1.1                          A bill for an act 
  1.2             relating to agriculture; changing the scope of the 
  1.3             value-added agricultural product processing and 
  1.4             marketing grant program; establishing a certification 
  1.5             pilot program; changing meeting provisions and duties 
  1.6             of the board of grain standards; changing certain 
  1.7             fees; making technical changes to pesticide and 
  1.8             fertilizer laws; clarifying the scope of certain 
  1.9             regulation of wholesale produce dealers; updating 
  1.10            certain food standards; simplifying certain language; 
  1.11            providing for uniformity in meat and poultry 
  1.12            inspection; changing certain reporting requirements; 
  1.13            increasing the amount of livestock dealer bonds; 
  1.14            clarifying status of certain grain buying 
  1.15            transactions; changing certain grain storage 
  1.16            provisions; changing the corporate and partnership 
  1.17            farming law; amending Minnesota Statutes 1998, 
  1.18            sections 17.101, subdivision 5; 17A.05, subdivision 2; 
  1.19            17B.07; 17B.12; 18C.005, subdivision 34, and by adding 
  1.20            a subdivision; 18C.215, subdivisions 1, 2, and by 
  1.21            adding a subdivision; 18C.411, subdivision 1; 18C.421, 
  1.22            subdivision 1; 18D.201, subdivision 3; 27.01, 
  1.23            subdivision 8; 27.19, subdivision 1; 31.101, as 
  1.24            amended; 31.102, subdivision 1; 31.103, subdivision 1; 
  1.25            31.104; 31.632; 31.633, subdivision 1; 31.651; 31A.02, 
  1.26            subdivisions 5, 6, 10, 13, and 14; 31A.03; 31A.05; 
  1.27            31A.06; 31A.07, subdivisions 1 and 2; 31A.08; 31A.10; 
  1.28            31A.13; 31A.16; 31A.17; 223.17, subdivision 5; 
  1.29            223.175; 232.21, by adding a subdivision; 232.23, 
  1.30            subdivisions 1, 3, and 6; and 500.24, subdivisions 4 
  1.31            and 5; Minnesota Statutes 1999 Supplement, sections 
  1.32            17B.15, subdivision 1; 31A.01; 31A.15, subdivision 1; 
  1.33            31B.07, subdivision 3; and 500.24, subdivisions 2 and 
  1.34            3; proposing coding for new law in Minnesota Statutes, 
  1.35            chapter 17. 
  1.36  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.37     Section 1.  Minnesota Statutes 1998, section 17.101, 
  1.38  subdivision 5, is amended to read: 
  1.39     Subd. 5.  [VALUE-ADDED AGRICULTURAL PRODUCT PROCESSING AND 
  1.40  MARKETING GRANT PROGRAM.] (a) For purposes of this section: 
  2.1      (1) "agricultural commodity" means a material produced for 
  2.2   use in or as food, feed, seed, or fiber and includes crops for 
  2.3   fiber, food, oilseeds, seeds, livestock, livestock products, 
  2.4   dairy, dairy products, poultry, poultry products, and other 
  2.5   products or by-products of the farm produced for the same or 
  2.6   similar use, except ethanol; and 
  2.7      (2) "agricultural product processing facility" means land, 
  2.8   buildings, structures, fixtures, and improvements located or to 
  2.9   be located in Minnesota and used or operated primarily for the 
  2.10  processing or production of marketable products from 
  2.11  agricultural commodities produced in Minnesota.  
  2.12     (b) The commissioner shall establish and implement a 
  2.13  value-added agricultural product processing and marketing grant 
  2.14  program to help farmers finance new cooperatives that organize 
  2.15  for the purposes of operating agricultural product processing 
  2.16  facilities and for marketing activities related to the sale and 
  2.17  distribution of processed agricultural products.  
  2.18     (c) To be eligible for this program a grantee must:  
  2.19     (1) be a cooperative organized under chapter 308A; 
  2.20     (2) certify that all of the control and equity in the 
  2.21  cooperative is from farmers as defined in section 500.24, 
  2.22  subdivision 2, who are actively engaged in agricultural 
  2.23  commodity production; 
  2.24     (3) be operated primarily for the processing of 
  2.25  agricultural commodities produced in Minnesota; 
  2.26     (4) receive agricultural commodities produced primarily by 
  2.27  shareholders or members of the cooperative; and 
  2.28     (5) have no direct or indirect involvement in the 
  2.29  production of agricultural commodities.  
  2.30     (d) The commissioner may receive applications from and make 
  2.31  grants up to $50,000 for feasibility, marketing 
  2.32  analysis, assistance with organizational development, financing 
  2.33  and managing new cooperatives, product development, development 
  2.34  of business and marketing plans, and predesign of 
  2.35  facilities including site analysis, development of bid 
  2.36  specifications, preliminary blueprints and schematics, and 
  3.1   completion of purchase agreements and other necessary legal 
  3.2   documents to eligible cooperatives.  The commissioner shall give 
  3.3   priority to applicants who use the grants for planning costs 
  3.4   related to an application for financial assistance from the 
  3.5   United States Department of Agriculture, Rural Business - 
  3.6   Cooperative Service. 
  3.7      Sec. 2.  [17.1025] [MINNESOTA CERTIFICATION PROGRAM.] 
  3.8      In cooperation with the University of Minnesota, the 
  3.9   department of trade and economic development, and the board of 
  3.10  animal health, the commissioner shall establish a pilot program 
  3.11  to certify agricultural production methods and agricultural 
  3.12  products grown or processed within the state to assure the 
  3.13  integrity of claims made by participating businesses.  The 
  3.14  commissioner may select and cooperate with private organizations 
  3.15  that have established procedures and safeguards to justify 
  3.16  claimed characteristics of the production process or the final 
  3.17  certified product to conduct certification activities for third 
  3.18  party producers. 
  3.19     The commissioner may establish guidelines for the 
  3.20  certification program, which are not subject to chapter 14.  The 
  3.21  commissioner shall submit a report on the pilot program to the 
  3.22  legislature by February 1, 2001. 
  3.23     Sec. 3.  Minnesota Statutes 1998, section 17A.05, 
  3.24  subdivision 2, is amended to read: 
  3.25     Subd. 2.  [LIVESTOCK DEALERS.] The amount of each livestock 
  3.26  dealer bond filed with the commissioner shall be not less 
  3.27  than $5,000 $10,000 or such larger amount as required, based on 
  3.28  the commissioner's consideration of the principal's financial 
  3.29  statement, the volume of business reported, or any other factor 
  3.30  the commissioner deems pertinent for the protection of the 
  3.31  public.  Each such bond shall contain the condition clause 
  3.32  applicable when the principal buys on commission or as a 
  3.33  dealer.  A livestock dealer's bond shall be executed on a form 
  3.34  furnished by the commissioner or in accordance with the Packers 
  3.35  and Stockyards Act, 1921, as amended, (United States Code, title 
  3.36  7, section 181 et seq.). 
  4.1      When a bond is executed on a state form furnished by the 
  4.2   commissioner, the bond shall be for the protection of both the 
  4.3   buyer and the seller named in the transaction when the principal 
  4.4   fails to pay when due for livestock purchased or sold for the 
  4.5   principal's own account or the account of others and shall be 
  4.6   limited to the protection of claimants whose residence or 
  4.7   principal place of livestock business is in the state of 
  4.8   Minnesota at the time of the transaction.  If the bond is filed 
  4.9   on a form in accordance with the Packers and Stockyards Act, the 
  4.10  bond shall cover claimants regardless of place of residence. 
  4.11     Sec. 4.  Minnesota Statutes 1998, section 17B.07, is 
  4.12  amended to read: 
  4.13     17B.07 [OFFICIAL TITLE OF BOARD; MEETINGS.] 
  4.14     The official title of the board shall be "The Minnesota 
  4.15  board of grain standards" and it shall have jurisdiction over 
  4.16  all grain appeal cases brought before it.  
  4.17     The board shall meet annually on or before June 15, as 
  4.18  needed and shall establish the grades of all grain subject to 
  4.19  state inspection which shall be known as the "Minnesota grades," 
  4.20  and all grain received at any public warehouse shall be graded 
  4.21  accordingly.  Such grades shall not be changed before the next 
  4.22  annual meeting without the concurrence of at least two members 
  4.23  of the board.  At the time of establishing Minnesota grades, the 
  4.24  board also shall adopt such rules, in accordance with the 
  4.25  Administrative Procedure Act, as it deems necessary for the 
  4.26  enforcement of this section and section 17B.06.  In establishing 
  4.27  the grades, in addition to the physical qualities of the grain, 
  4.28  there shall be taken into consideration the milling and 
  4.29  bread-producing quality of all grain products used as human 
  4.30  food.  The board shall determine the grade, and dockage, if any, 
  4.31  of all grain in all cases where appeals from the decisions of 
  4.32  the chief inspector have been taken and for such purpose they 
  4.33  may request fresh samples of such grain to be furnished directly 
  4.34  to the board.  Dockage shall be considered as being of two 
  4.35  classes; first, that having value and second, that having no 
  4.36  value.  At the annual meeting the board shall ascertain and 
  5.1   determine what dockage contained in grain is of value and 
  5.2   publish a list thereof in connection with the publication of the 
  5.3   Minnesota grades.  Any foreign content of the grain shall not be 
  5.4   considered in establishing the grade.  Whenever grain containing 
  5.5   dockage of value is sold to any public local warehouse or mill, 
  5.6   terminal warehouse, or to any flour mill located in St. Paul, 
  5.7   Minneapolis, or Duluth, or any other point within the state, 
  5.8   which is now or may hereafter be designated as a terminal point, 
  5.9   such sale shall not be considered to include such dockage of 
  5.10  value, but such dockage shall be paid for at its market value or 
  5.11  shall be returned to the vendor of said grain at the option of 
  5.12  the vendee.  
  5.13     Sec. 5.  Minnesota Statutes 1998, section 17B.12, is 
  5.14  amended to read: 
  5.15     17B.12 [APPEALS; PROCEDURE.] 
  5.16     Any owner, consignee, or shipper of grain, or any warehouse 
  5.17  operator, who is dissatisfied with the inspection of grain may 
  5.18  appeal to the board of grain standards by filing a notice of 
  5.19  such appeal with the commissioner and paying a fee, to be fixed 
  5.20  by the commissioner, which shall be refunded if the appeal is 
  5.21  sustained.  The commissioner shall forthwith promptly transmit 
  5.22  the notice to said the board of grain standards.  The decision 
  5.23  of said the board, fixing the grade of such the grains shall 
  5.24  be is final.  
  5.25     Sec. 6.  Minnesota Statutes 1999 Supplement, section 
  5.26  17B.15, subdivision 1, is amended to read: 
  5.27     Subdivision 1.  [ADMINISTRATION; APPROPRIATION.] The fees 
  5.28  for inspection and weighing shall be fixed by the commissioner 
  5.29  and be a lien upon the grain.  The commissioner shall set fees 
  5.30  for all inspection and weighing in an amount adequate to pay the 
  5.31  expenses of carrying out and enforcing the purposes of sections 
  5.32  17B.01 to 17B.23, including the portion of general support costs 
  5.33  and statewide indirect costs of the agency attributable to that 
  5.34  function, with a reserve sufficient for up to six months.  The 
  5.35  commissioner shall review the fee schedule twice each year.  Fee 
  5.36  adjustments are not subject to chapter 14.  Payment shall be 
  6.1   required for services rendered.  If the grain is in transit, the 
  6.2   fees shall be paid by the carrier and treated as advance 
  6.3   charges, and, if received for storage, the fees shall be paid by 
  6.4   the warehouse operator, and added to the storage charges. 
  6.5      All fees collected and all fines and penalties for 
  6.6   violation of any provision of this chapter shall be deposited in 
  6.7   the grain inspection and weighing account, which is created in 
  6.8   the agricultural fund for carrying out the purpose of sections 
  6.9   17B.01 to 17B.23.  The money in the account, including interest 
  6.10  earned on the account, is annually appropriated to the 
  6.11  commissioner of agriculture to administer the provisions of 
  6.12  sections 17B.01 to 17B.23.  When money from any other account is 
  6.13  used to administer sections 17B.01 to 17B.23, the commissioner 
  6.14  shall notify the chairs of the agriculture, environment and 
  6.15  natural resources finance, and ways and means committees of the 
  6.16  house of representatives; the agriculture and rural development 
  6.17  and finance committees of the senate; and the finance division 
  6.18  of the environment and natural resources committee of the senate.
