1.1                          A bill for an act
  1.2             relating to organic agriculture; adding organic 
  1.3             farmers to review panels for sustainable agriculture 
  1.4             grants and loans; requiring the commissioner of 
  1.5             agriculture to promote organic agriculture; extending 
  1.6             the expiration date of the Minnesota organic advisory 
  1.7             task force; adding a person representing the organic 
  1.8             industry to the advisory board for the agricultural 
  1.9             utilization research institute; providing funding for 
  1.10            organic agriculture; appropriating money; amending 
  1.11            Minnesota Statutes 1998, sections 17.115, subdivision 
  1.12            3; 17.116, subdivision 3; 31.94; 31.95, subdivision 
  1.13            3a; and 116O.09, subdivision 5. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 1998, section 17.115, 
  1.16  subdivision 3, is amended to read: 
  1.17     Subd. 3.  [AWARDING OF LOANS.] (a) Applications for loans 
  1.18  must be made to the commissioner on forms prescribed by the 
  1.19  commissioner. 
  1.20     (b) The applications must be reviewed, ranked, and 
  1.21  recommended by a loan review panel appointed by the 
  1.22  commissioner.  The loan review panel shall consist of two 
  1.23  lenders with agricultural experience, two resident farmers of 
  1.24  the state using sustainable agriculture methods, two resident 
  1.25  farmers of the state using organic agriculture methods, a farm 
  1.26  management specialist, a representative from a post-secondary 
  1.27  education institution, and a chair from the department.  
  1.28     (c) The loan review panel shall rank applications according 
  1.29  to the following criteria: 
  2.1      (1) realize savings to the cost of agricultural production 
  2.2   and project savings to repay the cost of the loan; 
  2.3      (2) reduce or make more efficient use of energy; and 
  2.4      (3) reduce production costs.  
  2.5      (d) A loan application must show that the loan can be 
  2.6   repaid by the applicant.  
  2.7      (e) The commissioner must consider the recommendations of 
  2.8   the loan review panel and may make loans for eligible projects.  
  2.9   Priority must be given based on the amount of savings realized 
  2.10  by adopting the practice implemented by the loan. 
  2.11     Sec. 2.  Minnesota Statutes 1998, section 17.116, 
  2.12  subdivision 3, is amended to read: 
  2.13     Subd. 3.  [AWARDING OF GRANTS.] (a) Applications for grants 
  2.14  must be made to the commissioner on forms prescribed by the 
  2.15  commissioner. 
  2.16     (b) The applications must be reviewed, ranked, and 
  2.17  recommended by a technical review panel appointed by the 
  2.18  commissioner.  The technical review panel shall consist of a 
  2.19  soil scientist, an agronomist, a representative from a 
  2.20  post-secondary educational institution, two resident farmers of 
  2.21  the state using sustainable agriculture methods, two resident 
  2.22  farmers of the state using organic agriculture methods, and a 
  2.23  chair from the department.  
  2.24     (c) The technical review panel shall rank applications 
  2.25  according to the following criteria: 
  2.26     (1) direct or indirect energy savings or production; 
  2.27     (2) environmental benefit; 
  2.28     (3) farm profitability; 
  2.29     (4) the number of farms able to apply the techniques or the 
  2.30  technology proposed; 
  2.31     (5) the effectiveness of the project as a demonstration; 
  2.32     (6) the immediate transferability of the project to farms; 
  2.33  and 
  2.34     (7) the ability of the project to accomplish its goals. 
  2.35     (d) The commissioner shall consider the recommendations of 
  2.36  the technical review panel and may award grants for eligible 
  3.1   projects.  Priority must be given to applicants who are farmers 
  3.2   or groups of farmers. 
  3.3      (e) Grants for eligible projects may not exceed $25,000 
  3.4   unless the portion above $25,000 is matched on an equal basis by 
  3.5   the applicant's cash or in-kind land use contribution.  Grant 
  3.6   funding of projects may not exceed $50,000 under this section, 
  3.7   but applicants may utilize other funding sources.  A portion of 
  3.8   each grant must be targeted for public information activities of 
  3.9   the project. 
