A BILL for an Act to create and enact a new section to chapter 54-27 of the North Dakota Century Code, relating to the growth of the state general fund budget.

69th Legislative Assembly (2025-26) Introduced by Jose Castaneda and 6 co-sponsors

HB 1502 caps general fund budget growth at 3% per biennium.

Second reading, failed to pass, yeas 19 nays 74

Main purpose and intent

HB 1502 would impose a statutory limit on how much the Legislature may increase the state general fund budget from one biennium to the next. The bill is intended to constrain general fund spending growth to a predictable maximum rate and to build predictable budget discipline into the biennial appropriations process.

Key provisions

Biennial growth cap: Except as provided otherwise in the bill, the total general fund budget approved for a biennium may not exceed 3.0% more than the general fund budget approved for the previous biennium.

Carryforward of unused allowance: If the Legislature enacts a biennial increase that is less than 3.0%, the unused portion (the difference between the actual increase and 3.0%) may be carried forward and used to exceed the 3.0% cap in a later biennium. Carryforward may be used for up to three bienniums.

Supermajority exception: The 3.0% limit does not apply to any general fund budget increase that is approved by a two‑thirds vote of the members elected to each house of the Legislative Assembly (i.e., a legislative override/exception via two‑thirds vote).

Who would be affected

Legislature: Directly limits the scope of general fund appropriations the Legislative Assembly may enact absent a two‑thirds supermajority or use of carryforward.

State agencies and programs funded from the general fund (education, human services, health, corrections, etc.): Potentially constrained appropriations growth, which could affect staffing, programs, and services.

Budget office / executive branch: Would need to budget and plan within the statutory cap, track carryforward balances, and adjust fiscal policy and forecasts accordingly.

Taxpayers and service recipients: Indirectly affected through potential limits on spending, tax adjustments, or reallocation among funds.

Potential fiscal and policy impacts (practical effects)

Increased fiscal discipline / slower growth in general fund spending (capped at 3% per biennium unless overridden).

Reduced flexibility to respond to economic shocks, large cost increases, population-driven demand, or one‑time needs unless the Legislature uses the two‑thirds exception.

May shift pressure to other funding sources (dedicated funds, fees, federal funds) if general fund growth is constrained.

Carryforward provision softens the cap by allowing temporary flexibility in later bienniums but is time‑limited (three bienniums).

Procedural / timeline status

Introduced: December 4, 2024.

Legislative status (as provided): Reached second reading but failed to pass — yeas 19, nays 74.

If enacted, the provision would create a new section in NDCC chapter 54‑27 governing appropriation limitations for biennial budgets.

Notes: This summary reflects the bill language as drafted (3.0% cap, three‑biennium carryforward, two‑thirds override). The bill’s final fiscal and operational impacts would depend on North Dakota’s revenue outlook, baseline spending trends, and how often the Legislature uses the two‑thirds exception or carryforward.

Bill