(honors music) - This is "Legislative Review" from Prairie Public.

I'm Dave Thompson.

We're on radio and we're on our digital platforms.

Today, we have a guest from West Fargo, he's a Republican legislator, Representative Mike Howe.

Representative, thank you for being here.

- Thanks for having me, Dave.

- Well, let me just ask you.

You've been here a few sessions, what's your impression of this session compared with the others?

- Well, this is my third legislative session now.

My second on House Appropriations, and like everything in 2021, it's nothing like anything we've seen before.

It's been challenging.

It's been rewarding.

Just the day-to-day operations of the legislative session... And typically throughout every week, we have busloads of kids through the Capitol.

The cafeteria is shoulder to shoulder people.

We have guests on the House floor... We haven't had any of that this session.

Just this week we amended our House rules to allow guests to sit on the floor, but of course, we're down to the last, potentially 10 days of the legislative session now.

So, just the day-to-day operations has been so different.

The budgetary issues though are still the same, but also different.

There's an influx of CARES Act money, federal money coming in that as an Appropriations Committee, we still have yet to figure that completely out and we're on day 67 now.

I don't know if we'll know what to do with it by the time we adjourn.

Time might be right for a special session come this July.

We do know we'll be back late November, early December, for a redistricting session and perhaps could address some of those federal money challenges at that point, as well.

- You mentioned July, is there discussion of a special session in July?

- There very well could be.

Our goal was to save about eight days, hopefully adjourn day 72.

As we are approaching ever so closely, I don't think we'll meet that goal.

But the intent there was to save about eight days, we could maybe come in the summer.

The guidelines on the federal relief money are still not very clear.

And so we would like a more clear picture of how to distribute those funds to where they need to go and who can use them the best.

We were thinking that would may be a three-day session this summer, and then have another three or four, for a redistricting session.

Now, if we do run out of days, the governor would have to call us back in for that special session for our redistricting session.

- But if the governor calls you back in then the 80 days does not matter.

Correct?

- That's correct.

The governor can call us in for however long he would like regardless of our 80-day constitutional period.

- Now, what I'm hearing that one thing is for certain about the new CARES Act or what the America Recovers Act money, it cannot be used for ongoing expenses, so a lot of things may go toward one-time expenses, possibly some infrastructure projects, but possibly some other things.

Correct?

- That is correct.

And you talk about ongoing expenses.

There's been conversations of maybe using that American Rescue Act money for salaries, especially with the Highway Patrol or things like that.

So, I guess, if salaries is an ongoing expense, but it's also one time expenditure because we do that, every two years, we budget that out.

So that alleviate the pressure off the general fund using those CARES Act dollars, but as a state, we don't wanna put ourselves in the position of, "Hey, we have now relied on federal money to continue something that is sorely needed within state government."

- I know it's not in your section, but there's that one piece or chunk of federal money that's called ESSER, it's toward education things.

- Yep.

- And there's a lot of talk about equipment and infrastructure on that as well, too.

- There is.

Yeah, you're exactly right, Dave.

That's not within my section of appropriations, but I know a little bit about that.

I think some schools are looking to, perhaps, renovate older buildings, put new technologies in there to function in 21st century society and educational system.

I know some schools are looking at that.

That formula is based off of how many students you have with free and reduced lunch.

The Senate, and this comes into my next point, the Senate I know has a one in one increase in the K-12 formula.

On the House, we had that budget in the first half, we did not give any increases.

We hadn't heard the March revenue forecast yet.

We weren't quite sure what we were gonna be able to do with that federal money.

So, it was the House's position, in the first half, to not have any increases.

Well, since then a lot has changed.

The March revenue forecast was very good news to the state of North Dakota.

Our revenues are projected higher than what we thought when we came in January.

But that one-in-one increase, there's some members of the House who think, "Well they have those ESSER dollars.

Let's use that."

Well, then you get into fairness.

That ESSER payment is not equal across the board because of how many students you have on free and reduced lunch.

So, there some schools in my district that are getting $500 per student, per pupil, and there's other schools getting $8,000.

