INDUSTRIAL COMMISSION
[Authorized: NDCC 54-17]
Created under the auspices of the Nonpartisan League (NPL) the Industrial Commission was established by the Legislature in 1919 (S. L. 1919, Ch. 151) to administer all utilities, industries, enterprises, and business projects owned and operated by the state of North Dakota. The Industrial Commission also had responsibility for the Bank of North Dakota, the North Dakota Mill and Elevator Association, and the Home Builders Association of North Dakota (S. L. 1919, Ch. 150). Together these state industries constituted the framework for North Dakota's system of state-owned industries. Since the beginning the Industrial Commission has consisted of the Governor as chairman, the Attorney General, and the Commissioner of Agriculture. The Governor and one other member constitute a quorum. The existence of the Industrial Commission and the state-owned industrial system were in jeopardy due to the political turmoil generated by opposition to the Nonpartisan League (NPL) program. The laws creating the Industrial Commission and the Bank of North Dakota were referred and approved by voters on June 26, 1919. In 1921 there was a recall of the members of the Industrial Commission and in 1923 a repeal of the Home Builders Association and the State Experimental Creamery took place. During the 1920s and 1930s there was a struggle over control of the North Dakota Mill and Elevator Association as well as other indicators of opposition to the Industrial Commission and the state industrial system. Over time most North Dakotan's accepted the state's unique system of business enterprises. In 1941 the Industrial Commission became involved in several attempts to create additional state-owned entities such as establishing a State Industrial Alcohol plant to use surplus and unmarketable agricultural products for manufacturing industrial alcohol. However the State Industrial Alcohol Plant was never funded and in 1965 (S. L. 1965, Ch. 349) was removed from the Century Code [NDCC 54-19]. Next the Industrial Commission administered the North Dakota Research Foundation (S. L. 1943, Ch. 197) a research agency designed to develop and promote natural resources. Additionally in 1949 the Industrial Commission would have had control over the Cement Plant had the legislation been enacted. The senate bill was vetoed by the Governor. With data collected by the Geological Survey from a study of limestone deposits in the state, the North Dakota Research Foundation was required to prepare a report on the feasibility of producing cement and establishing a cement plant in the state (S. L. 1951, Ch. 34). Despite the research and report a state-owned cement plant was never built. In addition to administration of state industries the Industrial Commission had responsibility for development of oil and gas properties owned by the state (S. L. 1965, Ch. 260) and in 1977 the Industrial Commission was authorized to issue permits for surface coal mining operations and to adopt regulations necessary to carry out legislation under the Federal Surface Mining Control and Reclamation Act of 1977 [NDCC 38-14.1]. Legislation added to other responsibilities of the Industrial Commission including the regulation and licensure of storage and disposal of nuclear wastes (S. L. 1979, Ch. 319), regulation of the development of geothermal resources and operations of geothermal extraction facilities (S. L. 1981, Ch. 377), and enforcement of the state's oil and gas conservation laws (S. L. 1981, Ch. 366). Additionally since 1981 the Industrial Commission has administered the Home Mortgage Financing Program as a low-income housing finance program (S. L. 1981, Ch. 650) and the North Dakota Agricultural Development Act allowing the Industrial Commission to issue bonds generating funds for the establishment and rehabilitation of agricultural enterprises (S. L. 1981, Ch. 526). In 1997 the North Dakota Farm Finance Agency was added as a part of the Industrial Commission joining the Bank of North Dakota, Housing and Finance Agency, the North Dakota Municipal Bond Bank, and the North Dakota Mill and Elevator Association (S. L. 1997, Ch. 449). According to the North Dakota Blue Book published in 2015 the Industrial Commission has under its jurisdiction the following eight business entities: A1) Bank of North Dakota; A2) North Dakota Mill and Elevator Association; A3) North Dakota Student Loan Trust; A4) North Dakota Housing Finance Agency; A5) North Dakota Public Finance Authority; A6) North Dakota Building Authority; A7) North Dakota Transmission Authority; and A8) North Dakota Pipeline Authority. In addition to the business entities the Industrial Commission also has regulatory responsibilities through two divisions of the Department of Mineral Resources for the B1) North Dakota Geological Survey Division; and B2) North Dakota Oil and Gas Division. The Industrial Commission is also involved in four research programs through the C1) Lignite Research, Development and Marketing Program; C2) Oil and Gas Research Program; C3) Renewable Energy Program; C4) and has oversight for the Outdoor Heritage Fund Program.
