05/01/2023
The 68th North Dakota Legislature adjourned sine die last night on the 75th legislative day, leaving five days remaining should members need to be called back to address issues in the interim.
The session saw numerous pieces of major legislation addressing such topics as tax relief, childcare, workforce, education, local infrastructure, agriculture and numerous social issues.
Tax Relief
HB 1158 is the most significant tax relief in North Dakota’s history.
This bill provides $515 million in direct tax relief by combining an income tax reduction with expanded homestead property tax credit and a $500 primary residence tax credit.
The income tax portion takes the five current tax brackets and reduces them into three, with the lowest bracket (earning under $44,725) paying 0%, the next bracket ($44,725-$225,975) paying 1.95%, and the highest bracket ($225,975 and above) paying 2.50%. The legislation provides property tax relief for those 65+ by expanding the homestead tax credit, increasing both the income and taxable valuation levels, and removing the requirement that an individual’s assets not be more than $500,000, while also creating a primary residence credit of $500 per year. This is over and above the ongoing $1.5 billion in property tax mill buy downs the state has been providing since 2007. Overall, HB 1158, with the tax credits, delivers an 18% reduction in tax rates without any increases for inflation.
Workforce
In addition to reducing income tax, the 68th legislature took major steps to address workforce concerns, including childcare funding and workforce initiatives. HB 1540 appropriated $62 million to DHHS for childcare assistance programs and the Department of Commerce budget provides $28 million for workforce programs. The legislature increasing salaries for all state employees, providing a 6% salary increase in year one of the biennium and 4% increase in year two. SB 2142 created an Office of Legal Immigration to support businesses in recruiting and retaining foreign labor, including immigrants already in the United States and integration of immigrants into the state.
Additional workforce initiatives included $70 million for ND Development Fund, funding for rural health care grants, and an Office of Global Engagement to help promote ND business to world markets.
Education
Education was a major focus again this session with the state investing nearly $2.5 billion for K-12 education. This not only ensures students receive an excellent education, but also reduces pressure on local property taxes. This funding is in addition to increased dollars for career and technical education.
The legislature also provided for enhanced opportunities for students by requiring both public and non-public schools to offer courses in computer science and cybersecurity, the first state in the country to do so. Legislators also passed bills to support parental involvement in children’s education and to ensure fairness in female sports by designating K-12 school and college athletic teams as exclusively based on s*x assigned at birth.
The legislature invested record funding in higher education with a budget of nearly one billion dollars for the 2023-25 biennium, this is a 15.5% increase from the previous biennium.
Members also approved several one-time funding requests from system institutions, including $9 million for UND’s planned national security corridor and $6.8 million to fund the state’s Career Builders scholarship and loan forgiveness program. As well as tuition freezes and $20 million in challenge grants to assist in growing scholarship opportunities across the state.
Support for Local Communities
The legislature provided extensive support for local communities this session ranging from expansion of animal agriculture operations to funding for emergency snow removal, water projects, and infrastructure.
HB 1371 relaxed the laws around corporate farming for the first time in 100 years. The bill allows family farms interested in animal production to form a business structure that mirrors the business structures common in other states. Construction of these local feed mills leads to more jobs and people supporting local businesses and schools.
Perhaps most significant is the move toward adopting a permanent funding formula for roads and bridges in non-oil counties and townships through “legacy streams,” which creates a state flexible transportation fund. This works in conjunction with HB 1012, which utilizes revenues from the motor vehicle excise tax for road funding. Overall, this provides $81 million to counties, townships, and cities.
Prairie Dog funding (dollars from the oil extraction tax that flow through “buckets” to cities, counties, and townships) remained intact and it is anticipated the full $250 million will be available based off the current forecast.
This funding when combined with K-12 leads to $5 billion dollars being invested in local communities.
Energy
Incentivizing gas capture technology was a key theme this session with grant dollars being allocated for gas produced on-site for beneficial uses like electrical conversion and conversion to computational power, as well as tank v***r collection and temporary gas injection into producing wells.
In addition, grant pools in the Oil & Gas Research Council and the Clean Sustainable Energy Authority will provide additional dollars to industry leaders driving progress in both R&D and commercialization of new technologies and innovations. The grants include $3 million to the Oil & Gas Research Fund for a pipeline leak detection and prevention grant program, $1.5 million to the State Energy Research Center for study on economically feasible accumulations of critical minerals and rare earth elements, $11.3 million to the State Energy Research Center for construction of up to two salt caverns for the development of underground energy resource storage, and $30 million to the Clean Sustainable Energy Authority (CSEA) for grants toward projects aimed at commercialization of developing new technologies and processes yielding cleaner energy production.
Veterans and Law Enforcement
The legislature again showed its support for law enforcement through “Back the Blue” legislation that provides $3.5 million to local law enforcement agencies for recruitment and retention bonuses, as well as expanding worker compensation and income tax relief for retired law enforcement.
Mental Health
The assembly improved access to behavioral health in both our schools and through providing tools for law enforcement for online counseling and prescriptive authority in situations where the only previous method was incarceration.
HB 1138 created a mental health court program, which is a district court supervised treatment program that combines judicial supervision with mental health services and treatment in a licensed treatment program.
Overall, the 68th Legislative Assembly funded the state’s priorities by putting dollars directly to work for the people of North Dakota, all while balancing the budget, providing meaningful tax relief, and planning for the future.
