Burgum: Session keeps general fund spending in check, invests in infrastructure without raising taxes and puts Legacy Fund to work for North Dakotans

North Dakota is funding infrastructure, education and other priorities, putting the Legacy Fund to work for current and future generations, and maintaining healthy reserves without raising taxes, Gov. Doug Burgum said today after the 67th Legislative Assembly adjourned its regular session sine die.

“This session delivered results that keep North Dakota on the path toward a bright and prosperous future,” Burgum said. “Working with the Legislature, we’ve delivered a balanced budget that keeps general fund spending in check, makes strategic investments in education, the economy and tax relief, and contains the largest infrastructure bonding package in state history – paid for with Legacy Fund earnings and not one extra dollar from taxpayers’ pockets.”

Landmark legislation passed this session puts the Legacy Fund, the state’s $8.7 billion sovereign wealth fund, to work for the benefit of North Dakotans in multiple ways:

• The $680 million bonding package will support infrastructure upgrades across the state, including flood control, roads, bridges, water projects and an agricultural products development facility at North Dakota State University.
• A separate bill significantly increases the amount of Legacy Fund principal invested within North Dakota, including in emerging or expanding companies, to boost economy activity and job creation.
• And a Legacy Fund “streams” bill provides a framework for how to strategically use Legacy Fund earnings in the future, including for repayment of infrastructure bonds, tax relief, funding for highways and roads, research and supporting the retirement system for state employees.

In December, Burgum recommended a 2021-23 budget with general fund expenditures of $4.84 billion and no increase in ongoing spending, and a total budget of $15.02 billion. The legislatively approved budget increases general fund spending by about $150 million, or 3%, to $5 billion, and the total budget to $16.9 billion, primarily due to the appropriation of additional federal funds passed by the U.S. Congress in December and March, after completion of the executive budget.

The general fund budget remains $1.8 billion lower than the record budget of $6.8 billion in 2013-15 and provides more than $187 in local property tax relief through the continuation of state funding to cover the cost of county social services. Tax relief also is provided in the school funding formula through the state’s assumption of 120 mills at a value of about $1.2 billion for the 2021-23 biennium.

Burgum had recommended $130 million to address critical maintenance needs in state-owned buildings, but that was not addressed in the legislative budget. The budget does invest additional dollars in information technology to enhance cybersecurity and upgrade or replace outdated mainframes.

The per pupil payment rate for K-12 education will increase by 1 percent each year to a record level, along with the total formula amount at $2.13 billion, while higher education funding will be $2.61 billion. The executive budget had recommended $45 million for career and technical academies; the legislative budget includes $70 million for that purpose from COVID capital projects funding from the federal government.

Following is a list of some of the legislation supporting priority areas:

TAX RELIEF

• HB 1380, the Legacy Fund streams bill, requires that up to $50 million of Legacy Fund earnings be dedicated to tax relief after the first $210 million in earnings is used for retiring infrastructure bonds, funding the state employee retirement system and supporting highway and road projects. 
• HB 1412 exempts coal-fired power plants from the state’s coal conversion tax for the next five years, saving the industry an estimated $20 million per year. This will free up funds to invest in innovative projects such as carbon capture, utilization and storage to curb emissions, improve the industry’s long-term viability, preserve jobs, ensure reliable baseload power and protect communities that depend on the coal industry.
• SB 2213 lowers property taxes for veterans by increasing the Disabled Veteran Property Tax Credit to apply to the first $8,100 of taxable valuation.
• HB 1137 expands the tax credit for charitable contributions from 25% up to 50% of a taxpayer’s income.
• SB 2041 creates an income tax exemption on gains from the sale or exchange of farm machinery.
• HB 1405 expands the existing income tax credit allowed to a corporation for hiring individuals with developmental disabilities or severe mental illness, increasing the credit from 5% to 25% of the first $6,000 of wages paid during the first 12 months of employment.

