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The North Dakota Legislature continues to debate ways to better regulate the grain industry. (Erin Brown/Grand Vale Creative)

North Dakota House revives proposal to move grain regulation to Ag Department

BISMARCK, N.D. — The North Dakota House has revived a proposal to move regulation of the grain industry from the Public Service Commission to the state Department of Agriculture.

The House on Wednesday, April 10, voted 80-13 to pass Senate Bill 2346, which had been amended to, in part, mirror a bill earlier passed by the House, House Bill 1467.

The North Dakota Public Service Commission is in charge of regulating grain traders for the state. In 34 of 38 states that regulate the grain industry, state departments of agriculture are in charge of such duties.

The recent case of Hunter Hanson, a roving grain buyer facing millions of dollars in claims against his businesses and several felony charges, has highlighted the state’s issues with grain trading regulation, leading to various proposals, including the idea that the Department of Agriculture would do a better job of keeping up with the grain industry.

In their original forms, House Bill 1467 would have moved regulation to the Ag Department, while SB2346 would have broadened the indemnity fund used to pay back growers in the case of insolvency.

The Senate in late March changed HB1467 to a study of the state’s regulation of the grain industry. The House, in turn, put the move to the Ag Department into the SB2346, along with putting additional requirements on roving grain buyers and grain brokers, increasing fees and making other changes to try to put more teeth in the state’s regulations on grain trading.

Rep. Dennis Johnson, R-Devils Lake, said on the House floor on Wednesday that the ag department already has “boots on the ground” regulating things like dry fertilizer, anhydrous ammonia, chemicals and more. Rep. Chet Pollert, R-Carrington, added that the Ag Department also handles regulation of livestock buyers in a similar manner as the House proposes it handle grain regulation.

Discussion of whether to adopt the bill largely centered on whether the PSC had enough tools to effectively regulate the industry, with some representatives indicating they believed the PSC had asked for and been denied additional help in the matter. However, Johnson, Pollert and Rep. Mike Brandenburg, R-Edgely, said the PSC had not requested additional funding and had taken grain regulation from being performed by four full-time employees in 2011 but in recent bienniums, those duties were handled by the equivalent of fewer than two employees.

The Ag Department would better “get their arms around” matters like bonding and what’s going on in the industry, Brandenburg said.

North Dakota Agriculture Commissioner Doug Goehring previously said he supports the idea of moving grain regulation to his department. Goehring said he would be looking into ways other states handle grain regulation in an effort to better protect farmers.

The grain regulation bills will have to be dealt with in a conference committee between the two chambers.