total of 1,020 bills and 63 resolutions were introduced this Session, the highest since the 2009 Session. Lawmakers passed 69% of the bills introduced, meaning 710 bills have crossed the hall to the opposite chamber. This indicates there is going to be a heavy lift to whittle the number of bills down, especially those with an appropriation. NDACo started the Session tracking 600 of the bills introduced and after crossover we are still involved in monitoring and acting on 425 bills that are county related. The following is a summary of some key topics and priority bills.

PROPERTY TAX RELATED

Lawmakers came into the Session with a strong desire to provide significant property tax relief. During the 2023 Legislative Session, the Legislature approved a $500 credit for primary residences. All bills being considered increase the amount of relief to taxpayers and many of them expand who would receive relief. At the same time, the momentum behind legislation to restrict local government’s ability to raise taxes has grown.

We started the Session with approximately 60 different property tax-related bills that included relief and reform measures. The Senate killed all their proposals; the House passed over four bills, three of them being packages that include both relief and limitations to local budgets, or caps.

Here is a summary of the remaining property tax-related bills as they crossed over from the House:

HB 1176

• Relief: provides $1,450 primary residence credit, increases threshold to qualify for the homestead credit and increases renter’s credit. Total of $503 million in relief.   
• Reform: 3% cap on dollars levied with allowances to carry over unused caps and exceed the cap with voter approval.

HB 1168

• Relief: 10 mill buydown on school mills, relief to all property owners. Total of $120 million in relief.
• Reform: 3% cap on dollars levied with allowances to carry over unused caps and exceed cap with voter approval.

HB 1575

• Relief: Reduces tax rates on residential, agricultural, commercial. Expands threshold to qualify for homestead credit and increases renter’s credit. Total of $703 million in relief.
• Reform: 3% cap on taxable values. Allows for voter approval to increase mills above levy limit. 

HB 1534

• Relief: None provided
• Reform: 3% cap on taxable valuation, allows to exceed cap by specific percentage with voter approval.

It is uncertain at this point what the Senate Finance and Taxation Committee’s appetite is for amending or combining these bills. Although we believe the Legislature will ultimately regret going down the cap road, it appears caps are on their way. Because of the strong position of the Legislature to restrict local spending, the strategy has now shifted to asking for lawmakers to lighten the cap to avoid severe consequences of diminished local services. NDACo is encouraging lawmakers to consider an indexed cap based on the Consumer Price Index (CPI) + 2% to account for high inflation years, as a better option over a flat 3% cap.

SB 2201 was the first bill signed into law. It allows primary residences owned by qualifying trusts to retroactively apply for the 2024 primary residence credit and to be eligible in the future.

A few bills were introduced to address levies that don’t directly impact local property; however, these true reform measures were unsuccessful. HCR 3012 and SCR 4023 were resolutions to allow voters to repeal the one mill for the state medical center with the intent of the state to fund the medical center through a direct appropriation ($15 million/biennium) versus an expense to local property taxpayers. Both these resolutions failed. HB 1572 was introduced to eliminate local levies for Garrison Diversion and NDSU Extension, again with the intent of shifting financial responsibility to the state. Those portions were removed from the bill. The bulk of HB 1572 now includes changes to the tax statement – PASSED

TRANSPORTATION RELATED

The NDDOT Budget (SB 2012) includes new funding for local roads and bridges. Funding concepts from three separate infrastructure bills were rolled into the DOT Budget Bill in the Senate. The greatest policy change is dedicating 100% of the motor vehicle excise tax to roads and bridges. This package includes additional funding and will have a positive impact on funding local road needs.

Here is a summary of what is included in the bill:

• Flexible Transportation Fund grows to $447 million
  • 100% of the motor vehicle excise tax ($360 million)
  • 1% of Legacy Fund Earnings ($87 million)
    • 50% of Flexible Transportation Fund to NDDOT ($223 million)
    • 50% split into six buckets for local roads and bridges ($223 million)
      • Non-oil County and Township Roads and Bridges ($56 m)
      • County and Township Bridges ($56 m)
      • County and City Formula Distribution ($28 m)
      • City Grants ($28 m)
      • Non-oil Township Formula Distribution ($28 m)
      • Non-oil Township Grants ($28 m)

The House approved a gas tax increase to help fund local roads. HB 1382 increases the gas tax $0.03 and generates an estimated $43 million to be distributed to non-oil counties, cities, and townships.