GROWING AND DIVERSIFYING THE ECONOMY

• HB 1425 sets targets for investing a greater portion of the Legacy Fund principal in North Dakota, with 10 percent of the principal to be invested in equity investments in the state – including emerging or expanding companies – and 10 percent in fixed income investments within the state. The fund’s current estimated value is over $8.7 billion. 
• HB 1141 allocates $15 million for the successful LIFT program, originally implemented after the 2019 session to support economic diversification and research.
• HB 1380, the Legacy Fund streams bill, includes up to $30 million for research, innovation and workforce development.
• SB 2018, the Department of Commerce budget, supports ongoing development of the state’s burgeoning unmanned aerial systems (UAS) industry, with $20 million to enhance beyond visual line of sight (BVLOS) capabilities, $7 million for the Grand Sky commercial UAS aviation park and $3 million for the Northern Plains UAS Test Site.
• HB 1175 creates common-sense liability protections to shield health care providers, businesses and others from frivolous claims related to exposure to COVID-19. It applies retroactively to Jan. 1, 2020, covering the entire COVID-19 pandemic.

AGRICULTURE, ENERGY AND NATURAL RESOURCES

• HB 1475 creates the Agriculture Diversification and Development Fund with $10 million and establishes a committee to help with diversification of the agriculture industry.
• HB 1452 allocates $25 million to create a Clean Sustainable Energy Fund to support low-emission technology projects and help provide a long-term, viable path forward for the state’s critical energy industry.
• SB 2014, the North Dakota Industrial Commission budget, includes $9.5 million to study the feasibility of underground salt cavern storage in North Dakota.
• SB 2065 creates a regulatory framework for underground salt cavern and natural gas storage, presenting an opportunity to reduce flaring.
• SB 2328 grants a tax credit of $0.75 per million BTUs of flared gas captured by an oilwell flare mitigation system.
• SB 2066 grants flexibility in the fossil excavation and restoration fund to allow funding for public fossil digs and fossil exhibits.

• HB 1455 ensures counties are included in the utility planning process.
• SB 2152 adds geologic storage of carbon dioxide to the sales and use tax exemption.
• SB 2206 allows utilities to recover costs for carbon capture.
• SB 2287 will study how best to address the increasing cost of coal insurance.
• SB 2313 will ensure the state has annual reports on the status and health of its electric grid.
• SB 2317 gives flexibility to coal companies to use their non-monetary assets as collateral to combat rising bonding and surety costs.
• HB 1218 allows non-residents who own land in North Dakota that is enrolled in the PLOTS program to hunt during the first week of pheasant season.
• HB 1242 grants another year of apprentice hunter licensing for new hunters who may have received a license last year and were unable to hunt due to COVID-19.

REINVENTING GOVERNMENT AND CUTTING RED TAPE

• SB 2175 makes it easier for military members and their spouses to obtain occupational licenses in North Dakota based on work experience, encouraging them to remain in North Dakota after their service ends.
• SB 2144 makes North Dakota the first state in the nation to allow electronic posting of private land. Hunters will be able to check whether the land is open for hunting via the North Dakota Game and Fish Department’s website or a downloadable app.
• SB 2012 allows NDDOT to match federal funding to establish a statewide Traffic Management Center that will improve traffic safety and road management.
• HB 1102 increases the age limit from 65 to 70 for a citizen to be able to renew a driver’s license online. The bill, which takes effect Aug. 1, will give approximately 40,000 additional licensed drivers the ability to renew online.
• HB 1072 allows NDDOT to offer a downloadable app to provide an option to carry a copy of your driver’s license on your smartphone.
• HB 1168 provides an online option for driver’s license knowledge testing, which will particularly benefit rural communities that would otherwise have to schedule an appointment and travel to the nearest testing center.
• SB 2112 allows NDDOT’s contracted motor vehicle branch offices to provide driver’s license services, impacting 18 communities across the state.
• HB 1359 eliminates the $50 application fee for medical marijuana designated caregivers, allows up to five designated caregivers for a registered qualifying patient and changes the membership of the Medical Marijuana Advisory Board. 
• HB 1353 reorganizes and unites the Office of State Engineer and the staff of the State Water Commission under a new cabinet agency, the Department of Water Resources.
• HB 1477 provides a process for universities to issue residential documentation to students for voting purposes. 
• HB 1035 revises the Juvenile Court Act, creating separate chapters for children in need of services and children in need of protection, and delinquent children, and provides attorney services for justice-involved children. 

