23.0305.03000
Sixty-eighth
Legislative Assembly SENATE BILL NO. 2309
of North Dakota
Introduced by
Senators Magrum, Larsen, Paulson
Representatives Bellew, S. Olson, Prichard
1 A BILL for an Act to create and enact two new sections to chapter 57-02 of the North Dakota
2 Century Code, relating to the creation of a primary residence property tax relief fund, a property
3 tax credit for property used as a primary residence, and limitations on the true and full valuation
4 of property for tax purposes; to amend and reenact subsection 7 of section 15.1-27-04.1,
5 subsection 4 of section 21-10-13, subdivision c of subsection 1 of section 57-20-07.1, and
6 section 57-51.1-07.5 of the North Dakota Century Code, relating to determination of state
7 school aid, information displayed on property tax statements, transfer of legacy fund earnings,
8 and deposit of oil and gas tax revenues; and to provide an effective date.
9 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
10 SECTION 1. AMENDMENT. Subsection 7 of section 15.1-27-04.1 of the North Dakota
11 Century Code, as effective through June 30, 2025, is amended and reenacted as follows:
12 7. For purposes of the calculation in subsection 4, each county auditor, in collaboration
13 with the school districts, shall report the following to the superintendent of public
14 instruction on an annual basis:
15 a. The amount of revenue received by each school district in the county during the
16 previous school year for each type of revenue identified in subdivisions c and d of
17 subsection 1 and the amount of state reimbursement of the primary residence
18 property tax credit;
19 b. The total number of mills levied in the previous calendar year by each school
20 district for all purposes; and
21 c. The number of mills levied in the previous calendar year by each school district
22 for sinking and interest fund purposes.
23 SECTION 2. AMENDMENT. Subsection 7 of section 15.1-27-04.1 of the North Dakota
24 Century Code, as effective after June 30, 2025, is amended and reenacted as follows:
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1 7. For purposes of the calculation in subsection 4, each county auditor, in collaboration
2 with the school districts, shall report the following to the superintendent of public
3 instruction on an annual basis:
4 a. The amount of revenue received by each school district in the county during the
5 previous school year for each type of revenue identified in subdivisions c and d of
6 subsection 1 and the amount of state reimbursement of the primary residence
7 property tax credit;
8 b. The total number of mills levied in the previous calendar year by each school
9 district for all purposes; and
10 c. The number of mills levied in the previous calendar year by each school district
11 for sinking and interest fund purposes.
12 SECTION 3. AMENDMENT. Subsection 4 of section 21-10-13 of the North Dakota Century
13 Code is amended and reenacted as follows:
14 4. On July first of each odd-numbered year, from the amount available for appropriation
15 or transfer from the legacy earnings fund for the biennium, the state treasurer shall
16 transfer funding in the following order:
17 a. The first one hundred fifty million dollars to the legacy sinking and interest fund
18 under section 6-09.4-10.1.
19 b. The next sixty million dollars to the highway tax distribution fund for allocations
20 under section 54-27-19.
21 c. Any remaining funds for other purposes as designated by the legislative
22 assembly, including:
23 (1) Up to fifty million dollars for tax relief pursuant to appropriations or transfers
24 authorized by the legislative assembly for the primary residence property tax
25 relief credit under section 4 of this Act;
26 (2) Up to thirty million dollars to the clean sustainable energy fund pursuant to
27 appropriations or transfers authorized by the legislative assembly; and
28 (3) Up to thirty million dollars for university research programs, the innovation
29 loan fund to support technology advancement, and workforce enrichment
30 initiatives pursuant to appropriations or transfers authorized by the
31 legislative assembly.
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1 SECTION 4. A new section to chapter 57-02 of the North Dakota Century Code is created
2 and enacted as follows:
3 Primary residence property tax relief fund - Primary residence property tax credit -
4 Certification - State treasurer.
5 1. There is created in the state treasury the primary residence property tax relief fund.
6 2. a. An individual is entitled to a credit applied as a reduction of up to the first five
7 thousand six hundred twenty-five dollars of taxable valuation of the individual's
8 primary residence as provided in this subsection. A credit under this subsection
9 applies regardless of whether the individual is the head of a family.
