1.1                          A bill for an act 
  1.2             relating to agriculture; modifying provisions relating 
  1.3             to shared savings loan program; establishing a 
  1.4             livestock production policy; modifying provisions 
  1.5             relating to certain home-processed foods and county 
  1.6             and regional fairs; modifying ethanol plant ownership 
  1.7             disclosure requirements; modifying eligibility and 
  1.8             limits for certain Rural Finance Authority loans; 
  1.9             providing for dairy modernization; changing certain 
  1.10            requirements for veterinary practice; modifying 
  1.11            amounts for certain grain buyers' bonds; providing for 
  1.12            the validity of electronic documents and signatures 
  1.13            for grain buyers and grain warehouses; modifying 
  1.14            certain restrictions on farming by business 
  1.15            organizations and certain restrictions on acquisition 
  1.16            of title; modifying requirements on uses of certain 
  1.17            vaccines in beef cattle; amending Minnesota Statutes 
  1.18            2002, sections 17.115, subdivisions 2, 3; 28A.15, by 
  1.19            adding a subdivision; 35.243; 38.04; 38.12; 38.14; 
  1.20            38.15; 38.16; 41B.03, subdivisions 2, 3; 41B.039, 
  1.21            subdivision 2; 41B.04, subdivision 8; 41B.042, 
  1.22            subdivision 4; 41B.043, subdivision 1b, by adding a 
  1.23            subdivision; 41B.045, subdivision 2; 41B.046, 
  1.24            subdivision 5; 41C.02, subdivision 12; 156.12, 
  1.25            subdivision 2, by adding a subdivision; 223.16, by 
  1.26            adding subdivisions; 223.17, subdivision 6; 223.177, 
  1.27            subdivision 3; 232.21, by adding subdivisions; 232.23, 
  1.28            subdivision 4; 308A.995, subdivision 5; 500.221, 
  1.29            subdivisions 1, 1a, 5; 500.24, subdivisions 2, 3a; 
  1.30            Minnesota Statutes 2003 Supplement, sections 18B.07, 
  1.31            subdivision 2; 38.02, subdivisions 1, 3; 41A.09, 
  1.32            subdivision 3a; 223.17, subdivision 4; 308B.121, 
  1.33            subdivision 5; proposing coding for new law in 
  1.34            Minnesota Statutes, chapters 17; 116J; repealing 
  1.35            Minnesota Statutes 2002, sections 38.02, subdivision 
  1.36            2; 38.13. 
  1.37  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.38     Section 1.  Minnesota Statutes 2002, section 17.115, 
  1.39  subdivision 2, is amended to read: 
  1.40     Subd. 2.  [LOAN CRITERIA.] (a) The shared savings loan 
  1.41  program must provide loans for purchase of new or used machinery 
  2.1   and installation of equipment for projects that make 
  2.2   environmental improvements or enhance farm profitability.  
  2.3   Eligible loan uses do not include seed, fertilizer, or fuel. 
  2.4      (b) Loans may not exceed $25,000 per individual applying 
  2.5   for a loan and may not exceed $100,000 for loans to four or more 
  2.6   individuals on joint projects.  The loan repayment period may be 
  2.7   up to seven years as determined by project cost and energy 
  2.8   savings.  The interest rate on the loans is must not exceed six 
  2.9   percent.  For loans made from May 1, 2004, to June 30, 2007, the 
  2.10  interest rate must not exceed three percent. 
  2.11     (c) Loans may only be made to residents of this state 
  2.12  engaged in farming.  
  2.13     Sec. 2.  Minnesota Statutes 2002, section 17.115, 
  2.14  subdivision 3, is amended to read: 
  2.15     Subd. 3.  [AWARDING OF LOANS.] (a) Applications for loans 
  2.16  must be made to the commissioner on forms prescribed by the 
  2.17  commissioner. 
  2.18     (b) The applications must be reviewed, ranked, and 
  2.19  recommended by a loan review panel appointed by the 
  2.20  commissioner.  The loan review panel shall consist of two 
  2.21  lenders with agricultural experience, two resident farmers of 
  2.22  the state using sustainable agriculture methods, two resident 
  2.23  farmers of the state using organic agriculture methods, a farm 
  2.24  management specialist, a representative from a postsecondary 
  2.25  education institution, and a chair from the department.  
  2.26     (c) The loan review panel shall rank applications according 
  2.27  to the following criteria: 
  2.28     (1) realize savings to the cost of agricultural production; 
  2.29     (2) reduce or make more efficient use of energy or inputs; 
  2.30     (3) increase overall farm profitability; and 
  2.31     (4) result in environmental benefits.  
  2.32     (d) A loan application must show that the loan can be 
  2.33  repaid by the applicant.  
  2.34     (e) The commissioner must consider the recommendations of 
  2.35  the loan review panel and may make loans for eligible projects.  
  2.36     (f) For loans made between May 1, 2004, and June 30, 2007, 
  3.1   the commissioner shall give priority to loans to resident 
  3.2   farmers beginning or expanding organic farming operations. 
  3.3      Sec. 3.  [17.844] [LIVESTOCK PRODUCTION POLICY.] 
  3.4      (a) The policy of the state is to promote livestock 
  3.5   production on family farms under a broad range of management 
  3.6   systems that are environmentally sound and meet all legal 
  3.7   requirements of all jurisdictions, including federal, state, 
  3.8   county, town, city, and watershed district requirements. 
  3.9      (b) In order to promote livestock production on family 
  3.10  farms, state agencies when appropriate shall, to the extent 
  3.11  allowed by law: 
  3.12     (1) promote the establishment of livestock enterprises on 
  3.13  family farms; 
  3.14     (2) promote environmental protection and water quality 
  3.15  improvement through increased livestock production that results 
  3.16  in controlling runoff through increased acreage of hay, pasture, 
  3.17  and small grains; and 
  3.18     (3) promote more farms to use agronomically applied manure 
  3.19  to increase the water holding capacity of the soil, control 
  3.20  erosion, and decrease phosphorus runoff. 
  3.21     Sec. 4.  Minnesota Statutes 2003 Supplement, section 
  3.22  18B.07, subdivision 2, is amended to read: 
  3.23     Subd. 2.  [PROHIBITED PESTICIDE USE.] (a) A person may not 
  3.24  use, store, handle, distribute, or dispose of a pesticide, 
  3.25  rinsate, pesticide container, or pesticide application equipment 
  3.26  in a manner: 
  3.27     (1) that is inconsistent with a label or labeling as 
  3.28  defined by FIFRA; 
  3.29     (2) that endangers humans, damages agricultural products, 
  3.30  food, livestock, fish, or wildlife; or 
  3.31     (3) that will cause unreasonable adverse effects on the 
  3.32  environment.  
  3.33     (b) A person may not direct a pesticide onto property 
  3.34  beyond the boundaries of the target site.  A person may not 
  3.35  apply a pesticide resulting in damage to adjacent property. 
  3.36     (c) A person may not directly apply a pesticide on a human 
  4.1   by overspray or target site spray, except when: 
  4.2      (1) the pesticide is intended for use on a human; 
  4.3      (2) the pesticide application is for mosquito control 
  4.4   operations; 
  4.5      (3) the pesticide application is for control of gypsy moth, 
  4.6   forest tent caterpillar, or other pest species, as determined by 
  4.7   the commissioner, and the pesticide used is a biological agent; 
  4.8   or 
  4.9      (4) the pesticide application is for a public health risk, 
  4.10  as determined by the commissioner of health, and the 
  4.11  commissioner of health, in consultation with the commissioner of 
  4.12  agriculture, determines that the application is warranted based 
  4.13  on the commissioner's balancing of the public health risk with 
  4.14  the risk that the pesticide application poses to the health of 
  4.15  the general population, with special attention to the health of 
  4.16  children. 
  4.17     (d) For pesticide applications under paragraph (c), clause 
  4.18  (2), the following conditions apply: 
  4.19     (1) no practicable and effective alternative method of 
  4.20  control exists; 
  4.21     (2) the pesticide is among the least toxic available for 
  4.22  control of the target pest; and 
  4.23     (3) notification to residents in the area to be treated is 
  4.24  provided at least 24 hours before application through direct 
  4.25  notification, posting daily on the treating organization's Web 
  4.26  site, if any, and by sending a broadcast e-mail to those persons 
  4.27  who request notification of such, of those areas to be treated 
  4.28  by adult mosquito control techniques during the next calendar 
  4.29  day.  For control operations related to human disease, notice 
  4.30  under this paragraph may be given less than 24 hours in advance. 
  4.31     (e) For pesticide applications under paragraph (c), clauses 
  4.32  (3) and (4), the following conditions apply: 
  4.33     (1) no practicable and effective alternative method of 
  4.34  control exists; 
  4.35     (2) the pesticide is among the least toxic available for 
  4.36  control of the target pest; and 
  5.1      (3) notification of residents in the area to be treated is 
  5.2   provided by direct notification and through publication in a 
  5.3   newspaper of general circulation within the affected area. 
  5.4      (f) For purposes of this subdivision, "direct notification" 
  5.5   may include mailings, public meetings, posted placards, 
  5.6   neighborhood newsletters, or other means of contact designed to 
  5.7   reach as many residents as possible.  Public meetings held to 
  5.8   meet this requirement for adult mosquito control, under 
  5.9   paragraph (d), must be held within each city or town where the 
  5.10  pesticide treatments are to be made, at a time and location that 
  5.11  is convenient for residents of the area where the treatments 
  5.12  will occur. 
  5.13     (g) A person may not apply a pesticide in a manner so as to 
  5.14  expose a worker in an immediately adjacent, open field. 
  5.15     Sec. 5.  Minnesota Statutes 2002, section 28A.15, is 
  5.16  amended by adding a subdivision to read: 
  5.17     Subd. 10.  [CERTAIN HOME-PROCESSED AND HOME-CANNED 
  5.18  FOODS.] (a) A person who receives less than $5,000 in gross 
  5.19  receipts in a calendar year from the sale of home-processed and 
  5.20  home-canned food products and meets the requirements in clauses 
  5.21  (1) to (5): 
  5.22     (1) the products are pickles, vegetables, or fruits having 
  5.23  an equilibrium pH value of 4.6 or lower; 
  5.24     (2) the products are home-processed and home-canned in 
  5.25  Minnesota; 
  5.26     (3) the products are sold or offered for sale at a 
  5.27  community or social event or a farmers' market in Minnesota; 
  5.28     (4) the seller displays at the point of sale a clearly 
  5.29  legible sign or placard stating:  "These canned goods are 
  5.30  homemade and not subject to state inspection" unless the 
  5.31  products were processed and canned in a kitchen that is licensed 
  5.32  or inspected; and 
  5.33     (5) each container of the product sold or offered for sale 
  5.34  under this exemption is accurately labeled to provide the name 
  5.35  and address of the person who processed and canned the goods and 
  5.36  the date on which the goods were processed and canned. 
  6.1      (b) A person that qualifies for an exemption under 
  6.2   paragraph (a) is also exempt from the provisions of sections 
  6.3   31.31 and 31.392. 
  6.4      (c) A person claiming an exemption under this subdivision 
  6.5   is urged to: 
  6.6      (1) attend and successfully complete a better process 
  6.7   school recognized by the commissioner; and 
  6.8      (2) have the recipe and manufacturing process reviewed by a 
  6.9   person knowledgeable in the food canning industry and recognized 
  6.10  by the commissioner as a process authority. 
  6.11     (d) The commissioner, in close cooperation with the 
  6.12  commissioner of health and the Minnesota Extension Service, 
  6.13  shall attempt to maximize the availability of information and 
  6.14  technical services and support for persons who wish to 
  6.15  home-process and home-can low acid and acidified food products. 
  6.16     Sec. 6.  Minnesota Statutes 2002, section 35.243, is 
  6.17  amended to read: 
  6.18     35.243 [RULES FOR CONTROL OF BRUCELLOSIS IN CATTLE.] 
