1.1                          A bill for an act 
  1.2             relating to agriculture; establishing a livestock 
  1.3             production policy; modifying provisions relating to 
  1.4             county and regional fairs; modifying ethanol plant 
  1.5             ownership disclosure requirements; modifying 
  1.6             eligibility and limits for certain Rural Finance 
  1.7             Authority loans; changing certain requirements for 
  1.8             veterinary practice; modifying amounts for certain 
  1.9             grain buyers' bonds; providing for the validity of 
  1.10            electronic documents and signatures for grain buyers 
  1.11            and grain warehouses; modifying certain restrictions 
  1.12            on farming by business organizations; modifying 
  1.13            requirements on uses of certain vaccines in beef 
  1.14            cattle; amending Minnesota Statutes 2002, sections 
  1.15            35.243; 38.04; 38.12; 38.14; 38.15; 38.16; 41B.03, 
  1.16            subdivisions 2, 3; 41B.039, subdivision 2; 41B.04, 
  1.17            subdivision 8; 41B.042, subdivision 4; 41B.043, 
  1.18            subdivision 1b, by adding a subdivision; 41B.045, 
  1.19            subdivision 2; 41B.046, subdivision 5; 41C.02, 
  1.20            subdivision 12; 156.12, subdivision 2, by adding a 
  1.21            subdivision; 223.16, by adding subdivisions; 223.17, 
  1.22            subdivision 6; 223.177, subdivision 3; 232.21, by 
  1.23            adding subdivisions; 232.23, subdivision 4; 500.24, 
  1.24            subdivisions 2, 3a; Minnesota Statutes 2003 
  1.25            Supplement, sections 18B.07, subdivision 2; 38.02, 
  1.26            subdivisions 1, 3; 41A.09, subdivision 3a; 223.17, 
  1.27            subdivision 4; proposing coding for new law in 
  1.28            Minnesota Statutes, chapter 17; repealing Minnesota 
  1.29            Statutes 2002, sections 38.02, subdivision 2; 38.13. 
  1.30  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.31     Section 1.  [17.844] [LIVESTOCK PRODUCTION POLICY.] 
  1.32     (a) The policy of the state and its political subdivisions 
  1.33  is to promote livestock production under a broad range of 
  1.34  management systems and sizes of operation, provided that 
  1.35  operations are environmentally sound and meet all legal 
  1.36  requirements of all jurisdictions, including federal, state, 
  1.37  county, town, city, and watershed district requirements. 
  2.1      (b) In order to promote livestock production, state 
  2.2   agencies and local governments shall, to the extent allowed by 
  2.3   law: 
  2.4      (1) allow farms to be competitive and have the potential to 
  2.5   generate a net profit through adoption of new technology, growth 
  2.6   in their farm business, and reinvestment in buildings, 
  2.7   equipment, and other infrastructure; 
  2.8      (2) provide encouragement for establishment of livestock 
  2.9   enterprises on farms; 
  2.10     (3) promote environmental protection and water quality 
  2.11  improvement through increased livestock production that results 
  2.12  in controlling runoff through increased acreage of hay, pasture, 
  2.13  and small grains; and 
  2.14     (4) promote more farms to use agronomically applied manure 
  2.15  to increase the water holding capacity of the soil, control 
  2.16  erosion, and decrease phosphorus runoff. 
  2.17     Sec. 2.  Minnesota Statutes 2003 Supplement, section 
  2.18  18B.07, subdivision 2, is amended to read: 
  2.19     Subd. 2.  [PROHIBITED PESTICIDE USE.] (a) A person may not 
  2.20  use, store, handle, distribute, or dispose of a pesticide, 
  2.21  rinsate, pesticide container, or pesticide application equipment 
  2.22  in a manner: 
  2.23     (1) that is inconsistent with a label or labeling as 
  2.24  defined by FIFRA; 
  2.25     (2) that endangers humans, damages agricultural products, 
  2.26  food, livestock, fish, or wildlife; or 
  2.27     (3) that will cause unreasonable adverse effects on the 
  2.28  environment.  
  2.29     (b) A person may not direct a pesticide onto property 
  2.30  beyond the boundaries of the target site.  A person may not 
  2.31  apply a pesticide resulting in damage to adjacent property. 
  2.32     (c) A person may not directly apply a pesticide on a human 
  2.33  by overspray or target site spray, except when: 
  2.34     (1) the pesticide is intended for use on a human; 
  2.35     (2) the pesticide application is for mosquito control 
  2.36  operations; 
  3.1      (3) the pesticide application is for control of gypsy moth, 
  3.2   forest tent caterpillar, or other pest species, as determined by 
  3.3   the commissioner, and the pesticide used is a biological agent; 
  3.4   or 
  3.5      (4) the pesticide application is for a public health risk, 
  3.6   as determined by the commissioner of health, and the 
  3.7   commissioner of health, in consultation with the commissioner of 
  3.8   agriculture, determines that the application is warranted based 
  3.9   on the commissioner's balancing of the public health risk with 
  3.10  the risk that the pesticide application poses to the health of 
  3.11  the general population, with special attention to the health of 
  3.12  children. 
  3.13     (d) For pesticide applications under paragraph (c), clause 
  3.14  (2), the following conditions apply: 
  3.15     (1) no practicable and effective alternative method of 
  3.16  control exists; 
  3.17     (2) the pesticide is among the least toxic available for 
  3.18  control of the target pest; and 
  3.19     (3) notification to residents in the area to be treated is 
  3.20  provided at least 24 hours before application through direct 
  3.21  notification, posting daily on the treating organization's Web 
  3.22  site, if any, and by sending a broadcast e-mail to those persons 
  3.23  who request notification of such, of those areas to be treated 
  3.24  by adult mosquito control techniques during the next calendar 
  3.25  day.  For control operations related to human disease, notice 
  3.26  under this paragraph may be given less than 24 hours in advance. 
  3.27     (e) For pesticide applications under paragraph (c), clauses 
  3.28  (3) and (4), the following conditions apply: 
  3.29     (1) no practicable and effective alternative method of 
  3.30  control exists; 
  3.31     (2) the pesticide is among the least toxic available for 
  3.32  control of the target pest; and 
  3.33     (3) notification of residents in the area to be treated is 
  3.34  provided by direct notification and through publication in a 
  3.35  newspaper of general circulation within the affected area. 
  3.36     (f) For purposes of this subdivision, "direct notification" 
  4.1   may include mailings, public meetings, posted placards, 
  4.2   neighborhood newsletters, or other means of contact designed to 
  4.3   reach as many residents as possible.  Public meetings held to 
  4.4   meet this requirement for adult mosquito control, under 
  4.5   paragraph (d), must be held within each city or town where the 
  4.6   pesticide treatments are to be made, at a time and location that 
  4.7   is convenient for residents of the area where the treatments 
  4.8   will occur. 
  4.9      (g) A person may not apply a pesticide in a manner so as to 
  4.10  expose a worker in an immediately adjacent, open field. 
  4.11     Sec. 3.  Minnesota Statutes 2002, section 35.243, is 
  4.12  amended to read: 
  4.13     35.243 [RULES FOR CONTROL OF BRUCELLOSIS IN CATTLE.] 
  4.14     The Board of Animal Health shall adopt rules to provide for 
  4.15  the control of brucellosis in cattle.  The rules may include 
  4.16  provisions for quarantine, tests, and vaccinations, and such 
  4.17  other measures as the board deems appropriate.  A prescription 
  4.18  from a licensed veterinarian is not required for the sale of 
  4.19  modified live vaccines used to prevent common diseases in beef 
  4.20  cattle, except for brucellosis, rabies, and anthrax. 
  4.21     Sec. 4.  Minnesota Statutes 2003 Supplement, section 38.02, 
  4.22  subdivision 1, is amended to read: 
  4.23     Subdivision 1.  [PRO RATA DISTRIBUTION; CONDITIONS.] (a) 
  4.24  Money appropriated to aid county and district agricultural 
  4.25  societies and associations shall be distributed among all county 
  4.26  and district agricultural societies or associations in the state 
  4.27  pro rata, upon condition that each of them has complied with the 
  4.28  conditions specified in paragraph (b). 
  4.29     (b) To be eligible to participate in the distribution of 
  4.30  aid, each agricultural society or association shall have: 
  4.31     (1) held an annual fair for each of the three years last 
  4.32  past, unless prevented from doing so because of a calamity or an 
  4.33  epidemic declared by the Board of Health as defined in section 
  4.34  145A.02, subdivision 2, or the state commissioner of health, or 
  4.35  the Board of Animal Health to exist; 
  4.36     (2) an annual membership of 25 15 or more; 
  5.1      (3) paid out to exhibitors for premiums awarded at the last 
  5.2   fair held a sum not less than the amount to be received from the 
  5.3   state; 
  5.4      (4) published and distributed, or made available on an 
  5.5   Internet Web site, not less than three weeks before the opening 
  5.6   day of the fair a premium list, listing all items or articles on 
  5.7   which premiums are offered and the amounts of such premiums and 
  5.8   shall have paid premiums pursuant to the amount shown for each 
  5.9   article or item to be exhibited; provided that premiums for 
  5.10  school exhibits may be advertised in the published premium list 
  5.11  by reference to a school premium list prepared and circulated 
  5.12  during the preceding school year; and shall have collected all 
  5.13  fees charged for entering an exhibit at the time the entry was 
  5.14  made and in accordance with schedule of entry fees to be charged 
  5.15  as published in the premium list; 
  5.16     (5) paid not more than one premium on each article or item 
  5.17  exhibited, excluding championship or sweepstake awards, and 
  5.18  excluding the payment of open class premium awards to 4H Club 
  5.19  exhibits which at this same fair had won a first prize award in 
  5.20  regular 4H Club competition; and 
  5.21     (6) submitted its records and annual report to the 
  5.22  commissioner of agriculture on a form provided by the 
  5.23  commissioner of agriculture, on or before the first day of 
  5.24  November of the year in which the fair was held its annual 
  5.25  report of premiums paid. 
