HF 1733

as introduced - 91st Legislature (2019 - 2020) Posted on 03/01/2019 12:01am

A bill for an act
relating to agriculture; making policy and technical changes to various agricultural
provisions including provisions related to hemp, food handlers, eggs, milk, cheese,
bioincentive programs, loan programs, and other agriculture provisions; amending
Minnesota Statutes 2018, sections 18C.425, subdivision 6; 18C.70, subdivision
5; 18C.71, subdivision 4; 18C.80, subdivision 2; 18H.10; 18K.02, subdivision 3;
18K.06; 25.33, subdivision 8; 28A.04, subdivision 1; 28A.05; 28A.075; 28A.0752,
subdivisions 1, 2; 28A.08, subdivision 3; 29.26; 32D.13, by adding a subdivision;
32D.20, subdivision 2; 32D.22; 34A.11, subdivision 7; 41A.15, subdivisions 2,
10, by adding a subdivision; 41A.16, subdivisions 1, 4; 41A.17, subdivisions 1,
2, 3; 41A.18, subdivisions 1, 2, 3; 41B.02, subdivision 10a; 41B.03, subdivision
3; 41B.0391, subdivision 1; 41B.047, subdivisions 1, 3; 41B.049, subdivision 5;
41B.055, subdivision 3; 41B.057, subdivision 3; repealing Minnesota Statutes
2018, section 41A.15, subdivisions 2a, 2b.

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

Section 1.

Minnesota Statutes 2018, section 18C.425, subdivision 6, is amended to read:

Subd. 6.

Payment of inspection fee.

(a) The person who registers and distributes in the
state a specialty fertilizer, soil amendment, or plant amendment under section 18C.411 shall
pay the inspection fee to the commissioner.

(b) The person licensed under section 18C.415 who distributes a fertilizer to a person
not required to be so licensed shall pay the inspection fee to the commissioner, except as
exempted under section 18C.421, subdivision 1, paragraph (b).

(c) The person responsible for payment of the inspection fees for fertilizers, soil
amendments, or plant amendments sold and used in this state must pay an inspection fee of
39 cents per ton, and until June 30, deleted text begin 2019 deleted text end new text begin 2029 new text end , an additional 40 cents per ton, of fertilizer,
soil amendment, and plant amendment sold or distributed in this state, with a minimum of
$10 on all tonnage reports. Notwithstanding section 18C.131, the commissioner must deposit
all revenue from the additional 40 cents per ton fee in the agricultural fertilizer research and
education account in section 18C.80. Products sold or distributed to manufacturers or
exchanged between them are exempt from the inspection fee imposed by this subdivision
if the products are used exclusively for manufacturing purposes.

(d) A registrant or licensee must retain invoices showing proof of fertilizer, plant
amendment, or soil amendment distribution amounts and inspection fees paid for a period
of three years.

Sec. 2.

Minnesota Statutes 2018, section 18C.70, subdivision 5, is amended to read:

Subd. 5.

Expiration.

This section expires June 30, deleted text begin 2020 deleted text end new text begin 2030 new text end .

Sec. 3.

Minnesota Statutes 2018, section 18C.71, subdivision 4, is amended to read:

Subd. 4.

Expiration.

This section expires June 30, deleted text begin 2020 deleted text end new text begin 2030 new text end .

Sec. 4.

Minnesota Statutes 2018, section 18C.80, subdivision 2, is amended to read:

Subd. 2.

Expiration.

This section expires June 30, deleted text begin 2020 deleted text end new text begin 2030 new text end .

Sec. 5.

Minnesota Statutes 2018, section 18H.10, is amended to read:

18H.10 STORAGE OF NURSERY STOCK.

(a) All nursery stock must be kept and displayed under conditions of temperature, light,
and moisture sufficient to maintain the viability and vigor of the nursery stock.

(b) Packaged dormant nursery stock must be stored under conditions that retard growth,
prevent etiolated growth, and protect its viability.