CHRONOLOGY-North Dakota Industrial Commission
Industrial Commission, North Dakota
[Authorized: NDCC 54-17]
1918 Elections allowed the Nonpartisan League to capture a majority in both Houses of the State Legislature and retain Governor Frazier for another term thus gaining control of state government.
1919 The Legislative Assembly created the Industrial Commission to conduct and manage on behalf of the state certain utilities, industries, enterprises, and business projects. Additionally legislation defined the powers and duties of the three members of the Industrial Commission who were the Governor, Attorney General, and the Commissioner of Agriculture and Labor (S. L. 1919, Ch. 151). Legislation authorized the Industrial Commission to issue a series of bonds known as the “Bonds of North Dakota Mill and Elevator Series” (S. L. 1919, Ch. 153) and another series known as the “Bonds of North Dakota Real Estate Series” (S. L. 1919, Ch. 154). The Legislative Assembly appropriated funds to address a statewide concern of providing homes for residents and to establish a business system operated by the state under the name of the Home Builders Association of North Dakota. Legislation defined the scope and manner of the operation and powers and duties of those charged with management (S. L. 1919, Ch. 150).
1921 An initiated measure to dissolve (NPL) Nonpartisan League industries survived defeat by voters. Legislation established procedures for the Governor to remove public officers (S. L. 1921, Ch. 230). The Industrial Commission was charged with providing electricity for power and lighting to all state buildings owned or leased by the state including the State Penitentiary (S. L. 1921, Ch. 34).
1923 The Legislative Assembly acted to transfer to the Industrial Commission the custody, control, and management of the property and assets of the Home Builders Association for the purpose of liquidating and winding up the business. Legislation defined powers and authority of the Industrial Commission concerning the rights and liabilities of applicants or purchasers of homes. Legislation gave the Bank of North Dakota all mortgages, notes, and contracts owned by the Home Builders Association (S. L. 1923, Ch. 294 and Ch. 317). Additionally the Legislative Assembly acted to close and liquidate the State Experimental Creamery and to repeal all legislation concerning the State Experimental Creamery (S. L. 1923, Ch. 197). The Board of Managers took control of the North Dakota Mill and Elevator Association.
1933 Legislation re-established the North Dakota Industrial Commission stating that all acts of the Industrial Commission were “acts of the State of North Dakota” (S. L. 1933, Ch. 191). Legislation repealed the Industrial Survey Commission (S. L. 1933, Ch. 192). State government offices were required to use letterhead and printed forms (S. L. 1933, Ch. 195) that carried the slogan “Buy Dakota Maid Flour.”
1941 The Legislature authorized the Industrial Commission to establish a State Industrial Alcohol Plant and to use surplus or unmarketable agricultural products for manufacturing industrial alcohol. The Legislative Assembly never funded the proposal. Legislation repealed all outdated laws and added new ones concerning the oil industry in the state. Mineral, gas, and oil rights on state owned lands were reserved for the state when lands were offered for sale (S. L. 1941, Ch. 165). Executors and administrators of decedents and guardians of minors were authorized to execute oil and gas leases and provide for the approval, confirmation, and validation of leases (S. L. 1941, Ch. 166). Administrators for estates with oil, gas, and mineral interests had authorization over the sale of oil, gas, and mineral rights provided procedures relative to the sales were in place (S. L. 1941, Ch. 167). Legislation expanded duties and authority concerning the Industrial Commission relating to rules, regulations, and enforcement (S. L. 1941, Ch. 170). Additionally legislation gave authority to governing boards for operation and development of gas and oil leases of land owned by school districts, cities, villages, townships, and park districts, and consolidated oil and gas leases with adjoining lands (S. L. 1941, Ch. 168).
