North Dakota Bankers
Extraordinary Leadership for North Dakota Banks

February 24, 2023 - Update

February 24, 2023 - Update

Posted: Feb 24 2023

This Week at the Legislature

We’re not yet to March Madness, but the first half buzzer has sounded! Legislators have entered crossover break until next Wednesday, March 1. When they return, they will still have hundreds of bills to hear and discuss. Here is the overall breakdown for the first half:
  • 572 House bills introduced, 397 passed, 131 failed, and 11 were withdrawn.
  • 410 Senate bills introduced, 321 passed, 82 failed, and 4 were withdrawn.
Some of the major topics of public policy discussion include income tax relief, for which there is well over $500M in proposed tax cuts, property tax relief, for which there is $200M in proposed tax cuts, workforce development, the opening of laws allowing for investment in agriculture, a long-term plan for how to invest the earnings from the $8B Legacy Fund, whether or not to keep the defined benefit plan for public employees or move to a defined contribution plan, the emerging CO2 industries relating to energy and agriculture, and new and historic investments in child care (over $100M).
The general fund is the fund used to operate government and is the key measure to a balanced budget. The past few sessions, transfers from other funds like the Strategic Investment and Improvements Fund (SIIF) and the Legacy Fund have been necessary to balance the budget. It appears that will again be the case for the 2023-2025 biennium. Last biennium’s general fund appropriations amounted to $5B. So far, considering the bills adopted by both respective chambers to date, the legislature has appropriated a total of $6.5B of general fund dollars. The state has $5.3B in anticipated general funds for the upcoming biennium—$1B of general fund dollars not committed from the last legislature plus $4.3B projected in general fund revenue for the upcoming biennium.
All in, with $5.3B “in the bank” and $6.5B in proposed appropriations, there is a $1.2B deficit going into the second half. Deep cuts—or transfers from other funds like SIIF and the Legacy Fund—will need to be made to balance the budget. While not entirely surprising given the session is only half completed, it’s interesting to observe that the governor’s budget provided for $5.9B in general fund appropriations—$600M less than the legislature to date.
Some other interesting budget tidbits:
  • The “final” revenue forecast will take place in March. Early indications are that the forecast will include additional revenue.
  • SIIF’s current balance is $1.4B. In the first half of the session, the legislature has obligated $1.8B of SIIF—a $400M delta. The largest appropriations from SIIF the first half are to higher education capital projects ($372M), infrastructure funding to DOT ($328M), commerce department’s ND Development Fund ($248M), a solvency payment to the state retirement plan ($240M), and investments in a new women’s prison ($160M).
  • The Budget Stabilization Fund will have a balance of $974M by the end of the biennium.
The Senate adjourned on legislative day 34 and the House on day 35. The state constitution allows 80 legislative days every two years. The legislature will not gavel in Wednesday and Thursday; it will only have committee hearings on those dates. The next milestone after legislators reconvene after crossover will be the final revenue forecast of the session in early March—expected to be favorable—at which time budgets will begin to firm up. The majority leaders are hoping to save at least a few of the 80 days.