So, finding in the fairness, in a proper lane to go into, there's still a lot to be worked out here in the final days of the session.

- It's almost like a giant puzzle that you're trying to put - It is.

- Together because there are a lot of parts to it.

And how everything fits together is going to be the real challenge to get the session closed out.

- That's that way every session, Dave.

You follow this much longer than I've been involved, but it is a 10,000 piece, I guess you looked at our budget, a $13 billion piece puzzle that we all have to put together to get out of here within 80 days.

- I wanna go back to your one-in-one, since the Senate passed a one-in-one, and put their line in the sand there.

Is there appetite, then, to go to one-in-one or is this still kind of up in the air?

- There is appetite to go there.

As we near closer, we talk about the hockey period, the hockey game.

We are now in the third period.

We're not halfway through the third period, but we're there.

And so I would imagine that one-in-one is a negotiation piece between the two chambers.

What those negotiations are, that's a bit above my pay grade, Dave, but there is appetite.

There certainly is.

- I would say, that that's probably a leadership thing, at this point.

- [Representative Howe] Yes, absolutely.

It is.

- Let me ask you about the bonding bill.

The chambers did agree at the House level which is $680 million, reduced from what the Senate was talking about originally and also what the governor proposed.

680, is that acceptable to you Or would you like to have seen it bigger or smaller?

- Well, I'm certainly happy with that $680 million bonding package.

There's a lot of important things for my area.

There's, we, I hope have put the Fargo Moorhead diversion conversation to rest.

We are, now, bonding for the remaining portion of the state share of the FM Diversion Project.

That's up to $850 million of the state share for the Fargo Diversion Project.

And that's huge.

That's huge for a number of reasons.

It's huge for the Fargo economy.

It's huge for the state economy, but also from a budgetary standpoint, that's big because we get that off the books of the Water Resources Trust Fund.

We can use those dollars, now, for smaller projects in smaller communities.

The Water Resources Trust Fund is where all the water projects go.

It was not intended for a $2 billion project.

I don't think when we, when the legislature created that trust fund, no one had any idea that there'd be a $2 billion project in there.

So, that's very important to get that off the books and open up money for other projects.

Another big component of the bonding bill, that I worked hard for, was the Harris Hall project at North Dakota State.

Harris Hall is the Cereals Building on campus at NDSU and it is, was in terrible shape.

They didn't have potable water.

So, that's where they're... We're the leading wheat- producing state and as our scientists and professors are testing wheat varieties, they actually couldn't taste the bread that they were making because there wasn't potable water there.

So, there is a new Harris Hall, and including that, is the Northern Crops Institute.

They will be shifting into what we're calling the Egg Products Development Center.

This is going to be a huge asset to the state, also to the United States, of a key component for our egg industry, bringing different trade partners, looking at different trade relationships, how we can find different customers for our egg products.

I know that it's been a long time in the making for these projects, just very glad that that was part of the bonding bill.

- Well, Harris Hall seems to have a lot of support from across the state and you'd expect that really because North Dakota is built on agriculture and energy.

- Absolutely.

It really is.

And I guess, getting back to the other point.

The original bonding bill was $1.2 billion.

That idea was scrapped in favor of the $680 million bill that came out of the House.

There are some things, I guess, if we had a wishlist, the career academies, that's very important to my region and also the state.

We do have a workforce shortage, a skilled workforce shortage.

We need to be able to train our workforce, keep them here, and keep our economy moving.

So, I'm hearing different avenues, perhaps, for those career academies to come back.

Right now on day 67, I don't know what that avenue is, but certainly, I hope the discussion continues in the final weeks, and if not, for sure next session.

- There seems to be some feeling that the new COVID relief money might be used to do that, since it is education-related.

- Yeah.

That's exactly right.

That's one of the components, as well, that we're just not quite sure, yet, of.

Can we do that?

Will we do that?

How will we do that?

- Let me ask you.

You're on the government operations section of appropriations.

- [Representative Howe] Yes.

- What were your big budgets?

- Well, the biggest budget, I guess, that I'm carrying and I think, really, in the section was the Industrial Commission budget.