(c) Balled and burlapped nursery stock being held for sale to the public must be kept in
a moisture-holding material approved by the commissioner and not toxic to plants. The
moisture-holding material must adequately cover and protect the ball of earth and must be
kept moist at all times. new text begin The commissioner may approve alternative nursery stock management
practices to maintain the viability of balled and burlapped stock.
new text end

Sec. 6.

Minnesota Statutes 2018, section 18K.02, subdivision 3, is amended to read:

Subd. 3.

Industrial hemp.

"Industrial hemp" means deleted text begin the plant deleted text end new text begin any plant species of the
genus new text end Cannabis deleted text begin sativa L. deleted text end and any deleted text begin part deleted text end new text begin parts new text end of the plant, whether growing or not, new text begin including
the plant's seeds, and all the plant's derivatives, extracts, cannabinoids, isomers, acids, salts,
and salts of isomers, whether growing or not, new text end with a delta-9 tetrahydrocannabinol
concentration of not more than 0.3 percent on a dry weight basis. Industrial hemp is not
marijuana as defined in section 152.01, subdivision 9.

Sec. 7.

Minnesota Statutes 2018, section 18K.06, is amended to read:

18K.06 RULEMAKING.

(a) The commissioner shall adopt rules governing the production, testing, and licensing
of industrial hemp.

(b) Rules adopted under paragraph (a) must include, but not be limited to, provisions
governing:

(1) the supervision and inspection of industrial hemp during its growth and harvest;

(2) the testing of industrial hemp to determine delta-9 tetrahydrocannabinol levels;

(3) the use of background check results required under section 18K.04 to approve or
deny a license application; and

(4) any other provision or procedure necessary to carry out the purposes of this chapter.

(c) Rules issued under this section must be consistent with federal law regarding the
production, distribution, and sale of industrial hemp.

new text begin (d) The commissioner may use the expedited rulemaking process in section 14.389 to
adopt rules authorized under this section.
new text end

Sec. 8.

Minnesota Statutes 2018, section 25.33, subdivision 8, is amended to read:

Subd. 8.

Drug.

"Drug" means new text begin (1) new text end any article intended for use in the diagnosis, cure,
mitigation, treatment, or prevention of disease in animals other than humans new text begin ; new text end and new text begin (2) new text end articles
other than feed intended to affect the structure or any function of the animal body.

Sec. 9.

Minnesota Statutes 2018, section 28A.04, subdivision 1, is amended to read:

Subdivision 1.

Application; date of issuance.

(a) No person shall engage in the business
of manufacturing, processing, selling, handling, or storing food without having first obtained
from the commissioner a license for doing such business. Applications for such license shall
be made to the commissioner in such manner and time as required and upon such forms as
provided by the commissioner and shall contain the name and address of the applicant,
address or description of each place of business, and the nature of the business to be
conducted at each place, and such other pertinent information as the commissioner may
require.

(b) A retail or wholesale food handler license shall be issued for the period July 1 to
June 30 following and shall be renewed thereafter by the licensee on or before July 1 each
year, except that:

(1) licenses for all mobile food concession units and retail mobile units must be issued
for the period April 1 to March 31, and must be renewed thereafter by the licensee on or
before April 1 each year; and

(2) a license issued for a temporary food concession stand must have a license issuance
and renewal date consistent with appropriate statutory provisions.

new text begin (c) A custom exempt food handler license shall be issued for the period July 1 to June
30 following and shall be renewed thereafter by the licensee on or before July 1 each year.
The custom exempt food handler license is for businesses that only conduct custom exempt
operations and mark all products as "Not For Sale." Food handlers that conduct retail exempt
operations or other operations other than custom exempt processing or slaughter are not
eligible for this license.
new text end

new text begin (d) new text end A license for a food broker or for a food processor or manufacturer shall be issued
for the period January 1 to December 31 following and shall be renewed thereafter by the
licensee on or before January 1 of each year, except that a license for a wholesale food
processor or manufacturer operating only at the state fair shall be issued for the period July
1 to June 30 following and shall be renewed thereafter by the licensee on or before July 1
of each year. A penalty for a late renewal shall be assessed in accordance with section
28A.08.

deleted text begin (c) deleted text end new text begin (e) new text end A person applying for a new license up to 14 calendar days before the effective
date of the new license period under paragraph (b) must be issued a license for the 14 days
and the next license year as a single license and pay a single license fee as if the 14 days
were part of the upcoming license period.

