Committee advances North Dakota property tax bill but reduces level of tax credit
Senate Majority Leader Sen. David Hogue, R-Minot, speaks during a meeting of the Senate Appropriations Committee on March 27, 2025. (Michael Achterling/North Dakota Monitor)
The North Dakota Senate Appropriations Committee advanced a property tax bill Thursday, but adopted amendments such as reducing the proposed tax credit for homeowners.
Senate Majority Leader Sen. David Hogue, R-Minot, introduced amendments to House Bill 1176, a property tax proposal backed by Gov. Kelly Armstrong.
Hogue proposed lowering the primary residence credit from the $1,450 approved by the House to $1,250. He also proposed changes he called a 'skin-in-the-game' amendment that would limit the credit to 75% of the property owner's total tax liability. Homeowners would get a minimum tax credit of $500, the same level approved by lawmakers in 2023.
North Dakota governor unveils bold property tax plan in first State of the State address
'If we adopt (House Bill) 1176 as is, you are virtually wiping out the tax liability of all the primary residence owners in those small communities,' Hogue said. 'I don't think that's good policy.'
The committee adopted the amendment with a 12-4 vote.
Armstrong's proposal, which was incorporated into the bill sponsored by Rep. Mike Nathe, R-Bismarck, called for a primary residence tax credit of up to $1,550. Though not included in the bill, Armstrong's long-term vision is to eliminate property taxes for most homeowners within a decade, a proposal he highlighted during his first State of the State address.
'I don't think what got put on in Appropriations today is nearly good enough for the North Dakota citizens,' Armstrong told the North Dakota Monitor after the hearing.
Armstrong said he hopes senators defeat the amendments on the floor and pass the bill as originally intended.
Hogue said if property tax liability is eliminated for a large portion of homeowners, then they won't have an economic stake in voting for future property tax increases or bonding proposals.
The committee also adopted an amendment from Hogue that adds language urging lawmakers in the 2027-29 session to consider property tax reductions for agriculture, commercial and centrally assessed properties. The language would not be binding.
The property tax credits would be paid for through earnings from the Legacy Fund, which was created by voters and is fueled with oil and gas revenue. Hogue expressed concerns about Legacy Fund earnings being used to only benefit homeowners.
'It should be broader based,' Hogue said.
Armstrong said he has concerns about using Legacy Fund earnings to benefit out-of-state interests that own farmland, businesses or other types of property.
'I don't think giving out-of-state landowners a tax break helps anybody buy farmland cheaper and I don't think it helps anybody rent land cheaper,' Armstrong said.
The committee rejected amendments related to the 3% property tax levy cap for local subdivisions.
The bill will now head to the Senate floor for a vote of the whole chamber. If passed, it will need to be reconciled in a conference committee between the House and Senate.
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