Thursday, February 23, 2017

ND Counties Optimistic as Session Reaches Crossover

As we reach the “crossover” period of this 65th Legislative Session, it is not only a good time to catch our breaths but also reflect on the first half. With 778 bills filed this session, NDACo identified 454 bills that have some degree of county impact – either positive or negative. At crossover, 142 of these “county-related” bills have been defeated or withdrawn, leaving just over 300 to monitor for the remainder of the session. 
“The bills we track are really as diverse as the programs and services counties provide and the issues they face. In one day our lobbying team can monitor bills on property tax exemptions, guardianship grants, and/or reducing penalties for drug crimes,” said NDACo Executive Director Mark Johnson.
“All in all, when you look at how our County priority issues are faring in this Legislative Session, we see a lot of positive momentum as bills cross over. A majority of the bills initiated by counties are still alive, and we have made efforts to improve bills so they better represent our ideas. Major priorities like Social Service funding and two bills to create a new radio network for law enforcement and first responders have made it into the second half. These are triumphs given the budget shortfall and cuts this session.” 

The following is a brief look at our “crossover” scorecard on some of our priority bills: 
Bills Passed by the Senate and coming over to the House in pretty good shape are:
SB2206, Social Service funding – We are hopeful it can meet with success on the House side without additional baggage.
SB2204, Health Dept. Budget – Some of the governor’s cuts to local public health have been restored and we hope to retain that funding.
SB2288, Unified property tax notice – A two-year effort to streamline and reduce notices that seems to be in pretty good shape.
SB2204, State SIRN funding/traffic fees – The House passed the local share of SIRN in the 911 fee bill. This is the state share.
SB2045, Remove “fat truck” sunset – Allows local road authorities to retain civil penalties for damages to THEIR own roads.

Bills Passed by the House and coming over to the Senate in pretty good shape are:
HB1012, DHS Budget – Although it is hopeful that some areas of funding can be restored, the continuation of Expanded Medicaid is important.
HB1024, Deficiency appropriation for DAPL protest costs.
HB 1178, Local SIRN funding/phone fee – The Senate passed the state share of SIRN in a traffic fee bill.  This is the local share.

Passed by one House but in need of additional work:
SB2286, Pipeline siting – This effort to unify local transmission pipeline siting (PSC and Township/County) will likely need some amendments but industry is working with counties.
SB2015, DOCR Budget – Amendments gave DOCR the power to refuse inmates, leaving them in county jails at county cost.
HB1294/HB1338, Indigent Burial – Some of the changes will increase county costs.

Unfortunately Dead:
HB1122 & HB1123, Election Equipment Appropriations – Obviously the state’s revenues may not allow this to come back in the Secretary of State’s budget or some other place, but it is a priority of counties.

Unfortunately Alive:
HB1361, 3% cap on property taxes – We are hopeful that the Senate will defeat this poor public policy that can encourage, rather than discourage, property tax growth.
HB1424, Tax exempt church property – We disagree with the concept that income-producing property of churches is tax exempt.

Reminder, next week the Legislature is only in session Wed - Friday. Below you will find a link to the schedule.

Tuesday, February 21, 2017

ND Senate Approves Social Service Funding Bill

By a vote of 43-2 the North Dakota Senate approved SB 2206; the plan to transfer the remaining cost of county social services to the state. The bill will eliminate the 20 mills a county can levy for social services, resulting in permanent, real property tax relief.

"Local taxes should pay for local issues," Senator Brad Bekkedahl said during his Tuesday floor speech. "Since social services are federal and state mandates, the counties have little to no say in these programs.  Local property taxes should not pay for those services. It's a $250 million burden to local taxpayers we are addressing with this bill."  

This bill is the final transition of funding responsibility for social services from the counties to the state. Starting in 1997, the state started taking over social service costs for certain programs. Counties are currently responsible for the administration costs of social services. The counties are allowed to levy up to 20 mills to pay for the administration costs, which this bill eliminates. The reason this transfer makes sense is because counties have no control over social service programs which are mandated by federal and state statutes. 

Senator Bekkedahl went over highlights of the bill, "This bill has cost controls with spending set by the Legislature each session.  Social service employees will continue to be locally employed and managed by the counties.  Taxpayers will receive the same or more property tax relief for tax year 2017, with funding available by using property tax relief funds currently set aside.  It is sustainable and offers better cost containment in that it will be controlled by the Legislature and will be a formula implementation based upon actual caseloads costs, unlike the 12% buy down, which is an automatic annual cost, and provides no incentives to control local level spending."

The bill now moves to the House where it will have another hearing and be voted on by Representatives. 

