HF 1545

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 02/22/2018 05:56pm

A bill for an act
relating to agriculture; establishing a budget for the Department of Agriculture,
the Board of Animal Health, and the Agricultural Utilization Research Institute;
making policy, technical, and conforming changes to various agriculture-related
provisions including provisions related to pesticides, noxious weeds, nursery law,
inspections, commercial feed, grain, food, and agricultural development;
reorganizing dairy law; establishing and modifying agriculture-related programs;
modifying partition fence law; modifying certain fees; modifying the Farmer-Lender
Mediation Act; requiring reports; appropriating money; amending Minnesota
Statutes 2016, sections 3.7371; 13.6435, subdivision 8; 15.985; 17.119, subdivisions
1, 2; 17.53, subdivisions 2, 8, 13; 17.983, subdivision 1; 17.984, subdivision 1;
18.79, subdivision 18; 18B.01, by adding subdivisions; 18B.065, subdivision 8;
18B.26, subdivision 1; 18B.28, subdivisions 1, 3; 18B.305; 18B.33, subdivision
1; 18B.34, subdivision 1; 18B.36, subdivision 1; 18B.37, subdivision 3; 18C.70,
subdivision 5; 18C.71, subdivision 4; 18H.06, subdivision 2; 18H.07, subdivisions
2, 3; 21.111, subdivisions 2, 3; 21.113; 21.117; 25.32; 25.33, subdivisions 5, 10,
21; 25.341, subdivisions 1, 2; 25.35; 25.371, subdivision 2; 25.38; 25.39,
subdivisions 1, 1a, 2, 3; 25.40, subdivision 2; 25.41, subdivisions 1, 2, 3, 5, 7a;
25.42; 27.04; 28A.03, by adding a subdivision; 28A.05; 28A.081; 28A.085,
subdivision 1; 28A.152, subdivision 2; 28A.21, subdivision 6; 31A.02, subdivision
4; 32C.02, subdivision 2; 32C.06; 34A.01, subdivision 1; 41A.12, subdivision 3;
41A.20, subdivision 2; 41B.03, subdivisions 2, 3; 41B.043, subdivision 5; 41B.045,
subdivision 2; 41C.02, subdivision 12; 116V.01, subdivisions 1, 2, 3, 4, 7, 10, 11,
13, 14; 223.17, subdivision 8; 232.22, subdivision 7; 336.9-601; 344.03, subdivision
1; 550.365, subdivision 1; 559.209, subdivision 1; 582.039, subdivision 1; 583.215;
583.24, subdivision 4, by adding a subdivision; 583.26, subdivisions 2, 3, 3a, 4,
10; 583.27, subdivision 1; Laws 2015, First Special Session chapter 4, article 1,
section 2, subdivision 4, as amended; proposing coding for new law in Minnesota
Statutes, chapter 18B; proposing coding for new law as Minnesota Statutes, chapter
32D; repealing Minnesota Statutes 2016, sections 18B.01, subdivisions 10a, 10b,
22a; 18B.285; 25.371, subdivisions 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15;
32.01, subdivisions 1, 2, 6, 8, 9, 10, 11, 12; 32.021; 32.071; 32.072; 32.073; 32.074;
32.075; 32.076; 32.078; 32.10; 32.102; 32.103; 32.105; 32.106; 32.21; 32.212;
32.22; 32.25; 32.391, subdivisions 1, 1d, 1e, 1f, 1g, 2, 3; 32.392; 32.393; 32.394,
subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 8a, 8b, 8c, 8d, 8e, 9, 11, 12; 32.395; 32.397;
32.398, subdivision 1; 32.401, subdivisions 1, 2, 3, 5; 32.415; 32.416; 32.475;
32.481, subdivision 1; 32.482; 32.483; 32.484; 32.486; 32.55, subdivisions 1, 2,
3, 4, 5, 12, 13, 14; 32.555; 32.56; 32.61; 32.62; 32.63; 32.64; 32.645; 32.70; 32.71;
32.72; 32.74; 32.745; 32.75; 32.90; 41A.20, subdivision 6; 41D.01, subdivision
4; 383C.809; 583.22, subdivision 7b.

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

ARTICLE 1

AGRICULTURE APPROPRIATIONS

Section 1. AGRICULTURE APPROPRIATIONS.

The sums shown in the columns marked "Appropriations" are appropriated to the agencies
and for the purposes specified in this article. The appropriations are from the general fund,
or another named fund, and are available for the fiscal years indicated for each purpose.
The figures "2018" and "2019" used in this article mean that the appropriations listed under
them are available for the fiscal year ending June 30, 2018, or June 30, 2019, respectively.
"The first year" is fiscal year 2018. "The second year" is fiscal year 2019. "The biennium"
is fiscal years 2018 and 2019.

			APPROPRIATIONS
			Available for the Year
			Ending June 30
				2018		2019

Sec. 2. DEPARTMENT OF AGRICULTURE

Subdivision 1. Total Appropriation

$

53,096,000

$

53,148,000

Appropriations by Fund
	2018	2019
General	52,703,000	52,751,000
Remediation	393,000	397,000

The amounts that may be spent for each
purpose are specified in the following
subdivisions.

Subd. 2. Protection Services

17,821,000

17,825,000

Appropriations by Fund
	2018	2019
General	17,428,000	17,428,000
Remediation	393,000	397,000

(a) $25,000 the first year and $25,000 the
second year are to develop and maintain
cottage food license exemption outreach and
training materials.

(b) $75,000 the first year and $75,000 the
second year are to coordinate the correctional
facility vocational training program and to
assist entities that have explored the feasibility
of establishing a USDA-certified or state
"equal to" food processing facility within 30
miles of the Northeast Regional Corrections
Center.

(c) $125,000 the first year and $125,000 the
second year are for additional funding for the
noxious weed and invasive plant program.
These are onetime appropriations.

(d) $250,000 the first year and $250,000 the
second year are for transfer to the pollinator
habitat and research account in the agricultural
fund. These are onetime transfers.

(e) $393,000 the first year and $397,000 the
second year are from the remediation fund for
administrative funding for the voluntary
cleanup program.

(f) $200,000 the first year and $200,000 the
second year are for the industrial hemp pilot
program under Minnesota Statutes, section
18K.09. These are onetime appropriations.

(g) $175,000 the first year and $175,000 the
second year are for compensation for
destroyed or crippled livestock under
Minnesota Statutes, section 3.737. This
appropriation may be spent to compensate for
livestock that were destroyed or crippled
during fiscal year 2017. If the amount in the
first year is insufficient, the amount in the
second year is available in the first year.

(h) $155,000 the first year and $155,000 the
second year are for compensation for crop
damage under Minnesota Statutes, section
3.7371. If the amount in the first year is
insufficient, the amount in the second year is
available in the first year. The commissioner
may use up to $30,000 of the appropriation
each year to reimburse expenses incurred by
the commissioner or the commissioner's
approved agent to investigate and resolve
claims.

If the commissioner determines that claims
made under Minnesota Statutes, section 3.737
or 3.7371, are unusually high, amounts
appropriated for either program may be
transferred to the appropriation for the other
program.

(i) $250,000 the first year and $250,000 the
second year are to expand current capabilities
for rapid detection, identification, containment,
control, and management of high priority plant
pests and pathogens. These are onetime
appropriations.

(j) $300,000 the first year and $300,000 the
second year are for transfer to the noxious
weed and invasive plant species assistance
account in the agricultural fund to award
grants to local units of government under
Minnesota Statutes, section 18.90, with
preference given to local units of government
responding to Palmer amaranth or other weeds
on the eradicate list. These are onetime
transfers.

(k) $120,000 the first year and $120,000 the
second year are for wolf-livestock conflict
prevention grants under article 2, section 89.
The commissioner must submit a report to the
chairs and ranking minority members of the
legislative committees with jurisdiction over
agriculture policy and finance by January 15,
2020, on the outcomes of the wolf-livestock
conflict prevention grants and whether
livestock compensation claims were reduced
in the areas that grants were awarded. These
are onetime appropriations.

Subd. 3. Agricultural Marketing and Development

3,996,000

3,996,000

(a) The commissioner must provide outreach
to urban farmers regarding the department's
financial and technical assistance programs
and must assist urban farmers in applying for
assistance.

(b) $186,000 the first year and $186,000 the
second year are for transfer to the Minnesota
grown account and may be used as grants for
Minnesota grown promotion under Minnesota
Statutes, section 17.102. Grants may be made
for one year. Notwithstanding Minnesota
Statutes, section 16A.28, the appropriations
encumbered under contract on or before June
30, 2019, for Minnesota grown grants in this
paragraph are available until June 30, 2021.

(c) $634,000 the first year and $634,000 the
second year are for continuation of the dairy
development and profitability enhancement
and dairy business planning grant programs
established under Laws 1997, chapter 216,
section 7, subdivision 2, and Laws 2001, First
Special Session chapter 2, section 9,
subdivision 2. The commissioner may allocate
the available sums among permissible
activities, including efforts to improve the
quality of milk produced in the state, in the
proportions that the commissioner deems most
beneficial to Minnesota's dairy farmers. The
commissioner must submit a detailed
accomplishment report and a work plan
detailing future plans for, and anticipated
accomplishments from, expenditures under
this program to the chairs and ranking minority
members of the legislative committees with
jurisdiction over agriculture policy and finance
on or before the start of each fiscal year. If
significant changes are made to the plans in
the course of the year, the commissioner must
notify the chairs and ranking minority
members.

(d) The commissioner may use funds
appropriated in this subdivision for annual
cost-share payments to resident farmers or
entities that sell, process, or package
agricultural products in this state for the costs
of organic certification. The commissioner
may allocate these funds for assistance for
persons transitioning from conventional to
organic agriculture.

Subd. 4. Agriculture, Bioenergy, and Bioproduct Advancement

22,581,000

22,636,000

(a) $9,300,000 the first year and $9,300,000
the second year are for transfer to the
agriculture research, education, extension, and
technology transfer account under Minnesota
Statutes, section 41A.14, subdivision 3. Of
these amounts: at least $600,000 the first year
and $600,000 the second year are for the
Minnesota Agricultural Experiment Station's
agriculture rapid response fund under
Minnesota Statutes, section 41A.14,
subdivision 1, clause (2); $2,000,000 the first
year and $2,000,000 the second year are for
grants to the Minnesota Agriculture Education
Leadership Council to enhance agricultural
education with priority given to Farm Business
Management challenge grants; $350,000 the
first year and $350,000 the second year are
for potato breeding; and $450,000 the first
year and $450,000 the second year are for the
cultivated wild rice breeding project at the
North Central Research and Outreach Center
to include a tenure track/research associate
plant breeder. The commissioner shall transfer
the remaining funds in this appropriation each
year to the Board of Regents of the University
of Minnesota for purposes of Minnesota
Statutes, section 41A.14. Of the amount
transferred to the Board of Regents, up to
$1,000,000 each year is for research on avian
influenza, including prevention measures that
can be taken.

To the extent practicable, funds expended
under Minnesota Statutes, section 41A.14,
subdivision 1, clauses (1) and (2), must
supplement and not supplant existing sources
and levels of funding. The commissioner may
use up to one percent of this appropriation for
costs incurred to administer the program.

(b) $13,256,000 the first year and $13,311,000
the second year are for the agricultural growth,
research, and innovation program in
Minnesota Statutes, section 41A.12. Except
as provided below, the commissioner may
allocate the appropriation each year among
the following areas: facilitating the start-up,
modernization, or expansion of livestock
operations including beginning and
transitioning livestock operations; developing
new markets for Minnesota farmers by
providing more fruits, vegetables, meat, grain,
and dairy for Minnesota school children;
assisting value-added agricultural businesses
to begin or expand, access new markets, or
diversify; providing funding not to exceed
$250,000 each year for urban youth
agricultural education or urban agriculture
community development; providing funding
not to exceed $250,000 each year for the good
food access program under Minnesota
Statutes, section 17.1017; facilitating the
start-up, modernization, or expansion of other
beginning and transitioning farms including
by providing loans under Minnesota Statutes,
section 41B.056; sustainable agriculture
on-farm research and demonstration;
development or expansion of food hubs and
other alternative community-based food
distribution systems; enhancing renewable
energy infrastructure and use; crop research;
Farm Business Management tuition assistance;
good agricultural practices/good handling
practices certification assistance; establishing
and supporting farmer-led water management
councils; and implementing farmer-led water
quality improvement practices. The
commissioner may use up to 6.5 percent of
this appropriation for costs incurred to
administer the program.

Of the amount appropriated for the agricultural
growth, research, and innovation program in
Minnesota Statutes, section 41A.12:

(1) $1,000,000 the first year and $1,000,000
the second year are for distribution in equal
amounts to each of the state's county fairs to
preserve and promote Minnesota agriculture;
and

(2) $1,500,000 the first year and $1,500,000
the second year are for incentive payments
under Minnesota Statutes, sections 41A.16,
41A.17, and 41A.18. Notwithstanding
Minnesota Statutes, section 16A.28, the first
year appropriation is available until June 30,
2019, and the second year appropriation is
available until June 30, 2020. If this
appropriation exceeds the total amount for
which all producers are eligible in a fiscal
year, the balance of the appropriation is
available for the agricultural growth, research,
and innovation program.

The commissioner may use funds appropriated
under this subdivision to award up to two
value-added agriculture grants per year of up
to $1,000,000 per grant for new or expanding
agricultural production or processing facilities
that provide significant economic impact to
the region. The commissioner may use funds
appropriated under this subdivision for
additional value-added agriculture grants for
awards between $1,000 and $200,000 per
grant.

Appropriations in clauses (1) and (2) are
onetime. Any unencumbered balance does not
cancel at the end of the first year and is
available for the second year. Notwithstanding
Minnesota Statutes, section 16A.28,
appropriations encumbered under contract on
or before June 30, 2019, for agricultural
growth, research, and innovation grants are
available until June 30, 2021.

The base budget for the agricultural growth,
research, and innovation program is
$14,275,000 for fiscal years 2020 and 2021
and includes funding for incentive payments
under Minnesota Statutes, sections 41A.16,
41A.17, 41A.18, and 41A.20.

The commissioner must develop additional
innovative production incentive programs to
be funded by the agricultural growth, research,
and innovation program.

The commissioner must consult with the
commissioner of transportation, the
commissioner of administration, and local
units of government to identify parcels of
publicly owned land that are suitable for urban
agriculture.

(c) $25,000 the first year and $25,000 the
second year are for grants to the Southern
Minnesota Initiative Foundation to promote
local foods through an annual event that raises
public awareness of local foods and connects
local food producers and processors with
potential buyers.

Subd. 5. Administration and Financial Assistance

8,698,000

8,691,000

(a) $474,000 the first year and $474,000 the
second year are for payments to county and
district agricultural societies and associations
under Minnesota Statutes, section 38.02,
subdivision 1. Aid payments to county and
district agricultural societies and associations
shall be disbursed no later than July 15 of each
year. These payments are the amount of aid
from the state for an annual fair held in the
previous calendar year.

(b) $1,000 the first year and $1,000 the second
year are for grants to the Minnesota State
Poultry Association.

(c) $18,000 the first year and $18,000 the
second year are for grants to the Minnesota
Livestock Breeders Association.

(d) $47,000 the first year and $47,000 the
second year are for the Northern Crops
Institute. These appropriations may be spent
to purchase equipment.

(e) $220,000 the first year and $220,000 the
second year are for farm advocate services.

(f) $17,000 the first year and $17,000 the
second year are for grants to the Minnesota
Horticultural Society.

(g) $108,000 the first year and $108,000 the
second year are for annual grants to the
Minnesota Turf Seed Council for basic and
applied research on: (1) the improved
production of forage and turf seed related to
new and improved varieties; and (2) native
plants, including plant breeding, nutrient
management, pest management, disease
management, yield, and viability. The grant
recipient may subcontract with a qualified
third party for some or all of the basic or
applied research. Any unencumbered balance
does not cancel at the end of the first year and
is available for the second year. These are
onetime appropriations.

(h) $113,000 the first year and $113,000 the
second year are for transfer to the Board of
Trustees of the Minnesota State Colleges and
Universities for statewide mental health
counseling support to farm families and
business operators. South Central College shall
serve as the fiscal agent.

(i) $550,000 the first year and $550,000 the
second year are for grants to Second Harvest
Heartland on behalf of Minnesota's six
Feeding America food banks for the purchase
of milk for distribution to Minnesota's food
shelves and other charitable organizations that
are eligible to receive food from the food
banks. Milk purchased under the grants must
be acquired from Minnesota milk processors
and based on low-cost bids. The milk must be
allocated to each Feeding America food bank
serving Minnesota according to the formula
used in the distribution of United States
Department of Agriculture commodities under
The Emergency Food Assistance Program
(TEFAP). Second Harvest Heartland must
submit quarterly reports to the commissioner
on forms prescribed by the commissioner. The
reports must include, but are not limited to,
information on the expenditure of funds, the
amount of milk purchased, and the
organizations to which the milk was
distributed. Second Harvest Heartland may
enter into contracts or agreements with food
banks for shared funding or reimbursement of
the direct purchase of milk. Each food bank
receiving money from this appropriation may
use up to two percent of the grant for
administrative expenses. Any unencumbered
balance does not cancel at the end of the first
year and is available for the second year.

(j) $1,100,000 the first year and $1,100,000
the second year are for grants to Second
Harvest Heartland on behalf of the six Feeding
America food banks that serve Minnesota to
compensate agricultural producers and
processors for costs incurred to harvest and
package for transfer surplus fruits, vegetables,
and other agricultural commodities that would
otherwise go unharvested, be discarded, or
sold in a secondary market. Surplus
commodities must be distributed statewide to
food shelves and other charitable organizations
that are eligible to receive food from the food
banks. Surplus food acquired under this
appropriation must be from Minnesota
producers and processors. Second Harvest
Heartland must report in the form prescribed
by the commissioner. Second Harvest
Heartland may use up to 15 percent of each
grant for matching administrative and
transportation expenses. Any unencumbered
balance does not cancel at the end of the first
year and is available for the second year.

(k) $150,000 the first year and $150,000 the
second year are for grants to the Center for
Rural Policy and Development.

(l) $235,000 the first year and $235,000 the
second year are for grants to the Minnesota
Agricultural Education and Leadership
Council for programs of the council under
Minnesota Statutes, chapter 41D.

(m) $600,000 the first year and $600,000 the
second year are for grants to the Board of
Regents of the University of Minnesota to
develop, in consultation with the
commissioner of agriculture and the Board of
Animal Health, a software tool or application
through the Veterinary Diagnostic Laboratory
that empowers veterinarians and producers to
understand the movement of unique pathogen
strains in livestock and poultry production
systems, monitor antibiotic resistance, and
implement effective biosecurity measures that
promote animal health and limit production
losses. These are onetime appropriations.

(n) $150,000 the first year is for the tractor
rollover protection pilot program under
Minnesota Statutes, section 17.119. This is a
onetime appropriation and is available until
June 30, 2019.

(o) $400,000 the first year is for a grant to the
Board of Trustees of the Minnesota State
Colleges and Universities to expand and
renovate the GROW-IT Center at Metropolitan
State University. This is a onetime
appropriation.

By January 15, 2018, the commissioner shall
submit a report to the chairs and ranking
minority members of the legislative
committees with jurisdiction over agricultural
policy and finance with a list of inspections
the department conducts at more frequent
intervals than federal law requires, an
explanation of why the additional inspections
are necessary, and provide recommendations
for eliminating any unnecessary inspections.

Sec. 3. BOARD OF ANIMAL HEALTH

$

5,420,000

$

5,456,000

Sec. 4. AGRICULTURAL UTILIZATION RESEARCH INSTITUTE

$

3,793,000

$

3,793,000

Sec. 5.

Laws 2015, First Special Session chapter 4, article 1, section 2, subdivision 4, as
amended by Laws 2016, chapter 184, section 11, and Laws 2016, chapter 189, article 2,
section 26, is amended to read:

Subd. 4. Agriculture, Bioenergy, and Bioproduct Advancement

14,993,000

19,010,000 18,316,000

$4,483,000 the first year and $8,500,000 the
second year are for transfer to the agriculture
research, education, extension, and technology
transfer account under Minnesota Statutes,
section 41A.14, subdivision 3. The transfer in
this paragraph includes money for plant
breeders at the University of Minnesota for
wild rice, potatoes, and grapes. Of these
amounts, at least $600,000 each year is for the
Minnesota Agricultural Experiment Station's
Agriculture Rapid Response Fund under
Minnesota Statutes, section 41A.14,
subdivision 1, clause (2). Of the amount
appropriated in this paragraph, $1,000,000
each year is for transfer to the Board of
Regents of the University of Minnesota for
research to determine (1) what is causing avian
influenza, (2) why some fowl are more
susceptible, and (3) prevention measures that
can be taken. Of the amount appropriated in
this paragraph, $2,000,000 each year is for
grants to the Minnesota Agriculture Education
Leadership Council to enhance agricultural
education with priority given to Farm Business
Management challenge grants. The
commissioner shall transfer the remaining
grant funds in this appropriation each year to
the Board of Regents of the University of
Minnesota for purposes of Minnesota Statutes,
section 41A.14.

