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HF 1595

as introduced - 91st Legislature (2019 - 2020) Posted on 03/11/2019 05:13pm

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

Bill Text Versions

Engrossments
Introduction Posted on 02/21/2019

Current Version - as introduced

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A bill for an act
relating to agriculture; modifying bioincentive program; creating an account;
appropriating money; amending Minnesota Statutes 2018, sections 41A.15,
subdivision 10, by adding a subdivision; 41A.16, subdivisions 1, 2, 4; 41A.17,
subdivisions 1, 2, 3; 41A.18, subdivisions 1, 2, 3; proposing coding for new law
in Minnesota Statutes, chapter 41A.

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

Section 1.

Minnesota Statutes 2018, section 41A.15, is amended by adding a subdivision
to read:


new text begin Subd. 2e. new text end

new text begin Biomass. new text end

new text begin "Biomass" means any organic matter that is available on a renewable
or recurring basis, including agricultural crops and trees; wood and wood waste and residues;
plants including aquatic plants, grasses, residues, and fibers; animal waste; and the organic
portion of solid wastes.
new text end

Sec. 2.

Minnesota Statutes 2018, section 41A.15, subdivision 10, is amended to read:


Subd. 10.

Renewable chemical.

"Renewable chemical" means a chemical deleted text begin with biobased
content.
deleted text end new text begin , polymer, monomer, plastic, or composite material that is entirely produced from
biomass.
new text end

Sec. 3.

Minnesota Statutes 2018, section 41A.16, subdivision 1, is amended to read:


Subdivision 1.

Eligibility.

(a) A facility eligible for payment under this section must
source new text begin from Minnesota new text end at least 80 percent deleted text begin raw materials from Minnesota.deleted text end new text begin of the biomass
used to produce an advanced biofuel, except that,
new text end if a facility is sited 50 miles or less from
the state border, deleted text begin raw materialsdeleted text end new text begin biomass used to produce an advanced biofuelnew text end may be sourced
from new text begin outside of Minnesota, but only if at least 80 percent of the biomass is sourced from
new text end within a 100-mile radiusnew text begin of the facility or from within Minnesotanew text end . deleted text begin Raw materials must be
from agricultural or forestry sources or from solid waste.
deleted text end The facility must be located in
Minnesota, must begin production at a specific location by June 30, 2025, and must not
begin operating above 23,750 MMbtu of quarterly new text begin advanced new text end biofuel production before July
1, 2015. Eligible facilities include existing companies and facilities that are adding advanced
biofuel production capacity, or retrofitting existing capacity, as well as new companies and
facilities. Production of conventional corn ethanol and conventional biodiesel is not eligible.
Eligible advanced biofuel facilities must produce at least deleted text begin 23,750deleted text end new text begin 1,500new text end MMbtu of new text begin advanced
new text end biofuel quarterly.

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

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

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

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

(f) Biobutanol is eligible under this section.

Sec. 4.

Minnesota Statutes 2018, section 41A.16, subdivision 2, is amended to read:


Subd. 2.

Payment amounts; limits.

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

(b) Total payments under this section to an eligible biofuel producer in a fiscal year may
not exceed the amount necessary for 2,850,000 MMbtu of biofuel production. Total payments
under this section to all eligible biofuel producers in a fiscal year may not exceed the amount
necessary for 17,100,000 MMbtu of biofuel production. deleted text begin The commissioner shall award
payments on a first-come, first-served basis within the limits of available funding.
deleted text end

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

Sec. 5.

Minnesota Statutes 2018, section 41A.16, subdivision 4, is amended to read:


Subd. 4.

Cellulosic forestry biomass requirements.