  5.26     (c) All payments authorized under the provisions of this 
  5.27  chapter shall be made only upon the presentation by the 
  5.28  commissioner of agriculture with the commissioner of finance of 
  5.29  a statement of premium allocations.  As used herein the term 
  5.30  premium shall mean the cash award paid to an exhibitor for the 
  5.31  merit of an exhibit of livestock, livestock products, grains, 
  5.32  fruits, flowers, vegetables, articles of domestic science, 
  5.33  handicrafts, hobbies, fine arts, other products of a creative 
  5.34  nature, and articles made by school pupils, or the cash award 
  5.35  paid to the merit winner of events such as 4H Club or Future 
  5.36  Farmer contest, youth group contests, school spelling contests 
  6.1   and school current events contests, the award corresponding to 
  6.2   the amount offered in the advertised premium list referred to in 
  6.3   schedule 2.  Payments of awards for horse races, horse pulls, 
  6.4   tractor pulls, demolition derby, automobile or other racing, 
  6.5   jackpot premiums, ball games, musical contests, talent contests, 
  6.6   parades, and for amusement features for which admission is 
  6.7   charged, are specifically excluded from consideration as 
  6.8   premiums within the meaning of that term as used herein.  Upon 
  6.9   receipt of the statement by the commissioner of agriculture, the 
  6.10  commissioner of finance shall draw a voucher in favor of the 
  6.11  agricultural society or association for the amount to which it 
  6.12  is entitled under the provisions of this chapter.  The amount 
  6.13  shall be computed as follows:  On the first $750 premiums paid 
  6.14  by each society or association at the last fair held, the 
  6.15  society or association shall receive 100 percent reimbursement; 
  6.16  on the second $750 premiums paid, 80 percent; on the third $750 
  6.17  premiums paid, 60 percent; and on any sum in excess of $2,250, 
  6.18  40 percent.  The commissioner of finance shall make payments not 
  6.19  later than July 15 of the year following the calendar year in 
  6.20  which the annual fair was held to those agricultural societies 
  6.21  or associations entitled to payments under the provisions of 
  6.22  this chapter. 
  6.23     (d) If the total amount of state aid to which the 
  6.24  agricultural societies and associations are entitled under the 
  6.25  provisions of this chapter exceeds the amount of the 
  6.26  appropriation therefor, the amounts to which the societies or 
  6.27  associations are entitled shall be prorated so that the total 
  6.28  payments by the state will not exceed the appropriation. 
  6.29     Sec. 5.  Minnesota Statutes 2003 Supplement, section 38.02, 
  6.30  subdivision 3, is amended to read: 
  6.31     Subd. 3.  [CERTIFICATION, COMMISSIONER OF 
  6.32  AGRICULTURE ENTITLEMENT FOR PRO RATA DISTRIBUTION.] Any A county 
  6.33  or district agricultural society which has held its second 
  6.34  annual fair is entitled to share pro rata in the 
  6.35  distribution.  The commissioner of agriculture shall certify to 
  6.36  the secretary of the State Agricultural Society, within 30 days 
  7.1   after payments have been made, a list of all county or district 
  7.2   agricultural societies that have complied with this chapter, and 
  7.3   which are entitled to share in the appropriation.  All Payments 
  7.4   shall be based on reports submitted by agricultural societies 
  7.5   under subdivision 1, paragraph (b), clause (6). 
  7.6      Sec. 6.  Minnesota Statutes 2002, section 38.04, is amended 
  7.7   to read: 
  7.8      38.04 [ANNUAL MEETINGS; REPORTS.] 
  7.9      Every county agricultural society shall hold an annual 
  7.10  meeting for the election of officers and the transaction of 
  7.11  other business on or before the third Tuesday in November.  
  7.12  Service on the county agricultural society board or as an 
  7.13  officer of the board is not a public office.  Elected officials 
  7.14  of the state or its political subdivisions may serve on the 
  7.15  board or be elected as officers. 
  7.16     At the annual meeting, the society's secretary an officer 
  7.17  of the society shall make a report of its proceedings for the 
  7.18  preceding year; this report shall contain a statement of all 
  7.19  transactions at its fairs, the numbers of entries, the amount 
  7.20  and source of all money received, and and a financial statement 
  7.21  prepared in accordance with generally accepted accounting 
  7.22  principles.  The report must also list the amount paid out for 
  7.23  premiums and for other purposes, and show in detail its entire 
  7.24  receipts and expenditures during the year.  The report must 
  7.25  contain a separate accounting of any income received from the 
  7.26  operation of horse racing on which pari-mutuel betting is 
  7.27  conducted, and of the disposition of that income.  
  7.28     The treasurer shall make a comprehensive report of the 
  7.29  funds received, paid out, and on hand, and upon whose order 
  7.30  paid.  Each secretary shall cause a certified copy of the annual 
  7.31  report to be filed with the county recorder of the county and 
  7.32  the commissioner of agriculture on or before the first day of 
  7.33  November each year. 
  7.34     Sec. 7.  Minnesota Statutes 2002, section 38.12, is amended 
  7.35  to read: 
  7.36     38.12 [APPROPRIATIONS BY CERTAIN MUNICIPALITIES.] 
  8.1      The council of any city and the board of supervisors of any 
  8.2   town having fairs of county and district agricultural societies 
  8.3   or associations, who are members of the Minnesota state 
  8.4   agricultural society, held within or in close proximity to their 
  8.5   corporate limits or in close proximity thereto, are hereby 
  8.6   authorized and empowered to may appropriate for and pay money to 
  8.7   such the agricultural society or association annually a sum not 
  8.8   exceeding $1,000.  
  8.9      Sec. 8.  Minnesota Statutes 2002, section 38.14, is amended 
  8.10  to read: 
  8.11     38.14 [IN COUNTIES OF 150,000:  APPROPRIATIONS FOR COUNTY 
  8.12  FAIRS.] 
  8.13     Subdivision 1.  [CONDITIONS, PROCEDURES, BOND.] In any 
  8.14  county in this state now or hereafter having a population of 
  8.15  150,000, the A county board may annually appropriate not to 
  8.16  exceed $3,000, except that counties having more than 300,000 and 
  8.17  less than 450,000 inhabitants may appropriate not to exceed 
  8.18  $5,000, money to assist in maintaining a county fair, which fair 
  8.19  shall be under the management and control of managed by a county 
  8.20  agricultural society.  The appropriation shall be made either to 
  8.21  the treasurer of the society or to some other suitable person,.  
  8.22  but before the money is paid, the treasurer or other person 
  8.23  shall file with the county auditor a satisfactory bond in double 
  8.24  the sum of the appropriation, conditioned upon the faithful 
  8.25  disbursing and accounting for all of the funds so appropriated.  
  8.26  The funds so appropriated shall be used solely for the purpose 
  8.27  of obtaining, preparing, and arranging exhibits and paying 
  8.28  premiums to exhibitors.  The treasurer or other person to whom 
  8.29  the appropriation is paid shall, within four months after the 
  8.30  holding of any such aided annual fair, file with the county 
  8.31  auditor a verified and detailed report showing the name and 
  8.32  address of every person to whom any of the money was paid, 
  8.33  together with the date of payment, and a full description of the 
  8.34  purposes for which the money was so paid, and shall attach 
  8.35  thereto receipts and subvouchers for each payment so made and 
  8.36  return to the county treasurer all of the unexpended portion 
  9.1   thereof.  After the report, receipts, and subvouchers have been 
  9.2   audited by the county board and found to be correct, it may, by 
  9.3   resolution, release the treasurer or other person and the 
  9.4   sureties from all further liabilities under bond. 
  9.5      Subd. 2.  [EXCEPT RAMSEY COUNTY.] This section and section 
  9.6   38.15 do not apply to Ramsey County. 
  9.7      Sec. 9.  Minnesota Statutes 2002, section 38.15, is amended 
  9.8   to read: 
  9.9      38.15 [SITES AND BUILDINGS.] 
  9.10     The county board in any such county may also annually 
  9.11  appropriate such further sum as it may desire, not exceeding 
  9.12  $7,500, money for the purpose of procuring a suitable site and 
  9.13  the erection of erecting on it a suitable county building 
  9.14  thereon, for the building or repairing of a race track and for 
  9.15  grading and improving the grounds, to be used in connection with 
  9.16  such a county fair, but the site and the building and 
  9.17  improvements shall be and remain the property of the county, and 
  9.18  the annual appropriation shall be used only for the purpose 
  9.19  of so acquiring the site and building and grading and for the 
  9.20  necessary care, repair, maintenance, and upkeep thereof.  In any 
  9.21  county in this state now or hereafter having a population in 
  9.22  excess of 150,000 and an area of more than 5,000 square miles, 
  9.23  the county agricultural society may expend funds appropriated to 
  9.24  it for the year 1957 for the payment of debts and liabilities 
  9.25  incurred during the year 1956 in the construction of county fair 
  9.26  buildings, notwithstanding the provisions of Laws 1941, chapter 
  9.27  118. 
  9.28     Sec. 10.  Minnesota Statutes 2002, section 38.16, is 
  9.29  amended to read: 
  9.30     38.16 [EXEMPTION FROM ZONING ORDINANCES.] 
  9.31     When lands lying within the corporate limits of towns or 
  9.32  cities of the first or second class of the state are owned by a 
  9.33  county or agricultural society and used for agricultural fair 
  9.34  purposes, the lands and the buildings now or hereafter erected 
  9.35  thereon shall be are exempt from the zoning, building, and other 
  9.36  ordinances of the town or city; provided, that no license or 
 10.1   permit need be obtained from, nor fee paid to, the town or city 
 10.2   in connection with the use of the lands.  
 10.3      Sec. 11.  Minnesota Statutes 2003 Supplement, section 
 10.4   41A.09, subdivision 3a, is amended to read: 
 10.5      Subd. 3a.  [ETHANOL PRODUCER PAYMENTS.] (a) The 
 10.6   commissioner shall make cash payments to producers of ethanol 
 10.7   located in the state that have begun production by June 30, 2000.
 10.8   For the purpose of this subdivision, an entity that holds a 
 10.9   controlling interest in more than one ethanol plant is 
 10.10  considered a single producer.  The amount of the payment for 
 10.11  each producer's annual production, except as provided in 
 10.12  paragraph (c), is 20 cents per gallon for each gallon of ethanol 
 10.13  produced on or before June 30, 2000, or ten years after the 
 10.14  start of production, whichever is later.  The first claim for 
 10.15  production after June 30, 2003, must be accompanied by Annually, 
 10.16  within 90 days of the end of its fiscal year, an ethanol 
 10.17  producer receiving payments under this subdivision must file a 
 10.18  disclosure statement on a form provided by the commissioner.  