So, the Industrial Commission budget includes the Bank of North Dakota, the Mill and Elevator, the Department of Mineral Resources, the Pipeline Authority...

There's about four or five more budgets in the Industrial Commission budget.

That just passed the House of Representatives.

Started in the Senate as a Senate bill.

It just passed the House yesterday or two days ago.

That will certainly be going to conference.

There's a lot of different moving parts that as you can imagine, with all those different budgets, different ideas for banking programs, different programs within the Department of Mineral Resources.

We are always trying to look to expand our economy.

We would love to attract.

Yeah, we would love to attract the petrochemical industry to North Dakota.

There's a salt caverns' study within the Industrial Commission budget that would look at can we store different gases underground.

I hope that stays in through the finish line and then would, hopefully, attract outside companies of saying, "Hey, North Dakota would be a great spot for the petrochemical industry."

That is our goal in funding that study.

- There's been talk for a number of years about getting the petrochemical industry to North Dakota in the Bakken Region, somewhere.

As we sit here, today, are you confident, more confident, that we would get something like that?

- Talking with the folks at the ERC in Grand Forks, also Lynn Helms, who's the director of the Department of Mineral Resources, they are very confident We have the geology to do this today.

We don't have concrete facts, yet.

That's what this study would do.

North Dakota has similar geology to Alberta and they've got a massive petrochemical industry.

They also have, of course, an oil industry, too.

So, I think, once we do the study, it'll highlight, "Hey, private sector, come to North Dakota" and we'll try to turn this into Alberta 2.0, as far as the petrochemical industry.

It's exciting because this certainly won't happen overnight.

This is a 30-year type deal.

So, it'll be really cool to look back in 30 years and say, "Hey, this maybe started right here with this study" - Another thing that on the energy front, there's been a lot of bills concerning the coal industry.

There's that two year moratorium on collecting taxes and going to a Lignite Research fund, trying to shore that up.

There's been a real focus on energy, not just petrochem, but oil and coal at this point, too.

- Without a doubt, Dave.

Coal industry has been the back, one of the backbones, of North Dakota's economy.

We all know what's happening at the federal level.

Is it reactionary policy?

I suppose maybe it is.

We are trying to save our bread and butter, the coal industry, but also trying to adjust with the new clean energy type of components that are here and, certainly, there's more to come.

Coal, I think, still will play a vital role in the state's economy.

It also our energy security within the United States.

And I certainly hope, and I do think, this is a worthwhile effort, to save coal, and keep it relevant within North Dakota, not only for our jobs for our citizens, but also the reliability of energy.

We saw that awful cold snap in mid February, which if you're a proponent of coal what a better time to start talking about it when it's 10 below zero in Dallas, Texas and the grid is really suffering.

So, I think the affordability, the reliability... We still need to keep championing that story.

I think, this is one way to do it.

And I hope it goes through.

- Are you confident, then, that a buyer will be found for Coal Creek?

- I am confident.

Just with some private discussions I've had, with other people, I know the Governor's Office has been working day and night to secure a buyer for Coal Creek.

The legislature, again, with our legislation that we have on the table, we're trying to make it a very attractive spot to be and I'm very confident that a buyer will come through and we'll move from there.

- Since we're on the subject of coal, just one thing.

You mentioned EERC.

They've been involved in project Tundra and these ideas about storing carbon dioxide underground or perhaps using it for enhanced oil recovery, but there's one little piece, I don't know if you've gotten into it too much, about rare earth metals that might be in coal deposits.

Did you get into that discussion at all?

- You know, not very in-depth, Dave.

The EERC, again, does all sorts of tremendous things up at Grand Forks and UND.

They've been a tremendous asset for our energy industry across the board, but I guess I don't recall getting super in-depth of the rare earth stuff.

- But of course, that also makes Lignite coal, perhaps, more valuable - Oh, without a doubt.

- [Dave] and with this whole thing, kind of fits together, too.

- [Representative Howe] Yeah.

Without a doubt.

You know, we are an all-of-the-above energy state.

We've got coal, oil, hopefully, natural gas, ethanol, wind.

We are blessed with so many natural resources here, in North Dakota, and it's our job to promote that.