All forestry-derived cellulosic
biomassnew text begin used for advanced biofuel productionnew text end must be produced using Minnesota deleted text begin statedeleted text end new text begin
forest
new text end biomass harvesting guidelines or the equivalent. All new text begin cellulosic new text end biomass from brushlands
must be produced using Minnesota brushland deleted text begin harvestingdeleted text end biomass deleted text begin harvestdeleted text end new text begin harvestingnew text end
guidelines or the equivalent. Forestry-derived cellulosic biomass that comes from land
parcels greater than 160 acres must be certified by the Forest Stewardship Council, new text begin the
new text end Sustainable Forestry Initiative, ornew text begin thenew text end American Tree Farm System. Uncertified land from
parcels of 160 acres or less and federal land must be harvested by a logger who has completed
training for biomass harvesting from the Minnesota logger education program or the
equivalent and have a forest deleted text begin stewardshipdeleted text end new text begin management new text end plannew text begin , as defined in section 290C.02,
subdivision 7, or its equivalent
new text end .

Sec. 6.

Minnesota Statutes 2018, section 41A.17, subdivision 1, is amended to read:


Subdivision 1.

Eligibility.

(a) A facility eligible for payment under this deleted text begin programdeleted text end new text begin sectionnew text end
must source new text begin from Minnesota new text end at least 80 percent deleted text begin biobased content from Minnesota.deleted text end new text begin of the
biomass used to produce a renewable chemical, except that,
new text end if a facility is sited 50 miles or
less from the state border, deleted text begin biobased content mustdeleted text end new text begin biomass used to produce a renewable
chemical may
new text end be sourced from new text begin outside of Minnesota, but only if at least 80 percent of the
biomass is sourced from
new text end within a 100-mile radiusnew text begin of the facility or from within Minnesotanew text end .
deleted text begin Biobased content must be from agricultural or forestry sources or from solid waste.deleted text end The
facility must be located in Minnesota, must begin production at a specific location by June
30, 2025, and must not begin production of deleted text begin 750,000deleted text end new text begin 250,000new text end pounds of chemicals quarterly
before January 1, 2015. Eligible facilities include existing companies and facilities that are
adding production capacity, or retrofitting existing capacity, as well as new companies and
facilities. Eligible renewable chemical facilities must produce at least deleted text begin 750,000deleted text end new text begin 250,000new text end
pounds of renewable chemicals quarterly. Renewable chemicals produced through processes
that are fully commercial before January 1, 2000, are not eligible.

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

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

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

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

Sec. 7.

Minnesota Statutes 2018, section 41A.17, subdivision 2, is amended to read:


Subd. 2.

Payment amounts; bonus; limits.

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

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

(c) Total payments under this section to an eligible renewable chemical producer in a
fiscal year may not exceed the amount necessary for 99,999,999 pounds of renewable
chemical production. Total payments under this section to all eligible renewable chemical
producers in a fiscal year may not exceed the amount necessary for 599,999,999 pounds of
renewable chemical production. deleted text begin The commissioner shall award payments on a first-come,
first-served basis within the limits of available funding.
deleted text end

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

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

Sec. 8.

Minnesota Statutes 2018, section 41A.17, subdivision 3, is amended to read:


Subd. 3.

Cellulosic new text begin forestry new text end biomass requirements.

All forestry-derived cellulosic
biomassnew text begin used for renewable chemical productionnew text end must be produced using Minnesota deleted text begin statedeleted text end new text begin
forest
new text end biomass harvesting guidelines or the equivalent. All cellulosic biomass from brushlands
must be produced using Minnesota brushland deleted text begin harvestingdeleted text end biomass deleted text begin harvestdeleted text end new text begin harvestingnew text end
guidelines or the equivalent. Forestry-derived cellulosic biomass that comes from land
parcels greater than 160 acres must be certified by the Forest Stewardship Council, new text begin the
new text end Sustainable Forestry Initiative, ornew text begin thenew text end American Tree Farm System. Uncertified land from
parcels of 160 acres or less and federal land must be harvested by a logger who has completed
training for biomass harvesting from the Minnesota logger education program or the
equivalent and have a forest deleted text begin stewardshipdeleted text end new text begin managementnew text end plannew text begin , as defined in section 290C.02,
subdivision 7, or its equivalent
new text end .