The Prairie Dog bucket got a nice addition in the OMB Budget Bill (HB 1015), increasing it from $170M to $220M.  This is to keep distributions whole if SB 2397 passes. SB 2397 re-defines low-oil producing counties as non-oil producing. There are five counties and 187 townships this would impact. The $50 million in additional Prairie Dog funds in HB 1015 would ensure distributions to cities, counties and townships would not decrease. In addition, House Appropriators decreased the amount deposited into the Strategic Investment and Improvements Fund that sits ahead of the Prairie Dog buckets from $400 million to $270 million. This would decrease the amount of oil and gas production tax revenue that is required to be deposited in other priority buckets prior to reaching non-oil counties, townships and cities. It is important to note that during a recent legislative revenue forecast, the state is predicting that the prairie dog buckets will likely not fill in the 25-27 biennium.

Other important transportation bills that have passed: HB 1444 allows counties to add township roads to the county system if it is determined a local road meets the criteria in the county road system definition.  SB 2183 increases the violation fee of speeding in construction work zones from $80 to $150.  The speed limits must be followed even if construction workers are not present in the construction zone.

The House defeated HB 1407 which would have increased weight limits for vehicles on the state and local roads from 80,000 to 113,000 pounds. The Senate defeated SB 2208, which would have penalized counties/townships that passed an ordinance or policy that exceeded state statute to restrict agriculture or energy infrastructure projects by prohibiting them from receiving Prairie Dog funding.     

PUBLIC SAFETY RELATED

Several priority public safety-related bills are still in play as we enter the second period of the Session, even if they have been amended. NDACo worked with several legislators to introduce bills to address jail funding. HB 1197 and HB 1213 have both been amended but will provide some relief to those counties looking at jail improvement projects.  HB 1197 was turned into a study of correctional needs, and HB 1213 is intended to dedicate $50 million in low-interest loans for jail improvements. HB 1344 was approved to clarify that NDDOCR will reimburse counties for housing state-sentenced inmates when the state system is experiencing overcrowding.

The Attorney General’s Truth in Sentencing bill, SB 2128, which forces violent offenders to serve a greater portion of their sentences in prison, has passed over to the House.

Several bills focused on rewarding those in public safety have found success. HB 1193 has been amended to mirror the Back the Blue Grants approved in the 2023 Session to provide $3.5 million in recruitment and or retention bonuses to local law enforcement and corrections officers.  HB 1419 would allow 9-1-1 dispatchers and EMS to enroll in the NDPERS public safety plan, if their county offers the plan. SB 2093 expands the income tax deduction for retired law enforcement to surviving spouses. The Senate turned SB 1371 into a study of health insurance for retired peace officers.

Here are a few other public safety bills worth noting:

SB 2277: Designates Highway 200 as ND Fallen Peace Officers Highway – FINAL PASSAGE

SB 2098: Improvements to criteria for issuing Silver Alerts – PASSED

SB 2365: Prohibits judges from waiving 24/7 fees – FAILED

FINANCE/ELECTION RELATED

Auditors of course are closely watching the property tax-related legislation and the technical aspects of those bills that will impact budgeting, statements, notices, etc. A success was the defeat of HB 1384 which sought to require that the county auditor be elected, along with the defeat of HB 1306 which would have expanded the number of free hours to respond to open record requests from one to 40 hours. This bill met heavy opposition from county officials. An effort to reduce publication requirement for counties failed in the House with the defeat of HB 1380.

A handful of election-related bills were introduced, all those of concern were defeated:

• HB 1587: Related to post-election audits and required ballots to be hand counted
• HB 1287: Established voter registration
• SB 2178: Required separate ballots for each party for the primary election

PUBLIC HEALTH RELATED

Local public health units will continue to seek an additional $2 million dollars for a total of $10 million in state aid funding in the Department of Health and Human Services Budget, HB 1012. State aid funding is critical, flexible funding assistance to fill gaps and cover the many responsibilities local public health units have that aren’t earmarked through designated funding. This funding increase is especially important with the threat of the state mandating local government budget restrictions.

Two septic system bills were introduced on each side and both passed. HB 1541 moves to the Senate with support from local public health units, the plumbing board and environmental health practitioners. Authority to create rules related to licensing, permitting, and inspecting septic systems lies within the Department of Environmental Quality (DEQ).  SB 2267 places licensing and oversight of septic systems with the plumbing board which continues to oppose “private sewage disposal systems” oversight, stating it is a separate discipline from plumbing.  

Data collection from the Youth Tobacco Survey and Youth Risk Behavior Surveillance System (YRBSS) are at risk in SB 2105 which was passed in the Senate. Currently, these two data sources are the only two of their kind and offer insight into areas such as dietary behaviors, sleep, mental health issues, tobacco/vaping use, safety concerns, and physical activity. Questions for the YRBSS survey are selected through a committee of stakeholders including HHS Public Health, HHS Behavioral Health Division, DPI, DOT, Community Organizations and Regional Education.