  6.19     The Board of Animal Health shall adopt rules to provide for 
  6.20  the control of brucellosis in cattle.  The rules may include 
  6.21  provisions for quarantine, tests, and vaccinations, and such 
  6.22  other measures as the board deems appropriate.  A prescription 
  6.23  from a licensed veterinarian is not required for the sale of 
  6.24  modified live vaccines used to prevent common diseases in beef 
  6.25  cattle, except for brucellosis, rabies, and anthrax. 
  6.26     Sec. 7.  Minnesota Statutes 2003 Supplement, section 38.02, 
  6.27  subdivision 1, is amended to read: 
  6.28     Subdivision 1.  [PRO RATA DISTRIBUTION; CONDITIONS.] (a) 
  6.29  Money appropriated to aid county and district agricultural 
  6.30  societies and associations shall be distributed among all county 
  6.31  and district agricultural societies or associations in the state 
  6.32  pro rata, upon condition that each of them has complied with the 
  6.33  conditions specified in paragraph (b). 
  6.34     (b) To be eligible to participate in the distribution of 
  6.35  aid, each agricultural society or association shall have: 
  6.36     (1) held an annual fair for each of the three years last 
  7.1   past, unless prevented from doing so because of a calamity or an 
  7.2   epidemic declared by the Board of Health as defined in section 
  7.3   145A.02, subdivision 2, or the state commissioner of health, or 
  7.4   the Board of Animal Health to exist; 
  7.5      (2) an annual membership of 25 15 or more; 
  7.6      (3) paid out to exhibitors for premiums awarded at the last 
  7.7   fair held a sum not less than the amount to be received from the 
  7.8   state; 
  7.9      (4) published and distributed, or made available on an 
  7.10  Internet Web site, not less than three weeks before the opening 
  7.11  day of the fair a premium list, listing all items or articles on 
  7.12  which premiums are offered and the amounts of such premiums and 
  7.13  shall have paid premiums pursuant to the amount shown for each 
  7.14  article or item to be exhibited; provided that premiums for 
  7.15  school exhibits may be advertised in the published premium list 
  7.16  by reference to a school premium list prepared and circulated 
  7.17  during the preceding school year; and shall have collected all 
  7.18  fees charged for entering an exhibit at the time the entry was 
  7.19  made and in accordance with schedule of entry fees to be charged 
  7.20  as published in the premium list; 
  7.21     (5) paid not more than one premium on each article or item 
  7.22  exhibited, excluding championship or sweepstake awards, and 
  7.23  excluding the payment of open class premium awards to 4H Club 
  7.24  exhibits which at this same fair had won a first prize award in 
  7.25  regular 4H Club competition; and 
  7.26     (6) submitted its records and annual report to the 
  7.27  commissioner of agriculture on a form provided by the 
  7.28  commissioner of agriculture, on or before the first day of 
  7.29  November of the year in which the fair was held its annual 
  7.30  report of premiums paid. 
  7.31     (c) All payments authorized under the provisions of this 
  7.32  chapter shall be made only upon the presentation by the 
  7.33  commissioner of agriculture with the commissioner of finance of 
  7.34  a statement of premium allocations.  As used herein the term 
  7.35  premium shall mean the cash award paid to an exhibitor for the 
  7.36  merit of an exhibit of livestock, livestock products, grains, 
  8.1   fruits, flowers, vegetables, articles of domestic science, 
  8.2   handicrafts, hobbies, fine arts, other products of a creative 
  8.3   nature, and articles made by school pupils, or the cash award 
  8.4   paid to the merit winner of events such as 4H Club or Future 
  8.5   Farmer contest, youth group contests, school spelling contests 
  8.6   and school current events contests, the award corresponding to 
  8.7   the amount offered in the advertised premium list referred to in 
  8.8   schedule 2.  Payments of awards for horse races, horse pulls, 
  8.9   tractor pulls, demolition derby, automobile or other racing, 
  8.10  jackpot premiums, ball games, musical contests, talent contests, 
  8.11  parades, and for amusement features for which admission is 
  8.12  charged, are specifically excluded from consideration as 
  8.13  premiums within the meaning of that term as used herein.  Upon 
  8.14  receipt of the statement by the commissioner of agriculture, the 
  8.15  commissioner of finance shall draw a voucher in favor of the 
  8.16  agricultural society or association for the amount to which it 
  8.17  is entitled under the provisions of this chapter.  The amount 
  8.18  shall be computed as follows:  On the first $750 premiums paid 
  8.19  by each society or association at the last fair held, the 
  8.20  society or association shall receive 100 percent reimbursement; 
  8.21  on the second $750 premiums paid, 80 percent; on the third $750 
  8.22  premiums paid, 60 percent; and on any sum in excess of $2,250, 
  8.23  40 percent.  The commissioner of finance shall make payments not 
  8.24  later than July 15 of the year following the calendar year in 
  8.25  which the annual fair was held to those agricultural societies 
  8.26  or associations entitled to payments under the provisions of 
  8.27  this chapter. 
  8.28     (d) If the total amount of state aid to which the 
  8.29  agricultural societies and associations are entitled under the 
  8.30  provisions of this chapter exceeds the amount of the 
  8.31  appropriation therefor, the amounts to which the societies or 
  8.32  associations are entitled shall be prorated so that the total 
  8.33  payments by the state will not exceed the appropriation. 
  8.34     Sec. 8.  Minnesota Statutes 2003 Supplement, section 38.02, 
  8.35  subdivision 3, is amended to read: 
  8.36     Subd. 3.  [CERTIFICATION, COMMISSIONER OF 
  9.1   AGRICULTURE ENTITLEMENT FOR PRO RATA DISTRIBUTION.] Any A county 
  9.2   or district agricultural society which has held its second 
  9.3   annual fair is entitled to share pro rata in the 
  9.4   distribution.  The commissioner of agriculture shall certify to 
  9.5   the secretary of the State Agricultural Society, within 30 days 
  9.6   after payments have been made, a list of all county or district 
  9.7   agricultural societies that have complied with this chapter, and 
  9.8   which are entitled to share in the appropriation.  All Payments 
  9.9   shall be based on reports submitted by agricultural societies 
  9.10  under subdivision 1, paragraph (b), clause (6). 
  9.11     Sec. 9.  Minnesota Statutes 2002, section 38.04, is amended 
  9.12  to read: 
  9.13     38.04 [ANNUAL MEETINGS; REPORTS.] 
  9.14     Every county agricultural society shall hold an annual 
  9.15  meeting for the election of officers and the transaction of 
  9.16  other business on or before the third Tuesday in November.  
  9.17  Service on the county agricultural society board or as an 
  9.18  officer of the board is not a public office.  Elected officials 
  9.19  of the state or its political subdivisions may serve on the 
  9.20  board or be elected as officers. 
  9.21     At the annual meeting, the society's secretary an officer 
  9.22  of the society shall make a report of its proceedings for the 
  9.23  preceding year; this report shall contain a statement of all 
  9.24  transactions at its fairs, the numbers of entries, the amount 
  9.25  and source of all money received, and and a financial statement 
  9.26  prepared in accordance with generally accepted accounting 
  9.27  principles.  The report must also list the amount paid out for 
  9.28  premiums and for other purposes, and show in detail its entire 
  9.29  receipts and expenditures during the year.  The report must 
  9.30  contain a separate accounting of any income received from the 
  9.31  operation of horse racing on which pari-mutuel betting is 
  9.32  conducted, and of the disposition of that income.  
  9.33     The treasurer shall make a comprehensive report of the 
  9.34  funds received, paid out, and on hand, and upon whose order 
  9.35  paid.  Each secretary shall cause a certified copy of the annual 
  9.36  report to be filed with the county recorder of the county and 
 10.1   the commissioner of agriculture on or before the first day of 
 10.2   November each year. 
 10.3      Sec. 10.  Minnesota Statutes 2002, section 38.12, is 
 10.4   amended to read: 
 10.5      38.12 [APPROPRIATIONS BY CERTAIN MUNICIPALITIES.] 
 10.6      The council of any city and the board of supervisors of any 
 10.7   town having fairs of county and district agricultural societies 
 10.8   or associations, who are members of the Minnesota state 
 10.9   agricultural society, held within or in close proximity to their 
 10.10  corporate limits or in close proximity thereto, are hereby 
 10.11  authorized and empowered to may appropriate for and pay money to 
 10.12  such the agricultural society or association annually a sum not 
 10.13  exceeding $1,000.  
 10.14     Sec. 11.  Minnesota Statutes 2002, section 38.14, is 
 10.15  amended to read: 
 10.16     38.14 [IN COUNTIES OF 150,000:  APPROPRIATIONS FOR COUNTY 
 10.17  FAIRS.] 
 10.18     Subdivision 1.  [CONDITIONS, PROCEDURES, BOND.] In any 
 10.19  county in this state now or hereafter having a population of 
 10.20  150,000, the A county board may annually appropriate not to 
 10.21  exceed $3,000, except that counties having more than 300,000 and 
 10.22  less than 450,000 inhabitants may appropriate not to exceed 
 10.23  $5,000, money to assist in maintaining a county fair, which fair 
 10.24  shall be under the management and control of managed by a county 
 10.25  agricultural society.  The appropriation shall be made either to 
 10.26  the treasurer of the society or to some other suitable person,.  
 10.27  but before the money is paid, the treasurer or other person 
 10.28  shall file with the county auditor a satisfactory bond in double 
 10.29  the sum of the appropriation, conditioned upon the faithful 
 10.30  disbursing and accounting for all of the funds so appropriated.  
 10.31  The funds so appropriated shall be used solely for the purpose 
 10.32  of obtaining, preparing, and arranging exhibits and paying 
 10.33  premiums to exhibitors.  The treasurer or other person to whom 
 10.34  the appropriation is paid shall, within four months after the 
 10.35  holding of any such aided annual fair, file with the county 
 10.36  auditor a verified and detailed report showing the name and 
 11.1   address of every person to whom any of the money was paid, 
 11.2   together with the date of payment, and a full description of the 
 11.3   purposes for which the money was so paid, and shall attach 
 11.4   thereto receipts and subvouchers for each payment so made and 
 11.5   return to the county treasurer all of the unexpended portion 
 11.6   thereof.  After the report, receipts, and subvouchers have been 
 11.7   audited by the county board and found to be correct, it may, by 
 11.8   resolution, release the treasurer or other person and the 
 11.9   sureties from all further liabilities under bond. 
 11.10     Subd. 2.  [EXCEPT RAMSEY COUNTY.] This section and section 
 11.11  38.15 do not apply to Ramsey County. 
 11.12     Sec. 12.  Minnesota Statutes 2002, section 38.15, is 
 11.13  amended to read: 
 11.14     38.15 [SITES AND BUILDINGS.] 
 11.15     The county board in any such county may also annually 
 11.16  appropriate such further sum as it may desire, not exceeding 
 11.17  $7,500, money for the purpose of procuring a suitable site and 
 11.18  the erection of erecting on it a suitable county building 
 11.19  thereon, for the building or repairing of a race track and for 
 11.20  grading and improving the grounds, to be used in connection with 
 11.21  such a county fair, but the site and the building and 
 11.22  improvements shall be and remain the property of the county, and 
 11.23  the annual appropriation shall be used only for the purpose 
 11.24  of so acquiring the site and building and grading and for the 
 11.25  necessary care, repair, maintenance, and upkeep thereof.  In any 
 11.26  county in this state now or hereafter having a population in 
 11.27  excess of 150,000 and an area of more than 5,000 square miles, 
 11.28  the county agricultural society may expend funds appropriated to 
 11.29  it for the year 1957 for the payment of debts and liabilities 
 11.30  incurred during the year 1956 in the construction of county fair 
 11.31  buildings, notwithstanding the provisions of Laws 1941, chapter 
 11.32  118. 
 11.33     Sec. 13.  Minnesota Statutes 2002, section 38.16, is 
 11.34  amended to read: 
 11.35     38.16 [EXEMPTION FROM ZONING ORDINANCES.] 
