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HF 1477

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/08/2023 10:24am

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 02/07/2023

Current Version - as introduced

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A bill for an act
relating to agriculture; modifying provisions pertaining to incentives for advanced
biofuel, renewable chemical, and biomass thermal production; appropriating money;
amending Minnesota Statutes 2022, sections 41A.16, subdivisions 1, 2; 41A.17,
subdivisions 1, 2; 41A.18, subdivisions 1, 2; proposing coding for new law in
Minnesota Statutes, chapter 41A; repealing Minnesota Statutes 2022, sections
41A.16, subdivision 7; 41A.17, subdivision 6; 41A.18, subdivision 6.

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

Section 1.

Minnesota Statutes 2022, section 41A.16, subdivision 1, is amended to read:


Subdivision 1.

Eligibility deleted text begin for participants on or before April 1, 2023deleted text end .

(a) A facility
eligible for payment under this section must source from Minnesota at least 80 percent of
the biomass used to produce an advanced biofuel, except that, if a facility is sited 50 miles
or less from the state border, biomass used to produce an advanced biofuel may be sourced
from outside of Minnesota, but only if at least 80 percent of the biomass is sourced from
within a 100-mile radius of the facility or from within Minnesota. The facility must be
located in Minnesota, must begin production at a specific location on or before deleted text begin April 1deleted text end new text begin June
30
new text end , 2023, and must not begin operating above 23,750 MMbtu of quarterly advanced biofuel
production before July 1, 2015. Eligible facilities include existing companies and facilities
that are adding advanced biofuel production capacity, or retrofitting existing capacity, as
well as new companies and facilities. Production of conventional corn ethanol and
conventional biodiesel is not eligible. Eligible advanced biofuel facilities must produce at
least 1,500 MMbtu of advanced biofuel quarterly.

(b) No payments shall be made for advanced biofuel production that occurs after June
30, 2035, for those eligible biofuel producers under paragraph (a).

(c) An eligible producer of advanced biofuel shall not transfer the producer's eligibility
for payments under this section to an advanced biofuel facility at a different location.

(d) A producer that ceases production for any reason is ineligible to receive payments
under this section until the producer resumes production.

(e) Renewable chemical production for which payment has been received under section
41A.17, and biomass thermal production for which payment has been received under section
41A.18, are not eligible for payment under this section.

(f) Biobutanol is eligible under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from March 31, 2023.
new text end

Sec. 2.

Minnesota Statutes 2022, section 41A.16, subdivision 2, is amended to read:


Subd. 2.

Payment amounts; limits.

(a) The commissioner shall make payments to
eligible producers of advanced biofuel. The amount of the payment for each eligible
producer's annual production is $2.1053 per MMbtu for advanced biofuel production from
cellulosic biomass, and $1.053 per MMbtu for advanced biofuel production from sugar,
starch, oil, or animal fat at a specific location for ten years after the start of production.

(b) Total payments under this section to an eligible biofuel producer in a fiscal year may
not exceed the amount necessary for 2,850,000 MMbtu of biofuel production. Total payments
under this section to all eligible biofuel producers in a fiscal year may not exceed the amount
necessary for 17,100,000 MMbtu of biofuel production. If the total amount for which all
producers are eligible in a quarter exceeds the amount available for payments, the
commissioner shall make the payments on a pro rata basis.new text begin An eligible producer may reapply
for payment, and the commissioner must pay, the difference between a claim for payment
filed under subdivision 6 and the pro rata amount received:
new text end

new text begin (1) until the full amount of the original claim is paid; and
new text end

new text begin (2) subject to available money appropriated for the express purpose of paying claims
not otherwise paid.
new text end

(c) For purposes of this section, an entity that holds a controlling interest in more than
one advanced biofuel facility is considered a single eligible producer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2020, and
applies to claims filed after January 1, 2020.
new text end

Sec. 3.

Minnesota Statutes 2022, section 41A.17, subdivision 1, is amended to read:


Subdivision 1.

Eligibility deleted text begin for participants on or before April 1, 2023deleted text end .

