North Dakota SB 2199 -- School Funding / Property Tax Bill

SB 2199

· Takes $300 million from state coffers to local school districts.

o Increases the state’s share of education expenses to 70% (a long-time goal)

o This is designed to replace school district revenue that would otherwise be collected through property taxes in an effort to reduce property taxes.

· This is a permanent structural change to the tax code.

· The bill, via amendment, removes the ability of local subdivisions to have unlimited mill levies.

o This is a form of installing caps on school districts’ mill levies.



· Below are the requirements for the amount of money allocated to the districts and the formula for distributing the state funds in school district budgets.

1.The mill levy reduction allocation rate for each qualifying school district is equal to

the payments to the school district based on the per student payment rate as

determined for the school year under chapter 15.1-27.

2. The grant to a qualifying school district may not exceed the smallest of:

a. The allocation determined under subsection 1;

b. The taxable valuation of property in the school district in the previous taxable

year times the number of mills determined by subtracting one hundred mills from the combined education mill rate of the school district for taxable year 2008; or

c. The taxable valuation of property in the school district in the previous taxable

year times seventy-five mills.

3. The grant to a qualifying school district may not be less than the grant to that

school district in the preceding school year.

4. The superintendent of public instruction shall report to each qualifying school

district by July fifteenth of each year the mill levy reduction grant in dollars

available to that school district during the upcoming school year.

5. By December first, January first, February first, and March first of each school

year, the superintendent of public instruction shall forward to each qualifying school district installments equal to twenty-five percent of the total mill levy reduction grant the district is eligible to receive during that school year.

6. Allocations to a school district under this chapter are not considered per student

payments or state aid for purposes of chapter 15.1-27.



57-64-04. Levy reduction priority. In setting mill rates for qualified school districts,

the county auditor shall apply funds allocated to a school district under this chapter for mill levy

reduction first to reduce the number of mills levied for general fund purposes and, if allocation

funds remain after the general fund mill rate is reduced to zero, the balance must be applied to

reduce the high school tuition levy and then to reduce the high school transportation levy of the

qualified school district.