To the extent practicable, funds expended
under Minnesota Statutes, section 41A.14,
subdivision 1, clauses (1) and (2), must
supplement and not supplant existing sources
and levels of funding. The commissioner may
use up to 4.5 percent of this appropriation for
costs incurred to administer the program. Any
unencumbered balance does not cancel at the
end of the first year and is available for the
second year.

$10,235,000 the first year and $10,235,000
$9,541,000 the second year are for the
agricultural growth, research, and innovation
program in Minnesota Statutes, section
41A.12. No later than February 1, 2016, and
February 1, 2017, the commissioner must
report to the legislative committees with
jurisdiction over agriculture policy and finance
regarding the commissioner's
accomplishments and anticipated
accomplishments in the following areas:
facilitating the start-up, modernization, or
expansion of livestock operations including
beginning and transitioning livestock
operations; developing new markets for
Minnesota farmers by providing more fruits,
vegetables, meat, grain, and dairy for
Minnesota school children; assisting
value-added agricultural businesses to begin
or expand, access new markets, or diversify
products; developing urban agriculture;
facilitating the start-up, modernization, or
expansion of other beginning and transitioning
farms including loans under Minnesota
Statutes, section 41B.056; sustainable
agriculture on farm research and
demonstration; development or expansion of
food hubs and other alternative
community-based food distribution systems;
incentive payments under Minnesota Statutes,
sections 41A.16, 41A.17, and 41A.18; and
research on bioenergy, biobased content, or
biobased formulated products and other
renewable energy development. The
commissioner may use up to 4.5 percent of
this appropriation for costs incurred to
administer the program. Any unencumbered
balance does not cancel at the end of the first
year and is available for the second year.
Notwithstanding Minnesota Statutes, section
16A.28, the appropriations encumbered under
contract on or before June 30, 2017, for
agricultural growth, research, and innovation
grants are available until June 30, 2019.

The commissioner may use funds appropriated
for the agricultural growth, research, and
innovation program as provided in this
paragraph. The commissioner may award
grants to owners of Minnesota facilities
producing bioenergy, biobased content, or a
biobased formulated product; to organizations
that provide for on-station, on-farm field scale
research and outreach to develop and test the
agronomic and economic requirements of
diverse strands of prairie plants and other
perennials for bioenergy systems; or to certain
nongovernmental entities. For the purposes of
this paragraph, "bioenergy" includes
transportation fuels derived from cellulosic
material, as well as the generation of energy
for commercial heat, industrial process heat,
or electrical power from cellulosic materials
via gasification or other processes. Grants are
limited to 50 percent of the cost of research,
technical assistance, or equipment related to
bioenergy, biobased content, or biobased
formulated product production or $500,000,
whichever is less. Grants to nongovernmental
entities for the development of business plans
and structures related to community ownership
of eligible bioenergy facilities together may
not exceed $150,000. The commissioner shall
make a good-faith effort to select projects that
have merit and, when taken together, represent
a variety of bioenergy technologies, biomass
feedstocks, and geographic regions of the
state. Projects must have a qualified engineer
provide certification on the technology and
fuel source. Grantees must provide reports at
the request of the commissioner.

Of the amount appropriated for the agricultural
growth, research, and innovation program in
this subdivision, $1,000,000 the first year and
$1,000,000 the second year are for distribution
in equal amounts to each of the state's county
fairs to preserve and promote Minnesota
agriculture.

Of the amount appropriated for the agricultural
growth, research, and innovation program in
this subdivision, $500,000 in fiscal year 2016
and $1,500,000 $806,000 in fiscal year 2017
are for incentive payments under Minnesota
Statutes, sections 41A.16, 41A.17, and
41A.18. If the appropriation exceeds the total
amount for which all producers are eligible in
a fiscal year, the balance of the appropriation
is available to the commissioner for the
agricultural growth, research, and innovation
program. Notwithstanding Minnesota Statutes,
section 16A.28, the first year appropriation is
available until June 30, 2017, and the second
year appropriation is available until June 30,
2018. The commissioner may use up to 4.5
percent of the appropriation for administration
of the incentive payment programs.

Of the amount appropriated for the agricultural
growth, research, and innovation program in
this subdivision, $250,000 the first year is for
grants to communities to develop or expand
food hubs and other alternative
community-based food distribution systems.
Of this amount, $50,000 is for the
commissioner to consult with existing food
hubs, alternative community-based food
distribution systems, and University of
Minnesota Extension to identify best practices
for use by other Minnesota communities. No
later than December 15, 2015, the
commissioner must report to the legislative
committees with jurisdiction over agriculture
and health regarding the status of emerging
alternative community-based food distribution
systems in the state along with
recommendations to eliminate any barriers to
success. Any unencumbered balance does not
cancel at the end of the first year and is
available for the second year. This is a onetime
appropriation.

$250,000 the first year and $250,000 the
second year are for grants that enable retail
petroleum dispensers to dispense biofuels to
the public in accordance with the biofuel
replacement goals established under
Minnesota Statutes, section 239.7911. A retail
petroleum dispenser selling petroleum for use
in spark ignition engines for vehicle model
years after 2000 is eligible for grant money
under this paragraph if the retail petroleum
dispenser has no more than 15 retail petroleum
dispensing sites and each site is located in
Minnesota. The grant money received under
this paragraph must be used for the installation
of appropriate technology that uses fuel
dispensing equipment appropriate for at least
one fuel dispensing site to dispense gasoline
that is blended with 15 percent of
agriculturally derived, denatured ethanol, by
volume, and appropriate technical assistance
related to the installation. A grant award must
not exceed 85 percent of the cost of the
technical assistance and appropriate
technology, including remetering of and
retrofits for retail petroleum dispensers and
replacement of petroleum dispenser projects.
The commissioner may use up to $35,000 of
this appropriation for administrative expenses.
The commissioner shall cooperate with biofuel
stakeholders in the implementation of the grant
program. The commissioner must report to
the legislative committees with jurisdiction
over agriculture policy and finance by
February 1 each year, detailing the number of
grants awarded under this paragraph and the
projected effect of the grant program on
meeting the biofuel replacement goals under
Minnesota Statutes, section 239.7911. These
are onetime appropriations.

$25,000 the first year and $25,000 the second
year are for grants to the Southern Minnesota
Initiative Foundation to promote local foods
through an annual event that raises public
awareness of local foods and connects local
food producers and processors with potential
buyers.

Sec. 6. APPROPRIATION CANCELLATION.

All unspent funds, estimated to be $694,000, appropriated for the agricultural growth,
research, and innovation program and designated for bioeconomy incentive payments under
Laws 2015, First Special Session chapter 4, article 1, section 2, subdivision 4, as amended
by Laws 2016, chapter 184, section 11, and Laws 2016, chapter 189, article 2, section 26,
are canceled to the general fund.

EFFECTIVE DATE.

This section is effective the day following final enactment.

ARTICLE 2

AGRICULTURAL POLICY

Section 1.

Minnesota Statutes 2016, section 3.7371, is amended to read:

3.7371 COMPENSATION FOR CROP OR FENCE DAMAGE CAUSED BY ELK.

Subdivision 1.

Authorization.

Notwithstanding section 3.736, subdivision 3, paragraph
(e), or any other law, a person who owns an agricultural crop or pasture shall be compensated
by the commissioner of agriculture for an agricultural crop, or fence surrounding the crop
or pasture, that is damaged or destroyed by elk as provided in this section.

Subd. 2.

Claim form.

The crop or pasture owner must prepare a claim on forms provided
by the commissioner and available at on the county extension agent's office Department of
Agriculture's Web site or by request from the commissioner. The claim form must be filed
with the commissioner.

Subd. 3.

Compensation.

(a) The crop owner is entitled to the target price or the market
price, whichever is greater, of the damaged or destroyed crop plus adjustments for yield
loss determined according to agricultural stabilization and conservation service programs
for individual farms, adjusted annually, as determined by the commissioner, upon
recommendation of the county extension commissioner's approved agent for the owner's
county. Verification of fence damage or destruction by elk may be provided by submitting
photographs or other evidence and documentation together with a statement from an
independent witness using forms prescribed by the commissioner. The commissioner, upon
recommendation of the commissioner's approved agent, shall determine whether the crop
damage or destruction or damage to or destruction of a fence surrounding a crop or pasture
is caused by elk and, if so, the amount of the crop or fence that is damaged or destroyed. In
any fiscal year, an owner may not be compensated for a damaged or destroyed crop or fence
surrounding a crop or pasture that is less than $100 in value and may be compensated up
to $20,000, as determined under this section, if normal harvest procedures for the area are
followed.

(b) In any fiscal year, the commissioner may provide compensation for claims filed
under this section up to the amount expressly appropriated for this purpose.

Subd. 4.

Insurance deduction.

Payments authorized by this section must be reduced
by amounts received by the owner as proceeds from an insurance policy covering crop
losses or damage to or destruction of a fence surrounding a crop or pasture, or from any
other source for the same purpose including, but not limited to, a federal program.

Subd. 5.

Decision on claims; opening land to hunting.

If the commissioner finds that
the crop or pasture owner has shown that the damage or destruction of the owner's crop or
damage to or destruction of a fence surrounding a crop or pasture was caused more probably
than not by elk, the commissioner shall pay compensation as provided in this section and
the rules of the commissioner. A crop An owner who receives compensation under this
section may, by written permission, permit hunting on the land at the landowner's discretion.

Subd. 6.

Denial of claim; appeal.

(a) If the commissioner denies compensation claimed
by a crop or pasture an owner under this section, the commissioner shall issue a written
decision based upon the available evidence including a statement of the facts upon which
the decision is based and the conclusions on the material issues of the claim. A copy of the
decision must be mailed to the crop or pasture owner.

(b) A decision denying compensation claimed under this section is not subject to the
contested case review procedures of chapter 14, but a crop or pasture an owner may have
the claim reviewed in a trial de novo in a court in the county where the loss occurred. The
decision of the court may be appealed as in other civil cases. Review in court may be obtained
by filing a petition for review with the administrator of the court within 60 days following
receipt of a decision under this section. Upon the filing of a petition, the administrator shall
mail a copy to the commissioner and set a time for hearing within 90 days after the filing.

Subd. 7.

Rules.

The commissioner shall adopt rules and may amend rules to carry out
this section. The commissioner may use the expedited rulemaking process in section 14.389
to adopt and amend rules authorized in this section. The rules must include:

(1) methods of valuation of crops damaged or destroyed;

(2) criteria for determination of the cause of the crop damage or destruction;

(3) notice requirements by the owner of the damaged or destroyed crop;

(4) compensation rates for fence damage or destruction that shall include a minimum
claim of $75.00 per incident and a maximum of must not exceed $1,800 per claimant per
fiscal year; and

(5) any other matters determined necessary by the commissioner to carry out this section.

Subd. 8.

Report.

The commissioner must submit a report to the chairs of the house of
representatives and senate committees and divisions with jurisdiction over agriculture and
environment and natural resources by December 15 each year that details the total amount
of damages paid, by elk herd, in the previous two fiscal years.

Sec. 2.

Minnesota Statutes 2016, section 15.985, is amended to read:

15.985 ADVISORY INSPECTIONS.

(a) Upon the voluntary request of a person to a state agency for an advisory inspection
for the purpose of complying with state law, the agency must, except as provided in
paragraphs (f) and (g), conduct an advisory inspection. An agency is not required to conduct
an advisory inspection if the agency has a regularly scheduled inspection that would occur
within 90 days after the request for the advisory inspection, or if before an advisory inspection
is requested, the agency has notified the person that it will be conducting an inspection
within 45 days. If an advisory inspection results in findings that potentially could make a
person subject to a fine or other penalty imposed by the agency, the agency must notify the
person in writing of those findings within ten days of the inspection.

(1) Except as provided in clause (2), if within 60 days of receiving notice, the person
notifies the agency that it has corrected the situation that made the person potentially subject
to the fine or penalty, and the agency later determines that the situation is corrected, the
agency may not impose a fine or penalty as a result of the findings in the advisory inspection.

(2) For violations of chapter 177, if the person notifies the agency within the time period
for remedying violations required under the applicable section of chapter 177 that it has
corrected the situation that made the person potentially subject to the fine or penalty, and
the agency later determines that the situation is corrected, the agency may not impose a fine
or penalty as a result of the finding in the advisory inspection.

(3) A person may not request more than one advisory inspection from the same agency
in a calendar year. A person may not request an advisory inspection after an inspection
resulting in a fine or other penalty has been determined and the violator notified of the
amount to be paid, until fines or penalties have been paid or settled.

(b) For purposes of this section:

(1) "inspection" includes an examination of real or personal property or an audit or other
examination of financial or other documents;

(2) "penalty" includes a civil or administrative fine or other financial sanction;

(3) "person" includes a real person and businesses, including corporations, partnerships,
limited liability companies, and unincorporated associations; and

(4) "state agency" means a department, agency, board, commission, constitutional office,
or other group in the executive branch of state government.

(c) If an agency revises, amends, extends, or adds additional violations to a notice, the
person has 60 days from the date of those changes to correct the situation without fine or
penalty. For violations of chapter 177, the person has the time period for remedying violations
under the applicable section of chapter 177 to correct the situation without fine or penalty.

(d) An agency conducting an inspection under this section may impose and collect from
the person requesting the inspection a fee equal to the costs incurred by the agency related
to the inspection. Fees under this section shall be considered charges for goods and services
provided for the direct and primary use of a private individual, business, or other entity
under section 16A.1283, paragraph (b), clause (3). Fee revenue collected under this section
must be deposited in an appropriate fund other than the general fund and is appropriated
from that fund to the agency collecting the fee for the purpose of conducting inspections
under this section.

(e) Nothing in this section shall prohibit or interfere with an agency offering similar
programs that allow independent audits or inspections, including the environmental
improvement program under chapter 114C. If a person conducts a self-audit under chapter
114C, the terms and conditions of this section do not apply. For advisory inspections
conducted by the Pollution Control Agency, terms and conditions of sections 114C.20 to
114C.28 shall be used instead of those in paragraphs (a) to (c) and (g).

(f) If agency staff resources are limited, an agency must give higher priority to the
agency's regular inspections over advisory inspections under this section. Insofar as
conducting advisory inspections reduces an agency's costs, the savings must be reflected
in the charges for advisory inspections. Before hiring additional staff complement for
purposes of this section, an agency must report to the chairs and ranking minority members
of the legislative budget committees with jurisdiction over the agency documenting: (1) the
demand for advisory inspections and why additional staff complement is needed to meet
the demand; and (2) that the revenue generated by advisory inspections will cover the
expenses of the additional staff complement. If a person requests an advisory inspection,
but the agency does not have staff resources necessary to conduct the advisory inspection
before a regular inspection is conducted, and the regular inspection results in findings that
could make a person subject to a fine or penalty, the agency must take into account the
person's request for an advisory inspection and the person's desire to take corrective action
before taking any enforcement action against the person.

(g) This section does not apply to:

(1) criminal penalties;

(2) situations in which implementation of this section is prohibited by federal law or
would result in loss of federal funding or in other federal sanctions or in which
implementation would interfere with multistate agreements, international agreements, or
agreements between state and federal regulatory agencies;

(3) conduct constituting fraud;

(4) violations in a manner that endangers human life or presents significant risk of major
injury or severe emotional harm to humans;

(5) violations that are part of a pattern that has occurred repeatedly and shows willful
intent;

(6) violations for which it may be demonstrated that the alternative inspections process
is being used to avoid enforcement;

(7) violations that occur within three years of violating an applicable law;

(8) the Department of Revenue;

(9) the Workers' Compensation Division at the Department of Labor and Industry;

(10) violations of vehicle size weight limits under sections 169.80 to 169.88;

(11) commercial motor vehicle inspections under section 169.781 and motor carrier
regulations under chapter 221;

(12) the Dairy and Food Inspection Division of the Department of Agriculture, if the
division provides free inspections similar to those under this section;

(13) (12) state inspections or surveys of hospitals, nursing homes, outpatient surgical
centers, supervised living facilities, board and lodging with special services, home care,
housing with services and assisted living settings, hospice, and supplemental nursing services
agencies;

(14) (13) examinations of health maintenance organizations or county-based purchasing
entities regulated under chapter 62D;

(15) (14) special transportation services under section 174.30; and

(16) (15) entities regulated by the Department of Commerce's Financial Institutions and
Insurance Divisions for purposes of regulatory requirements of those divisions.

If an agency determines that this section does not apply due to situations specified in clause
(2), the agency must report the basis for that determination to the chairs and ranking minority
members of the legislative committees with jurisdiction over the agency.

(h) An agency may terminate an advisory inspection and proceed as if an inspection
were a regular inspection if, in the process of conducting an advisory inspection, the agency
finds a situation that the agency determines: could lead to criminal penalties; endangers
human life or presents significant risk of major injury or severe emotional harm to humans;
presents a severe and imminent threat to animals, food, feed, crops, commodities, or the
environment; or evidences a pattern of willful violations.

Sec. 3.

Minnesota Statutes 2016, section 17.119, subdivision 1, is amended to read:

Subdivision 1.

Grants; eligibility.

(a) The commissioner must award cost-share grants
to Minnesota farmers who retrofit eligible tractors and Minnesota schools that retrofit eligible
tractors with eligible rollover protective structures.

(b) Grants for farmers are limited to 70 percent of the farmer's or school's documented
cost to purchase, ship, and install an eligible rollover protective structure. The commissioner
must increase the a farmer's grant award amount over the 70 percent grant limitation
requirement if necessary to limit a farmer's or school's cost per tractor to no more than $500.

(c) Schools are eligible for grants that cover the full amount of a school's documented
cost to purchase, ship, and install an eligible rollover protective structure.

(b) (d) A rollover protective structure is eligible if it meets or exceeds SAE International
standard J2194 is certified to appropriate national or international rollover protection structure
standards with a seat belt.

(c) (e) A tractor is eligible if the tractor was built before 1987.

EFFECTIVE DATE.

This section is effective retroactively from July 1, 2016.

Sec. 4.

Minnesota Statutes 2016, section 17.119, subdivision 2, is amended to read:

Subd. 2.

Promotion; administration.

The commissioner may spend up to 20 six percent
of total program dollars each fiscal year to promote and administer the program to Minnesota
farmers and schools.

Sec. 5.

Minnesota Statutes 2016, section 17.53, subdivision 2, is amended to read:

Subd. 2.

Agricultural commodity.

(a) Except as provided in paragraph (b), "agricultural
commodity" means any agricultural product, including, without limitation, animals and
animal products, grown, raised, produced, or fed within Minnesota for use as food, feed,
seed, or any industrial or chemurgic purpose.

(b) For wheat, barley, corn, and cultivated wild rice, "agricultural commodity" means
wheat, barley, corn and cultivated wild rice including, without limitation, wheat, barley,
corn and cultivated wild rice grown or produced within or outside Minnesota, for use as
food, feed, seed, or any industrial or chemurgic purpose.

Sec. 6.

Minnesota Statutes 2016, section 17.53, subdivision 8, is amended to read:

Subd. 8.

First purchaser.

(a) Except as provided in paragraph (b), "first purchaser"
means any person that buys agricultural commodities for movement into commercial channels
from the producer; or any lienholder, secured party or pledgee, public or private, or assignee
of said lienholder, secured party or pledgee, who gains title to the agricultural commodity
from the producer as the result of exercising any legal rights by the lienholder, secured
party, pledgee, or assignee thereof, regardless of when the lien, security interest or pledge
was created and regardless of whether the first purchaser is domiciled within the state or
without. "First purchaser" does not mean the Commodity Credit Corporation when a
commodity is used as collateral for a federal nonrecourse loan unless the commissioner
determines otherwise.

(b) For wheat, barley, corn, and cultivated wild rice, "first purchaser" means a person
who buys, receives delivery of, or provides storage for the agricultural commodity from a
producer for movement into commercial channels; or a lienholder, secured party, or pledgee,
who gains title to the agricultural commodity from the producers as the result of exercising
any legal rights by the lienholder, secured party, pledgee, or assignee, regardless of when
the lien, security interest, or pledge was created and regardless of whether or not the first
purchaser is domiciled in the state. "First purchaser" does not mean the Commodity Credit
Corporation when the wheat, barley, corn or cultivated wild rice is used as collateral for a
federal nonrecourse loan unless the commissioner determines otherwise.

Sec. 7.

Minnesota Statutes 2016, section 17.53, subdivision 13, is amended to read:

Subd. 13.

Producer.

(a) Except as provided in paragraph (b), "producer" means any
person who owns or operates an agricultural producing or growing facility for an agricultural
commodity and shares in the profits and risk of loss from such operation, and who grows,
raises, feeds or produces the agricultural commodity in Minnesota during the current or
preceding marketing year.

(b) For wheat, barley, corn, and cultivated wild rice, "producer" means in addition to
the meaning in paragraph (a) and for the purpose of the payment or the refund of the checkoff
fee paid pursuant to sections 17.51 to 17.69 only, a person who delivers into, stores within,
or makes the first sale of the agricultural commodity in Minnesota.

Sec. 8.

Minnesota Statutes 2016, section 18.79, subdivision 18, is amended to read:

Subd. 18.

Noxious weed education and notification.

(a) The commissioner shall
disseminate information and conduct educational campaigns with respect to control of
noxious weeds or invasive plants to enhance regulatory compliance and voluntary efforts
to eliminate or manage these plants. The commissioner shall call and attend meetings and
conferences dealing with the subject of noxious weeds. The commissioner shall maintain
on the department's Web site noxious weed management information including but not
limited to the roles and responsibilities of citizens and government entities under sections
18.76 to 18.91 and specific guidance as to whom a person should contact to report a noxious
weed issue.