(a) A facility
eligible for payment under this section must source from Minnesota at least 80 percent of
the biomass used to produce a renewable chemical, except that, if a facility is sited 50 miles
or less from the state border, biomass used to produce a renewable chemical may be sourced
from outside of Minnesota, but only if at least 80 percent of the biomass is sourced from
within a 100-mile radius of the facility or from within Minnesota. The facility must be
located in Minnesota, must begin production at a specific location on or before deleted text begin April 1deleted text end new text begin June
30
new text end , 2023, and must not begin production of 250,000 pounds of chemicals quarterly before
January 1, 2015. Eligible facilities include existing companies and facilities that are adding
production capacity, or retrofitting existing capacity, as well as new companies and facilities.
Eligible renewable chemical facilities must produce at least 250,000 pounds of renewable
chemicals quarterly. Renewable chemicals produced through processes that are fully
commercial before January 1, 2000, are not eligible.

(b) No payments shall be made for renewable chemical production that occurs after June
30, 2035, for those eligible renewable chemical producers under paragraph (a).

(c) An eligible producer of renewable chemicals shall not transfer the producer's eligibility
for payments under this section to a renewable chemical facility at a different location.

(d) A producer that ceases production for any reason is ineligible to receive payments
under this section until the producer resumes production.

(e) Advanced biofuel production for which payment has been received under section
41A.16, and biomass thermal production for which payment has been received under section
41A.18, are not eligible for payment under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from March 31, 2023.
new text end

Sec. 4.

Minnesota Statutes 2022, section 41A.17, subdivision 2, is amended to read:


Subd. 2.

Payment amounts; bonus; limits.

(a) The commissioner shall make payments
to eligible producers of renewable chemicals located in the state. The amount of the payment
for each producer's annual production is $0.03 per pound of sugar-derived renewable
chemical, $0.03 per pound of cellulosic sugar, starch, oil, or animal fat, and $0.06 per pound
of cellulosic-derived renewable chemical produced at a specific location for ten years after
the start of production.

(b) An eligible facility producing renewable chemicals using agricultural cellulosic
biomass is eligible for a 20 percent bonus payment for each pound produced from agricultural
biomass that is derived from perennial crop or cover crop biomass.

(c) Total payments under this section to an eligible renewable chemical producer in a
fiscal year may not exceed the amount necessary for 99,999,999 pounds of renewable
chemical production. Total payments under this section to all eligible renewable chemical
producers in a fiscal year may not exceed the amount necessary for 599,999,999 pounds of
renewable chemical production. If the total amount for which all producers are eligible in
a quarter exceeds the amount available for payments, the commissioner shall make the
payments on a pro rata basis.new text begin An eligible producer may reapply for payment, and the
commissioner must pay, the difference between a claim for payment filed under subdivision
5 and the pro rata amount received:
new text end

new text begin (1) until the full amount of the original claim is paid; and
new text end

new text begin (2) subject to available money appropriated for the express purpose of paying claims
not otherwise paid.
new text end

(d) An eligible facility may blend renewable chemicals with other chemicals that are
not renewable chemicals, but only the percentage attributable to renewable chemicals in
the blended product is eligible to receive payment.

(e) For purposes of this section, an entity that holds a controlling interest in more than
one renewable chemical production facility is considered a single eligible producer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2020, and
applies to claims filed after January 1, 2020.
new text end

Sec. 5.

Minnesota Statutes 2022, section 41A.18, subdivision 1, is amended to read:


Subdivision 1.

Eligibility deleted text begin for participants on or before April 1, 2023deleted text end .

(a) A facility
eligible for payment under this section must source from Minnesota at least 80 percent of
the biomass used for biomass thermal production, except that, if a facility is sited 50 miles
or less from the state border, biomass used for biomass thermal production may be sourced
from outside of Minnesota, but only if at least 80 percent of the biomass is sourced from
within a 100-mile radius of the facility, or from within Minnesota. Biomass must be from
agricultural or forestry sources. The facility must be located in Minnesota, must have begun
production at a specific location on or before deleted text begin April 1deleted text end new text begin June 30new text end , 2023, and must not begin
before July 1, 2015. Eligible facilities include existing companies and facilities that are
adding production capacity, or retrofitting existing capacity, as well as new companies and
facilities. Eligible biomass thermal production facilities must produce at least 250 MMbtu
of biomass thermal quarterly.