 11.36     When lands lying within the corporate limits of towns or 
 12.1   cities of the first or second class of the state are owned by a 
 12.2   county or agricultural society and used for agricultural fair 
 12.3   purposes, the lands and the buildings now or hereafter erected 
 12.4   thereon shall be are exempt from the zoning, building, and other 
 12.5   ordinances of the town or city; provided, that no license or 
 12.6   permit need be obtained from, nor fee paid to, the town or city 
 12.7   in connection with the use of the lands.  
 12.8      Sec. 14.  Minnesota Statutes 2003 Supplement, section 
 12.9   41A.09, subdivision 3a, is amended to read: 
 12.10     Subd. 3a.  [ETHANOL PRODUCER PAYMENTS.] (a) The 
 12.11  commissioner shall make cash payments to producers of ethanol 
 12.12  located in the state that have begun production by June 30, 2000.
 12.13  For the purpose of this subdivision, an entity that holds a 
 12.14  controlling interest in more than one ethanol plant is 
 12.15  considered a single producer.  The amount of the payment for 
 12.16  each producer's annual production, except as provided in 
 12.17  paragraph (c), is 20 cents per gallon for each gallon of ethanol 
 12.18  produced on or before June 30, 2000, or ten years after the 
 12.19  start of production, whichever is later.  The first claim for 
 12.20  production after June 30, 2003, must be accompanied by Annually, 
 12.21  within 90 days of the end of its fiscal year, an ethanol 
 12.22  producer receiving payments under this subdivision must file a 
 12.23  disclosure statement on a form provided by the commissioner.  
 12.24  The initial disclosure statement must include a detailed summary 
 12.25  description of the organization of the business structure of the 
 12.26  claimant, a listing of the percentages of ownership by any 
 12.27  person or other entity with an ownership interest of five 
 12.28  percent or greater, the distribution of income received by the 
 12.29  claimant, including operating income and payments under this 
 12.30  subdivision and a copy of its annual audited financial 
 12.31  statements, including the auditor's report and footnotes.  The 
 12.32  disclosure statement must include information sufficient to 
 12.33  demonstrate that a majority of the ultimate beneficial interest 
 12.34  in the demonstrating what percentage of the entity receiving 
 12.35  payments under this section is owned by farmers or spouses of 
 12.36  farmers, as defined in or other entities eligible to farm or own 
 13.1   agricultural land in Minnesota under the provisions of section 
 13.2   500.24, residing in Minnesota.  Subsequent quarterly claims 
 13.3   annual reports must report reflect noncumulative changes in 
 13.4   ownership of ten percent or more of the entity.  Payments must 
 13.5   not be made to a claimant that has less than a majority of 
 13.6   Minnesota farmer control except that the commissioner may grant 
 13.7   an exemption from the farmer majority ownership requirement to a 
 13.8   claimant that, on May 29, 2003, has demonstrated greater than 40 
 13.9   percent farmer ownership which, when combined with ownership 
 13.10  interests of persons residing within 30 miles of the plant, 
 13.11  exceeds 50 percent.  In addition, a claimant located in a city 
 13.12  of the first class which qualifies for payments in all other 
 13.13  respects is not subject to this condition.  Information provided 
 13.14  under this paragraph is The report need not disclose the 
 13.15  identity of the persons or entities eligible to farm or own 
 13.16  agricultural land with ownership interests, individuals residing 
 13.17  within 30 miles of the plant, or of any other entity with less 
 13.18  than ten percent ownership interest, but the claimant must 
 13.19  retain information within its files confirming the accuracy of 
 13.20  the data provided.  This data must be made available to the 
 13.21  commissioner upon request.  Not later than the 15th day of 
 13.22  February in each year the commissioner shall deliver to the 
 13.23  chairs of the standing committees of the senate and the house of 
 13.24  representatives that deal with agricultural policy and 
 13.25  agricultural finance issues an annual report summarizing 
 13.26  aggregated data from plants receiving payments under this 
 13.27  section during the preceding calendar year.  Audited financial 
 13.28  statements and notes and disclosure statements submitted to the 
 13.29  commissioner are nonpublic data under section 13.02, subdivision 
 13.30  9.  Notwithstanding the provisions of chapter 13 relating to 
 13.31  nonpublic data, summaries of the submitted audited financial 
 13.32  reports and notes and disclosure statements will be contained in 
 13.33  the report to the committee chairs and will be public data.  
 13.34     (b) No payments shall be made for ethanol production that 
 13.35  occurs after June 30, 2010.  
 13.36     (c) If the level of production at an ethanol plant 
 14.1   increases due to an increase in the production capacity of the 
 14.2   plant, the payment under paragraph (a) applies to the additional 
 14.3   increment of production until ten years after the increased 
 14.4   production began.  Once a plant's production capacity reaches 
 14.5   15,000,000 gallons per year, no additional increment will 
 14.6   qualify for the payment. 
 14.7      (d) Total payments under paragraphs (a) and (c) to a 
 14.8   producer in a fiscal year may not exceed $3,000,000. 
 14.9      (e) By the last day of October, January, April, and July, 
 14.10  each producer shall file a claim for payment for ethanol 
 14.11  production during the preceding three calendar months.  A 
 14.12  producer that files a claim under this subdivision shall include 
 14.13  a statement of the producer's total ethanol production in 
 14.14  Minnesota during the quarter covered by the claim.  For each 
 14.15  claim and statement of total ethanol production filed under this 
 14.16  subdivision, the volume of ethanol production must be examined 
 14.17  by an independent certified public accountant in accordance with 
 14.18  standards established by the American Institute of Certified 
 14.19  Public Accountants. 
 14.20     (f) Payments shall be made November 15, February 15, May 
 14.21  15, and August 15.  A separate payment shall be made for each 
 14.22  claim filed.  Except as provided in paragraph (g), the total 
 14.23  quarterly payment to a producer under this paragraph may not 
 14.24  exceed $750,000.  
 14.25     (g) Notwithstanding the quarterly payment limits of 
 14.26  paragraph (f), the commissioner shall make an additional payment 
 14.27  in the fourth quarter of each fiscal year to ethanol producers 
 14.28  for the lesser of:  (1) 20 cents per gallon of production in the 
 14.29  fourth quarter of the year that is greater than 3,750,000 
 14.30  gallons; or (2) the total amount of payments lost during the 
 14.31  first three quarters of the fiscal year due to plant outages, 
 14.32  repair, or major maintenance.  Total payments to an ethanol 
 14.33  producer in a fiscal year, including any payment under this 
 14.34  paragraph, must not exceed the total amount the producer is 
 14.35  eligible to receive based on the producer's approved production 
 14.36  capacity.  The provisions of this paragraph apply only to 
 15.1   production losses that occur in quarters beginning after 
 15.2   December 31, 1999. 
 15.3      (h) The commissioner shall reimburse ethanol producers for 
 15.4   any deficiency in payments during earlier quarters if the 
 15.5   deficiency occurred because appropriated money was insufficient 
 15.6   to make timely payments in the full amount provided in paragraph 
 15.7   (a).  Notwithstanding the quarterly or annual payment 
 15.8   limitations in this subdivision, the commissioner shall begin 
 15.9   making payments for earlier deficiencies in each fiscal year 
 15.10  that appropriations for ethanol payments exceed the amount 
 15.11  required to make eligible scheduled payments.  Payments for 
 15.12  earlier deficiencies must continue until the deficiencies for 
 15.13  each producer are paid in full. 
 15.14     Sec. 15.  Minnesota Statutes 2002, section 41B.03, 
 15.15  subdivision 2, is amended to read: 
 15.16     Subd. 2.  [ELIGIBILITY FOR RESTRUCTURED LOAN.] In addition 
 15.17  to the eligibility requirements of subdivision 1, a prospective 
 15.18  borrower for a restructured loan must:  
 15.19     (1) have received at least 50 percent of average annual 
 15.20  gross income from farming for the past three years or, for 
 15.21  homesteaded property, received at least 40 percent of average 
 15.22  gross income from farming in the past three years, and farming 
 15.23  must be the principal occupation of the borrower; 
 15.24     (2) have projected annual expenses, including operating 
 15.25  expenses, family living, and interest expenses after the 
 15.26  restructuring, that do not exceed 95 percent of the borrower's 
 15.27  projected annual income considering prior production history and 
 15.28  projected prices for farm production, except that the authority 
 15.29  may reduce the 95 percent requirement if it finds that other 
 15.30  significant factors in the loan application support the making 
 15.31  of the loan; 
 15.32     (3) demonstrate substantial difficulty in meeting projected 
 15.33  annual expenses without restructuring the loan; and 
 15.34     (4) have a total net worth, including assets and 
 15.35  liabilities of the borrower's spouse and dependents, of less 
 15.36  than $400,000 $660,000 in 1999 2004 and an amount in subsequent 
 16.1   years which is adjusted for inflation by 
 16.2   multiplying $400,000 that amount by the cumulative inflation 
 16.3   rate as determined by the United States All-Items Consumer Price 
 16.4   Index. 
 16.5      Sec. 16.  Minnesota Statutes 2002, section 41B.03, 
 16.6   subdivision 3, is amended to read: 
 16.7      Subd. 3.  [ELIGIBILITY FOR BEGINNING FARMER LOANS.] (a) In 
 16.8   addition to the requirements under subdivision 1, a prospective 
 16.9   borrower for a beginning farm loan in which the authority holds 
 16.10  an interest, must:  
 16.11     (1) have sufficient education, training, or experience in 
 16.12  the type of farming for which the loan is desired; 
 16.13     (2) have a total net worth, including assets and 
 16.14  liabilities of the borrower's spouse and dependents, of less 
 16.15  than $200,000 in 1991 $350,000 in 2004 and an amount in 
 16.16  subsequent years which is adjusted for inflation by 
 16.17  multiplying $200,000 that amount by the cumulative inflation 
 16.18  rate as determined by the United States All-Items Consumer Price 
 16.19  Index; 
 16.20     (3) demonstrate a need for the loan; 
 16.21     (4) demonstrate an ability to repay the loan; 
 16.22     (5) certify that the agricultural land to be purchased will 
 16.23  be used by the borrower for agricultural purposes; 
 16.24     (6) certify that farming will be the principal occupation 
 16.25  of the borrower; 
 16.26     (7) agree to participate in a farm management program 
 16.27  approved by the commissioner of agriculture for at least the 
 16.28  first three years of the loan, if an approved program is 
 16.29  available within 45 miles from the borrower's residence.  The 
 16.30  commissioner may waive this requirement for any of the programs 
 16.31  administered by the authority if the participant requests a 
 16.32  waiver and has either a four-year degree in an agricultural 
 16.33  program or certification as an adult farm management instructor; 
 16.34  and 
 16.35     (8) agree to file an approved soil and water conservation 
 16.36  plan with the Soil Conservation Service office in the county 
 17.1   where the land is located.  
 17.2      (b) If a borrower fails to participate under paragraph (a), 
 17.3   clause (7), the borrower is subject to penalty as determined by 
 17.4   the authority. 
 17.5      Sec. 17.  Minnesota Statutes 2002, section 41B.039, 
 17.6   subdivision 2, is amended to read: 
 17.7      Subd. 2.  [STATE PARTICIPATION.] The state may participate 
 17.8   in a new real estate loan with an eligible lender to a beginning 
 17.9   farmer to the extent of 45 percent of the principal amount of 
 17.10  the loan or $125,000 $200,000, whichever is less.  The interest 
 17.11  rates and repayment terms of the authority's participation 
 17.12  interest may be different than the interest rates and repayment 
 17.13  terms of the lender's retained portion of the loan. 
 17.14     Sec. 18.  Minnesota Statutes 2002, section 41B.04, 
 17.15  subdivision 8, is amended to read: 
 17.16     Subd. 8.  [STATE'S PARTICIPATION.] With respect to loans 
 17.17  that are eligible for restructuring under sections 41B.01 to 
 17.18  41B.23 and upon acceptance by the authority, the authority shall 
 17.19  enter into a participation agreement or other financial 
 17.20  arrangement whereby it shall participate in a restructured loan 
 17.21  to the extent of 45 percent of the primary principal or 
 17.22  $150,000 $225,000, whichever is less.  The authority's portion 
 17.23  of the loan must be protected during the authority's 
 17.24  participation by the first mortgage held by the eligible lender 
 17.25  to the extent of its participation in the loan. 
