NORTH DAKOTA LEGISLATIVE COUNCIL
Minutes of the
ADMINISTRATIVE RULES COMMITTEE
Thursday, June 11, 2009
Roughrider Room, State Capitol
Bismarck, North Dakota
Senator Tom Fischer, Chairman, called the
meeting to order at 10:00 a.m.
Members present: Senators Tom Fischer,
John M. Andrist, Layton W. Freborg, Jerry Klein, Tracy
Potter; Representatives Randy Boehning, Duane
DeKrey, David Drovdal, Rod Froelich, Kim
Koppelman, Blair Thoreson, Dwight Wrangham
Members absent: Representatives Chuck
Damschen, Mary Ekstrom, Chris Griffin, Jon Nelson,
Louise Potter
Others present: See Appendix A
It was moved by Representative DeKrey,
seconded by Representative Thoreson, and
carried on a voice vote that the minutes of the
previous meeting be approved as distributed.
AGRICULTURE COMMISSIONER
Chairman Fischer called on Mr. Wayne Carlson,
Program Manager, Livestock Services, Department of
Agriculture, for testimony (Appendix B) relating to
July 2009 rules of the Agriculture Commissioner.
Senator Klein said the state has experienced a
loss of dairy producers and asked whether the dairy
rules being adopted will put dairy farmers out of
business. Mr. Carlson said it is true that the state has
lost dairy producers recently, but he said the
expectation of the department is that these rules will
get some operators to improve their operations to
avoid getting shut down.
Representative DeKrey asked whether the
department still does a somatic cell count for dairy
operations. Mr. Carlson said the department does
monthly sampling and somatic cell count, bacteria
count, and other testing.
Representative DeKrey said the state is trying to
get more people into dairy production and he shares
Senator Klein’s concern about more restrictive
regulations putting dairy producers out of business.
Mr. Carlson said the department appreciates that
concern and does not believe the rules will have that
effect. He said there were no objections received by
the department during the rulemaking process.
Senator Andrist asked if dairy producers must be
licensed. Mr. Carlson said producers must be
licensed. Senator Andrist asked whether truckdrivers
hauling dairy products must be licensed. Mr. Carlson
said drivers must be licensed. Senator Andrist asked
whether these licensing requirements are imposed by
rules of the Agriculture Commissioner or state
statutes. Mr. Carlson said licensing requirements are
imposed by state statutes and federal law. Senator
Andrist asked whether the Agriculture Commissioner
has reviewed the rules since taking office.
Mr. Carlson said he has discussed the rules with the
Agriculture Commissioner and the commissioner did
not express any significant concerns.
Representative Froelich said he discussed the
dairy rules with Mr. Nathan Boehm, Chairman, State
Board of Animal Health, and dairy producer, and
Mr. Boehm said the rules have been in process for
several years and he believes the rules are
acceptable and needed to meet federal standards.
Senator Andrist asked whether these rules will
increase the workload for the Agriculture Department.
Mr. Carlson said the rules should actually make
inspections easier to administer.
Senator Potter asked several questions regarding
the safety to consumers of raw milk cheese.
Mr. Carlson said sale of raw milk cheese is not
allowed by law and most recalls nationwide regarding
dairy products have been for products with
unpasteurized milk. He said the United States
Department of Agriculture standards require
pasteurization of milk for use in cheese.
Senator Klein asked why it was necessary to adopt
federal standards on meat inspection. Mr. Carlson
said the rules in place were effective through an
earlier date and the federal standards have been
updated. He said it is necessary to adopt the federal
standards effective July 1, 2009, so the state
standards are equivalent to current federal standards.
Committee counsel asked whether state
enforcement of meat inspection rules is dependent on
the contents of rules adopted by the state.
Mr. Carlson said that is correct and the Agriculture
Department may only enforce state rules that have
been adopted by the Agriculture Commissioner. He
said the Agriculture Department cannot enforce
federal rules so it is necessary to update state rules.
DEPARTMENT OF FINANCIAL
INSTITUTIONS
Chairman Fischer called on Mr. Timothy Karsky,
Commissioner, Department of Financial Institutions,
for testimony (Appendix C) relating to July 2009 rules
of the department.
Mr. Karsky said the rules are primarily related to
loan production offices and deposit production offices.
Administrative Rules 2 June 11, 2009
He said a loan production office is essentially a bank
branch limited to loan-related activities and which is
not a full-service location. He said the rules on loan
production offices mirror the latest policies of the
Comptroller of the Currency. He said deposit
production offices are allowed by the rules of the
Comptroller of the Currency, which means deposit
production offices are allowed for national banks but
not state-chartered banks. He said adoption of these
rules by the state will allow state-chartered banks to
establish deposit production offices.