  6.19     Sec. 7.  Minnesota Statutes 1998, section 18C.005, is 
  6.20  amended by adding a subdivision to read: 
  6.21     Subd. 7a.  [CUSTOM BLEND FERTILIZER.] "Custom blend 
  6.22  fertilizer" means a fertilizer blended according to the 
  6.23  specifications that are furnished to a distributor by a consumer 
  6.24  prior to blending. 
  6.25     Sec. 8.  Minnesota Statutes 1998, section 18C.005, 
  6.26  subdivision 34, is amended to read: 
  6.27     Subd. 34.  [SPECIALTY FERTILIZER.] "Specialty fertilizer" 
  6.28  means a fertilizer labeled and distributed for, but not limited 
  6.29  to, the following uses:  greenhouses, nurseries, home gardens, 
  6.30  house plants, lawn fertilizer that is not custom applied, 
  6.31  shrubs, golf courses, municipal parks, and cemeteries. 
  6.32     Sec. 9.  Minnesota Statutes 1998, section 18C.215, 
  6.33  subdivision 1, is amended to read: 
  6.34     Subdivision 1.  [PACKAGED FERTILIZERS.] (a) A person may 
  6.35  not sell or distribute specialty fertilizer in bags or other 
  6.36  containers in this state unless a label is placed on or affixed 
  7.1   to the bag or container stating in a clear, legible, and 
  7.2   conspicuous form the following information:  
  7.3      (1) the net weight; 
  7.4      (2) the brand and grade, except the grade is not required 
  7.5   if primary nutrients are not claimed; 
  7.6      (3) the guaranteed analysis; 
  7.7      (4) the name and address of the guarantor; 
  7.8      (5) directions for use, except directions for use are not 
  7.9   required for custom blend specialty fertilizers; and 
  7.10     (6) a derivatives statement.  
  7.11     (b) A person may not sell or distribute fertilizer for 
  7.12  agricultural purposes in bags or other containers in this state 
  7.13  unless a label is placed on or affixed to the bag or container 
  7.14  stating in a clear, legible, and conspicuous form the 
  7.15  information listed in paragraph (a), clauses (1) to (4), except: 
  7.16     (1) the grade is not required if primary nutrients are not 
  7.17  claimed; and 
  7.18     (2) the grade on the label is optional if the fertilizer is 
  7.19  used only for agricultural purposes and the guaranteed analysis 
  7.20  statement is shown in the complete form as in section 18C.211. 
  7.21     (c) The labeled information must appear:  
  7.22     (1) on the front or back side of the container; 
  7.23     (2) on the upper one-third of the side of the container; 
  7.24     (3) on the upper end of the container; or 
  7.25     (4) printed on a tag affixed to the upper end of the 
  7.26  container. 
  7.27     (d) If a person sells a custom blend specialty fertilizer 
  7.28  in bags or other containers, the information required in 
  7.29  paragraph (a) must either be affixed to the bag or container as 
  7.30  required in paragraph (c) or be furnished to the customer on an 
  7.31  invoice or delivery ticket in written or printed form. 
  7.32     Sec. 10.  Minnesota Statutes 1998, section 18C.215, 
  7.33  subdivision 2, is amended to read: 
  7.34     Subd. 2.  [BLENDED, MIXED, BULK, AND CUSTOM APPLIED 
  7.35  FERTILIZER.] (a) A distributor who blends or mixes fertilizer or 
  7.36  distributes fertilizer, for agricultural use, in bulk, must 
  8.1   furnish each purchaser with an invoice or delivery ticket in 
  8.2   written or printed form showing: 
  8.3      (1) the net weight and guaranteed analysis of each of the 
  8.4   materials used in the mixture and the name and address of the 
  8.5   guarantor; or 
  8.6      (2) the net weight and guaranteed analysis of the final 
  8.7   mixture and the name and address of the guarantor. 
  8.8      (b) A person may not custom apply specialty fertilizer in 
  8.9   this state unless a label, invoice, or delivery ticket is given 
  8.10  to each purchaser stating in a clear, legible, and conspicuous 
  8.11  form the following information: 
  8.12     (1) the net weight, which may be listed as the total net 
  8.13  weight applied or the net weight applied per unit treated; 
  8.14     (2) the guaranteed analysis; 
  8.15     (3) the name and address of the guarantor; 
  8.16     (4) the number of units treated in square feet, acres, or 
  8.17  another unit of measure; and 
  8.18     (5) a derivative statement. 
  8.19     (c) Copies of invoices or delivery tickets must be kept for 
  8.20  five years after the sale, delivery, or application.  
  8.21     Sec. 11.  Minnesota Statutes 1998, section 18C.215, is 
  8.22  amended by adding a subdivision to read: 
  8.23     Subd. 2a.  [INFORMATION TO CUSTOMER.] If a person sells a 
  8.24  custom blend specialty fertilizer in bulk, the information 
  8.25  required in subdivision 1, paragraph (a), must be furnished to 
  8.26  the customer on an invoice or delivery ticket in written or 
  8.27  printed form. 
  8.28     Sec. 12.  Minnesota Statutes 1998, section 18C.411, 
  8.29  subdivision 1, is amended to read: 
  8.30     Subdivision 1.  [REGISTRATION REQUIRED.] (a) A person may 
  8.31  not sell brands or grades of specialty fertilizers, soil 
  8.32  amendments, or plant amendments in this state unless they are 
  8.33  registered with the commissioner.  
  8.34     (b) Registration of the materials is not a warranty by the 
  8.35  commissioner or the state.  
  8.36     (c) Specialty fertilizers custom applied are exempt from 
  9.1   the registration requirements of this section. 
  9.2      (d) Custom blend specialty fertilizers are exempt from the 
  9.3   registration requirements of this section if the distributor is 
  9.4   licensed as required by section 18C.415 and the fertilizer is 
  9.5   labeled as required by section 18C.215. 
  9.6      Sec. 13.  Minnesota Statutes 1998, section 18C.421, 
  9.7   subdivision 1, is amended to read: 
  9.8      Subdivision 1.  [SEMIANNUAL STATEMENT.] (a) Each licensed 
  9.9   distributor of fertilizer and each registrant of a specialty 
  9.10  fertilizer, soil amendment, or plant amendment must file a 
  9.11  semiannual statement for the periods ending December 31 and June 
  9.12  30 with the commissioner on forms furnished by the commissioner 
  9.13  stating the number of net tons and grade of each raw fertilizer 
  9.14  material distributed or the number of net tons of each brand or 
  9.15  grade of fertilizer, soil amendment, or plant amendment 
  9.16  distributed in this state during the reporting period. 
  9.17     (b) Tonnage reports are not required to be filed with the 
  9.18  commissioner from licensees who distributed fertilizer solely by 
  9.19  custom application. 
  9.20     (c) A report from a licensee who sells to an ultimate 
  9.21  consumer must be accompanied by records or invoice copies 
  9.22  indicating the name of the distributor who paid the inspection 
  9.23  fee, the net tons received, and the grade or brand name of the 
  9.24  products received.  
  9.25     (c) (d) The report is due on or before the last day of the 
  9.26  month following the close of each reporting period of each 
  9.27  calendar year.  
  9.28     (d) (e) The inspection fee at the rate stated in section 
  9.29  18C.425, subdivision 6, must accompany the statement.  
  9.30     Sec. 14.  Minnesota Statutes 1998, section 18D.201, 
  9.31  subdivision 3, is amended to read: 
  9.32     Subd. 3.  [INSPECTION REQUESTS BY OTHERS.] (a) A person who 
  9.33  believes that a violation of this chapter has occurred may 
  9.34  request an inspection by giving notice to the commissioner of 
  9.35  the violation.  The notice must be in writing, state with 
  9.36  reasonable particularity the grounds for the notice, and be 
 10.1   signed by the person making the request.  If the pesticide 
 10.2   application is alleged to have damaged a crop or vegetation, the 
 10.3   request for inspection must be submitted within 45 days of the 
 10.4   date of the pesticide application. 
 10.5      (b) If after receiving a notice of violation the 
 10.6   commissioner reasonably believes that a violation has occurred, 
 10.7   the commissioner shall make a special inspection in accordance 
 10.8   with the provisions of this section as soon as practicable, to 
 10.9   determine if a violation has occurred.  
 10.10     (c) An inspection conducted pursuant to a notice under this 
 10.11  subdivision may cover an entire site and is not limited to the 
 10.12  portion of the site specified in the notice.  If the 
 10.13  commissioner determines that reasonable grounds to believe that 
 10.14  a violation occurred do not exist, the commissioner must notify 
 10.15  the person making the request in writing of the determination. 
 10.16     Sec. 15.  Minnesota Statutes 1998, section 27.01, 
 10.17  subdivision 8, is amended to read: 
 10.18     Subd. 8.  [WHOLESALE PRODUCE DEALER.] (a) "Wholesale 
 10.19  produce dealer" or "dealer at wholesale" means:  
 10.20     (1) a person who buys from or contracts to buy with a 
 10.21  seller for production or sale of produce in wholesale lots for 
 10.22  resale; 
 10.23     (2) a person engaging in the business of a broker or agent, 
 10.24  who handles or deals in produce for a commission or fee; 
 10.25     (3) a truck owner or operator who buys produce in wholesale 
 10.26  lots for resale; and 
 10.27     (4) a person engaged in the business of a cannery, food 
 10.28  manufacturer, or food processor, who purchases produce in 
 10.29  wholesale lots as a part of that business. 
 10.30     (b) For purposes of paragraph (a), "wholesale lots" means 
 10.31  purchases from Minnesota sellers must total more than $12,000 
 10.32  annually. 
 10.33     (c) "Wholesale produce dealer" or "dealer at wholesale" 
 10.34  does not include:  
 10.35     (1) a truck owner and operator who regularly engages in the 
 10.36  business of transporting freight, including produce, for a 
 11.1   transportation fee only, and who does not purchase, contract to 
 11.2   purchase, or sell produce; 
 11.3      (2) a marketing cooperative association in which 
 11.4   substantially all of the voting stock is held by patrons who 
 11.5   patronize the association and in which at least 75 percent of 
 11.6   the business of the association is transacted with member or 
 11.7   stockholder patrons; 
 11.8      (3) a person who purchases Minnesota seasonally grown 
 11.9   perishable fresh fruits and vegetables, and pays cash, including 
 11.10  lawful money of the United States, a cashier's check, a 
 11.11  certified check, or a bank draft; 
 11.12     (4) a person who handles and deals in only canned, 
 11.13  packaged, or processed produce or packaged dairy products that 
 11.14  are no longer perishable as determined by the commissioner by 
 11.15  rule; or 
 11.16     (5) retail merchants who purchase produce, defined in 
 11.17  subdivision 2, directly from farmers, which in the aggregate 
 11.18  does not exceed $500 per month.  