Other public health-related bills worth noting:

• SB 2308: Removes the Onsite Wastewater Technical Review Committee and moves authority to create septic system rules to DEQ – PASSED
• SB 2281 and HB 1570: Proposed increases to tobacco tax – FAILED
• SB 2255: Pertains to qualifications, term, and duties of the state health officer – PASSED

OTHER BILLS OF COUNTY IMPORTANCE:

• HB 1602: Allow political subdivisions to opt out of NDPERS defined contribution plan – PASSED
• HB 1096: Reduce 9-1-1 service fee to 2.5%, returning additional funds to support 9-1-1 system – FINAL PASSAGE
• HB 1310: Eliminate fees for defendants, which would have reduced the amount of dollars going into the court improvement grants – FAILED
• HB 1141: Prohibit state or political subdivisions engaging in activities with member associations that endorse ballot measures – FAILED
• SB 2039: Property tax exemption for ag storage facilities – PASSED  

There is still a lot of important work to do! For bills that have crossed over, this is the last chance to weigh in to make changes or encourage their passage or defeat. If the bills are altered by the second chamber at all, they may go to conference committees where lawmakers from both sides will work on a compromise.

Two of the major property tax relief / reform bills had hearings Tuesday. HB 1168 buys down 10 mills of property taxes using the school funding formula and places a 3% cap on dollars levied for all political subdivisions except schools. NDACo suggested a restriction based on the Consumer Price Index plus 2% would be preferred over a 3% flat cap. HB 1168 does allow to carry over unused cap to the next year and allows for a vote to exceed the limitation. The Senate Finance & Taxation committee also received testimony on HB 1575 which reduces the tax rate on all property classes including centrally assessed and includes a 3% cap on taxable valuation. While the bills vary in how they restrict local government they both provide relief to all property taxpayers, which is appealing to some lawmakers. During both hearings the bill sponsors did suggest amendments. The committee did not act on these bills as the other major property tax bill is scheduled for Monday. HB 1176 provides $1450 in relief for primary residents only through the primary residence credit. It also includes a 3% cap on dollars levied but also allows for a vote to exceed the cap and allows for carry-over. HB 1176 will be heard Monday, March 17th at 9 a.m. in the Senate Finance & Tax committee. It is uncertain at this point if the committee will want to amend any of the bills and choose one as the favorite to pass out of the Senate. NDACo will be monitoring the committee work on these bills very closely.

Other important action this week:

• NDACo testified in opposition to SB 2039 which would provide a property tax exemption to Agriculture storage facilities on the basis that these tax exemptions shift the tax burden to other property taxpayers.
• SB 2365 sought to prohibit judges from waiving 24/7 fees, an action that is being done in some counties and impacts the associated costs for this program which is intended to be self-funded. SB 2365 had a hearing, received a Do Not Pass recommendation and was defeated in the House. The bill had been supported by the Sheriffs.
• HB 1096 which decreases the 911 service fee to provide additional revenues to support the 911 program received final passage in the Senate.
• SB 2098 also received final passage and changes the criteria used to issue Silver Alerts.
• SB 2183 which increases fines in construction zones was passed out of committee but amended to only include the fine when workers are present in a construction zone. 
• HB 1518 relating to rotary traffic islands (round abouts) came out of committee with a DNP as it is a duplicate bill of SB 2371, which already passed both houses.
• HB 1153, which passed both houses, clarifies exemptions for one-call notices for normal maintenance of paved roads as long as it does not extend deeper than existing pavement and normal surfacing of gravel roads, as long as the maintenance does not involve the road ditch.
• SB 2281 which would have increased the tobacco tax, failed in the House.

Click here to view the hearing schedule of bills NDACo is tracking

As we have now made it halfway through the 2025 legislative session much of the smoke and noise has gone away and we have a slightly better understanding of what Legislators are thinking when it comes to property tax relief and restrictions. As you might remember we started the session with 60 different bills dealing with property taxes, but we are now down to just a handful. View a summary of the property tax proposals here.

The remaining bills vary in how they deliver relief from providing a primary residence credit (HB 1176), to buying down school mills (HB 1168) and reducing tax rates (HB 1575). All three of these bills restrict local government’s ability to raise taxes. At this point, it seems bills that limit property values (HB 1575 & HB 1534) are not gaining much traction in the Senate but bills that provide either a property tax credit for primary residence and/or property tax “buydown” for school mills are gaining support.

