A BILL for an Act to amend and reenact subdivision b of subsection 4 of section 15.1-27-04.1, subsection 26 of section 57-02-08, sections 57-02-08.3, 57-02-08.9, 57-02-08.10, and 57-02-11.1, subsection 1 of section 57-23-06, and section 57-55-10 of the North Dakota Century Code, relating to the determination of state school aid, the primary residence credit, and removal of the homestead and disabled veterans' credit; to repeal sections 57-02-08.1, 57-02-08.2, and 57-02-08.8 of the North Dakota Century Code, relating to the homestead credit and disabled veterans' credit; to provide an effective date; and to declare an emergency.
HB1390 would substantially restructure North Dakota’s property tax relief system and related school-aid calculations. The bill amends the state school aid formula to adjust how certain tuition revenues are counted, including tuition for out-of-state students without a cross-border education contract and tuition from adjacent-district students in certain admitting districts. It also changes how township/county-level revenue is treated in the school aid deduction calculation by adjusting for sinking and interest mills.
The bill replaces the existing homestead credit and disabled veterans’ credit framework with a new primary residence credit. Under the new system, a taxpayer would receive a $500 credit against property tax on a primary residence, capped so the credit cannot exceed 70% of the property tax due. The bill defines primary residence broadly, including certain trusts, corporations, passthrough entities, and mobile homes, and it sets application, certification, and distribution procedures for the tax commissioner, county auditors, county treasurers, and the state treasurer. It also preserves the rule that the credit does not reduce special assessments.
HB1390 also revises or removes several existing property tax provisions. It updates the homestead exemption for paraplegic disabled individuals by replacing the prior reference to the homestead credit income limit with a fixed $70,000 income cap. It expands the special assessment homestead credit for seniors age 65 and older and for permanently and totally disabled individuals with income not above $70,000. In addition, it updates townhouse taxation language so townhouse owners can benefit from the homestead or other special classification if otherwise eligible, and it amends mobile home tax exemptions to align with the new primary residence credit.
The bill’s most significant legal effect would be the repeal of the current homestead credit and disabled veterans’ credit statutes, replacing them with the new primary residence credit structure beginning with taxable years after December 31, 2024. It also creates transition rules for mobile homes and for the 2025 application cycle, along with an emergency clause for the credit administration provisions. Overall, the bill would shift property tax relief away from the existing homestead/disabled veteran model toward a broader primary-residence-based credit administered through the tax commissioner and local tax officials.
The available context shows no committee transcript or recorded vote details, but the bill ultimately failed on February 11, 2025. Based on the text, the measure appears to have been designed as a major tax-relief and tax-administration overhaul, which likely made it consequential for homeowners, seniors, disabled taxpayers, mobile home owners, school districts, and local taxing districts. The main points of potential contention are the repeal of long-standing homestead and disabled veterans’ credits, the new eligibility and administrative rules, and the bill’s impact on state and local revenue calculations.
HB1390 would amend multiple sections of the North Dakota Century Code governing property tax relief, school aid calculations, homestead-related exemptions, special assessment credits, townhouse taxation, abatement procedures, and mobile home taxation. Its central legal change is the repeal of the homestead credit and disabled veterans’ credit statutes and their replacement with a new primary residence credit under section 57-02-08.9, with corresponding certification and payment procedures in section 57-02-08.10. It also changes the school aid formula by altering how tuition and other revenues are deducted, which could affect state aid calculations for school districts. The bill would directly affect homeowners, seniors, disabled individuals, mobile home owners, school districts, counties, and the state tax commissioner’s office.
The bill’s overall tone is reform-oriented and tax-relief focused, aiming to simplify and replace existing property tax credits with a new primary residence credit. Because there are no committee transcripts or recorded votes provided, there is no direct evidence of debate language or member positions in the available context. However, the bill’s failure suggests it did not secure sufficient support to advance, despite its broad property tax relief purpose. The measure appears to have been framed as a significant restructuring rather than a narrow technical adjustment.
The main likely points of contention are the repeal of the existing homestead credit and disabled veterans’ credit, the creation of a new credit structure with different eligibility rules, and the administrative burden of transitioning to a new statewide system. School districts and local taxing authorities may also have concerns about the bill’s changes to school aid revenue deductions and the fiscal effects on local revenues. Taxpayers who currently benefit from the homestead or disabled veterans’ credits could be affected by the new framework, while supporters would likely emphasize broader, more uniform relief for primary residences. The bill also raises implementation questions for mobile homes, trusts, passthrough entities, and cross-border tuition adjustments.