K-12 AND HIGHER EDUCATION

• SB 2196, the “pathways to graduation” bill – the No. 1 recommendation provided by the Governor’s Innovative Education Task Force – gives students additional flexibility in meeting graduation requirements by reducing the hours they’re required to spend in a classroom. This will allow for more personalized education and let students work on other academic goals and learning methods after they demonstrate mastery of a subject.
• HB 1388 authorizes K-12 schools to develop virtual learning academies to personalize education and add flexibility to models of learning for students.
• HB 1478, dubbed the “learn everywhere” bill, allows graduation credits to be fulfilled through internships, apprenticeships, extracurriculars, clubs and other educational opportunities by demonstrating competencies in course standards. 
• SB 2289 creates a scholarship around the Choice-Ready Framework, which emphasizes the importance of career, college and military readiness.
• SB 2304 requires all elementary and secondary public and nonpublic schools to provide learning experiences that emphasize the federally recognized tribes with whom North Dakota shares geography, including Native American history.
• HB 1188 allows the Department of Public Instruction to expand opportunities for special education paraprofessionals to receive a special education technician certificate. 
• HB 1436 increases access to summer school for students in grades K-4, with an emphasis on reading and math. 
• HB 1232 allows a school to satisfy the requirements of school calendar hours through virtual instruction during school closure due to weather or other conditions.
• SB 2003, the higher education budget, establishes a $19 million capital building fund for maintenance and extraordinary repair; provides $363,000 for the Lake Region State College Curtis and Annette Hofstad agricultural center; and provides $4 million for the Dakota College at Bottineau Old Main renovation project, including $1.5 million from locally raised funds.
• SB 2003 also includes a study of higher education funding mechanisms, include private-public partnerships and distributions from permanent funds, similar to what the governor proposed in his State of the State address.
• HB 1015 includes $4 million for the renovation of Pulver Hall at Dickinson State University from the federal coronavirus capital projects fund.

HEALTH, HUMAN SERVICES AND ENVIRONMENT

• HB 1012, the Department of Human Services budget, includes $15 million for Substance Use Disorder vouchers, more than doubling the current budget of $7 million, and an additional $2 million for two grants to expand voucher access in underserved areas.
• Funding for the Free Through Recovery program increased to $4.3 million, with the Legislature adding $3.3 million to the executive budget recommendation.
• HB 1466 provides grants for early childhood programs designed to serve 4-year-olds, supporting the creation of high-quality early learning experiences and providing program staff with coaching and support to grow professional practice.
• HB 1090 reforms the long-term care payment model that improves quality of care and service to residents while respecting the fiscal contribution from the state.
• SB 2237 will ensure that the state Department of Environmental Quality’s (DEQ’s) regulation of coal plants does not exceed federal requirements.
• SB 2070, the DEQ “Good Samaritan” bill, allows liability protection for purchasers of a contaminated property if they work with DEQ to clean up or control the site. 
• SB 2238 gives the DEQ flexibility for regional haze standards.

SMART INFRASTRUCTURE AND VIBRANT COMMUNITIES

• HB 1431 provides a $680 million bonding package to support infrastructure upgrades across the state, including flood control, roads, bridges, water projects and an agricultural products development facility at North Dakota State University. Legacy Fund earnings will be used to retire the bonds without raising taxes or using tax dollars, making the package extremely economical for North Dakota citizens. The bill includes $510 million for the state’s two largest flood control projects, the FM Area Diversion and Mouse River Flood Control.
• HB 1019 creates a Challenge Grant for the Parks and Recreation Department to drive $1.6 million of investment from the private sector and public sector for parks maintenance, infrastructure and capital improvements.
• HB 1018 provides the State Historical Society with $4.2 million of federal funding for capital project planning and extraordinary repairs.
• HB 1337 allows a school district to work with another political subdivision to preserve a school building should the declining enrollment cause the district to dissolve. 
• HB 1116 gives counties the ability to levy funds for road and bridge infrastructure.

MILITARY FRIENDLINESS AND VETERANS

• HB 1107 expands eligibility for in-state tuition rates at North Dakota colleges and universities to National Guard and Reserve members, their spouses and dependents from all states.
• HB 1125 cuts red tape to allow the dependents of both military members who die in the line of duty and 100% disabled veterans to receive free tuition at North Dakota colleges and universities.
• HB 1211 empowers the state treasurer to identify investment opportunities with the greatest return for the Veteran’s Aid Fund and the Postwar Trust Fund Earnings accounts – increasing funds used to directly serve veterans.
• HB 1278 allows military spouses to claim unemployment benefits when they lose employment due to military-related relocation.
• SB 2117 allows payment of death benefits for a National Guard service member who is killed while in state active-duty status.
• SB 2246 improves behavioral health services for veterans and creates sentencing alternatives for veterans involved in the justice system.
• SB 2114 repurposes the National Guard Training Area and Facility Development Trust Fund to fund Camp Grafton expansion.

