HF 2280

Introduction - 94th Legislature (2025 - 2026)

Posted on 03/13/2025 03:02 p.m.

A bill for an act
relating to agriculture; modifying beginning farmer program provisions; modifying
grain buyer provisions; allowing the commissioner of agriculture to coordinate
with other state agencies and local governments to protect public health against
fertilizers and fertilizer by-products; repealing a provision requiring the
commissioner of agriculture to report on implementing the biodiesel fuel mandate;
amending Minnesota Statutes 2024, sections 18C.111, by adding a subdivision;
41B.0391, subdivisions 1, 4; 223.17, subdivision 6; repealing Minnesota Statutes
2024, section 239.77, subdivision 5.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 18C.111, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Fertilizers and fertilizer by-products. new text end

new text begin The commissioner may coordinate the
protection of public health and the environment from the unreasonable adverse effects of
fertilizers and fertilizer by-products among state agencies and local governments and may
assist other state agencies and local governments in providing such protection.
new text end

Sec. 2.

Minnesota Statutes 2024, section 41B.0391, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have
the meanings given.

(b) "Agricultural assets" means agricultural land, livestock, facilities, buildings, and
machinery used for farming in Minnesota.

(c) "Beginning farmer" means an individual new text begin or a single-member limited liability company
owned by one individual new text end who:

(1) is a resident of Minnesota;

(2) is seeking entry, or has entered within the last ten years, into farming;

(3) intends to farm land located within the state borders of Minnesota;

(4) except as provided in subdivision 2, paragraph (f), is not and whose spouse is not a
family member of the owner of the agricultural assets from whom the beginning farmer is
seeking to purchase or rent agricultural assets;

(5) except as provided in subdivision 2, paragraph (f), is not and whose spouse is not a
family member of a partner, member, shareholder, or trustee of the owner of agricultural
assets from whom the beginning farmer is seeking to purchase or rent agricultural assets;
and

(6) meets the following eligibility requirements as determined by the authority:

(i) has a net worth that does not exceed the limit provided under section 41B.03,
subdivision 3, paragraph (a), clause (2);

(ii) provides the majority of the day-to-day physical labor and management of the farm;

(iii) has, by the judgment of the authority, adequate farming experience or demonstrates
knowledge in the type of farming for which the beginning farmer seeks assistance from the
authority;

(iv) demonstrates to the authority a profit potential by submitting projected earnings
statements;

(v) asserts to the satisfaction of the authority that farming will be a significant source
of income for the beginning farmer;

(vi) is enrolled in or has completed within ten years of their first year of farming a
financial management program approved by the authority or the commissioner of agriculture;

(vii) agrees to notify the authority if the beginning farmer no longer meets the eligibility
requirements within the three-year certification period, in which case the beginning farmer
is no longer eligible for credits under this section; and

(viii) has other qualifications as specified by the authority.

The authority may waive the requirement in item (vi) if the participant requests a waiver
and has a four-year degree in an agricultural program or related field, reasonable agricultural
job-related experience, or certification as an adult farm management instructor.

(d) "Emerging farmer" means an emerging farmer within the meaning of section 17.055,
subdivision 1.

(e) "Family member" means a family member within the meaning of the Internal Revenue
Code, section 267(c)(4).

(f) "Farm product" means plants and animals useful to humans and includes, but is not
limited to, forage and sod crops, oilseeds, grain and feed crops, dairy and dairy products,
poultry and poultry products, livestock, fruits, and vegetables.

(g) "Farming" means the active use, management, and operation of real and personal
property for the production of a farm product.

(h) "Owner of agricultural assets" means an individual, trust, or pass-through entity that
is the owner in fee of agricultural land or has legal title to any other agricultural asset. Owner
of agricultural assets does not mean an equipment dealer, livestock dealer defined in section
17A.03, subdivision 7, or comparable entity that is engaged in the business of selling
agricultural assets for profit and that is not engaged in farming as its primary business
activity. An owner of agricultural assets approved and certified by the authority under
subdivision 4 must notify the authority if the owner no longer meets the definition in this
paragraph within the three year certification period and is then no longer eligible for credits
under this section.