It's our job to sell that to not only North Dakota, but also the rest of the country and have them realize what we produce, the whole country needs to consume to keep the costs down and the reliability of energy up.

- Since you've got a big university in your backyard.

- Yeah.

- Of course.

And higher education is pretty important.

The bill is... Is it in conference?

Not in conference committee, yet.

Right?

Or is it in conference coming up?

- Well, the Higher Ed budget did pass the House chamber just the other day.

Some of that discussion revolved around the Challenge Grants and the original Challenge Grant bill, and then, some of the amendments related to planned Parenthood.

So, that was the majority of the discussion on the House floor.

The Challenge Grant money was amended out and, now, the university budget is going to conference committee.

Certainly, our higher, our 11 institutions are so vitally important to North Dakota and what we do here in retaining workers, attracting businesses, knowing, "Hey, they've got a great university system there.

They are going to be pumping out workers.

We can move our business to North Dakota and we will know we have the workforce to provide our service for our consumers."

Just getting back to the career academy portion of that, Dave, that's why this all, we want to refer back to our puzzle pieces, it all does fit together.

Having great four-year research institutions or a two-year technical skill colleges, and if we can have the career academies, it really sets North Dakota up to provide a workforce that not only fills our current situation in our economy, but also can attract new businesses to North Dakota.

And again, just in every evolving growing economy.

- These CTE centers, boy, there's been a huge growth and a real growth in interest in them, across the state.

There's a project, I think in Fargo.

NDSU is working with the state school of science.

Bismarck got one that Bismarck State College worked with local school district.

Dickinson's got one going.

They're all, they're starting to get all over the place and I think you make a good point when you say, you know, this is meeting workforce demands.

This is what the employers want.

- It is and we've heard from, or at least I have heard, from employers within District 22, the Fargo-West Fargo area, rural Cass County of how vitally important that is.

They're putting some skin in the game, too.

This isn't just state dollars going into it.

There is private monies going towards, I know the career academy within Fargo, and I know some of the local school districts are also willing to commit money to a project like that.

So, there really is that public-private partnership arrangement going on here.

I think, that just signals of how big of a deal this actually is.

- So do you think the overall budget for the universities, the colleges, maybe even the CTEs, what kind of shape do you think it's in, right now?

- You know, I'm a research guy.

I advocate for research all the time.

My family, we farm.

We have a seed company.

We've been involved at North Dakota State with research and extension.

I could always say, there's never enough research.

I know the egg and extension research budget, the Senate passed it to us in very good shape.

I think it left the House in some pretty good shape.

I believe, it was above the executive recommendation.

I think it's in fairly good shape.

I don't anticipate that conference committee meeting, you know, multiple times.

I think, they're not very far off between the House and the Senate, and then as well, with the university system.

I don't think there's that much contention between the two versions of the bill.

I will always advocate for more research.

It's just so important for so many areas in North Dakota.

- And I think you have a number of people who back you up on research because that seems to have been a real focus of a lot of people, you know, outside of the university system, you know, business leaders, chamber of commerce, they're all saying, "Hey, research is where it's at."

- It really is.

I'm on the North Dakota Grain Growers Association board, as well.

And that we have a member on (indistinct).

Research never stops.

We're always evolving.

You can't just not fund research.

Sometimes, that's why it gets criticized, too, because then I say, what's the end point.

Well, there really is no end point.

We want to keep getting better.

Look at the different varieties of seed that we have, the different technologies and agriculture.

That's all a result and an ROI of North Dakota's investment in research.

We're going to have a, potentially, devastating drought this summer.

The seed varieties, amongst all the different crops, to be able to withstand drought or minimal moisture, that's going to save a lot of people.

It's going to add a little more yield to maybe what it, potentially, could be.

We can just hope and pray for more rain and those varieties aren't tested too hard, but I really do think we'll see some of these drought-resistant varieties really pay off here this summer and when it comes to your grain bin in the fall.

- Well, now, as we're getting toward the end of the legislative session, what do you see are potential landmines or bumps in the road to getting done?