TRIBAL PARTNERSHIPS

• SB 2319 provides a framework for the state and MHA Nation to share tax revenue from oil wells that straddle the boundary of the Fort Berthold Reservation, settling an unresolved issue from the state’s historic 2019 tax agreement with MHA Nation.
• HB 1126 allows law enforcement entities to enter into agreements with tribes to provide mutual aid across reservation boundaries.

• HB 1417 allows the North Dakota Information Technology Department to enter into agreements with tribes and other government entities to assist with cybersecurity incident response.
• HB 1101 allows the North Dakota Department of Transportation to enter into agreements with tribal governments to assist with federally funded safety improvement projects on tribal-owned highways, streets, roads and bridges.
• SB 2297 designates State Highway 57 as Akicita Memorial Highway, recognizing the military service of all North Dakotans and particularly the many tribal members who defend our state and nation.
• HB 1052 extends for two years a pilot program that aims to ensure all justice-involved, at-risk tribal and non-tribal youth have access to similar services.
• HB 1063 reorganizes the Northwest Area Water Supply Advisory Board and adds a seat for the Turtle Mountain Band of Chippewa Indians.

PUBLIC SAFETY, SECURITY AND EMERGENCY RESPONSE

• HB 1187 creates a $50 million Rebuilders Permanent Revolving Loan Fund to provide low-interest loans to residents impacted by flooding, building on a program created after the Minot flood in 2011.
• HB 1314 requires executive branch agencies and political subdivisions to report cybersecurity incidents to the North Dakota Information Technology Department (NDIT), which will prevent further damage to the state network and protect citizen data.
• HB 1417 allows NDIT to enter into agreements to provide cybersecurity response for state, local and tribal governments.
• HB 1435 extends state health and pharmacy insurance coverage at no cost to the surviving spouse and dependents of an emergency responder who dies in the line of duty.
• HB 1463 gives local fire and EMS entities the ability to have an armed responder for defensive purposes only.  
• HB 1393 allows a district court judge to sentence an offender to complete a restorative justice program as an alternative sentence.

SECOND AMENDMENT RIGHTS

• HB 1498 removes a victim’s requirement to try and escape before defending themselves against an attacker, making North Dakota a “Stand Your Ground” state. 
• SB 2344 protects North Dakotans’ access to firearm and ammunition businesses. 
• HB 1293 expands constitutional carry in North Dakota and expands hunting rights for North Dakotans.  
• HB 1383 prohibits state agencies from enforcing federal gun laws that infringe on the Second Amendment.  
• HB 1450 allows more North Dakotans to qualify for a Class 1 Concealed Carry license.  
• HB 1248 clarifies the role of cities and political subdivisions in making local firearms policy.
• HB 1297 clarifies where firearms are and aren’t allowed.  
• HB 1339 creates a study to evaluate the North Dakota Century Code’s definitions of “public gathering” and “dangerous weapon” to ensure North Dakota’s law is up to date. 
• HB 1396 protects firearm and ammunition manufacturers from lawsuits for damages caused by a third party.  

COVID-19 EXECUTIVE ORDERS TURNED INTO LAW

Several executive orders issued by Burgum during the COVID-19 pandemic to cut red tape and ensure assistance to citizens were converted into law by the Legislature, including these bills:

• SB 2164 allows occupational licensing boards greater flexibility during emergencies and allows licensed practitioners from other states to provide services in North Dakota during emergencies.
• HB 1388 allows for the distribution of per pupil payments to school districts for students receiving virtual instruction.
• SB 2279 allows the state Board of Pharmacy to develop rules for registered pharmacy technicians, after receiving training, to administer medications including immunizations under the supervision of an authorized licensed pharmacist.
• SB 2221 allows pharmacists to administer immunizations, specifically COVID-19 vaccine.
• SB 2142 authorizes election officials to begin processing absentee ballots three days before the polls close.
• HB 1349 allows public meetings to occur by video or other electronic means and requires sufficient technical capacity to enable all interested parties to attend.
• HB 1338 allows the state agriculture commissioner to waive pesticide certification requirements for antimicrobial pesticides.