Friday, February 17, 2017

NDACo Legislative Report #8

Crossover should easily arrive on time, or very likely a bit early this year.  It has to do with leadership seeing its shadow or something.  Rumors suggest a short morning of floor sessions next Thursday and out the door they will go.

As scheduled, there will be no legislative activity on Monday and Tuesday, February 27 & 28, so we expect a light week for hearings then, and as you can see below, and extremely light week for hearings coming up, since much of the time (particularly in the House) will be spend on the floor.  So rather than talking about hearings, let’s look at some of the major county issues and discuss their status.

SB2206, social service funding, was amended slightly by the Senate Appropriations Committee to allow for spreading federal penalties and charges among the counties as is currently done, and to correct a technical issue in language.  The bill was then given a strong Do Pass recommendation, and will likely be voted on by the full Senate next Monday.  Senate Leadership and the body itself continue to appear very supportive of this concept.  When it gets to the House side, we will have a bit of a different reception.  While many, many of the House members see great value in this proposal, Leadership has not yet embraced the concept.  We expect this to be a major discussion item at our County Officials Academy next month, and we are hopeful that we will have a lot of county folks available to communicate this to their legislators face-to-face.

SIRN (Interoperable Radio) Funding is addressed by two bills. HB1178 provides an additional 50-cent fee on phone service to be dedicated to the LOCAL costs of a statewide system – our estimates are that this generates about $9.5 million per biennium.  SB2204 would add an administrative fee on criminal ($100) and non-criminal ($40) traffic violations, dedicating the funds to the STATE share of the system.  This one is tougher to project, but possibly $6 million would be generated.  Senate passage of an increase cost for speeding (over a 5/1 Do Not Pass recommendation) was surprising to many, and this may see stronger opposition in the House.  While the two together produce insufficient funds to totally implement the system immediately, there is enough over the long-term to phase in the entire system over time.

The removal of the “sunset” on the ability for counties to retain the civil penalties on overweight (fat) trucks on county roads (SB2045) has been very well received.  This bill received unanimous support in the Senate, already crossed over, and has already received a unanimous Do Pass recommendation from the House Transportation Committee. 

Most major budgets, and particularly HB1012 addressing the Dept. of Human Services, have seen some very significant cuts in both dollars and authorized FTE’s.  Although not addressed on the House floor as yet, the appropriations work indicates impacts to most programs, with the largest hitting the nursing homes – as that is the largest single piece of the overall budget.  It does appear that the House will continue to keep the concept of Medicaid expansion alive, moving it from a stand-alone bill to this budget as well. 

As with all budgets, the comments have been that nothing can be final until the March budget projection is approved and released.  This data will drive all final budget decisions.  Although income tax collections remain strong, the three months of sales tax collections since the last revenue projections have been disappointing at best. 

Another big budget generating considerable concern for counties is SB2015 – Department of Corrections and Rehabilitation.  While the don’t have funding that flows down to counties, there have been repeated attempts to shift incarceration costs to the counties in a manner similar to last session.  Several amendments for this budget have included the “quota” concept proposed last session.  Counties have resisted these attempts and the final version does not include that language, however it does include the “right to refuse” language put in the bill last session. 

The NDDOT Budget, SB2012, did not have much debate on funding levels, as they are only slated to get the federal dollars and whatever the highway distribution fund generates.  However, that does not mean that budget was without controversy.  With the restriction in funds, the DOT looked for cost cutting measures and has proposed to reduce the number of section shops by 8 and reduce the number of satellite driver’s license sites they service by 9.  The driver’s license site reduction caused nary a ripple, but the “optimization” of the 8 section shops created a firestorm.  Although some of the staff and equipment from them would be consolidated into other sections, there would be a net reduction in five staff and four trucks suggesting a $4.4 million savings.  Sections proposed for closure are in Starkweather, Finley, Mayville, Courtenay, Fessenden, Litchville, Gackle, and New England.   Understandably, legislators from those areas fought hard in the Appropriations Committee and on the floor of the Senate to restore those sites, but ultimately were not successful.   The DOT budget will therefore go to the House without those sections funded, but the issue will undoubtedly be debated on that side as well. 

In the state employee compensation area, the legislature appears to be moving in a slightly different direction than originally proposed by the Governor.  Although this doesn’t directly affect counties, we realize it does have an indirect effect on local decision-making.  The executive proposal to require state employees to pay 5% of their health insurance was reversed (so far) but the 1% salary increase proposed for the second year of the biennium has been eliminated (so far).  Again, these decisions will be revisited after the new budget projection is final.  Not likely to get revisited was the decision to kill the proposed increase in NDPERS retirement contributions.  This “final step” in the NDPERS board’s effort to stabilize the fund for the long term (30+ years) will be moved down the road some more.

