# Title 54 — State Government

## Chapter 54-17.5 — Lignite Research, Development and Marketing

### § 54-17.5-01. Declaration of findings and public purpose.

The legislative assembly finds and declares that North Dakota's lignite industry produces
approximately twenty-five million tons of lignite annually, contributing to our state's and nation's
energy independence by generating electricity for more than two million people in the northern
great plains region and by producing synthetic natural gas from coal that heats three hundred
thousand homes and businesses in eastern states, which is equivalent to over twenty thousand
barrels of oil per day. The legislative assembly further finds and declares that North Dakota's
lignite industry generates over twelve thousand direct and indirect jobs for North Dakota, nearly
six billion dollars in annual business volume, and over one hundred million dollars in annual tax
revenue. The legislative assembly further finds and declares that it is an essential governmental
function and public purpose to assist with the development and wise use of North Dakota's vast
lignite resources by supporting a lignite research, development, and marketing program that
promotes economic, efficient, and clean uses of lignite and products derived from lignite in order
to maintain and enhance development of North Dakota lignite and its products; support
educational activities relating to the lignite industry; preserve and create jobs involved in the
production and utilization of North Dakota lignite; ensure economic stability, growth, and
opportunity in the lignite industry; defend through litigation activities the production, use, and
continued development of lignite as a vital state natural resource; and maintain a stable and
competitive tax base for our state's lignite industry for the general welfare of North Dakota. The
legislative assembly further finds and declares that development of North Dakota's lignite
resources must be conducted in an environmentally sound manner that protects our state's air,
water, and soil resources as specified by applicable federal and state law.
### § 54-17.5-02. Lignite research council - Compensation - Appointment of members.

1. The industrial commission shall engage in regular and substantive consultation with
the lignite research council in matters of policy affecting the administration of the lignite
research fund, including holding regularly scheduled grant meetings and activities,
receiving formal written recommendations from the lignite research council, and
providing opportunities for the lignite research council to review and provide input on
proposed policies. Section 44-03-04 does not apply to members of the lignite research
council appointed by the governor.
2. The lignite research council is composed of twenty-four members appointed by the
governor from a list provided by the lignite energy council and two members of the
legislative assembly appointed by the chairman of the legislative management. The
governor may reject the list and request the lignite energy council submit a new list
until the appointments are made. The lignite research council consists of:
a. Six members representing lignite processing;
b. Three members representing lignite research;
c. Four members representing state agencies involved with lignite activities;
d. Four members representing mining;
e. One member representing the workforce community;
f. One member representing political subdivisions;
g. Two members representing transmission interests;
h. One Native American tribal representative; and
i. Two members representing landowners.
3. The lignite research council shall elect its chairman and vice chairman from among its
members.
4. The lignite research council shall elect five members from among its members to serve
with the chairman and vice chairman as an executive committee, to act on behalf of
the lignite research council between lignite research council meetings. The executive
committee shall meet at the request of the chairman.
5. The lignite research council shall meet at least twice a year and additional meetings as
the chairman determines necessary at a time and place to be fixed by the chairman. A

special meeting must be called by the chairman on written request of any three
members. A majority of active members constitutes a quorum.
6. The lignite research council shall recommend to the industrial commission the
approval of grants, loans, or other financial assistance necessary or appropriate for
funding, research, development, marketing, and educational projects, or activities, and
any other matters related to this chapter.
7. Members of the lignite research council appointed by the governor serve at the
pleasure of the governor.
8. A member of the lignite research council who is a member of the legislative assembly
is entitled to receive per diem compensation at the rate as provided under section
relating to the official business of the lignite research council. The legislative council
shall pay the per diem compensation and reimbursement for travel and expenses as
provided by law for any member of the lignite research council who is a member of the
legislative assembly.
### § 54-17.5-03. Priority projects, processes, and activities.