 10.19  The initial disclosure statement must include a detailed summary 
 10.20  description of the organization of the business structure of the 
 10.21  claimant, a listing of the percentages of ownership by any 
 10.22  person or other entity with an ownership interest of five 
 10.23  percent or greater, the distribution of income received by the 
 10.24  claimant, including operating income and payments under this 
 10.25  subdivision and a copy of its annual audited financial 
 10.26  statements, including the auditor's report and footnotes.  The 
 10.27  disclosure statement must include information sufficient to 
 10.28  demonstrate that a majority of the ultimate beneficial interest 
 10.29  in the demonstrating what percentage of the entity receiving 
 10.30  payments under this section is owned by farmers or spouses of 
 10.31  farmers, as defined in or other entities eligible to farm or own 
 10.32  agricultural land in Minnesota under the provisions of section 
 10.33  500.24, residing in Minnesota.  Subsequent quarterly claims 
 10.34  annual reports must report reflect noncumulative changes in 
 10.35  ownership of ten percent or more of the entity.  Payments must 
 10.36  not be made to a claimant that has less than a majority of 
 11.1   Minnesota farmer control except that the commissioner may grant 
 11.2   an exemption from the farmer majority ownership requirement to a 
 11.3   claimant that, on May 29, 2003, has demonstrated greater than 40 
 11.4   percent farmer ownership which, when combined with ownership 
 11.5   interests of persons residing within 30 miles of the plant, 
 11.6   exceeds 50 percent.  In addition, a claimant located in a city 
 11.7   of the first class which qualifies for payments in all other 
 11.8   respects is not subject to this condition.  Information provided 
 11.9   under this paragraph is The report need not disclose the 
 11.10  identity of the persons or entities eligible to farm or own 
 11.11  agricultural land with ownership interests, individuals residing 
 11.12  within 30 miles of the plant, or of any other entity with less 
 11.13  than ten percent ownership interest, but the claimant must 
 11.14  retain information within its files confirming the accuracy of 
 11.15  the data provided.  This data must be made available to the 
 11.16  commissioner upon request.  Not later than the 15th day of 
 11.17  February in each year the commissioner shall deliver to the 
 11.18  chairs of the standing committees of the senate and the house of 
 11.19  representatives that deal with agricultural policy and 
 11.20  agricultural finance issues an annual report summarizing 
 11.21  aggregated data from plants receiving payments under this 
 11.22  section during the preceding calendar year.  Audited financial 
 11.23  statements and notes and disclosure statements submitted to the 
 11.24  commissioner are nonpublic data under section 13.02, subdivision 
 11.25  9.  Notwithstanding the provisions of chapter 13 relating to 
 11.26  nonpublic data, summaries of the submitted audited financial 
 11.27  reports and notes and disclosure statements will be contained in 
 11.28  the report to the committee chairs and will be public data.  
 11.29     (b) No payments shall be made for ethanol production that 
 11.30  occurs after June 30, 2010.  
 11.31     (c) If the level of production at an ethanol plant 
 11.32  increases due to an increase in the production capacity of the 
 11.33  plant, the payment under paragraph (a) applies to the additional 
 11.34  increment of production until ten years after the increased 
 11.35  production began.  Once a plant's production capacity reaches 
 11.36  15,000,000 gallons per year, no additional increment will 
 12.1   qualify for the payment. 
 12.2      (d) Total payments under paragraphs (a) and (c) to a 
 12.3   producer in a fiscal year may not exceed $3,000,000. 
 12.4      (e) By the last day of October, January, April, and July, 
 12.5   each producer shall file a claim for payment for ethanol 
 12.6   production during the preceding three calendar months.  A 
 12.7   producer that files a claim under this subdivision shall include 
 12.8   a statement of the producer's total ethanol production in 
 12.9   Minnesota during the quarter covered by the claim.  For each 
 12.10  claim and statement of total ethanol production filed under this 
 12.11  subdivision, the volume of ethanol production must be examined 
 12.12  by an independent certified public accountant in accordance with 
 12.13  standards established by the American Institute of Certified 
 12.14  Public Accountants. 
 12.15     (f) Payments shall be made November 15, February 15, May 
 12.16  15, and August 15.  A separate payment shall be made for each 
 12.17  claim filed.  Except as provided in paragraph (g), the total 
 12.18  quarterly payment to a producer under this paragraph may not 
 12.19  exceed $750,000.  
 12.20     (g) Notwithstanding the quarterly payment limits of 
 12.21  paragraph (f), the commissioner shall make an additional payment 
 12.22  in the fourth quarter of each fiscal year to ethanol producers 
 12.23  for the lesser of:  (1) 20 cents per gallon of production in the 
 12.24  fourth quarter of the year that is greater than 3,750,000 
 12.25  gallons; or (2) the total amount of payments lost during the 
 12.26  first three quarters of the fiscal year due to plant outages, 
 12.27  repair, or major maintenance.  Total payments to an ethanol 
 12.28  producer in a fiscal year, including any payment under this 
 12.29  paragraph, must not exceed the total amount the producer is 
 12.30  eligible to receive based on the producer's approved production 
 12.31  capacity.  The provisions of this paragraph apply only to 
 12.32  production losses that occur in quarters beginning after 
 12.33  December 31, 1999. 
 12.34     (h) The commissioner shall reimburse ethanol producers for 
 12.35  any deficiency in payments during earlier quarters if the 
 12.36  deficiency occurred because appropriated money was insufficient 
 13.1   to make timely payments in the full amount provided in paragraph 
 13.2   (a).  Notwithstanding the quarterly or annual payment 
 13.3   limitations in this subdivision, the commissioner shall begin 
 13.4   making payments for earlier deficiencies in each fiscal year 
 13.5   that appropriations for ethanol payments exceed the amount 
 13.6   required to make eligible scheduled payments.  Payments for 
 13.7   earlier deficiencies must continue until the deficiencies for 
 13.8   each producer are paid in full. 
 13.9      Sec. 12.  Minnesota Statutes 2002, section 41B.03, 
 13.10  subdivision 2, is amended to read: 
 13.11     Subd. 2.  [ELIGIBILITY FOR RESTRUCTURED LOAN.] In addition 
 13.12  to the eligibility requirements of subdivision 1, a prospective 
 13.13  borrower for a restructured loan must:  
 13.14     (1) have received at least 50 percent of average annual 
 13.15  gross income from farming for the past three years or, for 
 13.16  homesteaded property, received at least 40 percent of average 
 13.17  gross income from farming in the past three years, and farming 
 13.18  must be the principal occupation of the borrower; 
 13.19     (2) have projected annual expenses, including operating 
 13.20  expenses, family living, and interest expenses after the 
 13.21  restructuring, that do not exceed 95 percent of the borrower's 
 13.22  projected annual income considering prior production history and 
 13.23  projected prices for farm production, except that the authority 
 13.24  may reduce the 95 percent requirement if it finds that other 
 13.25  significant factors in the loan application support the making 
 13.26  of the loan; 
 13.27     (3) demonstrate substantial difficulty in meeting projected 
 13.28  annual expenses without restructuring the loan; and 
 13.29     (4) have a total net worth, including assets and 
 13.30  liabilities of the borrower's spouse and dependents, of less 
 13.31  than $400,000 $660,000 in 1999 2004 and an amount in subsequent 
 13.32  years which is adjusted for inflation by 
 13.33  multiplying $400,000 that amount by the cumulative inflation 
 13.34  rate as determined by the United States All-Items Consumer Price 
 13.35  Index. 
 13.36     Sec. 13.  Minnesota Statutes 2002, section 41B.03, 
 14.1   subdivision 3, is amended to read: 
 14.2      Subd. 3.  [ELIGIBILITY FOR BEGINNING FARMER LOANS.] (a) In 
 14.3   addition to the requirements under subdivision 1, a prospective 
 14.4   borrower for a beginning farm loan in which the authority holds 
 14.5   an interest, must:  
 14.6      (1) have sufficient education, training, or experience in 
 14.7   the type of farming for which the loan is desired; 
 14.8      (2) have a total net worth, including assets and 
 14.9   liabilities of the borrower's spouse and dependents, of less 
 14.10  than $200,000 in 1991 $350,000 in 2004 and an amount in 
 14.11  subsequent years which is adjusted for inflation by 
 14.12  multiplying $200,000 that amount by the cumulative inflation 
 14.13  rate as determined by the United States All-Items Consumer Price 
 14.14  Index; 
 14.15     (3) demonstrate a need for the loan; 
 14.16     (4) demonstrate an ability to repay the loan; 
 14.17     (5) certify that the agricultural land to be purchased will 
 14.18  be used by the borrower for agricultural purposes; 
 14.19     (6) certify that farming will be the principal occupation 
 14.20  of the borrower; 
 14.21     (7) agree to participate in a farm management program 
 14.22  approved by the commissioner of agriculture for at least the 
 14.23  first three years of the loan, if an approved program is 
 14.24  available within 45 miles from the borrower's residence.  The 
 14.25  commissioner may waive this requirement for any of the programs 
 14.26  administered by the authority if the participant requests a 
 14.27  waiver and has either a four-year degree in an agricultural 
 14.28  program or certification as an adult farm management instructor; 
 14.29  and 
 14.30     (8) agree to file an approved soil and water conservation 
 14.31  plan with the Soil Conservation Service office in the county 
 14.32  where the land is located.  
 14.33     (b) If a borrower fails to participate under paragraph (a), 
 14.34  clause (7), the borrower is subject to penalty as determined by 
 14.35  the authority. 
 14.36     Sec. 14.  Minnesota Statutes 2002, section 41B.039, 
 15.1   subdivision 2, is amended to read: 
 15.2      Subd. 2.  [STATE PARTICIPATION.] The state may participate 
 15.3   in a new real estate loan with an eligible lender to a beginning 
 15.4   farmer to the extent of 45 percent of the principal amount of 
 15.5   the loan or $125,000 $200,000, whichever is less.  The interest 
 15.6   rates and repayment terms of the authority's participation 
 15.7   interest may be different than the interest rates and repayment 
 15.8   terms of the lender's retained portion of the loan. 