10 b. An estate or trust, or a corporation or passthrough entity that owns residential
11 property used as part of a farming or ranching operation is entitled to a credit as
12 provided in subdivision a if that residential property is not exempt from property
13 taxes as a farm residence and is occupied as a primary residence, as of the
14 assessment date of the taxable year, by an individual who is a beneficiary of the
15 estate or trust or who holds an ownership interest in the corporation or
16 passthrough entity. Either the occupant or the entity that owns the residence may
17 be the claimant for purposes of this subsection and the definition of primary
18 residence under subsection 7. An estate, trust, corporation, or passthrough entity
19 may not claim a credit for more than one property under this subsection.
20 c. The credit under subdivision a or b continues to apply if the individual claimant
21 does not reside in the primary residence because the individual is confined in a
22 nursing home, hospital, or other care facility, for as long as that confinement lasts
23 and the portion of the primary residence previously occupied by the individual is
24 not rented to another individual.
25 d. Individuals residing together who are co-owners of the property but who are not
26 spouses or dependents each are entitled to a percentage of a full credit under
27 subdivision a or b equal to their ownership interests in the property.
28 e. Subject to the limitation in subdivision a, the owner of a parcel of commercial
29 property is entitled to a credit equal to the taxable valuation attributable to the
30 portion of commercial property occupied by the owner as the owner's primary
31 residence. If a parcel of commercial property is owned in whole or in part by a
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1 corporation or passthrough entity, the credit under this subsection applies to that
2 property only if each individual having an ownership interest in the corporation or
3 passthrough entity resides in a primary residence eligible for the credit under
4 subdivision a or b.
5 f. To claim a credit under this section, a claimant shall sign and file with the
6 assessor, by May thirty-first of the year for which a credit is claimed, a claim form
7 containing a verified statement of facts establishing the claimant's eligibility as of
8 February first of that year.
9 g. The assessor shall attach the statement filed under subdivision f to the
10 assessment sheet and list the amount of the reduction on the assessment sheet.
11 h. A credit under this subsection is valid for the entire taxable year for which the
12 claim was approved, without regard to any change of ownership of the property
13 which occurs after the assessment date. A credit remains effective for succeeding
14 taxable years without the owner filing a claim for the credit unless there is a
15 change in ownership, but the assessor may require the owner to file a renewed
16 claim or verify eligibility for succeeding taxable years.
17 i. A denial of a credit under this subsection may be appealed through the informal
18 equalization process and formal abatement process.
19 j. This subsection does not reduce the liability of any individual for special
20 assessments levied upon any property.
21 3. a. By October thirty-first of each year, the county auditor of each county shall certify
22 to the tax commissioner, on forms prescribed by the tax commissioner,
23 information applicable to credits claimed under subsection 2, including:
24 (1) The full name of each individual for whom the credit is allowed;
25 (2) The legal description of the property;
26 (3) The taxable value of the property;
27 (4) The dollar amount of each reduction in taxable value allowed;
28 (5) The total of the tax mill rates for the current year of all taxing districts in
29 which the property is situated, exclusive of any state mill rates; and
30 (6) Any other information prescribed by the tax commissioner.
31 b. By November fifteenth of each year:
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1 (1) The tax commissioner shall review the credits claimed under subsection 2,
2 as certified under subdivision a, and make any required corrections or
3 adjustments.
4 (2) The tax commissioner shall calculate the reduction in tax liability by
5 multiplying the credits claimed under subsection 2, as certified under
6 subdivision a, for each qualifying property in each county by the total mill
7 rate applied by all taxing districts in which the property is situated, exclusive
8 of any state mill rates.
9 (3) The tax commissioner shall calculate the amount available in the fund as
10 follows:
11 (a) For an odd-numbered year, the amount available in the fund is equal
12 to fifty percent of the balance in the fund less the amount needed for
13 transfer to the state medical center fund.
14 (b) For an even-numbered year, the amount available in the fund is equal
15 to the remaining balance of the fund less the amount needed for
16 transfer to the state medical center fund.