(i) "Resident" has the meaning given in section 290.01, subdivision 7.

(j) "Share rent agreement" means a rental agreement in which the principal consideration
given to the owner of agricultural assets is a predetermined portion of the production of
farm products produced from the rented agricultural assets and which provides for sharing
production costs or risk of loss, or both.

Sec. 3.

Minnesota Statutes 2024, section 41B.0391, subdivision 4, is amended to read:

Subd. 4.

Authority duties.

(a) The authority shall:

(1) approve and certify or recertify beginning farmers as eligible for the program under
this section;

(2) approve and certify or recertify owners of agricultural assets as eligible for the tax
credit under subdivision 2 subject to the allocation limits in paragraph (c);

(3) provide necessary and reasonable assistance and support to beginning farmers for
qualification and participation in financial management programs approved by the authority;

(4) refer beginning farmers to agencies and organizations that may provide additional
pertinent information and assistance; and

(5) notwithstanding section 41B.211, the Rural Finance Authority must share information
with the commissioner of revenue to the extent necessary to administer provisions under
this subdivision and section 290.06, subdivisions 37 and 38. The Rural Finance Authority
must annually notify the commissioner of revenue of approval and certification or
recertification of beginning farmers and owners of agricultural assets under this section.
For credits under subdivision 2, the notification must include the amount of credit approved
by the authority and stated on the credit certificate.

(b) The certification of a beginning farmer or an owner of agricultural assets under this
section is valid for the year of the certification and the two following years, after which
time the beginning farmer or owner of agricultural assets must apply to the authority for
recertification.

(c) For credits for owners of agricultural assets allowed under subdivision 2, the authority
must not allocate more than $6,500,000 for taxable years beginning after December 31,
2022, and before January 1, 2024, and $4,000,000 for taxable years beginning after December
31, 2023. The authority must allocate credits on a first-come, first-served basis beginning
on January 1 of each year, except that recertifications for the second and third years of
credits under subdivision 2, paragraph (a), clauses (1) and (2), have first priority. Any
amount authorized but not allocated for taxable years ending before January 1, 2023, is
canceled and is not allocated for future taxable years. For taxable years beginning after
December 31, 2022, any amount authorized but not allocated in any taxable year does not
cancel and is added to the allocation for the next taxable year. For each taxable year, 50
percent of newly allocated credits must be allocated to emerging farmers. Any portion of a
taxable year's newly allocated credits that is reserved for emerging farmers that is not
allocated by deleted text begin September 30 deleted text end new text begin June 1 new text end of the taxable year is available for allocation to other
credit allocations beginning on deleted text begin October 1 deleted text end new text begin June 2 new text end .

Sec. 4.

Minnesota Statutes 2024, section 223.17, subdivision 6, is amended to read:

Subd. 6.

Financial statements.

(a) Except as allowed in paragraph (c), a grain buyer
licensed under this chapter must annually submit to the commissioner a financial statement
prepared new text begin by an independent third-party accountant or a certified public accountant, new text end in
accordance with deleted text begin generally accepted accounting principles deleted text end new text begin national or international accounting
standards new text end . The annual financial statement required under this subdivision must also:

(1) include deleted text begin , deleted text end but not be limited to the following:

(i) a balance sheet;

(ii) a statement of income (profit and loss);

(iii) a statement of retained earnings;

(iv) a statement of deleted text begin changes in financial position deleted text end new text begin cash flow new text end ; and

(v) a statement of the dollar amount of grain purchased in the previous fiscal year of the
grain buyer;