 11.19     Sec. 16.  Minnesota Statutes 1998, section 27.19, 
 11.20  subdivision 1, is amended to read: 
 11.21     Subdivision 1.  [PROHIBITED ACTS.] (a) A person subject to 
 11.22  the provisions of this section and sections 27.01 to 27.14 may 
 11.23  not:  
 11.24     (1) operate or advertise to operate as a dealer at 
 11.25  wholesale without a license; 
 11.26     (2) make any false statement or report as to the grade, 
 11.27  condition, markings, quality, or quantity of produce, as defined 
 11.28  in section 27.069, received or delivered, or act in any manner 
 11.29  to deceive a consignor or purchaser; 
 11.30     (3) refuse to accept a shipment contracted for by the 
 11.31  person, unless the refusal is based upon the showing of a state 
 11.32  inspection certificate secured with reasonable promptness after 
 11.33  the receipt of the shipment showing that the kind and quality of 
 11.34  produce, as defined in section 27.069, is other than that 
 11.35  purchased or ordered by the person; 
 11.36     (4) fail to account or make a settlement for produce within 
 12.1   the required time; 
 12.2      (5) violate or fail to comply with the terms or conditions 
 12.3   of a contract entered into by the person for the purchase, 
 12.4   production, or sale of produce; 
 12.5      (6) purchase for a person's own account any produce 
 12.6   received on consignment, either directly or indirectly, without 
 12.7   the consent of the consignor; 
 12.8      (7) issue a false or misleading market quotation, or cancel 
 12.9   a quotation during the period advertised by the person; 
 12.10     (8) increase the sales charges on produce shipped to the 
 12.11  person by means of "dummy" or fictitious sales; 
 12.12     (9) receive decorative forest products and the products of 
 12.13  farms and waters from foreign states or countries for sale or 
 12.14  resale, either within or outside of the state, and give the 
 12.15  purchaser the impression, through any method of advertising or 
 12.16  description, that the produce is of Minnesota origin; 
 12.17     (10) fail to notify in writing all suppliers of produce of 
 12.18  the protection afforded to suppliers by the person's licensee 
 12.19  bond, including:  availability of a bond, notice requirements, 
 12.20  and any other conditions of the bond; 
 12.21     (11) make a false statement to the commissioner on an 
 12.22  application for license or bond or in response to written 
 12.23  questions from the commissioner regarding the license or bond; 
 12.24     (12) commit to pay and not pay in full for all produce 
 12.25  committed for.  A processor may not pay an amount less than the 
 12.26  full contract price if the crop produced is satisfactory for 
 12.27  processing and is not harvested for reasons within the 
 12.28  processor's control.  If the processor sets the date for 
 12.29  planting, then bunching, unusual yields, and a processor's 
 12.30  inability or unwillingness to harvest must be considered to be 
 12.31  within the processor's control.  Under this clause growers must 
 12.32  be compensated for passed acreage at the same rate for grade and 
 12.33  yield as they would have received had the crop been harvested in 
 12.34  a timely manner minus any contractual provision for green manure 
 12.35  or feed value.  Both parties are excused from payment or 
 12.36  performance for crop conditions that are beyond the control of 
 13.1   the parties; or 
 13.2      (13) discriminate between different sections, localities, 
 13.3   communities, or cities, or between persons in the same 
 13.4   community, by purchasing produce from farmers of the same grade, 
 13.5   quality, and kind, at different prices, except that price 
 13.6   differentials are allowed if directly related to the costs of 
 13.7   transportation, shipping, and handling of the produce and a 
 13.8   person is allowed to meet the prices of a competitor in good 
 13.9   faith, in the same locality for the same grade, quality, and 
 13.10  kind of produce.  A showing of different prices by the 
 13.11  commissioner is prima facie evidence of discrimination.  
 13.12     (b) A separate violation occurs with respect to each 
 13.13  different person involved, each purchase or transaction 
 13.14  involved, and each false statement. 
 13.15     Sec. 17.  Minnesota Statutes 1998, section 31.101, as 
 13.16  amended by Laws 1999, chapter 231, section 55, is amended to 
 13.17  read: 
 13.18     31.101 [RULES; HEARINGS; UNIFORMITY WITH FEDERAL LAW.] 
 13.19     Subdivision 1.  [AUTHORITY.] The authority to commissioner 
 13.20  may promulgate and amend rules for the efficient administration 
 13.21  and enforcement of the Minnesota Food Law is vested in the 
 13.22  commissioner and is in addition to authority granted in sections 
 13.23  31.10, 31.11, and 31.12.  Such The rules when applicable shall 
 13.24  must conform, insofar as practicable and consistent with state 
 13.25  law, with those promulgated under the federal law.  This 
 13.26  rulemaking authority is in addition to that in sections 31.10, 
 13.27  31.11, and 31.12.  Rules adopted under this section may be 
 13.28  amended by the commissioner under chapter 14, subject to the 
 13.29  limitation in subdivision 7.  
 13.30     Subd. 2.  [HEARINGS.] Hearings authorized or required by 
 13.31  law shall must be conducted by the commissioner or such an 
 13.32  officer, agent, or employee as the commissioner may designate 
 13.33  designates for the purpose.  
 13.34     Subd. 3.  [FEDERAL PESTICIDE CHEMICAL REGULATIONS RULES.] 
 13.35  Federal pesticide chemical regulations and amendments thereto in 
 13.36  effect on April 1, 1997 2000, adopted under authority of the 
 14.1   Federal Insecticide, Fungicide and Rodenticide Act, as provided 
 14.2   by United States Code, title 7, chapter 6, are the pesticide 
 14.3   chemical rules in this state.  Such rules may be amended by the 
 14.4   commissioner proceeding in accordance with the Administrative 
 14.5   Procedure Act.  
 14.6      Subd. 4.  [FEDERAL FOOD ADDITIVE REGULATIONS RULES.] 
 14.7   Federal food additive regulations and amendments thereto in 
 14.8   effect on April 1, 1997 2000, as provided by Code of Federal 
 14.9   Regulations, title 21, parts 170 to 199, are the food additive 
 14.10  rules in this state.  Such rules may be amended by the 
 14.11  commissioner proceeding in accordance with the Administrative 
 14.12  Procedure Act.  
 14.13     Subd. 5.  [FEDERAL COLOR ADDITIVE REGULATIONS RULES.] 
 14.14  Federal color additive regulations and amendments thereto in 
 14.15  effect on April 1, 1997 2000, as provided by Code of Federal 
 14.16  Regulations, title 21, parts 70 to 82, are the color additive 
 14.17  rules in this state.  Such rules may be amended by the 
 14.18  commissioner proceeding in accordance with the Administrative 
 14.19  Procedure Act.  
 14.20     Subd. 6.  [FEDERAL SPECIAL DIETARY USE REGULATIONS RULES.] 
 14.21  Federal special dietary use regulations and amendments thereto 
 14.22  in effect on April 1, 1997 2000, as provided by Code of Federal 
 14.23  Regulations, title 21, parts 104 and 105, are the special 
 14.24  dietary use rules in this state.  Such rules may be amended by 
 14.25  the commissioner proceeding in accordance with the 
 14.26  Administrative Procedure Act.  
 14.27     Subd. 7.  [FAIR PACKAGING AND LABELING ACT REGULATIONS 
 14.28  RULES.] Federal regulations and amendments thereto in effect on 
 14.29  April 1, 1997 2000, adopted under the Fair Packaging and 
 14.30  Labeling Act, as provided by United States Code, title 15, 
 14.31  sections 1451 to 1461, are the rules in this state.  Such rules 
 14.32  may be amended by the commissioner proceeding in accordance with 
 14.33  the Administrative Procedure Act; provided that The commissioner 
 14.34  shall may not adopt amendments to such these rules or adopt 
 14.35  other rules which are contrary to the labeling requirements for 
 14.36  the net quantity of contents required pursuant to section 4 of 
 15.1   the Fair Packaging and Labeling Act and the 
 15.2   regulations promulgated thereunder adopted under that act.  
 15.3      Subd. 8.  [FOOD AND DRUGS REGULATIONS RULES.] Applicable 
 15.4   federal regulations including recodification contained in Code 
 15.5   of Federal Regulations, title 21, parts 0-1299, Food and Drugs, 
 15.6   in effect April 1, 1997 2000, and not otherwise adopted herein, 
 15.7   also are adopted as food rules of this state.  Such rules may be 
 15.8   amended by the commissioner in accordance with the 
 15.9   Administrative Procedure Act. 
 15.10     Subd. 9.  [FISHERY PRODUCTS RULES.] Federal regulations in 
 15.11  effect on April 1, 1997 2000, as provided by Code of Federal 
 15.12  Regulations, title 50, parts 260 to 267, are incorporated as 
 15.13  part of the fishery products rules in this state for state 
 15.14  inspections performed under a cooperative agreement with the 
 15.15  United States Department of Commerce, National Marine Fisheries 
 15.16  Service.  The rules may be amended by the commissioner under 
 15.17  chapter 14. 
 15.18     Subd. 10.  [MEAT AND POULTRY RULES.] Federal regulations in 
 15.19  effect on January April 1, 1999 2000, as provided by Code of 
 15.20  Federal Regulations, title 9, part 301, et seq., are 
 15.21  incorporated as part of the meat and poultry rules in this 
 15.22  state.  The rules may be amended by the commissioner under 
 15.23  chapter 14. 
 15.24     Subd. 11.  [STANDARDS FOR FRESH FRUITS, VEGETABLES, AND 
 15.25  OTHER PRODUCTS.] Federal regulations in effect on April 1, 
 15.26  1997 2000, as provided by Code of Federal Regulations, title 7, 
 15.27  parts 51 and 52, are incorporated as part of the rules in this 
 15.28  state.  The rules may be amended by the commissioner under 
 15.29  chapter 14. 
 15.30     Sec. 18.  Minnesota Statutes 1998, section 31.102, 
 15.31  subdivision 1, is amended to read: 
 15.32     Subdivision 1.  [IDENTITY, QUANTITY, AND FILL OF CONTAINER 
 15.33  RULES.] Federal definitions and standards of identity, quality, 
 15.34  and fill of container and amendments thereto, in effect on April 
 15.35  1, 1997 2000, adopted under authority of the federal act, are 
 15.36  the definitions and standards of identity, quality, and fill of 
 16.1   container in this state.  Such The rules may be amended by the 
 16.2   commissioner proceeding in accordance with the Administrative 
 16.3   Procedure Act under chapter 14.  
 16.4      Sec. 19.  Minnesota Statutes 1998, section 31.103, 
 16.5   subdivision 1, is amended to read: 
 16.6      Subdivision 1.  [CONSUMER COMMODITIES LABELING RULES.] All 
 16.7   labels of consumer commodities shall must conform with the 
 16.8   requirements for the declaration of net quantity of contents of 
 16.9   section 4 of the Fair Packaging and Labeling Act (United States 
 16.10  Code, title 15, section 1451 et seq.) and federal regulations in 
 16.11  effect on April 1, 1997 2000, promulgated pursuant 
 16.12  thereto adopted under authority of that act, except to the 
 16.13  extent that the commissioner shall exercise authority to amend 
 16.14  such amends the rules in accordance with the Administrative 
 16.15  Procedure Act under chapter 14.  Consumer commodities exempted 
 16.16  from the requirements of section 4 of the Fair Packaging and 
 16.17  Labeling Act shall are also be exempt from this subdivision.  
 16.18     Sec. 20.  Minnesota Statutes 1998, section 31.104, is 
 16.19  amended to read: 
 16.20     31.104 [FOOD LABELING EXEMPTION RULES.] 
 16.21     The commissioner shall promulgate rules exempting from any 
 16.22  labeling requirement food which is, in accordance with the 
 16.23  practice of the trade, to be processed, labeled or repacked in 
 16.24  substantial quantities at establishments other than those where 
 16.25  originally processed or packed, on condition that such food is 
 16.26  not adulterated or misbranded upon removal from such processing, 
 16.27  labeling or repacking establishment.  
 16.28     Federal regulations in effect on April 1, 1997 2000, 
 16.29  adopted under authority of the federal act relating to such 
 16.30  exemptions are effective in this state unless the commissioner 
 16.31  shall exercise authority to amend such regulations amends them.  
 16.32  The commissioner also may promulgate amendments to amend 
 16.33  existing rules concerning exemptions in accordance with the 
 16.34  Administrative Procedure Act under chapter 14. 
 16.35     Sec. 21.  Minnesota Statutes 1998, section 31.632, is 
 16.36  amended to read: 
 17.1      31.632 [MINNESOTA APPROVED MEATS; USE OF LABEL.] 
 17.2      The commissioner may authorize, pursuant to rules 
 17.3   promulgated in the manner provided by law, the use of the label 
 17.4   "Minnesota Approved" on meats and, meat products, poultry, and 
 17.5   poultry products processed by persons licensed under sections 
 17.6   31.51 to 31.58, or by establishments under the inspection 
 17.7   program of the United States Department of Agriculture, if the 
 17.8   ingredients of such the poultry, poultry products, meats, and 
 17.9   meat products are meat, meat by-products, poultry, poultry 
 17.10  products, or meat food products which have been inspected and 
 17.11  passed by the United States Department of Agriculture, or the 
 17.12  Minnesota department of agriculture and further if such the 
 17.13  poultry, poultry products, meats, and meat products, after such 
 17.14  processing, are sound, healthful, wholesome, and fit for human 
 17.15  food.  A person or establishment desiring to label poultry, 
 17.16  poultry products, meats, and meat products as provided in this 
 17.17  section shall apply to the commissioner for authority to do so.  
 17.18  The commissioner shall grant this authority to the applicant if 
 17.19  the applicant complies with the provisions of this section and 
 17.20  rules promulgated pursuant to this section.  A person using the 
 17.21  label "Minnesota Approved" on poultry, poultry products, meat 
 17.22  and, or meat products contrary to law is guilty of a misdemeanor.