1943 The North Dakota Research Foundation (S. L. 1943, Ch. 197) was established as a research agency to design, develop, and promote the natural resources statewide. Until 1957 it was managed by the Industrial Commission [NDCC 54-34-37].
1949 Two bills (one unnumbered) involved legislation concerning the creation of a North Dakota State Cement Plant (S. L. 1949, Ch. 84) under the control of the Industrial Commission. However the legislation was vetoed by the Governor.
1951 The North Dakota Research Foundation prepared a report on the feasibility of producing cement and establishing a cement plant in the state (S. L. 1951, Ch. 34). Despite the research and report a state-owned cement plant was never built.
1953 After the discovery of oil in 1951 new laws were passed and new regulations promulgated by the Industrial Commission who along with the state geologist had responsibility for oil and gas regulation to administer and enforce the rules and regulations.
1957 The Legislative Assembly provided an appropriation for a program called the Economic Development Act. It would set up a program of publicity for statewide industrial development. This legislation repealed a chapter of the Century Code [NDCC 54-34] relating to the North Dakota Research Foundation and all property of the Research Foundation was given to the director of the Economic Development Commission (S. L. 1957, Ch. 343).
1961 Letterhead and forms in use by state government agencies were required to bear the slogan "Buy North Dakota Products" [NDCC 44-08-10] thus replacing “Buy Dakota Maid Flour” (S. L. 1961, Ch. 292).
1965 The Industrial Commission assumed greater regulatory duties for the development of state-owned oil and gas properties and regulation of the energy development industry [NDCC 38-08-09.2]. It also had responsibility for development of oil and gas properties owned by the state (S. L. 1965, Ch. 260). Repealed from state laws was the 1941authorization for the Industrial Commission to establish a State Industrial Alcohol Plant (S. L. 1965, Ch. 349).
1967 Legislation concerned amendments regarding Industrial Commission members, meetings, and the definition for what constitutes an Industrial Commission quorum (S. L. 1967, Ch. 74). The Commissioner of Agriculture remained on the Industrial Commission when the Office of the Commissioner and Labor and the Commissioner of Agriculture became two separate entities. Additionally the State Hail Insurance Department (S. L. 1911, Ch. 23) created to insure crops of grain grown in the state from hail damage (S. L. 1915, Ch. 166) by allowing the state to tax farm land in order to pay part of the cost of providing hail insurance was repealed (S. L. 1967, Ch. 232).
1973 Government letterhead and forms were required to bear the slogan "Buy North Dakota Products" until the law was repealed (S. L. 1973, Ch. 364).
1977 Changes to the Century Code [NDCC 54-17-07.5] related to state reallocation under the Mortgage Subsidy Bond Tax Act.
1979 The Industrial Commission had responsibility to formulate regulations for the storage and disposal of nuclear and other waste in conjunction with the State Department of Health and Consolidated Laboratories and the North Dakota Geological Survey (S. L. 1979, Ch. 319) and the Industrial Commission also regulated the development of geothermal resources and operations of geothermal extraction facilities.
1981 Legislation concerned the powers and duties of the Industrial Commission, the issuance of irrigation permits, and the enforcement of the oil and gas conservation laws. Additionally the Legislative Assembly created the Oil Extraction Tax Trust Fund [NDCC 54-17-32] and gave the Industrial Commission responsibility for making grants-in-aid to those doing research or development on energy conservation, renewable energy sources, cogeneration, or waste products utilization by transferring the duties of the oil and gas production regulation from the North Dakota Geological Survey to the Industrial Commission (S. L. 1981, Ch. 365). Legislation also related to managing resources statewide by establishing of the Natural Resources Council and legislation concerned water for irrigation and the construction of dams and also the seller sponsored loan guarantee program for loans set up through the Bank of North Dakota for beginning farmers. It was called the Beginning Farmer Loan Guarantee Program with the guarantee of financial support from the Industrial Commission (S. L. 1981, Ch. 526). The Industrial Commission was given authority to carry out the purposes of the North Dakota Agricultural Development Act (S. L. 1981, Ch. 101). Added to the Century Code [NDCC 40-33.3] was the Municipal Pipeline Act allowing two or more cities (each having a population over forty-thousand) to form a municipal pipeline authority. Other cities could also request to join in as members (S. L. 1981, Ch. 417).