  3.10     (f) A project may continue for up to three years.  
  3.11  Multiyear projects must be reevaluated by the technical review 
  3.12  panel and the commissioner before second or third year funding 
  3.13  is approved.  A project is limited to one grant for its funding. 
  3.14     Sec. 3.  Minnesota Statutes 1998, section 31.94, is amended 
  3.15  to read: 
  3.16     31.94 [COMMISSIONER DUTIES.] 
  3.17     (a) The commissioner shall enforce sections 31.92 to 31.95. 
  3.18  The commissioner shall withhold from sale or trade any product 
  3.19  sold, labeled, or advertised in violation of sections 31.92 to 
  3.20  31.95. 
  3.21     (b) The commissioner shall investigate the offering for 
  3.22  sale, labeling, or advertising of an article or substance as 
  3.23  organically grown, organically processed, or produced in an 
  3.24  organic environment if there is reason to believe that action is 
  3.25  in violation of sections 31.92 to 31.95. 
  3.26     (c) The commissioner may adopt rules that further clarify 
  3.27  organic food standards and marketing practices. 
  3.28     (d) In order to promote opportunities for organic 
  3.29  agriculture in Minnesota, the commissioner shall: 
  3.30     (1) survey producers and support services and organizations 
  3.31  to determine information and research needs in the area of 
  3.32  organic agriculture practices; 
  3.33     (2) work with the University of Minnesota to demonstrate 
  3.34  the on-farm applicability of organic agriculture practices to 
  3.35  conditions in this state; 
  3.36     (3) direct the programs of the department so as to work 
  4.1   toward the promotion of organic agriculture in this state; 
  4.2      (4) inform agencies of how state or federal programs could 
  4.3   utilize and support organic agriculture practices; and 
  4.4      (5) work closely with farmers, the University of Minnesota, 
  4.5   the Minnesota trade office, and other appropriate organizations 
  4.6   to identify opportunities and needs as well as ensure 
  4.7   coordination and avoid duplication of state agency efforts 
  4.8   regarding research, teaching, and extension work relating to 
  4.9   organic agriculture. 
  4.10     (e) By November 15 of each even-numbered year the 
  4.11  commissioner, in conjunction with the task force created in 
  4.12  section 31.95, subdivision 3a, shall report on the status of 
  4.13  organic agriculture in Minnesota to the legislative policy and 
  4.14  finance committees and divisions with jurisdiction over 
  4.15  agriculture.  The report must include: 
  4.16     (1) a description of current state or federal programs 
  4.17  directed toward organic agriculture, including significant 
  4.18  results and experiences of those programs; 
  4.19     (2) a description of specific actions the department of 
  4.20  agriculture is taking in the area of organic agriculture, 
  4.21  including the proportion of the department's budget spent on 
  4.22  organic agriculture; 
  4.23     (3) a description of current and future research needs at 
  4.24  all levels in the area of organic agriculture; and 
  4.25     (4) suggestions for changes in existing programs or 
  4.26  policies or enactment of new programs or policies that will 
  4.27  affect organic agriculture. 
  4.28     Sec. 4.  Minnesota Statutes 1998, section 31.95, 
  4.29  subdivision 3a, is amended to read: 
  4.30     Subd. 3a.  [CERTIFICATION ORGANIZATIONS.] (a) A Minnesota 
  4.31  grown organic product that is labeled "certified" must be 
  4.32  certified by a designated certification organization.  
  4.33     (b) A certified organic product sold in this state must be 
  4.34  certified by a designated certification organization or by a 
  4.35  certification organization approved by the commissioner.  Before 
  4.36  approving a certification organization, the commissioner must 
  5.1   seek the evaluation and recommendation of the Minnesota organic 
  5.2   advisory task force. 
