John Hoeven: Governor of North Dakota

2001 Legislative Summary

Economic Development

• Created the Department of Commerce, combining Economic Development & Finance, Division of Community Services, Tourism Department, and Workforce Development to strengthen, streamline and improve economic development and build tourism.
• Created an Economic Development Cabinet to advise the Director of Commerce and promote development activity.
• Created a number of new and additional tax credits to help build the economy:
  1. A thirty-percent investment tax credit that will encourage investment in primary sector businesses within North Dakota.
  2. Investment tax credits for value added agriculture. (see Agriculture)
  3. Investment tax credits for wind energy. (see Energy)
• Increased tax credit for renaissance zones by $2.5 million.
• Created sales tax exemptions on high-tech equipment.
• Expanded the Beginning Entrepreneur Loan Fund from $500,000 to $4 million and increased individual loan amounts to $100,000.
• Increased public venture capital by adding $2.35 million to the North Dakota Development Fund (NDDF).
• The NDDF now has $21.1 million in total assets, which can be revolved and utilized for public investment.
• Increased funding for the Work Force 2000 training program to $2,100,000, an increase of $850,000 over the last biennium.
• Increased Work Force training delivered through higher education from $875,000 to $1,350,000.
• Increased funding by $1.7 million to market North Dakota to build tourism and economic development.
• Marketing dollars included in the Commerce Department budget total $5.2 million, with $906,000 allocated for the Lewis and Clark bicentennial.
• Increased access to capital markets by raising the upper limit to qualify for securities offering exemptions from $1 million to $5 million. Simplifies filing and reduces legal fees and costs of raising capital.
• Established greater uniformity with other states’ securities laws to reduce regulatory burden on businesses raising capital.

K-12 Education

• Provided $54 million in increased education funding - allocated $35 million to teacher compensation resulting in an average of $3,000 per teacher over the next two years and increased $19 million foundation aid.
• Increased tuition apportionment $13 million, funded through the common schools trust fund.
• Provided technology funding totaling of $9 million, to include wiring schools to statewide high-speed data network.
• Added $250,000 for state-financed repayments for student loans incurred by North Dakota students who agree to teach in grades or content areas identified as having teacher shortages.
• Dedicated $120,000 for teachers who enroll in courses to undergo retraining into other grade or subject areas.
• Increased post-retirement benefit adjustment multiplier from 1.88 to 2.00 under the teacher fund for retirement.

Higher Education

• Fundamentally changed the way higher education is funded. Flexible spending allows the universities to retain tuition dollars and other revenue generated to enhance the education curriculum by reallocating funding in response to the market. Gives discretion to the State Board of Higher Education to enhance quality education, workforce development and workforce training.
• Increased Experimental Programs to Stimulate Competitive Research (EPSCoR) funding from $2 million to $4 million as proposed by the Hoeven 2000 campaign.
• Established technology scholarships for the new economy. Students may receive $5,000 in principal student loan repayments if they pursue studies in technology and stay in North Dakota in a tech-related job.

Agriculture

• Created a value-added board in the Commerce Department to proactively promote opportunities in value added processing. The board will review business plans, advise on financial issues and prioritize promising projects.
• Created investment tax credits for value added ventures. A thirty-percent income tax credit on individual investments of up to $20,000 per year will be allowed and up to fifty percent of the tax credit may be claimed in any taxable year.
• Authorized the Industrial Commission to issue bonds through the Bank of North Dakota to individuals for the purpose of establishing meatpacking plants.
• Eliminated the farm equipment sales tax. On June 30, 2002, the sales tax on used farm machinery, irrigation equipment and parts will be eliminated, a priority of the Hoeven 2000 campaign.
• Increased general fund dollars for agricultural research from $46.2 million to $50.7 million. Provided $2.5 million to enhance ethanol production in North Dakota.

Technology

• Provided $89.6 million in funding to develop the statewide high-speed data, video and voice network linking North Dakota high schools, colleges, courthouses and state government agencies. The high-speed data network also provides the infrastructure necessary for the creation of tech-based businesses throughout the state.
• Initiated development of Enterprise Resource Planning (ERP), a software system to streamline resources in higher education and state government. ERP will enable higher education, in tandem with K-12 schools, to better prepare students for the job market by tracking education training and work force development.
• Opened the door for E-Commerce by signing a bill to legalize electronic signatures for transactions.

Energy

• Created tax incentives for innovative wind, geothermal and solar power development within the state through investment tax credits and reduced sales and property taxes.
• Revised coal conversion tax to make North Dakota lignite coal more competitive.
• Reduced fuel tax on bio-diesel fuel sold in North Dakota.

No Tax Increases

• De-coupled state income tax from the federal system while holding it revenue neutral. Doing so will improve the state’s image by changing the 14% federalized tax multiplier to simple state income tax rates of 2.1% to 5.54%.

Public Health

• Provided grants for community based tobacco prevention programs that will be coordinated through the local public health units and schools.
• Removed the asset test from Medicaid’s health care for families, resulting in expanded coverage, reduced paperwork and better coordination with the Children Health Insurance Program (CHIP).

Devils Lake Outlet

• Directed $10 million appropriation for general flooding assistance to Devils Lake, including money for downstream evaluations, upper basin management and land acquisitions.
• Created the authority to bond $5 million to meet the non-federal share for raising the Devils Lake dike.
• Signed quick-take authority (eminent domain) to design and build an outlet.
• Extended bonding authority to the water commission until 2003, giving the commission unencumbered authority of $20 million for a state-sponsored outlet and eliminating the condition for a federally approved project.

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