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Committee approves $10M milk-processing grant cap, shifts funding to line-of-credit approach
Summary
Senators approved an amendment and recommended a due-pass for Senate Bill 2,342, establishing an AD fund-backed reimbursable grant cap of $10 million (or 5% of project cost) to incentivize milk processing facilities and allowing Bank of North Dakota line-of-credit triggers rather than an up-front appropriation.
The Appropriations Committee amended Senate Bill 2,342 to authorize up to $10 million in grant funding (or up to 5% of total project costs) for milk processing facilities as an AD fund project and changed the funding mechanism from an up-front appropriation to a Bank of North Dakota line of credit that the Agriculture Department could call on if a qualifying project moved forward.
Senator Dwyer, carrying the bill, told the committee the state faces a processing shortage after a Bismarck plant closed; shipping milk to out-of-state processors raises costs and discourages dairy operations. The bill sets grants as reimbursable and limits funding to 5% of a project's total cost, capped at $10 million. The committee discussed whether grants or interest-rate buy-downs were the right tool; sponsors argued grants would be more effective to attract large processing investments.
The amendment that established the $10 million/5% cap and the line-of-credit mechanism passed in committee, and the committee then voted a due-pass recommendation as amended. Senators noted the model mirrors recent large economic development appropriations in which a state-backed credit facility was used to avoid leaving large up-front appropriations idle.
Committee members emphasized the proposal aims to create a financial "carrot" to attract large processors, referenced private fundraising prospects, and pointed to South Dakota's recent expansion of dairy processing as an example. A recorded tally for the amendment and the due-pass motion was reported in committee as "Motion passed 16," reflecting a unanimous or near-unanimous favorable committee vote.