Two of the bills will be heard this week. HB 1168 and HB 1575 will both be heard Tuesday. HB 1176 was previously scheduled for Monday morning but has been cancelled over the weekend. We predict HB 1176 will be heard the week of March 17th. HB 1176 & HB 1575 contain significant tax relief at $500 million and $703 million. All three bills contain limitations to local budgets. In other words……CAPS. The legislature has been solidly in the 3% camp so far. Exemptions to the 3% are provided in these bills but they are not all the same.

Although we believe the legislature will ultimately regret going down the cap road it appears CAPS are on their way. Because of the strong position of the legislature to restrict local spending, the strategy has now shifted to asking for lawmakers to lighten the cap to avoid severe consequences of diminished local services. Click here to view the list of what a 3% cap on levies means for each county.

Ath the direction of the ND County Commission Association legislative call, NDACo will be supporting any bill that provides relief for taxpayers. However, we are going to suggest that a flat 3% is not the way to go and instead they should consider an indexed cap based on the Consumer Price Index (CPI) + 2% to account for high inflation years like we all just recently experienced. We would also acknowledge there still would have to be an overall cap in this scenario so we are suggesting we would not go higher then 6% nor could we go lower than 2% in craze inflation or deflation times respectively.

These are tough decisions, and taxation policy is not easy. The chairman indicated they will hear all these bills before acting on them. It is unknown if they will work to merge some of the concepts into one bill or choice one to recommend passage. Regardless, we encourage you to review the bills and reach out to your legislators to let them know your thoughts. Now is the time!

Click here to view the schedule of bills NDACo is tracking for March 10-14.

*iMPORTANT: hb1176 appears on schedule but it has been cancelled

This is a quick update on a short but important week at the Capitol. Lawmakers have hit the crossover deadline where bills need to be acted on by the chamber they were introduced in. The Senate wrapped up their work Tuesday afternoon and the House ended at 10:30 p.m. Tuesday evening. The Legislative Session will resume Wednesday, March 5th. 1,082 bills and resolutions were submitted during this 2025 Session, the most since 2009. Watch for a NDACo crossover report to come in next few days.

Property Tax Bills

The big anticipation this week was over how the House and Senate would vote on the several property tax relief and reform bills. The two bills in the Senate failed, while the House passed on three bills with varying options to provide relief and reform. Click here to view summary chart of active bills proposing relief and reform.

• SB 2363 – Focused on providing relief to Agriculture taxpayers only. It went to Appropriations with a 30 mill reduction using the school funding formula, The Appropriations committee decreased it to a 15 mill reduction and a floor amendment introduced as the bill was before the full Senate further reduced the relief to 7 mill reduction. Failed 23-23.
• HB 1176 – Provides $1450 in relief to property owners through the primary residence credit. The bill also includes a 3% cap on levies but allows taxing districts to exceed the cap by a specific percentage if approved by a majority vote in the general election. Emergency levies are also exempt from the cap. Taxing districts can also carry over any unused cap, once within 5 years. The bill also includes an increase in the homestead tax credit and renter’s refund. Passed 81-10
• HB 1575 – Provides property tax relief to all property classes (Residential, Agriculture, Commercial) by reducing the tax rate. The bill also increases the threshold to qualify for the homestead tax credit as well as increases the renter’s refund. The bill includes a 3% cap on increase of taxable valuation. Taxing districts can, with majority voter approval in the general or primary, increase the mill levy authority for up to 6 years. The vote must be for a specific number of mills, state the intended purpose and identify for how long. Passed 86-5
• HB 1168 – Provides a 10 mill buy-down using the school funding formula for all properties. Includes a 3% cap on taxes levied for all taxing districts except school districts. Taxing districts can carry over unused cap to the next year. Taxing districts can exceed the limitation with a supermajority of 60% of the vote in the general or primary for no more than 5 years at a time. Passed 88-3.

Other Bills worth highlighting that were acted on this week:

• SB 2012 – DOT Budget – Passed 47-0. As described in last week’s report, this bill includes new funding for counties, townships and cities. The greatest policy change is dedicating 100% of the motor vehicle excise tax to roads and bridges. Three other Senate bills that included road funding were killed as portions of those bills were merged into SB 2012.
• SB 2281 – Tobacco Tax Increase – Passed 26-21.
• SCR 4023 – Vote to Repeal 1 mill for State Medical Center – Failed 21-26.
• SB 2128 – Attorney General Truth in Sentencing – Passed 28-18.
• HB 1213 – Low Interest Loans for Jail Improvements – Passed 64-28.

Legislative Council does have a schedule for next week published.

Click here to view or download the schedule.