A number of poor property tax proposals (PPTPs) were defeated in the “first half”, but unfortunately not all of them.  A broad rewrite of the property tax exemption for churches (HB1424) was passed (56/34) in the House and if made into law could turn this exemption upside-down.  It would allow churches to maintain income-producing property as long as the income was used for “religious purposes”, and it would require the tax assessor to proof they were not using it in this manner, rather than the other way around.  This would be a huge shift in policy for the state.

And, of course, we have to address “caps” in the second half of the session.  While one cap bill was defeated, HB1361 was passed by the House (56/34).  This bill, sponsored by the Majority Leader and the Chair of the Finance & Tax Committee, would limit all local governments (except schools) to 3% increase in taxes, unless a citizen vote was held to increase that limit.  It was identified that if schools were held to the 3%, it would cost the state $34 million more in school aid, so they delayed their involvement for two years.  For all the reasons we have discussed in the past, this is very bad public policy, and the research would suggest it is largely ineffective if not counter-productive.  For those interested, some of this research is posted on the “testimony page” of our legislative blog.  We will be looking for a good turnout when this bill is heard in the Senate. 

The concept of repealing the confusing “Truth in Taxation” notices and implementing a single unified notice prepared by the county has some traction, passing the Senate unanimously.  This bill (SB2288) was extensively amended at the request of County Auditors, and it will force the completion of centrally assessed property about a month earlier to facilitate greater accuracy in budget estimates.  Recognizing there are still concerns about the bill, this will be one that needs thorough review and more discussion as it moves to the House.

This report is getting awfully long for a blog post, and we still haven’t talked about county health funding, drug testing for TANF clients, indigent burials, wind generation taxation, GPT funding, recorder’s fees, infrastructure financing, large trucks, ag trucks, tarps & mud flaps, tiling, guns, drugs, protestors or marijuana.  All these and more will be addressed at the County Officials Academy March 6-7 in Bismarck.  Pre-registration is open until Feb. 24th (link below).   SEE YOU ALL THERE!

Hearings for Next Week


Top of Form
Monday 2/20

DHS bill to update language regarding develop. disabilities  
Senate Human Services 
Red River 
S *  
DHS to recover SPED overpayment
Senate Human Services 
Red River 
24/7 records to be given within 30 days 
House Judiciary 
Tuesday 2/21

J ***
Medical Marijuana implementation  
Senate Appropriations 
S * 
DHS bill updating language and creating a voucher program for substance abuse 
Bottom of Form
Senate Human Services 
Red River 

Thursday, February 9, 2017

NDACo Legislative Report #7

NDACo Legislative Report #7
NDACo continues to monitor the work being done in committee where legislators are contemplating amendments and discussing the bills’ merits and whether or not to give them do pass or do not pass recommendations. We saw a couple committees where bills had already “crossed over” to the other side. The Senate is able to keep up with the number of bills each day on the calendar. The House however, has at least two days-worth of bills waiting for action.
SB 2206, the bill that proposes the transfer of the cost of Social Services to the State had a very good hearing this week before the Senate Appropriations Committee. The bill has not been passed out of committee as of yet.
The Senate Tax and Finance Committee gave a Do Pass recommendation to SB 2288, which is a bill that would repeal the truth in taxation notices and publishing requirements and replace them with one single unified notice for all taxing districts.

As you may have read on the blog earlier this week, several law enforcement bills that were spurred by the DAPL protest passed in the House. The Senate approved a bill that contributes to the funding of the 9-1-1 radio system by adding a surcharge to certain traffic violations.

View the upcoming week's schedule of hearings at the following link:

Monday, February 6, 2017

House Approves Protest Related Bills

Law enforcement have asked lawmakers this session to strengthen laws that will give more "teeth" to the laws against those who engage in illegal protest activity. The House answered; passing a majority of the package of proposed bills.

House Bill 1193 creates a new offense for those who if in the act of an A misdemeanor directly or indirectly cause more than $1,000 worth or economic harm to a business. This would be a Class C Felony. Legislators cited examples such has Dakota Access Pipeline protesters who attached themselves to equipment, or vandalized construction equipment. Supporters of the new law say this protects the constitutional rights of those protesting peacefully and has consequences for those who cross the line.

"As one of the only Legislators who live within 15 minutes of the existing protest camp, I have heard from the officers and the locals who believe our current laws are not sufficient nor efficient to protect us," said Rep. Jim Schmidt.

"If there's a gap or holes in our laws, we need to fix it," added Rep. Kim Koppleman. "It is a C Felony if a person steals $1,000 worth of goods, why shouldn't this follow suit?"