(b) The commissioner shall post notice on the department's Web site and alert appropriate
media outlets when a weed on the eradicate list is confirmed for the first time in a county.

Sec. 9.

Minnesota Statutes 2016, section 18B.01, is amended by adding a subdivision to
read:

Subd. 9b.

Experimental use permit.

"Experimental use permit" means a permit issued
by the United States Environmental Protection Agency as authorized in Section 5 of the
Federal Insecticide, Fungicide, and Rodenticide Act.

Sec. 10.

Minnesota Statutes 2016, section 18B.01, is amended by adding a subdivision to
read:

Subd. 9c.

Experimental use pesticide product.

"Experimental use pesticide product"
means any federally registered or unregistered pesticide whose use is authorized by an
experimental use permit issued by the United States Environmental Protection Agency.

Sec. 11.

[18B.051] POLLINATOR HABITAT AND RESEARCH ACCOUNT.

Subdivision 1.

Account established.

A pollinator habitat and research account is
established in the agricultural fund. Money in the account, including interest, is appropriated
to the Board of Regents of the University of Minnesota for pollinator research and outreach
including, but not limited to, science-based best practices and the identification and
establishment of habitat beneficial to pollinators.

Subd. 2.

Expiration.

This section expires July 1, 2022.

Sec. 12.

Minnesota Statutes 2016, section 18B.065, subdivision 8, is amended to read:

Subd. 8.

Waste pesticide program surcharge.

The commissioner shall annually collect
a waste pesticide program surcharge of $50 on each agricultural waste pesticide product
and $125 on each nonagricultural waste pesticide product registered in the state as part of
a pesticide product registration application under section 18B.26, subdivision 3.

Sec. 13.

Minnesota Statutes 2016, section 18B.26, subdivision 1, is amended to read:

Subdivision 1.

Requirement.

(a) Except as provided in paragraphs (b) to (d) (e), a person
may not use or distribute a pesticide in this state unless it is registered with the commissioner.
Pesticide registrations expire on December 31 of each year and may be renewed on or before
that date for the following calendar year.

(b) Registration is not required if a pesticide is shipped from one plant or warehouse to
another plant or warehouse operated by the same person and used solely at the plant or
warehouse as an ingredient in the formulation of a pesticide that is registered under this
chapter.

(c) An unregistered pesticide that was previously registered with the commissioner may
be used for a period of two years following the cancellation of the registration of the pesticide,
unless the commissioner determines that the continued use of the pesticide would cause
unreasonable adverse effects on the environment, or with the written permission of the
commissioner. To use the unregistered pesticide at any time after the two-year period, the
pesticide end user must demonstrate to the satisfaction of the commissioner, if requested,
that the pesticide has been continuously registered under a different brand name or by a
different manufacturer and has similar composition, or, the pesticide end user obtains the
written permission of the commissioner.

(d) The commissioner may allow specific pesticide products that are not registered with
the commissioner to be distributed in this state for use in another state.

(e) A substance or mixture of substances being tested only to determine its potential
efficacy as a pesticide, or to determine its toxicity or other properties, and not requiring the
issuance of an experimental use permit under United States Environmental Protection
Agency criteria specified in federal regulations, is not required to be registered.

(e) (f) Each pesticide with a unique United States Environmental Protection Agency
pesticide registration number or a unique brand name must be registered with the
commissioner.

(f) (g) It is unlawful for a person to distribute or use a pesticide in the state, or to sell
into the state for use in the state, any pesticide product that has not been registered by the
commissioner and for which the applicable pesticide registration application fee, gross sales
fee, or waste pesticide program surcharge is not paid pursuant to subdivisions 3 and 4.

(g) (h) Every person who sells for use in the state a pesticide product that has been
registered by the commissioner shall pay to the commissioner the applicable registration
application fees, sales fees, and waste pesticide program surcharges. These sales expressly
include all sales made electronically, telephonically, or by any other means that result in a
pesticide product being shipped to or used in the state. There is a rebuttable presumption
that pesticide products that are sold or distributed in or into the state by any person are sold
or distributed for use in the state.

Sec. 14.

Minnesota Statutes 2016, section 18B.28, subdivision 1, is amended to read:

Subdivision 1.

Requirement.

A person may not use or distribute an experimental use
pesticide product in the state until it is registered with the commissioner. Experimental use
pesticide product registrations expire on December 31 of each year and may be renewed
on or before that date. A substance or mixture of substances being tested only to determine
its potential efficacy as a pesticide, or to determine its toxicity or other properties, and not
requiring the issuance of an experimental use permit under United States Environmental
Protection Agency criteria specified in federal regulations, is not required to be registered.

Sec. 15.

Minnesota Statutes 2016, section 18B.28, subdivision 3, is amended to read:

Subd. 3.

Application.

A person must file an application for experimental use pesticide
product registration with the commissioner. An application to register an experimental use
pesticide product must include:

(1) the name and address of the applicant;

(2) a federal copy of the United States Environmental Protection Agency approval
document permit;

(3) a description of the purpose or objectives of the experimental use product;

(4) an a copy of the experimental use pesticide labeling accepted experimental use
pesticide product label by the United States Environmental Protection Agency;

(5) the name, address, and telephone number of cooperators or participants in this state;

(6) the amount of material to be shipped or used in this state; and

(7) other information requested by the commissioner.

Sec. 16.

Minnesota Statutes 2016, section 18B.305, is amended to read:

18B.305 PESTICIDE EDUCATION AND TRAINING.

Subdivision 1.

Education and training.

(a) The commissioner, as the lead agency, shall
develop, implement or approve, and evaluate, in consultation with University of Minnesota
Extension, the Minnesota State Colleges and Universities system, and other educational
institutions, innovative educational and training programs addressing pesticide concerns
including:

(1) water quality protection;

(2) endangered species protection;

(3) minimizing pesticide residues in food and water;

(4) worker protection and applicator safety;

(5) chronic toxicity;

(6) integrated pest management and pest resistance;

(7) pesticide disposal;

(8) pesticide drift;

(9) relevant laws including pesticide labels and labeling and state and federal rules and
regulations; and

(10) current science and technology updates; and

(11) thresholds and guidance to reduce the impacts of insecticide on pollinators.

(b) The commissioner shall appoint educational planning committees which must include
representatives of industry and applicators.

(c) Specific current regulatory concerns must be discussed and, if appropriate,
incorporated into each training session. Relevant changes to pesticide product labels or
labeling or state and federal rules and regulations may be included.

(d) The commissioner may approve programs from private industry, higher education
institutions, and nonprofit organizations that meet minimum requirements for education,
training, and certification.

Subd. 2.

Training manual and examination development.

The commissioner, in
consultation with University of Minnesota Extension and other higher education institutions,
shall continually revise and update pesticide applicator training manuals and examinations.
The manuals and examinations must be written to meet or exceed the minimum standards
required by the United States Environmental Protection Agency and pertinent state specific
information. Questions in the examinations must be determined by the commissioner in
consultation with other responsible agencies. Manuals and examinations must include
pesticide management practices that discuss prevention of pesticide occurrence in
groundwater and surface water of the state, and economic thresholds and guidance for
insecticide use.

Sec. 17.

Minnesota Statutes 2016, section 18B.33, subdivision 1, is amended to read:

Subdivision 1.

Requirement.

(a) A person may not apply a pesticide for hire without a
commercial applicator license for the appropriate use categories or a structural pest control
license.

(b) A commercial applicator licensee must have a valid license identification card to
purchase a restricted use pesticide or apply pesticides for hire and must display it upon
demand by an authorized representative of the commissioner or a law enforcement officer.
The commissioner shall prescribe the information required on the license identification
card.

(c) A person licensed under this section is considered qualified and is not required to
verify, document, or otherwise prove a particular need prior to use, except as required by
the federal label.

Sec. 18.

Minnesota Statutes 2016, section 18B.34, subdivision 1, is amended to read:

Subdivision 1.

Requirement.

(a) Except for a licensed commercial applicator, certified
private applicator, or licensed structural pest control applicator, a person, including a
government employee, may not purchase or use a restricted use pesticide in performance
of official duties without having a noncommercial applicator license for an appropriate use
category.

(b) A licensee must have a valid license identification card when applying pesticides
and must display it upon demand by an authorized representative of the commissioner or a
law enforcement officer. The license identification card must contain information required
by the commissioner.

(c) A person licensed under this section is considered qualified and is not required to
verify, document, or otherwise prove a particular need prior to use, except as required by
the federal label.

Sec. 19.

Minnesota Statutes 2016, section 18B.36, subdivision 1, is amended to read:

Subdivision 1.

Requirement.

(a) Except for a licensed commercial or noncommercial
applicator, only a certified private applicator may use a restricted use pesticide to produce
an agricultural commodity:

(1) as a traditional exchange of services without financial compensation;

(2) on a site owned, rented, or managed by the person or the person's employees; or

(3) when the private applicator is one of two or fewer employees and the owner or
operator is a certified private applicator or is licensed as a noncommercial applicator.

(b) A person may not purchase a restricted use pesticide without presenting a license
card, certified private applicator card, or the card number.

(c) A person certified under this section is considered qualified and is not required to
verify, document, or otherwise prove a particular need prior to use, except as required by
the federal label.

Sec. 20.

Minnesota Statutes 2016, section 18B.37, subdivision 3, is amended to read:

Subd. 3.

Structural pest control applicators.

(a) A structural pest control applicator
must maintain a record of each structural pest control application conducted by that person
or by the person's employees. The record must include the:

(1) date of structural pest control application;

(2) target pest;

(3) brand name of the pesticide, United States Environmental Protection Agency
registration number, and amount used;

(4) for fumigation, the temperature and exposure time;

(5) time the pesticide application was completed;

(6) name and address of the customer;

(7) name of structural pest control applicator, name of company and address of applicator
or company, and license number of applicator; and

(8) any other information required by the commissioner.

(b) All information for this record requirement must be contained in a document for
each pesticide application. An invoice containing the required information may constitute
the record.

(c) The record must be completed no later than five days after the application of the
pesticide.

(d) Records must be retained for five years after the date of treatment.

(e) A copy of the record must be given to a person who ordered the application that is
present at the site where the structural pest control application is conducted, placed in a
conspicuous location at the site where the structural pest control application is conducted
immediately after the application of the pesticides, or delivered to the person who ordered
an application or the owner of the site. The commissioner must make sample forms available
that meet the requirements of this subdivision.

(f) A structural applicator must post in a conspicuous place inside a renter's apartment
where a pesticide application has occurred a list of postapplication precautions contained
on the label of the pesticide that was applied in the apartment and any other information
required by the commissioner.

Sec. 21.

Minnesota Statutes 2016, section 18C.70, subdivision 5, is amended to read:

Subd. 5.

Expiration.

This section expires January 8, 2017 June 30, 2020.

EFFECTIVE DATE.

This section is effective retroactively from January 7, 2017.

Sec. 22.

Minnesota Statutes 2016, section 18C.71, subdivision 4, is amended to read:

Subd. 4.

Expiration.

This section expires January 8, 2017 June 30, 2020.

EFFECTIVE DATE.

This section is effective retroactively from January 7, 2017.

Sec. 23.

Minnesota Statutes 2016, section 18H.06, subdivision 2, is amended to read:

Subd. 2.

Occasional sales.

(a) An individual may offer nursery stock for sale and be
exempt from the requirement to obtain a nursery stock certificate if:

(1) the gross sales of all nursery stock in a calendar year do not exceed $2,000;

(2) all nursery stock sold or distributed by the individual is intended for planting in
Minnesota;

(3) all nursery stock purchased or procured for resale or distribution was grown in
Minnesota and has been certified by the commissioner; and

(4) the individual conducts sales or distributions of nursery stock on ten or fewer days
in a calendar year.

(b) A municipality may offer certified nursery stock for sale and be exempt from the
requirement to obtain a nursery stock certificate if:

(1) all nursery stock offered for sale or distributed is intended for planting by residents
of the municipality on public property or public easements within the municipal boundary;

(2) all nursery stock purchased or procured for resale or distribution is grown in
Minnesota and has been certified by the commissioner; and

(3) the municipality submits to the commissioner before any sale or distribution of
nursery stock a list of all suppliers who provide the municipality with nursery stock.

(b) (c) The commissioner may prescribe the conditions of the exempt nursery sales under
this subdivision and may conduct routine inspections of the nursery stock offered for sale.

Sec. 24.

Minnesota Statutes 2016, section 18H.07, subdivision 2, is amended to read:

Subd. 2.

Nursery stock grower certificate.

(a) A nursery stock grower must pay an
annual fee based on the area of all acreage on which nursery stock is grown as follows:

(1) less than one-half acre, $150;

(2) from one-half acre to two acres, $200;

(3) over two acres up to five acres, $300;

(4) over five acres up to ten acres, $350;

(5) over ten acres up to 20 acres, $500;

(6) over 20 acres up to 40 acres, $650;

(7) over 40 acres up to 50 acres, $800;

(8) over 50 acres up to 200 acres, $1,100;

(9) over 200 acres up to 500 acres, $1,500; and

(10) over 500 acres, $1,500 plus $2 for each additional acre.

(b) In addition to the fees in paragraph (a), a penalty of ten percent of the fee due must
be charged for each month, or portion thereof, that the fee is delinquent up to a maximum
of 30 percent for any application for renewal not postmarked or electronically date stamped
by December 31 of the current year.

(c) A nursery stock grower found operating without a valid nursery stock grower
certificate cannot offer for sale or sell nursery stock until: (1) payment is received by the
commissioner for (i) the certificate fee due, and (ii) a penalty equal to the certificate fee
owed; and (2) a new certificate is issued to the nursery stock grower by the commissioner.

Sec. 25.

Minnesota Statutes 2016, section 18H.07, subdivision 3, is amended to read:

Subd. 3.

Nursery stock dealer certificate.

(a) A nursery stock dealer must pay an annual
fee based on the dealer's gross sales of certified nursery stock per location during the most
recent certificate year. A certificate applicant operating for the first time must pay the
minimum fee. The fees per sales location are:

(1) gross sales up to $5,000, $150;

(2) gross sales over $5,000 up to $20,000, $175;

(3) gross sales over $20,000 up to $50,000, $300;

(4) gross sales over $50,000 up to $75,000, $425;

(5) gross sales over $75,000 up to $100,000, $550;

(6) gross sales over $100,000 up to $200,000, $675; and

(7) gross sales over $200,000, $800.

(b) In addition to the fees in paragraph (a), a penalty of ten percent of the fee due must
be charged for each month, or portion thereof, that the fee is delinquent up to a maximum
of 30 percent for any application for renewal not postmarked or electronically date stamped
by December 31 of the current year.

(c) A nursery stock dealer found operating without a valid nursery stock dealer certificate
cannot offer for sale or sell nursery stock until: (1) payment is received by the commissioner
for (i) the certificate fee due, and (ii) a penalty equal to the certificate fee owed; and (2) a
new certificate is issued to the nursery stock dealer by the commissioner.

Sec. 26.

Minnesota Statutes 2016, section 21.111, subdivision 2, is amended to read:

Subd. 2.

Inspected.

"Inspected" means that the potato plants are examined in the field
and that the harvested potatoes produced by such the potato plants are examined by or under
the authority of the commissioner. For seed potatoes produced in a lab, inspected means
that the lab's records, including records related to the lab's procedures and protocols, as well
as the seed potatoes, have been examined under the authority of the commissioner.

Sec. 27.

Minnesota Statutes 2016, section 21.111, subdivision 3, is amended to read:

Subd. 3.

Certified.

"Certified" means that the potatoes were inspected while growing
in the field and again after being harvested, and were thereafter duly certified by or under
the authority of the commissioner, as provided in sections 21.111 to 21.122, and as provided
by rules adopted and published by the commissioner. For seed potatoes produced in a lab,
certified means that:

(1) the seed potato lab facilities and the lab's procedures and protocols have been
examined under the authority of the commissioner; and

(2) the seed potatoes have been inspected after they have been harvested, removed, or
released from the lab, and were duly certified by or under the authority of the commissioner,
as provided in sections 21.111 to 21.122.

Sec. 28.

Minnesota Statutes 2016, section 21.113, is amended to read:

21.113 CERTIFICATES OF INSPECTION.

(a) The commissioner shall cause issue certificates of inspection to be issued only when
seed potatoes have been inspected while growing in the field and again after being harvested.

(b) For seed potatoes produced in a lab, the commissioner shall issue certificates of
inspection only after:

(1) the seed potato lab facility and the lab's records have been inspected; and

(2) the seed potatoes have been inspected after they have been harvested, removed, or
released from the lab.

Such (c) Certificates of inspection under this section shall show the varietal purity and
the freedom from disease and physical injury of such potatoes and shall contain such any
other information as may be prescribed by rules adopted and published under sections 21.111
to 21.122.

Sec. 29.

Minnesota Statutes 2016, section 21.117, is amended to read:

21.117 APPLICATIONS FOR INSPECTIONS; WITHDRAWALS.

(a) Any person may make application to the commissioner for inspection or certification
of seed potatoes growing or to be grown. Upon receiving such application and the required
fee and such other information as may be required, the commissioner shall cause such
potatoes to be inspected or certified in accordance with the provisions of sections 21.111
to 21.122 and the rules adopted and published thereunder.

(b) If a grower wishes to withdraw a field or lab after having made application for
inspection and such withdrawal is requested before the field or lab inspection has been
made, the fee paid shall be refunded to said grower.

Sec. 30.

Minnesota Statutes 2016, section 25.32, is amended to read:

25.32 COMMISSIONER'S DUTIES.

The commissioner shall administer sections 25.31 to 25.43 shall be administered by the
commissioner.

Sec. 31.

Minnesota Statutes 2016, section 25.33, subdivision 5, is amended to read:

Subd. 5.

Commercial feed.

"Commercial feed" means materials or combinations of
materials that are distributed or intended to be distributed for use as feed or for mixing in
feed, including feed for aquatic animals, unless the materials are specifically exempted.
Unmixed whole seeds and physically altered entire unmixed seeds, as identified in the
United States grain standards, if the whole or physically altered seeds are not chemically
changed, are not labeled as a feed or for use as feed, or are not adulterated within the meaning
of section 25.37, paragraph (a), are exempt. The commissioner by rule may exempt from
this definition, or from specific provisions of sections 25.31 to 25.43, commodities such as
hay, straw, stover, silage, cobs, husks, hulls, and individual chemical compounds or
substances if those commodities, compounds, or substances are not intermixed with other
materials, are not labeled as a feed or for use as feed, and are not adulterated within the
meaning of section 25.37, paragraph (a).

Sec. 32.

Minnesota Statutes 2016, section 25.33, subdivision 10, is amended to read:

Subd. 10.

Manufacture.

"Manufacture" means to grind, mix or, blend, or further process,
package, or label a commercial feed for distribution.

Sec. 33.

Minnesota Statutes 2016, section 25.33, subdivision 21, is amended to read:

Subd. 21.

Commissioner.

"Commissioner" means the commissioner of agriculture or
a designated representative the commissioner's agent.

Sec. 34.

Minnesota Statutes 2016, section 25.341, subdivision 1, is amended to read:

Subdivision 1.

Requirement.

Before a person may: (1) manufacture a commercial feed
in the state; (2) distribute a commercial feed in or into the state; or (3) have the person's
name appear on the label of a commercial feed as guarantor, the person must have a
commercial feed license for each guarantor, or manufacturing or distributing facility. A
person who makes only retail sales of commercial feed, guaranteed by another, is not required
to obtain a license.

Sec. 35.

Minnesota Statutes 2016, section 25.341, subdivision 2, is amended to read:

Subd. 2.

Application; fee; term.

A person who is required to have a commercial feed
license shall must submit an application on a form provided or approved by the commissioner
accompanied by a an application fee of $75 paid to the commissioner for each location. A
license is not transferable from one person to another, from one ownership to another, or
from one location to another. The license year is the calendar year. A license expires on
December 31 of the year for which it is issued, except that a license is valid through January
31 of the next year or until the issuance of the renewal license, whichever comes first, if
the licensee has filed a renewal application with the commissioner that has been received
by the commissioner on or before December 31 of the year for which the current license
was issued, or postmarked on or before December 31 of the year for which the current
license was issued. Any person who is required to have, but fails to obtain a license or a
licensee who fails to comply with license renewal requirements, shall must pay a $100 late
fee in addition to the license fee.

Sec. 36.

Minnesota Statutes 2016, section 25.35, is amended to read:

25.35 LABELING.

(a) A commercial feed, except a customer formula feed, must be accompanied by a label
bearing the following information:

(1) the product name and the brand name, if any, under which the commercial feed is
distributed;

(2) the guaranteed analysis, stated in terms the commissioner requires by rule, to advise
the user of the composition of the feed or to support claims made in the labeling. The
substances or elements must be determinable by laboratory methods such as the methods
published by the AOAC International or other generally recognized methods;

(3) the common or usual name of each ingredient used in the manufacture of the
commercial feed. The commissioner may by rule permit the use of a collective term for a
group of ingredients which perform a similar function, or may exempt commercial feeds
or any group of commercial feeds from this requirement on finding that an ingredient
statement is not required in the interest of consumers;

(4) the name and principal mailing address of the manufacturer or the person responsible
for distributing the commercial feed;

(5) adequate directions for use for all commercial feeds containing drugs and for such
other feeds as the commissioner may require by rule as necessary for their safe and effective
use;

(6) precautionary statements which the commissioner determines by rule are necessary
for the safe and effective use of the commercial feed; and

(7) a quantity statement.