 17.26     Sec. 19.  Minnesota Statutes 2002, section 41B.042, 
 17.27  subdivision 4, is amended to read: 
 17.28     Subd. 4.  [PARTICIPATION LIMIT; INTEREST.] The authority 
 17.29  may participate in new seller-sponsored loans to the extent of 
 17.30  45 percent of the principal amount of the loan or 
 17.31  $125,000 $200,000, whichever is less.  The interest rates and 
 17.32  repayment terms of the authority's participation interest may be 
 17.33  different than the interest rates and repayment terms of the 
 17.34  seller's retained portion of the loan. 
 17.35     Sec. 20.  Minnesota Statutes 2002, section 41B.043, 
 17.36  subdivision 1b, is amended to read: 
 18.1      Subd. 1b.  [LOAN PARTICIPATION.] The authority may 
 18.2   participate in an agricultural improvement loan with an eligible 
 18.3   lender to a farmer who meets the requirements of section 41B.03, 
 18.4   subdivision 1, clauses (1) and (2), and who is actively engaged 
 18.5   in farming.  Participation is limited to 45 percent of the 
 18.6   principal amount of the loan or $125,000 $200,000, whichever is 
 18.7   less.  The interest rates and repayment terms of the authority's 
 18.8   participation interest may be different than the interest rates 
 18.9   and repayment terms of the lender's retained portion of the loan.
 18.10     Sec. 21.  Minnesota Statutes 2002, section 41B.043, is 
 18.11  amended by adding a subdivision to read: 
 18.12     Subd. 5.  [TOTAL NET WORTH LIMIT.] A prospective borrower 
 18.13  for an agricultural improvement loan in which the authority 
 18.14  holds an interest must have a total net worth, including assets 
 18.15  and liabilities of the borrower's spouse and dependents, of less 
 18.16  than $350,000 in 2004 and an amount in subsequent years which is 
 18.17  adjusted for inflation by multiplying that amount by the 
 18.18  cumulative inflation rate as determined by the United States 
 18.19  All-Items Consumer Price Index. 
 18.20     Sec. 22.  Minnesota Statutes 2002, section 41B.045, 
 18.21  subdivision 2, is amended to read: 
 18.22     Subd. 2.  [LOAN PARTICIPATION.] The authority may 
 18.23  participate in a livestock expansion loan with an eligible 
 18.24  lender to a livestock farmer who meets the requirements of 
 18.25  section 41B.03, subdivision 1, clauses (1) and (2), and who are 
 18.26  actively engaged in a livestock operation.  A prospective 
 18.27  borrower must have a total net worth, including assets and 
 18.28  liabilities of the borrower's spouse and dependents, of less 
 18.29  than $400,000 $660,000 in 1999 2004 and an amount in subsequent 
 18.30  years which is adjusted for inflation by 
 18.31  multiplying $400,000 that amount by the cumulative inflation 
 18.32  rate as determined by the United States All-Items Consumer Price 
 18.33  Index. 
 18.34     Participation is limited to 45 percent of the principal 
 18.35  amount of the loan or $250,000 $275,000, whichever is less.  The 
 18.36  interest rates and repayment terms of the authority's 
 19.1   participation interest may be different from the interest rates 
 19.2   and repayment terms of the lender's retained portion of the loan.
 19.3      Sec. 23.  Minnesota Statutes 2002, section 41B.046, 
 19.4   subdivision 5, is amended to read: 
 19.5      Subd. 5.  [LOANS.] (a) The authority may participate in a 
 19.6   stock loan with an eligible lender to a farmer who is eligible 
 19.7   under subdivision 4.  Participation is limited to 45 percent of 
 19.8   the principal amount of the loan or $24,000 $40,000, whichever 
 19.9   is less.  The interest rates and repayment terms of the 
 19.10  authority's participation interest may differ from the interest 
 19.11  rates and repayment terms of the lender's retained portion of 
 19.12  the loan, but the authority's interest rate must not exceed 50 
 19.13  percent of the lender's interest rate. 
 19.14     (b) No more than 95 percent of the purchase price of the 
 19.15  stock may be financed under this program. 
 19.16     (c) Security for stock loans must be the stock purchased, a 
 19.17  personal note executed by the borrower, and whatever other 
 19.18  security is required by the eligible lender or the authority. 
 19.19     (d) The authority may impose a reasonable nonrefundable 
 19.20  application fee for each application for a stock loan.  The 
 19.21  authority may review the fee annually and make adjustments as 
 19.22  necessary.  The application fee is initially $50.  Application 
 19.23  fees received by the authority must be deposited in the 
 19.24  value-added agricultural product revolving fund. 
 19.25     (e) Stock loans under this program will be made using money 
 19.26  in the value-added agricultural product revolving fund 
 19.27  established under subdivision 3. 
 19.28     (f) The authority may not grant stock loans in a cumulative 
 19.29  amount exceeding $2,000,000 for the financing of stock purchases 
 19.30  in any one cooperative. 
 19.31     Sec. 24.  Minnesota Statutes 2002, section 41C.02, 
 19.32  subdivision 12, is amended to read: 
 19.33     Subd. 12.  [LOW OR MODERATE NET WORTH.] "Low or moderate 
 19.34  net worth" means: 
 19.35     (1) for an individual, an aggregate net worth of the 
 19.36  individual and the individual's spouse and minor children of 
 20.1   less than $200,000 in 1991 $350,000 in 2004 and an amount in 
 20.2   subsequent years which is adjusted for inflation by 
 20.3   multiplying $200,000 that amount by the cumulative inflation 
 20.4   rate as determined by the United States All-Items Consumer Price 
 20.5   Index; or 
 20.6      (2) for a partnership, an aggregate net worth of all 
 20.7   partners, including each partner's net capital in the 
 20.8   partnership, and each partner's spouse and minor children of 
 20.9   less than $400,000 in 1991 and an amount in subsequent years 
 20.10  which is adjusted for inflation by multiplying $400,000 by the 
 20.11  cumulative inflation rate as determined by the United States 
 20.12  All-Items Consumer Price Index twice the amount set for an 
 20.13  individual in clause (1).  However, the aggregate net worth of 
 20.14  each partner and that partner's spouse and minor children may 
 20.15  not exceed $200,000 in 1991 and an amount in subsequent years 
 20.16  which is adjusted for inflation by multiplying $200,000 by the 
 20.17  cumulative inflation rate as determined by the United States 
 20.18  All-Items Consumer Price Index the amount set for an individual 
 20.19  in clause (1). 
 20.20     Sec. 25.  [116J.407] [DAIRY MODERNIZATION.] 
 20.21     Subdivision 1.  [GENERALLY.] The commissioner shall make 
 20.22  funds available to eligible regional or statewide development 
 20.23  organizations defined under section 116J.8731 to be used for the 
 20.24  purposes of this section. 
 20.25     Subd. 2.  [ELIGIBLE EXPENDITURES.] Money may be used for 
 20.26  loans for the acquisition, construction, or improvement of 
 20.27  buildings or facilities, or the acquisition of equipment, for 
 20.28  dairy animal housing, confinement, animal feeding, milk 
 20.29  production, and waste management, including the following, if 
 20.30  related to dairy animals: 
 20.31     (1) freestall barns; 
 20.32     (2) fences; 
 20.33     (3) watering facilities; 
 20.34     (4) feed storage and handling equipment; 
 20.35     (5) milking parlors; 
 20.36     (6) robotic equipment; 
 21.1      (7) scales; 
 21.2      (8) milk storage and cooling facilities; 
 21.3      (9) bulk tanks; 
 21.4      (10) manure pumping and storage facilities; 
 21.5      (11) digesters; 
 21.6      (12) equipment used to produce energy; 
 21.7      (13) capital investment in pasture; and 
 21.8      (14) on-farm processing facilities.  
 21.9      Subd. 3.  [APPLICATION PROCESS.] The commissioner of 
 21.10  agriculture and the commissioner of employment and economic 
 21.11  development shall establish a process by which an eligible dairy 
 21.12  producer may make application for assistance under this section 
 21.13  to the county in which the producer is located.  The application 
 21.14  must require the producer and county to provide information 
 21.15  regarding the producer's existing business, the intended use of 
 21.16  the requested funds, and other information the commissioners 
 21.17  find necessary to evaluate the feasibility, likely success, and 
 21.18  economic return of the project, and to ensure that money can be 
 21.19  provided consistent with other state and federal laws. 
 21.20     Sec. 26.  Minnesota Statutes 2002, section 156.12, 
 21.21  subdivision 2, is amended to read: 
 21.22     Subd. 2.  [AUTHORIZED ACTIVITIES.] No provision of this 
 21.23  chapter shall be construed to prohibit: 
 21.24     (a) a person from rendering necessary gratuitous assistance 
 21.25  in the treatment of any animal when the assistance does not 
 21.26  amount to prescribing, testing for, or diagnosing, operating, or 
 21.27  vaccinating and when the attendance of a licensed veterinarian 
 21.28  cannot be procured; 
 21.29     (b) a person who is a regular student in an accredited or 
 21.30  approved college of veterinary medicine from performing duties 
 21.31  or actions assigned by instructors or preceptors or working 
 21.32  under the direct supervision of a licensed veterinarian; 
 21.33     (c) a veterinarian regularly licensed in another 
 21.34  jurisdiction from consulting with a licensed veterinarian in 
 21.35  this state; 
 21.36     (d) the owner of an animal and the owner's regular employee 
 22.1   from caring for and administering to the animal belonging to the 
 22.2   owner, except where the ownership of the animal was transferred 
 22.3   for purposes of circumventing this chapter; 
 22.4      (e) veterinarians who are in compliance with subdivision 6 
 22.5   and who are employed by the University of Minnesota from 
 22.6   performing their duties with the College of Veterinary Medicine, 
 22.7   College of Agriculture, Agricultural Experiment Station, 
 22.8   Agricultural Extension Service, Medical School, School of Public 
 22.9   Health, or other unit within the university; or a person from 
 22.10  lecturing or giving instructions or demonstrations at the 
 22.11  university or in connection with a continuing education course 
 22.12  or seminar to veterinarians or pathologists at the University of 
 22.13  Minnesota Veterinary Diagnostic Laboratory; 
 22.14     (f) any person from selling or applying any pesticide, 
 22.15  insecticide or herbicide; 
 22.16     (g) any person from engaging in bona fide scientific 
 22.17  research or investigations which reasonably requires 
 22.18  experimentation involving animals; 
 22.19     (h) any employee of a licensed veterinarian from performing 
 22.20  duties other than diagnosis, prescription or surgical correction 
 22.21  under the direction and supervision of the veterinarian, who 
 22.22  shall be responsible for the performance of the employee; 
 22.23     (i) a graduate of a foreign college of veterinary medicine 
 22.24  from working under the direct personal instruction, control, or 
 22.25  supervision of a veterinarian faculty member of the College of 
 22.26  Veterinary Medicine, University of Minnesota in order to 
 22.27  complete the requirements necessary to obtain an ECFVG 
 22.28  certificate. 
 22.29     Sec. 27.  Minnesota Statutes 2002, section 156.12, is 
 22.30  amended by adding a subdivision to read: 
 22.31     Subd. 6.  [FACULTY LICENSURE.] (a) Veterinary Medical 
 22.32  Center clinicians at the College of Veterinary Medicine, 
 22.33  University of Minnesota who are engaged in the practice of 
 22.34  veterinary medicine as defined in subdivision 1 and who treat 
 22.35  animals owned by clients of the Veterinary Medical Center must 
 22.36  possess the same license required by other veterinary 
 23.1   practitioners in the state of Minnesota except for persons 
 23.2   covered by paragraphs (b) and (c). 