 17.23     Sec. 22.  Minnesota Statutes 1998, section 31.633, 
 17.24  subdivision 1, is amended to read: 
 17.25     Subdivision 1.  [MENU REQUIREMENT.] Any restaurant, eating 
 17.26  place, or other establishment serving meat or poultry in any 
 17.27  form to the public, which meat that has any filler or meat or 
 17.28  poultry substitute added to it or incorporated in it, shall 
 17.29  clearly and prominently indicate on its menu or bill of fare the 
 17.30  meat entrees that contain filler or meat or poultry substitutes. 
 17.31     Sec. 23.  Minnesota Statutes 1998, section 31.651, is 
 17.32  amended to read: 
 17.33     31.651 [KOSHER PRODUCTS, UNLAWFUL SALE.] 
 17.34     Subdivision 1.  [KOSHER REQUIREMENTS.] No person shall sell 
 17.35  or expose for sale any poultry, poultry products, meat, or meat 
 17.36  preparations and falsely represent the same to be kosher, 
 18.1   whether such poultry, poultry products, meat, or meat 
 18.2   preparations be raw or prepared for human consumption; nor shall 
 18.3   the person permit any such products or the contents of any 
 18.4   package or container to be labeled or to have inscribed thereon 
 18.5   the word "kosher" in any language unless such products shall 
 18.6   have been prepared or processed in accordance with orthodox 
 18.7   Hebrew religious requirements sanctioned by a recognized 
 18.8   rabbinical council.  
 18.9      Subd. 2.  [NOTICE REQUIRED.] Any person who sells or 
 18.10  exposes for sale in the same place of business both kosher and 
 18.11  nonkosher poultry, meat, or meat preparations, either raw or 
 18.12  prepared for human consumption, shall indicate on window signs 
 18.13  and all display advertising, in block letters at least four 
 18.14  inches in height, "kosher and nonkosher meat and poultry sold 
 18.15  here"; and shall display over each kind of poultry, meat, or 
 18.16  meat preparation so exposed a sign, in block letters at least 
 18.17  two inches in height, reading, "kosher meat," or "kosher 
 18.18  poultry," "nonkosher meat," or "nonkosher poultry," as the case 
 18.19  may be; provided that subdivision 2 shall not apply to persons 
 18.20  selling or offering for sale kosher poultry, poultry products, 
 18.21  meats, or meat products solely in separate consumer packages, 
 18.22  which have been prepackaged and properly labeled "kosher."  
 18.23     Subd. 3.  [PRESUMPTION.] Possession of nonkosher poultry, 
 18.24  poultry products, meat, or meat preparations in any place of 
 18.25  business shall be presumptive evidence that the person in 
 18.26  possession thereof exposes the same for sale.  
 18.27     Subd. 4.  [PRIMA FACIE EVIDENCE.] The absence of a duly 
 18.28  sanctioned kosher "plumba," mark, stamp, tag, brand, or label 
 18.29  from any poultry, poultry products, meat, meat preparation, or 
 18.30  food product shall be prima facie evidence that such product is 
 18.31  nonkosher.  
 18.32     Sec. 24.  Minnesota Statutes 1999 Supplement, section 
 18.33  31A.01, is amended to read: 
 18.34     31A.01 [POLICY.] 
 18.35     Meat, poultry, poultry food products, and meat food 
 18.36  products are an important source of the nation's total supply of 
 19.1   food.  It is essential in the public interest that the health 
 19.2   and welfare of consumers be protected by assuring that meat, 
 19.3   poultry, and meat food products distributed to them are 
 19.4   wholesome, unadulterated, and properly marked, labeled, and 
 19.5   packaged.  Unwholesome, adulterated, or misbranded meat, 
 19.6   poultry, poultry food products, or meat food products injure the 
 19.7   public welfare, destroy markets for wholesome, unadulterated, 
 19.8   and properly labeled and packaged meat, poultry, poultry food 
 19.9   products, and meat food products, and result in losses to 
 19.10  livestock producers and processors of meat, poultry, poultry 
 19.11  food products, and meat food products and injury to consumers.  
 19.12  Unwholesome, adulterated, mislabeled, or deceptively packaged 
 19.13  articles can be sold at lower prices and compete unfairly with 
 19.14  wholesome, unadulterated, and properly labeled and packaged 
 19.15  articles, to the detriment of consumers and the general public.  
 19.16     Regulation by the commissioner and cooperation between this 
 19.17  state and the United States under this chapter are appropriate 
 19.18  to protect the health and welfare of consumers and accomplish 
 19.19  the purposes of this chapter.  
 19.20     Sec. 25.  Minnesota Statutes 1998, section 31A.02, 
 19.21  subdivision 5, is amended to read: 
 19.22     Subd. 5.  [CUSTOM PROCESSING.] "Custom processing" means 
 19.23  slaughtering, eviscerating, dressing, or processing an animal or 
 19.24  processing meat products or poultry products for the owner of 
 19.25  the animal or of the meat products and poultry products, if all 
 19.26  meat products or poultry products derived from the custom 
 19.27  operation are returned to the owner of the animal or of the meat 
 19.28  products or poultry products.  No person may sell, offer for 
 19.29  sale, or possess with intent to sell meat derived from custom 
 19.30  processing. 
 19.31     Sec. 26.  Minnesota Statutes 1998, section 31A.02, 
 19.32  subdivision 6, is amended to read: 
 19.33     Subd. 6.  [MEAT BROKER.] "Meat broker" means a person in 
 19.34  the business of buying or selling carcasses, parts of carcasses, 
 19.35  meat, or meat food products, poultry, or poultry products of 
 19.36  animals on commission, or otherwise negotiating purchases or 
 20.1   sales of those articles other than for the person's own account 
 20.2   or as an employee of another person, firm, or corporation.  
 20.3      Sec. 27.  Minnesota Statutes 1998, section 31A.02, 
 20.4   subdivision 10, is amended to read: 
 20.5      Subd. 10.  [MEAT FOOD PRODUCT; POULTRY FOOD PRODUCT.] "Meat 
 20.6   food product" or "poultry food product" means a product usable 
 20.7   as human food and made wholly or in part from meat or poultry or 
 20.8   a portion of the carcass of cattle, sheep, swine, poultry, 
 20.9   farmed cervidae, as defined in section 17.451, subdivision 2, 
 20.10  llamas, as defined in section 17.455, subdivision 2, ratitae, as 
 20.11  defined in section 17.453, subdivision 3, or goats.  "Meat food 
 20.12  product" or "poultry food product" does not include products 
 20.13  which contain meat, poultry, or other portions of the carcasses 
 20.14  of cattle, sheep, swine, farmed cervidae, llamas, ratitae, or 
 20.15  goats only in a relatively small proportion or that historically 
 20.16  have not been considered by consumers as products of the meat 
 20.17  food industry, and which are exempted from definition as a meat 
 20.18  food product or poultry food product by the commissioner under 
 20.19  the conditions the commissioner prescribes to assure that the 
 20.20  meat or other portions of carcasses contained in the products 
 20.21  are not adulterated and that the products are not represented as 
 20.22  meat food products or poultry food products.  
 20.23     "Meat food product," as applied to products of equines, has 
 20.24  a meaning comparable to that for cattle, sheep, swine, farmed 
 20.25  cervidae, llamas, ratitae, and goats. 
 20.26     Sec. 28.  Minnesota Statutes 1998, section 31A.02, 
 20.27  subdivision 13, is amended to read: 
 20.28     Subd. 13.  [ADULTERATED.] "Adulterated" means a carcass, 
 20.29  part of a carcass, meat, poultry, poultry food product, or meat 
 20.30  food product under one or more of the following circumstances: 
 20.31     (a) if it bears or contains a poisonous or harmful 
 20.32  substance which may render it injurious to health; but if the 
 20.33  substance is not an added substance, the article is not 
 20.34  adulterated if the quantity of the substance in or on the 
 20.35  article does not ordinarily make it injurious to health; 
 20.36     (b) if it bears or contains, by administration of a 
 21.1   substance to the live animal or otherwise, an added poisonous or 
 21.2   harmful substance, other than (1) a pesticide chemical in or on 
 21.3   a raw agricultural commodity; (2) a food additive; or (3) a 
 21.4   color additive, which may, in the judgment of the commissioner, 
 21.5   make the article unfit for human food; 
 21.6      (c) if it is, in whole or in part, a raw agricultural 
 21.7   commodity that bears or contains a pesticide chemical which is 
 21.8   unsafe within the meaning of section 408 of the Federal Food, 
 21.9   Drug, and Cosmetic Act; 
 21.10     (d) if it bears or contains a food additive which is unsafe 
 21.11  within the meaning of section 409 of the Federal Food, Drug, and 
 21.12  Cosmetic Act; 
 21.13     (e) if it bears or contains a color additive which is 
 21.14  unsafe within the meaning of section 706 of the Federal Food, 
 21.15  Drug, and Cosmetic Act; 
 21.16     (f) if it contains a filthy, putrid, or decomposed 
 21.17  substance or is for any other reason unfit for human food; 
 21.18     (g) if it has been prepared, packed, or held under 
 21.19  unsanitary conditions so that it may be contaminated with filth 
 21.20  or harmful to health; 
 21.21     (h) if it is wholly or partly the product of an animal 
 21.22  which has died otherwise than by slaughter; 
 21.23     (i) if its container is wholly or partly composed of a 
 21.24  poisonous or harmful substance which may make the contents 
 21.25  harmful to health; 
 21.26     (j) if it has been intentionally subjected to radiation, 
 21.27  unless the use of the radiation conformed with a regulation or 
 21.28  exemption in effect under section 409 of the Federal Food, Drug, 
 21.29  and Cosmetic Act; 
 21.30     (k) if a valuable constituent has been wholly or partly 
 21.31  omitted or removed from it; if a substance has been wholly or 
 21.32  partly substituted for it; if damage or inferiority has been 
 21.33  concealed; or if a substance has been added to it or mixed or 
 21.34  packed with it so as to increase its bulk or weight, reduce its 
 21.35  quality or strength, or make it appear better or of greater 
 21.36  value than it is; or 
 22.1      (l) if it is margarine containing animal fat and any of the 
 22.2   raw material used in it wholly or partly consisted of a filthy, 
 22.3   putrid, or decomposed substance.  
 22.4      Sec. 29.  Minnesota Statutes 1998, section 31A.02, 
 22.5   subdivision 14, is amended to read: 
 22.6      Subd. 14.  [MISBRANDED.] "Misbranded" means a carcass, part 
 22.7   of a carcass, meat, poultry, poultry food product, or meat food 
 22.8   product under one or more of the following circumstances: 
 22.9      (a) if its labeling is false or misleading; 
 22.10     (b) if it is offered for sale under the name of another 
 22.11  food; 
 22.12     (c) if it is an imitation of another food, unless its label 
 22.13  bears, in type of uniform size and prominence, the word 
 22.14  "imitation" followed immediately by the name of the food 
 22.15  imitated; 
 22.16     (d) if its container is made, formed, or filled so as to be 
 22.17  misleading; 
 22.18     (e) if its package or other container does not have a label 
 22.19  showing (1) the name and place of business of the manufacturer, 
 22.20  packer, or distributor; and (2) an accurate statement of the 
 22.21  quantity of the contents in terms of weight, measure, or 
 22.22  numerical count subject to reasonable variations permitted and 
 22.23  exemptions for small packages established in rules of the 
 22.24  commissioner; 
 22.25     (f) if a word, statement, or other information required by 
 22.26  or under authority of this chapter to appear on the label or 
 22.27  other labeling is not prominently and conspicuously placed on 
 22.28  the label or labeling in terms that make it likely to be read 
 22.29  and understood by the ordinary individual under customary 
 22.30  conditions of purchase and use; 
 22.31     (g) if it is represented as a food for which a definition 
 22.32  and standard of identity or composition has been prescribed by 
 22.33  rules of the commissioner under section 31A.07, unless (1) it 
 22.34  conforms to the definition and standard, and (2) its label bears 
 22.35  the name of the food specified in the definition and standard 
 22.36  and, if required by the rules, the common names of optional 
 23.1   ingredients, other than spices, flavoring, and coloring, present 
 23.2   in the food; 
 23.3      (h) if it is represented as a food for which a standard of 
 23.4   fill of container has been prescribed by rules of the 
 23.5   commissioner under section 31A.07, and it falls below the 
 23.6   applicable standard of fill of container, unless its label 
 23.7   bears, in the manner and form the rules specify, a statement 
 23.8   that it falls below the standard; 
 23.9      (i) if it is not subject to paragraph (g), unless its label 
 23.10  bears (1) the usual name of the food, if there is one, and (2) 
 23.11  in case it is fabricated from two or more ingredients, the 
 23.12  common or usual name of each ingredient; except that spices, 
 23.13  flavorings, and colorings may, when authorized by the 
 23.14  commissioner, be designated as spices, flavorings, and colorings 
 23.15  without naming each.  To the extent that compliance with clause 
 23.16  (2) is impracticable, or results in deception or unfair 
 23.17  competition, the commissioner shall establish exemptions by 
 23.18  rule; 
 23.19     (j) if it purports to be or is represented for special 
 23.20  dietary uses, unless its label bears the information concerning 
 23.21  its vitamin, mineral, and other dietary properties that the 
 23.22  commissioner, after consultation with the Secretary of 
 23.23  Agriculture of the United States, determines by rule to be 
 23.24  necessary to inform purchasers of its value for special dietary 
 23.25  uses; 
 23.26     (k) if it bears or contains any artificial flavoring, 
 23.27  artificial coloring, or chemical preservative, unless it bears 
 23.28  labeling stating that fact; 
 23.29     (l) if it fails to bear, directly or on its container, as 
 23.30  the commissioner by rule prescribes, the inspection legend and 
 23.31  other information the commissioner may require by rule to assure 
 23.32  that it will not have false or misleading labeling and that the 
 23.33  public will be told how to keep the article wholesome.  
