Gov. John Hoeven's proposed property tax rebate plan was defeated in the Republican-controlled state Senate on Friday.

A coalition of all Democrats and six Republicans joined together to defeat the rebate plan by a vote of 27-21. A second property tax relief plan has yet to be voted on.

As proposed, the rebate measure would have spent $117 million of state revenue to offer property tax rebate checks to homeowners, farmers and business owners. Homeowners would have gotten a 10 percent rebate, while farmers and business owners would have gotten 5 percent rebates.

Hoeven said he remains committed to property tax relief. He urged the Legislature to come together and present him with a plan.

"This is something the people want, and I am going to continue to work to get it done," Hoeven said.

Friday's defeat came despite the adoption of an amendment that did away with the most controversial piece of the legislation: caps on how much local governments can raise their property taxes.

Democrats and local officials had opposed the caps, saying they limited the flexibility of local government. But even with their removal, all of the Senate's Democrats voted against the bill.

Senate Minority Leader David O'Connell, D-Lansford, said the Senate's 21 Democrats decided to vote as a bloc against the plan because they believe there are much better ways to offer property tax relief.

O'Connell said Democrats would like to see the problem solved by funneling more state aid to schools and counties, which assess the property taxes. He also said they'd like to see an expansion of the homestead tax credit, which lowers property taxes for low-income North Dakotans who are elderly and disabled.

"There are better, more sustainable ways to offer property tax relief," O'Connell said.

Although all Democrat-sponsored bills that did this have died, O'Connell said the ideas can be added to other bills through amendments.

Hoeven said he'd rather see a direct property tax relief plan.

"It needs to be property tax relief that goes directly back to the people," he said. "It can't be another spending plan."

Sen. Joel Heitkamp, D-Hankinson, said rebates would not solve the problem of high property taxes. He said the state should be looking to fix the problem in a long-term manner by using the money to fund counties and school districts, which levy property taxes.

"(North Dakotans) aren't looking for a check in the mail," Heitkamp said. "They're looking for the state government to do its job."

The defeat of Hoeven's plan shines the light on a second property tax rebate plan, which passed the Senate and is awaiting a hearing in the House Appropriations Committee. This plan would set aside about $100 million to offer rebates on the property taxes that residents pay to their local school districts.

Rebate amounts would vary among taxpayers - depending on the value of their property and the property tax rate in their local school district. The bill also could include caps on how much a school district could raise its property taxes. Its details are still being worked on in committee discussions.

Also, it's possible the rebate plan could come back.

That bill's sponsor, Sen. Dwight Cook, R-Mandan, said it could be voted on again with a motion to reconsider, or re-vote, which can be called for by anybody on the prevailing side of a vote. He also said aspects of the plan could be added to other bills via amendments.

"There's no doubt in my mind that the idea is still alive," Cook said. "We're going to go home with tax relief, or we're not going to go home."

Cook supported the tax rebate plan because he said it provided the best method of delivering the most property tax relief to the most people.

Before rejecting the bill Friday afternoon, the Senate also rejected amendments that would have committed the money to a fund and committed the interest to school districts and one that would have committed money to schools and expanded the state's homestead tax credit program, which lowers property taxes low-income residents who are elderly or disabled.

(Reach reporter Jonathan Rivoli at 223-8482 or jonathan.rivoli@;bismarcktribune.com.)