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February 6, 2023 - Update

February 6, 2023 - Update

Posted: Feb 06 2023

This Week at the Legislature

The North Dakota State Legislature hit day 20 of 80 this week, officially passing the one-quarter mark of the 68th session. Financial services legislation has taken center stage in multiple forms from ESG bills to foreign ownership of land, to expansion of credit union membership. Policy bills with appropriations began moving this week to Appropriation Committee hearings, and all policy bills with an earmark will have to be rereferred by Monday, Feb. 6. Appropriators are also in full gear amending dollar amounts on the major agency budgets.
 
Floor sessions are lasting longer each day, as more and more bills are coming out of committee and are now up for the larger debate. Law making is truly in full swing

Hearings and Other Action this Week

SB 2210 – UTC and Individual Retirement Accounts
The Senate Industry Business Committee heard SB 2210 Monday morning. Introduced by Sen. Jerry Klein, SB 2210 deals with the Uniform Trust Code (UTC) which provides a framework for state trust law to provide uniform treatment of trusts across the country. Brad Kraft, Ascensus Trust, testified in support of the bill. He explained Sen. Klein had sponsored the bill on their behalf. He noted North Dakota adopted the UTC in 2007 but explained the legislature had excluded several trusts from the provisions of the UTC, most notably, trusts that are a part of employee benefit arrangements or individual retirement accounts. The bill removes the retirement plan exclusion for these types of trusts.  Because of the exclusion, the current North Dakota Uniform Trust Code does not provide the clarity banks and trust companies need regarding employee benefit arrangements and individual retirement accounts. NDBA’s Rick Clayburgh testified in support of the bill, explaining NDBA was part of a working group that proposed the UTC in 2007. He explained there was no particular reason why these types of trusts were excluded. In 2007, the working group used New York trust law as a starting point for the review of the proposed changes in North Dakota and New York had the exclusion. ICNBD’s Barry Haugen also testified in support. There was no opposition, and the hearing was closed. On Tuesday afternoon, the committee gave the bill a 5-0 Do Pass recommendation and on Thursday, the full Senate passed it 47-0. The bill is now headed to the House for its consideration.
 
HB 1460 – Family Medical Leave
The House Industry Business and Labor Committee heard HB 1460 on Monday morning. NDBA is tracking HB 1460, which allows the state to develop an optional, state-facilitated paid family leave program funded through contributions from employees and/or employees. It also includes a paid family medical leave tax credit. There was a bit of testimony in support of the bill. The Greater North Dakota Chamber testified in opposition. GNDC questioned whether the government should establish a paid family medical leave mandate, or allow business and the private market to be responsive to the benefits sought by North Dakota workers. There was no additional opposing testimony and the hearing was closed. On Tuesday afternoon, the committee considered the bill and gave it a 7-5-2 Do Not Pass recommendation. On Thursday afternoon, the full House defeated the bill by a 16-77 vote.
 
HB 1392 – University Foundation Authority to Deposit into BND
The House Education Committee heard HB 1392 Tuesday morning. NDBA is tracking the bill. House Speaker Dennis Johnson introduced HB 1392. He explained the bill provides North Dakota higher education institutions the ability to deposit funds from their nonprofit organization or foundation into an institution’s general account at the Bank of North Dakota and subsequently disburse those dollars, without the funds being considered a gift under section 18 of Article X of the ND Constitution. The whole purpose of the bill is to allow the allow the institution to accept and subsequently disburse funds received from its foundation for foundation-specified purposes. Many of the smaller institutions have limited foundation staff and would like to provide funds directly to the institution for the President to use in fund-raising activities with donors such buying sodas and snacks at meetings. BND did not testify, but explained before the hearing that the University system already had the authority to deposit the funds in BND. There was no opposition, and the hearing was closed. The committee gave the bill a 14-0 Do Pass recommendation and it now awaits full House consideration.
 
HB 1487 – Relating to Financial Institutions use of Merchant Codes to Track Firearm Purchases
The House Industry Business and Labor Committee heard HB 1487 Wednesday morning. Rep. Ben Koppelman introduced the bill. He explained gun sales can have a unique merchant code (MCC), which is based on an international standard. He believes the state shouldn’t allow this tracking of individuals and firearm purchases which is an infringement on the 2nd Amendment. He explained he is working with the Department of Financial Institutions, NDBA and ICBND to address the concerns of the financial institutions. He noted he has substantial amendments to the bill which are based on similar legislation in West Virginia. NDBA’s Rick Clayburgh and ICBND’s Barry Haugen testified in opposition to the bill as drafted. Both noted they have seen Rep. Koppelman’s amendments and will continue to work with him on a resolution of the industry’s concerns. DFI Commissioner Kruse testified in opposition to the bill as drafted. She testified that her agency would have no jurisdiction over the credit card companies. She further stated local financial institutions should not be targeted. She noted she has been working with Rep. Koppelman using two bills that are in the Florida legislative process where they have better identified terms and use Internal Revenue Code. The hearing was closed. Committee Chairman Louser expects amendments for presentation in committee work and everyone to be in the room.
 
HB 1278 – State Investment Board ESG Requirements
The House Government and Veterans Affairs Committee heard HB 1278 Thursday morning. HB 1278, which was introduced by Rep Bernie Satrom, requires the State Investment Board to add written support of the fossil fuel and agriculture industries of North Dakota to all of contracts.  It also adds the requirement for the State Industrial Board (SIB) to put out for bid each of its advisory contracts every five years. Jan Murtha, SIB Executive Director, and Karen Tayler, Securities Commissioner, testified in opposition. Murtha specifically believes that HB 1278 will be infeasible to administer and will significantly increase the costs to perform compliance monitoring as well as have the unintended consequence of requiring the agency to internalize many functions that are currently performed by external partners. The hearing was closed with committee action.
 