(b) A customer formula feed must be accompanied by a label, invoice, delivery slip, or
other shipping document bearing the following information:

(1) name and address of the manufacturer;

(2) name and address of the purchaser;

(3) date of delivery;

(4) the product name and either (i) the quantity of each commercial feed and each other
ingredient used in the mixture, or (ii) a guaranteed analysis and list of ingredients in paragraph
(a), clauses (2) and (3);

(5) adequate directions for use for all customer formula feeds containing drugs and for
other feeds the commissioner requires by rule as necessary for their safe and effective use;

(6) precautionary statements the commissioner determines by rule are necessary for the
safe and effective use of the customer formula feed;

(7) if a product containing a drug is used:

(i) the purpose of the medication (claim statement); and

(ii) the established name of each active drug ingredient and the level of each drug used
in the final mixture expressed in a manner required by the commissioner by rule; and

(8) for a customer formula feed for which the formula is developed by someone other
than the manufacturer, a disclaimer may be included on the label stating "THIS FEED IS
A CUSTOMER FORMULA FEED DEVELOPED BY SOMEONE OTHER THAN THE
MANUFACTURER. THE MANUFACTURER DOES NOT CLAIM, REPRESENT,
WARRANT, OR GUARANTEE, AND IS NOT RESPONSIBLE FOR THE NUTRITIONAL
ADEQUACY OF THIS FEED OR THE NUTRITIONAL SUITABILITY OF THIS FEED
FOR ITS INTENDED PURPOSE."; and

(9) a quantity statement.

(c) The manufacturer of a customer formula feed the formula of which is developed by
someone other than the manufacturer is not responsible or liable for the nutritional adequacy
or the nutritional suitability of the feed for its intended purpose if: (1) the manufacturer does
not make a claim of nutritional adequacy for the customer formula feed and does not make
a claim for nutritional suitability of the feed for its intended purpose; and (2) the manufacturer
includes the disclaimer in paragraph (b), clause (8). A person other than the manufacturer
who develops or recommends a formula for a customer formula feed is responsible for
providing to the manufacturer of the feed the appropriate labeling information and for
providing the appropriate use information to the feed manufacturer.

Sec. 37.

Minnesota Statutes 2016, section 25.371, subdivision 2, is amended to read:

Subd. 2.

Certificate application.

(a) A person may apply to the commissioner for a
good manufacturing practices certificate for commercial feed and feed ingredients.
Application for good manufacturing practices certificates must be made on forms provided
or approved by the commissioner. The commissioner shall conduct inspections of facilities
for persons that have applied for or intend to apply for a good manufacturing practices
certificate for commercial feed and feed ingredients from the commissioner. The
commissioner shall not conduct an inspection under this section subdivision if the applicant
has not paid in full the inspection fee for previous inspections. Certificate issuance shall be
based on compliance with subdivisions 3 to 14, or United States Food and Drug
Administration rules regarding preventive controls for animal feed.

(b) The commissioner may assess a fee for the inspection, service, and work performed
in carrying out the issuance of a good manufacturing practices certificate for commercial
feed and feed ingredients. The inspection fee must be based on mileage and the cost of
inspection.

Sec. 38.

Minnesota Statutes 2016, section 25.38, is amended to read:

25.38 PROHIBITED ACTS.

The following acts and causing the following acts in Minnesota are prohibited:

(1) manufacture or distribution of any commercial feed that is adulterated or misbranded;

(2) adulteration or misbranding of any commercial feed;

(3) distribution of agricultural commodities such as whole seed, hay, straw, stover, silage,
cobs, husks, and hulls, which are adulterated within the meaning of section 25.37, paragraph
(a);

(4) removal or disposal of a commercial feed in violation of an order under section 25.42;

(5) failure or refusal to obtain a commercial feed license under section 25.341 or to
provide a small package listing under section 25.39; or

(6) failure to pay inspection fees, to register a small package under section 25.39, or to
file reports as required by section 25.39.

Sec. 39.

Minnesota Statutes 2016, section 25.39, subdivision 1, is amended to read:

Subdivision 1.

Amount of fee.

(a) An inspection fee at the rate of 16 cents per ton must
be paid to the commissioner on commercial feeds distributed in this state by the person who
first distributes the commercial feed, except that:

(1) no fee need be paid on:

(i) a commercial feed if the payment has been made by a previous distributor; or

(ii) any feed ingredient in a customer formula feeds if the inspection fee is paid on the
commercial feeds which are used as ingredients feed that has been directly furnished by the
customer; or

(2) a Minnesota feed distributor who can substantiate that greater than 50 percent of the
distribution of commercial feed is to purchasers outside the state may purchase commercial
feeds without payment of the inspection fee under a tonnage fee exemption permit issued
by the commissioner no fee need be paid on a first distribution if made to a qualified buyer
who, with approval from the commissioner, is responsible for the fee. Such location specific
license-specific tonnage-fee-exemption permits shall be issued on a calendar year basis to
commercial feed distributors licensees who distribute feed or feed ingredients outside the
state, and who submit a $100 nonrefundable application fee and comply with rules adopted
by the commissioner relative to record keeping, tonnage of commercial feed distributed in
Minnesota, total of all commercial feed tonnage distributed, and all other information which
the commissioner may require so as to ensure that proper inspection fee payment has been
made.

(b) In the case of pet food or specialty pet food distributed in the state only in packages
of ten pounds or less, a listing of distributor must register each product and submit a current
label for each product must be submitted annually on forms provided by the commissioner
and, accompanied by an annual application fee of $100 for each product in lieu of the
inspection fee. This annual fee is due by July 1 must be received by the commissioner on
or before June 30 or postmarked on or before June 30. The inspection fee required by
paragraph (a) applies to pet food or specialty pet food distributed in packages exceeding
ten pounds.

(c) In the case of specialty pet food distributed in the state only in packages of ten pounds
or less, a listing of each product and a current label for each product must be submitted
annually on forms provided by the commissioner and accompanied by an annual fee of
$100 for each product in lieu of the inspection fee. This annual fee is due by July 1. The
inspection fee required by paragraph (a) applies to specialty pet food distributed in packages
exceeding ten pounds.

(d) (c) The minimum inspection fee is $75 per annual reporting period.

Sec. 40.

Minnesota Statutes 2016, section 25.39, subdivision 1a, is amended to read:

Subd. 1a.

Containers of ten pounds or less.

A distributor who is subject to the annual
fee specified in subdivision 1, paragraph (b) or (c), shall must do the following:

(1) before beginning distribution, file register with the commissioner a listing of the pet
and specialty pet foods to be distributed in the state only in containers of ten pounds or less,
on forms provided by the commissioner. The listing registration under this clause must be
renewed annually on or before July 1 June 30 and is the basis for the payment of the annual
fee. New products added during the year must be submitted to the commissioner as a
supplement to the annual listing registration before distribution; and

(2) if the annual renewal of the listing registration is not received or postmarked on or
before July 1 June 30 or if an unlisted unregistered product is distributed, pay a late filing
fee of $100 per product in addition to the normal charge for the listing registration. The late
filing fee under this clause is in addition to any other penalty under this chapter.

Sec. 41.

Minnesota Statutes 2016, section 25.39, subdivision 2, is amended to read:

Subd. 2.

Annual statement.

A person who is liable for the payment of a fee under this
section shall must file with the commissioner on forms furnished by the commissioner an
annual statement setting forth the number of net tons of commercial feeds distributed in
this state during the calendar year. The report is due by on or before the 31st of each January
following the year of distribution. The inspection fee at the rate specified in subdivision 1
must accompany the statement. For each tonnage report not filed with the commissioner or
payment of inspection fees not made on time received by the commissioner on or before
January 31 or postmarked on or before January 31, a penalty of ten percent of the amount
due, with a minimum penalty of $10, must be assessed against the license holder, and the
amount of fees due, plus penalty, is a debt and may be recovered in a civil action against
the license holder. The assessment of this penalty does not prevent the department from
taking other actions as provided in this chapter.

Sec. 42.

Minnesota Statutes 2016, section 25.39, subdivision 3, is amended to read:

Subd. 3.

Records.

Each person required to pay an inspection fee or to report in accordance
with this section shall must keep records, as determined by the commissioner, accurately
detailing the tonnage of commercial feed distributed in this state. Records upon which the
tonnage is based must be maintained for six years and made available to the commissioner
for inspection, copying, and audit. A person who is located outside of this state must maintain
and make available records required by this section in this state or pay all costs incurred in
auditing of the records at another location. Unless required for the enforcement of this
chapter, the information in the records required by this subdivision is private or nonpublic.

Sec. 43.

Minnesota Statutes 2016, section 25.40, subdivision 2, is amended to read:

Subd. 2.

Notice; public comment.

Before the issuance, amendment, or repeal of any
rule authorized by sections 25.31 to 25.43, the commissioner shall publish the proposed
rule, amendment, or notice to repeal an existing rule in a manner reasonably calculated to
give interested parties, including all current license holders, adequate notice and shall afford
all interested persons an opportunity to present their views orally or in writing, within a
reasonable period of time. After consideration of all views presented by interested persons,
the commissioner shall take appropriate action to issue the proposed rule or to amend or
repeal an existing rule. The provisions of this subdivision notwithstanding, if the
commissioner, pursuant to the authority of sections 25.31 to 25.43, adopts the official
definitions of feed ingredients or and official feed terms as adopted by the Association of
American Feed Control Officials, any amendment or modification adopted by the association
shall be is adopted automatically under sections 25.31 to 25.43 without regard to the
publication of the notice required by this subdivision unless the commissioner, by order
specifically determines that the amendment or modification shall not be adopted.

Sec. 44.

Minnesota Statutes 2016, section 25.41, subdivision 1, is amended to read:

Subdivision 1.

Authorization; limitation.

For the purpose of enforcement of sections
25.31 to 25.43, and associated rules, in order to determine whether the provisions have been
complied with, including whether or not any operations may be subject to such provisions,
officers or employees duly designated by the commissioner or the commissioner's agent,
upon presenting appropriate credentials, and a written notice to the owner, operator, or agent
in charge, are authorized:

(1) to enter, during normal business hours, any factory, warehouse, or establishment
within the state in which commercial feeds are manufactured, processed, packed, or held
for distribution, or to enter any vehicle being used to transport or hold such feeds; and

(2) to inspect at reasonable times, within reasonable limits, and in a reasonable manner,
such factory, warehouse, establishment or vehicle and all pertinent equipment, finished and
unfinished materials, containers, and labeling therein. The inspection may include the
verification of records and production and control procedures related to the manufacture,
distribution, storage, handling, or disposal of commercial feed as may be necessary to
determine compliance with this chapter.

Sec. 45.

Minnesota Statutes 2016, section 25.41, subdivision 2, is amended to read:

Subd. 2.

Notification; promptness.

A separate notice shall must be given for each
inspection, but a notice shall is not be required for each entry made during the period covered
by the inspection. Each inspection shall be commenced must begin and be completed with
reasonable promptness. Upon completion of the inspection, the owner, operator, or agent
in charge of the facility or vehicle shall must be so notified.

Sec. 46.

Minnesota Statutes 2016, section 25.41, subdivision 3, is amended to read:

Subd. 3.

Receipt for samples.

If the officer or employee commissioner or the
commissioner's agent making such inspection of a factory, warehouse, or other establishment
has obtained a sample in the course of the inspection, upon completion of the inspection
and prior to leaving the premises the officer or employee commissioner or the commissioner's
agent shall give to the owner, operator, or agent in charge a receipt describing the samples
obtained.

Sec. 47.

Minnesota Statutes 2016, section 25.41, subdivision 5, is amended to read:

Subd. 5.

Entry of premises.

For the purpose of the enforcement of sections 25.31 to
25.43, the commissioner or the commissioner's duly designated agent is authorized to enter
upon any public or private premises including any vehicle of transport during regular business
hours to have access to, and to obtain samples, and to examine and copy records relating
to distribution of commercial feeds.

Sec. 48.

Minnesota Statutes 2016, section 25.41, subdivision 7a, is amended to read:

Subd. 7a.

Manufacturer's report of investigation.

If the inspection and analysis of an
official sample indicates that a commercial feed has been adulterated or misbranded, the
person whose name appears on the label of the indicated commercial feed as guarantor shall
must provide a manufacturer's report of investigation to the commissioner within 30 days
following the receipt of the official analysis.

Sec. 49.

Minnesota Statutes 2016, section 25.42, is amended to read:

25.42 DETAINED COMMERCIAL FEEDS.

Subdivision 1.

Withdrawal from distribution order.

When the commissioner or the
commissioner's authorized agent has reasonable cause to believe any lot of commercial feed
is being distributed in violation of any of the provisions of sections 25.31 to 25.43 or of any
of the prescribed rules under sections 25.31 to 25.43, the commissioner or the commissioner's
agent may issue and enforce a written or printed "withdrawal from distribution" order,
warning the distributor not to dispose of the lot of commercial feed in any manner until
written permission is given by the commissioner or the court. The commissioner shall release
the lot of withdrawn commercial feed so withdrawn when said provisions and sections 25.31
to 25.43 and associated rules have been complied with. If compliance is not obtained within
30 days, the commissioner may begin, or upon request of the distributor or license holder
shall begin, proceedings for condemnation.

Subd. 2.

Seizure; disposition.

Any lot of commercial feed not in compliance with said
provisions and sections 25.31 to 25.43 and associated rules shall be is subject to seizure on
complaint of the commissioner to the district court of the county in which said the commercial
feed is located. In the event the court finds the commercial feed to be in violation of sections
25.31 to 25.43 and orders the condemnation of said the commercial feed, it shall the
commercial feed must be disposed of in any a manner consistent with the quality of the
commercial feed and the laws of the state; provided, that in no instance, shall the disposition
of said the commercial feed be ordered by the court without first giving the claimant an
opportunity to apply to the court for release of said the commercial feed or for permission
to process or relabel said the commercial feed to bring it into compliance with sections
25.31 to 25.43.

Sec. 50.

Minnesota Statutes 2016, section 27.04, is amended to read:

27.04 APPLICATION FOR LICENSE.

Subdivision 1.

Issuance.

The commissioner shall issue a wholesale produce dealer's
license to engage in the business of a dealer at wholesale to persons submitting an application,
paying the prescribed fee, and complying with the conditions in this section.

Subd. 2.

Application contents.

(a) The application must be in writing, accompanied by
the prescribed fee, and state:

(1) the place or places where the applicant intends to carry on the business for which
the license is desired;

(2) the estimated amount of business to be done monthly;

(3) the amount of business done during the preceding year, if any;

(4) the full names of the persons constituting the firm for a partnership, and for a
corporation the names of the officers of the corporation and where incorporated; and

(5) a financial statement showing the value and character of the assets and the amount
of liabilities of the applicant;

(6) the income and expenses for the most recent year;

(7) the names and addresses of all shareholders who own at least five percent of a
corporate applicant's shares of stock;

(8) whether the applicant or any of its officers, partners, or agents have been involved
in any litigation relating to the business of a wholesale produce dealer in the previous five
years; and

(9) (5) any other information relevant to the conduct of its business as a wholesale
produce dealer in the previous five years, as the commissioner may require.

(b) If a contract is used in a transaction, a copy of the contract must also be filed with
the commissioner.

(c) Financial data required of an applicant under this section is classified as private data
with regard to data on individuals and as nonpublic data with regard to data not on individuals
under section 13.02.

Subd. 3.

Filing.

Applications shall be filed annually.

Sec. 51.

Minnesota Statutes 2016, section 28A.03, is amended by adding a subdivision to
read:

Subd. 11.

Regularly engaged.

"Regularly engaged" means any person who operates a
food business over a period of time at uniform, consistent intervals.

Sec. 52.

Minnesota Statutes 2016, section 28A.081, is amended to read:

28A.081 CERTIFICATE FEES.

Subdivision 1.

Fee.

A fee of $75 $125 for each certificate shall be charged to all food
establishments that request certificates any person who requests a certificate issued by the
Minnesota Department of Agriculture to facilitate the movement of Minnesota processed
and manufactured foods destined for export from the state of Minnesota. Certificates include,
but are not limited to, a certificate of free sale, certificate of export, certificate of sanitation,
sanitary certificate, certificate of origin and/or free sale, certificate of health and/or free
sale, sanitation, and purity, certificate of free trade, certificate of free sale, sanitation, purity,
and origin, certificate of health, sanitation, purity, and free sale, and letter of plant
certification.

The commissioner shall bill a food establishment the requesting person within seven
days after issuing a certificate to the establishment person. The operator of the food
establishment requesting person must submit payment for a certificate within ten days of
the billing date. If a certificate fee payment is not received within 15 days of the billing
date, the commissioner may not issue any future certificates to the requesting person until
previous fees due are paid in full. Fees paid under this section must be deposited in the food
certificate account established under subdivision 2 or another account in the agricultural
fund if the expenses for the certificate will be paid from that other account.

Subd. 2.

Food certificate account; appropriation.

A food certificate account is
established in the agricultural fund. Money in the account, including interest, is appropriated
to the commissioner for expenses relating to certifying Minnesota processed and
manufactured foods under chapters 28 to 34A or rules adopted under one of those chapters.

Sec. 53.

Minnesota Statutes 2016, section 28A.152, subdivision 2, is amended to read:

Subd. 2.

Direct sales to consumers.

(a) An individual qualifying for an exemption under
subdivision 1 may sell the exempt food:

(1) directly to the ultimate consumer at a community event or farmers' market;

(2) at a community event or farmers' market; or

(3) (2) directly from the individual's home to the ultimate consumer, to the extent allowed
by local ordinance.; or

(3) through donation to a community event with the purpose of fund-raising for an
individual, or fund-raising for an educational, charitable, or religious organization.

(b) If an exempt food product will be delivered to the ultimate consumer upon sale of
the food product, the individual who prepared the food product must be the person who
delivers the food product to the ultimate consumer.

(c) Food products exempt under subdivision 1, paragraph (a), clause (2), may not be
sold outside of Minnesota.

(d) Food products exempt under subdivision 1 may be sold over the Internet but must
be delivered directly to the ultimate consumer by the individual who prepared the food
product. The statement "These products are homemade and not subject to state inspection."
must be displayed on the Web site that offers the exempt foods for purchase.

Sec. 54.

Minnesota Statutes 2016, section 28A.21, subdivision 6, is amended to read:

Subd. 6.

Expiration.

This section expires June 30, 2017 2027.

Sec. 55.

Minnesota Statutes 2016, section 31A.02, subdivision 4, is amended to read:

Subd. 4.

Animals.

"Animals" means cattle, swine, sheep, goats, poultry, farmed Cervidae,
as defined in section 35.153, subdivision 3, llamas, as defined in section 17.455, subdivision
2, Ratitae, as defined in section 17.453, subdivision 3, horses, equines, and other large
domesticated animals.

Sec. 56.

Minnesota Statutes 2016, section 32C.02, subdivision 2, is amended to read:

Subd. 2.

Facility design; development and operation.

The authority may enter into
management contracts, lease agreements, or both, with a Minnesota nonprofit corporation
to design, develop, and operate a facility to further the purposes of this chapter at the site
determined by the board and on the terms that the board finds desirable. The board must
identify and acquire a site that will accommodate, where practicable, the following facilities
and activities:

(1) housing for bred and lactating animals;

(2) milking parlor;

(3) automatic milking systems;

(4) cross-ventilated and natural-ventilated housing;

(5) transition cow housing;

(6) special needs and hospital housing;

(7) classrooms and a conference room;

(8) dairy processing facility with retail;

(9) visitors' center;

(10) student housing;

(11) laboratory facilities;

(12) space to accommodate installation of an anaerobic digester system to research
energy production from feedstock produced on site or from off-site sources; and

(13) space for feed storage to allow for research capabilities at the facility.

Notwithstanding the provisions of section 32C.01, subdivision 7, relating to conflict of
interest, a director or officer of the authority who is also a director, officer, or member of
a nonprofit corporation with which the authority enters into management contracts or lease
agreements may participate in and vote on the decision of the board as to the terms and
conditions of management contracts or lease agreements between the Minnesota nonprofit
corporation and the authority.

Sec. 57.

Minnesota Statutes 2016, section 32C.06, is amended to read:

32C.06 EXPIRATION.

If by August 1, 2017 2020, the authority board has not identified and acquired a site for
a facility, as provided in section 32C.02, subdivision 2, sections 32C.01 to 32C.05 and this
section are repealed on that date. The Department of Agriculture shall notify the revisor of
statutes if the repealer under this section becomes effective.

Sec. 58.

Minnesota Statutes 2016, section 41A.12, subdivision 3, is amended to read:

Subd. 3.

Oversight.

The commissioner, in consultation with the chairs and ranking
minority members of the house of representatives and senate committees with jurisdiction
over agriculture finance, must allocate available appropriated funds among eligible uses as
provided by law, develop competitive eligibility criteria, and award funds on a needs basis.
By February 1 each year, the commissioner shall report to the legislature on the allocation
among eligible uses and any financial assistance provided the outcomes achieved under
this section.