 23.3      (b) A specialty practitioner in a hard-to-fill faculty 
 23.4   position who has been employed at the College of Veterinary 
 23.5   Medicine, University of Minnesota for five years or more prior 
 23.6   to 2003 or is specialty board certified by the American 
 23.7   Veterinary Medical Association may be granted a specialty 
 23.8   faculty Veterinary Medical Center clinician license which will 
 23.9   allow the licensee to practice veterinary medicine in the state 
 23.10  of Minnesota in the specialty area of the licensee's training 
 23.11  and only within the scope of employment at the Veterinary 
 23.12  Medical Center. 
 23.13     (c) A specialty practitioner in a hard-to-fill faculty 
 23.14  position at the College of Veterinary Medicine, University of 
 23.15  Minnesota who has graduated from a board-approved foreign 
 23.16  veterinary school may be granted a temporary faculty Veterinary 
 23.17  Medical Center clinician license.  The temporary faculty 
 23.18  Veterinary Medical Center clinician license expires in two years 
 23.19  and allows the licensee to practice veterinary medicine as 
 23.20  defined in subdivision 1 and treat animals owned by clients of 
 23.21  the Veterinary Medical Center.  The temporary faculty Veterinary 
 23.22  Medical Center clinician license allows the licensee to practice 
 23.23  veterinary medicine in the state of Minnesota in the specialty 
 23.24  area of the licensee's training and only within the scope of 
 23.25  employment at the Veterinary Medical Center.  The holder of a 
 23.26  temporary faculty Veterinary Medical Center clinician license 
 23.27  who is enrolled in a PhD program may apply for two two-year 
 23.28  extensions of an expiring temporary faculty Veterinary Medical 
 23.29  Center clinician license.  Any other holder of a temporary 
 23.30  faculty Veterinary Medical Center clinician license may apply 
 23.31  for one two-year extension of the expiring temporary faculty 
 23.32  Veterinary Medical Center clinician license.  Temporary faculty 
 23.33  Veterinary Medical Center clinician licenses that are allowed to 
 23.34  expire may not be renewed.  The board shall grant an extension 
 23.35  to a licensee who demonstrates suitable progress toward 
 23.36  completing the requirements of their academic program, specialty 
 24.1   board certification, or full licensure in Minnesota by a 
 24.2   graduate of a foreign veterinary college. 
 24.3      (d) Temporary and specialty faculty Veterinary Medical 
 24.4   Center clinician licensees must abide by all the laws governing 
 24.5   the practice of veterinary medicine in the state of Minnesota 
 24.6   and are subject to the same disciplinary action as any other 
 24.7   veterinarian licensed in the state of Minnesota. 
 24.8      (e) The fee for a license issued under this subdivision is 
 24.9   the same as for a regular license to practice veterinary 
 24.10  medicine in Minnesota.  License payment deadlines, late payment 
 24.11  fees, and other license requirements are also the same as for 
 24.12  regular licenses. 
 24.13     Sec. 28.  Minnesota Statutes 2002, section 223.16, is 
 24.14  amended by adding a subdivision to read: 
 24.15     Subd. 3a.  [ELECTRONIC DOCUMENT.] "Electronic document" 
 24.16  means a document that is generated, sent, received, or stored by 
 24.17  electronic, optical, or similar means, including electronic data 
 24.18  interchange, electronic mail, telegram, telex, or telecopy.  
 24.19  "Electronic document" includes, but is not limited to, grain 
 24.20  purchase contracts and voluntary extension of credit contracts. 
 24.21     Sec. 29.  Minnesota Statutes 2002, section 223.16, is 
 24.22  amended by adding a subdivision to read: 
 24.23     Subd. 3b.  [ELECTRONIC SIGNATURE.] "Electronic signature" 
 24.24  means an electronic sound, symbol, or process attached to or 
 24.25  logically associated with a record and executed or adopted by a 
 24.26  person with the intent to sign the record. 
 24.27     Sec. 30.  Minnesota Statutes 2003 Supplement, section 
 24.28  223.17, subdivision 4, is amended to read: 
 24.29     Subd. 4.  [BOND.] Before a grain buyer's license is issued, 
 24.30  the applicant for the license must file with the commissioner a 
 24.31  bond in a penal sum prescribed by the commissioner but not less 
 24.32  than the following amounts:  
 24.33     (a) $10,000 for grain buyers whose gross annual purchases 
 24.34  are $100,000 or less; 
 24.35     (b) $20,000 for grain buyers whose gross annual purchases 
 24.36  are more than $100,000 but not more than $750,000; 
 25.1      (c) $30,000 for grain buyers whose gross annual purchases 
 25.2   are more than $750,000 but not more than $1,500,000; 
 25.3      (d) $40,000 for grain buyers whose gross annual purchases 
 25.4   are more than $1,500,000 but not more than $3,000,000; and 
 25.5      (e) $50,000 for grain buyers whose gross annual purchases 
 25.6   exceed are more than $3,000,000 but not more than $6,000,000; 
 25.7      (f) $70,000 for grain buyers whose gross annual purchases 
 25.8   are more than $6,000,000 but not more than $12,000,000; 
 25.9      (g) $125,000 for grain buyers whose gross annual purchases 
 25.10  are more than $12,000,000 but not more than $24,000,000; and 
 25.11     (h) $150,000 for grain buyers whose gross annual purchases 
 25.12  exceed $24,000,000.  
 25.13     A grain buyer who has filed a bond with the commissioner 
 25.14  prior to July 1, 1983 2004, is not required to increase the 
 25.15  amount of the bond to comply with this section until July 1, 
 25.16  1984 2005.  The commissioner may postpone an increase in the 
 25.17  amount of the bond until July 1, 1985 2006, if a licensee 
 25.18  demonstrates that the increase will impose undue financial 
 25.19  hardship on the licensee, and that producers will not be harmed 
 25.20  as a result of the postponement.  The commissioner may impose 
 25.21  other restrictions on a licensee whose bond increase has been 
 25.22  postponed.  The amount of the bond shall be based on the most 
 25.23  recent financial statement of the grain buyer filed under 
 25.24  subdivision 6.  
 25.25     A first-time applicant for a grain buyer's license after 
 25.26  July 1, 1983 shall file a $20,000 $50,000 bond with the 
 25.27  commissioner. This bond shall remain in effect for the first 
 25.28  year of the license.  Thereafter, the licensee shall comply with 
 25.29  the applicable bonding requirements contained in clauses (a) 
 25.30  to (e) (h). 
 25.31     In lieu of the bond required by this subdivision the 
 25.32  applicant may deposit with the commissioner of finance cash, a 
 25.33  certified check, a cashier's check, a postal, bank, or express 
 25.34  money order, assignable bonds or notes of the United States, or 
 25.35  an assignment of a bank savings account or investment 
 25.36  certificate or an irrevocable bank letter of credit as defined 
 26.1   in section 336.5-102, in the same amount as would be required 
 26.2   for a bond. 
 26.3      Sec. 31.  Minnesota Statutes 2002, section 223.17, 
 26.4   subdivision 6, is amended to read: 
 26.5      Subd. 6.  [FINANCIAL STATEMENTS.] For the purpose of fixing 
 26.6   or changing the amount of a required bond or for any other 
 26.7   proper reason, the commissioner shall require an annual 
 26.8   financial statement from a licensee which has been prepared in 
 26.9   accordance with generally accepted accounting principles and 
 26.10  which meets the following requirements:  
 26.11     (a) The financial statement shall include, but not be 
 26.12  limited to the following:  (1) a balance sheet; (2) a statement 
 26.13  of income (profit and loss); (3) a statement of retained 
 26.14  earnings; (4) a statement of changes in financial position; and 
 26.15  (5) a statement of the dollar amount of grain purchased in the 
 26.16  previous fiscal year of the grain buyer.  
 26.17     (b) The financial statement shall be accompanied by a 
 26.18  compilation report of the financial statement which is reviewed 
 26.19  financial statement or audit prepared by a grain commission firm 
 26.20  or a management firm approved by the commissioner or by an 
 26.21  independent public accountant or a compilation report prepared 
 26.22  by a grain commission firm approved by the commissioner, in 
 26.23  accordance with standards established by the American Institute 
 26.24  of Certified Public Accountants.  
 26.25     (c) The financial statement shall be accompanied by a 
 26.26  certification by the chief executive officer or the chief 
 26.27  executive officer's designee of the licensee, under penalty of 
 26.28  perjury, that the financial statement accurately reflects the 
 26.29  financial condition of the licensee for the period specified in 
 26.30  the statement. 
 26.31     Only one financial statement must be filed for a chain of 
 26.32  warehouses owned or operated as a single business entity, unless 
 26.33  otherwise required by the commissioner.  Any grain buyer having 
 26.34  a net worth in excess of $500,000,000 need not file the 
 26.35  financial statement required by this subdivision but must 
 26.36  provide the commissioner with a certified net worth statement. 
 27.1   All financial statements filed with the commissioner are private 
 27.2   or nonpublic data as provided in section 13.02. 
 27.3      Sec. 32.  Minnesota Statutes 2002, section 223.177, 
 27.4   subdivision 3, is amended to read: 
 27.5      Subd. 3.  [CONTRACTS REDUCED TO WRITING.] A voluntary 
 27.6   extension of credit contract must be reduced to writing by the 
 27.7   grain buyer and mailed or given to the seller before the close 
 27.8   of the next business day after the contract is entered into or, 
 27.9   in the case of an oral or phone contract, after the written 
 27.10  confirmation is received by the seller.  Provided, however, that 
 27.11  if a scale ticket has been received by the seller prior to the 
 27.12  completion of the grain shipment, the contract must be reduced 
 27.13  to writing within ten days after the sale, but not later than 
 27.14  the close of the next business day after the completion of the 
 27.15  entire sale.  The form of the contract shall comply with the 
 27.16  requirements of section 223.175.  A grain buyer may use an 
 27.17  electronic version of a voluntary extension of credit contract 
 27.18  that contains the same information as a written document and 
 27.19  that conforms to the requirements of this chapter to which a 
 27.20  seller has applied an electronic signature in place of a written 
 27.21  document.  There must not at any time be an electronic and paper 
 27.22  voluntary extension of credit contract representing the same lot 
 27.23  of grain. 
 27.24     Sec. 33.  Minnesota Statutes 2002, section 232.21, is 
 27.25  amended by adding a subdivision to read: 
 27.26     Subd. 6a.  [ELECTRONIC DOCUMENT.] "Electronic document" 
 27.27  means a document that is generated, sent, received or stored by 
 27.28  electronic, optical, or similar means, including electronic data 
 27.29  interchange, electronic mail, telegram, telex, or telecopy.  
 27.30  "Electronic document" includes, but is not limited to, warehouse 
 27.31  receipts, grain purchase contracts, and voluntary extension of 
 27.32  credit contracts. 
 27.33     Sec. 34.  Minnesota Statutes 2002, section 232.21, is 
 27.34  amended by adding a subdivision to read: 
 27.35     Subd. 6b.  [ELECTRONIC GRAIN WAREHOUSE 
 27.36  RECEIPT.] "Electronic grain warehouse receipt" means an 
 28.1   electronic version of a grain warehouse receipt issued or 
 28.2   transmitted to a depositor by a grain warehouse operator under 
 28.3   the provisions of section 232.23 in the form of an electronic 
 28.4   document.  An electronic grain warehouse receipt is a negotiable 
 28.5   instrument except as provided in section 232.23, subdivision 11. 
 28.6      Sec. 35.  Minnesota Statutes 2002, section 232.21, is 
 28.7   amended by adding a subdivision to read: 
 28.8      Subd. 6c.  [ELECTRONIC SIGNATURE.] "Electronic signature" 
 28.9   means an electronic sound, symbol, or process attached to or 
 28.10  logically associated with a record and executed or adopted by a 
 28.11  person with the intent to sign the record. 
