Legislative Update | February 28, 2025
Posted: Feb 28 2025
This Week at the Legislature
The 2025 legislature adjourned for cross-over break on Tuesday - halftime - using 34 of 80 legislative days. The legislature will reconvene for committee hearings starting on Wednesday, March 5, and the House and Senate chambers will gavel back in for day 35 action on Friday, March 7. Below, we’ve identified key takeaways and themes from the first half. We have also provided some specific analysis of banking priorities.
Property Tax Relief and Reform
Do you know the similarity between all legislators? Each one has a laptop and a tax bill! Legislators introduced dozens of property tax proposals. The first bill of the session to be signed by Governor Armstrong was a small bill to extend property tax relief to primary residences owned by trusts and other entities. Three major proposals – including the Governor’s proposal, which is supported by legislative leaders – remain in play for the second half. The key questions are how much (the governor is pushing for $1550 per primary residence), for what types of property (the governor is pushing for primary residences, but others are pushing to include farmland, commercial property, and rental relief), and how best to control local tax increases (the governor is pushing for a 3% annual cap on increases, while others are pushing for local votes to remove the cap). Stay tuned.
Record Number of Bills
1,083 bills and resolutions were introduced this session – the most in 15 years – including 651 in the house and 424 in the senate. This came from a total queue of 1,741 bill requests. Of the 1,083 bills, 756 passed and 299 failed. Aside from tax policy, major topics of debate included:
- Educational Choice — A bill to establish an educational savings account (SB 2400) for each K-12 student (public, private, or homeschool) with a price tag of $28.3 million, squeaked through the state senate 25-22. The House passed its own ESA bill, HB 1540, in a 51-39 vote with a cost of $40 million.
- Energy — After unified opposition from the ethanol, oil and gas, and coal industries, about a dozen anti-CO2 bills were defeated in a reprise from 2023, with an eye towards enhanced oil recovery. Legislators also voted to extend a tax holiday for lignite coal as well as an incentive for the oil and gas industry to produce oil from reserves other than the Bakken and Three Forks formations.
- Foreign Influence — Numerous proposals seek to regulate, prohibit, or otherwise investigate corporate or real estate transactions involving foreign actors, including a controversial $15M proposal to toss the state’s Chinese-manufactured drone fleet for new domestic-manufactured drones (HB 1038)—a proposal that sailed through the House but died in the Senate.
- Social Policy — Numerous headline-grabbing bills included legislation aimed at defining gender, extending personhood rights to a fetus, and resolutions opposing same-sex marriage and recognizing the kingship of Jesus. Some failed, some passed.
- Criminal Justice — With a defense-lawyer Governor overseeing a jam-packed corrections and rehabilitation system and an Attorney General concerned for public safety, the pendulum of criminal justice reform swung in both directions simultaneously, requiring full and mandatory sentences for criminals on one side and reentry reform on the other side.
Budget
Governor Armstrong wasted no time, proposing a $19.89B budget within a month of taking office. Once bill introduction deadlines hit in early February, at its peak, the Legislature introduced appropriations “overspending” anticipated revenues by $8B. This set the tone of the past few weeks: cut, cut, cut. Some highlights:
- General Fund Revenue — With $1B in unobligated funds already sitting in the general fund, a forecast of $5.7B in new general fund revenue, and $500M in tax breaks or transfer, the total general fund balance for the 2025-2027 biennium totals $6.2B.
- General Fund Spending — Counting all bills still alive, total proposed general fund appropriations amount to $6.6B. Thus, the state’s general fund is (only) upside down $400M after the first half, which includes a $330M investment in a new state hospital, and large duplicate spending proposals, like those for property tax relief.
- Strategic Investment & Improvements Fund — SIIF, essentially a savings account, will have a balance of $1.63B. The sum of all bills seeking to spend SIIF amounts to $1.67B, overspending SIIF the first half by (only) $47M.
Surprise bill of the Session
The House passed a bill (HB 1408) by a vote of 64-26 to establish annual legislative sessions.
Hearings and Other Action this Week
SB 2364 – UCC Article 8 -- UPDATE
The Senate Judiciary Committee finally acted on SB 2364 Wednesday morning, February 19. After a conference call with Rick Thoreson, Thoreson Steffes Trust Company, and a series of emails from Thoreson and NDBA’s Rick Clayburgh, Senator Bob Paulson, a co-sponsor of the bill, offered amendments to change the bill into a non-mandatory study. Paulson explained he was not able to work an agreement with the bill’s supporters and the “bankers”. The study amendment was adopted, and the committee gave the bill a 7-0 do-pass recommendation. Over the weekend, NDBA provided some talking points against the study to Senator Dale Patten and Senator Jerry Klein. Monday morning, Clayburgh and ICBND’s Alexis Baxley “quietly” worked the floor to build support to defeat the study bill. During the Senate floor session, the study amendment was approved. On final passage, Senators Patten and Klien spoke against final passage. The bill failed on a vote of 20-27.
HB 1584 – Pharmacy Benefit Managers -- UPDATE
The House Industry Business and Labor Committee acted on HB 1584 Tuesday afternoon, February 18. HB 1584 was sponsored by Rep Jim Kasper and relates to pharmacy benefits managers (PBMs) and is intended to remove the statutory protection for Employee Retirement Income Security Act (ERISA) health plans, thereby allowing modifications to PBM laws for the benefit of pharmacies. Rep Kasper offered amendments prepared by the North Dakota Pharmacy Association to define “pharmacy benefit manager” not to include health benefit plans that manage their own pharmacy benefits. In response to NDBA’s testimony concerning the fact that many benefit plans don’t manage their own pharmacy benefits, the amendment included “manages or directs”. The committee adopted the amendments and then gave the bill a 11-0-3 do pass recommendation. On Friday, February 21, the full House passed the bill 90-0. NDBA does not believe the amendments address the concerns of ND Banks Benefit Trust and NDBA will continue to amend or defeat the bill in the Senate. More to come!
Hearings The Week of March 3, 2025
3/5/2025 9:00 AM
HB 1441
Relating to specie legal tender, the taxation of specie legal tender, and United States central bank digital currencies; to amend and reenact section 41‑01‑09 of the North Dakota Century Code, relating to the definition of United States central bank digital currency.
Senate Finance and Taxation
Priority
3/5/2025 9:30 AM
HB 1442
Relating to the creation of a legislative task force on government efficiency; to provide an expiration date; and to declare an emergency.
Senate Finance and Taxation
Tracking
3/5/2025 3:00 PM
SB 2122
Relating to the Uniform Commercial Real Estate Receivership Act and trustees for commercial buildings during foreclosures; and to provide for application.
House Industry, Business and Labor
Priority
3/5/2025 3:30 PM
SB 2164
Relating to the duty of confidentiality and disclosure to the North Dakota protection and advocacy project.
House Human Services
Priority
3/7/2025 8:30 AM
HB 1278
Relating to the management of moneys in the state treasury and a cash management board; to provide a report; and to provide an expiration date.
Senate Appropriations - Government Operations Division
Priority
3/7/2025 9:30 AM
SB 2152
Relating to statements of full consideration.
House Agriculture
Tracking