  5.3      (c) The commissioner shall appoint a Minnesota organic 
  5.4   advisory task force composed of members of the organic industry 
  5.5   to advise the commissioner on organic issues.  Members of the 
  5.6   task force may not be paid compensation or costs for expenses to 
  5.7   advise the commissioner on policies and practices to improve 
  5.8   organic agriculture in Minnesota.  The task force shall consist 
  5.9   of the following residents of the state: 
  5.10     (1) three farmers using organic agriculture methods; 
  5.11     (2) one organic food retailer or distributor; 
  5.12     (3) one representative of organic food certification 
  5.13  agencies; 
  5.14     (4) one organic food processor; 
  5.15     (5) one representative from the Minnesota extension 
  5.16  service; 
  5.17     (6) one representative from an environmental nonprofit 
  5.18  organization; 
  5.19     (7) two at-large members; and 
  5.20     (8) one representative from the agricultural utilization 
  5.21  research institute.  Terms, compensation, and removal of members 
  5.22  are governed by section 15.059, subdivision 6.  The task 
  5.23  force must meet at least twice each year and expires on June 30, 
  5.24  2001 2003. 
  5.25     Sec. 5.  Minnesota Statutes 1998, section 116O.09, 
  5.26  subdivision 5, is amended to read: 
  5.27     Subd. 5.  [ADVISORY BOARD.] A 26-member 27-member advisory 
  5.28  board may be established to identify priorities for the 
  5.29  agricultural utilization research institute.  Members of the 
  5.30  advisory board are appointed by the board.  The advisory board 
  5.31  consists of:  the chair of the Minnesota house of 
  5.32  representatives agricultural committee; the chair of the 
  5.33  Minnesota senate agricultural committee; a representative from 
  5.34  each of the ten largest agricultural-related businesses in the 
  5.35  state as determined by the corporation; a member from each of 
  5.36  the appropriate trade organizations representing producers 
  6.1   of organic products, beef cattle, dairy, corn, soybeans, pork, 
  6.2   wheat, turkey, barley, wild rice, edible beans, eggs, and 
  6.3   potatoes; a member of the Farmers's Union; and a member of the 
  6.4   Farm Bureau.  Terms and removal of members must be set by the 
  6.5   board and members of the advisory board serve without 
  6.6   compensation but shall receive their necessary and actual 
  6.7   expenses. 
  6.8      The advisory board shall annually provide a list of 
  6.9   priorities and suggested research and marketing studies that 
  6.10  should be performed by the agricultural utilization research 
  6.11  institute. 
  6.12     Sec. 6.  [APPROPRIATIONS.] 
  6.13     (a) $100,000 is appropriated in fiscal year 2000 and 
  6.14  $100,000 is appropriated in fiscal year 2001 from the general 
  6.15  fund to the University of Minnesota for the Minnesota extension 
  6.16  service for a position to provide educational programs and 
  6.17  related materials on organic agriculture to extension agents as 
  6.18  well as conduct field days and demonstrations on organic 
  6.19  agriculture.  The extension service must coordinate activities 
  6.20  under this paragraph with the task force created in Minnesota 
  6.21  Statutes, section 31.95, subdivision 3a.  This appropriation is 
  6.22  available until June 30, 2001. 
  6.23     (b) $200,000 is appropriated in fiscal year 2000 and 
  6.24  $200,000 is appropriated in fiscal year 2001 from the general 
  6.25  fund to the commissioner of agriculture, $150,000 each year is 
  6.26  for annual cost-share payments to resident farmers for the costs 
  6.27  of organic certification.  The annual cost-share payments per 
  6.28  farmer shall be two-thirds of the cost of the certification or 
  6.29  $200, whichever is less.  A certified farmer is only eligible to 
  6.30  receive annual certification cost-share payments for up to five 
  6.31  years.  $50,000 each year is for organic market and program 
  6.32  development.  This appropriation is available until expended.