HB 1008 – DFI Appropriation
HB 1014 - HB 1014 – Industrial Commission Appropriation Bill (BND & Housing Finance)
The Government Operation Division of the House Appropriations Committee continued their review of both budgets.  No formal action has occurred.
 
SB 2266 – Credit Union Field of Membership
The Senate Industry and Business Committee heard SB 2266 Tuesday afternoon. Sen. Robert Erbele introduced the bill. He explained the purpose of the bill is to expand the field of membership (FOM) of state-chartered credit unions from 75 miles to 250 miles. The bill would in essence provide a statewide FOM. North Dakota Credit Union League President Jeff Olson and five credit union managers from around North Dakota testified in support. Sarah Getzlaff , Security First Bank of ND; Tim Karsky, Choice Bank; Rick Clayburgh, NDBA; and Barry Haugen, ICBND, testified in opposition to the bill. According to observers, both sides made compelling arguments. The hearing lasted approximately 2.5 hours and was closed without committee action. Since the hearing, Sen. Jerry Klein was discussing amending the bill.  His thought was to strip the bill of all provisions but the FOM radius. He was leaning to increase the radius from 75 miles to 125 miles. Clayburgh and Haugen have met several times with Sen. Klein. They expressed their appreciation of his interest in reducing the radius, but that NDBA and ICBND would still be opposed. Clayburgh produced a state map for Sen. Klein showing the substantial impact of a 125 mile FOM increase. It is not anticipated the committee will act this week, as one of the committee members will be absent attending an out-of-state meeting. 
 

NDBA Grassroots Alert

Please Contact your Senator and ask them to Vote No on SB 2266:

Here is a link to the Senators contact information: https://www.ndlegis.gov/assembly/68-2023/regular/members?combine=&field_legis_chamber_target_id=4&field_legis_district_target_id=All&field_legislator_party_target_id=All&page=0
 
Background
North Dakota’s current credit union field of membership law was enacted in 2005 and codified the 75-mile radius that had been adopted by the State Credit Union Board to remove ambiguity and provide clarity. The 2005 legislation established that a credit union could branch only within their field of membership. This provision was enacted to prohibit credit unions from using branching to leapfrog across the state to the detriment of smaller credit unions.
 
Credit Unions Have Been Growing
According to the state department of financial institutions, state credit union assets, loan activity and numbers of physical locations in North Dakota have grown somewhat more than those of state-chartered banks in recent years.
 
Current Field of Membership is Clear and Fair
The credit union lobby is arguing that North Dakota’s field of membership is the most restrictive in the country. However, during the hearing, the Department of Financial Institutions confirmed current North Dakota law is clear and is not the most restrictive state law.
 
ND Citizens Already Have Access to Credit Unions
The credit union lobby believes they need expanded membership to ensure citizens’ financial needs are covered. The facts show North Dakota citizens, border to border, have complete access to financial services. In every corner of the state, individual citizens have multiple choices to join a credit union. Across North Dakota, there are 19 state-chartered credit unions with 111 branches and there are 77 state and national banks with 392 branches serving 175 communities.
 
Un-Level Playing Field
During the committee testimony, the credit unions explained they support SB 2266 because it will allow them grow even bigger and compete better with banks. Credit unions acknowledge their income tax-free status and exclusion from bank regulations are an advantage they want to keep and expand without any leveling of the legal or regulatory playing field.
 
Banks are not afraid of competition – they just want fair competition.

Hearings This Week

02/06/2023 09:30 AM   
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. 
House Appropriations - Government Operations Division 
NDBA Priority 

02/07/2023 08:00 AM   
HB 1368

Relating to a prohibition on investments and contracts with companies that boycott Israel. 
House Government and Veterans Affairs 
Tracking 

02/07/2023 08:00 AM   
HB 1499

Relating to a primary residence revolving loan fund; to provide a continuing appropriation; and to provide a transfer. 
House Industry, Business and Labor 
NDBA Priority 

02/07/2023 09:00 AM   
HB 1082

Relating to the adoption of the Uniform Commercial Code amendments (2022) relating transactions involving digital assets.   The amendments also address other technological developments affecting electronic chattel paper, negotiable instruments, payment systems, electronic documents of title, and sales and leases of goods.
House Judiciary 
NDBA Priority 

02/07/2023 09:00 AM   
SB 2330

Relating to the legacy and budget stabilization fund advisory board and legacy fund definitions; and to repeal section 6-09-49.1 of the North Dakota Century Code, relating to the legacy infrastructure loan fund. 
Senate Industry and Business 
Tracking 

02/08/2023 09:00 AM   
HB 1379

Relating to an agriculture infrastructure fund, an economic diversification research fund, a workforce development and enrichment fund, a legacy projects fund, a legacy projects advisory board, and a county and township bridge fund.
House Appropriations 
Tracking 

02/08/2023 09:30 AM   
HB 1450

Relating to the definition of pregnancy in the discrimination laws. 
House Judiciary 
Tracking 

02/08/2023 02:30 PM   
HB 1008

A BILL for an Act to provide an appropriation for defraying the expenses of the Department of Financial Institutions. 
House Appropriations 
NDBA Priority 

02/09/2023 08:30 AM   
HB 1393

Relating to grain and seed warehouses, grain buyers, insolvent grain warehousemen, uniform accounting for public elevators and warehouses, and credit-sale contracts indemnity; to provide a penalty; and to provide a continuing appropriation. 
House Agriculture 
Tracking 

02/09/2023 09:00 AM   
HB 1384

Relating to eminent domain and the assessment of damages. 
House Energy and Natural Resources 
Tracking 

How to Contact Your Legislators

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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