Sec. 10.

Minnesota Statutes 2018, 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 32D.01, subdivision 6.

new text begin (d) Custom exempt food handlers are persons who only conduct custom exempt
processing as defined in section 31A.02, subdivision 5. A retail or wholesale transaction
may not take place in a facility operated by a person with a custom exempt food handler
license.
new text end

deleted text begin (d) deleted text end new text begin (e) new text end 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. 11.

Minnesota Statutes 2018, section 28A.075, is amended to read:

28A.075 DELEGATION TO LOCAL BOARD OF HEALTH.

(a) At the request of a local board of health that licensed and inspected grocery and
convenience stores on January 1, 1999, the commissioner must enter into agreements before
January 1, 2001, with local boards of health to delegate to the appropriate local board of
health the licensing and inspection duties of the commissioner pertaining to retail food
handlers that are grocery or convenience stores. At the request of a local board of health
that licensed and inspected part of any grocery or convenience store on January 1, 1999,
the commissioner must enter into agreements before July 1, 2001, with local boards of
health to delegate to the appropriate local board of health the licensing and inspection duties
of the commissioner pertaining to retail food handlers that are grocery or convenience stores.
At any time thereafter, the commissioner may enter into an agreement with a local board
of health that licensed and inspected all or part of any grocery or convenience store on
January 1, 1999, to delegate to the appropriate local board of health the licensing and
inspection duties of the commissioner pertaining to retail food handlers deleted text begin that are deleted text end new text begin such as new text end
grocery or convenience stores. Retail deleted text begin grocery or convenience stores deleted text end new text begin food handlers new text end inspected
under the state meat inspection program of chapter 31A are exempt from delegation.

(b) A local board of health must adopt an ordinance consistent with the Minnesota Food
Code, Minnesota Rules, chapter 4626, for all of its jurisdiction to regulate deleted text begin grocery and
convenience stores deleted text end new text begin retail food handlers new text end and the ordinance (Food Code) must not be in conflict
with standards set in law or rule.

(c) A fee to recover the estimated costs of enforcement of this chapter must be established
by ordinance and must be fair, reasonable, and proportionate to the actual cost of the licensing
and inspection services. The fee must only be maintained and used for the estimated costs
of enforcing this chapter.

Sec. 12.

Minnesota Statutes 2018, section 28A.0752, subdivision 1, is amended to read:

Subdivision 1.

Agreements to perform duties of commissioner.

(a) Agreements to
delegate licensing and inspection duties pertaining to retail deleted text begin grocery or convenience stores deleted text end new text begin
food handlers new text end shall include licensing, inspection, reporting, and enforcement duties authorized
under sections 17.04, 29.21, 29.23, 29.235, 29.236, 29.237, 29.24, 29.25, 29.26, 29.27, and
30.49, appropriate sections of the Minnesota Food Law, chapters 31 and 34A, and applicable
Minnesota food rules.

(b) Agreements are subject to subdivision 3.

(c) This subdivision does not affect agreements entered into under section 28A.075 or
current cooperative agreements which base inspections and licensing responsibility on the
firm's most predominant mode of business.

Sec. 13.

Minnesota Statutes 2018, section 28A.0752, subdivision 2, is amended to read:

Subd. 2.

Approval of agreements.

An agreement to delegate licensing and inspection
of retail food handlers deleted text begin that are grocery or convenience stores deleted text end to a community health board
must be approved by the commissioner and is subject to subdivision 3.

Sec. 14.

Minnesota Statutes 2018, section 28A.08, subdivision 3, is amended to read:

Subd. 3.

Fees effective July 1, 2003.