Sec. 9.

Minnesota Statutes 2018, section 41A.18, subdivision 1, is amended to read:


Subdivision 1.

Eligibility.

(a) A facility eligible for payment under this section must
source new text begin from Minnesota new text end at least 80 percent deleted text begin raw materials from Minnesota.deleted text end new text begin of the biomass
used for biomass thermal production, except that,
new text end if a facility is sited 50 miles or less from
the state border, deleted text begin raw materials shoulddeleted text end new text begin biomass used for biomass thermal production may
new text end be sourced from new text begin outside of Minnesota, but only if at least 80 percent of the biomass is
sourced from
new text end within a 100-mile radiusnew text begin of the facility, or from within Minnesotanew text end . deleted text begin Raw
materials
deleted text end new text begin Biomassnew text end must be from agricultural or forestry sources. The facility must be located
in Minnesota, must have begun production at a specific location by June 30, 2025, and must
not begin before July 1, 2015. Eligible facilities include existing companies and facilities
that are adding production capacity, or retrofitting existing capacity, as well as new
companies and facilities. Eligible biomass thermal production facilities must produce at
least 250 MMbtu of biomass thermal quarterly.

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

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

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

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

Sec. 10.

Minnesota Statutes 2018, section 41A.18, subdivision 2, is amended to read:


Subd. 2.

Payment amounts; bonus; limits; blending.

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

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

(c) Total payments under this section to an eligible thermal producer in a fiscal year
may not exceed the amount necessary for 30,000 MMbtu of thermal production. Total
payments under this section to all eligible thermal producers in a fiscal year may not exceed
the amount necessary for 150,000 MMbtu of total thermal production. deleted text begin The commissioner
shall award payments on a first-come, first-served basis within the limits of available funding.
deleted text end

(d) An eligible facility may blend a cellulosic feedstock with other fuels in the biomass
thermal production facility, but only the percentage attributable to cellulosic material is
eligible to receive payment.

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

Sec. 11.

Minnesota Statutes 2018, section 41A.18, subdivision 3, is amended to read:


Subd. 3.

Cellulosic new text begin forestry new text end biomass requirements.

All forestry-derived cellulosic
biomassnew text begin used for biomass thermal productionnew text end must be produced using Minnesota deleted text begin statedeleted text end new text begin forestnew text end
biomass harvesting guidelines or the equivalent. All new text begin cellulosic new text end biomass from deleted text begin brushlanddeleted text end new text begin
brushlands
new text end must be produced using Minnesota brushland deleted text begin harvestingdeleted text end biomass new text begin harvesting
new text end guidelines or the equivalent. Forestry-derived cellulosic biomass that comes from land
parcels greater than 160 acres must be certified by the Forest Stewardship Council, the
Sustainable Forestry Initiative, ornew text begin thenew text end American Tree Farmnew text begin Systemnew text end . Uncertified land from
parcels of 160 acres or less and federal land must be harvested by a logger who has completed
training for biomass harvesting from the Minnesota logger education program or the
equivalent and have a forest deleted text begin stewardshipdeleted text end new text begin managementnew text end plannew text begin , as defined in section 290C.02,
subdivision 7, or its equivalent
new text end .

Sec. 12.

new text begin [41A.195] BIOINCENTIVE ACCOUNT.
new text end

new text begin A bioincentive account is established in the agricultural fund. The account consists of
money transferred by law to the account and any other money donated, allotted, or otherwise
provided to the account. Money in the account, including interest, is annually appropriated
to the commissioner for the purposes of making incentive payments under sections 41A.16,
41A.17, and 41A.18.
new text end

Sec. 13. new text begin APPROPRIATION.
new text end

new text begin $15,000,000 in fiscal year 2020 and $15,000,000 in fiscal year 2021 are transferred from
the general fund to the commissioner of agriculture for deposit in the bioincentive account
in the agricultural fund.
new text end