Committee expands law-enforcement retirement income exemption to surviving spouses, approves retroactive amendment

Senate Bill 2093, which would make surviving spouses eligible for a state income‑tax exemption on law‑enforcement retirement income that was previously extended to retired officers, passed the Senate Finance and Tax Committee on Jan. 8, 2025. The committee also voted to make the change retroactive to Dec. 31, 2023.

Sponsor Senator Diane Larson told the committee the prior session extended an income tax exemption for retirement income after 20 years of law‑enforcement service to help with recruitment and retention. She said the prior bill did not explicitly include surviving spouses; SB 2093 adds surviving spouses to the exemption to correct that omission.

Aaron Hummel, chief of staff for the North Dakota Highway Patrol, and representatives of the North Dakota Peace Officers Association and the Chiefs of Police Association testified in support; witnesses said many plans use joint‑survivor options and that the surviving spouse commonly receives a continuing benefit after a retiree’s death. Hummel related an example in which a surviving spouse sought the benefit after a retiree’s death and said the change would align statute with legislative intent.

Committee debate included a motion to amend the bill to add retroactivity to Dec. 31, 2023. Senator Wallen moved the retroactive amendment and the committee adopted it after discussion; the tax department said administration of a short retroactive period would be workable. The committee then voted to give the bill a 'do pass' recommendation as amended and assigned Senator Richard Marcellus to carry the bill to the floor.

The bill’s fiscal note was discussed in general terms; testimony indicated the overall fiscal impact is likely modest because prior income‑tax reductions have decreased the number of filers with state income tax liability. The committee closed the hearing with the amendment adopted and a committee 'do pass' vote recorded.