HB1193 passed with a vote of 72-19.

Representatives also approved HB 1304 which makes it a Class A misdemeanor for an individual to wear a mask while committing of a crime or leaving the scene of a crime.

Rep. Larry Klemin said, "A Class B Misdemeanor is just not going to cut it anymore."

The House also supported a bill that allows law enforcement to issue $250 fines for trespassing on property that is posted. This proposal could reduce the number of cases that need to go through the court system. It would work similar to how speeding tickets are issued.

The fourth bill approved increases the penalties for involvement in a riot. The crime is a Class B felony if the riot involves one hundred or more people and or if the individual possesses or supplies a firearm, dangerous weapon or like device. For even engaging in a riot, the crime is a Class A
misdemeanor. This bill passed even though it had a do not pass recommendation out of committee.

House members rejected HB 1383, which made it a Class B misdemeanor to loiter.

The four bills that passed have emergency clauses, which mean they will go into effect as soon as the Governor signs the bills into law. These bills will now go to the Senate for their action.

Law enforcement have requested several law changes as they have responded to the illegal acts perpetrated by those who are protesting the Dakota Access Pipeline in southern Morton County. Protest activity has been on-going since August and has resulted in law enforcement arresting 700 individuals for illegal protest acts.

Radio Funding Bill Passes Senate

The North Dakota Senate overturned a committee recommendation and passed SB2204 which allows a surcharge to be added to certain traffic violations for the creation and funding of a statewide interoperable radio network for law enforcement and first responders.
The bill came out of the Transportation committee with a do not pass recommendation. But it was persuasive testimony on the floor that convinced the Senate body to approve the bill 26-17.
"This is about protecting our law enforcement and first responders," said Sen. Rich Wardner. "We need to give them the equipment they need to protect them and us. We have to do something."
Sen. Curt Kreun also spoke up, "when equipment does not work properly, lives are at stake."
While many lawmakers say they didn't like the bill, they understand that the radios are reaching their end of their lives and that keeping this bill alive was vitally important.
SB 2204 is one of two bills that relate to funding a new radio system. HB 1178 has passed the House and would allow counties to increase the 9-1-1 fee .50 to be set aside for the local cost of paying for the radio system.

Thursday, February 2, 2017

NDACo Legislative Report #6

As you saw from a previous post, probably the most significant activity of the week was the unanimous approval of SB2206 - social service funding - by the Senate Finance and Taxation Committee.  This bill will be heard next week in the Senate Appropriations committee.

Also this week we saw strong House approval of HB1178 (81-12) to dedicate funding to the local government costs of a statewide interoperable radio system.  Although it has a long way to go, it is encouraging that the House has recognized the need in this area.

The House approved the regularly introduced Deficiency Appropriation, which was HB1024 this year.   Included in this bill was additional borrowing authority to address the costs of the pipeline protest that remains ongoing in Morton County, but involves law enforcement staff from many counties across the state.

A well intentioned, but poorly crafted efforts to keep property taxes down for seniors was soundly defeated (23-70) in the House.  HB1285 proposed to freeze property values for every property owner over the age of 65 (regardless of income and assets).

A county requested bill, SB2160, to clarify the duties of the county recorders regarding tax liens found favor in the Senate with unanimous passage.

Also receiving unanimous Senate support was SB2197, a county bill to clarify road bidding. It actually corrected issues created by the last Legislature.

As will be obvious from next week's hearing schedule (link below), things are moving along rapidly in the Legislature.  The hearing schedule is very short, and a number of bills have already "crossed-over" to the other chamber.  If the appropriations committees can also complete their work at this pace, they may actually be able to adjourn with days left "in the bank" as leadership hopes.  This however, does not mean things will be uneventful in the coming week. Plenty of bills remain “in committee” and still require final action.  A lot of interesting debate will be going on, and it will certainly involve county issues.

Keep watching, and keep talking to your legislators - it makes a difference.

Hearing schedule can be found with this report here:

Wednesday, February 1, 2017

911 Fee for Radio System Passes House 81-12

The North Dakota House voted Wednesday in support of a plan to raise 911 fees $.50 in order to help fund a new radio system for law enforcement and first responders. With a vote of 81-12 the bill now moves to the Senate.
North Dakota is the only state in the Upper Midwest that continues to operate on decades old radio communications. This radio system is reaching the end-of-life before the next legislative session. This funding plan will help pool investments to support a statewide system. Law enforcement testified that the response during the on-going Dakota Access Pipeline protest proved the current radio system is inadequate. Another bill SB 2204 also addresses a funding option for the radio system.