 28.12     Sec. 36.  Minnesota Statutes 2002, section 232.23, 
 28.13  subdivision 4, is amended to read: 
 28.14     Subd. 4.  [FORM OF GRAIN WAREHOUSE RECEIPT.] (a) A grain 
 28.15  warehouse receipt must be in duplicate, contain the name and 
 28.16  location of the grain warehouse, and be delivered to the 
 28.17  depositor or the depositor's agent.  Grain warehouse receipts 
 28.18  shall be consecutively numbered as prescribed by the 
 28.19  commissioner and state the date of deposit, except where the 
 28.20  deposit of a certain lot for storage is not completed in one 
 28.21  day.  In that case, the grain warehouse receipt, when issued, 
 28.22  shall be dated not later than Saturday of the week of delivery.  
 28.23     (b) A grain warehouse receipt shall contain either on its 
 28.24  face or reverse side the following specific grain warehouse and 
 28.25  storage contract:  "This grain is received, insured and stored 
 28.26  through the date of expiration of the annual licenses of this 
 28.27  grain warehouse and terms expressed in the body of this grain 
 28.28  warehouse receipt shall constitute due notice to its holder of 
 28.29  the expiration of the storage period.  It is unlawful for a 
 28.30  public grain warehouse operator to charge or collect a greater 
 28.31  or lesser amount than the amount filed with the commissioner.  
 28.32  All charges shall be collected by the grain warehouse operator 
 28.33  upon the owner's presentation of the grain warehouse receipt for 
 28.34  the sale or delivery of the grain represented by the receipt, or 
 28.35  the termination of the storage period.  Upon the presentation of 
 28.36  this grain warehouse receipt and payment of all charges accrued 
 29.1   up to the time of presentation, the above amount, kind and grade 
 29.2   of grain will be delivered within the time prescribed by law to 
 29.3   the depositor or the depositor's order."  
 29.4      (c) A grain warehouse receipt shall also have printed on it 
 29.5   the following:  
 29.6                        "Redemption of Receipt 
 29.7      Received from .............., the sum of $........ or 
 29.8   ........  bushels in full satisfaction of the obligation 
 29.9   represented by this grain warehouse receipt.  
 29.10     Gross price per bushel $.......  
 29.11     Storage per bushel $.......  
 29.12     Net price per bushel $.......  
 29.13     All blank spaces in this grain warehouse receipt were 
 29.14  filled in before I signed it and I certify that I am the owner 
 29.15  of the commodity for which this grain warehouse receipt was 
 29.16  issued and that there are no liens, chattel mortgages or other 
 29.17  claims against the commodity represented by this grain warehouse 
 29.18  receipt.  
 29.19                                 Signed ............ 
 29.20  Accepted ..................    Dated  ............
 29.21          Warehouse operator
 29.22     This redemption shall be signed by the depositor or the 
 29.23  depositor's agent in the event that the grain represented is 
 29.24  redelivered or purchased by the public grain warehouse 
 29.25  operator.  Signature of this redemption by the depositor 
 29.26  constitutes a valid cancellation of the obligation embraced in 
 29.27  the storage contract."  
 29.28     (d) A warehouse receipt for dry edible beans must state the 
 29.29  grade of the dry edible beans delivered to the grain warehouse 
 29.30  and the redelivery charge required under subdivision 10a, 
 29.31  paragraph (a).  
 29.32     (e) An electronic version of a grain warehouse receipt 
 29.33  generated by a vendor licensed and approved by the United States 
 29.34  Department of Agriculture that contains the same information as 
 29.35  the paper version of a grain warehouse receipt may be issued 
 29.36  instead of a paper document.  The electronic version of a grain 
 30.1   warehouse receipt carries the same rights and obligations as the 
 30.2   paper version.  At no time may a paper receipt and an electronic 
 30.3   receipt represent the same lot of grain.  Redemption of an 
 30.4   electronic version of a warehouse receipt may be accomplished by 
 30.5   the warehouse receipt holder applying an electronic signature 
 30.6   registered and authenticated by a vendor credited by the United 
 30.7   States Department of Agriculture. 
 30.8      Sec. 37.  Minnesota Statutes 2002, section 308A.995, 
 30.9   subdivision 5, is amended to read: 
 30.10     Subd. 5.  [REINSTATEMENT.] A cooperative may, within one 
 30.11  year of the date of dissolution under this section, 
 30.12  retroactively reinstate its existence by filing a single annual 
 30.13  registration and paying a $25 fee.  Filing the annual 
 30.14  registration with the secretary of state: 
 30.15     (1) returns the cooperative to active status as of the date 
 30.16  of the dissolution; 
 30.17     (2) validates contracts or other acts within the authority 
 30.18  of the articles, and the cooperative is liable for those 
 30.19  contracts or acts; and 
 30.20     (3) restores to the cooperative all assets and rights of 
 30.21  the cooperative and its shareholders or members to the extent 
 30.22  they were held by the cooperative and its shareholders or 
 30.23  members before the dissolution occurred, except to the extent 
 30.24  that assets or rights were affected by acts occurring after the 
 30.25  dissolution or sold or otherwise distributed after that time. 
 30.26     Sec. 38.  Minnesota Statutes 2003 Supplement, section 
 30.27  308B.121, subdivision 5, is amended to read: 
 30.28     Subd. 5.  [REINSTATEMENT.] A cooperative may, within one 
 30.29  year of the date of dissolution under this section, 
 30.30  retroactively reinstate its existence by filing a single annual 
 30.31  registration and paying a $25 fee.  Filing the annual 
 30.32  registration with the secretary of state: 
 30.33     (1) returns the cooperative to active status as of the date 
 30.34  of the dissolution; 
 30.35     (2) validates contracts or other acts within the authority 
 30.36  of the articles and the cooperative is liable for those 
 31.1   contracts or acts; and 
 31.2      (3) restores to the cooperative all assets and rights of 
 31.3   the cooperative and its shareholders or members to the extent 
 31.4   they were held by the cooperative and its shareholders or 
 31.5   members before the dissolution occurred, except to the extent 
 31.6   that assets or rights were affected by acts occurring after the 
 31.7   dissolution or sold or otherwise distributed after that time. 
 31.8      Sec. 39.  Minnesota Statutes 2002, section 500.221, 
 31.9   subdivision 1, is amended to read: 
 31.10     Subdivision 1.  [DEFINITIONS.] For purposes of this 
 31.11  section, "agricultural land" means land capable of use in the 
 31.12  production of agricultural crops, livestock or livestock 
 31.13  products, poultry or poultry products, milk or dairy products, 
 31.14  or fruit and other horticultural products but does not include 
 31.15  any land zoned by a local governmental unit for a use other than 
 31.16  and nonconforming with agricultural use.  For the purposes of 
 31.17  this section, "interest in agricultural land" includes any 
 31.18  leasehold interest.  For the purposes of this section, a 
 31.19  "permanent resident alien of the United States" is a natural 
 31.20  person who: 
 31.21     (1) has been lawfully admitted to the United States for 
 31.22  permanent residence and in fact maintains; or 
 31.23     (2) is a holder of a nonimmigrant treaty investment visa 
 31.24  pursuant to United States Code, title 8, section 
 31.25  1101(a)15(E)(ii). 
 31.26     A person who qualifies as a permanent resident alien of the 
 31.27  United States under clause (1) must also maintain that person's 
 31.28  principal, actual dwelling place within the United States for at 
 31.29  least six months out of every consecutive 12-month period 
 31.30  without regard to intent.  A person who qualifies as a permanent 
 31.31  resident alien of the United States under clause (2) must also 
 31.32  maintain that person's principal actual dwelling place in 
 31.33  Minnesota for at least ten months out of every 12-month period, 
 31.34  and is limited to dairy farming and up to 1,500 acres of 
 31.35  agricultural land.  The eligibility of a person under clause (2) 
 31.36  is limited to three years, unless the commissioner waives the 
 32.1   three-year limitation upon finding that the person is actively 
 32.2   pursuing the status under clause (1) or United States 
 32.3   citizenship.  For the purposes of this section, "commissioner" 
 32.4   means the commissioner of agriculture.  
 32.5      Sec. 40.  Minnesota Statutes 2002, section 500.221, 
 32.6   subdivision 1a, is amended to read: 
 32.7      Subd. 1a.  [DETERMINATION OF ALIEN STATUS.] An alien who 
 32.8   qualifies under subdivision 1, clause (1), and has been 
 32.9   physically absent from the United States for more than six 
 32.10  months out of any 12-month period shall be presumed not to be a 
 32.11  permanent resident alien.  An alien who qualifies under 
 32.12  subdivision 1, clause (2), and has been physically absent from 
 32.13  Minnesota for more than two months out of any 12-month period 
 32.14  shall be presumed not to be a permanent resident alien.  Every 
 32.15  permanent resident alien of the United States who owns purchases 
 32.16  property subject to this section shall must: 
 32.17     (1) file a report with the commissioner within 30 days of 
 32.18  the date of purchase; and 
 32.19     (2) annually, at some time during the month of January, 
 32.20  file with the commissioner a statement setting forth the dates 
 32.21  and places of that person's residence in the United States 
 32.22  during the prior calendar year. 
 32.23     The statement shall required under clause (2) must include 
 32.24  an explanation of absences totaling more than six two months 
 32.25  during the prior calendar year and any facts which support the 
 32.26  continuation of permanent resident alien status.  Upon receipt 
 32.27  of the statement, the commissioner shall have 30 days to review 
 32.28  the statement and notify the resident alien whether the facts 
 32.29  support continuation of the permanent resident alien status.  
 32.30     Sec. 41.  Minnesota Statutes 2002, section 500.221, 
 32.31  subdivision 5, is amended to read: 
 32.32     Subd. 5.  [PENALTY.] Willful failure to properly file a 
 32.33  report required under subdivision 1a or to properly register any 
 32.34  parcel of land as required by subdivision 4 is a gross 
 32.35  misdemeanor.  Each full month of failure to register is a 
 32.36  separate offense. 
 33.1      Sec. 42.  Minnesota Statutes 2002, section 500.24, 
 33.2   subdivision 2, is amended to read: 
 33.3      Subd. 2.  [DEFINITIONS.] The definitions in this 
 33.4   subdivision apply to this section. 
 33.5      (a) "Farming" means the production of (1) agricultural 
 33.6   products; (2) livestock or livestock products; (3) milk or milk 
 33.7   products; or (4) fruit or other horticultural products.  It does 
 33.8   not include the processing, refining, or packaging of said 
 33.9   products, nor the provision of spraying or harvesting services 
 33.10  by a processor or distributor of farm products.  It does not 
 33.11  include the production of timber or forest products, the 
 33.12  production of poultry or poultry products, or the feeding and 
 33.13  caring for livestock that are delivered to a corporation for 
 33.14  slaughter or processing for up to 20 days before slaughter or 
 33.15  processing. 
 33.16     (b) "Family farm" means an unincorporated farming unit 
 33.17  owned by one or more persons residing on the farm or actively 
 33.18  engaging in farming. 
 33.19     (c) "Family farm corporation" means a corporation founded 
 33.20  for the purpose of farming and the ownership of agricultural 
 33.21  land in which the majority of the stock is held by and the 
 33.22  majority of the stockholders are persons, the spouses of 
 33.23  persons, or current beneficiaries of one or more family farm 
 33.24  trusts in which the trustee holds stock in a family farm 
 33.25  corporation, related to each other within the third degree of 
 33.26  kindred according to the rules of the civil law, and at least 
 33.27  one of the related persons is residing on or actively operating 
 33.28  the farm, and none of whose stockholders are corporations; 
 33.29  provided that a family farm corporation shall not cease to 
 33.30  qualify as such hereunder by reason of any: 
 33.31     (1) transfer of shares of stock to a person or the spouse 
 33.32  of a person related within the third degree of kindred according 
 33.33  to the rules of civil law to the person making the transfer, or 
 33.34  to a family farm trust of which the shareholder, spouse, or 
 33.35  related person is a current beneficiary; or 
 33.36     (2) distribution from a family farm trust of shares of 
 34.1   stock to a beneficiary related within the third degree of 
 34.2   kindred according to the rules of civil law to a majority of the 
 34.3   current beneficiaries of the trust, or to a family farm trust of 
 34.4   which the shareholder, spouse, or related person is a current 
 34.5   beneficiary. 
