Burgum: Session funds priorities, leaves state well-positioned for the future

BISMARCK, N.D. – North Dakota is well-positioned for the future with a leaner, more efficient state government and smaller budget that provides permanent property tax relief, fully funds K-12 education and uses innovative approaches to support other priorities, Gov. Doug Burgum said Thursday after the 65th Legislative Assembly adjourned sine die.

“Despite the unprecedented revenue shortfall we faced heading into this session, we were able to fund our priorities and balance the budget through sensible cuts, limited use of reserves and new initiatives that will streamline state government and make it more responsive to taxpayers,” Burgum said. “Over the next 20 months, our administration will work tirelessly to carry out this budget and identify ways to reinvent government and improve services to the citizens of North Dakota.”

The $4.3 billion general fund budget for 2017-19 represents a more than 28 percent decrease from the current two-year budget cycle, which ends June 30.

The budget approved Thursday contains more than $1.3 billion in local property tax relief, including $161 million in state funding to cover the cost of federally and state-mandated county social services and reduce local property tax rates.

The state’s overall budget will decrease from $14.2 billion to $13.6 billion.

“We thank the Legislature for working with the executive branch and other state agencies to curb spending and create a balanced budget,” Burgum said. “Our balance sheet remains strong and North Dakota’s future is brighter than ever.”

Following is a snapshot of some of the legislation supporting priorities:

PROPERTY TAX RELIEF

• Senate Bill 2206 transfers the funding responsibility for social services from counties to the state during a two-year pilot program, creating $161 million in permanent property tax relief while repealing the unsustainable 12 percent state-paid property tax buydown program. The bill also directs the Department of Human Services to develop a plan to look at improving the efficiency and effectiveness of how social services are delivered to clients across the state.
• The state continues to provide property tax relief through K-12 funding to reduce local mill levies, to the tune of an estimated $1.13 billion in 2017-19.
• Relief also will be provided through $14.8 million for the homestead tax credit, $8.1 million for the disabled veterans tax credit, $24.2 million in court administration costs and an undetermined amount from state administration of child support enforcement.

K-12 AND HIGHER EDUCATION

• The “innovative education” bill, SB 2186, empowers local school districts to better shape educational delivery to meet the needs of the 21st century by allowing schools to submit a request to waive sections of law related to K-12 education, provided their plan improves the delivery or administration of education, increases educational opportunities or improves students’ academic success.
• Thanks largely to $110 million from the Foundation Aid Stabilization Fund, K-12 funding through the per-pupil student payment in HB 1013 was held harmless, ensuring that students and teachers are protected from the economic downturn facing the state. Special education grants also were increased by $2 million.
• The North Dakota University System’s budget includes a Shared Campus Services Line with $500,000 for open educational resources and a system-wide shared services review to find efficiencies between campuses and throughout the entire system.
• The UND School of Medicine and Health Sciences will receive $15.2 million for the student residency program, while the Education Challenge Grants program will receive $2 million.

GROWING OUR ECONOMY AND JOBS

• The Department of Commerce budget bill, SB 2018, contains funding to help diversify our economy and foster job creation, including $3 million for further development of the Grand Sky unmanned aircraft systems (UAS) business and technology park in Grand Forks and $2 million for Northern Plains UAS Test Site operations.
• HB 1035 ensures the angel fund program can continue its important role of encouraging capital formation and building investment capacity for new and expanding businesses in North Dakota and beyond.
• HB 1296 eliminates unemployment insurance paper reporting for businesses. Electronic reporting is more efficient for both North Dakota Job Service and employers, and eliminating paper reporting will save money and time while improving customer service. 
• Legislation provides grant funding of $35 million to the Williston airport and $5 million to the Dickinson airport, supporting economic activity.

CORRECTIONS REFORM: The governor signed a package of bills that aim to reduce spending on corrections while moving funding upstream to provide additional support for people dealing with behavioral health and substance abuse issues and avoid additional future costs in health care and the criminal justice system.

• SB 2015, the Department of Corrections and Rehabilitation budget, redirects $7 million to improve access to effective, community-based substance abuse treatment and an additional $500,000 to develop a network of treatment providers to serve people in the criminal justice system and reduce recidivism.
• Justice reinvestment legislation, HB 1041, reduces the drug possession charge level, establishes probation as the presumptive sentence for low-level, nonviolent felonies and has other provisions designed to free up limited and costly jail and prison space.
• Legislation was approved prioritizing prison space for people convicted of serious and violent offenses, while HB 1269 reduces the minimum mandatory penalties for offenses involving a controlled substance or analog, giving the courts broader sentencing discretion that can result in more meaningful and cost-effective sentencing.

PUBLIC SAFETY AND SECURITY

• To improve communications capabilities for law enforcement, ambulance services and other first responders, HB 1178 authorizes the creation of a statewide interoperable radio network.
• In response to the Dakota Access Pipeline protests, the governor signed legislation designed to protect landowner rights, deter criminal activity and aid law enforcement.
• HB 1430 addresses the dangers of numerous distracting behaviors while driving, beyond texting while driving.
• HB 1359 creates a Silver Alert Notification System that allows for a notification – similar to an Amber Alert – when a disabled adult, vulnerable elderly adults or minor with a development disability is reported missing to law enforcement.
• Together, HB 1104, HB 1106 and SB 2110 allow the state to work with critical infrastructure owners and providers to understand cyber threats, to be proactive in supporting lifeline service providers when under threat or attack by cyber events, and to use National Guard cyber protection and defense assets as they’re developed.
• SB 2322 gives financial industry professionals, our state Securities Commissioner, and our Aging Services professionals new tools to help detect and prevent financial exploitation of seniors and vulnerable adults. 