1. In evaluating applications for funding from the lignite research fund for North Dakota's
lignite research, development, and marketing program, the industrial commission and
lignite research council shall give priority to those projects, processes, or activities that
will preserve existing jobs and production, which will create the greatest number of
new jobs and most additional lignite production and economic growth potential in
coal-producing counties or those counties with recoverable coal reserves, which will
attract matching private industry investment equal to at least fifty percent or more of
the total cost, and which will result in development and demonstration of a marketable
lignite product or products with a high level of probability of near term
commercialization.
2. For marketing applications, priority must be given to those projects, processes, or
activities that develop baseline information, implement specific marketing strategies,
and otherwise contribute to the effective marketing of lignite and its products.
3. For reclamation applications, priority must be given to those projects, processes, or
activities that will reduce unnecessary regulatory costs and assist in effectively
reclaiming surface mined land to its original or better productivity as soon as possible.
4. Any projects, activities, or processes selected by the commission for funding must
achieve the priorities and purposes of the program, must have undergone technical
review and be determined to have technical merit, must have generated matching
private industry investment, and must have received a favorable lignite research
council recommendation.
5. The industrial commission shall take into consideration, in selecting independent
technical reviewers, a reviewer's educational background, government or industry
experience, and experience relevant to the subject matter of the proposed project or
program.
### § 54-17.5-04. Industrial commission powers.

The industrial commission is hereby granted all powers necessary or appropriate to carry
out and effectuate the purposes of this chapter, including the power:
1. To make grants or loans, and to provide other forms of financial assistance as
necessary or appropriate, to qualified persons for research, development, and
marketing projects, processes, or activities directly related to lignite and products
derived from lignite.
2. To make and execute contracts and all other instruments necessary or convenient for
the performance of its powers and functions under this chapter, including the authority
to contract for the administration of the lignite research, development, and marketing
program.
3. To allocate sufficient funding from the lignite research, development, and marketing
program to retain a technical advisor, as determined necessary by the lignite research

council, to support program operations and provide expert analysis, project evaluation,
research coordination, and industry engagement to advance the objective of the lignite
research program and ensure the effective and strategic use of program funds.
4. To issue evidences of indebtedness as authorized in this chapter and to borrow money
in an amount not to exceed six million dollars from the Bank of North Dakota for a
period not to exceed five years on the terms and conditions as the Bank of North
Dakota and the industrial commission may approve without the necessity of
establishing or maintaining any reserve fund as otherwise required by section
54-17.5-05.
5. To receive and accept aid, grants, or contributions of money or other things of value
from any source to be held, used, and applied to carry out the purposes of this
chapter, subject to the conditions upon which the aid, grants, or contributions are
made, including aid, grants, or contributions from any department, agency, or
instrumentality of the United States for any purpose consistent with the provisions of
this chapter.
6. To issue and sell evidences of indebtedness in an amount or amounts as the
commission may determine, plus costs of issuance, financing, and any evidences of
indebtedness funded reserve funds required by agreements with or for the benefit of
holders of the evidences of indebtedness for the purpose of funding research,
development, and marketing projects, processes, or activities directly related to lignite
and products derived from lignite.
7. To refund and refinance its evidences of indebtedness from time to time as often as it
is advantageous and in the public interest to do so, and to pledge any and all income
and revenues derived by the commission under this chapter or from a project, process,
or activity funded under this chapter to secure payment or redemption of the evidences
of indebtedness.
8. To keep accurate records of all financial transactions performed under this chapter.
9. To adopt and enforce policies to effectuate the purpose of this chapter.
### § 54-17.5-05. Evidences of indebtedness.