 34.6      For the purposes of this section, a transfer may be made 
 34.7   with or without consideration, either directly or indirectly, 
 34.8   during life or at death, whether or not in trust, of the shares 
 34.9   in the family farm corporation, and stock owned by a family farm 
 34.10  trust are considered to be owned in equal shares by the current 
 34.11  beneficiaries. 
 34.12     (d) "Family farm trust" means: 
 34.13     (1) a trust in which: 
 34.14     (i) a majority of the current beneficiaries are persons or 
 34.15  spouses of persons who are related to each other within the 
 34.16  third degree of kindred according to the rules of civil law; 
 34.17     (ii) all of the current beneficiaries are natural persons 
 34.18  or nonprofit corporations or trusts described in the Internal 
 34.19  Revenue Code, section 170(c), as amended, and the regulations 
 34.20  under that section; and 
 34.21     (iii) one of the family member current beneficiaries is 
 34.22  residing on or actively operating the farm; or the trust leases 
 34.23  the agricultural land to a family farm unit, a family farm 
 34.24  corporation, an authorized farm corporation, an authorized 
 34.25  livestock farm corporation, a family farm limited liability 
 34.26  company, a family farm trust, an authorized farm limited 
 34.27  liability company, a family farm partnership, or an authorized 
 34.28  farm partnership; or 
 34.29     (2) a charitable remainder trust as defined in the Internal 
 34.30  Revenue Code, section 664, as amended, and the regulations under 
 34.31  that section, and a charitable lead trust as set forth in the 
 34.32  Internal Revenue Code, section 170(f), and the regulations under 
 34.33  that section, if the lead period does not exceed ten years and 
 34.34  the majority of remainder beneficiaries are related to the 
 34.35  grantor within the third degree of kindred according to the 
 34.36  rules of civil law. 
 35.1      For the purposes of this section, if a distributee trust 
 35.2   becomes entitled to, or at the discretion of any person may 
 35.3   receive, a distribution from income or principal of a family 
 35.4   farm trust, then the distributee trust must independently 
 35.5   qualify as a family farm trust. 
 35.6      (e) "Authorized farm corporation" means a corporation 
 35.7   meeting the following standards: 
 35.8      (1) it has no more than five shareholders, provided that 
 35.9   for the purposes of this section, a husband and wife are 
 35.10  considered one shareholder; 
 35.11     (2) all its shareholders, other than any estate, are 
 35.12  natural persons or a family farm trust; 
 35.13     (3) it does not have more than one class of shares; 
 35.14     (4) its revenue from rent, royalties, dividends, interest, 
 35.15  and annuities does not exceed 20 percent of its gross receipts; 
 35.16     (5) shareholders holding 51 percent or more of the interest 
 35.17  in the corporation reside on the farm or are actively engaging 
 35.18  in farming; 
 35.19     (6) it does not, directly or indirectly, own or otherwise 
 35.20  have an interest in any title to more than 1,500 acres of 
 35.21  agricultural land; and 
 35.22     (7) none of its shareholders are shareholders in other 
 35.23  authorized farm corporations that directly or indirectly in 
 35.24  combination with the corporation own more than 1,500 acres of 
 35.25  agricultural land. 
 35.26     (f) "Authorized livestock farm corporation" means a 
 35.27  corporation formed for the production of livestock and meeting 
 35.28  the following standards: 
 35.29     (1) it is engaged in the production of livestock other than 
 35.30  dairy cattle; 
 35.31     (2) all its shareholders, other than any estate, are 
 35.32  natural persons, family farm trusts, or family farm 
 35.33  corporations; 
 35.34     (3) it does not have more than one class of shares; 
 35.35     (4) its revenue from rent, royalties, dividends, interest, 
 35.36  and annuities does not exceed 20 percent of its gross receipts; 
 36.1      (5) shareholders holding 75 percent or more of the control, 
 36.2   financial, and capital investment in the corporation are farmers 
 36.3   residing in Minnesota, and at least 51 percent of the required 
 36.4   percentage of farmers are actively engaged in livestock 
 36.5   production; 
 36.6      (6) it does not, directly or indirectly, own or otherwise 
 36.7   have an interest in any title to more than 1,500 acres of 
 36.8   agricultural land; and 
 36.9      (7) none of its shareholders are shareholders in other 
 36.10  authorized farm corporations that directly or indirectly in 
 36.11  combination with the corporation own more than 1,500 acres of 
 36.12  agricultural land. 
 36.13     (g) "Agricultural land" means real estate used for farming 
 36.14  or capable of being used for farming in this state. 
 36.15     (h) "Pension or investment fund" means a pension or 
 36.16  employee welfare benefit fund, however organized, a mutual fund, 
 36.17  a life insurance company separate account, a common trust of a 
 36.18  bank or other trustee established for the investment and 
 36.19  reinvestment of money contributed to it, a real estate 
 36.20  investment trust, or an investment company as defined in United 
 36.21  States Code, title 15, section 80a-3.  
 36.22     (i) "Farm homestead" means a house including adjoining 
 36.23  buildings that has been used as part of a farming operation or 
 36.24  is part of the agricultural land used for a farming operation. 
 36.25     (j) "Family farm partnership" means a limited partnership 
 36.26  formed for the purpose of farming and the ownership of 
 36.27  agricultural land in which the majority of the interests in the 
 36.28  partnership is held by and the majority of the partners are 
 36.29  natural persons, the spouses of persons, or current 
 36.30  beneficiaries of one or more family farm trusts in which the 
 36.31  trustee holds an interest in a family farm partnership related 
 36.32  to each other within the third degree of kindred according to 
 36.33  the rules of the civil law, and at least one of the related 
 36.34  persons is residing on the farm, actively operating the farm, or 
 36.35  the agricultural land was owned by one or more of the related 
 36.36  persons for a period of five years before its transfer to the 
 37.1   limited partnership, and none of the partners are corporations 
 37.2   is a corporation.  A family farm partnership does not cease to 
 37.3   qualify as a family farm partnership because of a: 
 37.4      (1) transfer of a partnership interest to a person or 
 37.5   spouse of a person related within the third degree of kindred 
 37.6   according to the rules of civil law to the person making the 
 37.7   transfer or to a family farm trust of which the partner, spouse, 
 37.8   or related person is a current beneficiary; or 
 37.9      (2) distribution from a family farm trust of a partnership 
 37.10  interest to a beneficiary related within the third degree of 
 37.11  kindred according to the rules of civil law to a majority of the 
 37.12  current beneficiaries of the trust, or to a family farm trust of 
 37.13  which the partner, spouse, or related person is a current 
 37.14  beneficiary. 
 37.15     For the purposes of this section, a transfer may be made 
 37.16  with or without consideration, either directly or indirectly, 
 37.17  during life or at death, whether or not in trust, of a 
 37.18  partnership interest in the family farm partnership, and 
 37.19  interest owned by a family farm trust is considered to be owned 
 37.20  in equal shares by the current beneficiaries. 
 37.21     (k) "Authorized farm partnership" means a limited 
 37.22  partnership meeting the following standards:  
 37.23     (1) it has been issued a certificate from the secretary of 
 37.24  state or is registered with the county recorder and farming and 
 37.25  ownership of agricultural land is stated as a purpose or 
 37.26  character of the business; 
 37.27     (2) it has no more than five partners; 
 37.28     (3) all its partners, other than any estate, are natural 
 37.29  persons or family farm trusts; 
 37.30     (4) its revenue from rent, royalties, dividends, interest, 
 37.31  and annuities does not exceed 20 percent of its gross receipts; 
 37.32     (5) its general partners hold at least 51 percent of the 
 37.33  interest in the land assets of the partnership and reside on the 
 37.34  farm or are actively engaging in farming not more than 1,500 
 37.35  acres as a general partner in an authorized limited partnership; 
 37.36     (6) its limited partners do not participate in the business 
 38.1   of the limited partnership including operating, managing, or 
 38.2   directing management of farming operations; 
 38.3      (7) it does not, directly or indirectly, own or otherwise 
 38.4   have an interest in any title to more than 1,500 acres of 
 38.5   agricultural land; and 
 38.6      (8) none of its limited partners are limited partners in 
 38.7   other authorized farm partnerships that directly or indirectly 
 38.8   in combination with the partnership own more than 1,500 acres of 
 38.9   agricultural land.  
 38.10     (l) "Family farm limited liability company" means a limited 
 38.11  liability company founded for the purpose of farming and the 
 38.12  ownership of agricultural land in which the majority of the 
 38.13  membership interests are is held by and the majority of the 
 38.14  members are natural persons or the spouses of persons, or 
 38.15  current beneficiaries of one or more family farm trusts in which 
 38.16  the trustee holds stock an interest in a family farm limited 
 38.17  liability company related to each other within the third degree 
 38.18  of kindred according to the rules of the civil law, and at least 
 38.19  one of the related persons is residing on the farm, actively 
 38.20  operating the farm, or the agricultural land was owned by one or 
 38.21  more of the related persons for a period of five years before 
 38.22  its transfer to the limited liability company, and none of the 
 38.23  members are corporations is a corporation or a limited liability 
 38.24  companies company.  A family farm limited liability company does 
 38.25  not cease to qualify as a family farm limited liability company 
 38.26  because of: 
 38.27     (1) a transfer of a membership interest to a person or 
 38.28  spouse of a person related within the third degree of kindred 
 38.29  according to the rules of civil law to the person making the 
 38.30  transfer or to a family farm trust of which the member, spouse, 
 38.31  or related person is a current beneficiary; or 
 38.32     (2) distribution from a family farm trust of a membership 
 38.33  interest to a beneficiary related within the third degree of 
 38.34  kindred according to the rules of civil law to a majority of the 
 38.35  current beneficiaries of the trust, or to a family farm trust of 
 38.36  which the member, spouse, or related person is a current 
 39.1   beneficiary. 
 39.2      For the purposes of this section, a transfer may be made 
 39.3   with or without consideration, either directly or indirectly, 
 39.4   during life or at death, whether or not in trust, of a 
 39.5   membership interest in the family farm limited liability 
 39.6   company, and interest owned by a family farm trust is considered 
 39.7   to be owned in equal shares by the current beneficiaries.  
 39.8   Except for a state or federally chartered financial institution 
 39.9   acquiring an encumbrance for the purpose of security or an 
 39.10  interest under paragraph (x), a member of a family farm limited 
 39.11  liability company may not transfer a membership interest, 
 39.12  including a financial interest, to a person who is not otherwise 
 39.13  eligible to be a member under this paragraph. 
 39.14     (m) "Authorized farm limited liability company" means a 
 39.15  limited liability company meeting the following standards: 
 39.16     (1) it has no more than five members; 
 39.17     (2) all its members, other than any estate, are natural 
 39.18  persons or family farm trusts; 
 39.19     (3) it does not have more than one class of membership 
 39.20  interests; 
 39.21     (4) its revenue from rent, royalties, dividends, interest, 
 39.22  and annuities does not exceed 20 percent of its gross receipts; 
 39.23     (5) members holding 51 percent or more of both the 
 39.24  governance rights and financial rights in the limited liability 
 39.25  company reside on the farm or are actively engaged in farming; 
 39.26     (6) it does not, directly or indirectly, own or otherwise 
 39.27  have an interest in any title to more than 1,500 acres of 
 39.28  agricultural land; and 
 39.29     (7) none of its members are members in other authorized 
 39.30  farm limited liability companies that directly or indirectly in 
 39.31  combination with the authorized farm limited liability company 
 39.32  own more than 1,500 acres of agricultural land. 
 39.33     Except for a state or federally chartered financial 
 39.34  institution acquiring an encumbrance for the purpose of security 
 39.35  or an interest under paragraph (x), a member of an authorized 
 39.36  farm limited liability company may not transfer a membership 
 40.1   interest, including a financial interest, to a person who is not 
 40.2   otherwise eligible to be a member under this paragraph. 