 23.34     Sec. 30.  Minnesota Statutes 1998, section 31A.03, is 
 23.35  amended to read: 
 23.36     31A.03 [INSPECTION OF LIVE ANIMALS; DISPOSITION OF 
 24.1   DEFECTIVE ANIMALS.] 
 24.2      To prevent the use in intrastate commerce of adulterated 
 24.3   meat and, meat food products, poultry, and poultry food 
 24.4   products, the commissioner shall appoint inspectors and have 
 24.5   them examine and inspect all animals before the animals enter a 
 24.6   slaughtering, packing, meat canning, rendering, or similar 
 24.7   establishment in this state in which slaughtering of animals and 
 24.8   preparation of meat and, meat food products, poultry, and 
 24.9   poultry food products are conducted solely for intrastate 
 24.10  commerce.  Animals found on inspection to show symptoms of 
 24.11  disease must be set apart and slaughtered separately from other 
 24.12  animals.  The carcasses of those animals must be carefully 
 24.13  examined and inspected under rules of the commissioner.  
 24.14     Sec. 31.  Minnesota Statutes 1998, section 31A.05, is 
 24.15  amended to read: 
 24.16     31A.05 [APPLICATION OF INSPECTION PROVISIONS.] 
 24.17     Sections 31A.03 and 31A.04 apply to carcasses or parts of 
 24.18  animals, poultry, or poultry food products, and meat or meat 
 24.19  products derived from them that are usable as human food, when 
 24.20  these items are brought into a slaughtering, meat canning, 
 24.21  salting, packing, rendering, or similar establishment, where 
 24.22  inspection under sections 31A.01 to 31A.16 is done.  Examination 
 24.23  and inspection must be made before the carcasses or animal parts 
 24.24  may enter into a department where they are to be treated and 
 24.25  prepared for meat food products or poultry food products. 
 24.26     Sections 31A.03 and 31A.04 also apply to products which, 
 24.27  after having been issued from a slaughtering, meat canning, 
 24.28  salting, packing, rendering, or similar establishment, must be 
 24.29  returned to it or to a similar establishment where inspection is 
 24.30  done. 
 24.31     The commissioner may limit the entry of carcasses, parts of 
 24.32  carcasses, poultry, poultry food products, meat and, meat food 
 24.33  products, and other materials into an establishment where 
 24.34  inspection under sections 31A.01 to 31A.16 is done to conditions 
 24.35  the commissioner prescribes to assure that allowing the entry of 
 24.36  articles into inspected establishments is consistent with the 
 25.1   purposes of this chapter.  
 25.2      Sec. 32.  Minnesota Statutes 1998, section 31A.06, is 
 25.3   amended to read: 
 25.4      31A.06 [INSPECTORS' DUTIES.] 
 25.5      The commissioner shall appoint inspectors to examine and 
 25.6   inspect poultry food products and meat food products prepared in 
 25.7   a slaughtering, meat canning, salting, packing, rendering, or 
 25.8   similar establishment, where the articles are prepared solely 
 25.9   for intrastate commerce.  For examination and inspection 
 25.10  purposes, the inspectors must be given access at all times, 
 25.11  whether the establishment is operated or not, to every part of 
 25.12  the establishment.  The inspectors shall mark, stamp, tag, or 
 25.13  label as "Minnesota Inspected and Passed" all products found to 
 25.14  be unadulterated, and the inspectors shall label, mark, stamp, 
 25.15  or tag as "Minnesota Inspected and Condemned" all products found 
 25.16  to be adulterated.  Condemned meat food products or poultry food 
 25.17  products must be destroyed for food purposes under section 
 25.18  31A.04.  The commissioner may remove inspectors from an 
 25.19  establishment which fails to destroy condemned poultry food 
 25.20  products or meat food products.  
 25.21     Sec. 33.  Minnesota Statutes 1998, section 31A.07, 
 25.22  subdivision 1, is amended to read: 
 25.23     Subdivision 1.  [LABELING; PACKING.] When poultry, poultry 
 25.24  food products, meat, or a meat food product products prepared 
 25.25  for intrastate commerce which has have been inspected and marked 
 25.26  "Minnesota Inspected and Passed" is placed or packed in a can, 
 25.27  pot, tin, canvas, or other receptacle or covering in an 
 25.28  establishment where inspection is done under sections 31A.01 to 
 25.29  31A.31, the person, firm, or corporation preparing the product 
 25.30  shall have a label attached to the can, pot, tin, canvas, or 
 25.31  other receptacle or covering, under supervision of an 
 25.32  inspector.  The label must state that the contents have been 
 25.33  "Minnesota Inspected and Passed" under sections 31A.01 to 
 25.34  31A.31.  An inspection or examination of poultry, poultry food 
 25.35  products, meat, or meat food products deposited or enclosed in 
 25.36  cans, tins, pots, canvas, or other receptacles or coverings in 
 26.1   an establishment where inspection is done under this chapter is 
 26.2   not complete until the poultry, poultry food products, meat, or 
 26.3   meat food products have been sealed or enclosed in the can, tin, 
 26.4   pot, canvas, or other receptacle or covering under the 
 26.5   supervision of an inspector.  
 26.6      Sec. 34.  Minnesota Statutes 1998, section 31A.07, 
 26.7   subdivision 2, is amended to read: 
 26.8      Subd. 2.  [LABELS; MARKS.] All carcasses, parts of 
 26.9   carcasses, poultry, poultry food products, meat, and meat food 
 26.10  products inspected at an establishment under this chapter and 
 26.11  found not to be adulterated, must when they leave the 
 26.12  establishment bear, directly or on their containers, legible 
 26.13  labels or official marks as required by the commissioner.  
 26.14     Sec. 35.  Minnesota Statutes 1998, section 31A.08, is 
 26.15  amended to read: 
 26.16     31A.08 [RULES.] 
 26.17     The commissioner shall have experts in sanitation or other 
 26.18  competent inspectors inspect all slaughtering, meat canning, 
 26.19  salting, packing, rendering, or similar establishments in which 
 26.20  animals are slaughtered and their poultry, poultry food 
 26.21  products, meat, and meat food products are prepared solely for 
 26.22  intrastate commerce.  The inspections must be conducted as 
 26.23  necessary for the commissioner to know the sanitary conditions 
 26.24  of the establishments, and to prescribe the rules of sanitation 
 26.25  under which the establishments must be maintained.  If an 
 26.26  establishment has sanitary conditions that allow poultry, 
 26.27  poultry food products, meat, or meat food products to become 
 26.28  adulterated, the commissioner shall refuse to allow the poultry, 
 26.29  poultry food products, meat, or meat food products to be 
 26.30  labeled, marked, stamped, or tagged as "Minnesota Inspected and 
 26.31  Passed."  
 26.32     Sec. 36.  Minnesota Statutes 1998, section 31A.10, is 
 26.33  amended to read: 
 26.34     31A.10 [PROHIBITIONS.] 
 26.35     No person may, with respect to an animal, carcass, part of 
 26.36  a carcass, poultry, poultry food product, meat, or meat food 
 27.1   product: 
 27.2      (1) slaughter an animal or prepare an article that is 
 27.3   usable as human food, at any establishment preparing articles 
 27.4   solely for intrastate commerce, except in compliance with this 
 27.5   chapter; 
 27.6      (2) sell, transport, offer for sale or transportation, or 
 27.7   receive for transportation, in intrastate commerce (i) articles 
 27.8   which are usable as human food and are adulterated or misbranded 
 27.9   at the time of sale, transportation, offer for sale or 
 27.10  transportation, or receipt for transportation; or (ii) articles 
 27.11  required to be inspected under sections 31A.01 to 31A.16 that 
 27.12  have not been inspected and passed; 
 27.13     (3) do something to an article that is usable as human food 
 27.14  while the article is being transported in intrastate commerce or 
 27.15  held for sale after transportation, which is intended to cause 
 27.16  or has the effect of causing the article to be adulterated or 
 27.17  misbranded; or 
 27.18     (4) sell, offer for sale, or possess with intent to sell 
 27.19  meat derived from custom processing.  
 27.20     Sec. 37.  Minnesota Statutes 1998, section 31A.13, is 
 27.21  amended to read: 
 27.22     31A.13 [INSPECTORS.] 
 27.23     The commissioner shall appoint inspectors to inspect 
 27.24  animals, whole or parts of carcasses, poultry, poultry food 
 27.25  products, meat, and meat food products the inspection of which 
 27.26  is provided for by law, and the sanitary conditions of all 
 27.27  establishments in which the poultry, poultry food products, 
 27.28  meat, and meat food products are prepared.  Inspectors shall 
 27.29  refuse to stamp, mark, tag, or label a whole or part of a 
 27.30  carcass or a meat food product derived from it, prepared in an 
 27.31  establishment covered by sections 31A.01 to 31A.12, until it has 
 27.32  actually been inspected and found to be not adulterated.  
 27.33  Inspectors shall perform other duties required by this chapter 
 27.34  or by rules adopted by the commissioner that are necessary for 
 27.35  the efficient execution of this chapter.  Inspections under this 
 27.36  chapter must conform to the rules adopted by the commissioner 
 28.1   consistent with this chapter.  
 28.2      Sec. 38.  Minnesota Statutes 1999 Supplement, section 
 28.3   31A.15, subdivision 1, is amended to read: 
 28.4      Subdivision 1.  [INSPECTION.] The provisions of sections 
 28.5   31A.01 to 31A.16 requiring inspection of the slaughter of 
 28.6   animals and the preparation of the carcasses, parts of 
 28.7   carcasses, meat, poultry, poultry food products, and meat food 
 28.8   products at establishments conducting slaughter and preparation 
 28.9   do not apply: 
 28.10     (1) to the processing by a person of the person's own 
 28.11  animals and the owner's preparation and transportation in 
 28.12  intrastate commerce of the carcasses, parts of carcasses, meat, 
 28.13  poultry, poultry food products, and meat food products of those 
 28.14  animals exclusively for use by the owner and members of the 
 28.15  owner's household, nonpaying guests, and employees; or 
 28.16     (2) to the custom processing by a person of cattle, sheep, 
 28.17  swine, poultry, or goats delivered by the owner for processing, 
 28.18  and the preparation or transportation in intrastate commerce of 
 28.19  the carcasses, parts of carcasses, meat, poultry, poultry food 
 28.20  products, and meat food products of animals, exclusively for use 
 28.21  in the household of the owner by the owner and members of the 
 28.22  owner's household, nonpaying guests, and employees.  Meat from 
 28.23  custom processing of cattle, sheep, swine, poultry, or goats 
 28.24  must be identified and handled as required by the commissioner, 
 28.25  during all phases of processing, chilling, cooling, freezing, 
 28.26  preparation, storage, and transportation.  The custom processor 
 28.27  may not engage in the business of buying or selling carcasses, 
 28.28  parts of carcasses, meat, poultry, poultry food products, or 
 28.29  meat food products of animals usable as human food unless the 
 28.30  carcasses, parts of carcasses, meat, poultry, poultry food 
 28.31  products, or meat food products have been inspected and passed 
 28.32  and are identified as inspected and passed by the Minnesota 
 28.33  department of agriculture or the United States Department of 
 28.34  Agriculture.  
 28.35     Sec. 39.  Minnesota Statutes 1998, section 31A.16, is 
 28.36  amended to read: 
 29.1      31A.16 [STORING AND HANDLING CONDITIONS.] 