ND Legislative Session Nears Crossover

It was a fierce week for lawmakers in terms of acting on bills. The House held several evening floor sessions and Appropriations committee held evening sessions as well. They are on pace to hit the crossover mark Wednesday. Crossover is the legislative deadline for when bills need to be acted on in the chamber of origination. Bills that are still alive will then move over to the other chamber and have a hearing and be voted on by the committee and chamber. So, House bills passed by house members will now move to the senate and vice versus. They will resume session Wednesday, March 5th.

There are a number of priority items to keep watch for in the next few days that will come up for votes. The House Appropriations committee Friday evening gave three property tax relief/reform measures HB 1176, HB 1575 & 1168 do pass recommendations. The major change appropriators made to HB 1176 is shortening the years a vote to exceed the cap is good for from 10 to 4 years. The three House bills each provide the relief using different vehicles from a Primary Residence Credit (1176), reduction in tax rates (1575) and school funding (1168). All three include a cap or revenue limitation for political subs. These bills could be voted on Tuesday or Wednesday. The Senate also has two property tax relief/reform bills waiting to be acted on. SB 2378 has a DNP and SB 2363, which uses the school funding formula to provide relief, has a Do Pass recommendation. Click here to view a list of property tax relief/reform bills that are still active.

Property Tax related, Governor Armstrong signed his first bill, SB 2201, which fixes an oversight related to trusts and the primary residence credit approved by the legislature in 2023. The bill has an emergency clause which takes effect immediately. Primary residences now owned by trusts are eligible for the PRC and are able to retroactively apply for the 2024 credit.

HB 2013 which seeks to provide $50 million in low-interest loans dedicated to jail improvements was passed out of House Appropriations with a Do Not Pass recommendation. This bill along with HB 1176 were introduced to assist counties planning jail expansions. That bill was amended into a study of correctional facility needs.

SB 2128, the Attorney General’s Truth in Sentencing bill was sent out of appropriations with a do not pass recommendation.

The Department of Transportation Budget, SB 2012, got a major rework in Senate Appropriations. The committee merged three bills with proposals for local road funding into the DOT budget. The committee’s actions build upon 2023 legislation to provide more reliable funding for to address state and local government road needs. A big move in policy is dedicating 100% of the motor vehicle excise tax ($360 million) to roads. The Senate plan would also dedicate 1% of Legacy Earnings to provide a total of $447 million into the flexible transportation fund. 50% of those funds would be for state DOT projects and the other 50% ($223 million) to local governments through six different buckets.

HB 1541 was amended to allow local public health units to permit and inspect septic systems but not license septic system installers. The authority to create rules related to licensing, permitting, and inspecting septic systems lies within DEQ’s authority. This bill creates the “Environmental Quality Advisory Committee” which has 7 members, 1 ex officio member from DEQ, 3 licensed installers, and 3 local public health members. The committee is tasked with recommended standards and procedures relating to licensing, permitting and inspections of systems. Local public health and environmental health practitioners support this bill which is still on the Floor for final passage.

With the desire to move the bill through committee, SB 2267 received a Do Pass with amendments. One amendment removed the section that was inserted into public health core competencies of Century Code stating LPHU had no authority over septic systems. Additional discussion without resolution included ultimate responsibility authority through DEQ or the plumbing board. Consideration of the amendments are on the Senate Floor.

SB 2308 passed through committee with amendments.  Among the many state boards and committees being reviewed in this bill is the Onsite Wastewater Technical Review Committee established in the 2023 session. As amended, authority to create septic system rules would move to DEQ.

Here’s a highlight of other bills of importance that were acted on this week:

• HB 1382 – Gas tax increase of 3 cents to counties, townships & cities ($42 million in additional revenue which includes $18 million for counties) PASSED 58-35
• HB 1193 – Law enforcement appreciation grants amended to $3.5 million similar to Back the Blue Grants approved in 2023 Session. PASSED 78-14
• HB 1602 – Allows political subs in NDPERS to opt out of defined contribution plan and fund own plan. PASSED
• SB 2208 – Prohibited counties limiting energy development from receiving Prairie Dog funds. FAILED
• HB 1306 – Expanded free hours for open records requests to 40 hours. FAILED
• HB 1587 – Election related including hand count post-election audit. FAILED
• HB 1287 – Voter Registration – FAILED

The following information was shared with lawmakers in the NDACo Common Ground e-newsletter.

There is a great deal of pressure this session to approve both property tax relief and reform. This is no easy task as there are many strong opinions on how best to accomplish this.  As you know, counties are dependent on property taxes to pay for local services. Half of the property taxes collected are dedicated to roads and public safety. These local services are important to the safety and quality of life of North Dakota citizens. What citizens don’t want is less law enforcement keeping their community safe and neglected roads. This scenario could be a reality if counties are limited in how much revenue they can generate to keep services running. In fact, budgets are set based on needs and citizen input which led to counties cutting taxes 1.2% in 2022. Furthermore, 22 counites in 2023 reduced mill rates and eight of those counties lowered the dollars they levied.