Sec. 59.

Minnesota Statutes 2016, section 41A.20, subdivision 2, is amended to read:

Subd. 2.

Eligibility.

(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 forest resources. The facility must be located in Minnesota, must begin
production at a specific location by June 30, 2025, and must not begin operating before July
1, 2017 2019. Eligible facilities include existing companies and facilities that are adding
siding production capacity, or retrofitting existing capacity, as well as new companies and
facilities. Eligible siding production facilities must produce at least 200,000,000 siding
square feet on a 3/8 inch nominal basis of siding each year.

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

(c) An eligible producer of siding shall not transfer the producer's eligibility for payments
under this section to a 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.

Sec. 60.

Minnesota Statutes 2016, section 41B.03, subdivision 2, is amended to read:

Subd. 2.

Eligibility for restructured loan.

In addition to the eligibility requirements
of subdivision 1, a prospective borrower for a restructured loan must:

(1) have received at least 50 percent of average annual gross income from farming for
the past three years or, for homesteaded property, received at least 40 percent of average
gross income from farming in the past three years, and farming must be the principal
occupation of the borrower;

(2) have projected annual expenses, including operating expenses, family living, and
interest expenses after the restructuring, that do not exceed 95 percent of the borrower's
projected annual income considering prior production history and projected prices for farm
production, except that the authority may reduce the 95 percent requirement if it finds that
other significant factors in the loan application support the making of the loan;

(3) demonstrate substantial difficulty in meeting projected annual expenses without
restructuring the loan; and

(4) have a total net worth, including assets and liabilities of the borrower's spouse and
dependents, of less than $660,000 in 2004 $1,700,000 in 2017 and an amount in subsequent
years which is adjusted for inflation by multiplying that amount by the cumulative inflation
rate as determined by the United States All-Items Consumer Price Index.

Sec. 61.

Minnesota Statutes 2016, section 41B.03, subdivision 3, is amended to read:

Subd. 3.

Eligibility for beginning farmer loans.

(a) In addition to the requirements
under subdivision 1, a prospective borrower for a beginning farm loan in which the authority
holds an interest, must:

(1) have sufficient education, training, or experience in the type of farming for which
the loan is desired;

(2) have a total net worth, including assets and liabilities of the borrower's spouse and
dependents, of less than $350,000 in 2004 $800,000 in 2017 and an amount in subsequent
years which is adjusted for inflation by multiplying that amount by the cumulative inflation
rate as determined by the United States All-Items Consumer Price Index;

(3) demonstrate a need for the loan;

(4) demonstrate an ability to repay the loan;

(5) certify that the agricultural land to be purchased will be used by the borrower for
agricultural purposes;

(6) certify that farming will be the principal occupation of the borrower;

(7) agree to participate in a farm management program approved by the commissioner
of agriculture for at least the first three years of the loan, if an approved program is available
within 45 miles from the borrower's residence. The commissioner may waive this requirement
for any of the programs administered by the authority if the participant requests a waiver
and has either a four-year degree in an agricultural program or certification as an adult farm
management instructor; and

(8) agree to file an approved soil and water conservation plan with the Natural Resources
Conservation Service office in the county where the land is located.

(b) If a borrower fails to participate under paragraph (a), clause (7), the borrower is
subject to penalty as determined by the authority.

Sec. 62.

Minnesota Statutes 2016, section 41B.043, subdivision 5, is amended to read:

Subd. 5.

Total net worth limit.

A prospective borrower for an agricultural improvement
loan in which the authority holds an interest must have a total net worth, including assets
and liabilities of the borrower's spouse and dependents, of less than $350,000 in 2004
$800,000 in 2017 and an amount in subsequent years which is adjusted for inflation by
multiplying that amount by the cumulative inflation rate as determined by the United States
All-Items Consumer Price Index.

Sec. 63.

Minnesota Statutes 2016, section 41B.045, subdivision 2, is amended to read:

Subd. 2.

Loan participation.

The authority may participate in a livestock expansion
loan with an eligible lender to a livestock farmer who meets the requirements of section
41B.03, subdivision 1, clauses (1) and (2), and who are actively engaged in a livestock
operation. A prospective borrower must have a total net worth, including assets and liabilities
of the borrower's spouse and dependents, of less than $660,000 in 2004 $1,700,000 in 2017
and an amount in subsequent years which is adjusted for inflation by multiplying that amount
by the cumulative inflation rate as determined by the United States All-Items Consumer
Price Index.

Participation is limited to 45 percent of the principal amount of the loan or $525,000,
whichever is less. The interest rates and repayment terms of the authority's participation
interest may be different from the interest rates and repayment terms of the lender's retained
portion of the loan.

Sec. 64.

Minnesota Statutes 2016, section 41C.02, subdivision 12, is amended to read:

Subd. 12.

Low or moderate net worth.

"Low or moderate net worth" means:

(1) for an individual, an aggregate net worth of the individual and the individual's spouse
and minor children of less than $350,000 in 2004 $800,000 in 2017 and an amount in
subsequent years which is adjusted for inflation by multiplying that amount by the cumulative
inflation rate as determined by the United States All-Items Consumer Price Index; or

(2) for a partnership, an aggregate net worth of all partners, including each partner's net
capital in the partnership, and each partner's spouse and minor children of less than twice
the amount set for an individual in clause (1). However, the aggregate net worth of each
partner and that partner's spouse and minor children may not exceed the amount set for an
individual in clause (1).

Sec. 65.

Minnesota Statutes 2016, section 116V.01, subdivision 1, is amended to read:

Subdivision 1.

Establishment.

The Agricultural Utilization Research Institute is
established as a nonprofit corporation under section 501(c)(3) of the Internal Revenue Code
of 1986, as amended. The Agricultural Utilization Research Institute shall conduct onsite
and applied research, promote the establishment of new products and product uses and the
expansion of existing markets for the state's agricultural commodities and products, including
direct financial and technical assistance for Minnesota entrepreneurs in Minnesota and
bordering states. The institute must establish or maintain facilities and work with private
and public entities to leverage the resources available to achieve maximum results for
Minnesota agriculture.

Sec. 66.

Minnesota Statutes 2016, section 116V.01, subdivision 2, is amended to read:

Subd. 2.

Board of directors.

The board of directors of the Agricultural Utilization
Research Institute is comprised of:

(1) the chairs of the senate and the house of representatives standing committees with
jurisdiction over agriculture finance or the chair's designee;

(2) two representatives of statewide farm organizations;

(3) two representatives of agribusiness; and

(4) three representatives of the commodity promotion councils; and

(5) two at-large representatives.

Sec. 67.

Minnesota Statutes 2016, section 116V.01, subdivision 3, is amended to read:

Subd. 3.

Duties.

(a) The Agricultural Utilization Research Institute shall:

(1) identify development opportunities for agricultural products;

(2) implement a program that identifies techniques to meet those opportunities;

(3) monitor and coordinate research among the public and private organizations and
individuals specifically addressing procedures to transfer new technology to businesses,
farmers, and individuals;

(4) provide research grants to public and private educational institutions and other
organizations that are undertaking basic and applied research to promote the development
of emerging agricultural industries;

(5) assist organizations and individuals with market analysis and product marketing
implementations;

(6) (5) to the extent possible earn and receive revenue from contracts, patents, licenses,
royalties, grants, fees-for-service, and memberships;

(7) (6) work with the Department of Agriculture, the United States Department of
Agriculture, the Department of Employment and Economic Development, and other agencies
to maximize marketing opportunities locally, nationally, and internationally; and

(8) (7) leverage available funds from federal, state, and private sources to develop new
markets and value added opportunities for Minnesota agricultural products.

(b) The Agricultural Utilization Research Institute board of directors shall have the sole
approval authority for establishing agricultural utilization research priorities, requests for
proposals to meet those priorities, awarding of grants, hiring and direction of personnel,
and other expenditures of funds consistent with the adopted and approved mission and goals
of the Agricultural Utilization Research Institute. The actions and expenditures of the
Agricultural Utilization Research Institute are subject to audit. The institute shall annually
report by February 1 to the senate and house of representatives standing committees with
jurisdiction over agricultural policy and funding. The report must list projects initiated,
progress on projects, and financial information relating to expenditures, income from other
sources, and other information to allow the committees to evaluate the effectiveness of the
institute's activities.

(c) The Agricultural Utilization Research Institute shall convene a Renewable Energy
Roundtable, the purpose of which shall be to further the state's leadership on bioenergy
issues.

(i) The Renewable Energy Roundtable shall consist of one representative appointed by
the commissioner of the Minnesota Department of Agriculture, one appointed by the
commissioner of the Minnesota Department of Commerce, one appointed by the chancellor
of the Minnesota State Colleges and Universities, and one appointed by the president of the
University of Minnesota. The appointees must have expertise relevant to bioenergy.

(ii) The board shall oversee the activities and shall provide staff to assist the Renewable
Energy Roundtable.

(iii) The Renewable Energy Roundtable will engage professionals and experts from
private, government, academic, and nonprofit entities across the state to identify bioenergy
opportunities and collaborate with a broad group of interested parties to identify future
alternative courses of action the state can take to sustain a long-term competitive position
in renewable energy through the year 2025. The Renewable Energy Roundtable will consult,
advise, and review projects and initiatives funded by the state as directed by the
administration and the legislature.

Sec. 68.

Minnesota Statutes 2016, section 116V.01, subdivision 4, is amended to read:

Subd. 4.

Staff.

The board of directors shall hire staff an executive director for the
Agricultural Utilization Research Institute. Persons employed by the Agricultural Utilization
Research Institute are not state employees and may participate in state retirement, deferred
compensation, insurance, or other plans that apply to state employees generally and are
subject to regulation by the state Campaign Finance and Public Disclosure Board.

Sec. 69.

Minnesota Statutes 2016, section 116V.01, subdivision 7, is amended to read:

Subd. 7.

Bylaws.

The board of directors shall adopt bylaws necessary for the conduct
of the business of the institute consistent with this section. The corporation must publish
bylaws and amendments to the bylaws in the State Register on the board's Web site.

Sec. 70.

Minnesota Statutes 2016, section 116V.01, subdivision 10, is amended to read:

Subd. 10.

Meetings.

The board of directors shall meet at least twice each year and may
hold additional meetings upon giving notice in accordance with the bylaws of the institute.
Board meetings are subject to chapter 13D, except section 13D.01, subdivision 6, as it
pertains to financial information, business plans, income and expense projections, customer
lists, market and feasibility studies, and trade secret information as defined by section 13.37,
subdivision 1, paragraph (b). For the purposes of section 13D.015, the board of directors is
a state board.

Sec. 71.

Minnesota Statutes 2016, section 116V.01, subdivision 11, is amended to read:

Subd. 11.

Conflict of interest.

A director, employee, or officer of the institute may not
participate in advocate for or vote on a decision of the board relating to an organization in
which the director, employee, or officer has either a direct or indirect financial interest.

Sec. 72.

Minnesota Statutes 2016, section 116V.01, subdivision 13, is amended to read:

Subd. 13.

Funds.

The institute may accept and use gifts, grants, or contributions from
any source. Unless otherwise restricted by the terms of a gift or bequest, the board may sell,
exchange, or otherwise dispose of and invest or reinvest the money, securities, or other
property given or bequested to it. The principal of these funds, the income from them, and
all other revenues received by it from any nonstate source must be placed in the depositories
the board determines and is are subject to expenditure for the board's purposes. Receipts
and expenditures of more than $25,000 $50,000 must be approved by the full board.

Sec. 73.

Minnesota Statutes 2016, section 116V.01, subdivision 14, is amended to read:

Subd. 14.

Accounts; audits.

The institute may establish funds and accounts that it finds
convenient. The board shall provide for and pay the cost of an independent annual audit of
its official books and records by the legislative auditor subject to sections 3.971 and 3.972.
In addition, the board shall provide and pay for the cost of an annual financial audit of its
official books and records by a CPA firm licensed under chapter 326A. A copy of this the
annual financial audit shall be filed with the secretary of state Office of the Attorney General,
Charities Division.

For purposes of this section, "institute" means the Agricultural Utilization Research
Institute established under this section and "board of directors" means the board of directors
of the Agricultural Utilization Research Institute.

Sec. 74.

Minnesota Statutes 2016, section 223.17, subdivision 8, is amended to read:

Subd. 8.

Bond disbursement.

(a) The bond required under subdivision 4 shall provide
for payment of loss caused by the grain buyer's failure to pay, upon the owner's demand,
the purchase price of grain sold to the grain buyer in the manner provided by subdivision
5, including loss caused by failure to pay within the time required. The bond shall be
conditioned upon the grain buyer being duly licensed as provided herein.

(b) The commissioner shall promptly determine the validity of all claims filed and notify
the claimants of the determination. An aggrieved party may appeal the commissioner's
determination by requesting, within 15 days, that the commissioner initiate a contested case
proceeding. In the absence of such a request, or following the issuance of a final order in a
contested case, the surety company shall issue payment promptly to those claimants entitled
to payment. The commissioner may apply to the district court for an order appointing a
trustee or receiver to manage and supervise the operations of the grain buyer in default. The
commissioner may participate in any resulting court proceeding as an interested party.

(c) If a grain buyer has become liable to more than one producer by reason of breaches
of the conditions of the bond and the amount of the bond is insufficient to pay the entire
liability to all producers entitled to the protection of the bond, the proceeds of the bond shall
be apportioned among the bona fide claimants.

(d) The bond shall not be cumulative from one licensing period to the next. The maximum
liability of the bond shall be its face value for the licensing period.

(e) The bond disbursement shall occur 200 days from the date the commissioner publishes
a public notice of a claim. At the end of this time period, the commissioner shall initiate
bond payments on all valid claims received by the commissioner.

Sec. 75.

Minnesota Statutes 2016, section 232.22, subdivision 7, is amended to read:

Subd. 7.

Bond disbursement.

(a) The bond of a public grain warehouse operator must
be conditioned that the public grain warehouse operator issuing a grain warehouse receipt
is liable to the depositor for the delivery of the kind, grade and net quantity of grain called
for by the receipt.

(b) Upon notification of default, the commissioner shall determine the validity of all
claims and notify all parties having filed claims. Any aggrieved party may appeal the
commissioner's determination by requesting, within 15 days, that the commissioner initiate
a contested case proceeding. In the absence of such a request, or following the issuance of
a final order in a contested case, the surety company shall issue payment to those claimants
entitled to payment. If the commissioner determines it is necessary, the commissioner may
apply to the district court for an order appointing a trustee or receiver to manage and supervise
the operations of the grain warehouse operator in default. The commissioner may participate
in any resulting court proceeding as an interested party.

(c) For the purpose of determining the amount of bond disbursement against all valid
claims under a condition one bond, all grain owned or stored in the public grain warehouse
shall be sold and the combined proceeds deposited in a special fund. Payment shall be made
from the special fund satisfying the valid claims of grain warehouse receipt holders.

(d) If a public grain warehouse operator has become liable to more than one depositor
or producer by reason of breaches of the conditions of the bond and the amount of the bond
is insufficient to pay, beyond the proceeds of the special fund, the entire liability to all valid
claimants, the proceeds of the bond and special fund shall be apportioned among the valid
claimants on a pro rata basis.

(e) A bond is not cumulative from one licensing period to the next. The maximum
liability of the bond shall be its face value for the licensing period.

(f) The bond disbursement shall occur 200 days from the date the commissioner publishes
a public notice of a claim. At the end of this time period, the commissioner shall initiate
bond payments on all valid claims received by the department.

Sec. 76.

Minnesota Statutes 2016, section 336.9-601, is amended to read:

336.9-601 RIGHTS AFTER DEFAULT; JUDICIAL ENFORCEMENT;
CONSIGNOR OR BUYER OF ACCOUNTS, CHATTEL PAPER, PAYMENT
INTANGIBLES, OR PROMISSORY NOTES.

(a) Rights of secured party after default. After default, a secured party has the rights
provided in this part and, except as otherwise provided in section 336.9-602, those provided
by agreement of the parties. A secured party:

(1) may reduce a claim to judgment, foreclose, or otherwise enforce the claim, security
interest, or agricultural lien by any available judicial procedure; and

(2) if the collateral is documents, may proceed either as to the documents or as to the
goods they cover.

(b) Rights and duties of secured party in possession or control. A secured party in
possession of collateral or control of collateral under section 336.7-106, 336.9-104,
336.9-105, 336.9-106, or 336.9-107 has the rights and duties provided in section 336.9-207.

(c) Rights cumulative; simultaneous exercise. The rights under subsections (a) and
(b) are cumulative and may be exercised simultaneously.

(d) Rights of debtor and obligor. Except as otherwise provided in subsection (g) and
section 336.9-605, after default, a debtor and an obligor have the rights provided in this part
and by agreement of the parties.

(e) Lien of levy after judgment. If a secured party has reduced its claim to judgment,
the lien of any levy that may be made upon the collateral by virtue of an execution based
upon the judgment relates back to the earliest of:

(1) the date of perfection of the security interest or agricultural lien in the collateral;

(2) the date of filing a financing statement covering the collateral; or

(3) any date specified in a statute under which the agricultural lien was created.

(f) Execution sale. A sale pursuant to an execution is a foreclosure of the security interest
or agricultural lien by judicial procedure within the meaning of this section. A secured party
may purchase at the sale and thereafter hold the collateral free of any other requirements
of this article.

(g) Consignor or buyer of certain rights to payment. Except as otherwise provided
in section 336.9-607(c), this part imposes no duties upon a secured party that is a consignor
or is a buyer of accounts, chattel paper, payment intangibles, or promissory notes.

(h) Security interest in collateral that is agricultural property; enforcement. A
person may not begin to enforce a security interest in collateral that is agricultural property
subject to sections 583.20 to 583.32 that has secured a debt of more than $5,000 the amount
provided in section 583.24, subdivision 5, unless: a mediation notice under subsection (i)
is served on the debtor after a condition of default has occurred in the security agreement
and a copy served on the director of the agricultural extension service; and the debtor and
creditor have completed mediation under sections 583.20 to 583.32; or as otherwise allowed
under sections 583.20 to 583.32.

(i) Mediation notice. A mediation notice under subsection (h) must contain the following
notice with the blanks properly filled in.

"TO: ...(Name of Debtor)...

YOU HAVE DEFAULTED ON THE ...(Debt in Default)... SECURED BY
AGRICULTURAL PROPERTY DESCRIBED AS ...(Reasonable Description of Agricultural
Property Collateral). THE AMOUNT OF THE OUTSTANDING DEBT IS ...(Amount of
Debt)...

AS A SECURED PARTY, ...(Name of Secured Party)... INTENDS TO ENFORCE
THE SECURITY AGREEMENT AGAINST THE AGRICULTURAL PROPERTY
DESCRIBED ABOVE BY REPOSSESSING, FORECLOSING ON, OR OBTAINING A
COURT JUDGMENT AGAINST THE PROPERTY.

YOU HAVE THE RIGHT TO HAVE THE DEBT REVIEWED FOR MEDIATION.
IF YOU REQUEST MEDIATION, A DEBT THAT IS IN DEFAULT WILL BE
MEDIATED ONLY ONCE. IF YOU DO NOT REQUEST MEDIATION, THIS DEBT
WILL NOT BE SUBJECT TO FUTURE MEDIATION IF THE SECURED PARTY
ENFORCES THE DEBT.

IF YOU PARTICIPATE IN MEDIATION, THE DIRECTOR OF THE
AGRICULTURAL EXTENSION SERVICE WILL PROVIDE AN ORIENTATION
MEETING AND A FINANCIAL ANALYST TO HELP YOU TO PREPARE FINANCIAL
INFORMATION. IF YOU DECIDE TO PARTICIPATE IN MEDIATION, IT WILL BE
TO YOUR ADVANTAGE TO ASSEMBLE YOUR FARM FINANCE AND OPERATION
RECORDS AND TO CONTACT A COUNTY EXTENSION OFFICE AS SOON AS
POSSIBLE. MEDIATION WILL ATTEMPT TO ARRIVE AT AN AGREEMENT FOR
HANDLING FUTURE FINANCIAL RELATIONS.

TO HAVE THE DEBT REVIEWED FOR MEDIATION YOU MUST FILE A
MEDIATION REQUEST WITH THE DIRECTOR WITHIN 14 DAYS AFTER YOU
RECEIVE THIS NOTICE. THE MEDIATION REQUEST FORM IS AVAILABLE AT
ANY COUNTY RECORDER'S OR COUNTY EXTENSION OFFICE.

FROM: ...(Name and Address of Secured Party)..."

EFFECTIVE DATE.

This section is effective August 1, 2017, and applies to debt
subject to the Farmer-Lender Mediation Act that is initiated on or after that date.

Sec. 77.

Minnesota Statutes 2016, section 344.03, subdivision 1, is amended to read:

Subdivision 1.

Adjoining owners.

If all or a part of adjoining Minnesota land is improved
and used, (a) Except as provided in paragraph (b), if two adjoining lands are both used in
whole or in part to produce or maintain livestock for agricultural or commercial purposes
and one or both of the owners of the land desires the land to be partly or totally fenced, the
land owners or occupants shall build and maintain a partition fence between their lands in
equal shares.

(b) The requirement in this section and the procedures in this chapter apply to the
Department of Natural Resources when it owns land adjoining privately owned land subject
to this section and chapter and the landowner desires the land permanently fenced for the
purpose of restraining livestock.