 15.9      Sec. 15.  Minnesota Statutes 2002, section 41B.04, 
 15.10  subdivision 8, is amended to read: 
 15.11     Subd. 8.  [STATE'S PARTICIPATION.] With respect to loans 
 15.12  that are eligible for restructuring under sections 41B.01 to 
 15.13  41B.23 and upon acceptance by the authority, the authority shall 
 15.14  enter into a participation agreement or other financial 
 15.15  arrangement whereby it shall participate in a restructured loan 
 15.16  to the extent of 45 percent of the primary principal or 
 15.17  $150,000 $225,000, whichever is less.  The authority's portion 
 15.18  of the loan must be protected during the authority's 
 15.19  participation by the first mortgage held by the eligible lender 
 15.20  to the extent of its participation in the loan. 
 15.21     Sec. 16.  Minnesota Statutes 2002, section 41B.042, 
 15.22  subdivision 4, is amended to read: 
 15.23     Subd. 4.  [PARTICIPATION LIMIT; INTEREST.] The authority 
 15.24  may participate in new seller-sponsored loans to the extent of 
 15.25  45 percent of the principal amount of the loan or 
 15.26  $125,000 $200,000, whichever is less.  The interest rates and 
 15.27  repayment terms of the authority's participation interest may be 
 15.28  different than the interest rates and repayment terms of the 
 15.29  seller's retained portion of the loan. 
 15.30     Sec. 17.  Minnesota Statutes 2002, section 41B.043, 
 15.31  subdivision 1b, is amended to read: 
 15.32     Subd. 1b.  [LOAN PARTICIPATION.] The authority may 
 15.33  participate in an agricultural improvement loan with an eligible 
 15.34  lender to a farmer who meets the requirements of section 41B.03, 
 15.35  subdivision 1, clauses (1) and (2), and who is actively engaged 
 15.36  in farming.  Participation is limited to 45 percent of the 
 16.1   principal amount of the loan or $125,000 $200,000, whichever is 
 16.2   less.  The interest rates and repayment terms of the authority's 
 16.3   participation interest may be different than the interest rates 
 16.4   and repayment terms of the lender's retained portion of the loan.
 16.5      Sec. 18.  Minnesota Statutes 2002, section 41B.043, is 
 16.6   amended by adding a subdivision to read: 
 16.7      Subd. 5.  [TOTAL NET WORTH LIMIT.] A prospective borrower 
 16.8   for an agricultural improvement loan in which the authority 
 16.9   holds an interest must have a total net worth, including assets 
 16.10  and liabilities of the borrower's spouse and dependents, of less 
 16.11  than $350,000 in 2004 and an amount in subsequent years which is 
 16.12  adjusted for inflation by multiplying that amount by the 
 16.13  cumulative inflation rate as determined by the United States 
 16.14  All-Items Consumer Price Index. 
 16.15     Sec. 19.  Minnesota Statutes 2002, section 41B.045, 
 16.16  subdivision 2, is amended to read: 
 16.17     Subd. 2.  [LOAN PARTICIPATION.] The authority may 
 16.18  participate in a livestock expansion loan with an eligible 
 16.19  lender to a livestock farmer who meets the requirements of 
 16.20  section 41B.03, subdivision 1, clauses (1) and (2), and who are 
 16.21  actively engaged in a livestock operation.  A prospective 
 16.22  borrower must have a total net worth, including assets and 
 16.23  liabilities of the borrower's spouse and dependents, of less 
 16.24  than $400,000 $660,000 in 1999 2004 and an amount in subsequent 
 16.25  years which is adjusted for inflation by 
 16.26  multiplying $400,000 that amount by the cumulative inflation 
 16.27  rate as determined by the United States All-Items Consumer Price 
 16.28  Index. 
 16.29     Participation is limited to 45 percent of the principal 
 16.30  amount of the loan or $250,000 $275,000, whichever is less.  The 
 16.31  interest rates and repayment terms of the authority's 
 16.32  participation interest may be different from the interest rates 
 16.33  and repayment terms of the lender's retained portion of the loan.
 16.34     Sec. 20.  Minnesota Statutes 2002, section 41B.046, 
 16.35  subdivision 5, is amended to read: 
 16.36     Subd. 5.  [LOANS.] (a) The authority may participate in a 
 17.1   stock loan with an eligible lender to a farmer who is eligible 
 17.2   under subdivision 4.  Participation is limited to 45 percent of 
 17.3   the principal amount of the loan or $24,000 $40,000, whichever 
 17.4   is less.  The interest rates and repayment terms of the 
 17.5   authority's participation interest may differ from the interest 
 17.6   rates and repayment terms of the lender's retained portion of 
 17.7   the loan, but the authority's interest rate must not exceed 50 
 17.8   percent of the lender's interest rate. 
 17.9      (b) No more than 95 percent of the purchase price of the 
 17.10  stock may be financed under this program. 
 17.11     (c) Security for stock loans must be the stock purchased, a 
 17.12  personal note executed by the borrower, and whatever other 
 17.13  security is required by the eligible lender or the authority. 
 17.14     (d) The authority may impose a reasonable nonrefundable 
 17.15  application fee for each application for a stock loan.  The 
 17.16  authority may review the fee annually and make adjustments as 
 17.17  necessary.  The application fee is initially $50.  Application 
 17.18  fees received by the authority must be deposited in the 
 17.19  value-added agricultural product revolving fund. 
 17.20     (e) Stock loans under this program will be made using money 
 17.21  in the value-added agricultural product revolving fund 
 17.22  established under subdivision 3. 
 17.23     (f) The authority may not grant stock loans in a cumulative 
 17.24  amount exceeding $2,000,000 for the financing of stock purchases 
 17.25  in any one cooperative. 
 17.26     Sec. 21.  Minnesota Statutes 2002, section 41C.02, 
 17.27  subdivision 12, is amended to read: 
 17.28     Subd. 12.  [LOW OR MODERATE NET WORTH.] "Low or moderate 
 17.29  net worth" means: 
 17.30     (1) for an individual, an aggregate net worth of the 
 17.31  individual and the individual's spouse and minor children of 
 17.32  less than $200,000 in 1991 $350,000 in 2004 and an amount in 
 17.33  subsequent years which is adjusted for inflation by 
 17.34  multiplying $200,000 that amount by the cumulative inflation 
 17.35  rate as determined by the United States All-Items Consumer Price 
 17.36  Index; or 
 18.1      (2) for a partnership, an aggregate net worth of all 
 18.2   partners, including each partner's net capital in the 
 18.3   partnership, and each partner's spouse and minor children of 
 18.4   less than $400,000 in 1991 and an amount in subsequent years 
 18.5   which is adjusted for inflation by multiplying $400,000 by the 
 18.6   cumulative inflation rate as determined by the United States 
 18.7   All-Items Consumer Price Index twice the amount set for an 
 18.8   individual in clause (1).  However, the aggregate net worth of 
 18.9   each partner and that partner's spouse and minor children may 
 18.10  not exceed $200,000 in 1991 and an amount in subsequent years 
 18.11  which is adjusted for inflation by multiplying $200,000 by the 
 18.12  cumulative inflation rate as determined by the United States 
 18.13  All-Items Consumer Price Index the amount set for an individual 
 18.14  in clause (1). 
 18.15     Sec. 22.  Minnesota Statutes 2002, section 156.12, 
 18.16  subdivision 2, is amended to read: 
 18.17     Subd. 2.  [AUTHORIZED ACTIVITIES.] No provision of this 
 18.18  chapter shall be construed to prohibit: 
 18.19     (a) a person from rendering necessary gratuitous assistance 
 18.20  in the treatment of any animal when the assistance does not 
 18.21  amount to prescribing, testing for, or diagnosing, operating, or 
 18.22  vaccinating and when the attendance of a licensed veterinarian 
 18.23  cannot be procured; 
 18.24     (b) a person who is a regular student in an accredited or 
 18.25  approved college of veterinary medicine from performing duties 
 18.26  or actions assigned by instructors or preceptors or working 
 18.27  under the direct supervision of a licensed veterinarian; 
 18.28     (c) a veterinarian regularly licensed in another 
 18.29  jurisdiction from consulting with a licensed veterinarian in 
 18.30  this state; 
 18.31     (d) the owner of an animal and the owner's regular employee 
 18.32  from caring for and administering to the animal belonging to the 
 18.33  owner, except where the ownership of the animal was transferred 
 18.34  for purposes of circumventing this chapter; 
 18.35     (e) veterinarians who are in compliance with subdivision 6 
 18.36  and who are employed by the University of Minnesota from 
 19.1   performing their duties with the College of Veterinary Medicine, 
 19.2   College of Agriculture, Agricultural Experiment Station, 
 19.3   Agricultural Extension Service, Medical School, School of Public 
 19.4   Health, or other unit within the university; or a person from 
 19.5   lecturing or giving instructions or demonstrations at the 
 19.6   university or in connection with a continuing education course 
 19.7   or seminar to veterinarians or pathologists at the University of 
 19.8   Minnesota Veterinary Diagnostic Laboratory; 
 19.9      (f) any person from selling or applying any pesticide, 
 19.10  insecticide or herbicide; 
 19.11     (g) any person from engaging in bona fide scientific 
 19.12  research or investigations which reasonably requires 
 19.13  experimentation involving animals; 
 19.14     (h) any employee of a licensed veterinarian from performing 
 19.15  duties other than diagnosis, prescription or surgical correction 
 19.16  under the direction and supervision of the veterinarian, who 
 19.17  shall be responsible for the performance of the employee; 
 19.18     (i) a graduate of a foreign college of veterinary medicine 
 19.19  from working under the direct personal instruction, control, or 
 19.20  supervision of a veterinarian faculty member of the College of 
 19.21  Veterinary Medicine, University of Minnesota in order to 
 19.22  complete the requirements necessary to obtain an ECFVG 
 19.23  certificate. 
 19.24     Sec. 23.  Minnesota Statutes 2002, section 156.12, is 
 19.25  amended by adding a subdivision to read: 
 19.26     Subd. 6.  [FACULTY LICENSURE.] (a) Veterinary Medical 
 19.27  Center clinicians at the College of Veterinary Medicine, 
 19.28  University of Minnesota who are engaged in the practice of 
 19.29  veterinary medicine as defined in subdivision 1 and who treat 
 19.30  animals owned by clients of the Veterinary Medical Center must 
 19.31  possess the same license required by other veterinary 
 19.32  practitioners in the state of Minnesota except for persons 
 19.33  covered by paragraphs (b) and (c). 