County commissioners are the closest level of government to the people. It is important to keep local control the focus of any reform measures you consider. Discussion related to caps has counties concerned. A cap will directly limit local control and the ability for local government leaders to respond to their community.

WHAT CONCERNS COUNTIES ABOUT CAPS:

What does a 3% cap on property tax levies mean to your county? Click here to see…  

Counties are not equal. They are different in geographical size, population, property tax base, and economic factors. A cap, regardless of the level, means different things based on a county’s budget and the value of a mill.

• A 3% cap on property tax levies in Sioux County would provide $20,000 in additional funds for all county operations, that’s the low end. For comparison, the median amount generated by a 3% cap would generate $98,000 additional revenue for a county.  
  • Half of the counties in the state will generate less.
  • Most of those counties have little to no ability to generate revenue other than from property taxes.
• A 3% cap would generate more than $500,000 in the state’s four largest counties.   

Existing property tax laws already limit the revenue that can be raised from county property taxes.

• Four counties are at their mill levy maximum for their general fund.
• Four additional counties are within five mills of reaching the maximum limit for their general fund.
• There are 31 counties in the state where one mill generates less than $50,000.

There are numerous costs a county can’t control including:

• State unfunded mandates
• Road maintenance
• Fuel
• Road equipment
• Health insurance premiums
• Mandated valuation increases
• Criminal law changes

WHEN LOOKING AT REFORM ISSUES, WE ASK LEGISLATORS TO CONSIDER:

Budget restrictions remove local boards’ discretion to respond. It is the responsibility of local boards to evaluate funding sources and weigh how to pay for mandated services along with citizens’ requests. In addition, there are investments counties need to make to support infrastructure needs due to population growth and industrial expansions. Board members know the needs of their county and are elected to make those decisions.

• Citizens should have options to decide if a cap is appropriate for their county.  Providing an opportunity for citizens to vote to opt-out or exceed a cap allows for LOCAL CONTROL.
  • Citizens have overwhelmingly approved of recent county measures seeking tax increases to address specific county needs like roads and public safety.
  • Taxpayers ultimately should have a voice on whether they support paying more for services.
• Emergency levies are already restricted on how they can be used and the level of dollars allowed. This levy should be exempt from caps. Local governments need the ability to rebuild the fund to address future emergency events. Situations where a county would need to utilize funds from the emergency levy often can’t wait two years for a vote.
• If caps of any kind are to be included in tax reform policy measures, the legislature needs to discontinue passing additional costs to local government of which they have no control.
• Property tax exemptions shift the tax burden to other taxpayers. An individual pays more property taxes when a property tax exemption is provided to someone else. For property tax fairness, we encourage the legislature to refrain from passing any new exemptions and to evaluate property tax exemptions previously approved by the state that can or should be funded by the state versus passed on to taxpayers.

ENDING THOUGHT…

It is critical that property tax reform measures allow for flexibility and do not hinder growth. Local control is imperative. Citizens should have a say on the services they want in their community and have an opportunity to support paying more for those services.

Click here for a view of the schedule of hearings for the week of February 17th. Click here to view all bills NDACo is tracking.

Legislature Narrows Down Property Tax Relief and Reform Measures

It was a busy week of committee work as policy committees spent their time wrapping up their work on bills they have heard and passed out of committee. The first priority for policy committees was acting on bills with appropriations as the deadline for those bills to get referred was Monday. The Finance & Tax committees passed out the property tax relief and reform bills that have been proposed. We now have a greater understanding of which options are moving forward. The options out there vary greatly on how they propose to deliver relief and reform.

Here is a summary of the bills that have received Do Pass committee recommendations and have been referred to Appropriations. We expect that they could be voted on this week.

• HB 1176 – Relief: $1450 Primary Residence Credit. Reform: 3% cap on property tax dollars. Allows counties to exceed or opt out of the cap with a vote in the general or primary election.
  Will be heard in House Appropriations Monday 2/17 at 3:00.
• HB 1168 – Relief: Provides 10 mills of relief through school funding formula. Reform: 3% cap on property tax dollars. Allows carryover of unused cap to next year. Allows counties to exceed the cap with a 60% vote in a regular or special election.
• HB 1534 – Reform: 3% cap on taxable values, allows to exceed % with a vote.
• HB 1575 – Relief: Reduces tax rates for residential, agricultural, and commercial. Reform: 3% cap on taxable values. Cap can be exceeded by a defined % with approval by the voters.
• SB 2363 – Relief: 60 mill reduction for residential, commercial and centrally assessed, 30 mill reduction for agriculture land using school funding formula.
• SB 2378 – Reform: CPI cap, can be exceeded by defined % with voter approval of two-thirds qualified electors. No committee action yet.