(c) For purposes of this section, "livestock" means beef cattle, dairy cattle, swine, poultry,
goats, donkeys, hinnies, mules, farmed Cervidae, Ratitae, bison, sheep, horses, alpacas, and
llamas.

EFFECTIVE DATE.

This section is effective the day following final enactment and
applies to partition fences built pursuant to Minnesota Statutes, chapter 344, on or after that
date.

Sec. 78.

Minnesota Statutes 2016, section 550.365, subdivision 1, is amended to read:

Subdivision 1.

Requirement.

A person may not attach, execute on, levy on, or seize
agricultural property subject to sections 583.20 to 583.32 that has secured a debt of more
than $5,000 the amount provided in section 583.24, subdivision 5, unless: (1) a mediation
notice is served on the judgment debtor and a copy served on the director and the debtor
and creditor have completed mediation under sections 583.20 to 583.32; or (2) as otherwise
allowed under sections 583.20 to 583.32.

EFFECTIVE DATE.

This section is effective August 1, 2017, and applies to debt
subject to the Farmer-Lender Mediation Act that is initiated on or after that date.

Sec. 79.

Minnesota Statutes 2016, section 559.209, subdivision 1, is amended to read:

Subdivision 1.

Requirement.

A person may not begin to terminate a contract for deed
under section 559.21 to purchase agricultural property subject to sections 583.20 to 583.32
for a remaining balance on the contract of more than $5,000 the amount provided in section
583.24, subdivision 5, unless: (1) a mediation notice is served on the contract for deed
purchaser after a default has occurred under the contract and a copy served on the director
and the contract for deed vendor and purchaser have completed mediation under sections
583.20 to 583.32; or (2) as otherwise allowed under sections 583.20 to 583.32.

EFFECTIVE DATE.

This section is effective August 1, 2017, and applies to debt
subject to the Farmer-Lender Mediation Act that is initiated on or after that date.

Sec. 80.

Minnesota Statutes 2016, section 582.039, subdivision 1, is amended to read:

Subdivision 1.

Requirement.

A person may not begin a proceeding under this chapter
or chapter 580 to foreclose a mortgage on agricultural property subject to sections 583.20
to 583.32 that has a secured debt of more than $5,000 the amount provided in section 583.24,
subdivision 5, unless: (1) a mediation notice is served on the mortgagor after a default has
occurred in the mortgage and a copy is served on the director and the mortgagor and
mortgagee have completed mediation under sections 583.20 to 583.32; or (2) as otherwise
allowed under sections 583.20 to 583.32.

EFFECTIVE DATE.

This section is effective August 1, 2017, and applies to debt
subject to the Farmer-Lender Mediation Act that is initiated on or after that date.

Sec. 81.

Minnesota Statutes 2016, section 583.215, is amended to read:

583.215 EXPIRATION.

Sections 336.9-601, subsections (h) and (i); 550.365; 559.209; 582.039; and 583.20 to
583.32, expire June 30, 2018 2022.

Sec. 82.

Minnesota Statutes 2016, section 583.24, subdivision 4, is amended to read:

Subd. 4.

Debts.

The Farmer-Lender Mediation Act does not apply to a debt:

(1) for which a proof of claim form has been filed in bankruptcy by a creditor or that
was listed as a scheduled debt, of a debtor who has filed a petition in bankruptcy after July
1, 1987, under United States Code, title 11, chapter 7, 11, 12, or 13;

(2) if the debt was in default when the creditor received a mediation proceeding notice
under the Farmer-Lender Mediation Act and the creditor filed a claim form, the debt was
mediated during the mediation period under section 583.26, subdivision 8, and (i) the
mediation was unresolved; or (ii) a mediation agreement with respect to that debt was signed;

(3) for which the creditor has served a mediation notice, the debtor has failed to make
a timely request for mediation, and within 60 days after the debtor failed to make a timely
request the creditor began a proceeding to enforce the debt against the agricultural property
of the debtor;

(4) for which a creditor has received a mediation proceeding notice and the creditor and
debtor have restructured the debt and have signed a separate mediation agreement with
respect to that debt; or

(5) for which there is a lien for rental value of farm machinery under section 514.661.;
or

(6) that is a new line of credit, loan, or other debt extended by a creditor to the debtor
as a result of a mediation conducted pursuant to the Farmer-Lender Mediation Act. However,
this new debt becomes subject to the Farmer-Lender Mediation Act two years after the
mediation from which the new debt originated ends, as evidenced by the date on the
termination statement issued by the mediator under section 583.26, subdivision 10.

EFFECTIVE DATE.

This section is effective August 1, 2017, and applies to debt
subject to the Farmer-Lender Mediation Act that is initiated on or after that date.

Sec. 83.

Minnesota Statutes 2016, section 583.24, is amended by adding a subdivision to
read:

Subd. 5.

Minimum eligible debt amount.

The minimum eligible debt amount is $15,000.
In 2022 and every five years thereafter, the commissioner of agriculture, in consultation
with the director, must report to the legislative committees with jurisdiction over agriculture
policy what the minimum eligible debt amount under this subdivision would be if adjusted
using the United States Department of Agriculture's Index of the Cost of Production.

EFFECTIVE DATE.

This section is effective August 1, 2017, and applies to debt
subject to the Farmer-Lender Mediation Act that is initiated on or after that date.

Sec. 84.

Minnesota Statutes 2016, section 583.26, subdivision 2, is amended to read:

Subd. 2.

Mediation request.

(a) A debtor must file a mediation request form with the
director by 14 days after receiving a mediation notice. The debtor must state all known
creditors with debts secured for agricultural property and must authorize the director to
obtain the debtor's credit report from one or more credit reporting agencies. The mediation
request form must include an instruction that the debtor must state all known creditors with
debts secured by agricultural property and unsecured creditors that are necessary for the
farm operation of the debtor. It is the debtor's discretion as to which unsecured creditors
are necessary for the farm operation but the mediation request form must notify the debtor
that omission of a significant unsecured creditor could result in a bad-faith determination
pursuant to section 583.27, subdivisions 1, paragraph (a), clause (2), and 2. The mediation
request must state the date that the notice was served on the debtor. The director shall make
mediation request forms available in the county recorder's and county extension office of
each county.

(b) Except as provided in section 583.24, subdivision 4, paragraph (a), clause (3), a
debtor who fails to file a timely mediation request waives the right to mediation for that
debt under the Farmer-Lender Mediation Act. The director shall notify the creditor who
served the mediation notice stating that the creditor may proceed against the agricultural
property because the debtor has failed to file a mediation request.

(c) If a debtor has not received a mediation notice and is subject to a proceeding of a
creditor enforcing a debt against agricultural property under chapter 580 or 581 or sections
336.9-601 to 336.9-628, terminating a contract for deed to purchase agricultural property
under section 559.21, or garnishing, levying on, executing on, seizing, or attaching
agricultural property, the debtor may file a mediation request with the director. The mediation
request form must indicate that the debtor has not received a mediation notice.

EFFECTIVE DATE.

This section is effective August 1, 2017, and applies to debt
subject to the Farmer-Lender Mediation Act that is initiated on or after that date.

Sec. 85.

Minnesota Statutes 2016, section 583.26, subdivision 3, is amended to read:

Subd. 3.

Financial analyst and farm advocate.

(a) Within three business days after
receiving a mediation request, the director shall provide a financial analyst to meet with the
debtor and assure that all information relative to the finances of the debtor is prepared for
prior to the initial mediation meeting. The financial analyst must review and, if necessary,
prepare the debtor's financial records before the initial mediation meeting.

(b) After receiving the mediation notice, the director shall provide the debtor with a list
of farm advocates that may be available without charge to assist the debtor and the financial
analyst.

EFFECTIVE DATE.

This section is effective August 1, 2017, and applies to debt
subject to the Farmer-Lender Mediation Act that is initiated on or after that date.

Sec. 86.

Minnesota Statutes 2016, section 583.26, subdivision 3a, is amended to read:

Subd. 3a.

Orientation session.

The director shall schedule an orientation session to be
held at least five days before the first mediation meeting. The debtor, the financial analyst,
and a mediator shall participate in the orientation session. The mediator at the session need
not be the one assigned to the mediation proceeding under subdivision 4. Creditors
participating in the mediation may participate in the orientation session. At the orientation
session, the financial analyst shall review the debtor's financial and inventory records to
determine if they are adequate for the mediation and inform the debtor of any inadequacies,
and the mediator shall inform the debtor of the requirements of the mediation process
including but not limited to the requirement to participate in good faith by addressing, prior
to the initial mediation meeting, any inadequacies identified by the financial analyst.

EFFECTIVE DATE.

This section is effective August 1, 2017, and applies to debt
subject to the Farmer-Lender Mediation Act that is initiated on or after that date.

Sec. 87.

Minnesota Statutes 2016, section 583.26, subdivision 4, is amended to read:

Subd. 4.

Mediation proceeding notice.

(a) By ten days after receiving a mediation
request, the director shall send: (1) a mediation proceeding notice to the debtor; (2) a
mediation proceeding notice to all creditors listed by the debtor in the mediation request
and any additional secured creditors identified by the director from the credit report obtained
with the debtor's permission under subdivision 2; and (3) a claim form to all secured creditors
stated by the debtor or identified by the director.

(b) The mediation proceeding notice must state:

(1) the name and address of the debtor;

(2) that the debtor has requested mediation under the Farmer-Lender Mediation Act;

(3) the time and place for the orientation session;

(4) the time and place for the initial mediation meeting;

(5) a list of the names of three mediators that may be assigned to the proceeding, along
with background information on those mediators including biographical information, a
summary of previous mediation experience, and the number of agreements signed by parties
to previous mediation;

(6) that the debtor and the initiating creditor may each request the director to exclude
one mediator by notifying the director within three days after receiving the notice;

(7) that in lieu of having a mediator assigned by the director, the debtor and any one or
more of the creditors may agree to select and pay for a professional mediator that is approved
by the director;

(8) that the Farmer-Lender Mediation Act prohibits the creditor from beginning or
continuing a proceeding to enforce the debt against agricultural property for 90 days after
the debtor files a mediation request with the director unless otherwise allowed; and

(9) that the creditor must provide the debtor by the initial mediation meeting with copies
of notes and contracts for debts subject to the Farmer-Lender Mediation Act and provide a
statement of interest rates on the debts, delinquent payments, unpaid principal and interest
balances, the creditor's value of the collateral, and debt restructuring programs available by
the creditor.

(c) An initial mediation meeting must be held within 20 days of the notice.

(d) The initiating creditor and the debtor may each request the director to exclude one
mediator from the list by sending the director a notice to exclude the mediator within three
days after receiving the mediation proceeding notice.

(e) In lieu of the director assigning a mediator, the debtor and any one or more of the
creditors may agree to select and pay for a professional mediator for the mediation
proceeding. The director must approve the professional mediator before the professional
mediator may be assigned to the mediation proceeding. The professional mediator may not
be approved unless the professional mediator prepares and signs an affidavit:

(1) disclosing any biases, relationships, or previous associations with the debtor or
creditors subject to the mediation proceedings;

(2) stating certifications, training, or qualifications as a professional mediator;

(3) disclosing fees to be charged or a rate schedule of fees for the mediation proceeding;
and

(4) affirming to uphold the Farmer-Lender Mediation Act and faithfully discharge the
duties of a mediator.

(f) After receiving a mediation proceeding notice, a secured creditor must return a claim
form if the debt is not subject to the Farmer-Lender Mediation Act and specify why the debt
is not subject to sections 583.20 to 583.32.

EFFECTIVE DATE.

This section is effective August 1, 2017, and applies to debt
subject to the Farmer-Lender Mediation Act that is initiated on or after that date.

Sec. 88.

Minnesota Statutes 2016, section 583.26, subdivision 10, is amended to read:

Subd. 10.

End of mediation.

(a) The mediator shall sign and serve to the parties and
the director a termination statement by the end of the time period specified in subdivision
5.

(b) The mediator shall prepare a termination statement that:

(1) acknowledges that mediation has ended and specifies the date on which the mediation
ended; and

(2) describes or references agreements, if any, reached between a creditor and the debtor,
if any, including any new line of credit, loan, or other debt issued by a creditor to the debtor
as a result of the mediation; and agreements, if any, reached among creditors, if any.

(c) Mediation agreements may be included as part of the termination statement.

EFFECTIVE DATE.

This section is effective August 1, 2017, and applies to debt
subject to the Farmer-Lender Mediation Act that is initiated on or after that date.

Sec. 89.

Minnesota Statutes 2016, section 583.27, subdivision 1, is amended to read:

Subdivision 1.

Obligation of good faith.

(a) The parties must engage in mediation in
good faith. Prior to the initial mediation meeting, the director must notify all parties in
writing of their obligation to participate in good faith, the consequences of failing to
participate in good faith, and that not participating in good faith includes: (1) a failure on a
regular or continuing basis to attend and participate in mediation sessions without cause;
(2) failure to provide full information no later than the initial mediation meeting regarding
the financial obligations of the parties and other creditors including the obligation of a
creditor to provide information under section 583.26, subdivision 5, paragraph (d); (3)
failure of the creditor to designate a representative to participate in the mediation with
authority to make binding commitments within one business day to fully settle, compromise,
or otherwise mediate the matter; (4) lack of a written statement of debt restructuring
alternatives and a statement of reasons why alternatives are unacceptable to one of the
parties; (5) failure of a creditor to release funds from the sale of farm products to the debtor
for necessary living and farm operating expenses; or (6) other similar behavior which
evidences lack of good faith by the party. A failure to agree to reduce, restructure, refinance,
or forgive debt does not, in itself, evidence lack of good faith by the creditor.

(b) The amount that the creditor is required to release for necessary living expenses
under this section is limited to $1,600 $3,600 per month less the debtor's off-farm income.
In 2022 and every five years thereafter, the commissioner of agriculture, in consultation
with the director, must report to the legislative committees with jurisdiction over agriculture
policy what the monetary limit under this paragraph would be if adjusted using the United
States All-Items Consumer Price Index.

(c) If the debtor and creditor do not agree on the amount of necessary living expenses
to be released, the debtor or creditor may petition conciliation court in the county of the
debtor's residence to make a determination of the amount to be released. The conciliation
court must make the determination within ten days after receiving the petition.

(d) If the debtor and creditors do not agree on the amount of necessary operating expenses
or necessary living and operating expenses to be released, the debtor or a creditor requested
to release necessary living or operating expenses may petition the district court of the debtor's
residence to make a determination of the amount to be released. The court shall hear and
make a determination of the amount of living and operating expenses to be released within
ten days after receiving the petition. The court shall also add or subtract up to ten days to
the time when the creditor can begin to enforce a proceeding to collect the debt against
agricultural property of the debtor and assess costs, including any attorney fees, among the
parties to the court proceeding. The court shall equitably adjust the time to begin a creditor's
proceeding and the assessment of costs based on the parties' good faith claim to the amount
of living and operating expenses to be released.

EFFECTIVE DATE.

This section is effective August 1, 2017, and applies to debt
subject to the Farmer-Lender Mediation Act that is initiated on or after that date.

Sec. 90. WOLF-LIVESTOCK CONFLICT PREVENTION PILOT PROGRAM.

(a) The commissioner of agriculture may award grants to livestock producers to prevent
wolf-livestock conflicts. Livestock producers located in Minnesota are eligible to apply for
reimbursement for the cost of practices to prevent wolf-livestock conflicts. The commissioner
may establish a cap on the amount a recipient may receive annually.

(b) To be eligible for the grant under this section, a livestock producer must raise livestock
within Minnesota's wolf range or on property determined by the commissioner to be affected
by wolf-livestock conflicts.

(c) Eligible wolf-livestock conflict prevention activities include, but are not limited to:

(1) the purchase of guard animals;

(2) veterinary costs for guard animals;

(3) the installation of wolf barriers; wolf barriers may include pens, fladry, and fencing;

(4) the installation of wolf-deterring lights and alarms; and

(5) calving or lambing shelters.

(d) Eligible grant recipients must:

(1) make a good-faith effort to avoid wolf-livestock conflicts;

(2) make a good-faith effort to care for guard animals paid for under this section;

(3) retain proper documentation of expenses;

(4) report annually to the commissioner on the effectiveness of the nonlethal methods
employed; and

(5) allow follow-up evaluation and monitoring by the commissioner.

(e) Grant recipients shall continue to be eligible for depredation payments under
Minnesota Statutes, section 3.737.

Sec. 91. BASE BUDGET REPORT REQUIRED.

No later than October 15, 2018, the commissioner of agriculture must submit a report
detailing the agency's base budget, including any prior appropriation riders, to the chairs
and ranking minority members of the legislative committees with jurisdiction over agriculture
finance.

Sec. 92. REVISOR'S INSTRUCTION.

The revisor of statutes shall renumber Minnesota Statutes, section 18B.01, subdivision
9a, to Minnesota Statutes, section 18B.01, subdivision 9d, and correct any cross-references
related to the renumbering.

Sec. 93. REPEALER.

Minnesota Statutes 2016, sections 18B.01, subdivisions 10a, 10b, and 22a; 18B.285;
25.371, subdivisions 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, and 15; 41A.20, subdivision 6;
41D.01, subdivision 4; 383C.809; and 583.22, subdivision 7b, are repealed.

ARTICLE 3

DAIRY LAW REORGANIZATION

Section 1.

Minnesota Statutes 2016, section 13.6435, subdivision 8, is amended to read:

Subd. 8.

Dairy products.

Financial and production information obtained by the
commissioner of agriculture to administer chapter 32 32D are classified under section 32.71,
subdivision 2 32D.25, subdivision 2.

Sec. 2.

Minnesota Statutes 2016, section 17.983, subdivision 1, is amended to read:

Subdivision 1.

Administrative penalties; citation.

If a person has violated a provision
of chapter 25, 31B, or 32 32D, the commissioner may issue a written citation to the person
by personal service or by certified mail. The citation must describe the nature of the violation
and the statute or rule alleged to have been violated; state the time for correction, if
applicable; and the amount of any proposed fine. The citation must advise the person to
notify the commissioner in writing within 30 days if the person wishes to appeal the citation.
If the person fails to appeal the citation, the citation is the final order and not subject to
further review.

Sec. 3.

Minnesota Statutes 2016, section 17.984, subdivision 1, is amended to read:

Subdivision 1.

Authority.

To carry out the commissioner's enforcement duties under
chapter 32 32D, the commissioner may, upon presenting appropriate credentials, during
regular working hours and at other reasonable times, inspect premises subject to the
commissioner's enforcement and licensing authority for reasons related to the commissioner's
enforcement and licensing authority; request information from persons with information
relevant to an inspection; and inspect relevant papers and records, including business records.
The commissioner may issue notices in lieu of citations for minor violations if a notice is
in the public interest.

Sec. 4.

Minnesota Statutes 2016, section 28A.05, is amended to read:

28A.05 CLASSIFICATION.

All persons required to have a license under section 28A.04 shall be classified into one
of the following classes of food handlers, according to their principal mode of business.

(a) Retail food handlers are persons who sell or process and sell food directly to the
ultimate consumer or who custom process meat or poultry. The term includes a person who
sells food directly to the ultimate consumer through the use of vending machines, and a
person who sells food for consumption on site or off site if the sale is conducted on the
premises that are part of a grocery or convenience store operation.

(b) Wholesale food handlers are persons who sell to others for resale. A person who
handles food in job lots (jobbers) is included in this classification.

(c) Wholesale food processors or manufacturers are persons who process or manufacture
raw materials and other food ingredients into food items, or who reprocess food items, or
who package food for sale to others for resale, or who commercially slaughter animals or
poultry. Included herein are persons who can, extract, ferment, distill, pickle, bake, freeze,
dry, smoke, grind, mix, stuff, pack, bottle, recondition, or otherwise treat or preserve food
for sale to others for resale, cold storage warehouse operators as defined in section 28.01,
subdivision 3, salvage food processors as defined in section 31.495, subdivision 1, and dairy
plants as defined in section 32.01 32D.01, subdivision 6.

(d) A food broker is a person who buys and sells food and who negotiates between a
buyer and a seller of food, but who at no time has custody of the food being bought and
sold.

Sec. 5.

Minnesota Statutes 2016, section 28A.085, subdivision 1, is amended to read:

Subdivision 1.

Violations; prohibited acts.

The commissioner may charge a reinspection
fee for each reinspection of a food handler that:

(1) is found with a major violation of requirements in chapter 28, 29, 30, 31, 31A, 32
32D, 33, or 34, or rules adopted under one of those chapters; or

(2) fails to correct equipment and facility deficiencies as required in rules adopted under
chapter 28, 29, 30, 31, 31A, 32 32D, or 34.

The first reinspection of a firm with gross food sales under $1,000,000 must be assessed
at $150. The fee for a firm with gross food sales over $1,000,000 is $200. The fee for a
subsequent reinspection of a firm for the same violation is 50 percent of their current license
fee or $300, whichever is greater. The establishment must be issued written notice of
violations with a reasonable date for compliance listed on the notice. An initial inspection
relating to a complaint is not a reinspection.

Sec. 6.

[32D.01] DEFINITIONS.

Subdivision 1.

Scope.

The definitions in this section apply to this chapter.

Subd. 2.

Adulterated.