 19.34     (b) A specialty practitioner in a hard-to-fill faculty 
 19.35  position who has been employed at the College of Veterinary 
 19.36  Medicine, University of Minnesota for five years or more prior 
 20.1   to 2003 or is specialty board certified by the American 
 20.2   Veterinary Medical Association may be granted a specialty 
 20.3   faculty Veterinary Medical Center clinician license which will 
 20.4   allow the licensee to practice veterinary medicine in the state 
 20.5   of Minnesota in the specialty area of the licensee's training 
 20.6   and only within the scope of employment at the Veterinary 
 20.7   Medical Center. 
 20.8      (c) A specialty practitioner in a hard-to-fill faculty 
 20.9   position at the College of Veterinary Medicine, University of 
 20.10  Minnesota who has graduated from a board-approved foreign 
 20.11  veterinary school may be granted a temporary faculty Veterinary 
 20.12  Medical Center clinician license.  The temporary faculty 
 20.13  Veterinary Medical Center clinician license expires in two years 
 20.14  and allows the licensee to practice veterinary medicine as 
 20.15  defined in subdivision 1 and treat animals owned by clients of 
 20.16  the Veterinary Medical Center.  The temporary faculty Veterinary 
 20.17  Medical Center clinician license allows the licensee to practice 
 20.18  veterinary medicine in the state of Minnesota in the specialty 
 20.19  area of the licensee's training and only within the scope of 
 20.20  employment at the Veterinary Medical Center.  The holder of a 
 20.21  temporary faculty Veterinary Medical Center clinician license 
 20.22  who is enrolled in a PhD program may apply for two two-year 
 20.23  extensions of an expiring temporary faculty Veterinary Medical 
 20.24  Center clinician license.  Any other holder of a temporary 
 20.25  faculty Veterinary Medical Center clinician license may apply 
 20.26  for one two-year extension of the expiring temporary faculty 
 20.27  Veterinary Medical Center clinician license.  Temporary faculty 
 20.28  Veterinary Medical Center clinician licenses that are allowed to 
 20.29  expire may not be renewed.  The board shall grant an extension 
 20.30  to a licensee who demonstrates suitable progress toward 
 20.31  completing the requirements of their academic program, specialty 
 20.32  board certification, or full licensure in Minnesota by a 
 20.33  graduate of a foreign veterinary college. 
 20.34     (d) Temporary and specialty faculty Veterinary Medical 
 20.35  Center clinician licensees must abide by all the laws governing 
 20.36  the practice of veterinary medicine in the state of Minnesota 
 21.1   and are subject to the same disciplinary action as any other 
 21.2   veterinarian licensed in the state of Minnesota. 
 21.3      (e) The fee for a license issued under this subdivision is 
 21.4   the same as for a regular license to practice veterinary 
 21.5   medicine in Minnesota.  License payment deadlines, late payment 
 21.6   fees, and other license requirements are also the same as for 
 21.7   regular licenses. 
 21.8      Sec. 24.  Minnesota Statutes 2002, section 223.16, is 
 21.9   amended by adding a subdivision to read: 
 21.10     Subd. 3a.  [ELECTRONIC DOCUMENT.] "Electronic document" 
 21.11  means a document that is generated, sent, received, or stored by 
 21.12  electronic, optical, or similar means, including electronic data 
 21.13  interchange, electronic mail, telegram, telex, or telecopy.  
 21.14  "Electronic document" includes, but is not limited to, grain 
 21.15  purchase contracts and voluntary extension of credit contracts. 
 21.16     Sec. 25.  Minnesota Statutes 2002, section 223.16, is 
 21.17  amended by adding a subdivision to read: 
 21.18     Subd. 3b.  [ELECTRONIC SIGNATURE.] "Electronic signature" 
 21.19  means an electronic sound, symbol, or process attached to or 
 21.20  logically associated with a record and executed or adopted by a 
 21.21  person with the intent to sign the record. 
 21.22     Sec. 26.  Minnesota Statutes 2003 Supplement, section 
 21.23  223.17, subdivision 4, is amended to read: 
 21.24     Subd. 4.  [BOND.] Before a grain buyer's license is issued, 
 21.25  the applicant for the license must file with the commissioner a 
 21.26  bond in a penal sum prescribed by the commissioner but not less 
 21.27  than the following amounts:  
 21.28     (a) $10,000 for grain buyers whose gross annual purchases 
 21.29  are $100,000 or less; 
 21.30     (b) $20,000 for grain buyers whose gross annual purchases 
 21.31  are more than $100,000 but not more than $750,000; 
 21.32     (c) $30,000 for grain buyers whose gross annual purchases 
 21.33  are more than $750,000 but not more than $1,500,000; 
 21.34     (d) $40,000 for grain buyers whose gross annual purchases 
 21.35  are more than $1,500,000 but not more than $3,000,000; and 
 21.36     (e) $50,000 for grain buyers whose gross annual purchases 
 22.1   exceed are more than $3,000,000 but not more than $6,000,000; 
 22.2      (f) $70,000 for grain buyers whose gross annual purchases 
 22.3   are more than $6,000,000 but not more than $12,000,000; 
 22.4      (g) $125,000 for grain buyers whose gross annual purchases 
 22.5   are more than $12,000,000 but not more than $24,000,000; and 
 22.6      (h) $150,000 for grain buyers whose gross annual purchases 
 22.7   exceed $24,000,000.  
 22.8      A grain buyer who has filed a bond with the commissioner 
 22.9   prior to July 1, 1983 2004, is not required to increase the 
 22.10  amount of the bond to comply with this section until July 1, 
 22.11  1984 2005.  The commissioner may postpone an increase in the 
 22.12  amount of the bond until July 1, 1985 2006, if a licensee 
 22.13  demonstrates that the increase will impose undue financial 
 22.14  hardship on the licensee, and that producers will not be harmed 
 22.15  as a result of the postponement.  The commissioner may impose 
 22.16  other restrictions on a licensee whose bond increase has been 
 22.17  postponed.  The amount of the bond shall be based on the most 
 22.18  recent financial statement of the grain buyer filed under 
 22.19  subdivision 6.  
 22.20     A first-time applicant for a grain buyer's license after 
 22.21  July 1, 1983 shall file a $20,000 $50,000 bond with the 
 22.22  commissioner. This bond shall remain in effect for the first 
 22.23  year of the license.  Thereafter, the licensee shall comply with 
 22.24  the applicable bonding requirements contained in clauses (a) 
 22.25  to (e) (h). 
 22.26     In lieu of the bond required by this subdivision the 
 22.27  applicant may deposit with the commissioner of finance cash, a 
 22.28  certified check, a cashier's check, a postal, bank, or express 
 22.29  money order, assignable bonds or notes of the United States, or 
 22.30  an assignment of a bank savings account or investment 
 22.31  certificate or an irrevocable bank letter of credit as defined 
 22.32  in section 336.5-102, in the same amount as would be required 
 22.33  for a bond. 
 22.34     Sec. 27.  Minnesota Statutes 2002, section 223.17, 
 22.35  subdivision 6, is amended to read: 
 22.36     Subd. 6.  [FINANCIAL STATEMENTS.] For the purpose of fixing 
 23.1   or changing the amount of a required bond or for any other 
 23.2   proper reason, the commissioner shall require an annual 
 23.3   financial statement from a licensee which has been prepared in 
 23.4   accordance with generally accepted accounting principles and 
 23.5   which meets the following requirements:  
 23.6      (a) The financial statement shall include, but not be 
 23.7   limited to the following:  (1) a balance sheet; (2) a statement 
 23.8   of income (profit and loss); (3) a statement of retained 
 23.9   earnings; (4) a statement of changes in financial position; and 
 23.10  (5) a statement of the dollar amount of grain purchased in the 
 23.11  previous fiscal year of the grain buyer.  
 23.12     (b) The financial statement shall be accompanied by a 
 23.13  compilation report of the financial statement which is reviewed 
 23.14  financial statement or audit prepared by a grain commission firm 
 23.15  or a management firm approved by the commissioner or by an 
 23.16  independent public accountant, in accordance with standards 
 23.17  established by the American Institute of Certified Public 
 23.18  Accountants.  
 23.19     (c) The financial statement shall be accompanied by a 
 23.20  certification by the chief executive officer or the chief 
 23.21  executive officer's designee of the licensee, under penalty of 
 23.22  perjury, that the financial statement accurately reflects the 
 23.23  financial condition of the licensee for the period specified in 
 23.24  the statement. 
 23.25     Only one financial statement must be filed for a chain of 
 23.26  warehouses owned or operated as a single business entity, unless 
 23.27  otherwise required by the commissioner.  Any grain buyer having 
 23.28  a net worth in excess of $500,000,000 need not file the 
 23.29  financial statement required by this subdivision but must 
 23.30  provide the commissioner with a certified net worth statement. 
 23.31  All financial statements filed with the commissioner are private 
 23.32  or nonpublic data as provided in section 13.02. 
 23.33     Sec. 28.  Minnesota Statutes 2002, section 223.177, 
 23.34  subdivision 3, is amended to read: 
 23.35     Subd. 3.  [CONTRACTS REDUCED TO WRITING.] A voluntary 
 23.36  extension of credit contract must be reduced to writing by the 
 24.1   grain buyer and mailed or given to the seller before the close 
 24.2   of the next business day after the contract is entered into or, 
 24.3   in the case of an oral or phone contract, after the written 
 24.4   confirmation is received by the seller.  Provided, however, that 
 24.5   if a scale ticket has been received by the seller prior to the 
 24.6   completion of the grain shipment, the contract must be reduced 
 24.7   to writing within ten days after the sale, but not later than 
 24.8   the close of the next business day after the completion of the 
 24.9   entire sale.  The form of the contract shall comply with the 
 24.10  requirements of section 223.175.  A grain buyer may use an 
 24.11  electronic version of a voluntary extension of credit contract 
 24.12  that contains the same information as a written document and 
 24.13  that conforms to the requirements of this chapter to which a 
 24.14  seller has applied an electronic signature in place of a written 
 24.15  document.  There must not at any time be an electronic and paper 
 24.16  voluntary extension of credit contract representing the same lot 
 24.17  of grain. 
 24.18     Sec. 29.  Minnesota Statutes 2002, section 232.21, is 
 24.19  amended by adding a subdivision to read: 
 24.20     Subd. 6a.  [ELECTRONIC DOCUMENT.] "Electronic document" 
 24.21  means a document that is generated, sent, received or stored by 
 24.22  electronic, optical, or similar means, including electronic data 
 24.23  interchange, electronic mail, telegram, telex, or telecopy.  
