Legislative & Regulatory Update

​North Dakota's Legislative Session closes with a bang and historic property tax relief steals the show.

By John Alexander, DakCU Director of Legislative & Regulatory Affairs

North Dakota Legislative Session Wraps with Bold Property Tax Relief—and Big Wins for Credit Unions
The 2025 North Dakota legislative session closed with a decisive move that will reshape household budgets and community finance alike. After months of pressure, negotiation, and competing proposals, lawmakers passed House Bill 1176, a sweeping property tax reform package that delivers the most aggressive relief in state history. For credit unions and their members, the implications are immediate and long-term.

DakCU’s Legislative Advocacy: Key 2024 Bills That Mattered
While property tax reform dominated headlines, DakCU was actively working behind the scenes on legislation directly affecting credit union operations and regulatory clarity. Here’s a concise summary of the top bills DakCU tracked and helped shape:

• House Bill 1378 – Escrow Account Mandate (Defeated): DakCU successfully opposed and helped defeat this bill, which posed operational and compliance risks to credit unions managing escrow accounts.
• House Bill 1507 – Cooperative Conversions: Established a framework for financial institutions converting to cooperatives; DakCU ensured clarity around unresolved Field of Membership (FOM) concerns.
• Senate Bill 2028 – DFI Budget Authority: Restored appropriation control to the State Credit Union Board, removing legislative bottlenecks and enhancing oversight responsiveness.
• House Bill 1127 – Cybersecurity Mandate: Required financial institutions to implement standardized data protection programs, aligning with national security best practices.
• House Bill 1447 – Crypto Kiosk Regulation: Introduced licensing, disclosures, and fraud protections for virtual currency kiosks, safeguarding consumers and institutions alike.
• Senate Bill 2127 – Electronic Estate Planning: Legalized and standardized electronic estate documents, modernizing estate services for members.
• Senate Bill 2123 – Special Deposits Act: Created legal clarity for managing escrow, trust, and other contingent funds—enhancing operational consistency.
• Senate Bill 2122 – Commercial Real Estate Receivership: Streamlined rules for handling commercial property foreclosures, clarifying lenders' responsibilities and protections.
• Senate Bill 2310 – Garnishment Fees: Increased garnishment disclosure fees from $25 to $40, prompting procedural updates for credit unions.

The Road Ahead
This session DakCU submitted 22 testimonies, and tracked 79 bills—supporting eight, opposing six, and remaining neutral on others as needed. Every action taken was aimed at defending and advancing the interests of member institutions and the communities they serve.

With the property tax reform now law and major financial statutes updated, credit unions can prepare for a year of implementation, education, and member outreach. As new regulations take root, DakCU will continue its work to ensure credit unions remain empowered, compliant, and community focused.

Historic Property Tax Reform: House Bill 1176
North Dakota’s 2025 legislative session ended not with a whimper, but with a roar. In the early hours of Saturday morning, lawmakers closed the books on months of intense debate and mounting public pressure to tackle one of the state's most persistent grievances: unpredictable property taxes.

At the center of the session was House Bill 1176, a sweeping reform that did far more than tweak the tax code. Described by many as the most aggressive tax relief effort in state history, HB 1176 restructures how property tax relief is delivered and introduces bold limitations on future tax increases.

A Game-Changer for Homeowners
The cornerstone of the legislation is a $1,600 annual property tax credit for primary residences, more than triple the previous benefit. This credit will provide immediate financial relief to North Dakota homeowners, many of whom have watched property taxes climb steadily year after year.

“I’ve lived in the same home for 22 years,” said Donna Keller, a retiree in Jamestown. “I’ve watched my property taxes go up almost every single year. This is the first time I feel like someone in Bismarck is actually listening.”

In addition to the credit, the bill also caps local property tax growth at 3% per year, bringing much-needed predictability for property owners, especially fixed-income residents and rural homeowners, who are among the most vulnerable to sudden tax hikes.

To fund these changes, the state will draw nearly $500 million from the $11.5 billion Legacy Fund over the next biennium. This strategic move offsets revenue losses that local governments might face under the new tax caps while keeping the reform fiscally sustainable.

Governor Kelly Armstrong, who championed the bill from the outset, praised its dual benefits. “This bill provides real relief and real reform for taxpayers,” Armstrong stated. “It’s responsible, affordable, and durable. It creates Legacy Fund buy-in, and it’s the single most impactful thing we could do for North Dakota citizens this session.”

While HB 1176 was widely celebrated, it wasn’t without controversy. The 3% cap on property tax increases sparked concern among local governments and school districts, many of which fear the limits could strain their budgets during periods of inflation.

“We’re worried,” said Donnell Preskey, representing the North Dakota Association of Counties. “The caps are restrictive, and in times of inflation, it’s going to be hard for counties to meet obligations. But we fought hard to include the opt-out provision—that’s a win for local control.”

In response to concerns, lawmakers included a $30 million school stabilization fund and opt-out mechanisms to help ease the transition and maintain educational funding levels.

Despite broad support, HB 1176 wasn’t without political fallout. Rep. Scott Louser (R-Minot), who proposed an alternative plan to have the state fully fund public education as a path to even deeper property tax reductions, criticized the final bill and announced plans to take his proposal to the people through a 2026 ballot measure.

“For a legislator to announce a petition drive because he didn’t get his way. That’s a bit over the top,” countered Rep. Craig Headland (R-Montpelier), chair of the House Finance and Taxation Committee and a vocal supporter of HB 1176. “The people demanded tax relief. We’re giving them real, sustainable reform.”

What This Means for North Dakotans
For the average homeowner, the message is clear: relief is on the way. Along with the expanded credit and capped increases, the bill also includes additional support for renters and disabled veterans, ensuring the package is comprehensive.

Whether this represents the beginning of a new tax policy era, or a temporary fix remains to be seen. But for residents like Donna Keller, the impact is immediate. “All I know is next year, I’ll have $1,600 more in my budget. That means groceries. That means grandkids’ birthdays. That means peace of mind.”

And for now, that might be exactly what lawmakers were aiming for.
​
Stay Connected
For more information or to share your perspectives, feel free to contact me.