BISMARCK, N.D. (NorthDakotaMoniter) – A property tax bill backed by Gov. Kelly Armstrong received a unanimous do pass recommendation Monday immediately following a Senate committee hearing.
House Bill 1176, sponsored by Rep. Mike Nathe, R-Bismarck, would give North Dakota homeowners up to a $1,450 primary residence tax credit and cap the amount of property taxes that could be levied locally at a 3% annual increase.
The bill would also raise income thresholds for seniors to the Homestead Tax Credit program by $10,000 and expand the state’s renters credit for those that qualify from $400 to $600.
Tax Commissioner Brian Kroshus estimates the bill would provide an estimated $503.3 million in tax relief to citizens for 2025-27.
“During my campaign, I visited with thousands of constituents from every corner of our state and I can confidently say that this is their top priority and it should still be ours,” Armstrong told the Senate Finance and Taxation Committee.
Other property tax relief bills under consideration by the Senate would reduce property taxes for commercial, agriculture and centrally assessed properties in addition to residential property.
Armstrong said focusing on primary residences would bring tax reductions to small business owners in the state indirectly.
“Every small business owner I know in North Dakota lives in North Dakota,” he said.
Most of the testimony Monday was in support of the bill, but some including the North Dakota League of Cities and North Dakota Association of Counties advocated for amending the 3% cap for local political subdivisions. Both groups favor a cap tied to the rate of inflation, such as the consumer price index plus 2%.
Brandy Madrigga, finance director for Cass County, told lawmakers that salaries and benefits for the county’s 277 employees account for the majority of the county budget. She said the average annual raise and cost of living adjustment for county employees is about 5%.
“These increases are necessary to ensure the county can retain skilled personnel and maintain the quality of essential services,” Madrigga said.
Nathe said the Legislature could revisit the caps during the 2027 legislative session.
The bill also allows local governments to exceed the cap with approval from voters. It also allows local governments to bank unused increases for up to five years.
Committee member Sen. Michelle Powers, R-Fargo, said she liked that House Bill 1176 only affects primary residences. The committee advanced the bill to the Senate Appropriations Committee, which could make amendments to the bill, including discussing the 3% caps.
The two other property tax bills, House Bill 1575 and House Bill 1168, also would affect out-of-state property owners and those who own multiple properties in the state. The committee held hearings on those bills last week but has yet to make a recommendation.
All three bills were passed by the House.
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