The ND Hospitality Association places a high priority on protecting your business from unfair taxation, undue regulation, and harmful changes that will hurt your business. We focus on creating a strong working relationship between our industry and the decision makers that impact your business on a daily basis.
NDHA members benefit from a team that works to develop legislative policy that is best for our members, and shepherding that policy through the legislative process. These policies are developed by the NDHA Board of Directors and our Legislative Committee based on member input.
The largest legislative accomplishment for the North Dakota hospitality association this legislative session was the passage of Senate bill 2304, an omnibus gaming bill. Within this bill North Dakota hospitality association members secured a rent increase on electronic pull tab machines. This rent increase is broken down into two parts.
Maximum rent on the first five machines moves from a maximum of $100 per machine, to $175 per machine
the maximum rent allowed on the next five machines was raised from $50 per machine to $75 per machine
Definitions and statutory clean up
SB 2304 also added a series of statutory changes that defined where electronic pull tabs may be within bars, what venues are eligible for electronic pull tabs, and statutorily established the previous code language limiting any site to a maximum of 10 electronic pull tab machines. The bill also granted charities and hospitality establishments new protections from local interference in charitable gaming site selection, and added a new role for the attorney general in oversight when a local authority intervenes with the charitable gaming and hospitality establishment relationship.
After nearly a decade of trying cigar bars are finely set to be legalized in North Dakota with the passage of house bill 1229. The bill will allow for the opening of cigar bars under the following conditions: has a humidor on the premises; is enclosed by solid walls or windows, a ceiling, and a solid door; and is equipped with a ventilation system by which exhausted air is not recirculated to nonsmoking areas and smoke is not backstreamed into nonsmoking areas. Bars may open starting in August!
Swipe fee study
Senate bill 2217 would have eliminated the ability for banks, credit card companies, and other financial institutions from imposing interchange fees on the portions of a credit card transaction that were simply taxes to be paid to the state of North Dakota. This bill was supported by both majority leaders, and had broad based support in the Senate. However in the house significant lobbying efforts were made by credit unions, banks, and other financial institutions to stop this legislation. After the legislation failed in the house the North Dakota hospitality association in conjunction with several legislators made sure that the study would be conducted by legislative management on the total costs of these fees, and the financial impact on North Dakota businesses annually.
Changes to lodging health inspection
Certain lodging establishments are now Exempted from certain licensing requirements and inspection requirements under select definitions. Under Senate bill 2082 single structures with five or fewer guest rooms and 10 or fewer total occupants, or facilities with multiple structures with a total of five guest rooms and 10 or fewer total occupants, or facilities providing certain personal care services will no longer have the same inspection requirements.
State employee meal reimbursement
An unexpectedly controversial bill this session was sb2124 which would allow for the first major increase in state employee meal reimbursement rates in over a decade. The meal reimbursements changed as follows
- Breakfast: $7 to $9
- Lunch: $10.50 to $14
- Dinner: $17.50 to $22
The bill also clarifies that the nightly lodging reimbursement rate is a maximum of 90% of the United States Federal General Services lodging reimbursement rate within the state of North Dakota
Property and income tax changes
HB 1158 provides the largest tax relief package in North Dakota history. The tax relief package was aimed at incentivizing worker migration to the state, while simultaneously making it more affordable to be a homeowner in the state. A long-standing cause for concern has been worker retention and recruitment; this package was written and passed with a goal to directly address each of those concerns. With the passage of HB 1158 the state now has the lowest income tax in the county amongst states which levy an income tax.
- Provides $515M in targeted relief for the people of North Dakota:
- $358.2M in income tax relief
- Reduces the current five brackets down to three:
- $0-$44,725: 0% tax rate (reduced from 1.1%)
- $44,726-$74,750: 1.95% (reduced from 2.04% and 2.27%)
- $74,751-$225,975+: 2.5% (reduced from 2.64% and 2.9%)
- Provides the most relief to middle income families
- $156.7M in property tax relief
- $53.5M in ongoing funding for an expansion of the Homestead Tax Credit Program
Legislative Interm Process
The legislature has now begun the interim process, allowing for the State Legislature to study areas of note to prepare for next session.
The largest study of note to NDHA Members is 2304 § 6.
“A study statewide charitable gaming comprehensively. The study must include input from the Attorney General, stakeholders from large and small charitable organizations, local political subdivisions that authorize sites, gaming equipment manufacturers and distributors, gambling addiction counselors, and other industry leaders. The study also must include an evaluation of the economic impact of charitable gaming on the state in urban and rural areas; an evaluation of gambling addiction and treatment services currently available; an evaluation of the civic benefit of charitable gaming to the communities most closely related to the gaming sites; an evaluation of how site authorization is approved and renewed, including whether charities have equitable access to sites; an evaluation of the gaming tax structure; an evaluation of public support for charitable gaming; an evaluation of statewide local restrictions placed on charitable gaming; an evaluation of gaming expansion; an evaluation of site locations where gaming is taking place; an evaluation of charitable gaming proceeds and the eligible uses of gaming proceeds, including the percentage of proceeds that may be used for administration; an evaluation of the categories of organizations that are allowed to conduct charitable gaming, including the missions of such organizations; an evaluation of the placement of gaming activity within a gaming site, including electronic pull-tab device placement; an evaluation of the rental rate paid by organizations to alcoholic beverage establishments; and an evaluation of the authority of the Attorney General to regulate alcoholic beverage establishments.”
If you would like to contribute to the study or have your voice heard though testimony please contact Executive Director Martinson.
Other Issue Priorities
- NDHA advocates on behalf of the hospitality industry on a wide range of wage and hour issues before the legislature including minimum wage, changes to the tip credit statute, and other issues.
- NDHA advocates on behalf of the hospitality industry to ensure that the fees and license requirements imposed by state and local governments are reasonable and do not impose an undue burden on bars, restaurants, or hotels.
- NDHA has worked closely with State Health Department on Food Safety code and can be a resource to members looking to remain prepared for health inspections and other regulatory requirements.
- NDHA is able to offer advice and guidance to members facing issues at the local level related to food and beverage or lodging ordinances.
- NDHA has been very active at the state capitol on charitable gaming issues and has consistently delivered for hospitality venues to ensure that they receive a fair rental rate from charities utilizing their venue
- NDHA also works to protect and promote a positive business environment for the hospitality industry in North Dakota, including tax issues, regulatory changes, wage and hour policies, and licensing requirements.
Past Legislative Accomplishments
- NDHA secured an increase in electronic pull tab maximum rental rates
- Championed legislation establishing a rental rate for electronic pull tabs.
- Successfully lobbied to provide $62 million in state economic impact funds for our industry in response to the COVID-19 pandemic.
- Joined our industry allies at the federal level to secure additional economic relief dollars in the form of the Restaurant Recovery Fund.
- Joined other business associations to secure liability protections for businesses related to the COVID-19 pandemic.
- NDHA successfully advocated against policy that would have removed the teeth from the trespassing law that helps keep our employees and customers safe.
- Advanced legislation empowering hospitality establishments to help curb the use of fake or illegal IDs.
- Passed legislation allowing alcohol service to begin at 8am on Sunday for hospitality establishments.
- Successfully lobbied the legislature to provide incentives for hospitality venues that provide responsible beverage server training to their employees.
- Passed legislation raising the reimbursement rate for retailers collecting sales tax.
- Facilitated the passage of legislation authorizing a special study on the impact of credit card swipe fees on collected sales taxes.
For more information, contact Rudie Martinson at 701-527-7692 or RudieM@NDHospitality.com.