				Penalties
	Type of food handler		License Fee Effective July 1, 2003	Late Renewal	No License
1.	Retail food handler new text begin or custom exempt food handler new text end
	(a) Having gross sales of only prepackaged nonperishable food of less than $15,000 for the immediately previous license or fiscal year and filing a statement with the commissioner		$ 50	$ 17	$ 33
	(b) Having under $15,000 gross sales or service including food preparation or having $15,000 to $50,000 gross sales or service for the immediately previous license or fiscal year		$ 77	$ 25	$ 51
	(c) Having $50,001 to $250,000 gross sales or service for the immediately previous license or fiscal year		$155	$ 51	$102
	(d) Having $250,001 to $1,000,000 gross sales or service for the immediately previous license or fiscal year		$276	$ 91	$182
	(e) Having $1,000,001 to $5,000,000 gross sales or service for the immediately previous license or fiscal year		$799	$264	$527
	(f) Having $5,000,001 to $10,000,000 gross sales or service for the immediately previous license or fiscal year		$1,162	$383	$767
	(g) Having $10,000,001 to $15,000,000 gross sales or service for the immediately previous license or fiscal year		$1,376	$454	$908
	(h) Having $15,000,001 to $20,000,000 gross sales or service for the immediately previous license or fiscal year		$1,607	$530	$1,061
	(i) Having $20,000,001 to $25,000,000 gross sales or service for the immediately previous license or fiscal year		$1,847	$610	$1,219
	(j) Having over $25,000,001 gross sales or service for the immediately previous license or fiscal year		$2,001	$660	$1,321
2.	Wholesale food handler
	(a) Having gross sales or service of less than $25,000 for the immediately previous license or fiscal year		$ 57	$ 19	$ 38
	(b) Having $25,001 to $250,000 gross sales or service for the immediately previous license or fiscal year		$284	$ 94	$187
	(c) Having $250,001 to $1,000,000 gross sales or service from a mobile unit without a separate food facility for the immediately previous license or fiscal year		$444	$147	$293
	(d) Having $250,001 to $1,000,000 gross sales or service not covered under paragraph (c) for the immediately previous license or fiscal year		$590	$195	$389
	(e) Having $1,000,001 to $5,000,000 gross sales or service for the immediately previous license or fiscal year		$769	$254	$508
	(f) Having $5,000,001 to $10,000,000 gross sales or service for the immediately previous license or fiscal year		$920	$304	$607
	(g) Having $10,000,001 to $15,000,000 gross sales or service for the immediately previous license or fiscal year		$990	$327	$653
	(h) Having $15,000,001 to $20,000,000 gross sales or service for the immediately previous license or fiscal year		$1,156	$381	$763
	(i) Having $20,000,001 to $25,000,000 gross sales or service for the immediately previous license or fiscal year		$1,329	$439	$877
	(j) Having over $25,000,001 or more gross sales or service for the immediately previous license or fiscal year		$1,502	$496	$991
3.	Food broker		$150	$ 50	$ 99
4.	Wholesale food processor or manufacturer
	(a) Having gross sales or service of less than $125,000 for the immediately previous license or fiscal year		$169	$ 56	$112
	(b) Having $125,001 to $250,000 gross sales or service for the immediately previous license or fiscal year		$392	$129	$259
	(c) Having $250,001 to $1,000,000 gross sales or service for the immediately previous license or fiscal year		$590	$195	$389
	(d) Having $1,000,001 to $5,000,000 gross sales or service for the immediately previous license or fiscal year		$769	$254	$508
	(e) Having $5,000,001 to $10,000,000 gross sales or service for the immediately previous license or fiscal year		$920	$304	$607
	(f) Having $10,000,001 to $15,000,000 gross sales or service for the immediately previous license or fiscal year		$1,377	$454	$909
	(g) Having $15,000,001 to $20,000,000 gross sales or service for the immediately previous license or fiscal year		$1,608	$531	$1,061
	(h) Having $20,000,001 to $25,000,000 gross sales or service for the immediately previous license or fiscal year		$1,849	$610	$1,220
	(i) Having $25,000,001 to $50,000,000 gross sales or service for the immediately previous license or fiscal year		$2,090	$690	$1,379
	(j) Having $50,000,001 to $100,000,000 gross sales or service for the immediately previous license or fiscal year		$2,330	$769	$1,538
	(k) Having $100,000,000 or more gross sales or service for the immediately previous license or fiscal year		$2,571	$848	$1,697
5.	Wholesale food processor of meat or poultry products under supervision of the U.S. Department of Agriculture
	(a) Having gross sales or service of less than $125,000 for the immediately previous license or fiscal year		$112	$ 37	$ 74
	(b) Having $125,001 to $250,000 gross sales or service for the immediately previous license or fiscal year		$214	$ 71	$141
	(c) Having $250,001 to $1,000,000 gross sales or service for the immediately previous license or fiscal year		$333	$110	$220
	(d) Having $1,000,001 to $5,000,000 gross sales or service for the immediately previous license or fiscal year		$425	$140	$281
	(e) Having $5,000,001 to $10,000,000 gross sales or service for the immediately previous license or fiscal year		$521	$172	$344
	(f) Having over $10,000,001 gross sales or service for the immediately previous license or fiscal year		$765	$252	$505
	(g) Having $15,000,001 to $20,000,000 gross sales or service for the immediately previous license or fiscal year		$893	$295	$589
	(h) Having $20,000,001 to $25,000,000 gross sales or service for the immediately previous license or fiscal year		$1,027	$339	$678
	(i) Having $25,000,001 to $50,000,000 gross sales or service for the immediately previous license or fiscal year		$1,161	$383	$766
	(j) Having $50,000,001 to $100,000,000 gross sales or service for the immediately previous license or fiscal year		$1,295	$427	$855
	(k) Having $100,000,001 or more gross sales or service for the immediately previous license or fiscal year		$1,428	$471	$942
6.	Wholesale food processor or manufacturer operating only at the State Fair		$125	$ 40	$ 50
7.	Wholesale food manufacturer having the permission of the commissioner to use the name Minnesota Farmstead cheese		$ 30	$ 10	$ 15
8.	Wholesale food manufacturer processing less than 700,000 pounds per year of raw milk		$ 30	$ 10	$ 15
9.	A milk marketing organization without facilities for processing or manufacturing that purchases milk from milk producers for delivery to a licensed wholesale food processor or manufacturer		$ 50	$ 15	$ 25