1983 Legislation required the Industrial Commission to appoint a secretary and other staff as needed (S. L. 1983, Ch. 558) and repealed from the Century Code [NDCC 54-17-29] legislation related to the role of the Industrial Commission concerning loan guarantees for seller sponsored loans between land owners and beginning farmers, default procedures for a guaranteed beginning farmer security loan, appropriations for the establishment and maintenance of inadequate guarantee funds, and usage of lands and mineral trusts (S. L.1983, Ch.126).
1985 Legislation included the Family Farm Survival Act (S. L. 1985, Ch. 136) adding a new section to the Century Code to provide short term loans to agri-businesses and farmers under to the Agricultural Development Act. This legislation also appropriated funding for a Reserve Fund [NDCC 4-36].
1987 Legislation repealed the Century Code [NDCC 54-17-07.5] relating to a state reallocation under the Mortgage Subsidy Bond Tax Act (S. L. 1987, Ch. 630) and also repealed the Industrial Development Revenue Bond Fund (S. L. 1987, Ch. 141). Changes to the Century Code [NDCC-51-02.1-03] involved the gross production tax as a real property tax on oil and gas production concerning the interest accrued on mineral estates. Also included in the legislation were explanations for how the tax works and exceptions and alternatives (S. L. 1987, Ch. 85).
1989 Legislation allowed the Industrial Commission to establish an Agricultural Mortgage Marketing Facility Trust within the Federal Agricultural Mortgage Secondary Market Program (S. L. 1989, Ch. 102) and also allowed the Industrial Commission authority to approve and exempt taxes on any extraction of oil (S. L. 1989, Ch. 734) that fell under a section of the Century Code [NDCC 57-51.1-03]. An addition the Code [NDCC 57-51-15] concerned the continuing appropriation taken from a portion of Oil and Gas Gross Production Tax Revenues (S. L. 1989, Ch. 733) used to offset the negative impact resulting from oil and gas development. Also an amendment was approved for the Oil and Gas Impact Fund [NDCC 57-62]. Additionally the Legislative Assembly established a Resources Trust Fund [NDCC 54-17-32].
1991 Legislation related to the powers of the Bank of North Dakota and the role of the Industrial Commission regarding participation with export trading companies, export trading funds (S. L. 1991, Ch. 590), and the repeal a section of the Century Code concerning participation by the Department of Agriculture’s Marketing Bureau [NDCC 4-01-19.1].
1993 The Vietnam Veterans’ Bonus Bond Issue and Compensation [NDCC 54-17.1] under the administration of the Industrial Commission was repealed (S. L. 1993, Ch. 364).
1995 The Oil Extraction Tax Trust Fund [NDCC 54-17-32] was created giving the Industrial Commission responsibility for making grants-in-aid available to those doing research or development with respect to energy conservation, renewable energy sources, cogeneration, or waste products utilization. The Agricultural Mortgage Secondary Market State Trust Fund was created as Agricultural Mortgage Secondary Market Trust Fund from the Agricultural Credit Act (P.L. 100-233) on December 31, 1995 [NDCC 54-17-33; NDCC 54-17-34; and NDCC 54-17-35].
1997 Legislation added six new sections to the Century Code [NDCC 54-17] concerning tax-exempt financing on farmland, livestock, and farm equipment through the Industrial Commission. The North Dakota Farm Finance Agency was added as a part of the Industrial Commission joining the Bank of North Dakota, Housing and Finance Agency, the North Dakota Municipal Bond Bank, and the North Dakota Mill and Elevator Association (S. L. 1997, Ch. 449).
1999 Legislation also repealed several sections of the Century Code relating to the authority of the Industrial Commission to act as the state planning agency in negotiating, contracting, applying, receiving, disbursing, or establishing a separate planning account for federal planning funds made available from the Federal Housing Administration and the Home Finance Administrator. Legislation included the repeal of the development and construction of public works in the city of Riverdale (McLean County). It was owned by the federal government and first settled in 1946 as a result of the construction of the Garrison Dam. In 1986 the city was turned over to the state and became incorporated with its own government and elected officials. The Industrial Commission was authorized to acquire and dispose of the Riverdale site, properties, and facilities (S. L. 1999, Ch. 457).
