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19098 |
Prepared by the North Dakota Legislative Council staff for the Budget
Committee on Government Services |
OTHER RESPONSIBILITIES OF THE BUDGET COMMITTEE ON GOVERNMENT SERVICES
APPROVE AGREEMENTS BETWEEN NORTH DAKOTA AND SOUTH DAKOTA
North Dakota Century Code Section 54-40-01, a copy of which is included in Appendix A, provides that an agency, department, or institution may enter into an agreement with the state of South Dakota to form a bistate authority to jointly exercise any function that the entity is authorized to perform by law. Any proposed agreement must be submitted to the Legislative Assembly or, if the Legislative Assembly is not in session, to the Legislative Council or a committee designated by the Council for approval or rejection. The agreement may not become effective until approved by the Legislative Assembly or the Legislative Council. The Budget Committee on Government Services has been assigned this responsibility for the 1999-2000 interim.
The 1997-98 interim Budget Committee on Government Services was also assigned this responsibility; however, no proposed agreements were submitted to the committee for approval to form a bistate authority with the state of South Dakota.
Action Plan
The committee may wish to carry out this responsibility as follows:
- Receive any proposed agreement from a state agency to form a bistate authority with an agency of South Dakota.
- Receive testimony from interested persons on the proposed agreement.
- Review the proposed agreement regarding costs, effect on services, economic impacts, quality, etc.
- Approve or disapprove the proposed agreement.
DEPARTMENT OF HUMAN SERVICES FTE REPORT
Section 6 of Senate Bill No. 2012 approved by the 1999 Legislative Assembly, a copy of which is included in Appendix A, provides that the human service centers, State Hospital, and Developmental Center report to the Budget Section and the Legislative Council, or its designee, on the hiring of any additional full-time equivalent (FTE) positions in addition to those authorized by the Legislative Assembly for the 1999-2001 biennium.
Because funding for the human service centers, State Hospital, and Developmental Center is provided by the Legislative Assembly in the form of block grants, these entities may hire additional FTE positions to meet service needs. The section requires that these entities report to the Budget Section and a committee of the Legislative Council (Budget Committee on Government Services) on any additional FTE positions hired.
The 1997-98 interim Budget Committee on Government Services also received this report and learned that the department hired 26.25 FTE positions in addition to those authorized by the Legislative Assembly at an estimated biennial cost of $1.9 million. Funding for these positions during the 1997-99 biennium was made available from a variety of sources, including additional federal or other funds, budget reallocations, or transfers of appropriation authority from the State Hospital to the human service centers.
The following schedule presents the authorized FTE positions for the human service centers, the State Hospital, and the Developmental Center for the 1999-2001 biennium:
| Entity | 1999-2001 Authorized FTE Positions |
|
State Hospital |
537.01 |
|
Developmental Center |
481.30 |
|
Northwest Human Service Center |
67.00 |
|
North Central Human Service Center |
110.75 |
|
Lake Region Human Service Center |
66.00 |
|
Northeast Human Service Center |
157.65 |
|
Southeast Human Service Center |
181.75 |
|
South Central Human Service Center |
79.00 |
|
West Central Human Service Center |
131.15 |
|
Badlands Human Service Center |
90.50 |
Action Plan
The committee may wish to carry out this responsibility as follows:
- Receive periodic reports from representatives of the Department of Human Services on any additional FTEs hired in addition to those authorized by the 1999 Legislative Assembly.
- Determine the fiscal effect of hiring these additional FTE positions of the 1999-2001 budget and the projected cost if the positions are continued in the 2001-03 biennium.
- Include the committee's findings in its report to the Legislative Council.
HOUSING DEVELOPMENT FUND REPORT
Section 5 of House Bill No. 1383, a copy of which is attached as Appendix B, provides that the governing board overseeing the housing development fund provide annual financial statements and a report for the first four taxable years beginning after December 31, 1998, on the housing development fund. The report is to analyze the impact of the fund on the state's economy, business and employment activity generated by loans from the fund, and the effects of that activity on state and local tax revenues.
The bill allows a financial institution or group of financial institutions to establish a corporation or limited liability company to operate a housing development fund. The fund may be used for making loans in housing development projects in the state. The loans may be made for any housing project in the state, but the primary focus for loans from the fund must be to provide funding for multifamily housing projects in rural areas that are experiencing or expecting a shortage of housing as a result of economic development. The bill allows a credit against a financial institution's taxes equal to the difference between the participating financial institution's share of interest earned on the loan from the fund in the amount the institution would have earned by applying an interest rate of 300 basis points more than a comparable treasury security rate. The bill is effective for the four taxable years beginning after December 31, 1998. The fiscal note on this bill presented during the 1999 legislative session reflects a reduction in county revenues of $1,072,000 for the 1999-2001 biennium and a reduction of general fund revenues of $428,000 for the 1999-2001 biennium.
The housing development fund program allows a higher percentage of the cost of a housing construction project in rural North Dakota to be financed then would be available through traditional financing programs. Traditional financing programs will generally provide financing based on the appraised value of the housing unit. Because in rural North Dakota the cost of new housing construction generally exceeds its appraised value, it is difficult to obtain an adequate amount of financing for new construction in these areas. This program will provide the financing for the cost of construction that exceeds the appraised value which will make housing construction projects more feasible in rural areas of the state.
While the Housing Finance Agency provides lower cost financing for eligible homebuyers and homeowners and administers multifamily housing programs that provide lower cost financing alternatives through the issuance of tax-exempt revenue bonds, its programs operate similarly to traditional financing methods which do not provide financing of costs that exceed appraised value.
Action Plan
The committee may wish to carry out this responsibility as follows:
- Receive the housing development fund reports.
- Review the effectiveness of the fund on the state's economy, business and employment activity, and state and local tax revenue.
- Consider making a recommendation to continue the program beyond December 31, 2002.
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