1.1                          A bill for an act 
  1.2             relating to agriculture; providing loans for 
  1.3             demonstration projects of new technology for 
  1.4             processing manure and odor control; regulating biomass 
  1.5             fuel supply contracts; providing incentives for the 
  1.6             purchase of energy generated by manure waste methane 
  1.7             recovery systems; appropriating money; amending 
  1.8             Minnesota Statutes 1998, sections 17.115, by adding a 
  1.9             subdivision; 215B.2424, by adding a subdivision; and 
  1.10            216C.41. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1998, section 17.115, is 
  1.13  amended by adding a subdivision to read: 
  1.14     Subd. 5.  [MANURE PROCESS AND ODOR CONTROL 
  1.15  TECHNOLOGY.] Notwithstanding subdivision 2, paragraphs (b) and 
  1.16  (c), interest-free loans up to $200,000 may be made under this 
  1.17  section to any resident of Minnesota for demonstration projects 
  1.18  of new technology for processing manure and odor control.  Loans 
  1.19  under this subdivision may be used as a match for federal loans 
  1.20  or grants.  Money from repayment of loans must be deposited in 
  1.21  the revolving loan account for this program to be used for 
  1.22  future projects.  
  1.23     Sec. 2.  Minnesota Statutes 1998, section 216B.2424, is 
  1.24  amended by adding a subdivision to read: 
  1.25     Subd. 6.  [FUEL SUPPLY CONTRACT.] Notwithstanding any other 
  1.26  provision of this section, a public utility may satisfy up to 75 
  1.27  megawatts of the mandate in subdivision 5 by converting power 
  1.28  purchase agreements entered into to satisfy that mandate and 
  2.1   executed prior to March 15, 1999, into fuel supply agreements 
  2.2   between the same parties. 
  2.3      Sec. 3.  Minnesota Statutes 1998, section 216C.41, is 
  2.4   amended to read: 
  2.5      216C.41 [RENEWABLE ENERGY PRODUCTION INCENTIVE.] 
  2.6      Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
  2.7   subdivision apply to this section. 
  2.8      (b) "Qualified hydroelectric facility" means a 
  2.9   hydroelectric generating facility in this state that: 
  2.10     (1) is located at the site of a dam, if the dam was in 
  2.11  existence as of March 31, 1994; and 
  2.12     (2) begins generating electricity after July 1, 1994. 
  2.13     (c) "Qualified wind energy conversion facility" means a 
  2.14  wind energy conversion system that: 
  2.15     (1) produces two megawatts or less of electricity as 
  2.16  measured by nameplate rating and begins generating electricity 
  2.17  after June 30, 1997, and before July 1, 1999; or 
  2.18     (2) begins generating electricity after June 30, 1999, 
  2.19  produces two megawatts or less of electricity as measured by 
  2.20  nameplate rating, and is: 
  2.21     (i) located within one county and owned by a natural person 
  2.22  who owns the land where the facility is sited; 
  2.23     (ii) owned by a Minnesota small business as defined in 
  2.24  section 645.445; 
  2.25     (iii) owned by a nonprofit organization; or 
  2.26     (iv) owned by a tribal council if the facility is located 
  2.27  within the boundaries of the reservation; or 
  2.28     (3) begins generating electricity after June 30, 1999, 
  2.29  produces ten megawatts or less of electricity as measured by 
  2.30  nameplate rating, and: 
  2.31     (i) is owned by a cooperative organized under chapter 308A; 
  2.32  and 
  2.33     (ii) all shares and membership in the cooperative are held 
  2.34  by natural persons or estates, at least 51 percent of whom 
  2.35  reside in a county or contiguous to a county where the wind 
  2.36  energy production facilities of the cooperative are located. 
  3.1      (d) "Qualified methane recovery facility" means a 
  3.2   farm-located farm animal manure waste methane recovery system 
  3.3   that:  (1) is located in Minnesota; and (2) begins generating 
  3.4   electricity after January 1, 1999. 
  3.5      Subd. 2.  [INCENTIVE PAYMENT.] Incentive payments shall be 
  3.6   made according to this section to the owner or operator of a 
  3.7   qualified methane recovery facility, qualified hydropower 
  3.8   facility, or qualified wind energy conversion facility for 
  3.9   electric energy generated and sold by the facility.  Payment may 
  3.10  only be made upon receipt by the commissioner of finance of an 
  3.11  incentive payment application that establishes that the 
  3.12  applicant is eligible to receive an incentive payment and that 
  3.13  satisfies other requirements the commissioner deems necessary.  
  3.14  The application shall be in a form and submitted at a time the 
  3.15  commissioner establishes.  There is annually appropriated from 
  3.16  the general fund sums sufficient to make the payments required 
  3.17  under this section.  
  3.18     Subd. 3.  [ELIGIBILITY WINDOW.] Payments may be made under 
  3.19  this section only for electricity generated: 
  3.20     (a) from a qualified hydroelectric facility that is 
  3.21  operational and generating electricity before January 1, 2001; 
  3.22  or 
  3.23     (b) from a qualified wind energy conversion facility that 
  3.24  is operational and generating electricity before January 1, 
  3.25  2005; or 
  3.26     (c) from a qualified methane recovery facility that is 
  3.27  operational and generating electricity before January 1, 2010. 
  3.28     Subd. 4.  [PAYMENT PERIOD.] A facility may receive payments 
  3.29  under this section for a ten-year period.  No payment under this 
  3.30  section may be made for electricity generated: 
  3.31     (a) by a qualified hydroelectric facility after December 
  3.32  31, 2010; or 
  3.33     (b) by a qualified wind energy conversion facility after 
  3.34  December 31, 2015; or 
  3.35     (c) by a qualified methane recovery facility after December 
  3.36  31, 2020.  
  4.1      The payment period begins and runs consecutively from the 
  4.2   first year in which electricity generated from the facility is 
  4.3   eligible for incentive payment. 
  4.4      Subd. 5.  [AMOUNT OF PAYMENT.] (a) An incentive payment is 
  4.5   based on the number of kilowatt hours of electricity generated. 
  4.6   The amount of the payment is 1.5 cents per kilowatt hour.  
  4.7      (b) For electricity generated by qualified wind energy 
  4.8   conversion facilities, the incentive payment under this section 
  4.9   is limited to no more than 100 megawatts of nameplate capacity.  
  4.10  During any period in which qualifying claims for incentive 
  4.11  payments exceed 100 megawatts of nameplate capacity, the 
  4.12  payments must be made to producers in the order in which the 
  4.13  production capacity was brought into production. 
  4.14     (c) For electricity generated by a qualified methane 
  4.15  recovery facility, the incentive payment under this section is 
  4.16  limited to no more than 15 megawatts of capacity. 
  4.17     Sec. 4.  [APPROPRIATION; MANURE AND ODOR CONTROL.] 
  4.18     $2,000,000 is appropriated from the general fund to the 
  4.19  commissioner of agriculture for fiscal year 2000 to be used for 
  4.20  loans under section 1.