 24.24  "Electronic document" includes, but is not limited to, warehouse 
 24.25  receipts, grain purchase contracts, and voluntary extension of 
 24.26  credit contracts. 
 24.27     Sec. 30.  Minnesota Statutes 2002, section 232.21, is 
 24.28  amended by adding a subdivision to read: 
 24.29     Subd. 6b.  [ELECTRONIC GRAIN WAREHOUSE 
 24.30  RECEIPT.] "Electronic grain warehouse receipt" means an 
 24.31  electronic version of a grain warehouse receipt issued or 
 24.32  transmitted to a depositor by a grain warehouse operator under 
 24.33  the provisions of section 232.23 in the form of an electronic 
 24.34  document.  An electronic grain warehouse receipt is a negotiable 
 24.35  instrument except as provided in section 232.23, subdivision 11. 
 24.36     Sec. 31.  Minnesota Statutes 2002, section 232.21, is 
 25.1   amended by adding a subdivision to read: 
 25.2      Subd. 6c.  [ELECTRONIC SIGNATURE.] "Electronic signature" 
 25.3   means an electronic sound, symbol, or process attached to or 
 25.4   logically associated with a record and executed or adopted by a 
 25.5   person with the intent to sign the record. 
 25.6      Sec. 32.  Minnesota Statutes 2002, section 232.23, 
 25.7   subdivision 4, is amended to read: 
 25.8      Subd. 4.  [FORM OF GRAIN WAREHOUSE RECEIPT.] (a) A grain 
 25.9   warehouse receipt must be in duplicate, contain the name and 
 25.10  location of the grain warehouse, and be delivered to the 
 25.11  depositor or the depositor's agent.  Grain warehouse receipts 
 25.12  shall be consecutively numbered as prescribed by the 
 25.13  commissioner and state the date of deposit, except where the 
 25.14  deposit of a certain lot for storage is not completed in one 
 25.15  day.  In that case, the grain warehouse receipt, when issued, 
 25.16  shall be dated not later than Saturday of the week of delivery.  
 25.17     (b) A grain warehouse receipt shall contain either on its 
 25.18  face or reverse side the following specific grain warehouse and 
 25.19  storage contract:  "This grain is received, insured and stored 
 25.20  through the date of expiration of the annual licenses of this 
 25.21  grain warehouse and terms expressed in the body of this grain 
 25.22  warehouse receipt shall constitute due notice to its holder of 
 25.23  the expiration of the storage period.  It is unlawful for a 
 25.24  public grain warehouse operator to charge or collect a greater 
 25.25  or lesser amount than the amount filed with the commissioner.  
 25.26  All charges shall be collected by the grain warehouse operator 
 25.27  upon the owner's presentation of the grain warehouse receipt for 
 25.28  the sale or delivery of the grain represented by the receipt, or 
 25.29  the termination of the storage period.  Upon the presentation of 
 25.30  this grain warehouse receipt and payment of all charges accrued 
 25.31  up to the time of presentation, the above amount, kind and grade 
 25.32  of grain will be delivered within the time prescribed by law to 
 25.33  the depositor or the depositor's order."  
 25.34     (c) A grain warehouse receipt shall also have printed on it 
 25.35  the following:  
 25.36                       "Redemption of Receipt 
 26.1      Received from .............., the sum of $........ or 
 26.2   ........  bushels in full satisfaction of the obligation 
 26.3   represented by this grain warehouse receipt.  
 26.4      Gross price per bushel $.......  
 26.5      Storage per bushel $.......  
 26.6      Net price per bushel $.......  
 26.7      All blank spaces in this grain warehouse receipt were 
 26.8   filled in before I signed it and I certify that I am the owner 
 26.9   of the commodity for which this grain warehouse receipt was 
 26.10  issued and that there are no liens, chattel mortgages or other 
 26.11  claims against the commodity represented by this grain warehouse 
 26.12  receipt.  
 26.13                                 Signed ............ 
 26.14  Accepted ..................    Dated  ............
 26.15          Warehouse operator
 26.16     This redemption shall be signed by the depositor or the 
 26.17  depositor's agent in the event that the grain represented is 
 26.18  redelivered or purchased by the public grain warehouse 
 26.19  operator.  Signature of this redemption by the depositor 
 26.20  constitutes a valid cancellation of the obligation embraced in 
 26.21  the storage contract."  
 26.22     (d) A warehouse receipt for dry edible beans must state the 
 26.23  grade of the dry edible beans delivered to the grain warehouse 
 26.24  and the redelivery charge required under subdivision 10a, 
 26.25  paragraph (a).  
 26.26     (e) An electronic version of a grain warehouse receipt 
 26.27  generated by a vendor licensed and approved by the United States 
 26.28  Department of Agriculture that contains the same information as 
 26.29  the paper version of a grain warehouse receipt may be issued 
 26.30  instead of a paper document.  The electronic version of a grain 
 26.31  warehouse receipt carries the same rights and obligations as the 
 26.32  paper version.  At no time may a paper receipt and an electronic 
 26.33  receipt represent the same lot of grain.  Redemption of an 
 26.34  electronic version of a warehouse receipt may be accomplished by 
 26.35  the warehouse receipt holder applying an electronic signature 
 26.36  registered and authenticated by a vendor credited by the United 
 27.1   States Department of Agriculture. 
 27.2      Sec. 33.  Minnesota Statutes 2002, section 500.24, 
 27.3   subdivision 2, is amended to read: 
 27.4      Subd. 2.  [DEFINITIONS.] The definitions in this 
 27.5   subdivision apply to this section. 
 27.6      (a) "Farming" means the production of (1) agricultural 
 27.7   products; (2) livestock or livestock products; (3) milk or milk 
 27.8   products; or (4) fruit or other horticultural products.  It does 
 27.9   not include the processing, refining, or packaging of said 
 27.10  products, nor the provision of spraying or harvesting services 
 27.11  by a processor or distributor of farm products.  It does not 
 27.12  include the production of timber or forest products, the 
 27.13  production of poultry or poultry products, or the feeding and 
 27.14  caring for livestock that are delivered to a corporation for 
 27.15  slaughter or processing for up to 20 days before slaughter or 
 27.16  processing. 
 27.17     (b) "Family farm" means an unincorporated farming unit 
 27.18  owned by one or more persons residing on the farm or actively 
 27.19  engaging in farming. 
 27.20     (c) "Family farm corporation" means a corporation founded 
 27.21  for the purpose of farming and the ownership of agricultural 
 27.22  land in which the majority of the stock is held by and the 
 27.23  majority of the stockholders are persons, the spouses of 
 27.24  persons, or current beneficiaries of one or more family farm 
 27.25  trusts in which the trustee holds stock in a family farm 
 27.26  corporation, related to each other within the third degree of 
 27.27  kindred according to the rules of the civil law, and at least 
 27.28  one of the related persons is residing on or actively operating 
 27.29  the farm, and none of whose stockholders are corporations; 
 27.30  provided that a family farm corporation shall not cease to 
 27.31  qualify as such hereunder by reason of any: 
 27.32     (1) transfer of shares of stock to a person or the spouse 
 27.33  of a person related within the third degree of kindred according 
 27.34  to the rules of civil law to the person making the transfer, or 
 27.35  to a family farm trust of which the shareholder, spouse, or 
 27.36  related person is a current beneficiary; or 
 28.1      (2) distribution from a family farm trust of shares of 
 28.2   stock to a beneficiary related within the third degree of 
 28.3   kindred according to the rules of civil law to a majority of the 
 28.4   current beneficiaries of the trust, or to a family farm trust of 
 28.5   which the shareholder, spouse, or related person is a current 
 28.6   beneficiary. 
 28.7      For the purposes of this section, a transfer may be made 
 28.8   with or without consideration, either directly or indirectly, 
 28.9   during life or at death, whether or not in trust, of the shares 
 28.10  in the family farm corporation, and stock owned by a family farm 
 28.11  trust are considered to be owned in equal shares by the current 
 28.12  beneficiaries. 
 28.13     (d) "Family farm trust" means: 
 28.14     (1) a trust in which: 
 28.15     (i) a majority of the current beneficiaries are persons or 
 28.16  spouses of persons who are related to each other within the 
 28.17  third degree of kindred according to the rules of civil law; 
 28.18     (ii) all of the current beneficiaries are natural persons 
 28.19  or nonprofit corporations or trusts described in the Internal 
 28.20  Revenue Code, section 170(c), as amended, and the regulations 
 28.21  under that section; and 
 28.22     (iii) one of the family member current beneficiaries is 
 28.23  residing on or actively operating the farm; or the trust leases 
 28.24  the agricultural land to a family farm unit, a family farm 
 28.25  corporation, an authorized farm corporation, an authorized 
 28.26  livestock farm corporation, a family farm limited liability 
 28.27  company, a family farm trust, an authorized farm limited 
 28.28  liability company, a family farm partnership, or an authorized 
 28.29  farm partnership; or 
 28.30     (2) a charitable remainder trust as defined in the Internal 
 28.31  Revenue Code, section 664, as amended, and the regulations under 
 28.32  that section, and a charitable lead trust as set forth in the 
 28.33  Internal Revenue Code, section 170(f), and the regulations under 
 28.34  that section, if the lead period does not exceed ten years and 
 28.35  the majority of remainder beneficiaries are related to the 
 28.36  grantor within the third degree of kindred according to the 
 29.1   rules of civil law. 
 29.2      For the purposes of this section, if a distributee trust 
 29.3   becomes entitled to, or at the discretion of any person may 
 29.4   receive, a distribution from income or principal of a family 
 29.5   farm trust, then the distributee trust must independently 
 29.6   qualify as a family farm trust. 
 29.7      (e) "Authorized farm corporation" means a corporation 
 29.8   meeting the following standards: 
 29.9      (1) it has no more than five shareholders, provided that 
 29.10  for the purposes of this section, a husband and wife are 
 29.11  considered one shareholder; 
 29.12     (2) all its shareholders, other than any estate, are 
 29.13  natural persons or a family farm trust; 
 29.14     (3) it does not have more than one class of shares; 
 29.15     (4) its revenue from rent, royalties, dividends, interest, 
 29.16  and annuities does not exceed 20 percent of its gross receipts; 
 29.17     (5) shareholders holding 51 percent or more of the interest 
 29.18  in the corporation reside on the farm or are actively engaging 
 29.19  in farming; 
 29.20     (6) it does not, directly or indirectly, own or otherwise 
 29.21  have an interest in any title to more than 1,500 acres of 
 29.22  agricultural land; and 
 29.23     (7) none of its shareholders are shareholders in other 
 29.24  authorized farm corporations that directly or indirectly in 
 29.25  combination with the corporation own more than 1,500 acres of 
 29.26  agricultural land. 