(b) No payments shall be made for biomass thermal production that occurs after June
30, 2035, for those eligible biomass thermal producers under paragraph (a).

(c) An eligible producer of biomass thermal production shall not transfer the producer's
eligibility for payments under this section to a biomass thermal production facility at a
different location.

(d) A producer that ceases production for any reason is ineligible to receive payments
under this section until the producer resumes production.

(e) Biofuel production for which payment has been received under section 41A.16, and
renewable chemical production for which payment has been received under section 41A.17,
are not eligible for payment under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from March 31, 2023.
new text end

Sec. 6.

Minnesota Statutes 2022, section 41A.18, subdivision 2, is amended to read:


Subd. 2.

Payment amounts; bonus; limits; blending.

(a) The commissioner shall make
payments to eligible producers of biomass thermal located in the state. The amount of the
payment for each producer's annual production is $5.00 per MMbtu of biomass thermal
production produced at a specific location for ten years after the start of production.

(b) An eligible facility producing biomass thermal using agricultural cellulosic biomass
is eligible for a 20 percent bonus payment for each MMbtu produced from agricultural
biomass that is derived from perennial crop or cover crop biomass.

(c) Total payments under this section to an eligible thermal producer in a fiscal year
may not exceed the amount necessary for 30,000 MMbtu of thermal production. Total
payments under this section to all eligible thermal producers in a fiscal year may not exceed
the amount necessary for 150,000 MMbtu of total thermal production. If the total amount
for which all producers are eligible in a quarter exceeds the amount available for payments,
the commissioner shall make the payments on a pro rata basis.new text begin An eligible producer may
reapply for payment, and the commissioner must pay, the difference between a claim for
payment filed under subdivision 5 and the pro rata amount received:
new text end

new text begin (1) until the full amount of the original claim is paid; and
new text end

new text begin (2) subject to available money appropriated for the express purpose of paying claims
not otherwise paid.
new text end

(d) An eligible facility may blend a cellulosic feedstock with other fuels in the biomass
thermal production facility, but only the percentage attributable to biomass meeting the
cellulosic forestry biomass requirements or agricultural cellulosic biomass sourcing plan is
eligible to receive payment.

(e) When a facility is eligible due to adding production capacity or retrofitting existing
capacity, the entire amount of biomass meeting the cellulosic forestry biomass requirements
or agricultural cellulosic biomass sourcing plan is assumed to have been used for the biomass
thermal production from the added or retrofitted production capacity.

(f) For purposes of this section, an entity that holds a controlling interest in more than
one biomass thermal production facility is considered a single eligible producer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2020, and
applies to claims filed after January 1, 2020.
new text end

Sec. 7.

new text begin [41A.185] APPROPRIATION; INCENTIVE PAYMENTS.
new text end

new text begin (a) In fiscal year 2023 through fiscal year 2036, a sum sufficient to make the payments
required under Minnesota Statutes, sections 41A.16, 41A.17, and 41A.18, not to exceed
$15,000,000 in a fiscal year, is annually appropriated from the general fund to the
commissioner of agriculture.
new text end

new text begin (b) This section expires June 30, 2036.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8. new text begin APPROPRIATION; UNPAID CLAIMS.
new text end

new text begin $10,000,000 in fiscal year 2023 is appropriated from the general fund to the commissioner
of agriculture for the express purpose of paying claims not previously paid under Minnesota
Statutes, sections 41A.16, 41A.17, and 41A.18. This is a onetime appropriation. The
commissioner must pay all claims no later than June 30, 2023.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, sections 41A.16, subdivision 7; 41A.17, subdivision 6; and
41A.18, subdivision 6,
new text end new text begin are repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 23-02619

41A.16 ADVANCED BIOFUEL PRODUCTION INCENTIVE.

Subd. 7.

Eligibility for participants after April 1, 2023.