- Well, for the past couple of sessions the House has looked at income tax reduction, maybe the potential elimination of the income tax.

It's been the stance of the Senate that they don't want to do that.

They talk about the three legged stool with your income tax, your property tax, and your sales tax.

There has been some discussions this week that the House would like to have that conversation, again.

I don't know if the Senate is more receptive to that, but that's something, really, to watch next week as we come into the final days of where does that conversation go?

I don't know the answer to that.

I wouldn't be opposed to income tax reduction.

It really is the only type of tax relief the state can provide.

We've tried to do the property tax relief route.

We do it with K-12 and the per pupil payment.

During the Hoeven administration, I know they instituted the property tax buy-down.

Some would call that an epic failure.

It doesn't control what the local political subdivisions would do.

They can just raise their budgets up as in, we try to fund them more.

So, people see income tax as a way the legislature can really provide real consistent tax relief.

Some of the players have changed over in the Senate.

I know Senator Cook, the great senator from Mandan, he was opposed to the elimination of the income tax.

So there's a new chairwoman, Bell, over there.

I'm not quite sure what her stance would be, but that certainly could be, I don't want to call it a landmine, but an interesting discussion as we head towards the final days.

- Yeah.

Probably, landmine is the wrong term there.

(Representative Howe laughing) There are some things that may cause, you know, something to be brought to a floor and then they send it back to the conference committee because you can't get one House or the other to agree to it.

So there are always a few bills like that.

I'm guessing that commerce might be one of them.

- Commerce certainly is.

Commerce is, kind of, becoming our OMB 2.0.

The OMB budget is the catch-all budget bill, which is always the last bill passed.

Ideas that maybe weren't addressed or weren't passed early on in the session, they'll tag it on the OMB budget or something we hadn't thought about within the first 75 days, they'll throw it on the OMB budget, but commerce certainly is becoming that.

There's different ideas, different projects, not directly related to the internal workings of the commerce department, but certainly related in commerce stuff.

IT, I guess, could be a hangup as well.

We're looking at IT unification.

There's several FTEs going to ITD from the different agencies and then cybersecurity.

We've added 17 different, 17 cybersecurity FTEs towards that.

We are, our cybersecurity is really a concern for many cross the state.

We are in charge of securing our, the networks within our local political subdivisions, our school districts, as well as the state.

So, we are a very vulnerable to a cyber attack.

It's my thinking, we need to shore that up.

- So there might be further discussions on that particular budget as it goes along.

- I think so.

- Of course, at the same time the legislature is kind of weening itself and, maybe, putting its own kind of IT thing together.

- Yeah.

Within our legislative council and assembly budget, we are taking over control of our own ITD services, much like the judicial branch does.

I carried that budget to the House floor and I said, "The number one difference we'll see, as legislators, our email addresses will change."

Right now, everyone within state government is an @nd.gov email address.

Well, ours now will be @ndlegis.gov, just like the judicial branch has an @judiciary.gov address.

But there's, we're bringing that in-House.

We're trying to be more efficient.

We had a make-over of our IT system within the Legislative Assembly with our online bill hearings, updated software for our live-streaming of our floor sessions...

The whole COVID situation and being more online, I think, has really opened that up as to why we need our own internal IT staff.

- And of course, people can testify online, too.

- They can testify online.

Legislators can testify online.

I think it's great that a snowstorm won't prohibit someone from Cavalier, North Dakota, from testifying on an important bill, rather than getting in a car and driving five hours to Bismark.

I think that's fantastic.

I do hesitate as we move out of the COVID-era.

I do hesitate with the notion of letting legislators participate remotely.

I, with any situation, I think that can be abused.

I would hope it wouldn't be, but certainly different legislators can come down with health issues, and maybe that's an exemption, but I just really hope we're all in the chamber.

That just makes for better policy, better conversation for all involved.

- Well, I appreciate the time.

We have run out of time.

Thanks again very much, Mike, for being here.

- Hey, Dave, thanks for the invitation.

I enjoyed it.

- Representative Mike Howe from West Fargo was our guest on "Legislative Review" here on Prairie Public.

Thanks for watching.

Thanks for listening.

(honors music)