We’ve got an update on various pieces of legislation that have moved through the North Dakota legislature that we’ve been monitoring. As of this writing, the legislature had just wrapped up the session and sent final bills to the Governor. In next month's Bridge, we’ll include a full recap of how the session turned out. We hope you can join us for upcoming events to learn even more!

HB 1053: Income tax deduction for military
This House Bill exempts state income tax on military retirement income. This bill was introduced in order to help with retention and recruitment of military retirees. North Dakota was the only state in the Midwest without an exemption for military retirees before this bill went through. There are only seven total states that offer no special tax treatment of military pensions. The legislation strives to make North Dakota competitive for recruitment of military retirees who are often qualified for higher skilled jobs. House Bill 1053 works to make North Dakota a more military friendly state.

The bill passed the House and Senate in the beginning of April and was signed by the Governor on April 8.

HB 1040: Manufacturing workforce incentive
The revitalized automation tax credit bill, also known as the 21st Century Manufacturing Workforce initiative, was passed by both the Senate and House in the last days of session. The final version included a $1 million limit and sunset after the first four taxable years beginning after December 31, 2018.

We have been supportive of this bill as it is extremely important to our manufacturing workforce.

SCR 4016: Higher Education
Senate concurrent resolution 4016 relates to the governance structure of North Dakota’s higher education system. The resolution expands the state board of higher education to 15 members and lengthens the term from four to six years. The selection team of the members would be amended to replace the chief justice of the supreme court to the secretary of state. This resolution included various other changes relating to the board and their meeting requirements as well.

The resolution was passed by both the House and the Senate and filed with the Secretary of State. This constitutional amendment will now be on the ballot for the citizens of North Dakota to vote on.

HB 1019: Career Academy Funding
House Bill 1019, the funding bill for the state board for career and technical education, was recommended by the governor to include $30 million of state matching funds for career academies. The final Senate and House version failed to include any matching funds for career academies.

The Chamber remains supportive of this initiative as it addresses our region’s workforce issues.

SB 2020: FM Area Diversion Project funding
In February, the Senate passed SB 2020, the state water commission funding bill, with $703 million in legislative intent for the FM Area Diversion Project. In early April, the House passed their version of the bill, still with the $703 million level of funding in legislative intent for the project. The Senate refused to concur with the amended bill, creating a conference committee to reconcile differences. After discussions, the conference committee took a vote on $870 million in legislative intent for the project, where there was a 3-3 vote. The committee then took another vote for $750 million in legislative intent, which passed with a 5-1 vote. The House and Senate both adopted the conference committee reports and passed the bill as amended including $750 million in legislative intent for the project – $120 million short of the ask. The Governor signed SB 2020 on April 25.

Diversion Project Update
As of Monday, April 8, all requested construction on the FM Area Diversion Project proceeded due to a modification to the injunction by the U.S. District Court Judge John A. Tunheim. This was an important milestone for the project as this decision allowed our community to be “shovel ready” waiting on funding commitments. Due to the judge’s decision, the project will resume construction this spring. As noted above, the ND legislature, pending signatures of the President of the Senate, Speaker of the House and Governor, passed a funding bill with legislative intent for $750 million for the project. This leaves the project $120 million short of the $870 million ask.

Conversations have been started regarding the plan moving forward due to this funding shortfall. Some intend to head back to the legislature next session looking for the dollars while others have suggested searching for other funding sources to make up the difference. One Fargo City Commissioner, Tony Grindberg, who is also the chair of the Diversion Authority’s Finance Committee, is committed to assure homeowner that local property taxes won’t be sued to make up the $120 million shortfall in funding for the project.

At the time of publishing, Commissioner Grindberg introduced a resolution pledging not to activate a property tax assessment district which was created to make up a shortfall in local sales tax revenue in the event that there is a gap. Fargo Mayor Tim Mahoney also said he would support Grindberg’s resolution as they have had no intention of using the tax district and would work to get around it. At their April 22, 2019 Commission meeting, the Fargo City Commission decided to delay the resolution for two weeks.

*This information was compiled and accurate as of April 30, 2019.*