 29.2      The commissioner may adopt rules prescribing conditions 
 29.3   under which carcasses, parts of carcasses, poultry, poultry food 
 29.4   products, meat, and meat food products of animals usable as 
 29.5   human food must be stored or otherwise handled by a person in 
 29.6   the business of buying, selling, freezing, storing, or 
 29.7   transporting them, in or for intrastate commerce, if the 
 29.8   commissioner considers action necessary to assure that the 
 29.9   articles will not be adulterated or misbranded when delivered to 
 29.10  the consumer.  
 29.11     Sec. 40.  Minnesota Statutes 1998, section 31A.17, is 
 29.12  amended to read: 
 29.13     31A.17 [ARTICLES NOT INTENDED AS HUMAN FOOD.] 
 29.14     Inspection must not be provided under sections 31A.01 to 
 29.15  31A.16 at an establishment for the slaughter of animals or the 
 29.16  preparation of carcasses or parts or products of animals which 
 29.17  are not intended for use as human food.  Before they are offered 
 29.18  for sale or transportation in intrastate commerce, those 
 29.19  articles must be denatured or otherwise identified as prescribed 
 29.20  by rules of the commissioner to deter their use for human food, 
 29.21  unless they are naturally inedible by humans.  No person may 
 29.22  buy, sell, transport, offer for sale or transportation, or 
 29.23  receive for transportation, in intrastate commerce, carcasses, 
 29.24  parts of carcasses, poultry, poultry food products, meat, or 
 29.25  meat food products of animals which are not intended for use as 
 29.26  human food unless they are denatured or otherwise identified as 
 29.27  required by the rules of the commissioner or are naturally 
 29.28  inedible by humans. 
 29.29     Sec. 41.  Minnesota Statutes 1999 Supplement, section 
 29.30  31B.07, subdivision 3, is amended to read: 
 29.31     Subd. 3.  [EXPIRATION.] The reporting provisions of this 
 29.32  section expire 30 days after a department or agency of the 
 29.33  federal government has a price reporting requirement at least as 
 29.34  comprehensive as this section, as determined by the commissioner 
 29.35  and results in Minnesota-specific information being available to 
 29.36  the commissioner and to Minnesota producers.  
 30.1      Sec. 42.  Minnesota Statutes 1998, section 223.17, 
 30.2   subdivision 5, is amended to read: 
 30.3      Subd. 5.  [CASH SALES; MANNER OF PAYMENT.] For a cash sale 
 30.4   of a shipment of grain which is part of a multiple shipment 
 30.5   sale, the grain buyer shall tender payment to the seller in cash 
 30.6   or by check not later than ten days after the sale of that 
 30.7   shipment, except that when the entire sale is completed, payment 
 30.8   shall be tendered not later than the close of business on the 
 30.9   next day, or within 48 hours, whichever is later.  For other 
 30.10  cash sales the grain buyer, before the close of business on the 
 30.11  next business day after the sale, shall tender payment to the 
 30.12  seller in cash or by check, or shall wire or mail funds to the 
 30.13  seller's account in the amount of at least 80 percent of the 
 30.14  value of the grain at the time of delivery.  The grain buyer 
 30.15  shall complete final settlement as rapidly as possible through 
 30.16  ordinary diligence.  Any transaction which is not a cash sale in 
 30.17  compliance with the provisions of this subdivision constitutes a 
 30.18  voluntary extension of credit which is not afforded protection 
 30.19  under the grain buyer's bond, and which must comply with 
 30.20  sections 223.175 and 223.177. 
 30.21     Sec. 43.  Minnesota Statutes 1998, section 223.175, is 
 30.22  amended to read: 
 30.23     223.175 [WRITTEN VOLUNTARY EXTENSION OF CREDIT CONTRACTS; 
 30.24  FORM.] 
 30.25     A written confirmation required under section 223.177, 
 30.26  subdivision 2, and a written voluntary extension of credit 
 30.27  contract must include those items prescribed by the commissioner 
 30.28  by rule.  A contract shall include a statement of the legal and 
 30.29  financial responsibilities of grain buyers and sellers 
 30.30  established in this chapter.  A contract shall also include the 
 30.31  following statement in not less than ten point, all capital 
 30.32  type, framed in a box with space provided for the seller's 
 30.33  signature:  "THIS CONTRACT CONSTITUTES A VOLUNTARY EXTENSION OF 
 30.34  CREDIT.  THIS CONTRACT IS NOT COVERED BY ANY GRAIN BUYER'S 
 30.35  BOND."  If a written contract is provided at the time the grain 
 30.36  is delivered to the grain buyer, the seller shall sign the 
 31.1   contract in the space provided beneath the statement.  A 
 31.2   transaction that does not meet the provisions of a voluntary 
 31.3   extension of credit, including the issuance and signing of a 
 31.4   voluntary extension of credit contract, is a cash sale. 
 31.5      Sec. 44.  Minnesota Statutes 1998, section 232.21, is 
 31.6   amended by adding a subdivision to read: 
 31.7      Subd. 14.  [OPEN STORAGE.] "Open storage" means grain or 
 31.8   agricultural products received by a warehouse operator from a 
 31.9   depositor for which warehouse receipts have not been issued or a 
 31.10  purchase made and the records documented accordingly. 
 31.11     Sec. 45.  Minnesota Statutes 1998, section 232.23, 
 31.12  subdivision 1, is amended to read: 
 31.13     Subdivision 1.  [DISCRIMINATION PROHIBITED.] (a) Except as 
 31.14  provided in paragraph (b), a public grain warehouse operator 
 31.15  must receive for storage, so far as the capacity of the grain 
 31.16  warehouse will permit, all sound grain tendered in warehouseable 
 31.17  condition without discrimination against any person tendering 
 31.18  the grain.  
 31.19     (b) A public grain warehouse is not required to receive for 
 31.20  storage grain beyond the storage capacity actually owned by the 
 31.21  warehouse.  Capacity owned by another may be managed by a public 
 31.22  grain warehouse with the written permission of the owner of that 
 31.23  capacity. 
 31.24     Sec. 46.  Minnesota Statutes 1998, section 232.23, 
 31.25  subdivision 3, is amended to read: 
 31.26     Subd. 3.  [GRAIN DELIVERED CONSIDERED SOLD STORED.] All 
 31.27  grain delivered to a public grain warehouse operator shall be 
 31.28  considered sold stored at the time of delivery, unless 
 31.29  arrangements have been made with the public grain warehouse 
 31.30  operator prior to or at the time of delivery to apply the grain 
 31.31  on contract, for shipment or consignment or for storage cash 
 31.32  sale.  Grain may be held in open storage or placed on a 
 31.33  warehouse receipt.  Warehouse receipts must be issued for all 
 31.34  grain held in open storage within six months of delivery to the 
 31.35  warehouse unless the depositor has signed a statement that the 
 31.36  depositor does not desire a warehouse receipt.  The warehouse 
 32.1   operator's tariff applies for any grain that is retained in open 
 32.2   storage or under warehouse receipt.  
 32.3      Sec. 47.  Minnesota Statutes 1998, section 232.23, 
 32.4   subdivision 6, is amended to read: 
 32.5      Subd. 6.  [LIABILITY.] A public grain warehouse 
 32.6   operator issuing a grain warehouse receipt is liable to the 
 32.7   depositor for the delivery of the kind, grade, and net quantity 
 32.8   of grain called for by the grain warehouse receipt. or scale 
 32.9   ticket marked "store." 
 32.10     Sec. 48.  Minnesota Statutes 1999 Supplement, section 
 32.11  500.24, subdivision 2, is amended to read: 
 32.12     Subd. 2.  [DEFINITIONS.] The definitions in this 
 32.13  subdivision apply to this section. 
 32.14     (a) "Farming" means the production of (1) agricultural 
 32.15  products; (2) livestock or livestock products; (3) milk or milk 
 32.16  products; or (4) fruit or other horticultural products.  It does 
 32.17  not include the processing, refining, or packaging of said 
 32.18  products, nor the provision of spraying or harvesting services 
 32.19  by a processor or distributor of farm products.  It does not 
 32.20  include the production of timber or forest products, the 
 32.21  production of poultry or poultry products, or the feeding and 
 32.22  caring for livestock that are delivered to a corporation for 
 32.23  slaughter or processing for up to 20 days before slaughter or 
 32.24  processing. 
 32.25     (b) "Family farm" means an unincorporated farming unit 
 32.26  owned by one or more persons residing on the farm or actively 
 32.27  engaging in farming. 
 32.28     (c) "Family farm corporation" means a corporation founded 
 32.29  for the purpose of farming and the ownership of agricultural 
 32.30  land in which the majority of the voting stock is held by and 
 32.31  the majority of the stockholders are persons or, the spouses of 
 32.32  persons, or current beneficiaries of one or more family farm 
 32.33  trusts in which the trustee holds stock in a family farm 
 32.34  corporation, related to each other within the third degree of 
 32.35  kindred according to the rules of the civil law, and at least 
 32.36  one of said related persons is residing on or actively operating 
 33.1   the farm, and none of whose stockholders are corporations; 
 33.2   provided that a family farm corporation shall not cease to 
 33.3   qualify as such hereunder by reason of any devise or bequest: 
 33.4      (1) transfer of shares of voting stock to a person or the 
 33.5   spouse of a person related within the third degree of kindred 
 33.6   according to the rules of civil law to the person making the 
 33.7   transfer, or to a family farm trust of which the shareholder, 
 33.8   spouse, or related person is a current beneficiary; or 
 33.9      (2) distribution from a family farm trust of shares of 
 33.10  stock to a beneficiary related within the third degree of 
 33.11  kindred according to the rules of civil law to a majority of the 
 33.12  current beneficiaries of the trust, or to a family farm trust of 
 33.13  which the shareholder, spouse, or related person is a current 
 33.14  beneficiary. 
 33.15     For the purposes of this section, a transfer may be made 
 33.16  with or without consideration, either directly or indirectly, 
 33.17  during life or at death, whether or not in trust, of the shares 
 33.18  in the family farm corporation, and stock owned by a family farm 
 33.19  trust are considered to be owned in equal shares by the current 
 33.20  beneficiaries. 
 33.21     (d) "Family farm trust" means: 
 33.22     (1) a trust in which: 
 33.23     (i) a majority of the current beneficiaries are persons or 
 33.24  spouses of persons who are related to each other within the 
 33.25  third degree of kindred according to the rules of civil law; 
 33.26     (ii) all of the current beneficiaries are natural persons 
 33.27  or nonprofit corporations or trusts described in Internal 
 33.28  Revenue Code, section 170(c), as amended, and the regulations 
 33.29  under that section; and 
 33.30     (iii) one of the family member current beneficiaries is 
 33.31  residing on or actively operating the farm; or 
 33.32     (2) a charitable remainder trust as defined in Internal 
 33.33  Revenue Code, section 664, as amended, and the regulations under 
 33.34  that section, and a charitable lead trust as set forth in 
 33.35  Internal Revenue Code, section 170(f), and the regulations under 
 33.36  that section, if the lead period does not exceed ten years and 
 34.1   the majority of remainder beneficiaries are related to the 
 34.2   grantor within the third degree of kindred according to the 
 34.3   rules of civil law. 
 34.4      For the purposes of this section, if a distributee trust 
 34.5   becomes entitled to, or at the discretion of any person may 
 34.6   receive, a distribution from income or principal of a family 
 34.7   farm trust, then the distributee trust must independently 
 34.8   qualify as a family farm trust. 
