The North Dakota House passed Senate Bill 23-42, establishing a value-added milk processing facility incentive program and authorizing a line of credit from the Bank of North Dakota to support loans, interest-rate buy-downs and grants for new or expanding milk processing facilities.

Representative Brandenburg, explaining the bill on the floor, said the proposal creates an Agriculture Diversification Development Fund to provide loans, interest-rate buy-downs and grants to financially feasible value-added agricultural businesses. "The agricultural diversification development committee shall develop a value added milk processing facility incentive program to provide grants," he said, describing grant uses such as natural gas supply, electrical supply, roads, water and wastewater lines and rail lines.

Under the bill as presented, grant awards would be post-payment after a facility achieves validated processing capacity. Brandenburg said the grant could be up to $5,000,000 or 5% of total construction costs, and that the Bank of North Dakota would develop loan and buy-down policies in consultation with the agriculture diversification committee. The bill also contemplates a deficiency appropriation to repay the line of credit in a subsequent biennium.

Representative Hawley disclosed a personal financial interest, saying his family farm is starting a milk processing plant and could be a recipient; the House excused Representative Hawley from voting on the bill. Representative Hawley’s excusal was moved by Representative Bosch and adopted. The bill later received final passage on a recorded vote of 81 yeas and 11 nays and was declared passed.

The bill’s sponsors framed the program as supporting planned dairies and the infrastructure needed to convert milk into higher-value products; implementation details, grant criteria and reporting requirements will be set by the agricultural diversification development committee and Bank of North Dakota policies.

Votes at a glance: Excusal of Representative Hawley from voting — motion carried; Final passage of Senate Bill 23-42 — 81 yea, 11 nay.

Implementation will require rule-making and application processes by the Agriculture Diversification Development Committee and the Bank of North Dakota.