Committee approves bill easing financial-reporting rules for small grain buyers after testimony from feed‑mill owners

The House Agriculture Finance and Policy Committee voted to re‑refer House File 1063 to the General Register after hearing testimony from Department of Agriculture staff and small‑business owners who said current financial‑reporting requirements for grain buyers had forced some small operators to give up licenses.

What the bill would do: HF1063 would change the financial-reporting requirements for entities licensed as grain buyers. Under the bill’s framework discussed in committee, smaller buyers would be allowed to submit less‑expensive forms of financial statements (for example, compilations or tax‑basis statements) instead of requiring a CPA-performed review or audit. The department said the tiered approach is intended to preserve oversight while reducing costs for very small buyers.

Why proponents support it: small operators told the committee the existing requirement that some buyers obtain CPA reviews created a severe financial and administrative burden. Donovan Story, owner of Feed Mill Inc. in Barnesville, said his mill does not store third‑party grain and purchases about $500,000 of grain annually for use as feed ingredients. He said his renewal was denied because his accountant’s review was not performed by a CPA, and he later found a CPA willing to perform the needed review only at roughly $18,000. “This review was going to cost $18,000,” Story said, describing months of attempts to find a CPA and the resulting operational strain.

Jim Falk of Falk Seed Farm, testifying with the Minnesota Farmers Union, said his review cost about $7,000 a year and recently increased to $7,400, a burden he said is disproportionate to the scale of small seed‑processing and specialty buyers.

Department view and safeguards: Nick Malinowski (MDA fruit, vegetable and grain program supervisor) said the department, the drafter of the agency bill, supports tiered reporting because it would still require grantees to provide a set of specific financial-data items the agency can use to monitor year‑to‑year financial condition. Malinowski told the committee the department conducts on‑site inspections and would evaluate financial statements to identify solvency concerns, and that the Grama indemnity fund and related statutory language gives the department tools to pursue managers or board members in cases of misconduct.

Committee debate and vote: members voiced competing priorities: several said the change is necessary to avoid driving small community grain buyers out of business; others urged caution given past elevator failures and the state’s indemnity fund, which insures farmer claims. After discussion, Chair Anderson moved HF1063 for referral to the General Register. The committee roll call recorded nine yes votes and four no votes. The clerk’s roll-call list recorded individual member votes (see actions below). The motion carried.

What happens next: HF1063 will be placed on the General Register and may be scheduled for further floor action. Committee members asked MDA to provide additional details on implementation, and some members proposed follow‑up work to ensure oversight provisions and penalties are adequate for protecting the indemnity fund and farmers’ payments.