1. Evidences of indebtedness issued by the industrial commission under this chapter are
payable solely from:
a. Appropriations by the legislative assembly from moneys in the lignite research
fund.
b. Revenues or income that may be received by the commission from lignite
projects, processes, or activities funded under this chapter with the proceeds of
the commission's evidences of indebtedness.
c. Revenues or income received by the commission under this chapter from any
source.
2. Not later than July fifteenth of each year preceding the biennial session of the
legislative assembly, the industrial commission shall submit to the office of the budget
a request for the amount required to be appropriated from the lignite research fund to
pay debt service on outstanding evidences of indebtedness during the following
biennium.
3. The evidences of indebtedness are not subject to taxation by the state or any of its
political subdivisions and are not debt of the state or of any officer or agent of the state
within the meaning of any statutory or constitutional provision. The evidences of
indebtedness must be executed by the manual or facsimile signature of a member or
members of the commission and the manual signature of a designated authenticating
agent. Any evidences of indebtedness bearing the signature of a member of the
commission in office at the date of signing are valid and binding for all purposes
notwithstanding that before delivery the person has ceased to be a member of the
commission.
4. The industrial commission shall establish and maintain a reserve fund for evidences of
indebtedness issued under this chapter. There must be deposited in the reserve fund:

a. All moneys appropriated by the legislative assembly to the commission for the
purpose of the reserve fund.
b. All proceeds of evidences of indebtedness issued under this chapter required to
be deposited in the reserve fund by the terms of any contract between the
commission and the holders of its evidences of indebtedness or any resolution of
the commission concerning the proceeds of its evidences of indebtedness.
c. Any lawfully available moneys of the commission which it may determine to
deposit in the reserve fund.
d. Any moneys from any other source made available to the commission for deposit
in the reserve fund.
5. Moneys in the reserve fund may be expended only to pay the principal of and interest
on evidences of indebtedness, including payment of any premium required to be paid
when evidences of indebtedness are redeemed prior to maturity, and sinking fund
installments as the same become due and payable.
6. Moneys in the reserve fund may only be withdrawn in conformity with the terms of any
contract between the commission and the holders of its evidences of indebtedness or
any resolution of the commission concerning the proceeds of its evidences of
indebtedness.
7. The industrial commission must include in its biennial request to the office of the
budget the amount, if any, necessary to restore the reserve fund to an amount equal to
the amount required to be deposited in the fund by the terms of any contract or
resolution described in subdivision b of subsection 4. The legislative assembly may
appropriate such amount from the lignite research fund to the commission for deposit
in the reserve fund. If sufficient moneys are not available in the lignite research fund,
the legislative assembly may appropriate any amount necessary out of any moneys in
the general fund or any special funds in the state treasury not otherwise appropriated.
### § 54-17.5-06. Access to commission records.

1. Materials and data submitted to, or made or received by, the commission, to the extent
that the commission determines the materials or data consist of trade secrets or
commercial, financial, or proprietary information of individuals or entities applying to or
contracting with the commission or receiving commission services under this chapter,
are not public records subject to section 44-04-18 and section 6 of article XI of the
Constitution of North Dakota.
2. A person or entity must file a request with the commission to have material designated
as confidential under subsection 1. A request to have material designated as
confidential is exempt as defined in section 44-04-17.1. The request must contain any
information required by the commission, and must include at least the following:
a. A general description of the nature of the information sought to be protected.
b. An explanation of why the information derives independent economic value,
actual or potential, from not being generally known to other persons.
c. An explanation of why the information is not readily ascertainable by proper
means by other persons.
d. A general description of any person or entity that may obtain economic value from
disclosure or use of the information, and how the person or entity may obtain this
value.
e. A description of the efforts used to maintain the secrecy of the information.
3. Any information submitted under subsection 2 is confidential. The commission shall
examine the request and determine whether the information is relevant to the matter at
hand and is a trade secret under the definition in section 47-25.1-01 or 44-04-18.4. If
the commission determines the information is either not relevant or not a trade secret,
the commission shall notify the requester and the requester may ask for the return of
the information and request within ten days of the notice. If no return is sought, the
information and request are a public record.
4. The names or identities of independent technical reviewers on any project or program
and the names of individual lignite council members making recommendations are

confidential and may not be disclosed by the commission, and are not public records
subject to section 44-04-18 or section 6 of article XI of the Constitution of North
Dakota.
