Bill Summary – FastDemocracy

1003.01000
     Sixty-ninth
     Legislative Assembly                    HOUSE BILL NO. 1176
     of North Dakota
     Introduced by
       Representatives Nathe, Hagert, Headland, Lefor, Porter, Stemen, Swiontek, Vigesaa
       Senators Bekkedahl, Hogue, Weber, Rummel
  A BILL for an Act to create and enact two new sections to chapter 54-27, a new section to
  chapter 57-02, and a new section to chapter 57-15 of the North Dakota Century Code, relating
  to a legacy earnings fund, a legacy property tax relief fund, a primary residence certification,
  and a limitation on property tax levies without voter approval; to amend and reenact
  subsection 1 of section 21-10-06, section 57-02-01, subdivision c of subsection 1 of section
  57-02-08.1, subdivision b of subsection 2 of section 57-02-08.1, and sections 57-02-08.9,
  57-02-08.10, 57-02-27, 57-02-27.1, 57-02-53, 57-09-04, 57-11-03, 57-12-06, and 57-20-07.1 of
  the North Dakota Century Code, relating to funds invested by the state investment board,
  property tax definitions, the homestead tax credit and renters refund, the primary residence
 credit, property classifications, notices to property owners, and the property tax statement; to
 repeal sections 21-10-12, 21-10-13, and 57-15-02.2 of the North Dakota Century Code, relating
 to legacy fund definitions, the legacy earnings fund, and estimated property tax and budget
 hearing notices; to provide an appropriation; to provide a transfer; to provide an effective date;
 to provide an expiration date; and to declare an emergency.
 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
     SECTION 1. AMENDMENT. Subsection 1 of section 21-10-06 of the North Dakota Century
 Code is amended and reenacted as follows:
     1.   Subject to the provisions of section 21-10-02, the board shall invest the following
          funds:
          a.     State bonding fund.
          b.     Teachers' fund for retirement.
           c.    State fire and tornado fund.
          d.     Workforce safety and insurance fund.
          e.     Public employees retirement system.
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             f.   Insurance regulatory trust fund.
             g.   State risk management fund.
             h.   Budget stabilization fund.
             i.   Water projects stabilization fund.
             j.   Health care trust fund.
             k.   Cultural endowment fund.
             l.   Petroleum tank release compensation fund.
            m.    Legacy fund.
             n.   Legacy earnings fund.
            o.   Opioid settlement fund.
          p.o.   A fund under contract with the board pursuant to subsection 3.
    SECTION 2. A new section to chapter 54-27 of the North Dakota Century Code is created
 and enacted as follows:
    Legacy earnings fund - State treasurer - Legacy fund distribution - Allocations.
     1.    There is created in the state treasury the legacy earnings fund. The fund consists of all
           moneys distributed by the state treasurer from the legacy fund pursuant to section 26
           of article X of the Constitution of North Dakota. The distribution from the legacy fund
           on July first of each odd-numbered year must be equal to seven percent of the
           five-year average value of the legacy fund balance as reported by the state investment
           board. The average value of the legacy fund balance must be calculated using the
           fund balance at the end of each fiscal year for the five-year period ending with the
           most recently completed even-numbered fiscal year.
     2.    From the amount distributed to the legacy earnings fund under subsection 1, the state
           treasurer shall allocate funding in July of each odd-numbered year in the following
           order:
            a.   The first one hundred two million six hundred twenty-four thousand dollars or an
                 amount equal to the amount appropriated from the legacy sinking and interest
                 fund for debt service payments for a biennium, whichever is less, to the legacy
                 sinking and interest fund under section 6-09.4-10.1.
            b.   The next two hundred twenty-five million dollars to the general fund to provide
                 support for tax relief initiatives approved by the legislative assembly.
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           c.   The next one hundred million dollars to the legacy earnings highway distribution
                fund for allocations under section 54-27-19.3.
           d.   The remaining amount to the legacy property tax relief fund under section 3 of
                this Act.
     SECTION 3. A new section to chapter 54-27 of the North Dakota Century Code is created
  and enacted as follows:
     Legacy property tax relief fund - Intent.
      1.   There is created in the state treasury the legacy property tax relief fund. The fund
           consists of all moneys allocated to the fund under section 2 of this Act and all moneys
          transferred to the fund by the legislative assembly.