 40.3      (n) "Farmer" means a natural person who regularly 
 40.4   participates in physical labor or operations management in the 
 40.5   person's farming operation and files "Schedule F" as part of the 
 40.6   person's annual Form 1040 filing with the United States Internal 
 40.7   Revenue Service. 
 40.8      (o) "Actively engaged in livestock production" means 
 40.9   performing day-to-day physical labor or day-to-day operations 
 40.10  management that significantly contributes to livestock 
 40.11  production and the functioning of a livestock operation. 
 40.12     (p) "Research or experimental farm" means a corporation, 
 40.13  limited partnership, pension, investment fund, or limited 
 40.14  liability company that owns or operates agricultural land for 
 40.15  research or experimental purposes, provided that any commercial 
 40.16  sales from the operation are incidental to the research or 
 40.17  experimental objectives of the corporation.  A corporation, 
 40.18  limited partnership, limited liability company, or pension or 
 40.19  investment fund seeking initial approval by the commissioner to 
 40.20  operate agricultural land for research or experimental purposes 
 40.21  must first submit to the commissioner a prospectus or proposal 
 40.22  of the intended method of operation containing information 
 40.23  required by the commissioner including a copy of any operational 
 40.24  contract with individual participants. 
 40.25     (q) "Breeding stock farm" means a corporation, limited 
 40.26  partnership, or limited liability company, that owns or operates 
 40.27  agricultural land for the purpose of raising breeding stock, 
 40.28  including embryos, for resale to farmers or for the purpose of 
 40.29  growing seed, wild rice, nursery plants, or sod.  An entity that 
 40.30  is organized to raise livestock other than dairy cattle under 
 40.31  this paragraph that does not qualify as an authorized farm 
 40.32  corporation must:  
 40.33     (1) sell all castrated animals to be fed out or finished to 
 40.34  farming operations that are neither directly nor indirectly 
 40.35  owned by the business entity operating the breeding stock 
 40.36  operation; and 
 41.1      (2) report its total production and sales annually to the 
 41.2   commissioner.  
 41.3      (r) "Aquatic farm" means a corporation, limited 
 41.4   partnership, or limited liability company, that owns or leases 
 41.5   agricultural land as a necessary part of an aquatic farm as 
 41.6   defined in section 17.47, subdivision 3.  
 41.7      (s) "Religious farm" means a corporation formed primarily 
 41.8   for religious purposes whose sole income is derived from 
 41.9   agriculture.  
 41.10     (t) "Utility corporation" means a corporation regulated 
 41.11  under Minnesota Statutes 1974, chapter 216B, that owns 
 41.12  agricultural land for purposes described in that chapter, or an 
 41.13  electric generation or transmission cooperative that owns 
 41.14  agricultural land for use in its business if the land is not 
 41.15  used for farming except under lease to a family farm unit, a 
 41.16  family farm corporation, a family farm trust, a family farm 
 41.17  partnership, or a family farm limited liability company.  
 41.18     (u) "Development organization" means a corporation, limited 
 41.19  partnership, limited liability company, or pension or investment 
 41.20  fund that has an interest in agricultural land for which the 
 41.21  corporation, limited partnership, limited liability company, or 
 41.22  pension or investment fund has documented plans to use and 
 41.23  subsequently uses the land within six years from the date of 
 41.24  purchase for a specific nonfarming purpose, or if the land is 
 41.25  zoned nonagricultural, or if the land is located within an 
 41.26  incorporated area.  A corporation, limited partnership, limited 
 41.27  liability company, or pension or investment fund may hold 
 41.28  agricultural land in the amount necessary for its nonfarm 
 41.29  business operation; provided, however, that pending the 
 41.30  development of agricultural land for nonfarm purposes, the land 
 41.31  may not be used for farming except under lease to a family farm 
 41.32  unit, a family farm corporation, a family farm trust, an 
 41.33  authorized farm corporation, an authorized livestock farm 
 41.34  corporation, a family farm partnership, an authorized farm 
 41.35  partnership, a family farm limited liability company, or an 
 41.36  authorized farm limited liability company, or except when 
 42.1   controlled through ownership, options, leaseholds, or other 
 42.2   agreements by a corporation that has entered into an agreement 
 42.3   with the United States under the New Community Act of 1968 
 42.4   (Title IV of the Housing and Urban Development Act of 1968, 
 42.5   United States Code, title 42, sections 3901 to 3914) as amended, 
 42.6   or a subsidiary or assign of such a corporation.  
 42.7      (v) "Exempt land" means agricultural land owned or leased 
 42.8   by a corporation as of May 20, 1973, agricultural land owned or 
 42.9   leased by a pension or investment fund as of May 12, 1981, 
 42.10  agricultural land owned or leased by a limited partnership as of 
 42.11  May 1, 1988, or agricultural land owned or leased by a trust as 
 42.12  of the effective date of Laws 2000, chapter 477, including the 
 42.13  normal expansion of that ownership at a rate not to exceed 20 
 42.14  percent of the amount of land owned as of May 20, 1973, for a 
 42.15  corporation; May 12, 1981, for a pension or investment fund; May 
 42.16  1, 1988, for a limited partnership, or the effective date of 
 42.17  Laws 2000, chapter 477, for a trust, measured in acres, in any 
 42.18  five-year period, and including additional ownership reasonably 
 42.19  necessary to meet the requirements of pollution control rules.  
 42.20  A corporation, limited partnership, or pension or investment 
 42.21  fund that is eligible to own or lease agricultural land under 
 42.22  this section prior to May 1997, or a corporation that is 
 42.23  eligible to own or lease agricultural land as a benevolent trust 
 42.24  under this section prior to the effective date of Laws 2000, 
 42.25  chapter 477, may continue to own or lease agricultural land 
 42.26  subject to the same conditions and limitations as previously 
 42.27  allowed.  
 42.28     (w) "Gifted land" means agricultural land acquired as a 
 42.29  gift, either by grant or devise, by an educational, religious, 
 42.30  or charitable nonprofit corporation, limited partnership, 
 42.31  limited liability company, or pension or investment fund if all 
 42.32  land so acquired is disposed of within ten years after acquiring 
 42.33  the title.  
 42.34     (x) "Repossessed land" means agricultural land acquired by 
 42.35  a corporation, limited partnership, limited liability company, 
 42.36  or pension or investment fund by process of law in the 
 43.1   collection of debts, or by any procedure for the enforcement of 
 43.2   a lien or claim on the land, whether created by mortgage or 
 43.3   otherwise if all land so acquired is disposed of within five 
 43.4   years after acquiring the title.  The five-year limitation is a 
 43.5   covenant running with the title to the land against any grantee, 
 43.6   assignee, or successor of the pension or investment fund, 
 43.7   corporation, limited partnership, or limited liability company.  
 43.8   The land so acquired must not be used for farming during the 
 43.9   five-year period, except under a lease to a family farm unit, a 
 43.10  family farm corporation, a family farm trust, an authorized farm 
 43.11  corporation, an authorized livestock farm corporation, a family 
 43.12  farm partnership, an authorized farm partnership, a family farm 
 43.13  limited liability company, or an authorized farm limited 
 43.14  liability company.  Notwithstanding the five-year divestiture 
 43.15  requirement under this paragraph, a financial institution may 
 43.16  continue to own the agricultural land if the agricultural land 
 43.17  is leased to the immediately preceding former owner, but must 
 43.18  dispose of the agricultural land within ten years of acquiring 
 43.19  the title.  Livestock acquired by a pension or investment fund, 
 43.20  corporation, limited partnership, or limited liability company 
 43.21  in the collection of debts, or by a procedure for the 
 43.22  enforcement of lien or claim on the livestock whether created by 
 43.23  security agreement or otherwise after August 1, 1994, must be 
 43.24  sold or disposed of within one full production cycle for the 
 43.25  type of livestock acquired or 18 months after the livestock is 
 43.26  acquired, whichever is earlier.  
 43.27     (y) "Commissioner" means the commissioner of agriculture.  
 43.28     (z) "Nonprofit corporation" means a nonprofit corporation 
 43.29  organized under state nonprofit corporation or trust law or 
 43.30  qualified for tax-exempt status under federal tax law that uses 
 43.31  the land for a specific nonfarming purpose or leases the 
 43.32  agricultural land to a family farm unit, a family farm 
 43.33  corporation, an authorized farm corporation, an authorized 
 43.34  livestock farm corporation, a family farm limited liability 
 43.35  company, a family farm trust, an authorized farm limited 
 43.36  liability company, a family farm partnership, or an authorized 
 44.1   farm partnership. 
 44.2      (aa) "Current beneficiary" means a person who at any time 
 44.3   during a year is entitled to, or at the discretion of any person 
 44.4   may, receive a distribution from the income or principal of the 
 44.5   trust.  It does not include a distributee trust, other than a 
 44.6   trust described in section 170(c) of the Internal Revenue Code, 
 44.7   as amended, but does include the current beneficiaries of the 
 44.8   distributee trust.  It does not include a person in whose favor 
 44.9   a power of appointment could be exercised until the holder of 
 44.10  the power of appointment actually exercises the power of 
 44.11  appointment in that person's favor.  It does not include a 
 44.12  person who is entitled to receive a distribution only after a 
 44.13  specified time or upon the occurrence of a specified event until 
 44.14  the time or occurrence of the event.  For the purposes of this 
 44.15  section, a distributee trust is a current beneficiary of a 
 44.16  family farm trust. 
 44.17     (bb) "De minimis" means that any corporation, pension or 
 44.18  investment fund, limited liability company, or limited 
 44.19  partnership that directly or indirectly owns, acquires, or 
 44.20  otherwise obtains any interest in 40 acres or less of 
 44.21  agricultural land and annually receives less than $150 per acre 
 44.22  in gross revenue from rental or agricultural production. 
 44.23     Sec. 43.  Minnesota Statutes 2002, section 500.24, 
 44.24  subdivision 3a, is amended to read: 
 44.25     Subd. 3a.  [LEASE AGREEMENT; CONSERVATION PRACTICE 
 44.26  PROTECTION CLAUSE.] A corporation, pension or investment fund, 
 44.27  limited partnership, or limited liability company other than 
 44.28  those meeting any of the definitions in subdivision 2, 
 44.29  paragraphs (c) to (f) or (j) to (m), when leasing farm land to a 
 44.30  family farm unit, a family farm corporation, a family farm 
 44.31  trust, an authorized farm corporation, an authorized livestock 
 44.32  farm corporation, a family farm partnership, an authorized farm 
 44.33  partnership, a family farm limited liability company, or an 
 44.34  authorized farm limited liability company, under provisions of 
 44.35  subdivision 2, paragraph (x), must include within the lease 
 44.36  agreement a provision prohibiting intentional damage or 
 45.1   destruction to a conservation practice on the agricultural land. 
 45.2      Sec. 44.  [DAIRY PRODUCER PAYMENT REPORT.] 
 45.3      By January 15, 2005, the commissioner shall report to the 
 45.4   senate and house policy and finance committees with jurisdiction 
 45.5   over agriculture on a value-added agriculture program to pay 
 45.6   beginning dairy farmers based on the amount of milk production.  
 45.7   The report shall include suggested language to create the 
 45.8   program. 
 45.9      Sec. 45.  [DELAYED PAYMENTS IN 2003.] 
 45.10     Not later than 60 days after the effective date of section 
 45.11  11, the commissioner of agriculture shall pay any producer 
 45.12  denied payment for failure to meet the ownership and reporting 
 45.13  requirements imposed by Laws 2003, chapter 128, article 3, 
 45.14  section 38, the amount to which the producer would have been 
 45.15  otherwise entitled. 
 45.16     Sec. 46.  [REPEALER.] 
 45.17     Minnesota Statutes 2002, sections 38.02, subdivision 2; and 
 45.18  38.13, are repealed. 
 45.19     Sec. 47.  [EFFECTIVE DATE.] 
 45.20     Sections 1, 2, 14, 39, 40, 41, and 45 are effective the day 
 45.21  following final enactment.  Section 29 is effective July 1, 2004.