BISMARCK — Lawmakers unanimously advanced a bill aimed at replacing over 300 Chinese-made drones used by North Dakota agencies due to security concerns, though development of drone infrastructure in the bill drew scrutiny from lawmakers.

House Bill 1038

would create a $15 million program to replace all drones used by North Dakota agencies that do not comply with the

National Defense Authorization Act

and the

American Security Drone Act of 2023.

In short, any drones that are manufactured in adversarial countries would be replaced.

For North Dakota, that would be 307 of the 353 drones — or 86.97% — used by state agencies, according to a survey administered by the North Dakota University System.

All 307 drones that would be replaced are from China, according to the survey, specifically from a company called DJI, according to bill sponsor Rep. Mike Nathe, R-Bismarck.

During his testimony to the appropriations committee, Nathe said that DJI has roughly 90% of the hobby market, 70% of the industrial market and 80% of the first responder market in the U.S., something he said was “very disturbing” to him.

“Even if out of the 307 we have one of these that are bad, it’s worth doing,” Nathe said. “So, these drones are flying all over our state. They’re flying over our communities, our air bases, our missile sites, our oil fields and God knows if they’re collecting data and transmitting that. And that is not only a security risk for North Dakota but also for the country.”

Nathe said North Dakota agencies are using Chinese drones because they are cheap.

“Why do we have so many of these in our inventory? And we’re not the only state, every other state is – has as many of these as we do,” Nathe said. “And the answer is they’re cheap. Cheaper than U.S. stuff, and they’re easy to fly and they’re very consumer-friendly. And they are not just years ahead, they’re like generations ahead of the (U.S.) manufacturers.”

Despite this, he said he has not had any pushback from state agencies on the proposed bill.

The program would be run by the Grand Forks-based

Northern Plains Unmanned Aircraft System (UAS) Test Site

. Under the proposed bill, the test site would find and pay for drones that could serve the same function of the Chinese drones currently used by agencies, then organize training on the new drones for agencies’ personnel and inspect and dispose of the Chinese-made drones.

Agencies would be able to continue using the drones they have until a replacement drone from a U.S. manufacturer or a manufacturer in a country friendly to the U.S. has been found by the test site, Nathe said.

Some members of the committee questioned how much it would cost to replace the current drones. Frank Mattis, director of UAS integration at Thales and newly minted chair of the

North Dakota UAS Council

, said that it would likely cost more than $10,000 per drone to replace the current DJI drones used by state agencies.

Thales is a company partnered with the state and the Northern Plains UAS Test Site to develop the

Vantis

system. The system, simply put, is a radar system that tracks and identifies drones, which allows them to operate beyond the line of sight of pilots.

The second part of HB 1038 would allocate $11 million to develop an FAA radar data enclave and engage in a first-of-its-kind one-year pathfinder program where the FAA would share radar data with Vantis that would extend the system’s reach over most of the state.

Northern Plains UAS Test Site Deputy Executive Director Erin Roesler said the system covers 3,000 square miles and with the FAA data would cover 56,000 square miles — an expansion that would cost the state $255 million to develop without the FAA’s assistance.

The hope, according to those in support of the bill, is that Vantis with the FAA’s data would become the guideline for a national drone infrastructure system.

According to Mattis, this would be the first time the FAA shared unfiltered radar data with an organization outside of the federal government.

The data is not classified as “top secret” or “secret,” Mattis said, but it does rise to a level of importance where it needs to be protected. The $11 million would pay for the training, screening of personnel, and physical and cybersecurity upgrades to the test site that would allow them to house and utilize the data.

Several lawmakers on the committee questioned how and when the state would see a return on the $11 million investment in Vantis.

Roesler said that Vantis should be viewed as an infrastructure project and that its value comes from the opportunities it will create.

She said that state agencies and other drone operators must create their own often costly and redundant systems to operate drones the way Vantis allows for. Creating this shared-use infrastructure lowers the barrier for agencies and companies to use drones in new ways.

Rep. David Richter, R-Williston, told a story about a hospital in his part of the state using a drone to deliver medicine across Lake Sakakawea to a remote area as an example of the use of drone infrastructure.