Crossover Report

It has been quite a raucous first half for the North Dakota Bankers Association. Two Senate bills have turned into intense floor-lobbying efforts as NDBA has sought their defeat.
The first bill, SB 2217, would prohibit financial institutions from charging an interchange fee on the sales tax portion of credit and debit card transactions. Due to compelling testimony on both sides, the Senate Finance and Taxation Committee tied 3-3, first on a do not pass motion, then a do pass. The committee was forced to vote it out on a 6-0 vote for no recommendation. Countering messaging mainly from the Retailers Associations, the final floor debate favored the retailers’ perspective and the bill passed the Sente 26-21. Facing more votes in the House, NDBA and ICBND is banding with additional coalition voices and credit card companies to counter this bill after crossover.
The second bill, SB 2266, came at the request of Credit Unions for an increase in field of membership from a 75-mile radius to a 250-mile radius and the ability to “leapfrog,” or create fields outside of the original office location around a new branch office. After presenting strong opposition and with much committee member lobbying, the Senate Industry & Business Committee, in an effort to split the baby, amended the 250-mile radius down to 125 miles, removed the leapfrog provision, and gave the bill a 4-0-1 do pass recommendation. Despite the Credit Unions’ messaging, that this was a compromise, NDBA and ICBND banded together to convince the floor for a no vote. Again, messaging favored the rural access and cooperative mentality of credit unions in favor of the committee’s work and recommendation. The final vote showed 24-23, and bankers contemplated a reconsideration attempt. Deciding against reconsideration, the new effort will be to address messaging in the House in March, with continued strong lobbying efforts.
We anticipate taking quick action when legislators return to educate House leadership and Finance and Tax legislators on the importance of stopping both SB 2217 and SB 2266.
Additionally, NDBA worked diligently on HB 1487, sponsored by House Representative Ben Koppelman, to limit credit card companies from tracking purchases from gun retailers with a unique Merchant Category Code (MCC). House Industry Business and Labor legislators heard from the sponsor and then opposition from NDBA, ICBND and Commissioner of Financial Institutions Lise Kruse. Rep. Koppelman agreed to friendly amendments with the opposing parties, working off a Mississippi law, and brought his amendments to committee on February 15. Although the amendments were considerably more favorable, NDBA is still opposed. The amended bill was given an 11-2-1 do pass recommendation and passed the House, 83-9.
NDBA has also actively followed a number of ESG-related bills during the first half of the session. The House Industry Business and Labor Committee worked through HBs 1283, 1469, and 1429, dealing with the boycott of energy and production agriculture, proxy voting made on behalf of state funds, and prohibited practices in insurance. Ultimately, the committee decided to combine the three bills, utilizing HB 1429 as its vehicle. The House defeated HBs 1283 and 1469 and passed HB 1429. 
The House Government & Veterans Affairs Committee and the House Agriculture Committee also worked through several ESG bills. Below is a short description of each:
  • HB 1278 – Prohibiting state entities from social investing, unless the state entity demonstrates the investment would provide an equivalent rate of return compared to a non-social investment. The state investment board must report annually a list of countries in which funds are invested. Passed the House 92-1.
  • HB 1345 – Providing the state may give priority in state purchasing contracts to companies that support the state’s agriculture and energy industries.  Passed the House 85-8.
  • HB 1347 – Creating a “restricted financial institutions list” comprised of financial institutions engaged in “a boycott of energy companies.”  Defeated in the House 3-90.
  • HB 1368 – Prohibiting the state from adopting an investment policy that would have the effect of requiring or inducing any person to boycott Israel. Passed the House 86-7.

Hearings Next Week (2.27.23 – 3.3.23)

03/01/2023 10:00 AM   
HB 1411

Relating to public employees retirement system health benefits coverage of prosthetic devices; to provide a statement of legislative intent; to provide for application; and to declare an emergency. 
Senate Human Services 

03/01/2023 01:00 PM   
HB 1014

A BILL for an Act to provide an appropriation for defraying the expenses of the industrial commission and the agencies under its control; to provide for a transfer; and to provide an exemption.  Includes a BND retention incentive program. 
Senate Appropriations 
NDBA Priority 

03/01/2023 01:00 PM   
HB 1068

Relating to residential mortgage loan servicers; to provide a penalty; and to provide an appropriation. 
Senate Industry and Business 

03/02/2023 10:00 AM   
SB 2111

Relating to certificate of title to be allowed in electronic form. 
House Transportation 
NDBA Priority 

03/02/2023 10:00 AM   
HB 1098

Relating to the enforcement and penalties of communities that fail to adopt or enforce floodplain management ordinances as required under the national flood insurance program. 
Senate State and Local Government 

03/02/2023 10:30 AM   
SB 2048

Relating to the definitions and notice to an accused individual. 
House Government and Veterans Affairs 

03/03/2023 09:00 AM   
SB 2242

Relating to the Bank of North Dakota and the administration of the bulk propane storage tank revolving loan fund; to provide an appropriation; and to provide a continuing appropriation. 
House Energy and Natural Resources 

03/03/2023 11:00 AM   
HB 1107

Relating to the regulation of real estate appraisers; and to provide a penalty. 
Senate Workforce Development 
NDBA Priority 
During a legislative session, a legislator can be reached at the State Capitol through: Otherwise, a legislator can be reached by mail, telephone or email at the address listed in the legislator’s biography, or one of the lists provided below. Individual legislator contact information is listed here:

Over the course of the session, NDBA may ask you to call your Senator or Representative to talk to them about a particular bill or to ask them to support or oppose a particular bill.

Legislator contacts from local bankers are extremely important, so, please, if we ask, contact your legislators!

Also, local legislative forums are great to attend because they inform you about issues beyond banking and let you get to know your legislators at home where they are most responsive to your interests and concerns.

Don’t be a stranger; get to know your representatives in Bismarck!

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