1.1                          A bill for an act 
  1.2             relating to agriculture; providing a 
  1.3             second-generation, targeted ethanol development 
  1.4             program; appropriating money; amending Minnesota 
  1.5             Statutes 2000, section 41A.09, subdivision 2a; 
  1.6             proposing coding for new law in Minnesota Statutes, 
  1.7             chapter 41A.  
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2000, section 41A.09, 
  1.10  subdivision 2a, is amended to read: 
  1.11     Subd. 2a.  [DEFINITIONS.] For the purposes of this 
  1.12  section and section 41A.10, the terms defined in this 
  1.13  subdivision have the meanings given them. 
  1.14     (a) "Ethanol" means fermentation ethyl alcohol derived from 
  1.15  agricultural products, including potatoes, cereal, grains, 
  1.16  cheese whey, and sugar beets; forest products; or other 
  1.17  renewable resources, including residue and waste generated from 
  1.18  the production, processing, and marketing of agricultural 
  1.19  products, forest products, and other renewable resources, that: 
  1.20     (1) meets all of the specifications in ASTM specification D 
  1.21  4806-88; and 
  1.22     (2) is denatured as specified in Code of Federal 
  1.23  Regulations, title 27, parts 20 and 21. 
  1.24     (b) "Wet alcohol" means agriculturally derived fermentation 
  1.25  ethyl alcohol having a purity of at least 50 percent but less 
  1.26  than 99 percent. 
  2.1      (c) "Anhydrous alcohol" means fermentation ethyl alcohol 
  2.2   derived from agricultural products as described in paragraph 
  2.3   (a), but that does not meet ASTM specifications or is not 
  2.4   denatured and is shipped in bond for further processing. 
  2.5      (d) "Ethanol plant" means a plant at which ethanol, 
  2.6   anhydrous alcohol, or wet alcohol is produced. 
  2.7      Sec. 2.  [41A.10] [TARGETED ETHANOL DEVELOPMENT PROGRAM.] 
  2.8      Subdivision 1.  [DEVELOPMENT GOAL.] The goals of the 
  2.9   targeted ethanol development program are to expand ethanol 
  2.10  production facilities to geographic regions of the state where 
  2.11  plants do not currently exist and to demonstrate efficient 
  2.12  utilization of nontraditional feedstocks for the production of 
  2.13  ethanol in the state. 
  2.14     Subd. 2.  [PREAPPROVAL BY COMMISSIONER.] To be eligible for 
  2.15  loans and producer payments under the targeted ethanol 
  2.16  development program, a proposer must receive approval from the 
  2.17  commissioner for a planned ethanol plant.  The application for 
  2.18  approval must be submitted to the commissioner not less than 90 
  2.19  days before construction begins on the ethanol plant.  The 
  2.20  commissioner shall deny or approve a properly completed 
  2.21  application within 30 days of receipt.  An approval must include 
  2.22  certification of the maximum plant production for which the 
  2.23  producer credit may be paid, but not exceeding 15,000,000 
  2.24  gallons of ethanol per year. 
  2.25     Subd. 3.  [PREFERENCES FOR ELIGIBILITY.] A producer may 
  2.26  provide information to the commissioner demonstrating that a 
  2.27  proposed ethanol plant will be optimized for feedstocks not 
  2.28  commonly used in existing ethanol plants in the state.  In 
  2.29  evaluating a proposal the commissioner shall give priority 
  2.30  consideration to a plant that: 
  2.31     (1) is engineered and designed to produce ethanol from 
  2.32  wheat or barley or both; 
  2.33     (2) is located in a geographic area that minimizes 
  2.34  competition for feedstocks used by existing ethanol plants; and 
  2.35     (3) consumes primarily Minnesota-grown feedstocks. 
  2.36     Subd. 4.  [PRODUCER PAYMENTS.] (a) An ethanol producer 
  3.1   certified for producer payments under subdivision 2 may apply to 
  3.2   the commissioner for cash payments within 30 days after the end 
  3.3   of each calendar quarter.  The claim must cover ethanol 
  3.4   production during the preceding three months. 
  3.5      (b) The commissioner shall make payments not later than 45 
  3.6   days after the close of each calendar quarter.  The total 
  3.7   quarterly payment to a producer under this section may not 
  3.8   exceed $750,000. 
  3.9      (c) An ethanol producer is eligible for producer payments 
  3.10  under this section for production during 40 consecutive calendar 
  3.11  quarters beginning with the quarter in which production began at 
  3.12  the ethanol plant. 
  3.13     Sec. 3.  [APPROPRIATION; TARGETED ETHANOL DEVELOPMENT 
  3.14  PRODUCER PAYMENTS.] 
  3.15     $....... is appropriated from the general fund to the 
  3.16  commissioner of agriculture for targeted ethanol development 
  3.17  producer payments under section 2.  This appropriation is 
  3.18  available until June 30, 2003.