HB 1168 — North Dakota (2025) — Summary
Status: Introduced November 12, 2024. Reached second reading and failed to pass (yeas 13, nays 77). (Not enacted.)
Purpose
- Establish a new mechanism to distribute a portion of Legacy Fund earnings (a “legacy earnings fund”), create a dedicated legacy property tax relief fund, tighten rules for primary-residence certification and certain property tax credits, and limit property-tax levy increases by taxing districts (other than school districts) without voter approval. The bill also made numerous technical and substantive changes to property-tax credits and the state school-aid funding formula.
Key provisions and changes
- Create Legacy Earnings Fund (new chapter 54‑27 section)
- On July 1 of each odd-numbered year the state treasurer would distribute an amount equal to 7% of the five‑year average Legacy Fund balance (as reported by the State Investment Board).
- Distribution order (each odd-numbered July):
1. Up to $102,624,000 (or the amount needed for biennial debt service appropriated from the legacy sinking & interest fund), transferred to the Legacy Sinking and Interest Fund.
2. $100,000,000 to a newly defined Legacy Earnings Highway Distribution Fund.
3. Remaining balance to a newly created Legacy Property Tax Relief Fund.
- Legacy Earnings Highway Distribution Fund (amend §54‑27‑19.3)
- Allocations from this highway fund: 60% to the State Highway Fund; 10% to township highway aid; 1.5% to public transportation; 28.5% to cities and counties (per statutory formula). Funds must be used for roadway purposes.
- Legacy Property Tax Relief Fund (new fund)
- Created to receive remaining legacy earnings distribution and used to provide property tax relief (details and programmatic distribution rules included in bill text).
- Primary residence certification and property‑tax credits
- Changes to definitions, application/recertification or verification processes, and the calculation/eligibility rules for the homestead/primary residence credit, renters’ refund, disabled veterans credit, and other credits (amendments across multiple sections of chapter 57).
- Levy limitation for non‑school taxing districts
- New section limiting property-tax levy increases by taxing districts other than school districts unless approved by voters; includes related edits to levy authority language for school districts and reporting deadlines.
- School funding formula and reporting
- Amendments to baseline funding/state aid calculation (sections in chapter 15.1‑27), repeal of several prior adjustment provisions to state aid, and a December 15 reporting deadline requirement for districts’ taxable valuations and mill levy certifications (failure to file could delay state aid).
- Other changes
- Adjustments to which funds the State Investment Board may invest (adds legacy earnings fund to list).
- Repeal of earlier statutory legacy‑earnings definitions/sections (21‑10‑12, 21‑10‑13).
- Includes statement of legislative intent, authorization for a Legislative Management study, appropriation language, an effective/expiration date and an emergency clause in various versions.
Who would be affected
- Property owners (primary-residence claimants, renters, disabled veterans) — through changes to credits/refunds and certification requirements.
- Local taxing districts (counties, cities, townships, special districts) — new levy limitations for non‑school districts and changes in distributions from legacy earnings for road funding.
- School districts and K–12 funding — changes to state aid baseline and related reporting requirements.
- State Treasurer, State Investment Board, Department of Transportation, Public Finance Authority and Bank of North Dakota — by new fund flows, allocations, and debt-service arrangements.
Procedural / timeline notes
- Introduced Nov 12, 2024. Advanced through committee/work sessions with multiple amendments in the 69th Legislative Assembly, but on second reading the measure failed (yeas 13, nays 77) and therefore was not enacted. Because it did not pass, its provisions did not take effect; the bill text reflected multiple engrossed, reengrossed, and conference committee versions during consideration.
Implications (high‑level)
- If enacted, HB 1168 would have redirected a sizeable and recurring portion of Legacy Fund earnings into highway funding, debt service, and an explicit property-tax relief fund rather than leaving all earnings available for other purposes. It also would have tightened residency verification and reshaped local taxing authority by requiring voter approval before many levy increases, while altering school aid calculations. The bill combined fiscal reallocation with broad property‑tax and school‑funding policy changes, producing significant effects on state and local budgets and on homeowners’ tax liabilities.
