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Committee backs exclusion of Segal AmeriCorps education award from state income tax
Summary
The House Finance and Taxation Committee recommended a do‑pass on House Bill 1107 to exclude from state income tax the Segal AmeriCorps Education Award; sponsors and Commerce staff said the change would let volunteers use the award entirely for education costs and could modestly boost AmeriCorps participation in North Dakota.
House Bill 1107 would exclude Segal AmeriCorps Education Awards from North Dakota taxable income, allowing award amounts — which federal law treats as taxable income — to be used tax free for qualified student loan repayment or education expenses at eligible institutions.
Representative Munson, chairing the bill’s House sponsorship, said the proposal aims to encourage North Dakotans to participate in AmeriCorps and to make the education benefit more useful to alumni. “After successfully completing the AmeriCorps term of service and enrolling in the National Service Trust, you are eligible to receive the Segal AmeriCorps Education Award,” Munson told the committee, and the bill would prevent North Dakota from taxing that benefit.
Tim Matherne, an appointee to the North Dakota State Commission on National and Community Service (Serve North Dakota), explained the program’s federal origin and purpose. He asked the committee for a due‑pass recommendation, saying the state program leverages federal funds to support tutoring, after‑school programming and nonprofit capacity — activities that “are meeting workforce needs across the state.”
Katie Ralston Howe, workforce director at the Department of Commerce, described program operations and usage in North Dakota, estimating an average annual membership of about 150–200 participants and saying awards are restricted to education uses (tuition, loan repayment, training). She told the committee removing the state tax would allow members to “fully benefit from the award that they've earned by serving their communities.” She also noted North Dakota would become the seventh state to exempt the award at the state level if the bill passed.
Representative Vicki Steiner said she opposed piecemeal carve‑outs and preferred eliminating individual income tax entirely; Representative Zach Ista asked whether most award recipients would already have no state tax liability. Senator Mathern and Commerce staff said eligibility spans income ranges and can include retirees and others not limited to low‑income residents.
After testimony, Representative **** Anderson moved a do‑pass recommendation; Representative Olson seconded. The committee voted to recommend the bill with a final recorded result the clerk summarized as 10 in favor and 4 opposed. Representative Austin Foss agreed to carry the bill to the floor.
What happens next: With a committee recommendation, the bill advances to the House floor for consideration and possible amendment.
