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HB 1559

Establishing the student basic needs at public postsecondary institutions act.

2023-2024 Regular Session Introduced by Steve Bergquist and 7 co-sponsors

Caps residential taxable value to a 3-year base average; reassesses on sale, ownership change, or qualifying improvements, slowing year-to-year tax growth.

Effective date 7/23/2023.
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Bill Summary · HB 1559

Summary — HB 1559 (North Dakota)

A bill to create a new section in chapter 57‑02, North Dakota Century Code, limiting increases in taxable valuation for residential property.

Main purpose / intent

HB 1559 would cap increases in the taxable valuation used for property taxation of residential parcels by tying a parcel’s taxable valuation to a multi‑year “base year” average, except in specific circumstances that trigger reassessment. The stated goal is to limit year‑to‑year taxable value growth for residential property owners while preserving reassessment on sales, new taxation, or significant improvements.

Key provisions

  • Creates a new statutory section titled “Limitation on taxable valuation increases of residential property.”
  • Taxable valuation cap:
    • For taxation purposes, a residential parcel’s taxable valuation “may not exceed the amount of the base year valuation” unless a reassessment event in the statute occurs.
  • Base year valuation:
    • Defined as the average of the parcel’s taxable value over the three most recent taxable years before the current taxable year.
  • Reassessment triggers (assessor must reassess to current true and full value):
    1. The property or an improvement was not taxable in the preceding taxable year but is taxable in the current year.
    2. Upon sale, transfer, or other change in ownership — reassessment as of the date of sale/transfer.
    3. When an owner makes (or causes) an improvement — reassess as of the date construction is completed, accounting for the added value.
  • “Improvement” defined to mean additions or structural changes increasing true and full value; explicitly excludes ordinary maintenance and replacements after casualty unless replacement increases square footage or exterior quality.
  • Preempts local modification: cities or counties may not supersede or alter this section by home‑rule authority.
  • Effective date: for taxable years beginning after December 31, 2024.

Who would be affected

  • Primary: residential property owners in North Dakota. Long‑term owners with no change in ownership or significant improvements would generally see limits on taxable valuation growth.
  • Local government (county assessors and taxing units): changes to assessment practice, tracking of base‑year averages, and potentially lower taxable value growth — with corresponding effects on property tax revenues and tax rate calculations.
  • Buyers/sellers and owners who make qualifying improvements: their properties would be reassessed to current true and full value on transfer or completion of improvements.

Procedural / timeline notes

  • Bill introduced (filed) December 10, 2024.
  • The version provided is a new section to NDCC ch. 57‑02 and includes the effective date above.
  • Status reported in the provided materials: second reading — failed to pass (vote: yeas 31, nays 58). (Note: the materials supplied include texts and actions from multiple states’ bills labeled “HB 1559”; this summary focuses on the North Dakota bill text and the status information supplied for that version.)

Potential fiscal and practical impacts (overview)

  • Could limit growth in residential taxable valuations and slow increases in property tax bills for qualifying owners.
  • May reduce assessed base for local property tax collections unless tax rates are adjusted upward; could shift tax burdens between new purchasers/improvers and long‑term owners.
  • Administrative impacts: assessors must compute and maintain three‑year averages, implement reassessment triggers, and apply the statutory definitions (e.g., “improvement”) — potential for increased appeals and implementation complexity.

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

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