A BILL for an Act to amend and reenact sections 11-11-55.1, 40-22-01.3, and 57-15-41 of the North Dakota Century Code, relating to infrastructure fees levied by cities and counties, and the exemption of infrastructure fees from levy limitations.
HB 1389 would revise North Dakota law governing how cities and counties finance local infrastructure projects. It authorizes municipalities and counties to levy an “infrastructure fee” on utility bills in place of general special assessments for infrastructure maintenance costs, and it requires the fee to be used only for those maintenance costs. The bill also preserves the ability of local governments to levy “green field special assessments” for development of agricultural or undeveloped property when an infrastructure fee is used.
The bill sets out procedural safeguards for projects funded by the fee. A city or county would have to create an infrastructure zone for each project, mail notice to utility account holders in the zone, include project cost and description information, provide a protest form, and hold a public hearing. If a majority of utility account holders in the proposed zone submit protest forms, the project could not proceed in that zone. The bill also caps commercial infrastructure fees at no more than twice the residential rate.
HB 1389 would also amend the state’s levy-limitation statute so that tax levy limits do not apply to levies used to pay special assessments or the new infrastructure fees, or to debt service on bonds issued to prepay those assessments. In practical terms, this would give local governments more flexibility to raise revenue for infrastructure-related obligations without those amounts counting against general levy caps.
The bill appears to have had strong support in the House, passing second reading 91-0, but it was overwhelmingly rejected in the Senate, where second reading failed 3-44. That voting pattern suggests broad initial support in one chamber but substantial opposition in the other, likely reflecting concerns about local fees, taxpayer burden, or the scope of the levy exemption. No committee transcript was provided, so the specific arguments for and against the bill are not available in the record supplied.
The main point of contention is the shift from traditional special assessments to utility-bill-based infrastructure fees and the exemption of those fees from levy limitations. Supporters likely viewed the bill as a more flexible and administratively workable way to fund local infrastructure, while opponents likely objected to expanding local revenue authority and reducing the practical effect of levy caps. The protest-and-hearing requirements indicate an effort to balance that authority with property-owner notice and objection rights.
The bill would amend sections 11-11-55.1 and 40-22-01.3 to expressly authorize counties and municipalities to impose infrastructure fees through utility bills for infrastructure maintenance, subject to notice, hearing, protest, and rate-limit requirements. It would also amend section 57-15-41 to exempt these infrastructure-fee levies from state levy limitations, alongside existing exemptions for special assessments and related debt service. The affected parties are local governments, utility account holders, property owners in proposed infrastructure zones, and commercial property owners, who could be charged up to twice the residential rate.
The recorded vote history shows a sharply divided outcome between chambers. The House approved the bill unanimously on second reading, indicating clear support at that stage, while the Senate later defeated it by a wide margin. With no committee transcripts available, the overall sentiment can be described as initially favorable in the House but ultimately negative in the Senate, suggesting that the proposal did not maintain enough support to become law.
The central controversy was whether cities and counties should be allowed to replace general special assessments with infrastructure fees collected on utility bills and whether those fees should be exempt from levy limits. Supporters likely favored the bill as a way to finance infrastructure maintenance more predictably and with clearer local procedures. Opponents likely objected to the expansion of local taxing or fee authority, the potential impact on utility customers, and the reduced constraint on local levies. The bill’s protest mechanism and commercial-rate cap appear designed to address fairness concerns, but the Senate vote indicates those safeguards were not enough to overcome opposition.