HEALTH AND ENVIRONMENT

• SB 2344 establishes a medical marijuana program to be administered by the North Dakota Department of Health, with a $1.56 million budget and six FTE positions, with about half the budget coming from patient, caregiver, grower and seller fees and the other half coming from the general fund.
• The bill remedies some of the challenges posed by last year’s Measure 5, including adding decriminalization language and adding terminal illness to the list of more than a dozen qualifying debilitating medical conditions included in the original measure.
• SB 2327 will create a new, standalone Department of Environmental Quality by July 1, 2019, by separating the Environmental Health Section from the Department of Health. This will enable the state to better address environmental needs and increase the visibility of this important work by elevating the DEQ to a cabinet-level agency.
• As recommended by the governor, the Legislature repealed BreatheND and moved all tobacco prevention and control activities to the Department of Health, boosting efficiency by centralizing efforts to prevent and reduce tobacco use among youths and adults into one agency.

HUMAN SERVICES

• HB 1040 provides additional funding for behavioral health services and creates an evidence-based alcohol and drug education program to educate minors about alcohol and substance abuse.
• HB 1038 supports the establishment of a caregiver resource center website, providing easy access to caregiver information in a centralized location for caregivers and the general public.
• HB 1136 puts the substance use disorder treatment voucher system into state law.
• SB 2088 broadens the scope of work for addiction counselors to include nicotine and problem gambling and reduces barriers to licensing to support workforce development.
• SB 2251 will provide early support and interventions to keep substance-exposed infants in their homes while their parents receive treatment, reducing the likelihood that these families will continue to rely extensively on government services in the future.
• SB 2342 creates a 10-member, multi-disciplinary task force to study the prevention of sexual abuse of children and provide recommendations including policy changes, training for school personnel, educational information for parents and counseling and resources for students affected by this type of trauma.

TRANSPORTATION

• SB 2012, the North Dakota Department of Transportation (NDDOT) budget bill, optimizes the department’s 67 maintenance sections by consolidating eight smaller, outdated section shops into larger service areas. This allows the NDDOT to realize technological advances in snow removal equipment and recognizes the state’s changing demographics and traffic. The bill also allows the NDDOT to work with political subdivisions to lease the buildings and transfer used snow plows, if requested.
• SB 2012 also optimizes NDDOT driver’s license sites, moving services from nine satellite sites to the main driver’s license sites, resulting in a cost savings and a net increase in counter hours and driving tests available.
• HB 1299 allows for online renewal of driver’s licenses. Noncommercial drivers can apply by mail or electronically for renewal of a license during every other renewal cycle. Those under 65 will only need to visit a driver’s license office once every 12 years for renewal.
• HB 1255 directs the North Dakota Department of Transportation (NDDOT) to establish a limited transportation network of designated highways with higher truck weight limits, allowing shippers to be more efficient and make less trips.
• HB 1202 requires the NDDOT to study the use of autonomous vehicles on state highways and report the findings to the 66th Legislative Assembly.

WATER PROJECTS AND FLOOD PROTECTION

• HB 1020 contains $298.8 million in new funding for water projects across the state.
• The bill also contains legislative intent to provide up to $193 million for flood control projects in Minot over the course of the next four biennia and up to $30 million in 2017-19 for the Red River Valley Water Supply Project for planning, permitting, and construction-related expenses.
• HB 1374 also provides intent for the State Water Commission to have its seven members be appointed from areas of the state that represent each of the state’s seven major drainage basins and limits development downstream of dams within breach inundation zones.

ENERGY, NATURAL RESOURCES AND AGRICULTURE

• HB 1336 provides for oil and gas operators to conduct voluntary environmental health and safety audits to find and fix potential violations of state laws, free from threat of civil penalties if certain conditions are met. This concept is modeled after states like Texas, South Dakota, Wyoming and Oklahoma.
• HB 1347 increases the appropriation to the Abandoned Well Oil and Gas Site Plugging Restoration Fund Legacy program to remediate old oilfield issues where there’s no responsible party under law. It also continues studies on brine pond remediation and conducts a study on pipeline risk assessment and leak detection technology.
• HB 1257 decreases the minimum royalty owner and working interest owner consent needed to form a unit from 60 percent to 55 percent, allowing for greater possibility of unitization in the future for increased oil recovery and footprint reduction.
• SB 2134 establishes state policy for definition of mineral ownership under the Missouri River and provides due process to those who wish to challenge the presumptive ordinary high water mark. This bill sets a statute of limitations for court challenges of North Dakota Industrial Commission ordinary high water mark determinations and establishes a timeline for distributing lease and mineral revenue to the rightful owners.
• HB 1433 will make it easier for food producers to sell directly to consumers.
• HB 1204 reduces the age to qualify for an apprentice hunter validation license from 16 to 12 years old, and allows youths who turn 11 before the end of the calendar year to receive a whitetail doe license valid for only the youth hunting season.
• HB 1419 appropriates $250,000 to the Game and Fish Department to establish and administer a shooting sports grant program, which may be made available to schools, clubs and organized youth groups in the state. 
• HB 1207 allows the Game and Fish Department to seize tangible property presumed abandoned on state game refuges and streamlines the process for auctioning the property to benefit the Report All Poachers rewards fund.