Armstrong: Legislature passes meaningful property tax relief and reform for North Dakota homeowners

BISMARCK, N.D. – North Dakota lawmakers have sent Gov. Kelly Armstrong a landmark property tax relief and reform bill that closely resembles the package he proposed in January to ease the burden on homeowners and limit local spending growth.

“This bill provides real relief and real reform for taxpayers. It’s responsible, affordable and durable. It creates Legacy Fund buy-in, and it’s the single most impactful thing we could do for North Dakota citizens this session,” Armstrong said. “We thank the Legislature for advancing a bill with meaningful tax relief and reform to help our workforce recruitment efforts and make North Dakota an even better place to live, work and raise a family.”

House Bill 1176 passed the House 86-4 and the Senate 46-0 on Friday. Armstrong plans to sign the bill later today.

The bill more than triples the state’s existing primary residence property tax credit from $500 per year to $1,600 per year. A dedicated stream of earnings from the state’s $12 billion Legacy Fund will pay for the relief, estimated at $409 million in the 2025-2027 biennium. This earnings stream will grow as the Legacy Fund grows, allowing the size of the primacy residence credit to be increased in future sessions.

Armstrong thanked lawmakers for going beyond the $1,550 credit he proposed in his State of the State Address on Jan. 7, which kicked off the regular session that occurs every two years.

Lawmakers adopted the governor’s proposed 3% cap on future increases in local property tax budgets. The cap will limit property tax increases across residential, commercial and agricultural property and encourage cities, counties, schools, and park districts to budget prudently and plan ahead. If the entire 3% isn’t used, the remainder of it can be carried over for up to five years. Other sections of the bill expand the current renter’s refund program and increase funding for a disabled veterans tax credit.

House Bill 1176 was introduced by Rep. Mike Nathe and co-sponsored by House Majority Leader Mike Lefor, Senate Majority Leader David Hogue, Reps. Jared Hagert, Craig Headland, Todd Porter, Greg Stemen, Steve Swiontek and Don Vigesaa, and Sens. Brad Bekkedahl, Mark Weber and Dean Rummel.

Before adjourning sine die early today, the Legislature approved a preliminary two-year general fund budget of $6.25 billion and a total state budget of $20.3 billion for 2025-27, representing increases of 2.6% and 3.5%, respectively, over the current 2023-25 biennium.

Other administration priorities addressed by lawmakers included:

Phone-free Schools: In what Armstrong called one of the most impactful bills of the session, HB 1160 requires K-12 public schools in North Dakota to adopt bell-to-bell phone-free school policies. The bill, which takes effect Aug. 1, requires all personal electronic communication devices to be securely stowed and inaccessible to students during instructional time from the start of school until dismissal at the end of the day.

Armstrong and Lt. Gov. Michelle Strinden championed the legislation with State Superintendent Kirsten Baesler, lead sponsor Rep. Jim Jonas, Sen. Michelle Axtman and others through bill amendments introduced in late March. Axtman’s companion bill, SB 2354, also passed the Legislature and was signed Friday.

Recovery and Reentry: Armstrong signed a trio of bills focused on reentry practices that will make North Dakota safer and help address prison overcrowding. The new laws – HB 1425, 1417 and 1549 – focus resources on efforts that interrupt crime, promote recovery and help people leaving prison and jails successfully transition back to the community. Lawmakers also granted Armstrong’s request to fully fund the successful Free Through Recovery and Community Connect programs.

To further address jail and prison overcrowding, the administration worked to secure a letter of intent from the Grand Forks County Commission to enter into an agreement with the state Department of Corrections and Rehabilitation to provide custody and care of DOCR residents in unused space in the county’s new jail expansion. The Legislature granted Armstrong’s request for funding to support the agreement with the county. Funding was also provided for a similar agreement with the Burleigh-Morton Detention Center in Bismarck, as well as a Reentry Center to better serve correctional needs in northwestern North Dakota. Over $35 million was also provided for completion of the Heart River Correctional Center in Mandan, a project authorized by the 68^th Legislative Assembly, to better serve the state’s female residents.

State Hospital and Behavioral Health Services: The Legislature approved a plan to replace the outdated State Hospital with a new state-of-the-art facility, to be constructed in Jamestown. The facility will provide 140 treatment beds to serve those most in need of acute mental health services. The budget includes $300 million for construction.

Lawmakers also provided nearly $13 million for behavioral health facility grants, to create 24 new in-patient acute psychiatric beds in Grand Forks, and $1.5 million for 10 beds in Williston. 

Public Charter Schools: Armstrong signed SB 2241 creating a framework for establishing public charter schools. North Dakota previously was one of only four states not to allow public charter schools, which operate to achieve specific educational objectives. Public charter schools can’t charge tuition or engage in religious practices, and they must be open to all North Dakota students and operate under a performance agreement with the state Superintendent of Public Instruction

Challenge Grants: Lawmakers appropriated nearly $25 million for higher education Challenge Grants, which leverage public funds with private dollars to support student scholarships.

Boards and Commissions: Senate Bill 2308 establishes a task force to review and assess all state boards, commissions, committees, councils and task forces for inefficiencies and duplications. It eliminates 16 boards and commissions. Armstrong proposed the review in his State of the State address and testified in favor of the bill, saying the more than 150 boards and commissions in state government is too many.

Natural Gas Pipeline: Lawmakers authorized $100 million through a Bank of North Dakota line of credit to purchase pipeline capacity, to improve the feasibility of constructing a critical west-to-east natural gas pipeline. The pipeline would ensure continued Bakken oil production and supply natural gas to eastern North Dakota for residential and commercial uses.

Value-added Agriculture: Armstrong signed HB 1322 creating a $30 million incentive program to attract value-added agriculture projects to North Dakota, such as the proposed Agristo potato processing plant in Grand Forks.

Military Friendliness: Armstrong signed several bills supporting the North Dakota National Guard, including HB 1076, which increases the death benefit paid to families of fallen service members from $15,000 to $100,000, and HB 1078, which provides more comprehensive medical coverage for Guard members called to state active duty.

Military-related infrastructure investments include $74 million for a military gallery expansion to the North Dakota Heritage Center, which includes $15 million from the Strategic Investment and Improvements Fund, $20 million from a Bank of North Dakota line of credit, and $39 million through private sector donations. In addition, the budget includes $2.5 million to design a new National Guard readiness center in Williston, $3 million for the Fargo National Cemetery, $6 million for critical infrastructure improvements across the state, and the transfer of 25.2 acres of property in Jamestown to the National Guard for future growth and operational capabilities.

Supporting First Responders: Armstrong signed two bills, HB 1419 and SB 2296, acknowledging dispatchers as first responders, opening access to mental health and disability benefits and adding dispatchers to the state’s Public Safety retirement plan.