By Lance Gaebe
Executive Director, NDGGA
Email: agdakota@btigate.com

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Prairie Grains is the official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain Growers Association,
South Dakota Wheat, Inc., and the Minnesota Barley Growers Association.

Research & Extension funding
HB 1021 was the NDSU Experiment Station, NDSU Extension Service, Northern Crop Institute and Upper Great Plains Transportation Institute appropriation package. In the research area, the Governor had proposed an additional appropriation above the 95% budget to fund $2.4 million for 21 research initiatives that were a mix of restorations and new projects. Most of the priorities were funded; however in the end $310,000 was cut from the initiative package, and the State Board of Agriculture Research was directed to determine how the cuts would occur. The SBAR was created during the last Legislative Session to establish priorities for research.

Nearly $500,000 in capital improvements at the main campus and the branch station were not funded. The portion that was financed will provide some additional money required to complete three pesticide spray projects. The legislation also provides authority for fund transfers from the main station to the branch stations. It provides authority for the branch stations to manage money between budget items. Overall cuts were $700,000 from the proposed budget. The resulting amount is slightly over 100% of the previous biennium budget.

Oversight of the NDSU Extension Service is added to the responsibilities of the SBAR, which is now SBARE with the word "Education" added. With the addition of a few initiative dollars the NDSU Extension Service ended up with slightly less than 100% of its current biennium budget, excluding salaries.

Pesticide measures
There were several resolutions and a handful of bills targeted at the discrepancy of pesticide availability and pricing differential between North Dakota and Canada.

The NDGGA participated extensively in the efforts to address pesticide harmonization and access. The Association drafted several resolutions which identified the pesticide inequities with Canada and sought to inform the Administration, Congress, and the EPA of the state legislature’s disapproval of the situation.

An early bill would have established a tax on pesticides equal to the difference between the U.S. and the Canadian retail price. The tax was termed a business privilege tax. It was defeated as unworkable and probably unconstitutional.

HB1335 sought to require commodities that are imported into ND carry certification of freedom of pesticides not registered in the U.S. The bill passed both chambers but was vetoed by the Governor. The bill was not to go into effect until July 1, 2001. The NDGGA supported the measure and urged the Governor not to veto the bill. The attempt to override the veto by the House of Representatives was unsuccessful.

HB1252 as originally introduced simply declared that any pesticide that is sold in Canada was to be made available in ND at a price equal to the Canadian price. Since the bill probably would have been against federal law, the legislation was amended to attempt to address the different situations of pesticide harmonization issues: 1) Products that are available in Canada, but not in the U.S. 2) Products or active ingredients that are available in both countries, but are priced higher in the U.S. 3) New compounds not available in either country, but being tested and registrations sought in different time tables. The bill does not allow implementation if it violates federal law and it essentially directs the ag commissioner and the governor to work with Canadian officials and the EPA to attempt to accelerate harmonization effort.

The NDGGA was instrumental in the legislative creation of a crop protection product harmonization task force. The committee will be made up of the chairmen of the two ag committees and three additional appointees, one of whom must be a pesticide industry nominee. I have already been asked by several legislators to consider being nominated to serve on the committee. The committee is charged with prioritizing pesticide needs for the state, identifying the state’s pesticide regulating authority under federal law, and secure research and resources to register additional pesticides in the state. The committee received $30,000 for the biennium for its operation.

The minor use pesticide fund was generously funded at $465,000, including the carryover from the current biennium.

Reduction in farm machinery sales tax
HB 1487 and SB2217 both sought to reduce the sales tax farmers pay on machinery and irrigation parts and used machinery. One would have provided an 18-month "holiday" and the other a permanent elimination of the 3% tax. The measures both received considerable attention and were one of the few concepts introduced in the Legislature that received widespread support from all agriculture organizations The elimination of this sales tax would have cost the state $10 million in revenues, thus it was intensely debated.

The final negotiation provides for a 1.5 % tax on machinery and irrigation parts and used machinery starting on May 1. This is a decrease from the current 3%. The measure will cost the state an estimated $4.8 million in revenues and thus, that is the expected reprieve that it provides for farmers. The tax is scheduled to return to 3% on June 30, 2001.

Wheat Checkoff for trade
The ND wheat checkoff was raised from 8/10 of a cent per bushel to one penny per bushel. The assessment was raised and the authorization given to the ND Wheat Commission to use the $500,000 it will raise for "involvement in trade issues."

The NDGGA supported the increase in the wheat checkoff and assisted in securing passage of the measure. The bill was introduced by several legislators in response to a grassroots generation of support for the NDWC to finance legal investigation of a dumping action against the Canadians for selling wheat below the cost of production.

Zoning of Agriculture
SB 2355 was a legislative effort to limit the regulation and restriction of agriculture activities by political subdivisions. The bill was substantially amended over the course of the session and was referenced by some as a "corporate farming bill."

In actuality, it sought to more clearly define what farming and ranching activities a county or township is able to zone. The bill seeks to establish parameters for the zoning of agriculture activities. It declares that counties and townships cannot restrict the normal incidences of farming and then attempt to define what "normal" is. The legislation grandfathers in existing operations, and explains that political subdivisions may not prohibit normal expansion of an existing operation.

It also provides a financial assurance requirement. It does provide some authority to the political subdivisions to regulate the scope and scale of concentrated livestock feeding operations. The measure refers to both counties and townships.

Gas Tax and Registration Fees
The State Legislature needed to raise Department of Transportation revenues to provide matching funding required to secure millions of dollars in additional federal highway funds. The debate continued back and forth throughout the session whether the money should be raised through an increase in gasoline taxes or an increase in vehicle registration fees. The end result was a compromise and agriculture fared well considering the options. The compromise raises the gasoline tax by one penny to 21 cents, and it raises the vehicle registration fees $1 per year on vehicles less than 20 years old. However, it also exempts farm trucks from the increase in fees.

Ag Commissioner Appropriation
The Ag Commissioner’s operating budget was cut by 20% or $100,000. The Ag Mediation program was cut $75,000. At one point the cuts to the Commissioner’s budget were even more substantial, but some of the money was restored by the conference committee. The Legislature did not provide any direction to the Commissioner on what programs or expenses should be cut from the Ag Department’s activities.

Grain handling and storage issues
State established grain storage rates were repealed by HB 1156. The bill also includes DON level in the allowable dispute resolution by a third party analysis. The option is currently available under state law for protein, moisture, grade or dockage. The measure will also allow for the lowering of the bond requirement for facilities that may actually realize a greater volume of contract sale grain than storage grain.

The bill originally included a provision to require that elevators carry a bond for the volume of credit sale grain they handle. Credit sales include delayed price, contracted grain and delayed payment. The requirement was removed and the legislature decided to study the issues instead. It was revealed during the course of the bill hearings that the cost of the bond could be as high as 5 cents per bushel of commodity.

The decision to support or oppose is a complicated one, because obviously if elevators have to spend an extra nickel, it is one less nickel that goes to farmers. Conversely, many farmers probably do not realize the risk that they are open to with the loss of control of their grain before being paid for it. One scenario that was suggested was to create a state-run risk pool, rather than require a bond. The issue will be evaluated over the course of the next two years.