     2.   It is the intent of the legislative assembly that:
          a.   The primary residence credit under section 57-02-08.9 be increased each
               biennium to provide additional property tax relief using only increased funding
               available from the legacy earnings fund allocation under section 2 of this Act.
          b.   After the amount of the primary residence credit under section 57-02-08.9
               exceeds two thousand dollars, future legislative assemblies use additional
               funding available from the legacy earnings fund allocation under section 2 of this
               Act in future biennial budgets to replace a portion or all of the funding transferred
               from the general fund or other sources to the legacy property tax relief fund for
               the primary residence credit.
     3.   It is further the intent of the legislative assembly that after providing the amount
          needed for the maximum property tax relief of all eligible taxpayers under the primary
          residence credit under section 57-02-08.9, future legislative assemblies use any
          excess funding available from the legacy earnings fund allocation under section 2 of
          this Act in future biennial budgets to replace a portion or all of the funding from the
          general fund, oil and gas tax revenues, or other sources for:
          a.   The state reimbursement of the homestead credit under section 57-02-08.1;
          b.   The state reimbursement of the disabled veterans' credit under section
               57-02-08.8;
          c.   State-funded human services under chapter 50-35; and
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           d.   The portion of state aid for payments to school districts under chapter 15.1-27
                attributable to property tax relief.
     SECTION 4. AMENDMENT. Section 57-02-01 of the North Dakota Century Code is
  amended and reenacted as follows:
     57-02-01. Definitions.
     As used in this title, unless the context or subject matter otherwise requires:
      1.   "Agricultural property" means platted or unplatted lands used for raising agricultural
           crops or grazing farm animals, except lands platted and assessed as agricultural
           property prior to March 30, 1981, shall continue to be assessed as agricultural
          property until put to a use other than raising agricultural crops or grazing farm animals.
          Agricultural property includes land on which a greenhouse or other building is located
          if the land is used for a nursery or other purpose associated with the operation of the
          greenhouse. The time limitations contained in this section may not be construed to
          prevent property that was assessed as other than agricultural property from being
          assessed as agricultural property if the property otherwise qualifies under this
          subsection.
          a.   Property platted on or after March 30, 1981, is not agricultural property when any
               four of the following conditions exist:
               (1)   The land is platted by the owner.
               (2)   Public improvements, including sewer, water, or streets, are in place.
               (3)   Topsoil is removed or topography is disturbed to the extent that the property
                     cannot be used to raise crops or graze farm animals.
               (4)   Property is zoned other than agricultural.
               (5)   Property has assumed an urban atmosphere because of adjacent
                     residential or commercial development on three or more sides.
               (6)   The parcel is less than ten acres [4.05 hectares] and not contiguous to
                     agricultural property.
               (7)   The property sells for more than four times the county average true and full
                     agricultural value.
          b.   Land that was assessed as agricultural property at the time the land was put to
               use for extraction of oil, natural gas, or subsurface minerals as defined in section
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                38-12-01 must continue to be assessed as agricultural property if the remainder
                of the surface owner's parcel of property on which the subsurface mineral activity
                is occurring continues to qualify for assessment as agricultural property under
                this subsection.
      2.   "Air carrier transportation property" means the operative property of each airline
           whose property is assessed for taxation purposes pursuant to chapters 57-06 and
           57-32.
      3.   "Assessed valuation" means fifty percent of the true and full value of property.
      4.   "Centrally assessed property" means all property which is assessed by the state board
          of equalization under chapters 57-05, 57-06, and 57-32.
     5.   "Commercial property" means all property, or portions of property, not included in the
          classes of property defined in subsections 1, 4, 11, and 12.
     6.   "Credits" means and includes every claim and demand for money or other valuable
          thing, and every annuity or sum of money receivable at stated periods, due or to
          become due, and all claims and demands secured by deeds or mortgages, due or to
          become due.
     7.   "Governing body" means a board of county commissioners, city council, board of city
          commissioners, school board, or board of education, or the similarly constituted and
          acting board of any other municipality.
     8.   "Money" or "moneys" means gold and silver coin, treasury notes, bank notes, and
          every deposit which any person owning the same or holding in trust and residing in
          this state is entitled to withdraw as money or on demand.
