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Lawmakers debate incentives for value‑added milk processing; senator proposes targeting large projects
Summary
The Appropriations Committee debated Senate Bill 23‑42, a proposed grant program to incentivize milk processing facilities, and considered an amendment by Senator Thomas to focus the program on much larger, private‑investment projects.
The House Appropriations Committee discussed Senate Bill 23‑42, which would authorize grants to support construction or expansion of milk processing facilities in North Dakota, with grant funding limited to $10 million or 5% of total construction costs. Representative Mike Belz presented the bill and described the program as an enticement to attract processing capacity to the state.
Belz said the program would reimburse capital expenses — including utilities and roads — and would distribute a grant "upon achieving 100% of the processing capacity." He told the committee there are roughly 8,700 dairy cows in the state and that most milk currently leaves North Dakota for processing in Fargo or Minnesota.
Committee members questioned the scale of facilities intended to benefit. Representative Bosch asked whether 3,000,000 pounds of milk per year would represent a small plant; Belz said 3,000,000 pounds annually equates to a small facility (about 120 cows). Senator Thomas, who came to the hearing to offer an amendment, told the committee his intent was to target much larger projects — on the order of millions of pounds per day at scale — and to ensure the state offered incentives for projects that bring substantial private investment and processing capacity.
Senator Thomas proposed amending the bill to require an applicant to (a) deliver at least 3,000,000 pounds of milk per year and (b) contribute at least $20 million from non‑state sources toward total construction costs to qualify for a grant. In his remarks, Thomas described the measure as a "carrot" to attract large processing projects — or to encourage existing processors to expand — not to replace the smaller projects eligible under the existing Ag Diversification (AD) Fund.
Members raised practical concerns: what constitutes success, how the state’s existing economic development tools (including PACE and the Bank of North Dakota programs) interact with the proposed grant, and whether the proposal duplicates existing AD Fund authority for smaller projects. Representative Nelson and others noted the AD Fund and Commerce development programs already provide loans and incentives; Representative Richter and others emphasized distinguishing the large‑project focus from the AD Fund’s smaller grant program.
No final committee vote on Senate Bill 23‑42 or on Senator Thomas’s amendment is recorded in the transcript. Committee members said they would consider the amendment and review how the bill should coordinate with existing development funds.
Discussion points included the trade‑off between targeting a single large plant versus supporting multiple small processors, the importance of workforce and location considerations in private decisions to build processing, and the potential for duplicative funding streams if state grants overlap with existing development programs.
