Much of the bill has been designed, and discussed, with the proposed Agristo potato processing facility in Grand Forks in mind.

A proposal to allow state grants for large agricultural development projects passed the North Dakota House of Representatives with strong support Tuesday night.

House Bill 1332 passed 82-8 and will now move to the North Dakota Senate for consideration. The bill directs and allocates incentive funds for large, value-added agricultural facilities through the agricultural diversification and development fund. The proposal had been given a unanimous “do pass” from the House Appropriations Committee.

Much of the bill has been designed, and discussed, with a proposed potato processing facility in Grand Forks in mind. Agristo, a Belgium-based potato company, announced plans for the $450 million facility — its first American plant — earlier this year.

“From an economic perspective and thinking about economic diversification of the state, which is something we talk about a lot, this is one of those projects that could be a real game-changer for the eastern part of the state,” Kevin Hullet, chief business development officer for the Bank of North Dakota, said during the committee hearing.

Many of the incentives for the facility come through the state, but the city of Grand Forks has proposed a 20-year, 90% property tax incentive. The other taxing entities in Grand Forks would have to approve an incentive, but if approved, it would lower the company’s property tax bill for 20 years before being fully taxed.

“We worked this one from the ground up,” Grand Forks Mayor Brandon Bochenski told committee members. “We got to the point where locally, we pretty much reached our limit on what we could offer as far as what we had done for infrastructure and a property tax incentive.”

The proposal passed by the House would allow Agristo to apply for an up to $30 million grant through the state agriculture commissioner that would be paid in two parts. The first half of the grant would be given when a certificate of occupancy is issued and the rest when the facility has reached 50% of production capacity. The grant works on a reimbursement model and can be used for capital expenditures, infrastructure and site acquisition.

To fund the grant, the Bank of North Dakota will be able to extend a line of credit to the agriculture commissioner for grant awards from the agricultural diversification and development fund. The appropriation measure would only be valid for the upcoming biennium that ends in June 2029.

The $30 million grant is not the only state support for the Agristo project being proposed. Other proposals include a sales tax exemption for construction materials and equipment, a limited-time exception to corporate income tax and other grants through through the state. Agristo has said that it expects to break ground sometime this year, with the facility being operational by 2028.

If the facility does come to fruition, it could mean that potato acreage lost over the last 30 years could return as Agristo is able to use dry land potatoes. The acreage of potatoes has declined in the region over the last few decades due to drought and shifts in markets. The facility doesn’t just economically support Grand Forks, but also much of the northeast part of the state , according to Gary Shields, executive director of the Northland Potato Growers Association.

“We need businesses like this in other communities other than the largest communities in the state of North Dakota, and especially along the northern tier,” Rep. Jon Nelson, R-Rugby, said during the committee meeting. “This is a great acquisition for the entire state, but certainly for the northern part of the state.”

Source - https://www.grandforksherald.com