     9.   "Municipality" or "taxing district" means a county, city, township, school district, water
          conservation and flood control district, Garrison Diversion Conservancy District, county
          park district, joint county park district, irrigation district, park district, rural fire protection
          district, or any other subdivision of the state empowered to levy taxes.
    10.   "Nonprimary residential property" means residential property, or portions of residential
          property, not included in the class of property defined in subsection 12.
    11.   "Person" includes a firm, corporation, or limited liability company.
 11.12.   "Primary residential property" means residential property certified as a primary
          residence under section 11 of this Act.
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     13.   "Railroad property" means the operating property, including franchises, of each
           railroad operated in this state, including any electric or other street or interurban
           railway.
  12.14.   "Residential property" means all property, or portions of property, used by an individual
           or group of individuals as a dwelling, including property upon which a mobile home is
           located but not including hotel and motel accommodations required to be licensed
           under chapter 23-09 nor structures providing living accommodations for four or more
           separate family units nor any tract of land upon which four or more mobile homes are
           located. The term includes nonprimary residential property and primary residential
          property.
 13.15.   "Taxable valuation" signifies the valuation remaining after deducting exemptions and
          making other reductions from the original assessed valuation, and is the valuation
          upon which the rate of levy finally is computed and against which the taxes finally are
          extended.
 14.16.   "Tract", "lot", "piece or parcel of real property", or "piece or parcel of land" means any
          contiguous quantity of land in the possession of, owned by or recorded as the property
          of, the same claimant, person, or company.
 15.17.   "True and full value" means the value determined by considering the earning or
          productive capacity, if any, the market value, if any, and all other matters that affect the
          actual value of the property to be assessed. This shall include, for purposes of arriving
          at the true and full value of property used for agricultural purposes, farm rentals, soil
          capability, soil productivity, and soils analysis.
 16.18.   "Unencumbered cash" means the total cash on hand in any fund, less the amount
          belonging to the fund in closed banks and less the amount of outstanding warrants,
          bills, accounts, and contracts which are chargeable against the fund.
 17.19.   There shall be a presumption that a unit of land is not a farm unless such unit contains
          a minimum of ten acres [4.05 hectares], and the taxing authority, in determining
          whether such presumption shall apply, shall consider such things as the present use,
          the adaptability to use, and how similar type properties in the immediate area are
          classified for tax purposes.
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     SECTION 5. AMENDMENT. Subdivision c of subsection 1 of section 57-02-08.1 of the
  North Dakota Century Code is amended and reenacted as follows:
           c.   The exemption must be determined according to the following schedule:
                (1)   If the person's income is not in excess of fortyfifty thousand dollars, a
                      reduction of one hundred percent of the taxable valuation of the person's
                      homestead up to a maximum reduction of nine thousandeleven thousand
                      two hundred fifty dollars of taxable valuation.
                (2)   If the person's income is in excess of fortyfifty thousand dollars and not in
                      excess of seventyeighty thousand dollars, a reduction of fifty percent of the
                     taxable valuation of the person's homestead up to a maximum reduction of
                     four thousand five hundredfive thousand six hundred twenty-five dollars of
                     taxable valuation.
    SECTION 6. AMENDMENT. Subdivision b of subsection 2 of section 57-02-08.1 of the
 North Dakota Century Code is amended and reenacted as follows:
          b.   For the purpose of this subsection, twenty percent of the annual rent, exclusive of
               any federal rent subsidy and of charges for any utilities, services, furniture,
               furnishings, or personal property appliances furnished by the landlord as part of
               the rental agreement, whether expressly set out in the rental agreement, must be
               considered as payment made for property tax. When any part of the twenty
               percent of the annual rent exceeds four percent of the annual income of a
               qualified applicant, the applicant is entitled to receive a refund from the state
               general fund for that amount in excess of four percent of the person's annual
               income, but the refund may not be in excess of four hundredsix hundred dollars.
               If the calculation for the refund is less than five dollars, a minimum of five dollars
               must be sent to the qualifying applicant.
    SECTION 7. AMENDMENT. Section 57-02-08.9 of the North Dakota Century Code is
 amended and reenacted as follows:
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     57-02-08.9. Primary residence credit - Qualification - Application. (Effective for the
  first two taxable yearsyear beginning after December 31, 20232024)
      1.   An individualA taxpayer is entitled to a credit of five hundred dollars against the
           property tax due on the individual'staxpayer's primary residence as provided in this
           section. The credit