Panel hears bill to extend income-tax exemption to surviving spouses of retired law enforcement officers

The Finance and Taxation Committee opened a hearing on Senate Bill 2093, a measure "relating to an income tax deduction for retired law enforcement personnel benefits and to provide for retroactive application." Senator Diane Larson, who sponsored the change, told the committee the bill adds surviving-spouse benefits to the exemption lawmakers created last session.

Senator Diane Larson, state senator representing District 30 (Bismarck), said the measure builds on last session’s law that exempted retired military-style pensions from state income tax. "So the only thing new in this bill is adding the surviving spouse's benefit," Larson said, adding the intent is to mirror the military exemption to "help with recruitment and retention." The Senate previously passed the underlying measure unanimously.

Why it matters: Supporters said clarifying that surviving spouses may claim the exemption will ensure families receiving a retired-officer benefit are treated the same as military survivors. Proponents described the change as a narrow technical fix rather than a new, broad tax break.

Testimony and administration: Chief Jason Ziegler, chief of the Mandan Police Department and president of the Chiefs Association, testified in support and framed the change as protecting families. "The true heroes in our families, the ones that keep our families going so we can go protect our communities is our spouses," Ziegler said. Tom Iverson, chief of operations for the North Dakota Highway Patrol, said the patrol brought a similar bill after learning the earlier exemption did not explicitly cover surviving spouses.

On retroactivity and implementation, Matt Pearl with the Office of the State Tax Commissioner told the committee the provision is written to be retroactive "to tax years beginning after December 31, 2023," meaning it would apply to tax year 2024 returns currently being filed. Pearl said the department would publish guidance and allow taxpayers to amend returns after the bill becomes law. He also noted a substantiation requirement: the underlying exemption requires demonstration of 20 years of qualifying service, and the department will work with the Bureau of Criminal Investigation (BCI) to verify service records.

Committee discussion: Members asked whether the exemption treats all taxpayers equitably and discussed whether retroactive implementation would generate refunds or require amended returns. Senator Larson and supporters characterized the bill as a technical cleanup to match the original policy intent; committee members said they may seek additional information from the Tax Department during follow-up.

Support: Testimony was offered by law-enforcement organizations including the Chiefs Association, the North Dakota Sheriffs and Deputies Association (via ND Association of Counties testimony), the North Dakota Peace Officers Association, and the Highway Patrol. No formal opposition was recorded during the hearing. The committee closed the hearing on Senate Bill 2093 and indicated staff and sponsors would follow up with the tax department on implementation details.

Ending: The committee did not take final action during the hearing; sponsors and staff said they would return with technical fixes or drafting adjustments as needed to ensure the department can administer the retroactive claims and the surviving-spouse substantiation.