17 (4) If the reduction in tax liability calculated under paragraph 2 exceeds the
18 amount available in the fund as calculated under paragraph 3, the tax
19 commissioner shall prorate the credits among the claimants and notify the
20 county treasurer and county auditor of the pro rata reductions.
21 (5) The tax commissioner shall calculate the total payment to each county by
22 multiplying the credits as prorated under paragraph 4 for each qualifying
23 property in each county by the total mill rate applied by all taxing districts in
24 which the property is situated, exclusive of any state mill rates, and shall
25 certify the amounts to the state treasurer.
26 (6) The tax commissioner shall calculate the amount needed for transfer to the
27 state medical center fund by multiplying the credits as prorated under
28 paragraph 4 for each qualifying property in each county by one mill and
29 shall certify the amount to the state treasurer.
30 c. By December first of each year, pursuant to legislative appropriation, the state
31 treasurer shall distribute moneys in the fund to counties and transfer moneys to
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1 the state medical center fund as certified by the tax commissioner under
2 subdivision b.
3 d. Upon receipt of the payment from the state treasurer under subdivision c, the
4 county treasurer shall distribute payments to the county and to the taxing districts
5 of the county in proportion to the property taxes levied by each taxing district in
6 the county.
7 e. Supplemental certifications by the county auditor and the tax commissioner and
8 supplemental payments by the state treasurer may be made after the dates
9 prescribed in this section to make any corrections necessary because of errors or
10 approval of any application for equalization or abatement filed by an individual or
11 entity because all or part of the credit under this section was not allowed.
12 4. The tax commissioner shall prescribe, design, and make available all forms necessary
13 to effectuate this section. Claim forms must include the full name and address of the
14 claimant and any other information prescribed by the tax commissioner. The county
15 director of tax equalization shall make these forms available to claimants upon
16 request.
17 5. If any claimant is found to have claimed a credit fraudulently under this section to
18 which that claimant is not entitled, all credits under this section for that claimant for
19 that taxable year must be canceled. If a claimant received a credit that is canceled
20 under this section, the auditor of the county in which the property is located shall enter
21 the amount of the canceled credit as omitted property on the assessment roll of
22 property that has escaped taxation.
23 6. An individual who claims a credit under this section may not claim a credit under the
24 homestead credit provided in section 57-02-08.1 or the property tax credit for disabled
25 veterans provided in section 57-02-08.8.
26 7. For the purposes of this section:
27 a. "Dependent" has the same meaning it has for federal income tax purposes.
28 b. "Fund" means the primary residence property tax relief fund.
29 c. "Owned" means the claimant holds a present ownership interest, including
30 ownership in fee simple, holds a present life estate or other terminable present
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1 ownership interest, or is a purchaser under a contract for deed. The term does
2 not include a mere right of occupancy or a tenancy under a lease.
3 d. "Primary residence" means a dwelling in this state owned and occupied by the
4 claimant as that claimant's primary residence as of the assessment date of the
5 taxable year and which is not exempt from property taxes as a farm residence.
6 SECTION 5. A new section to chapter 57-02 of the North Dakota Century Code is created
7 and enacted as follows:
8 Limitation on true and full valuation on a primary residence.
9 1. Notwithstanding any other provision of law, the true and full valuation on any parcel of
10 taxable property used as a primary residence as defined in section 4 of this Act may
11 not exceed by more than three percent the true and full valuation on that parcel of
12 taxable property in the preceding taxable year, except to the extent improvements to
13 the property have been made which were not included in the taxable valuation of the
14 property in the previous taxable year.
15 2. True and full valuations exceeding the limitations under subsection 1 may be imposed
16 upon approval of a ballot measure, stating the proposed maximum allowable
17 percentage increase in true and full valuation, by a majority of the qualified electors of
18 the taxing district voting on the question at a regular or special election of the taxing
19 district. True and full valuations exceeding the limitations under subsection 1 may be
20 approved by electors for not more than one taxable year at a time.
21 3. A city or county may not supersede or modify the application of the provisions of this
22 section under home rule authority.
23 SECTION 6. AMENDMENT. Su