"Adulterated" means an item is covered by section 34A.02.

Subd. 3.

Cheese.

"Cheese" includes all varieties of cheese, cheese spreads, cheese foods,
cheese compounds, or processed cheese made or manufactured in whole or in part from
milk.

Subd. 4.

Commissioner.

"Commissioner" means the commissioner of agriculture.

Subd. 5.

Dairy farm.

"Dairy farm" means a place or premises where one or more lactating
animals, including cows, goats, sheep, water buffalo, camels, or other hoofed mammals,
are kept, and from which all or a portion of the milk produced at the place or premises is
delivered, sold, or offered for sale.

Subd. 6.

Dairy plant.

"Dairy plant" means any place where a dairy product is
manufactured, processed, or handled and includes milk-receiving stations, creameries,
cheese factories, condenseries, milk plants, transfer stations, and marketing organizations
that purchase milk and cream directly from producers for resale and other establishments,
as those terms are used in this chapter and chapters 17, 27, and 31; but does not include any
place where dairy products are not processed but sold at whole or retail only.

Subd. 7.

Dairy product.

"Dairy product" means milk as defined by Code of Federal
Regulations, title 21, cream, any product or by-product of either, or any commodity among
the principal constituents or ingredients of which is one or a combination of two or more
of them, as determined by standards, grades, or rules adopted by the commissioner.

Subd. 8.

Fluid milk products.

"Fluid milk products" means yogurt, cream, sour cream,
half and half, reconstituted half and half, concentrated milk, concentrated milk products,
skim milk, nonfat milk, chocolate flavored milk, chocolate flavored dairy drink, chocolate
flavored reconstituted milk, chocolate flavored reconstituted dairy drink, buttermilk, cultured
buttermilk, cultured milk, vitamin D milk, reconstituted or recombined milk, reconstituted
cream, reconstituted skim milk, homogenized milk, and any other fluid milk product made
by the addition of any substance to milk or to any of the fluid milk products enumerated
under this subdivision or by rule adopted by the commissioner.

Subd. 9.

Goat milk.

"Goat milk" means a whole, fresh, clean lacteal secretion free from
colostrum, obtained by the complete milking of one or more healthy goats.

Subd. 10.

Milk.

"Milk" means the normal lacteal secretion, practically free of colostrum,
obtained by the milking of one or more healthy hoofed mammals. Hoofed mammals include
but are not limited to cattle, water buffalo, sheep, goats, yaks, and camels.

Subd. 11.

Milk for manufacturing purposes.

"Milk for manufacturing purposes" means
milk produced for processing and manufacturing into products for human consumption but
not subject to Grade A or comparable requirements.

Subd. 12.

Milk-receiving station.

"Milk-receiving station" means a dairy plant where
raw milk for pasteurization or for manufacture is received, handled, or prepared for
processing or for resale as unpasteurized milk or fluid milk products.

Subd. 13.

Minnesota farmstead cheese.

"Minnesota farmstead cheese" means cheese
manufactured in Minnesota on the same farm that the milk used in its manufacturing is
produced.

Subd. 14.

Misbranded or misbranding.

"Misbranded" or "misbranding" means an item
is covered by section 34A.03.

Subd. 15.

Pasteurization or pasteurized.

(a) "Pasteurization," "pasteurized," and similar
terms mean:

(1) the process of heating every particle of milk or dairy product in properly operated
equipment approved by the commissioner to a temperature of at least 145 degrees Fahrenheit
and holding the temperature for at least 30 minutes;

(2) the process of heating every particle of milk or dairy product in properly operated
equipment approved by the commissioner to a temperature of at least 161 degrees Fahrenheit
and holding the temperature for at least 15 seconds; or

(3) the process of heating every particle of milk or dairy product in properly operated
equipment approved by the commissioner to the temperatures and holding for the times as
the commissioner may prescribe by rule, containing standards more stringent than those
imposed by this subdivision.

(b) Nothing in this subdivision shall be construed as excluding any other process that
has been demonstrated to be equally efficient and is approved by the commissioner.

Subd. 16.

Recombinant bovine growth hormone or rBGH.

"Recombinant bovine
growth hormone" or "rBGH" means a growth hormone intended for use in bovine animals
that has been produced through recombinant DNA techniques, described alternately as
recombinant bovine somatotropin or rBST.

Sec. 7.

[32D.02] INSPECTION AUTHORITY AND DUTIES.

Subdivision 1.

Enforcement.

The commissioner is charged with the enforcement of this
chapter.

Subd. 2.

Power and authority.

For the purpose of enforcing this chapter, the
commissioner and the commissioner's assistants, agents, and employees have the power
and authority granted under sections 31.02 to 31.171.

Subd. 3.

Inspection of dairies.

At times the commissioner determines proper, the
commissioner shall inspect all places where dairy products are made, stored, or served as
food for purchase, and all places where hoofed mammals are kept by persons engaged in
the sale of milk, and shall require the correction of all unsanitary conditions and practices.

Subd. 4.

Refusal of inspection.

A refusal or physical threat that prevents the completion
of an inspection or neglect to obey a lawful direction of the commissioner or the
commissioner's agent given while carrying out this section may result in the suspension of
the offender's permit or certification or other enforcement as deemed appropriate by the
commissioner. The offender is required to meet with a representative of the offender's plant
or marketing organization and a representative of the commissioner within 48 hours of
receiving notice, excluding holidays or weekends, or the suspension or enforcement action
shall take effect. A producer may request a hearing before the commissioner or the
commissioner's agent if a serious concern exists relative to the retention of the offender's
permit or certification to sell milk.

Subd. 5.

Inspection service.

To ensure compliance with the laws and rules governing
the production, handling, processing, and sale of milk and dairy products, the commissioner
is authorized, through a duly trained and qualified milk inspector, to inspect milk and milk
products and the premises and plants where milk and milk products are produced, handled,
and processed. Inspection services must acquaint the processor and producers with the
requirements for a Grade A or manufacturing grade milk supply for preliminary inspection
to determine if a processor has brought the processor's farms and plants to the state of
compliance that qualifies the processor's products for the Grade A or manufacturing grade
label, and for continuous inspection to ensure that a farm or plant and all products from a
farm or plant are in compliance with this chapter.

Subd. 6.

Field service.

Grade A or manufacturing grade processors shall provide a
continuous field service to assist producers who sell their milk to the processor's plant to
attain and maintain compliance with this chapter. A person who performs field service must
first obtain a permit from the commissioner. A person desiring to secure a permit must apply
on a form provided by the commissioner, and before a permit is issued the commissioner
shall determine that the applicant is competent and qualified to perform field service. The
permit is not transferable to another person and may be revoked for due cause after the
holder of the permit has been given the opportunity for a hearing. The permit holder must
be given a notice in writing of the time and place of the hearing at least seven days before
the date of the hearing.

Subd. 7.

Enforcement standards.

The standards in this chapter and rules adopted under
this chapter by the commissioner shall be the only standards for use in Minnesota. No
municipality or other subdivision of state government shall provide, by ordinance, more
stringent or comprehensive standards than are contained in this chapter and rules adopted
by the commissioner under this chapter.

Subd. 8.

Rules.

(a) The commissioner shall by rule adopt identity, production, and
processing standards for both Grade A and manufacturing grade milk and dairy products.

(b) In the exercise of the authority to establish requirements for Grade A milk and milk
products, the commissioner adopts definitions, standards of identity, and requirements for
production and processing contained in the most current version of the Grade A Pasteurized
Milk Ordinance, and its associated documents, of the United States Department of Health
and Human Services in a manner provided for and not in conflict with law.

(c) Producers of milk, other than Grade A, shall conform to the standards contained in
subparts B, C, D, E, and F of the United States Department of Agriculture Agricultural
Marketing Service Recommended Requirements for Milk for Manufacturing Purposes and
its Production and Processing, except that the commissioner shall develop methods by which
producers are able to comply with the standards without violation of religious beliefs.

Subd. 9.

Certified industry inspection.

Industry personnel may be certified to perform
any inspection, to the extent allowed by federal law and provided that performance of the
inspections is consistent with rules adopted in subdivision 8.

Subd. 10.

Fees; dairy services account; appropriation.

(a) All fees and penalties
collected under this chapter must be deposited in the dairy services account in the agricultural
fund. Money in the account, including interest, is appropriated to the commissioner for
purposes of administering this chapter.

(b) Unless otherwise noted, all fees are payable by a processor or marketing organization
and are invoiced on July 1 of each year for Grade A and January 1 of each year for
manufacturing grade, and if not paid within 30 days of the due date, inspection service may
be discontinued. If a farm discontinues the production of milk within six months of the
billing date, a request for a refund based on inspection services not received may be made
by the processor or by the marketing organization on behalf of its patrons. This request must
be made in writing by June 30 for manufacturing grade or by December 31 for Grade A.
Upon approval by the commissioner, refunds must be made to the processor or marketing
organization.

Sec. 8.

[32D.03] BULK MILK HAULER AND SAMPLER LICENSE.

Subdivision 1.

License requirement.

A person collecting milk from a dairy farm and
transporting the milk by bulk pickup and not in individual containers from farm to plant
must obtain a bulk milk hauler and sampler license.

Subd. 2.

Application.

A person desiring to secure a bulk milk hauler and sampler license
must apply on a form provided by the commissioner. Before the license is issued, the
commissioner shall determine that the applicant is competent and qualified.

Subd. 3.

Term of license; transferability.

An initial bulk milk hauler and sampler
license issued by the commissioner expires on the following December 31 and is not
transferable. A renewal bulk milk hauler and sampler license is not transferable, is valid for
two years, and expires on December 31 of the second year.

Subd. 4.

Fees and penalties.

The fee for an initial or renewal bulk milk hauler and
sampler license is $60. The fee shall be paid to the commissioner before the commissioner
issues an initial or renewal bulk milk hauler and sampler license. If a bulk milk hauler and
sampler license renewal is not applied for on or before January 1, a fee of $30 shall be
imposed. A person who does not renew a bulk milk hauler and sampler license within one
year following its December 31 expiration date, except those persons who do not renew the
bulk milk hauler and sampler license while engaged in active military service, shall be
required to prove competency and qualification under subdivision 2 before a bulk milk
hauler and sampler license is issued. The commissioner may require any other person who
renews a bulk milk hauler and sampler license to prove competency and qualification in
the same manner.

Subd. 5.

Suspension or cancellation.

The commissioner is empowered to conduct
enforcement action, suspend, or cancel any bulk milk hauler and sampler license pursuant
to section 34A.06.

Sec. 9.

[32D.04] MILK TANK TRUCKS.

All farm bulk milk pickup tankers, milk transports, and tankers used to transport milk
products must be inspected and obtain a permit issued by the commissioner at least once
every 12 months. The owner or operator must pay a $25 permit fee per tanker to the
commissioner. The commissioner may appoint a person the commissioner deems qualified
to make inspections.

Sec. 10.

[32D.05] GRADE A DAIRY FARM PERMITTING; WATER WELL
DISTANCE REQUIREMENT.

(a) No milk producer may sell or distribute milk from a dairy farm as Grade A milk
without a valid Grade A dairy farm permit issued by the commissioner.

(b) A dairy farmer who wishes to be permitted to produce Grade A milk may not be
denied the Grade A permit solely because of provisions in rules adopted by the commissioner
requiring a minimum distance between a water well and dairy farm. To be eligible for a
Grade A permit, the following conditions must be met:

(1) the water well must have been in place prior to January 1, 1974;

(2) the water well must comply with all other rules applicable to the well, other than the
distance requirement; and

(3) water from the well must be tested at least once every 12 months. More frequent
testing may be required in compliance with guidelines established by the commissioner if
water test results fail to meet water quality requirements.

Sec. 11.

[32D.06] GRADE A DAIRY FARM INSPECTION; FEES.

(a) As provided in section 32D.02, the commissioner shall provide inspection service
to any milk producer who wishes to market Grade A milk and is in compliance with the
requirement for the production of Grade A milk. Grade A inspections shall be completed
at least once every six months.

(b) The fee for inspections must be no more than $50 per farm, paid annually by the
processor or by the marketing organization on behalf of its patrons.

(c) For a farm requiring a reinspection in addition to the required biannual inspections,
an additional fee must be paid by the processor or by the marketing organization on behalf
of its patrons. The fee for reinspection of a farm with fewer than 100 hoofed milk-producing
animals is $60 per reinspection. The fee for reinspection of a farm with 100 or more hoofed
milk-producing animals is $150 per reinspection.

Sec. 12.

[32D.07] MANUFACTURING GRADE DAIRY FARM CERTIFICATION.

A producer who wishes to sell milk for manufacturing purposes must obtain from the
commissioner an annual Grade B farm certification.

Sec. 13.

[32D.08] MANUFACTURING GRADE DAIRY FARM INSPECTION;
FEES.

(a) A producer selling milk for manufacturing purposes must be inspected at least once
every 12 months.

(b) The fee for the certification inspection must not be more than $25 per producer, to
be paid annually by the processor or the marketing organization on behalf of its patrons.

(c) For a producer requiring more than one inspection for certification, a reinspection
fee of $45 must be paid by the processor or by the marketing organization on behalf of its
patrons.

Sec. 14.

[32D.09] DAIRY PLANT LICENSING AND PERMITTING.

Subdivision 1.

Licensing.

A dairy plant must obtain a license as required under section
28A.04.

Subd. 2.

Permitting.

No person shall operate a dairy plant in this state unless the dairy
plant, equipment, and water supply and plumbing system have been first approved by the
commissioner and a permit issued to operate the same. A permit may be revoked by the
commissioner for due cause pursuant to section 34A.06.

Subd. 3.

Approval.

At the time of filing the application for a permit, the applicant shall
submit to the commissioner duplicate floor plans of the plant that show the placement of
equipment, the source of water supply and method of distribution, a detailed pasteurization
flow chart, and the location of the plumbing system, including the disposal of wastes. New
construction or alteration of an existing dairy plant shall be made only with the approval of
the commissioner and duplicate plans for the construction or alteration shall be submitted
to the commissioner for approval. The fee for approval services is $45 per hour of department
staff time spent in the approval process.

Subd. 4.

Farmstead cheese.

(a) The commissioner or the commissioner's designee shall
issue an additional permit to a dairy plant that desires to use the name "Minnesota farmstead
cheese" upon application made by the dairy plant for use of the name, provided the cheese
meets the definition in section 32D.01, subdivision 13.

(b) No cheese or packaged cheese that is sold, offered or exposed for sale, or held in
possession with intent to sell at either retail or wholesale in this state may be labeled or
described as "Minnesota farmstead cheese" unless it meets the criteria in section 32D.01,
subdivision 13, and the manufacturer has obtained the designated permit.

Sec. 15.

[32D.10] INSPECTIONS.

(a) Inspections of Grade A plants must be completed at least once every three months.
A pasteurization plant requesting Grade A inspection must pay an annual inspection fee of
no more than $500.

(b) Inspections of manufacturing plants that process milk or milk products other than
Grade A must be completed at least once every six months. A manufacturing plant that
pasteurizes milk or milk by-products must pay an annual fee based on the number of
pasteurization units. The fee must not exceed $140 per unit.

Sec. 16.

[32D.11] PROCUREMENT FEE.

A dairy plant operator in this state must pay to the commissioner on or before the 18th
of each month a fee of 1.1 cents per hundredweight of milk purchased the previous month.
If a milk producer in this state ships milk out of the state for sale, the producer must pay
the fee to the commissioner unless the purchaser voluntarily pays the fee. Producers who
ship milk out of state and processors must submit to the commissioner monthly reports
related to milk purchases along with the appropriate procurement fee. The commissioner
shall have access to all relevant purchase or sale records as necessary to verify compliance
with this section and may require the producer or purchaser to produce records as necessary
to determine compliance.

Sec. 17.

[32D.12] SELECTED PRODUCTS FEE.

(a) A manufacturer must pay to the commissioner a fee for fluid milk processed and
milk used in the manufacture of fluid milk products sold for retail sale in Minnesota in an
amount not less than five cents and not more than nine cents per hundredweight as set by
the commissioner's order. No change within any 12-month period may be in excess of one
cent per hundredweight.

(b) A processor must report quantities of milk processed under paragraph (a) on forms
provided by the commissioner. Processor fees must be paid monthly. The commissioner
may require the production of records as necessary to determine compliance with this
paragraph.

(c) The commissioner may create within the department a dairy consulting program to
provide assistance to dairy producers who are experiencing problems meeting the sanitation
and quality requirements of the dairy laws and rules. The commissioner may use money
appropriated from the dairy services account to pay for the program authorized in this
paragraph.

Sec. 18.

[32D.13] MILK QUALITY STANDARDS.

Subdivision 1.

Visible adulteration or odors.

Milk shall not be visibly adulterated, or
have any objectionable odor, or be abnormal in appearance or consistency.

Subd. 2.

Grade A raw milk.

(a) The bacterial count of Grade A raw milk from producers
must not exceed 100,000 bacteria per milliliter prior to commingling with other producer
milk.

(b) After commingling with other producer milk, the bacteria count must not exceed
300,000 per milliliter prior to pasteurization.

Subd. 3.

Grade A pasteurized milk and fluid milk products.

(a) The bacterial count
of Grade A pasteurized milk and fluid milk products, at any time after pasteurization until
delivery, must not exceed 20,000 bacteria per milliliter.

(b) The coliform count of Grade A pasteurized milk and fluid milk products must not
exceed ten bacteria per milliliter except that bulk tank transport shipments must not exceed
100 per milliliter.

Subd. 4.

Raw milk, other than Grade A.

The bacterial count of raw milk other than
Grade A from producers must not exceed 500,000 bacteria per milliliter prior to commingling
with other producer milk.

Subd. 5.

Pasteurized milk, other than Grade A.

The bacterial count of pasteurized
milk other than Grade A pasteurized milk, at any time after pasteurization until delivery,
must not exceed 20,000 bacteria per milliliter.

Subd. 6.

Exceptions.

Bacterial count standards do not apply to sour cream, cultured
buttermilk, and other cultured fluid milk products.

Subd. 7.

Rules and standards.

The commissioner may prescribe standards and rules
adopted in accordance with law more stringent than those imposed by this section.

Subd. 8.

Somatic cell count.

(a) The somatic cell count, as determined by a direct
microscopic somatic cell count or an electronic somatic cell count, must not exceed 750,000
cells per milliliter for Grade A raw milk and raw milk other than Grade A. Notwithstanding
any federal standard, the somatic cell count of goat milk must not exceed 1,500,000 cells
per milliliter.

(b) The commissioner may prescribe standards and rules adopted in accordance with
law more stringent than those imposed by this subdivision.

Subd. 9.

Temperature.

If milk is received or collected from a dairy farm more than two
hours after the most recent milking, the temperature of the milk shall not exceed 45 degrees
Fahrenheit (7 degrees Celsius). If the milk consists of a blend of milk from two or more
milkings, and the milk is received or collected less than two hours after the most recent
milking, the blend temperature shall not exceed 50 degrees Fahrenheit (10 degrees Celsius).

Subd. 10.

Industry enforcement.

A dairy plant is not required to reject milk shipments
in response to a violation of subdivisions 2 to 9 unless the commissioner suspends or revokes
the dairy plant permit or milk producer's Grade A permit or manufacturing grade certification.

Sec. 19.

[32D.14] OFFICIAL PRODUCER SAMPLES.

(a) An official producer sample for each producer must be analyzed for bacteria, somatic
cell count, temperature, and antibiotic residues at least once per month in four out of every
six months. Official producer samples must be collected and analyzed without providing
the producer with prior notification of the sampling date.

(b) Official producer sample results must be inclusive of all animals from which milk
is collected and sold on the day of sampling.

(c) Official producer sample results must be collected by a licensed sampler.

Sec. 20.

[32D.15] MONTHLY REPORTING.

(a) In at least four out of every six months, the dairy plant that procures milk from the
producer must report to the commissioner at least one representative test result for bacteria,
somatic cell count, temperature, and antibiotic residues. The result shall be reported within
seven days after the laboratory obtains the test results.

(b) A laboratory that performs the tests required under this section for a dairy plant may
report the test results for the dairy plant.

(c) A dairy plant or laboratory shall report test results under this section in an electronic
form approved by the department or using an approved alternative.

Sec. 21.

[32D.16] ENFORCEMENT.

The commissioner shall suspend a producer's permit or certification if three of the last
five official producer samples exceed the applicable standard. The commissioner shall
provide warning of a pending suspension when two of the last four producer samples exceed
the applicable standard.

Sec. 22.

[32D.17] LABORATORY CERTIFICATION.

(a) A laboratory and its methods are required to be approved or certified prior to testing
Grade A milk samples. The results of approved or certified laboratories may be used by
official regulatory agencies in enforcement of requirements for milk and milk products. The
approval or certification remains valid unless suspended or revoked by the commissioner
for failure to comply with the requirements of this chapter.

(b) Certified or approved laboratories must receive a permit from the commissioner.
The permit remains valid without renewal unless suspended or revoked by the commissioner
for failure to comply with the requirements of this chapter.

(c) Satisfactory analytical procedures and results for split samples, the nature, number,
and frequency of which shall be in accordance with rules established by the commissioner,
shall be required of a certified laboratory for retention of its certification and permit.