STATE BOARD OF REGISTRATION FOR
PROFESSIONAL ENGINEERS AND
LAND SURVEYORS
Chairman Fischer called on Mr. Clifford Keller,
Executive Secretary, State Board of Registration for
Professional Engineers and Land Surveyors, for
testimony (Appendix D) relating to July 2009 rules of
the board.
After reviewing his testimony, Mr. Keller said
setting of monuments for surveys of easements will no
longer be necessary unless the easement duration is
five years or more. He said this rule change will
nearly eliminate the requirement for a survey in
acquisition of easements. He said the regulatory
analysis attached to his testimony indicates that the
rule change could result in saved survey costs of
thousands of dollars per mile of easement on a single
project.
Representative DeKrey asked whether the existing
rules allow surveyors to use common sense on when
markers are required. Mr. Keller said these rules
would not alter the current situation regarding surveys
when property is sold. Mr. Lyle Kirmis, legal counsel
for the board and special assistant Attorney General,
said existing law and rules would require a surveyor to
set markers for boundaries of property transferred
unless the job is so simple that a surveyor would not
be required.
DEPARTMENT OF TRANSPORTATION
Chairman Fischer called on Ms. Linda Butts,
Deputy Director, Driver and Vehicle Services Division,
Department of Transportation, for testimony
(Appendix E) relating to July 2009 rules of the
department.
Senator Klein asked whether the penalties
provided by these rules are now consistent with
federal provisions. Ms. Butts said the amended rules
are consistent with federal provisions.
Senator Potter asked when an out-of-service order
is used. Ms. Butts said if alcohol is detected for a
driver or equipment violations are found, an out-ofservice
order will be entered.
INSURANCE COMMISSIONER
Chairman Fischer called on Ms. Melissa Hauer,
General Counsel, Insurance Department, for
testimony (Appendix F) relating to July 2009 rules of
the Insurance Commissioner.
Ms. Hauer said the rules relate to Medicare
supplement insurance policies. She said these rules
are required by federal law and without these rules
changes, the state will not be allowed to regulate
Medicare supplement insurance. She said the rules
changes are based on National Association of
Insurance Commissioners (NAIC) model regulations.
She said the Insurance Commissioner accepted
suggestions offered from some commenters and
adjusted rules accordingly.
Representative Froelich asked how the rules can
be required by federal law and adjusted after
comments without violating the federal requirements.
Ms. Hauer said under the NAIC model there are some
optional rules provisions allowing a choice of
complying provisions. She said in some instances,
commenters suggested the option not chosen by the
department and the department made the suggested
changes.
Representative Koppelman said federal
requirements are in place that allow the Insurance
Commissioner options in adoption of complying rules.
He said the committee does not have information on
what choices were available and why the choices
made were chosen. Ms. Hauer said a summary could
be provided of the options that were available and the
options that were chosen.
Senator Potter said some of the plans authorized
by previous law would be eliminated by the federal
and state rules changes and asked whether new
products will be available. Ms. Hauer said new
products will be available and requested Mr. Michael
Fix, director of Life and Health Insurance and actuary
for the Insurance Department, to provide information
on the changes. Mr. Fix said Plans H, I, J, and highdeductible
Plan J are eliminated. He said prescription
drug benefits were removed from these plans. He
said Plan E is also being eliminated because after
changes it ended up being the same as Plan D.
Senator Potter asked if the rules cover how
companies will be allowed to approach customers with
new plans to replace plans being eliminated. Mr. Fix
said the rules do cover those situations.
STATE DEPARTMENT OF HEALTH
Chairman Fischer called on Ms. Bridget Weidner,
Hospital Program Manager, Division of Health
Facilities, State Department of Health, for testimony
(Appendix G) relating to July 2009 Medical Records
Services rules of the department.
COMMITTEE DISCUSSION
Senator Andrist said the committee should hold
over consideration of the Agriculture Commissioner’s
dairy rules to determine whether the new Agriculture
Commissioner has had time to review those rules and
whether the commissioner supports them. He said
information also should be obtained on the individuals
Administrative Rules 3 June 11, 2009
involved in the dairy industry subject to licensing
requirements, with information on whether the
licensing requirements are imposed by state or federal
law or by administrative rules. It was moved by
Senator Andrist, seconded by Senator Potter, and
carried on a roll call vote that the dairy rules of the
Agriculture Commissioner be carried over for
consideration at the next meeting. Senators
Fischer, Andrist, Freborg, Klein, and Potter and
Representatives Boehning, DeKrey, Drovdal,
Koppelman, Thoreson, and Wrangham voted “aye.”
Representative Froelich voted “nay.”
It was moved by Representative DeKrey,
seconded by Representative Koppelman, and
carried on a voice vote that the meeting be
adjourned. Chairman Fischer adjourned the meeting
at 12:00 noon.
___________________________________________
John Walstad
Code Revisor
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