 29.27     (f) "Authorized livestock farm corporation" means a 
 29.28  corporation formed for the production of livestock and meeting 
 29.29  the following standards: 
 29.30     (1) it is engaged in the production of livestock other than 
 29.31  dairy cattle; 
 29.32     (2) all its shareholders, other than any estate, are 
 29.33  natural persons, family farm trusts, or family farm 
 29.34  corporations; 
 29.35     (3) it does not have more than one class of shares; 
 29.36     (4) its revenue from rent, royalties, dividends, interest, 
 30.1   and annuities does not exceed 20 percent of its gross receipts; 
 30.2      (5) shareholders holding 75 percent or more of the control, 
 30.3   financial, and capital investment in the corporation are farmers 
 30.4   residing in Minnesota, and at least 51 percent of the required 
 30.5   percentage of farmers are actively engaged in livestock 
 30.6   production; 
 30.7      (6) it does not, directly or indirectly, own or otherwise 
 30.8   have an interest in any title to more than 1,500 acres of 
 30.9   agricultural land; and 
 30.10     (7) none of its shareholders are shareholders in other 
 30.11  authorized farm corporations that directly or indirectly in 
 30.12  combination with the corporation own more than 1,500 acres of 
 30.13  agricultural land. 
 30.14     (g) "Agricultural land" means real estate used for farming 
 30.15  or capable of being used for farming in this state. 
 30.16     (h) "Pension or investment fund" means a pension or 
 30.17  employee welfare benefit fund, however organized, a mutual fund, 
 30.18  a life insurance company separate account, a common trust of a 
 30.19  bank or other trustee established for the investment and 
 30.20  reinvestment of money contributed to it, a real estate 
 30.21  investment trust, or an investment company as defined in United 
 30.22  States Code, title 15, section 80a-3.  
 30.23     (i) "Farm homestead" means a house including adjoining 
 30.24  buildings that has been used as part of a farming operation or 
 30.25  is part of the agricultural land used for a farming operation. 
 30.26     (j) "Family farm partnership" means a limited partnership 
 30.27  formed for the purpose of farming and the ownership of 
 30.28  agricultural land in which the majority of the interests in the 
 30.29  partnership is held by and the majority of the partners are 
 30.30  natural persons, the spouses of persons, or current 
 30.31  beneficiaries of one or more family farm trusts in which the 
 30.32  trustee holds an interest in a family farm partnership related 
 30.33  to each other within the third degree of kindred according to 
 30.34  the rules of the civil law, and at least one of the related 
 30.35  persons is residing on the farm, actively operating the farm, or 
 30.36  the agricultural land was owned by one or more of the related 
 31.1   persons for a period of five years before its transfer to the 
 31.2   limited partnership, and none of the partners are corporations 
 31.3   is a corporation.  A family farm partnership does not cease to 
 31.4   qualify as a family farm partnership because of a: 
 31.5      (1) transfer of a partnership interest to a person or 
 31.6   spouse of a person related within the third degree of kindred 
 31.7   according to the rules of civil law to the person making the 
 31.8   transfer or to a family farm trust of which the partner, spouse, 
 31.9   or related person is a current beneficiary; or 
 31.10     (2) distribution from a family farm trust of a partnership 
 31.11  interest to a beneficiary related within the third degree of 
 31.12  kindred according to the rules of civil law to a majority of the 
 31.13  current beneficiaries of the trust, or to a family farm trust of 
 31.14  which the partner, spouse, or related person is a current 
 31.15  beneficiary. 
 31.16     For the purposes of this section, a transfer may be made 
 31.17  with or without consideration, either directly or indirectly, 
 31.18  during life or at death, whether or not in trust, of a 
 31.19  partnership interest in the family farm partnership, and 
 31.20  interest owned by a family farm trust is considered to be owned 
 31.21  in equal shares by the current beneficiaries. 
 31.22     (k) "Authorized farm partnership" means a limited 
 31.23  partnership meeting the following standards:  
 31.24     (1) it has been issued a certificate from the secretary of 
 31.25  state or is registered with the county recorder and farming and 
 31.26  ownership of agricultural land is stated as a purpose or 
 31.27  character of the business; 
 31.28     (2) it has no more than five partners; 
 31.29     (3) all its partners, other than any estate, are natural 
 31.30  persons or family farm trusts; 
 31.31     (4) its revenue from rent, royalties, dividends, interest, 
 31.32  and annuities does not exceed 20 percent of its gross receipts; 
 31.33     (5) its general partners hold at least 51 percent of the 
 31.34  interest in the land assets of the partnership and reside on the 
 31.35  farm or are actively engaging in farming not more than 1,500 
 31.36  acres as a general partner in an authorized limited partnership; 
 32.1      (6) its limited partners do not participate in the business 
 32.2   of the limited partnership including operating, managing, or 
 32.3   directing management of farming operations; 
 32.4      (7) it does not, directly or indirectly, own or otherwise 
 32.5   have an interest in any title to more than 1,500 acres of 
 32.6   agricultural land; and 
 32.7      (8) none of its limited partners are limited partners in 
 32.8   other authorized farm partnerships that directly or indirectly 
 32.9   in combination with the partnership own more than 1,500 acres of 
 32.10  agricultural land.  
 32.11     (l) "Family farm limited liability company" means a limited 
 32.12  liability company founded for the purpose of farming and the 
 32.13  ownership of agricultural land in which the majority of the 
 32.14  membership interests are is held by and the majority of the 
 32.15  members are natural persons or the spouses of persons, or 
 32.16  current beneficiaries of one or more family farm trusts in which 
 32.17  the trustee holds stock an interest in a family farm limited 
 32.18  liability company related to each other within the third degree 
 32.19  of kindred according to the rules of the civil law, and at least 
 32.20  one of the related persons is residing on the farm, actively 
 32.21  operating the farm, or the agricultural land was owned by one or 
 32.22  more of the related persons for a period of five years before 
 32.23  its transfer to the limited liability company, and none of the 
 32.24  members are corporations is a corporation or a limited liability 
 32.25  companies company.  A family farm limited liability company does 
 32.26  not cease to qualify as a family farm limited liability company 
 32.27  because of: 
 32.28     (1) a transfer of a membership interest to a person or 
 32.29  spouse of a person related within the third degree of kindred 
 32.30  according to the rules of civil law to the person making the 
 32.31  transfer or to a family farm trust of which the member, spouse, 
 32.32  or related person is a current beneficiary; or 
 32.33     (2) distribution from a family farm trust of a membership 
 32.34  interest to a beneficiary related within the third degree of 
 32.35  kindred according to the rules of civil law to a majority of the 
 32.36  current beneficiaries of the trust, or to a family farm trust of 
 33.1   which the member, spouse, or related person is a current 
 33.2   beneficiary. 
 33.3      For the purposes of this section, a transfer may be made 
 33.4   with or without consideration, either directly or indirectly, 
 33.5   during life or at death, whether or not in trust, of a 
 33.6   membership interest in the family farm limited liability 
 33.7   company, and interest owned by a family farm trust is considered 
 33.8   to be owned in equal shares by the current beneficiaries.  
 33.9   Except for a state or federally chartered financial institution 
 33.10  acquiring an encumbrance for the purpose of security or an 
 33.11  interest under paragraph (x), a member of a family farm limited 
 33.12  liability company may not transfer a membership interest, 
 33.13  including a financial interest, to a person who is not otherwise 
 33.14  eligible to be a member under this paragraph. 
 33.15     (m) "Authorized farm limited liability company" means a 
 33.16  limited liability company meeting the following standards: 
 33.17     (1) it has no more than five members; 
 33.18     (2) all its members, other than any estate, are natural 
 33.19  persons or family farm trusts; 
 33.20     (3) it does not have more than one class of membership 
 33.21  interests; 
 33.22     (4) its revenue from rent, royalties, dividends, interest, 
 33.23  and annuities does not exceed 20 percent of its gross receipts; 
 33.24     (5) members holding 51 percent or more of both the 
 33.25  governance rights and financial rights in the limited liability 
 33.26  company reside on the farm or are actively engaged in farming; 
 33.27     (6) it does not, directly or indirectly, own or otherwise 
 33.28  have an interest in any title to more than 1,500 acres of 
 33.29  agricultural land; and 
 33.30     (7) none of its members are members in other authorized 
 33.31  farm limited liability companies that directly or indirectly in 
 33.32  combination with the authorized farm limited liability company 
 33.33  own more than 1,500 acres of agricultural land. 
 33.34     Except for a state or federally chartered financial 
 33.35  institution acquiring an encumbrance for the purpose of security 
 33.36  or an interest under paragraph (x), a member of an authorized 
 34.1   farm limited liability company may not transfer a membership 
 34.2   interest, including a financial interest, to a person who is not 
 34.3   otherwise eligible to be a member under this paragraph. 
 34.4      (n) "Farmer" means a natural person who regularly 
 34.5   participates in physical labor or operations management in the 
 34.6   person's farming operation and files "Schedule F" as part of the 
 34.7   person's annual Form 1040 filing with the United States Internal 
 34.8   Revenue Service. 
 34.9      (o) "Actively engaged in livestock production" means 
 34.10  performing day-to-day physical labor or day-to-day operations 
 34.11  management that significantly contributes to livestock 
 34.12  production and the functioning of a livestock operation. 
 34.13     (p) "Research or experimental farm" means a corporation, 
 34.14  limited partnership, pension, investment fund, or limited 
 34.15  liability company that owns or operates agricultural land for 
 34.16  research or experimental purposes, provided that any commercial 
 34.17  sales from the operation are incidental to the research or 
 34.18  experimental objectives of the corporation.  A corporation, 
 34.19  limited partnership, limited liability company, or pension or 
 34.20  investment fund seeking initial approval by the commissioner to 
 34.21  operate agricultural land for research or experimental purposes 
 34.22  must first submit to the commissioner a prospectus or proposal 
 34.23  of the intended method of operation containing information 
 34.24  required by the commissioner including a copy of any operational 
 34.25  contract with individual participants. 