 34.9      (e) "Authorized farm corporation" means a corporation 
 34.10  meeting the following standards: 
 34.11     (1) it has no more than five shareholders, provided that 
 34.12  for the purposes of this section, a husband and wife are 
 34.13  considered one shareholder; 
 34.14     (2) all its shareholders, other than any estate, are 
 34.15  natural persons; 
 34.16     (3) it does not have more than one class of shares; 
 34.17     (4) its revenue from rent, royalties, dividends, interest, 
 34.18  and annuities does not exceed 20 percent of its gross receipts; 
 34.19     (5) shareholders holding 51 percent or more of the interest 
 34.20  in the corporation reside on the farm or are actively engaging 
 34.21  in farming; 
 34.22     (6) it does not, directly or indirectly, own or otherwise 
 34.23  have an interest in any title to more than 1,500 acres of 
 34.24  agricultural land; and 
 34.25     (7) none of its shareholders are shareholders in other 
 34.26  authorized farm corporations that directly or indirectly in 
 34.27  combination with the corporation own more than 1,500 acres of 
 34.28  agricultural land. 
 34.29     (e) (f) "Authorized livestock farm corporation" means a 
 34.30  corporation formed for the production of livestock and meeting 
 34.31  the following standards: 
 34.32     (1) it is engaged in the production of livestock other than 
 34.33  dairy cattle; 
 34.34     (2) all its shareholders, other than any estate, are 
 34.35  natural persons or family farm corporations; 
 34.36     (3) it does not have more than one class of shares; 
 35.1      (4) its revenue from rent, royalties, dividends, interest, 
 35.2   and annuities does not exceed 20 percent of its gross receipts; 
 35.3      (5) shareholders holding 75 percent or more of the control, 
 35.4   financial, and capital investment in the corporation are farmers 
 35.5   residing in Minnesota and at least 51 percent of the required 
 35.6   percentage of farmers are actively engaged in livestock 
 35.7   production; 
 35.8      (6) it does not, directly or indirectly, own or otherwise 
 35.9   have an interest in any title to more than 1,500 acres of 
 35.10  agricultural land; and 
 35.11     (7) none of its shareholders are shareholders in other 
 35.12  authorized farm corporations that directly or indirectly in 
 35.13  combination with the corporation own more than 1,500 acres of 
 35.14  agricultural land. 
 35.15     (f) (g) "Agricultural land" means real estate used for 
 35.16  farming or capable of being used for farming in this state. 
 35.17     (g) (h) "Pension or investment fund" means a pension or 
 35.18  employee welfare benefit fund, however organized, a mutual fund, 
 35.19  a life insurance company separate account, a common trust of a 
 35.20  bank or other trustee established for the investment and 
 35.21  reinvestment of money contributed to it, a real estate 
 35.22  investment trust, or an investment company as defined in United 
 35.23  States Code, title 15, section 80a-3.  
 35.24     (h) (i) "Farm homestead" means a house including adjoining 
 35.25  buildings that has been used as part of a farming operation or 
 35.26  is part of the agricultural land used for a farming operation. 
 35.27     (i) (j) "Family farm partnership" means a limited 
 35.28  partnership formed for the purpose of farming and the ownership 
 35.29  of agricultural land in which the majority of the interests in 
 35.30  the partnership is held by and the majority of the partners are 
 35.31  persons or, the spouses of persons, or current beneficiaries of 
 35.32  one or more family farm trusts in which the trustee holds an 
 35.33  interest in a family farm partnership related to each other 
 35.34  within the third degree of kindred according to the rules of the 
 35.35  civil law, at least one of the related persons is residing on or 
 35.36  actively operating the farm, and none of the partners are 
 36.1   corporations.  A family farm partnership does not cease to 
 36.2   qualify as a family farm partnership because of a devise or 
 36.3   bequest: 
 36.4      (1) transfer of a partnership interest in the 
 36.5   partnership to a person or spouse of a person related within the 
 36.6   third degree of kindred according to the rules of civil law to 
 36.7   the person making the transfer or to a family farm trust of 
 36.8   which the partner, spouse, or related person is a current 
 36.9   beneficiary; or 
 36.10     (2) distribution from a family farm trust of a partnership 
 36.11  interest to a beneficiary related within the third degree of 
 36.12  kindred according to the rules of civil law to a majority of the 
 36.13  current beneficiaries of the trust, or to a family farm trust of 
 36.14  which the partner, spouse, or related person is a current 
 36.15  beneficiary. 
 36.16     For the purposes of this section, a transfer may be made 
 36.17  with or without consideration, either directly or indirectly, 
 36.18  during life or at death, whether or not in trust, of a 
 36.19  partnership interest in the family farm partnership, and 
 36.20  interest owned by a family farm trust is considered to be owned 
 36.21  in equal shares by the current beneficiaries. 
 36.22     (j) (k) "Authorized farm partnership" means a limited 
 36.23  partnership meeting the following standards:  
 36.24     (1) it has been issued a certificate from the secretary of 
 36.25  state or is registered with the county recorder and farming and 
 36.26  ownership of agricultural land is stated as a purpose or 
 36.27  character of the business; 
 36.28     (2) no more than five partners; 
 36.29     (3) all its partners, other than any estate, are natural 
 36.30  persons; 
 36.31     (4) its revenue from rent, royalties, dividends, interest, 
 36.32  and annuities do not exceed 20 percent of its gross receipts; 
 36.33     (5) its general partners hold at least 51 percent of the 
 36.34  interest in the land assets of the partnership and reside on the 
 36.35  farm or are actively engaging in farming not more than 1,500 
 36.36  acres as a general partner in an authorized limited partnership; 
 37.1      (6) its limited partners do not participate in the business 
 37.2   of the limited partnership including operating, managing, or 
 37.3   directing management of farming operations; 
 37.4      (7) it does not, directly or indirectly, own or otherwise 
 37.5   have an interest in any title to more than 1,500 acres of 
 37.6   agricultural land; and 
 37.7      (8) none of its limited partners are limited partners in 
 37.8   other authorized farm partnerships that directly or indirectly 
 37.9   in combination with the partnership own more than 1,500 acres of 
 37.10  agricultural land.  
 37.11     (k) (l) "Farmer" means a natural person who regularly 
 37.12  participates in physical labor or operations management in the 
 37.13  person's farming operation and files "Schedule F" as part of the 
 37.14  person's annual Form 1040 filing with the United States Internal 
 37.15  Revenue Service. 
 37.16     (l) (m) "Actively engaged in livestock production" means 
 37.17  performing day-to-day physical labor or day-to-day operations 
 37.18  management that significantly contributes to livestock 
 37.19  production and the functioning of a livestock operation. 
 37.20     (m) (n) "Research or experimental farm" means a 
 37.21  corporation, limited partnership, or pension or investment fund 
 37.22  that owns or operates agricultural land for research or 
 37.23  experimental purposes, provided that any commercial sales from 
 37.24  the operation are incidental to the research or experimental 
 37.25  objectives of the corporation.  A corporation, limited 
 37.26  partnership, or pension or investment fund seeking initial 
 37.27  approval by the commissioner to operate agricultural land for 
 37.28  research or experimental purposes must first submit to the 
 37.29  commissioner a prospectus or proposal of the intended method of 
 37.30  operation containing information required by the commissioner 
 37.31  including a copy of any operational contract with individual 
 37.32  participants. 
 37.33     (n) (o) "Breeding stock farm" means a corporation or 
 37.34  limited partnership that owns or operates agricultural land for 
 37.35  the purpose of raising breeding stock, including embryos, for 
 37.36  resale to farmers or for the purpose of growing seed, wild rice, 
 38.1   nursery plants, or sod.  An entity that is organized to raise 
 38.2   livestock other than dairy cattle under this paragraph that does 
 38.3   not qualify as an authorized farm corporation must:  
 38.4      (1) sell all castrated animals to be fed out or finished to 
 38.5   farming operations that are neither directly nor indirectly 
 38.6   owned by the business entity operating the breeding stock 
 38.7   operation; and 
 38.8      (2) report its total production and sales annually to the 
 38.9   commissioner.  
 38.10     (o) (p) "Aquatic farm" means a corporation or limited 
 38.11  partnership that owns or leases agricultural land as a necessary 
 38.12  part of an aquatic farm as defined in section 17.47, subdivision 
 38.13  3.  
 38.14     (p) (q) "Religious farm" means a corporation formed 
 38.15  primarily for religious purposes whose sole income is derived 
 38.16  from agriculture.  
 38.17     (q) (r) "Utility corporation" means a corporation regulated 
 38.18  under Minnesota Statutes 1974, chapter 216B, that owns 
 38.19  agricultural land for purposes described in that chapter, or an 
 38.20  electric generation or transmission cooperative that owns 
 38.21  agricultural land for use in its business if the land is not 
 38.22  used for farming except under lease to a family farm unit, a 
 38.23  family farm corporation, a family farm trust, or a family farm 
 38.24  partnership.  
 38.25     (r) "Benevolent trust" means a pension fund or family trust 
 38.26  established by the owners of a family farm, authorized farm 
 38.27  corporation, authorized livestock farm corporation, or family 
 38.28  farm corporation that holds an interest in title to agricultural 
 38.29  land on which one or more of those owners or shareholders have 
 38.30  resided or have been actively engaged in farming as required by 
 38.31  paragraph (b), (c), (d), or (e). 
 38.32     (s) "Development organization" means a corporation, limited 
 38.33  partnership, or pension or investment fund that owns has an 
 38.34  interest in agricultural land for which the corporation, limited 
 38.35  partnership, or pension or investment fund has documented plans 
 38.36  to use and subsequently uses the land within six years from the 
 39.1   date of purchase for a specific nonfarming purpose, or if the 
 39.2   land is zoned nonagricultural, or if the land is located within 
 39.3   an incorporated area.  A corporation, limited partnership, or 
 39.4   pension or investment fund may hold agricultural land in the 
 39.5   amount necessary for its nonfarm business operation; provided, 
 39.6   however, that pending the development of agricultural land for 
 39.7   nonfarm purposes, the land may not be used for farming except 
 39.8   under lease to a family farm unit, a family farm corporation, a 
 39.9   family farm trust, an authorized farm corporation, an authorized 
 39.10  livestock farm corporation, a family farm partnership, or an 
 39.11  authorized farm partnership, or except when controlled through 
 39.12  ownership, options, leaseholds, or other agreements by a 
 39.13  corporation that has entered into an agreement with the United 
 39.14  States under the New Community Act of 1968 (Title IV of the 
 39.15  Housing and Urban Development Act of 1968, United States Code, 
 39.16  title 42, sections 3901 to 3914) as amended, or a subsidiary or 
 39.17  assign of such a corporation.  
 39.18     (t) "Exempt land" means agricultural land owned or leased 
 39.19  by a corporation as of May 20, 1973, agricultural land owned or 
 39.20  leased by a pension or investment fund as of May 12, 1981, or 
 39.21  agricultural land owned or leased by a limited partnership as of 
 39.22  May 1, 1988, or agricultural land owned or leased by a trust as 
 39.23  of the effective date of this act, including the normal 
 39.24  expansion of that ownership at a rate not to exceed 20 percent 
 39.25  of the amount of land owned as of May 20, 1973, for a 
 39.26  corporation; May 12, 1981, for a pension or investment fund; or 
 39.27  May 1, 1988, for a limited partnership, or the effective date of 
 39.28  this act for a trust, measured in acres, in any five-year 
 39.29  period, and including additional ownership reasonably necessary 
 39.30  to meet the requirements of pollution control rules.  A 
 39.31  corporation, limited partnership, or pension or investment fund 
 39.32  that is eligible to own or lease agricultural land under this 
 39.33  section prior to May 1997, or a corporation that is eligible to 
 39.34  own or lease agricultural land as a benevolent trust under this 
 39.35  section prior to the effective date of this act, may continue to 
 39.36  own or lease agricultural land subject to the same conditions 
 40.1   and limitations as previously allowed.  
 40.2      (u) "Gifted land" means agricultural land acquired as a 
 40.3   gift, either by grant or devise, by an educational, religious, 
 40.4   or charitable nonprofit corporation, limited partnership, or 
 40.5   pension or investment fund if all land so acquired is disposed 
 40.6   of within ten years after acquiring the title.  