“We build highways and then people use them,” Richter said. “We are building a highway and people will use it.”

The bill was given a unanimous “do pass” recommendation by the committee and will be carried to the floor for a vote by Nathe.

Agristo, a leading European producer of frozen potato products, is making big moves in North America. The company, founded in 1986, has chosen Grand Forks, North Dakota, as the site for its first U.S. production facility.

Agristo has been testing potato farming across the U.S. for years and found North Dakota to be the perfect fit. The state offers high-quality potato crops and a strong agricultural community.

In a statement, Agristo said it believes those factors make it an ideal location for producing the company’s high-quality frozen potato products, including fries, hash browns, and more.

“Seeing strong potential in both potato supply and market growth in North America, Agristo is now ready to invest in its first production facility in the United States, focusing on high-quality products, innovation, and state-of-the-art technology.”

Agristo plans to invest up to $450 million to build a cutting-edge facility in Grand Forks. This project will create 300 to 350 direct jobs, giving a boost to the local economy.

Agristo is working closely with North Dakota officials to finalize the details of the project.

Negotiations for the plant are expected to wrap up by mid-2025.

For more information about Agristo and its products, visit www.agristo.com.

Agristo’s headquarters are located in Belgium.

A long-anticipated performance audit of the North Dakota State Auditor’s Office found no significant issues, consultants told a panel of lawmakers Thursday afternoon.

“Based on the work that we performed, there weren’t any red flags,” Chris Ricchiuto, representing consulting firm Forvis Mazars, said.

The review was commissioned by the 2023 Legislature following complaints from local governments about the cost of the agency’s services.

The firm found that the State Auditor’s Office is following industry standards and laws, and is completing audits in a reasonable amount of time, said Charles Johnson, a director with the firm’s risk advisory services.

“The answer about the audit up front is that we identified four areas where things are working exactly as you expect the state auditor to do,” Johnson told the committee.

The report also found that the agency has implemented some policies to address concerns raised during the 2023 session.

For example, the Auditor’s Office now provides cost estimates to clients before they hire the office for services, Johnson said. The proposals include not-to-exceed clauses, so clients have to agree to any proposed changes.

The State Auditor’s Office also now includes more details on its invoices, so clients have more comprehensive information about what they’re being charged for.

The audit originally was intended to focus on fiscal years 2020 through 2023. However, the firm extended the scope of its analysis to reflect policy changes that the Auditor’s Office implemented after the 2023 fiscal year ended.

State Auditor Josh Gallion told lawmakers the period the audit covers was an unusual time for his agency. The coronavirus pandemic made timely work more difficult for his staff. Moreover, because of the influx of pandemic-related assistance to local governments from the federal government, the State Auditor’s Office’s workload increased significantly.

Gallion said that, other than confirming that the changes the agency has made were worthwhile, he didn’t glean anything significant from the audit.

“The changes had already been implemented,” he said.

Gallion has previously called the audit redundant and unnecessary. When asked Thursday if he thought the audit was a worthwhile use of taxpayer money, Gallion said, “Every audit has value, at the end of the day.”

The report has not been finalized, though the Legislative Audit and Fiscal Review Committee voted to accept it.

Audit of state auditor delayed; Gallion calls it ‘redundant, unnecessary’

“There was no shenanigans, there were no red flags,” Sen. Jerry Klein, R-Fessenden, said at the close of the hearing.

Forvis representatives told lawmakers they plan to finish the report sometime this month.

The contract for the audit is for $285,000.

Johnson said as far as he is aware Forvis has sent bills for a little over $150,000 so far. That doesn’t include the last two months of the company’s work, he said.

The consulting firm sent out surveys to local governments that use the agency’s services.

The top five suggestions for improvements were:

• Communication with clients
• Timeliness
• Helping clients complete forms
• Asking for same information more than once
• Providing more detailed invoices

The top five things respondents thought the agency does well were:

• Understanding of the audit process
• Professionalism
• Willingness to improve
• Attention to detail
• Helpfulness

Johnson said that some of the survey findings should be taken with a “grain of salt.”

“In our work as auditors, we don’t always make people happy doing what we’re supposed to do,” he said.