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HB 1285

A BILL for an Act to provide for state employee compensation adjustments and to provide for an appropriation and transfer to the teachers' fund for retirement for cost-of-living adjustments.

69th Legislative Assembly (2025-26) Introduced by Jim Jonas and 4 co-sponsors

The bill would fund a 3%/2%, performance-based state employee pay raise for 2025–27 and transfer $49.2M to the Teachers' Fund for Retirement for a one-time retiree COLA payment.

Second reading, failed to pass, yeas 3 nays 88
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WeVote Research Nonpartisan
Bill Summary · HB 1285

HB 1285 — Summary (State employee compensation adjustments; transfer to Teachers' Fund for Retirement)

Status (as provided): Second reading; failed to pass (yeas 3, nays 88).
Introduced: November 13, 2024.
Bill identifier in text: 25.0143.01000 (Sixty‑ninth Legislative Assembly, North Dakota).

Main purpose

To set guidelines and funding intent for state employee compensation adjustments for the 2025–27 biennium and to authorize an appropriation and transfer from the general fund to the Teachers' Fund for Retirement to provide a one‑time supplemental cost‑of‑living payment to eligible retirees.

Key provisions

  • Compensation adjustments (Section 1)

    • Target average increases for permanent state employees: 3% per eligible employee (first fiscal year of the biennium) and 2% per eligible employee (second fiscal year).
    • Timing: Increases to begin effective in July each year and be paid in August — i.e., July 2025 (paid Aug 2025) and July 2026 (paid Aug 2026).
    • Increases are performance‑based (must be supported by documented performance) and need not be identical percentages for every employee.
    • Probationary employees are not entitled to these increases (appointing authority may grant partial or full increases at its discretion).
    • Employees whose documented performance “does not meet standards” are not eligible for any salary increase.
    • The Office of Management and Budget (OMB) must develop guidelines for agencies consistent with the state compensation philosophy.

  • Funding intent and appropriation (Section 2)

    • Legislative intent that each state agency receive appropriations to cover its costs for implementing the compensation adjustments.
    • The bill states the compensation amounts are intended to be one‑half of previously approved higher increases (referencing prior 6%/4% increases), and that the funding freed by reducing those increases be transferred to the Teachers' Fund for Retirement.
    • Appropriation/transfer: $49,200,000 from the general fund to the Teachers' Fund for Retirement during the 2025–27 biennium (to be transferred by OMB).
    • Use of transfer: a one‑time supplemental payment to eligible retirees “in recognition of cost‑of‑living adjustments.”

Who is affected

  • Primary: Permanent (classified) North Dakota state employees (eligible for performance‑based salary adjustments).
  • Excluded or limited: probationary employees (unless appointing authority elects otherwise) and employees failing to meet performance standards.
  • Retirees covered by the Teachers' Fund for Retirement: eligible retirees to receive a one‑time supplemental COLA payment funded by the $49.2M transfer.
  • State agencies: required to implement increases and expected to receive appropriations to cover costs; OMB to issue implementation guidelines.

Fiscal impact & timing

  • Direct appropriation/transfer of $49.2 million from the general fund to the Teachers' Fund for Retirement during FY 2026–27 (biennium starting July 1, 2025 — ending June 30, 2027).
  • Agencies are intended to receive funding to cover compensation costs; specific per‑agency amounts not specified in the bill text.

Implementation timeline

  • Salary increases effective July 2025 (paid August 2025) and July 2026 (paid August 2026).
  • $49.2M transfer to occur during the 2025–27 biennium for distribution as the one‑time retiree payment.

Notes / Additional context

  • The bill frames the transfer as representing “one‑half of the estimated general fund cost” of earlier, larger increases — an explicit policy choice to reduce employee increase funding and direct savings to retiree COLA payments.
  • The bill text emphasizes performance documentation and OMB guidance rather than an across‑the‑board raise.

If you want, I can:
- Draft a short fiscal note estimating agency cost exposure; or
- Produce a version tracking likely implementation challenges (e.g., documenting performance, timing of agency appropriations).

Compiled from official sources — confirm details with the bill’s official record.

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