(d) An application for initial certification or biennial recertification, or for recertification
following suspension or revocation of a permit, shall be accompanied by an annual fee
based on the number of analyses approved and the number of specific tests for which they
are approved. The fee must not be less than $150 nor more than $200 for each analysis
approved and not less than $35 nor more than $50 for each test approved. The commissioner
may annually adjust assessments within the limits established by this subdivision to meet
the cost recovery of the services required by this section.

Sec. 23.

[32D.18] MILK BOUGHT BY WEIGHT; TESTING METHODS.

Subdivision 1.

Milk fat, protein, and solids not fat bases of payment; tests.

(a) Milk
must be purchased from producers using a formula based on one or more of the following:

(1) payment of a standard rate with uniform differentials for milk testing above or below
3.5 percent milk fat;

(2) payment of a standard rate for the pounds of milk fat contained in the milk;

(3) payment of a standard rate for the pounds of protein contained in the milk;

(4) payment of a standard rate for the pounds of nonfat solids contained in the milk; or

(5) payment of standard rates based on other attributes of value in the milk.

(b) In addition, an adjustment may be made on the basis of milk quality and other
premiums. Testing procedures for determining the percentages of milk fat, protein, and
nonfat solids must comply with the methods approved by the Association of Analytical
Chemists or be as adopted by rule.

Subd. 2.

Apparatus to conform to specifications.

Glassware, test bottles, pipettes, acid
measures, chemicals, scales, and other apparatus used in the operation of these tests shall
conform to the specifications for the particular test method.

Subd. 3.

Penalties for violations.

A person who:

(1) employs any test other than those tests authorized by rule adopted by the
commissioner, or any methods other than the standard official methods for determining the
milk fat content of milk or cream;

(2) incorrectly samples milk or cream purchased or sold;

(3) incorrectly weighs milk or cream purchased or sold;

(4) incorrectly grades milk or cream purchased or sold;

(5) makes a false entry of the weight, test result, or grade of any milk or cream purchased
or sold;

(6) incorrectly samples, weighs, tests, or records or reports weights or tests of skim milk
or buttermilk purchased or sold;

(7) underreads the tests;

(8) falsifies the reading of the tests;

(9) manipulates the reading of the tests; or

(10) falsely states, certifies, or uses in the purchase or sale of milk or cream a misreading
of such tests, whether the tests or actual reading have been made by the person or by any
other person,

is guilty of a misdemeanor.

Sec. 24.

[32D.19] ADULTERATED DAIRY PRODUCTS.

Subdivision 1.

Purchase and sale prohibition.

A person may not sell or knowingly
buy adulterated dairy products.

Subd. 2.

Manufacture of food for human consumption from adulterated milk or
cream prohibited.

An article of food for human consumption may not be manufactured
from adulterated milk or cream, except as provided in the Federal Food, Drug, and Cosmetic
Act, United States Code, title 21, section 301 et seq., and related federal regulations.

Subd. 3.

Adulterated milk.

For purposes of this section, milk is adulterated if it:

(1) is drawn in a filthy or unsanitary place;

(2) is drawn from unhealthy or diseased animals;

(3) contains water in excess of that normally found in milk;

(4) contains a substance that is not a normal constituent of the milk except as allowed
in this chapter; or

(5) contains drug residues or other chemical or biological substances in amounts above
the tolerances or safe levels established by rule.

Subd. 4.

Drug residues.

(a) Before processing milk, all bulk milk pickup tankers must
be tested for the presence of beta lactam drug residues and for other residues as determined
necessary by the commissioner. Milk received from a producer in other than a bulk milk
pickup tanker is also subject to this section.

(b) Bulk milk tankers that confirm positive for beta lactam drug residues or other residues
must follow up with producer sample testing of all producers contained on the positive load.

(c) Individual producer samples must be tested for the presence of beta lactam drug
residues at least once a month for four out of every six-month period. Results of these tests
must be reported to the commissioner as official producer sample results using established
electronic reporting procedures.

(d) Drug residue testing methods must be those approved by the Food and Drug
Administration (FDA) and the National Conference of Interstate Milk Shipments or listed
in the FDA's current version of M-a-85.

(e) All drug residue samples testing positive must be reported to the commissioner or
the commissioner's designee within 24 hours. The report must include how and where the
milk was disposed of, and the volume, the responsible producer, and the possible cause of
the violative residue. All milk sample residue results must be recorded and retained for six
months by the receiving plant for examination by the commissioner or the commissioner's
designee.

Subd. 5.

Penalties.

(a) The permit or certification of a milk producer identified as having
a positive drug residue is immediately suspended. The producer must not ship milk while
the permit or certification is suspended.

(b) The producer's permit or certification may be reinstated after being sampled by the
commissioner or the commissioner's designee and testing negative on the sample.

(c) A milk producer may not change plants within 30 days, without permission of the
commissioner, after receiving notification from the commissioner of a residue violation.

(d) The producer that is identified with the drug residue violation is responsible for the
value of all milk on any load that tests positive for drug residues and any costs associated
with its disposal. Payment shall be made to the purchaser of the milk.

(e) For the first and second violation within a 12-month period, the dairy producer must,
within 30 days of the date of the residue:

(1) meet with the dairy inspector to review potential causes of the adulteration; and

(2) complete the designated drug residue prevention educational program with a licensed
veterinarian and submit the signed certificate to the commissioner.

(f) Failure to comply with the requirements for the first and second violation listed in
paragraph (e) may result in suspension of the producer's permit or certification until the
conditions in paragraph (e) are met.

(g) For the third or subsequent violation within a 12-month period, the commissioner
may initiate proceedings for further enforcement action, that may include a penalty of up
to a 30-day permit or certification suspension. In lieu of a suspension, the producer may be
assessed an administrative penalty of up to $1,000 or the value of milk sold during the
intended suspension period.

Subd. 6.

Other forms of adulteration.

A milk producer who violates subdivision 3 is
subject to any of the following penalties:

(1) the permit or certification of a milk producer identified as having adulterated milk
is immediately suspended. The producer may not ship milk while the permit or certification
is suspended;

(2) the producer that is identified with the adulterated milk violation is responsible for
the value of all milk on any load that is contaminated by the adulterant and any costs
associated with its disposal. Payment shall be made to the purchaser of the milk;

(3) the producer's permit or certification may be reinstated after the commissioner receives
adequate verification that the milk is no longer adulterated; and

(4) the commissioner may, after evaluation of the severity and repetitive nature of the
adulteration, initiate additional enforcement action in the form of permit or certification
suspension for up to 30 days or in lieu of suspension, an administrative penalty of up to
$1,000, or the value of the milk sold during the intended suspension period for each violation.

Subd. 7.

Civil penalty.

A person other than a milk producer who causes milk to be
adulterated is subject to a civil penalty of up to $1,000.

Subd. 8.

Appeals.

A dairy producer may appeal an adulteration violation by sending
written notice to the commissioner within ten days of receipt of the notice of a violation.
The appeal must contain a description of why the producer wishes to appeal the violation.

Sec. 25.

[32D.20] LIMITATION ON SALE.

Subdivision 1.

Pasteurization.

No milk or fluid milk products shall be sold, offered or
exposed for sale, or held in possession for sale for the purpose of human consumption in
fluid form in this state unless the milk or fluid milk product has been pasteurized, as defined
in section 32D.01, subdivision 15, and cooled, provided that this section shall not apply to
milk, cream, or skim milk occasionally secured or purchased for personal use by a consumer
at the place or farm where the milk is produced.

Subd. 2.

Labels.

(a) Pasteurized milk or fluid milk products offered or exposed for sale
or held in possession for sale shall be labeled or otherwise designated as pasteurized milk
or pasteurized fluid milk products, and in the case of fluid milk products the label shall also
state the name of the specific product.

(b) Milk and dairy products must be labeled with the plant number where the product
was produced, or if produced in a state where official plant numbers are not assigned, the
name of the manufacturer and the address of the plant where it was manufactured.

Sec. 26.

[32D.21] COOLING AFTER PASTEURIZATION.

Immediately following pasteurization, all milk and fluid milk products shall be cooled
in properly operated equipment approved by the commissioner to a temperature of 45 degrees
Fahrenheit or lower, and maintained at 45 degrees Fahrenheit or lower until delivered;
provided, however, that if the milk or fluid milk product is to be cultured immediately after
pasteurization, then cooling may be delayed until after the culturing process is completed;
provided further that the commissioner may prescribe by rule standards more stringent than
those imposed by this section.

Sec. 27.

[32D.22] MANUFACTURE OF CHEESE; REQUIREMENTS IN PROCESS.

No person, firm, or corporation shall manufacture, transport, sell, offer, or expose for
sale or have in possession with intent to sell at retail to a consumer any cheese that has not
been (1) manufactured from milk or milk products that have been pasteurized; (2) subjected
to a heat treatment equivalent to pasteurization during the process of manufacturing or
processing; or (3) subjected to an aging process where it has been kept for at least 60 days
after manufacture at a temperature no lower than 35 degrees Fahrenheit.

Sec. 28.

[32D.23] RECOMBINANT BOVINE GROWTH HORMONE LABELING.

Subdivision 1.

Labeling.

Products offered for wholesale or retail sale in this state that
contain milk, cream, or any product or by-product of milk or cream that have been processed
and handled pursuant to this section may be labeled with an rBGH statement that is not
false or misleading and in accordance with the federal labeling standards. Products offered
for wholesale or retail sale in this state need not contain any further label information relative
to the use of rBGH in milk production.

Subd. 2.

Affidavit; records.

(a) A dairy plant purchasing milk or cream to be used in
products labeled with rBGH claims pursuant to subdivision 1 must provide an affidavit
from each producer that states that all cows used in the producer's dairy operations have
not and will not be treated with rBGH, without advanced written notice of at least 30 days.

(b) The affidavit must be signed by the producer or authorized representative. Affidavits
must be kept on file for not less than two years after receiving written notice that rBGH use
status will change.

(c) If a plant chooses to process and handle only milk or milk products sourced from
cows who have not been treated with rBGH, the plant, as an alternative to providing
individual producer affidavits, may provide one affidavit to certify that the plant has
procedures in place to verify that all producers are not using rBGH. A copy of the written
procedure that describes this verification process must also be provided with the plant
affidavit.

(d) All affidavits and corresponding records must be available for inspection by the
commissioner.

(e) Dairy plants supplying milk or cream to a processor or manufacturer of a product to
be labeled pursuant to subdivision 1, for use in that product, shall supply a certification to
that processor or manufacturer stating that producers of the supplied milk or cream have
executed and delivered affidavits pursuant to this subdivision.

Subd. 3.

Separation of nontreated cows and milk.

Milk or cream from
non-rBGH-treated cows used in manufacturing or processing of products labeled pursuant
to subdivision 1 must be kept fully separate from any other milk or cream through all stages
of storage, transportation, and processing until the milk or resulting dairy products are in
final packaged form in a properly labeled container. Records of the separation must be kept
by the dairy plant and product processor or manufacturer at all stages and made available
to the commissioner for inspection.

Sec. 29.

[32D.24] DAIRY TRADE PRACTICES; DEFINITIONS.

Subdivision 1.

Application.

The definitions in this section apply to sections 32D.24 to
32D.28.

Subd. 2.

Basic cost.

(a) "Basic cost," for a processor, means the actual cost of the raw
milk plus 75 percent of the actual processing and handling costs for a selected class I or
class II dairy product.

(b) Basic cost, for a wholesaler, means the actual cost of the selected class I or class II
dairy product purchased from the processor or another wholesaler.

(c) Basic cost, for a retailer, means the actual cost of the selected class I or class II dairy
product purchased from a processor or wholesaler.

Subd. 3.

Bona fide charity.

"Bona fide charity" means a corporation, trust, fund, or
foundation organized and operated exclusively for religious, charitable, scientific, literary,
or educational purposes.

Subd. 4.

Processor.

"Processor" means a person engaged in manufacturing or processing
selected class I or class II dairy products in the person's own plant for sale in Minnesota.

Subd. 5.

Producer.

"Producer" means a person who operates a dairy herd or herds in
Minnesota producing milk or cream commercially and whose milk or cream is sold to, or
received or handled by, a distributor or processor. Producer does not include an incorporated
or unincorporated association of producers.

Subd. 6.

Responsible person.

"Responsible person" means the business entity that
makes payment to an individual Grade A or Grade B milk producer.

Subd. 7.

Selected class I dairy products.

"Selected class I dairy products" means milk
for human consumption in fluid form and all other class I dairy products as defined by the
Upper Midwest Milk Marketing Order, Code of Federal Regulations, title 7, part 1030.40,
or successor orders.

Subd. 8.

Selected class II dairy products.

"Selected class II dairy products" means
milk for human consumption processed into fluid cream, eggnog, yogurt, and all other class
II dairy products as defined by the Upper Midwest Milk Marketing Order, Code of Federal
Regulations, title 7, part 1030.40, or successor orders.

Subd. 9.

Sell at retail; sale at retail; retail sales.

"Sell at retail," "sale at retail," or
"retail sales" means a retail sale or offer for retail sale of a selected class I or class II dairy
product for ultimate consumption or use.

Subd. 10.

Sell at wholesale; sale at wholesale; wholesale sales.

"Sell at wholesale,"
"sale at wholesale," or "wholesale sales" means sale or offer for sale of a selected class I
dairy product for purposes of resale or further processing or manufacturing but does not
include a producer selling or delivering milk to a processor.

Subd. 11.

Wholesaler.

"Wholesaler" means a person including a distributor in the
business of making sales of selected class I or class II dairy products at wholesale in
Minnesota. In the case of a person making sales at both retail and wholesale, wholesaler
applies only to the sales at wholesale.

Sec. 30.

[32D.25] DUTIES AND POWERS OF COMMISSIONER; DATA PRIVACY.

Subdivision 1.

Duties; rules.

The commissioner shall adopt rules to implement and
administer sections 32D.24 to 32D.28.

Subd. 2.

Data privacy.

Financial and production information received by the
commissioner on processors, wholesalers, or retailers, including but not limited to financial
statements, fee reports, price schedules, cost documentation, books, papers, records, or other
documentation for the purpose of administration and enforcement of this chapter is classified
private data or nonpublic data pursuant to chapter 13. The classification shall not limit the
use of the information in the preparation, institution, or conduct of a legal proceeding by
the commissioner in enforcing this chapter.

Sec. 31.

[32D.26] SALES BELOW COST PROHIBITED; EXCEPTIONS.

Subdivision 1.

Policy; processors; wholesalers; retailers.

(a) It is the intent of the
legislature to accomplish partial deregulation of milk marketing with a minimum negative
impact on small-volume retailers.

(b) A processor or wholesaler may not sell or offer for sale selected class I or class II
dairy products at a price lower than the processor's or wholesaler's basic cost.

(c) A retailer may not sell or offer for sale selected class I or class II dairy products at
a retail price lower than (1) 105 percent of the retailer's basic cost until June 30, 1994; and
(2) the retailer's basic cost beginning July 1, 1994, and thereafter. A retailer may not use
any method or device in the sale or offer for sale of a selected dairy product that results in
a violation of this section.

Subd. 2.

Exceptions.

The minimum processor, wholesaler, and retailer prices of
subdivision 1 do not apply:

(1) to a sale complying with section 325D.06;

(2) to a retailer giving away selected class I and class II dairy products for free if the
customer is not required to make a purchase; or

(3) to a processor, wholesaler, or retailer giving away selected class I and class II dairy
products for free or at a reduced cost to a bona fide charity.

Sec. 32.

[32D.27] REDRESS FOR INJURY OR THREATENED INJURY.

A person injured by a violation of sections 32D.24 to 32D.28 may commence a legal
action based on the violation in a court of competent jurisdiction and may recover economic
damages and the costs of the action, including reasonable attorney fees. A person injured
or who is threatened with injury or loss by reason of violation of sections 32D.24 to 32D.28
may commence a legal action based on the violation and obtain injunctive relief in a court
of competent jurisdiction against persons involved in a violation or threatened violation of
sections 32D.24 to 32D.28 to prevent and restrain violations or threatened violations of
sections 32D.24 to 32D.28 without alleging or proving actual damages or that an adequate
remedy at law does not exist, so that injunctive relief can be obtained promptly and without
awaiting evidence of injury or actual damage. The injunctive relief does not abridge and is
not in lieu of any other civil remedy provided in sections 32D.24 to 32D.28.

Sec. 33.

[32D.28] ANNUAL SUSPENSION OF DAIRY TRADE PRACTICES ACT.

The provisions of section 32D.26 are suspended during the month of June each year in
honor of "Dairy Month."

Sec. 34.

Minnesota Statutes 2016, section 34A.01, subdivision 1, is amended to read:

Subdivision 1.

Applicability.

The definitions in this section and chapters 28, 28A, 29,
30, 31, 31A, 32 32D, and 34 apply to this chapter. The definitions in this section apply to
chapter 32 32D.

Sec. 35. REPEALER.

Minnesota Statutes 2016, sections 32.01, subdivisions 1, 2, 6, 8, 9, 10, 11, and 12; 32.021;
32.071; 32.072; 32.073; 32.074; 32.075; 32.076; 32.078; 32.10; 32.102; 32.103; 32.105;
32.106; 32.21; 32.212; 32.22; 32.25; 32.391, subdivisions 1, 1d, 1e, 1f, 1g, 2, and 3; 32.392;
32.393; 32.394, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 8a, 8b, 8c, 8d, 8e, 9, 11, and 12; 32.395;
32.397; 32.398, subdivision 1; 32.401, subdivisions 1, 2, 3, and 5; 32.415; 32.416; 32.475;
32.481, subdivision 1; 32.482; 32.483; 32.484; 32.486; 32.55, subdivisions 1, 2, 3, 4, 5, 12,
13, and 14; 32.555; 32.56; 32.61; 32.62; 32.63; 32.64; 32.645; 32.70; 32.71; 32.72; 32.74;
32.745; 32.75; and 32.90, are repealed.

APPENDIX

Repealed Minnesota Statutes: HF1545-1

18B.01 DEFINITIONS.

No active language found for: 18B.01.10aNo active language found for: 18B.01.10bNo active language found for: 18B.01.22aNo active language found for: 18B.285

25.371 GOOD MANUFACTURING PRACTICES CERTIFICATE FOR COMMERCIAL FEED AND FEED INGREDIENTS.

No active language found for: 25.371.1No active language found for: 25.371.3No active language found for: 25.371.4No active language found for: 25.371.5No active language found for: 25.371.6No active language found for: 25.371.7No active language found for: 25.371.8No active language found for: 25.371.9No active language found for: 25.371.10No active language found for: 25.371.11No active language found for: 25.371.12No active language found for: 25.371.13No active language found for: 25.371.14No active language found for: 25.371.15No active language found for: 32.01.1No active language found for: 32.01.2No active language found for: 32.01.6No active language found for: 32.01.8No active language found for: 32.01.9No active language found for: 32.01.10No active language found for: 32.01.11No active language found for: 32.01.12No active language found for: 32.021No active language found for: 32.071No active language found for: 32.072No active language found for: 32.073No active language found for: 32.074No active language found for: 32.075No active language found for: 32.076No active language found for: 32.078No active language found for: 32.10No active language found for: 32.102No active language found for: 32.103No active language found for: 32.105No active language found for: 32.106No active language found for: 32.21No active language found for: 32.212No active language found for: 32.22No active language found for: 32.25No active language found for: 32.391.1No active language found for: 32.391.1dNo active language found for: 32.391.1eNo active language found for: 32.391.1fNo active language found for: 32.391.1gNo active language found for: 32.391.2No active language found for: 32.391.3No active language found for: 32.392No active language found for: 32.393No active language found for: 32.394.1No active language found for: 32.394.2No active language found for: 32.394.3No active language found for: 32.394.4No active language found for: 32.394.5No active language found for: 32.394.6No active language found for: 32.394.7No active language found for: 32.394.8No active language found for: 32.394.8aNo active language found for: 32.394.8bNo active language found for: 32.394.8cNo active language found for: 32.394.8dNo active language found for: 32.394.8eNo active language found for: 32.394.9No active language found for: 32.394.11No active language found for: 32.394.12No active language found for: 32.395No active language found for: 32.397No active language found for: 32.398.1No active language found for: 32.401.1No active language found for: 32.401.2No active language found for: 32.401.3No active language found for: 32.401.5No active language found for: 32.415No active language found for: 32.416No active language found for: 32.475No active language found for: 32.481.1No active language found for: 32.482No active language found for: 32.483No active language found for: 32.484No active language found for: 32.486No active language found for: 32.55.1No active language found for: 32.55.2No active language found for: 32.55.3No active language found for: 32.55.4No active language found for: 32.55.5No active language found for: 32.55.12No active language found for: 32.55.13No active language found for: 32.55.14No active language found for: 32.555No active language found for: 32.56No active language found for: 32.61No active language found for: 32.62No active language found for: 32.63No active language found for: 32.64No active language found for: 32.645No active language found for: 32.70No active language found for: 32.71No active language found for: 32.72No active language found for: 32.74No active language found for: 32.745No active language found for: 32.75No active language found for: 32.90

41A.20 SIDING PRODUCTION INCENTIVE.

No active language found for: 41A.20.6

41D.01 MINNESOTA AGRICULTURE EDUCATION LEADERSHIP COUNCIL.

No active language found for: 41D.01.4No active language found for: 383C.809

583.22 DEFINITIONS.

No active language found for: 583.22.7b