The House Industry, Business and Labor Committee on a banker‑heavy hearing day advanced two related bills to change how North Dakota’s State Fire and Tornado Fund and State Bonding Fund are administered, approved legislation requiring interest on many mortgage escrow accounts, and rejected a measure that would explicitly allow the State Board of University and School Lands to invest up to 10% of managed funds in precious metals or digital assets.

Lawmakers voted to give HB1026 and HB1027 a “do pass” recommendation after the North Dakota insurance commissioner and the state’s public risk pool briefed the committee on operations, contract rules and new amendment language. The actions formally authorize continued use of an external risk pool to administer those constitutional funds and add contract, appraisal and reporting requirements intended to reduce gaps in property coverage for state agencies and political subdivisions.

The bills matter because the funds provide property coverage for state entities and political subdivisions. Committee members pressed agency witnesses on whether outsourcing administration to the North Dakota Insurance Reserve Fund (the state’s public risk pool) creates a conflict when the Insurance Department both regulates the pool and contracts with it for administration. Insurance Commissioner John Godfried told the committee the arrangement grew from concerns about under‑insured property and from a government finance interim committee recommendation.

"We had about 2 staff members that were in charge of, responsible for administering this fund, and that provides property coverage for state entities. Frankly, we were not doing a very good job. We were not out in the field," Godfried said, describing why the department engaged the Reserve Fund. He told the committee the Reserve Fund’s field work uncovered roughly $3,000,000,000 in previously uncovered property statewide, reducing the risk that a loss would fall to the state.

The committee adopted a set of amendments to HB1027 that the Office of Management and Budget, the Reserve Fund and the Insurance Department negotiated. The key amendments the committee adopted (read into the record) include:
- A definition clarifying “North Dakota Insurance Reserve Fund” as the public risk pool established in statute, covering continuity if the pool changes name or reincorporates so long as it continues to provide coverage to a majority of eligible political subdivisions.
- Authorization for the Insurance Office to use State Fire Marshal program information and to delegate administrative responsibilities by contract to the Reserve Fund or another entity; such contracts must be two‑year terms ending June 30 of odd‑numbered years and may not be terminated midterm. If either party does not plan to renew, notice must be given by Sept. 30 of the even‑numbered year during the two‑year term.
- A requirement that each state agency insured under the fund obtain replacement‑cost appraisals at least once every six years and that agencies adjust values as required by the Insurance Office. If an appraisal produces a premium increase the agency cannot pay from current appropriations, the bill treats the additional premium as an earned receivable of the fund and directs the agency to seek a deficiency or general appropriation the next legislative session.
- An effective‑date amendment (sections 1–16 effective July 1) to avoid a contract lapse and a legislative management study to analyze the feasibility and impact of removing political subdivisions from the State Fire and Tornado Fund.

Keith Peach, chief executive of the North Dakota Insurance Reserve Fund, told the committee the six‑year appraisal cycle is what the Reserve Fund currently uses for state buildings on a replacement‑cost basis and described two appraisal pathways: Reserve Fund staff using standard replacement‑cost estimator software or local agents running the estimator under Reserve Fund guidelines.

Committee action on HB1026 and HB1027
- House Bill 1026 (fire/tornado fund): Motion for a do‑pass by Representative Shower; second by Representative Volmer. Committee moved the bill forward (do‑pass).
- House Bill 1027 (state bonding fund): Committee adopted the amendments described above, then approved a do‑pass as amended (mover: Representative Casper; second: Representative Bomer).

Escrow interest bill (HB1378)
The committee also took up and adopted Representative Johnson’s amendment to House Bill 1378, which requires banks, savings institutions and credit unions to pay interest on residential mortgage escrow accounts that meet the bill’s thresholds and terms. The adopted amendment sets a minimum interest rate (the amendment as read in the hearing included a floor of 0.5% annually for accounts meeting the thresholds) and added operational exemptions and thresholds intended to limit compliance burdens on servicers and credit unions. Representative Johnson described the amendment as a compromise aimed at returning interest to consumers while addressing servicer and credit union concerns.

Committee members discussed exempting the North Dakota Housing Finance Agency; the committee adopted a further amendment exempting that agency from the requirement. After debate, the committee voted to recommend do‑pass as twice amended.

Board of University and School Lands investment bill (HB1184)
A separate bill (House Bill 1184) that would have explicitly authorized the Board of University and School Lands to invest up to 10% of funds in precious metals and digital assets failed in committee. Supporters said the change merely codified powers some witnesses said the board already has. Opponents argued the legislation was unnecessary because the board can already make such investments and expressed concern about volatility and liquidity for funds with short‑term needs. The committee adopted a motion of do‑not‑pass on HB1184.

What’s next
The two insurance‑fund bills and the escrow bill were reported from committee with recommendations (do‑pass as amended where applicable). HB1184 (university lands investments) received a do‑not‑pass recommendation. The bills will appear next in the House process according to floor scheduling and leadership assignment.

Speakers quoted or cited in this article spoke during the committee hearing on the record and included Commissioner John Godfried and Keith Peach of the North Dakota Insurance Reserve Fund. Where roll‑call details were not fully read into the audio transcript, committee actions and adopted amendments are described from the hearing record.