(2) be accompanied by a deleted text begin compilation deleted text end report of the financial statement that is prepared
by a grain commission firm or a management firm approved by the commissioner or by an
independent new text begin third-party accountant or a certified new text end public accountant, in accordance with
new text begin national or international accounting new text end standards deleted text begin established by the American Institute of
Certified Public Accountants deleted text end ;

deleted text begin (3) be accompanied by a certification by the chief executive officer or the chief executive
officer's designee of the licensee, and where applicable, all members of the governing board
of directors under penalty of perjury, that the financial statement accurately reflects the
financial condition of the licensee for the period specified in the statement;
deleted text end

deleted text begin (4) for grain buyers purchasing under $7,500,000 of grain annually, be reviewed by a
certified public accountant in accordance with standards established by the American Institute
of Certified Public Accountants, and must show that the financial statements are free from
material misstatements; and
deleted text end

deleted text begin (5) deleted text end new text begin (3) new text end for grain buyers purchasing $7,500,000 or more of grain annually, be audited new text begin or
reviewed new text end by a certified public accountant in accordance with standards established by the
American Institute of Certified Public Accountants deleted text begin and deleted text end new text begin or similar international standard.
Audits under this paragraph new text end must include an opinion statement from the certified public
accountant deleted text begin . deleted text end new text begin ; and
new text end

new text begin (4) for grain buyers purchasing above $20,000,000 or more of grain annually, be audited
by a certified public accountant in accordance with the standards established by the American
Institute of Certified Public Accountants or similar international standard and must include
an opinion statement from the certified public accountant.
new text end

(b) Only one financial statement must be filed for a chain of warehouses owned or
operated as a single business entity, unless otherwise required by the commissioner. All
financial statements filed with the commissioner are private or nonpublic data as provided
in section 13.02.

(c) A grain buyer who purchases grain immediately upon delivery solely with cash deleted text begin ; a
certified check; a cashier's check; or a postal, bank, or express money order deleted text end new text begin , as defined in
section 223.16, subdivision 2a, paragraph (b), new text end is exempt from this subdivision if the grain
buyer's gross annual purchases are $1,000,000 or less.

new text begin (d) For grain buyers who qualify for the exemption under paragraph (c), the commissioner
retains the right to require financial reporting based on inspections, reports of nonpayment
or other violations defined in this chapter, chapter 232, or Minnesota Rules, chapter 1562.
new text end

deleted text begin (d) deleted text end new text begin (e) new text end The commissioner shall annually provide information on a person's fiduciary
duties to each licensee. To the extent practicable, the commissioner must direct each licensee
to provide this information to all persons required to certify the licensee's financial statement
under paragraph (a) deleted text begin , clause (3) deleted text end .

new text begin (f) For the purpose of compliance with this chapter, the commissioner must annually
review financial statements for each grain buyer licensed under this chapter.
new text end

Sec. 5. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2024, section 239.77, subdivision 5, new text end new text begin is repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 25-03756

239.77 BIODIESEL CONTENT MANDATE.

Subd. 5.

Annual report.

(a) Beginning in 2009, the commissioner of agriculture must report by January 15 of each year to the chairs and ranking minority members of the legislative committees and divisions with jurisdiction over agriculture policy and finance regarding the implementation of the minimum content requirements in subdivision 2, including information about the price and supply of biodiesel fuel. The report shall include information about the impacts of the biodiesel mandate on the development of biodiesel production capacity in the state, and on the use of feedstock grown or raised in the state for biodiesel production. The report must include any written comments received from members of the biodiesel fuel task force by January 1 of that year designated by them for inclusion in the report.

(b) The commissioner of agriculture, in consultation with the commissioner of commerce and the Biodiesel Fuel Task Force, shall study the need to continue the exceptions in subdivision 3. The 2013 report under paragraph (a) shall include recommendations for studies and other research needs to make a determination on the need for the exceptions, including any recommendations for use of the agricultural growth, research, and innovation program funding to conduct the research. The 2014 report under paragraph (a) shall contain the commissioner of agriculture's recommendations on whether to continue any of the exceptions in subdivision 3.