LEGISLATIVE BULLETIN - March 15, 2003

SB 2358, our railroad lease and indemnification bill, was heard in the House Transportation Committee on March 13.  The city of Mandan, Ag Coalition and Rural Water Users Assoc joined us in support. The RRs say they have suspended all negotiations on leases and site sales pending the outcome of the bill.  RRs say if it becomes law that suspension will continue, and they may cancel some leases because the liability back on them exceeds the value of the lease.  These actions by the RRs, whether bluster or fact, have alarmed some people, including legislators.  Threats to cancel leases are difficult to ignore.  One party with an interest said outside the hearing he would like relief as in the bill, but he has a project pending that the RR says is at risk because of the bill.

Some Grain Dealer leaders and legal counsel met for more than three hours with six CP & BNSF officials, five of them lawyers, the evening of March 12.  Most of you who read this had a more relaxing evening.  RRs hate the bill, but know of concern in the legislature to rebalance interests.  RRs want to hold lessees responsible for almost anything that happens on leased property.  CP’s leases may be less harsh on that than BNSF’s.  Issues include sole fault vs. concurrent(split) fault; damage to RR or lessee property, or to  3^rd parties.  If a train derails, hits and ruptures your anhydrous tank, and the leak kills someone, who’s at fault?   The RR says it allowed you on its property and so you must pay for your own tank.  And, but for your tank, no one would have been killed, and so you should pay for the death too.  And you must have insurance for this.  The flipside is that but for the derailment there wouldn’t have been a death.  That was the sole triggering event and so the RR should pay for at least the death.  There is also a question if liability policies cover, and so lessees might be unknowingly going somewhat bare.

Senator Nething of Jamestown, a strong supporter of the bill and lawyer who has worked with elevators, offered an amendment allowing the PSC to levy up to a $1 million fine on a RR that negotiates in bad faith.  Bad faith includes a significant increase in lease cost or burden on the lessee.  This is intended to stop the RR from jacking lessees around on price or terms.

Grain Dealers is still talking to the RRs, but there will likely be issues that can’t be resolved that way and on which the committee will have to decide for one side or the other.  Contact House Transportation Committee members and urge them to support a couple simple principles – 1)businesses should pay for the damages they cause, in other words RRs shouldn’t be able to shift so much liability to others for acts of their fault, and 2)in an unbalanced “negotiation,” such as RRs holding lessees hostage for unreasonable rental charges, there needs to be a referee such as the PSC.  These principles will continue to guide NDGDA on this bill.

SB 2008, the PSC budget including $250,000 for a rail rate complaint, is still in the House Appropriations Committee, Government Operations Division.  Reps Koppelman, Carlson and Glassheim are the subcommittee to be contacted for support at this time.

HB 1486, wheat checkoff increase, is still in the Senate Ag Committee.  The Grain Growers and Durum Growers would like checkoff dollars diverted to them by law.  One proposed amendment would have the Commission maintain a separate fund from 3 mills of checkoff that could be used for grower group membership dues.  The Wheat Commission and Grain Dealers oppose this bill.  Both fear a farmer backlash, hurting the Commission.  There’s also the question of who should collect membership dues.  Those membership groups say they need the money to lobby for better farm policy such as crop insurance, better LDPs, disaster programs, etc.  A farmer who testified against the bill in Senate Ag said farmers should look more to markets instead of their mailbox for their livelihood.  The groups have 1500 members out of 19,000 wheat growers in the state.   Farmers who oppose an increase and/or the policies of these groups will go for checkoff refunds.  That will take money away from the Commission’s market development and promotion activities.  The ND Farmers Union has publicly said that if the bill passes with the diversion of funds to grower groups it will encourage its members to get refunds.  In northwest ND a group of people is already talking about starting a sideline business of doing the paperwork to get checkoff refunds, in return for a percentage.  This will affect all checkoffs.   Late News: We’re told that late on Friday March 14 an amendment was added to the bill that keeps the checkoff level at the current 10 mills per bushel, but says the Commission may use the amount raised by two mills to contract with grower groups for services.  This seems an unnecessary amendment.  The Commission already contracts with the grower groups for about 0.8 mill($200,000).  A year or two ago about half of that went to pay ND Grain Growers dues in the National Assoc of Wheat Growers.  If the bill passes the Senate with any amendment it then must go back to the House for concurrence.  The most powerful and vocal promoters of checkoff diversion to the grower groups are there, and could rework the bill again to it original 50% increase in checkoff.  This bill should be killed now.  Contact Senate Ag Committee members and other Senators as well to urge a Do Not Pass.

A parallel to what has been going on here is for the Grain Dealers Association to push a bill that would raise elevator license fees significantly, and then have most of the increase diverted over to the Grain Dealers Association.  That doesn’t seem an appropriate use of taxing or fee authority.

HB 1372 requires elevators to notify emergency personnel if a train is to block a crossing.  The hearing is at 11 a.m. Thursday March 20 in Senate Transportation.  This bill needs some work and we will be working on it.   As it stands, it could be read that running a few cars through a crossing without even stopping might require the notice, if the cars could momentarily block traffic.  Contact committee members and urge their attention to Grain Dealer concerns.

HB 1403 and HB 1291 come up in Senate Transportation on Friday March 21 at 9:00 and 9:30 a.m. respectively.  These are good bills about sale of abandoned RR property.  Operators of fixed assets on the property get first chance, adjoining landowners next, and public use third.

All bills are to be out of committee by March 21.  The pace will quicken and the tough decisions on spending will be made in the weeks after that.  The constitutionally-allowed 80 days of session runs out May 1.  Many legislators, and lobbyists, are hoping for an adjournment before then.  One veteran legislator has said that if they don’t adjourn by April 25 they will come back for all that next week and be the first legislative session in ND history to run into May, a dubious distinction.