(a) A facility eligible for payment under this section must source at least 80 percent raw materials from Minnesota. If a facility is sited 50 miles or less from the state border, raw materials may be sourced from within a 100-mile radius. Raw materials must be from agricultural or forestry sources or from solid waste. The facility must be located in Minnesota, must begin production at a specific location after April 1, 2023, and before June 30, 2025, and must not begin operating above 23,750 MMbtu of quarterly biofuel production before July 1, 2015. Eligible facilities include existing companies and facilities that are adding advanced biofuel production capacity, or retrofitting existing capacity, as well as new companies and facilities. Production of conventional corn ethanol and conventional biodiesel is not eligible. Eligible advanced biofuel facilities must produce at least 23,750 MMbtu of biofuel quarterly.

(b) No payments shall be made for advanced biofuel production that occurs after June 30, 2035, for those eligible biofuel producers under paragraph (a).

(c) An eligible producer of advanced biofuel shall not transfer the producer's eligibility for payments under this section to an advanced biofuel facility at a different location.

(d) A producer that ceases production for any reason is ineligible to receive payments under this section until the producer resumes production.

(e) Renewable chemical production for which payment has been received under section 41A.17, and biomass thermal production for which payment has been received under section 41A.18, are not eligible for payment under this section.

(f) Biobutanol is eligible under this section.

41A.17 RENEWABLE CHEMICAL PRODUCTION INCENTIVE.

Subd. 6.

Eligibility for participants after April 1, 2023.

(a) A facility eligible for payment under this program must source at least 80 percent biobased content from Minnesota. For the purposes of this subdivision, "biobased content" means a chemical, polymer, monomer, or plastic that is not sold primarily for use as food, feed, or fuel and that has a biobased percentage of at least 51 percent as determined by testing representative samples using American Society for Testing and Materials specification D6866. If a facility is sited 50 miles or less from the state border, biobased content must be sourced from within a 100-mile radius. Biobased content must be from agricultural or forestry sources or from solid waste. The facility must be located in Minnesota, must begin production at a specific location after April 1, 2023, and before June 30, 2025, and must not begin production of 750,000 pounds or more of chemicals quarterly before January 1, 2015. Eligible facilities include existing companies and facilities that are adding production capacity, or retrofitting existing capacity, as well as new companies and facilities. Eligible renewable chemical facilities must produce at least 750,000 pounds of renewable chemicals quarterly. Renewable chemicals produced through processes that are fully commercial before January 1, 2000, are not eligible.

(b) No payments shall be made for renewable chemical production that occurs after June 30, 2035, for those eligible renewable chemical producers under paragraph (a).

(c) An eligible producer of renewable chemicals shall not transfer the producer's eligibility for payments under this section to a renewable chemical facility at a different location.

(d) A producer that ceases production for any reason is ineligible to receive payments under this section until the producer resumes production.

(e) Advanced biofuel production for which payment has been received under section 41A.16, and biomass thermal production for which payment has been received under section 41A.18, are not eligible for payment under this section.

41A.18 BIOMASS THERMAL PRODUCTION INCENTIVE.

Subd. 6.

Eligibility for participants after April 1, 2023.

(a) A facility eligible for payment under this section must source at least 80 percent raw materials from Minnesota. If a facility is sited 50 miles or less from the state border, raw materials should be sourced from within a 100-mile radius. Raw materials must be from agricultural or forestry sources. The facility must be located in Minnesota, must have begun production at a specific location after April 1, 2023, and before June 30, 2025, and must not begin before July 1, 2015. Eligible facilities include existing companies and facilities that are adding production capacity, or retrofitting existing capacity, as well as new companies and facilities. Eligible biomass thermal production facilities must produce at least 250 MMbtu of biomass thermal quarterly.

(b) No payments shall be made for biomass thermal production that occurs after June 30, 2035, for those eligible biomass thermal producers under paragraph (a).

(c) An eligible producer of biomass thermal production shall not transfer the producer's eligibility for payments under this section to a biomass thermal production facility at a different location.

(d) A producer that ceases production for any reason is ineligible to receive payments under this section until the producer resumes production.

(e) Biofuel production for which payment has been received under section 41A.16, and renewable chemical production for which payment has been received under section 41A.17, are not eligible for payment under this section.