(The Center Square) - North Dakota Governor Doug Burgum signed a bill Thursday that brings $515 million in tax relief to North Dakotans.

House Bill 1158 started as an income tax relief plan that would have created a 1.5 percent flat tax but lowered the income tax threshold so that many North Dakotans would not pay any income tax.

The final bill eliminated the states' bottom tax bracket. Lawmakers created two brackets out of the remaining four. Those in the lowest new bracket will pay 1.95 percent in income taxes and those in the top bracket will pay 2.5 percent, according to Burgum's office.

Lawmakers pushed to include property tax relief in the bill. The move triples the state's homestead tax exemption, lawmakers said. The bill's final version gives a 100 percent reduction of the taxable valuation of a homestead deduction to residents 65 and older making less than $40,000 annually. North Dakotans with incomes between $40,000 to $70,000 would receive a 50 percent reduction of the taxable valuation.

The bill also gives a $500 tax credit on primary residences.

A conference committee met 13 times to hammer out the final details. The bill passed the House by a vote of 84-6 and the Senate 45-2.

“While this isn’t the flat tax we originally proposed, North Dakota will still be able to claim the lowest income tax rates in the nation among states that have individual income tax, helping us to recruit and retain workers to address our workforce challenges,” Burgum said. “We’re grateful to our legislative partners whose thoughtful work allows North Dakotans to save more than half a billion dollars over the next two years and moves us further down the path toward becoming a zero income tax state.”

A committee will discuss further tax relief in the interim. The bill created the Legislative Tax Relief Advisory Committee, which will analyze HB 1158 and look at other tax relief options, including a flat tax, according to a news release from Burgum. The committee will present its report to the 2025 Legislature.