Gov. John Hoeven issued his first and only vetoes of the 2007 legislative session on Wednesday, declining to sign a bill that automatically enrolled state employees in a retirement savings program and rejecting part of another that would have expanded vehicle tax exemptions for Native Americans.

Don Canton, a spokesman for Hoeven, said these vetoes would be the governor's only such rejections this session.

Hoeven has already signed the session's major initiatives, including a $118 million property tax cut package, a major overhaul of the state's school funding formula, and a bill to fund and plan a new state prison.

Republicans in the Legislature claimed throughout the session that they were working closely with the Republican governor. Hoeven's veto of just one bill and one provision of another bill lends credence to this.

According to data from the Legislative Council, the Legislature's research arm, this year's two vetoes are the fewest since 1981. Hoeven vetoed six bills in 2003 and 2005, and five in 2001.

"They worked with us to pass our agenda," Canton said. "This is our fourth session, and we've learned to work with them better."

This year's first veto blocks a provision that would have automatically enrolled state employees in a deferred compensation program that would have expanded their retirement benefits. Requested by the Public Employees Retirement System Board, the bill would have withheld an additional $25 per month to be invested in a retirement investment account as a supplement to their pensions.

Employees could opt out of the program, but were automatically enrolled if they didn't.

Jodee Buhr, executive director of the North Dakota Public Employees Association, said her group was neutral on the bill. Most everybody supported increased retirement savings, she said, but the question was whether it should be automatic or whether the worker should have to voluntarily enroll.

"We definitely didn't oppose it, but we purposely chose not to support it," Buhr said.

In a letter explaining his veto, Hoeven wrote that he didn't support the automatic enrollment because the money is withheld without the employee's consent and they could face a financial penalty for then choosing to opt out.

"Individuals should be free to determine in the first instance how best to establish their savings," Hoeven wrote.

Hoeven's other veto of a line item in the North Dakota Department of Transportation budget eliminates the expansion of a tax credit for American Indians.

Under current law, citizens on a North Dakota Indian reservation are exempt from paying state taxes when they purchase a vehicle. The vetoed provision would have expanded this right to any tribal member in the U.S.

In his veto letter, Hoeven wrote that the law would "open an exception that would be overly broad and exempt certain individuals from a law that is otherwise blind to a person's nationality."

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