Click here to see a status report of the property tax relief and reform measures.

Other important legislative highlights from the week:

• SB 2201: Property Tax relief related – retroactive to allow for trusts to receive Primary Residence Credit – FINAL PASSAGE
• HB 1382: Increases gas tax 3 cents for counties, cities & townships – was defeated on house floor, reconsidered and passed – rereferred to Appropriations
• HCR3012: Resolution to put on ballot repeal of one mill for state medical center – FAILED
• HB 1602: Allows political subs to opt out of NDPERS defined contribution plan – Do Pass recommendation – expect this on the House floor Monday,
• HB 1213: $50 million in Infrastructure Revolving Loan Fund for Jail Improvements – PASSED
• HB 1197: Amended to study jail needs – PASSED
• HB 1306: Expanded free hours allowed for open records requests – Do Not Pass recommendation
• HB 1193: Law Enforcement Grants amended in House Appropriations to mirror Back the Blue grants from 2023 Session for local law enforcement & corrections officers – Do Pass Recommendation

Public Health Day at the Capitol

SACCHO local public health members teamed up with the North Dakota Public Health Association (NDPHA) and the North Dakota Department of Health and Human Services (NDHHS) partners for Public Health Day at the Legislature. Held in the Capitol’s Memorial and Legislative Halls, the event showcased public health initiatives, and the work public health professionals do to protect and improve the health of North Dakota communities. Public health trivia and Plinko were among the activities enjoyed by Legislators.

Local Government Capitol Connection THIS WEEK!

There is still time to register for the upcoming Local Government Capitol Connection Feb. 18-19th at the Bismarck Event Center. NDACo is partnering with other associations representing cities, townships, schools and parks to bring all local political sub leaders together for legislative updates. We hope to see you there! Click here for more information.

In a somewhat rare move, House members Tuesday requested to debate amendments on HB 1176. HB 1176 is the property tax relief and reform bill sponsored by Rep. Nathe to provide a $1450 primary residence credit and caps local government limits property taxes at 3% growth. More detail about what is included in the bill was provided in a previous legislative blog post.

Rep. Ben Koppelman of West Fargo wanted to debate amendments included in two specific sections of the bill. He criticized the flexibility provided to political subs in relation to the cap on property tax revenues. The amendments he singled out for debate allow political subdivisions to vote to exceed the cap for two years as well as the ability for counties and cities to ask for voter approval to override the cap, good for 10 years. After plenty of debate, House members voted to keep the flexibility to exceed and opt out of the cap in HB 1176.

The other amendment debated was a section added to include income tax relief, increasing the income threshold for the bottom, zero bracket. The House did vote to remove that section of the bill.

HB 1176 will now go to House Appropriations before returning to the House Floor for another vote on the bill in its entirety. We encourage you to let your Representatives know the reasons why any reform measures need to allow for some level of local control.

Listen to the House debate on the amendments here

Click here to review a status update on property tax relief/reform bills

Click here for a view of the schedule of hearings for the week of February 10th. New features on the NDACo website make it easy to find the schedule of NDACo bills. The schedule is updated daily – and is available to download and print. The website also includes a list of bills NDACo is tracking. Click here to check it out.

Property Tax Update

Perhaps the biggest news of the week is the House Finance & Tax Committee acting on one of the major property tax relief / reform bills. The committee passed an amended version of HB 1176 which is sponsored by Rep. Nathe and Governor Armstrong highlighted elements of the bill in his State of the State Address. HB 1176 will go to the House Appropriations committee either late this week or next, then it will be voted on the House floor. While caps still remain in this bill, NDACo was able to make suggestions that were included in the amendment that help improve the bill – including votes to exceed the cap good for 2 years and the option for counties and cities to over-ride the cap with voter approval good for 10 years. The approved amendments are not posted online yet but here is a summary of what is included in the bill:

• Primary Residence Credit: $1450 maximum
• Assessment Notice: Mailed in spring to all property owners, includes true & full value of each parcel for current & previous year and date, time & location of board of equalization meetings.
• Budget Hearing Notice: Mailed in August, includes date, time, & location of budget hearings of taxing entities. All other information included on past estimated tax notices is removed.
• Cap on Property Taxes Levied: The levy may not exceed the greater of the base year levy or the adjusted year levy increased by 3%. The “base year” levy is the highest amount levied in preceding three years. The “adjusted year” levy is the amount levied in dollars the preceding year plus new growth. Cap is on total property taxes levied.
  • Unused Cap Carryover: Can be used once within 5 years.
  • Allows for 3% Cap Exemptions:
    • Emergency Levy exempt from 3% cap
    • Allows taxing districts to exceed 3% cap with majority vote in general or primary or 60% majority at a special election.
    • County or City can be excluded from 3% cap for 10 years with majority vote at general or primary election.
    • Homestead Tax Credit: Amended to stay at level currently in state law – which was expanded in 2023.
    • Income Tax Relief: Increases the income for the bottom zero bracket.
  • The sections of the bill related to the primary residence credit have an emergency clause, meaning the increased amount of the PRC would take effect for 2025.

The House Finance & Tax Committee will be working on other Tax bills with appropriations Monday. They have no other hearings scheduled. The Senate Finance & Tax Committee will be doing the same in between hearings. Monday is the deadline to get bills with an appropriation attached out of committee.

SB2201: Allows primary residences owned by “qualifying trusts” to retroactively apply for the tax year 2024 credit. Amended bill allows applications no later than May 1, 2025. Amended bill passed House Finance & Tax Committee and was rereferred to Appropriations. This bill also includes an Emergency Clause.

Transportation Related:

HB 1382: Special Fuel Excise Taxes for County/Township Road Fund – creates a new fund for County, City, Township Road Fund ($0.03 gas tax) NDACE and NDACo provided testimony in support of bill.

HB 1453: Prohibits state and political subs from doing business with natural asset companies. NDACo opposed the bill as there was no clear definition of a natural asset and included unintended consequences of counties no longer being able to purchase wetland credits.  Requested to have clarification in the bill to exempt wetland credits and bill sponsor was open to making the change.

SB 2317: Revocation of Township Zoning Authority – township may reacquire zoning authority from county.  Committee approved amendment that townships adopt a comprehensive plan (zoning). No committee action was taken.

SB 2371 & HB 1518: Rotary Traffic Islands (Round Abouts) – both bills passed out of committees to remove the signaling requirement in a round about.

Law Enforcement Related

HB 1193: Law Enforcement Appreciation Grants – as introduced the bill was $8.5 million and sought to provide a $6,000 bonus for all peace officers and state correctional officers who have been with their agency for 4 or more years. The bill received a DNP recommendation but passed the floor. It will be heard in House Appropriations Monday. We expect the bill to be amended in Appropriations to mirror the Back the Blue Grant passed during the 2023 Session.

HB 1613: Restricted the use of drones & robots. The law enforcement community had heavy opposition to the bill. The committee amended it to remove the suggested language and to insert robots into the code relating to limitations of unmanned aircraft for surveillance.

HB 1310: This bill eliminates fees for defendants but in turn repeals the court improvement grants. NDACo testified on the importance of the court improvement grants and that a new funding source will need to be identified.

SB 2365: Addresses when 24/7 fees are waived by Judges. An amendment prohibits Judges from waiving these fees.

HB 1344: Clarifies that when NDDOCR is over capacity and utilizing county / regional jail facilities they will pay starting 7 days after sentencing/notification to NDDOCR. Passed the House Judiciary committee 12-0.

HB 1197 & HB 1213 were two jail related bills seeking state support for Jail Improvements. Both bills were amended and will more than likely be voted on in the House early this week. HB 1197 was changed into a study of current and projected correctional needs and costs. HB 1213 was amended to expand access to the infrastructure revolving loan fund and earmarking $50 million specifically for jail improvements, expansions or new construction.

Other Bills of Importance:

HB 1306: relates to open record requests and proposes to expand the number of hours for free from one hour to 40 hours, for one requester per year if they are a North Dakota resident. This bill met heavy opposition from county folks. Testimony was submitted and provided by NDACo along with commissioners, recorders, auditors, state’s attorneys and Sheriffs.

Septic systems permitting and regulation is the seen in three bills this session.

HB 1541 was initially voted out of the Energy and Natural Resources Committee with a Do Not Pass. The bill was re-considered and an amendment removing the fiscal note was adopted. Additional work on the bill and its amendment is in progress.  This bill is supported by local public health, DEQ and the State Plumbing Board.

Addressing public health units to adopt an onsite wastewater recycling treatment guide, SB 2308 received neutral testimony from local public health unit Committee members stating the Committee accomplished what it can and the guide is ready to move to the Department of Environmental Quality.

Standing in opposition of SB 2267, local public health units, environmental health practitioners and the State Plumbing Board reject the removal of local public health input for septic systems which poses significant risks to public health and environmental safety in North Dakota.