Senators considered a proposal to reduce the school portion of property taxes on agricultural land during discussion of Senate Bill 2363.

Sponsor Senator Eberly (self-identified in testimony as the bill sponsor) and supporters described the measure as a way to ensure equity in any broader property-tax-relief package. The proposal would buy down the school mill rate applied to agricultural land from 60 mills to 30 mills. Advocates and commodity groups told the committee agricultural property bears a disproportionate share of local tax collections in many counties.

Why it matters: Witnesses and staff cited statewide data: agricultural property accounted for about 19% of property-tax collections (excluding special assessments) in 2024; the state has roughly 25,000 farms and 95% of farmland is operated by about 12,677 farms. Testimony summarized that about 1.6% of the population (farm operators) provide roughly 15.6% of property-tax collections — underscoring the distributional effect of relief targeted only at residential property.

Fiscal and administrative issues: The fiscal note for the buydown was described as approximately $80.5 million. School-finance staff noted implementation timing issues: the Department of Public Instruction calculates state aid using the prior-year taxable valuation (taxable valuation for 2024 is used for the 2026–27 funding cycle). Adam Tesher, school finance officer at DPI, said the department could implement the change, but doing so for the upcoming funding cycle would require updated 2024 valuation data by school district; otherwise implementation could be delayed one year or DPI would need to retroactively collect county data and recompute distributions.

Supporters and testimony: Agricultural and ranching organizations strongly supported the bill. Julie Ellingson of the North Dakota Stockmen’s Association, Pete Hanover of the North Dakota Farm Bureau and Leslie Isengild of the Corn Growers Association asked the committee to pass a package that includes ag-property relief so that reductions to residential property do not simply shift the tax burden disproportionately onto farm landowners.

Questions from lawmakers addressed the map showing county-level shares of property-tax collections attributed to agricultural land, and the committee asked the tax commissioner and DPI whether counties could administratively implement a separate mill rate for agricultural land. Tax department staff indicated counties could apply the change in their templates and said administration was feasible; DPI staff flagged timing/data issues but said the change could be integrated with an extra data collection or by deferring the change one year.

Ending: Supporters asked the committee for a favorable recommendation so agricultural property would be included in any final property-tax-relief package. No final committee vote on SB 2363 was recorded in the transcript.