A BILL for an Act to create and enact a new section to chapter 32-31, a new section to chapter 57-20, and a new section to chapter 57-28 of the North Dakota Century Code, relating to eliminating foreclosure of tax liens for residential property and collection of delinquent real property and special assessment taxes; to amend and reenact sections 40-25-03, 57-02-08.9, 57-02-08.10, 57-20-26, and 57-22-22, subsection 1 of section 57-38.3-02, sections 57-45-12, 61-01-21, 61-09-15, 61-16.1-31, 61-24.8-40, and 61-35-87, relating to the primary residence credit, setoff of income tax refunds for payment of delinquent real property and special assessment taxes, and eliminating foreclosure of tax liens for primary residential property; to provide an effective date; to provide an expiration date; and to declare an emergency.

69th Legislative Assembly (2025-26) Introduced by Mike Brandenburg and 11 co-sponsors

North Dakota bill eliminates tax lien foreclosure for primary residences while creating alternative debt collection methods, protecting homeowners but potentially reducing municipal tax recovery rates.

Second reading, failed to pass, yeas 22 nays 71

Legislative bill overview

HB 1586 would eliminate foreclosure as a collection method for residential property tax liens in North Dakota and modify how delinquent residential property and special assessment taxes are collected. The bill also adjusts the primary residence credit and creates alternative collection mechanisms through income tax refund setoffs and other means.

Why is this important

This bill addresses a significant pain point for homeowners facing tax delinquency by removing the threat of losing their primary residence through tax lien foreclosure. The change would fundamentally alter North Dakota's property tax collection system and could impact both municipal revenue collection efficiency and homeowner financial security.

Potential points of contention

Municipal revenue impact: Cities and counties rely on tax lien foreclosure as a backstop for delinquent property taxes; eliminating it could reduce collection rates and strain local government budgets

Fairness concerns: Property owners paying taxes on time may view preferential treatment of residential delinquencies as unfair, while renters get no equivalent protection

Collection mechanism effectiveness: Alternative collection methods (refund setoffs, liens without foreclosure rights) may be slower or less effective at recovering unpaid taxes, potentially increasing bad debt write-offs