 34.26     (q) "Breeding stock farm" means a corporation, limited 
 34.27  partnership, or limited liability company, that owns or operates 
 34.28  agricultural land for the purpose of raising breeding stock, 
 34.29  including embryos, for resale to farmers or for the purpose of 
 34.30  growing seed, wild rice, nursery plants, or sod.  An entity that 
 34.31  is organized to raise livestock other than dairy cattle under 
 34.32  this paragraph that does not qualify as an authorized farm 
 34.33  corporation must:  
 34.34     (1) sell all castrated animals to be fed out or finished to 
 34.35  farming operations that are neither directly nor indirectly 
 34.36  owned by the business entity operating the breeding stock 
 35.1   operation; and 
 35.2      (2) report its total production and sales annually to the 
 35.3   commissioner.  
 35.4      (r) "Aquatic farm" means a corporation, limited 
 35.5   partnership, or limited liability company, that owns or leases 
 35.6   agricultural land as a necessary part of an aquatic farm as 
 35.7   defined in section 17.47, subdivision 3.  
 35.8      (s) "Religious farm" means a corporation formed primarily 
 35.9   for religious purposes whose sole income is derived from 
 35.10  agriculture.  
 35.11     (t) "Utility corporation" means a corporation regulated 
 35.12  under Minnesota Statutes 1974, chapter 216B, that owns 
 35.13  agricultural land for purposes described in that chapter, or an 
 35.14  electric generation or transmission cooperative that owns 
 35.15  agricultural land for use in its business if the land is not 
 35.16  used for farming except under lease to a family farm unit, a 
 35.17  family farm corporation, a family farm trust, a family farm 
 35.18  partnership, or a family farm limited liability company.  
 35.19     (u) "Development organization" means a corporation, limited 
 35.20  partnership, limited liability company, or pension or investment 
 35.21  fund that has an interest in agricultural land for which the 
 35.22  corporation, limited partnership, limited liability company, or 
 35.23  pension or investment fund has documented plans to use and 
 35.24  subsequently uses the land within six years from the date of 
 35.25  purchase for a specific nonfarming purpose, or if the land is 
 35.26  zoned nonagricultural, or if the land is located within an 
 35.27  incorporated area.  A corporation, limited partnership, limited 
 35.28  liability company, or pension or investment fund may hold 
 35.29  agricultural land in the amount necessary for its nonfarm 
 35.30  business operation; provided, however, that pending the 
 35.31  development of agricultural land for nonfarm purposes, the land 
 35.32  may not be used for farming except under lease to a family farm 
 35.33  unit, a family farm corporation, a family farm trust, an 
 35.34  authorized farm corporation, an authorized livestock farm 
 35.35  corporation, a family farm partnership, an authorized farm 
 35.36  partnership, a family farm limited liability company, or an 
 36.1   authorized farm limited liability company, or except when 
 36.2   controlled through ownership, options, leaseholds, or other 
 36.3   agreements by a corporation that has entered into an agreement 
 36.4   with the United States under the New Community Act of 1968 
 36.5   (Title IV of the Housing and Urban Development Act of 1968, 
 36.6   United States Code, title 42, sections 3901 to 3914) as amended, 
 36.7   or a subsidiary or assign of such a corporation.  
 36.8      (v) "Exempt land" means agricultural land owned or leased 
 36.9   by a corporation as of May 20, 1973, agricultural land owned or 
 36.10  leased by a pension or investment fund as of May 12, 1981, 
 36.11  agricultural land owned or leased by a limited partnership as of 
 36.12  May 1, 1988, or agricultural land owned or leased by a trust as 
 36.13  of the effective date of Laws 2000, chapter 477, including the 
 36.14  normal expansion of that ownership at a rate not to exceed 20 
 36.15  percent of the amount of land owned as of May 20, 1973, for a 
 36.16  corporation; May 12, 1981, for a pension or investment fund; May 
 36.17  1, 1988, for a limited partnership, or the effective date of 
 36.18  Laws 2000, chapter 477, for a trust, measured in acres, in any 
 36.19  five-year period, and including additional ownership reasonably 
 36.20  necessary to meet the requirements of pollution control rules.  
 36.21  A corporation, limited partnership, or pension or investment 
 36.22  fund that is eligible to own or lease agricultural land under 
 36.23  this section prior to May 1997, or a corporation that is 
 36.24  eligible to own or lease agricultural land as a benevolent trust 
 36.25  under this section prior to the effective date of Laws 2000, 
 36.26  chapter 477, may continue to own or lease agricultural land 
 36.27  subject to the same conditions and limitations as previously 
 36.28  allowed.  
 36.29     (w) "Gifted land" means agricultural land acquired as a 
 36.30  gift, either by grant or devise, by an educational, religious, 
 36.31  or charitable nonprofit corporation, limited partnership, 
 36.32  limited liability company, or pension or investment fund if all 
 36.33  land so acquired is disposed of within ten years after acquiring 
 36.34  the title.  
 36.35     (x) "Repossessed land" means agricultural land acquired by 
 36.36  a corporation, limited partnership, limited liability company, 
 37.1   or pension or investment fund by process of law in the 
 37.2   collection of debts, or by any procedure for the enforcement of 
 37.3   a lien or claim on the land, whether created by mortgage or 
 37.4   otherwise if all land so acquired is disposed of within five 
 37.5   years after acquiring the title.  The five-year limitation is a 
 37.6   covenant running with the title to the land against any grantee, 
 37.7   assignee, or successor of the pension or investment fund, 
 37.8   corporation, limited partnership, or limited liability company.  
 37.9   The land so acquired must not be used for farming during the 
 37.10  five-year period, except under a lease to a family farm unit, a 
 37.11  family farm corporation, a family farm trust, an authorized farm 
 37.12  corporation, an authorized livestock farm corporation, a family 
 37.13  farm partnership, an authorized farm partnership, a family farm 
 37.14  limited liability company, or an authorized farm limited 
 37.15  liability company.  Notwithstanding the five-year divestiture 
 37.16  requirement under this paragraph, a financial institution may 
 37.17  continue to own the agricultural land if the agricultural land 
 37.18  is leased to the immediately preceding former owner, but must 
 37.19  dispose of the agricultural land within ten years of acquiring 
 37.20  the title.  Livestock acquired by a pension or investment fund, 
 37.21  corporation, limited partnership, or limited liability company 
 37.22  in the collection of debts, or by a procedure for the 
 37.23  enforcement of lien or claim on the livestock whether created by 
 37.24  security agreement or otherwise after August 1, 1994, must be 
 37.25  sold or disposed of within one full production cycle for the 
 37.26  type of livestock acquired or 18 months after the livestock is 
 37.27  acquired, whichever is earlier.  
 37.28     (y) "Commissioner" means the commissioner of agriculture.  
 37.29     (z) "Nonprofit corporation" means a nonprofit corporation 
 37.30  organized under state nonprofit corporation or trust law or 
 37.31  qualified for tax-exempt status under federal tax law that uses 
 37.32  the land for a specific nonfarming purpose or leases the 
 37.33  agricultural land to a family farm unit, a family farm 
 37.34  corporation, an authorized farm corporation, an authorized 
 37.35  livestock farm corporation, a family farm limited liability 
 37.36  company, a family farm trust, an authorized farm limited 
 38.1   liability company, a family farm partnership, or an authorized 
 38.2   farm partnership. 
 38.3      (aa) "Current beneficiary" means a person who at any time 
 38.4   during a year is entitled to, or at the discretion of any person 
 38.5   may, receive a distribution from the income or principal of the 
 38.6   trust.  It does not include a distributee trust, other than a 
 38.7   trust described in section 170(c) of the Internal Revenue Code, 
 38.8   as amended, but does include the current beneficiaries of the 
 38.9   distributee trust.  It does not include a person in whose favor 
 38.10  a power of appointment could be exercised until the holder of 
 38.11  the power of appointment actually exercises the power of 
 38.12  appointment in that person's favor.  It does not include a 
 38.13  person who is entitled to receive a distribution only after a 
 38.14  specified time or upon the occurrence of a specified event until 
 38.15  the time or occurrence of the event.  For the purposes of this 
 38.16  section, a distributee trust is a current beneficiary of a 
 38.17  family farm trust. 
 38.18     (bb) "De minimis" means that any corporation, pension or 
 38.19  investment fund, limited liability company, or limited 
 38.20  partnership that directly or indirectly owns, acquires, or 
 38.21  otherwise obtains any interest in 40 acres or less of 
 38.22  agricultural land and annually receives less than $150 per acre 
 38.23  in gross revenue from rental or agricultural production. 
 38.24     Sec. 34.  Minnesota Statutes 2002, section 500.24, 
 38.25  subdivision 3a, is amended to read: 
 38.26     Subd. 3a.  [LEASE AGREEMENT; CONSERVATION PRACTICE 
 38.27  PROTECTION CLAUSE.] A corporation, pension or investment fund, 
 38.28  limited partnership, or limited liability company other than 
 38.29  those meeting any of the definitions in subdivision 2, 
 38.30  paragraphs (c) to (f) or (j) to (m), when leasing farm land to a 
 38.31  family farm unit, a family farm corporation, a family farm 
 38.32  trust, an authorized farm corporation, an authorized livestock 
 38.33  farm corporation, a family farm partnership, an authorized farm 
 38.34  partnership, a family farm limited liability company, or an 
 38.35  authorized farm limited liability company, under provisions of 
 38.36  subdivision 2, paragraph (x), must include within the lease 
 39.1   agreement a provision prohibiting intentional damage or 
 39.2   destruction to a conservation practice on the agricultural land. 
 39.3      Sec. 35.  [DELAYED PAYMENTS IN 2003.] 
 39.4      Not later than 60 days after the effective date of section 
 39.5   11, the commissioner of agriculture shall pay any producer 
 39.6   denied payment for failure to meet the ownership and reporting 
 39.7   requirements imposed by Laws 2003, chapter 128, article 3, 
 39.8   section 38, the amount to which the producer would have been 
 39.9   otherwise entitled. 
 39.10     Sec. 36.  [REPEALER.] 
 39.11     Minnesota Statutes 2002, sections 38.02, subdivision 2; and 
 39.12  38.13, are repealed. 
 39.13     Sec. 37.  [EFFECTIVE DATE.] 
 39.14     Sections 11 and 35 are effective the day following final 
 39.15  enactment.  Section 26 is effective July 1, 2004.