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HF 1560

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to agriculture; defining terms; requiring
certain payments; establishing a base funding level
for rural economic development including ethanol
producer payments; amending Minnesota Statutes 2004,
section 41A.09, subdivisions 2a, 3a.


Section 1.

Minnesota Statutes 2004, section 41A.09,
subdivision 2a, is amended to read:

Subd. 2a.


For the purposes of this section,
the terms defined in this subdivision have the meanings given

(a) "Ethanol" means fermentation ethyl alcohol derived from
agricultural products, including potatoes, cereal grains, cheese
whey, and sugar beets; forest products; or other renewable
resources, including residue and waste generated from the
production, processing, and marketing of agricultural products,
forest products, and other renewable resources, that:

(1) meets all of the specifications in ASTM specification
D4806-01; and

(2) is denatured as specified in Code of Federal
Regulations, title 27, parts 20 and 21.

(b) "Ethanol plant" means a plant at which ethanol is

(c) "Commissioner" means the commissioner of agriculture.

new text begin (d) "E85 fuel dispensing equipment" means capital
investments installed primarily for the receipt, storage,
handling, pumping, and delivery of E85 petroleum products as
defined in section 296A.01, subdivision 19.
new text end

new text begin (e) "Rural economic infrastructure" means the development
of activities, including transportation infrastructure and the
servicing of bonded indebtedness for infrastructure, that will
enhance the value of agricultural crop or livestock commodities
or by-products or waste from farming operations.
new text end

Sec. 2.

Minnesota Statutes 2004, section 41A.09,
subdivision 3a, is amended to read:

Subd. 3a.

Ethanol producer payments.

(a) The
commissioner shall make cash payments to producers of ethanol
located in the state that have begun production by June 30, 2000.
For the purpose of this subdivision, an entity that holds a
controlling interest in more than one ethanol plant is
considered a single producer. The amount of the payment for
each producer's annual production, except as provided in
paragraph (c), is 20 cents per gallon for each gallon of ethanol
produced on or before June 30, 2000, or ten years after the
start of production, whichever is later. Annually, within 90
days of the end of its fiscal year, an ethanol producer
receiving payments under this subdivision must file a disclosure
statement on a form provided by the commissioner. The initial
disclosure statement must include a summary description of the
organization of the business structure of the claimant, a
listing of the percentages of ownership by any person or other
entity with an ownership interest of five percent or greater,
and a copy of its annual audited financial statements, including
the auditor's report and footnotes. The disclosure statement
must include information demonstrating what percentage of the
entity receiving payments under this section is owned by farmers
or other entities eligible to farm or own agricultural land in
Minnesota under the provisions of section 500.24. Subsequent
annual reports must reflect noncumulative changes in ownership
of ten percent or more of the entity. The report need not
disclose the identity of the persons or entities eligible to
farm or own agricultural land with ownership interests,
individuals residing within 30 miles of the plant, or of any
other entity with less than ten percent ownership interest, but
the claimant must retain information within its files confirming
the accuracy of the data provided. This data must be made
available to the commissioner upon request. Not later than the
15th day of February in each year the commissioner shall deliver
to the chairs of the standing committees of the senate and the
house of representatives that deal with agricultural policy and
agricultural finance issues an annual report summarizing
aggregated data from plants receiving payments under this
section during the preceding calendar year. Audited financial
statements and notes and disclosure statements submitted to the
commissioner are nonpublic data under section 13.02, subdivision
9. Notwithstanding the provisions of chapter 13 relating to
nonpublic data, summaries of the submitted audited financial
reports and notes and disclosure statements will be contained in
the report to the committee chairs and will be public data.

(b) No payments shall be made for ethanol production that
occurs after June 30, 2010.

(c) If the level of production at an ethanol plant
increases due to an increase in the production capacity of the
plant, the payment under paragraph (a) applies to the additional
increment of production until ten years after the increased
production began. Once a plant's production capacity reaches
15,000,000 gallons per year, no additional increment will
qualify for the payment.

(d) Total payments under paragraphs (a) and (c) to a
producer in a fiscal year may not exceed $3,000,000.

(e) By the last day of October, January, April, and July,
each producer shall file a claim for payment for ethanol
production during the preceding three calendar months. A
producer that files a claim under this subdivision shall include
a statement of the producer's total ethanol production in
Minnesota during the quarter covered by the claim. For each
claim and statement of total ethanol production filed under this
subdivision, the volume of ethanol production must be examined
by an independent certified public accountant in accordance with
standards established by the American Institute of Certified
Public Accountants.

(f) Payments shall be made November 15, February 15, May
15, and August 15. A separate payment shall be made for each
claim filed. Except as provided in paragraph (g), the total
quarterly payment to a producer under this paragraph may not
exceed $750,000.

(g) Notwithstanding the quarterly payment limits of
paragraph (f), the commissioner shall make an additional payment
in the fourth quarter of each fiscal year to ethanol producers
for the lesser of: (1) 20 cents per gallon of production in the
fourth quarter of the year that is greater than 3,750,000
gallons; or (2) the total amount of payments lost during the
first three quarters of the fiscal year due to plant outages,
repair, or major maintenance. Total payments to an ethanol
producer in a fiscal year, including any payment under this
paragraph, must not exceed the total amount the producer is
eligible to receive based on the producer's approved production
capacity. The provisions of this paragraph apply only to
production losses that occur in quarters beginning after
December 31, 1999.

(h) The commissioner shall reimburse ethanol producers for
any deficiency in payments during earlier quarters if the
deficiency occurred because appropriated money was insufficient
to make timely payments in the full amount provided in paragraph
(a). Notwithstanding the quarterly or annual payment
limitations in this subdivision, the commissioner shall begin
making payments for earlier deficiencies in each fiscal year
that appropriations for ethanol payments exceed the amount
required to make eligible scheduled payments. Payments for
earlier deficiencies must continue until the deficiencies for
each producer are paid in full.

new text begin (i) If in any year the appropriation for value-added
agricultural products under this section is in excess of the
amount required to make scheduled ethanol producer payments and
deficiency payments for payments delayed because appropriated
funds in earlier fiscal years were insufficient, the
commissioner may make grants in amounts not exceeding $50,000
each to retailers of motor fuels as defined in section 296A.01,
subdivision 33, for up to 75 percent of the cost incurred for
the purchase and installation of E85 fuel dispensing equipment.
new text end

new text begin In addition, the commissioner may make payments for rural
economic infrastructure with any remaining amount of the annual
new text end

new text end

new text begin The appropriation for value-added agricultural products for
fiscal year 2005 under Laws 2003, chapter 128, article 3,
section 2, subdivision 4, is established as base-level funding
for fiscal years 2006 and thereafter for purposes of ethanol
producer payments, grants for the installation of E85 fuel at
retail outlets, and payments to providers of rural economic
new text end

Sec. 4. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 1 to 3 are effective the day following final
new text end