 40.7      (v) "Repossessed land" means agricultural land acquired by 
 40.8   a corporation, limited partnership, or pension or investment 
 40.9   fund by process of law in the collection of debts, or by any 
 40.10  procedure for the enforcement of a lien or claim on the land, 
 40.11  whether created by mortgage or otherwise if all land so acquired 
 40.12  is disposed of within five years after acquiring the title.  The 
 40.13  five-year limitation is a covenant running with the title to the 
 40.14  land against any grantee, assignee, or successor of the pension 
 40.15  or investment fund, corporation, or limited partnership.  The 
 40.16  land so acquired must not be used for farming during the 
 40.17  five-year period, except under a lease to a family farm unit, a 
 40.18  family farm corporation, an authorized farm corporation, an 
 40.19  authorized livestock farm corporation, a family farm 
 40.20  partnership, or an authorized farm partnership.  Notwithstanding 
 40.21  the five-year divestiture requirement under this paragraph, a 
 40.22  financial institution may continue to own the agricultural land 
 40.23  if the agricultural land is leased to the immediately preceding 
 40.24  former owner, but must dispose of the agricultural land within 
 40.25  ten years of acquiring the title.  Livestock acquired by a 
 40.26  pension or investment fund, corporation, or limited partnership 
 40.27  in the collection of debts, or by a procedure for the 
 40.28  enforcement of lien or claim on the livestock whether created by 
 40.29  security agreement or otherwise after August 1, 1994, must be 
 40.30  sold or disposed of within one full production cycle for the 
 40.31  type of livestock acquired or 18 months after the livestock is 
 40.32  acquired, whichever is later earlier.  
 40.33     (w) "Commissioner" means the commissioner of agriculture.  
 40.34     (x) "Demonstration "Nonprofit corporation" means a 
 40.35  nonprofit corporation organized under state nonprofit 
 40.36  corporation law and formed primarily for the purpose of 
 41.1   demonstrating historical farming practices or qualified for tax 
 41.2   exempt status under federal tax law that uses the land for a 
 41.3   specific nonfarming purpose or leases the agricultural land to a 
 41.4   family farm unit, a family farm corporation, an authorized farm 
 41.5   corporation, an authorized livestock farm corporation, a family 
 41.6   farm partnership, or an authorized farm partnership. 
 41.7      (y) "Current beneficiary" means a person who at any time 
 41.8   during a year is entitled to, or at the discretion of any person 
 41.9   may, receive a distribution from the income or principal of the 
 41.10  trust.  It does not include a distributee trust, other than a 
 41.11  trust described in section 170(c) of the Internal Revenue Code, 
 41.12  as amended, but does include the current beneficiaries of the 
 41.13  distributee trust.  It does not include a person in whose favor 
 41.14  a power of appointment could be exercised until the holder of 
 41.15  the power of appointment actually exercises the power of 
 41.16  appointment in that person's favor.  It does not include a 
 41.17  person who is entitled to receive a distribution only after a 
 41.18  specified time or upon the occurrence of a specified event until 
 41.19  the time or occurrence of the event.  For the purposes of this 
 41.20  section, a distributee trust is a current beneficiary of a 
 41.21  family farm trust. 
 41.22     (z) "De minimis" means that any corporation, pension or 
 41.23  investment fund, or limited partnership that directly or 
 41.24  indirectly owns, acquires, or otherwise obtains any interest in 
 41.25  40 acres or less of agricultural land and annually receives less 
 41.26  than $150 per acre in gross revenue from rental or agricultural 
 41.27  production. 
 41.28     Sec. 49.  Minnesota Statutes 1999 Supplement, section 
 41.29  500.24, subdivision 3, is amended to read: 
 41.30     Subd. 3.  [FARMING AND OWNERSHIP OF AGRICULTURAL LAND BY 
 41.31  CORPORATIONS RESTRICTED.] (a) No corporation, limited liability 
 41.32  company, pension or investment fund, trust, or limited 
 41.33  partnership shall engage in farming; nor shall any corporation, 
 41.34  limited liability company, pension or investment fund, trust, or 
 41.35  limited partnership, directly or indirectly, own, acquire, or 
 41.36  otherwise obtain any interest, in agricultural land other than a 
 42.1   bona fide encumbrance taken for purposes of security.  This 
 42.2   subdivision does not apply to general partnerships.  This 
 42.3   subdivision does not apply to any agricultural land, 
 42.4   corporation, limited partnership, trust, or pension or 
 42.5   investment fund that meet any of the definitions in subdivision 
 42.6   2, paragraphs (b) to (e) (f), (i), (j), (k), (m) (n) to (v), 
 42.7   and (x), and (z), has a conservation plan prepared for the 
 42.8   agricultural land, and reports as required under subdivision 4.  
 42.9      (b) A corporation, pension or investment fund, trust, or 
 42.10  limited partnership that cannot meet any of the definitions in 
 42.11  subdivision 2, paragraphs (b) to (f), (j), (k), (n) to (v), (x), 
 42.12  and (z), may petition the commissioner for an exemption from 
 42.13  this subdivision.  The commissioner may issue an exemption if 
 42.14  the entity meets the following criteria: 
 42.15     (1) the exemption would not contradict the purpose of this 
 42.16  section; and 
 42.17     (2) the petitioning entity would not have a significant 
 42.18  impact upon the agriculture industry and the economy. 
 42.19     The commissioner shall review annually each entity that is 
 42.20  issued an exemption under this paragraph to ensure that the 
 42.21  entity continues to meet the criteria in clauses (1) and (2).  
 42.22  If an entity fails to meet the criteria, the commissioner shall 
 42.23  withdraw the exemption and the entity is subject to enforcement 
 42.24  proceedings under subdivision 5.  The commissioner shall submit 
 42.25  a report with a list of each entity that is issued an exemption 
 42.26  under this paragraph to the chairs of the senate and house 
 42.27  agricultural policy committees by October 1 of each year. 
 42.28     Sec. 50.  Minnesota Statutes 1998, section 500.24, 
 42.29  subdivision 4, is amended to read: 
 42.30     Subd. 4.  [REPORTS.] (a) The chief executive officer of 
 42.31  every pension or investment fund, corporation, or limited 
 42.32  partnership, or entity that is seeking to qualify for an 
 42.33  exemption from the commissioner, and the trustee of a family 
 42.34  farm trust that holds any interest in agricultural land or land 
 42.35  used for the breeding, feeding, pasturing, growing, or raising 
 42.36  of livestock, dairy or poultry, or products thereof, or land 
 43.1   used for the production of agricultural crops or fruit or other 
 43.2   horticultural products, other than a bona fide encumbrance taken 
 43.3   for purposes of security, or which is engaged in farming or 
 43.4   proposing to commence farming in this state after May 20, 1973, 
 43.5   shall file with the commissioner a report containing the 
 43.6   following information and documents: 
 43.7      (1) the name of the pension or investment fund, 
 43.8   corporation, or limited partnership and its place of 
 43.9   incorporation, certification, or registration; 
 43.10     (2) the address of the pension or investment plan 
 43.11  headquarters or of the registered office of the corporation in 
 43.12  this state, the name and address of its registered agent in this 
 43.13  state and, in the case of a foreign corporation or limited 
 43.14  partnership, the address of its principal office in its place of 
 43.15  incorporation, certification, or registration; 
 43.16     (3) the acreage and location listed by quarter-quarter 
 43.17  section, township, and county of each lot or parcel of 
 43.18  agricultural land or land used for the keeping or feeding of 
 43.19  poultry in this state owned or leased by the pension or 
 43.20  investment fund, limited partnership, or corporation; 
 43.21     (4) the names and addresses of the officers, 
 43.22  administrators, directors, or trustees of the pension or 
 43.23  investment fund, or of the officers, shareholders owning more 
 43.24  than ten percent of the stock, including the percent of stock 
 43.25  owned by each such shareholder, and the members of the board of 
 43.26  directors of the corporation, and the general and limited 
 43.27  partners and the percentage of interest in the partnership by 
 43.28  each partner; 
 43.29     (5) the farm products which the pension or investment fund, 
 43.30  limited partnership, or corporation produces or intends to 
 43.31  produce on its agricultural land; 
 43.32     (6) with the first report, a copy of the title to the 
 43.33  property where the farming operations are or will occur 
 43.34  indicating the particular exception claimed under subdivision 3; 
 43.35  and 
 43.36     (7) with the first or second report, a copy of the 
 44.1   conservation plan proposed by the soil and water conservation 
 44.2   district, and with subsequent reports a statement of whether the 
 44.3   conservation plan was implemented. 
 44.4      The report of a corporation, trust, or partnership seeking 
 44.5   to qualify hereunder as a family farm corporation, an authorized 
 44.6   farm corporation, an authorized livestock farm corporation, a 
 44.7   family farm partnership, or an authorized farm partnership, or a 
 44.8   family farm trust or under an exemption from the commissioner 
 44.9   shall contain the following additional information:  the number 
 44.10  of shares or the partnership interests owned by persons or 
 44.11  current beneficiaries of a family farm trust residing on the 
 44.12  farm or actively engaged in farming, or their relatives within 
 44.13  the third degree of kindred according to the rules of the civil 
 44.14  law or their spouses; the name, address, and number of shares 
 44.15  owned by each shareholder or partnership interests owned by each 
 44.16  partner; and a statement as to percentage of gross receipts of 
 44.17  the corporation derived from rent, royalties, dividends, 
 44.18  interest, and annuities.  No pension or investment fund, limited 
 44.19  partnership, or corporation shall commence farming in this state 
 44.20  until the commissioner has inspected the report and certified 
 44.21  that its proposed operations comply with the provisions of this 
 44.22  section. 
 44.23     (b) Every pension or investment fund, limited partnership, 
 44.24  trust, or corporation as described in paragraph (a) shall, prior 
 44.25  to April 15 of each year, file with the commissioner a report 
 44.26  containing the information required in paragraph (a), based on 
 44.27  its operations in the preceding calendar year and its status at 
 44.28  the end of the year.  A pension or investment fund, limited 
 44.29  partnership, or corporation that does not file the report by 
 44.30  April 15 must pay a $500 civil penalty.  The penalty is a lien 
 44.31  on the land being farmed under subdivision 3 until the penalty 
 44.32  is paid. 
 44.33     (c) The commissioner may, for good cause shown, issue a 
 44.34  written waiver or reduction of the civil penalty for failure to 
 44.35  make a timely filing of the annual report required by this 
 44.36  subdivision.  The waiver or reduction is final and conclusive 
 45.1   with respect to the civil penalty, and may not be reopened or 
 45.2   modified by an officer, employee, or agent of the state, except 
 45.3   upon a showing of fraud or malfeasance or misrepresentation of a 
 45.4   material fact.  The report required under paragraph (b) must be 
 45.5   completed prior to a reduction or waiver under this paragraph.  
 45.6   The commissioner may enter into an agreement under this 
 45.7   paragraph only once for each corporation or partnership. 
 45.8      (d) Failure to file a required report or the willful filing 
 45.9   of false information is a gross misdemeanor. 
 45.10     Sec. 51.  Minnesota Statutes 1998, section 500.24, 
 45.11  subdivision 5, is amended to read: 
 45.12     Subd. 5.  [ENFORCEMENT.] With reason to believe that a 
 45.13  corporation, limited partnership, limited liability company, 
 45.14  trust, or pension or investment fund is violating subdivision 3, 
 45.15  the attorney general shall commence an action in the district 
 45.16  court in which any agricultural lands relative to such violation 
 45.17  are situated, or if situated in two or more counties, in any 
 45.18  county in which a substantial part of the lands are situated.  
 45.19  The attorney general shall file for record with the county 
 45.20  recorder or the registrar of titles of each county in which any 
 45.21  portion of said lands are located a notice of the pendency of 
 45.22  the action as provided in section 557.02.  If the court finds 
 45.23  that the lands in question are being held in violation of 
 45.24  subdivision 3, it shall enter an order so declaring.  The 
 45.25  attorney general shall file for record any such order with the 
 45.26  county recorder or the registrar of titles of each county in 
 45.27  which any portion of said lands are located.  Thereafter, the 
 45.28  pension or investment fund, limited partnership, or corporation 
 45.29  owning such land shall have a period of five years from the date 
 45.30  of such order to divest itself of such lands.  The 
 45.31  aforementioned five-year limitation period shall be deemed a 
 45.32  covenant running with the title to the land against any pension 
 45.33  or investment fund, limited partnership, or corporate grantee or 
 45.34  assignee or the successor of such pension or investment fund, 
 45.35  limited partnership, or corporation.  Any lands not so divested 
 45.36  within the time prescribed shall be sold at public sale in the 
 46.1   manner prescribed by law for the foreclosure of a mortgage by 
 46.2   action.  In addition, any prospective or threatened violation 
 46.3   may be enjoined by an action brought by the attorney general in 
 46.4   the manner provided by law. 
 46.5      Sec. 52.  [EFFECTIVE DATE.] 
 46.6      Section 2 is effective the day following final enactment.