2001 Legislation permitted the state to lease any project or other property under the control of the Industrial Commission by transfer of titles. The Industrial Commission could sublease or leaseback a project or property to the state in connection with any financing provided by the Industrial Commission under specific statutory authority (S. L. 2001, Ch. 481).
2003 The Legislative Assembly requested that the Industrial Commission comply [NDCC 54-17-35] with statewide projects, processes, or activities that gave assistance to the resolution of electricity transmission export constraints (S. L. 2003, Ch. 471). Legislation also allowed the Industrial Commission to enter agreements to lease interests in a physical plant or other equipment relating to waterworks, water mains, or water distribution systems. Also included were sewage systems coming to or from a municipality, or other political subdivisions, or any person (S. L. 2003, Ch. 342).
2005 Numerous sections of the Century Code were addressed in legislation relating to the Industrial Commission and the agencies under its management including the appointment of a director of North Dakota Department of Mineral Resources, the transferring of the functions of the state geologist to the director of the Department of Mineral Resources, and the appointment of the secretary to serve the Industrial Commission (S. L. 2005, Ch. 42).
2007 Legislation authorized the Industrial Commission to establish a Biomass Incentive and Research Program and a Biomass Incentive and Research Fund with guidelines and procedures set up and funded by the Industrial Commission (S. L. 2007, Ch. 462). Legislation also concerned the creation of the geophysical, geothermal, subsurface mineral, coal exploration, a Geologic Data Preservation Fund, and the Oil and Gas Well Plugging and Site Reclamation Fund. Additionally legislation concerned oil well plugging contracts, geothermal energy extraction permits, and exemptions from procurement practices (S. L. 2007, Ch. 314).
2009 Legislation removed the requirement that the Industrial Commission approve of leases for state-owned property (S. L. 2009, Ch. 456) and have authority to establish a Biomass Incentive and Research Program and a Biomass Incentive and Research Fund as a special fund within the North Dakota State Treasury (S. L. 2009, Ch. 521). An appropriation was made for defraying the expenses of the Industrial Commission and the agencies managed by the Industrial Commission (S. L. 2009, Ch. 42) and other legislation concerned changes for energy conservation standards for new buildings (S. L. 2009, Ch. 474).
2013 Programs receiving funding were included in the legislation and new sections added to the Century Code provided for funds to defray the expenses of the Industrial Commission and agencies managed by the Industrial Commission. Appropriations allowing for loan guarantees for child care facilities, housing incentive fund tax credits, an energy conservation fund, and value-added market opportunities for renewable energy resources. Monies were also appropriated for the Beginning Entrepreneur Loan Guarantee Program, the Resources Trust Fund, the Housing Incentive Fund and Housing Credits Fund, and the Oil and Gas Research Fund. Additionally there were changes to the Oil and Gas Research Council membership and a request for an oil and gas study (S. L. 2013, Ch. 45).
2015 Changes to the Century Code related to the Fund for abandoned Oil and Gas Well Plugging and Site Reclamation. The Oil and Gas Research Fund started during the 2015-2017 biennium within the Office of Management and Budget with monies transferred at the request of the Industrial Commission. This funding was for the purpose of conducting a pilot program to determine the best techniques for remediating salt and any other contamination from the soil surrounding waste pits that had been reclaimed by trenching between 1951 and 1984. Additionally legislation addressed the role of the Industrial Commission and research facilities. It provided matching funds for those participating in established programs (S. L. 2015, Ch. 14).
RECORD SERIES
31198 Administration. Industrial Commission Minutes.
31096 Oil and Gas Division. Oil Drilling Permit List, 1920-1969.
31739 Oil and Gas Natural Resources Council. Financial Records.
31740 Natural Gas Pipeline Company. Dunn Center (ND) Coal and Gas.
32262 Oil and Gas Division, Report of Oil Production
32263 Oil and Gas Division, Monthly Gas Production Report
32277 Oil and Gas Division. Log Files
32391 Geological Survey. Western North Dakota Field Notes
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