Sec. 15.

Minnesota Statutes 2018, section 29.26, is amended to read:

29.26 EGGS IN POSSESSION OF RETAILER.

All eggs sold or offered for sale at retail must have been candled and graded and must
be clearly labeled according to Minnesota consumer grades as established by rule under
section 29.23. No eggs shall be sold or offered for sale as "ungraded," "unclassified," or by
any other name that does not clearly designate the grade. All eggs in possession of the
retailer, either in temporary storage or on display, must be held at a temperature not to
exceed 45 degrees Fahrenheit (7 degrees Celsius).

deleted text begin Candled and graded deleted text end new text begin Grade AA new text end eggs held 31 days past the coded pack date new text begin for Grade
AA eggs, or Grade A eggs held 46 days past the coded pack date for Grade A eggs, new text end lose
their grades and must be removed from sale.

Sec. 16.

Minnesota Statutes 2018, section 32D.13, is amended by adding a subdivision to
read:

new text begin Subd. 11. new text end

new text begin Milk storage requirement. new text end

new text begin (a) A milk hauler must not pick up milk from a
farm that has a bulk tank that is not in proper working order.
new text end

new text begin (b) Milk must not be stored for longer than 72 hours at a farm before the milk is picked
up by a milk hauler for transport to a plant. The commissioner or an agent of the
commissioner may waive the 72-hour time limit in the case of hardship, emergency, or
natural disaster.
new text end

Sec. 17.

Minnesota Statutes 2018, section 32D.20, subdivision 2, is amended to read:

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 new text begin (1) new text end with the plant number where the product
was produced deleted text begin , deleted text end new text begin ; new text end or new text begin (2) new text end if produced in a state where official plant numbers are not assigned,
new text begin with new text end the name new text begin and address new text end of the manufacturer deleted text begin and the address of the plant where it was
manufactured deleted text end new text begin or distributor new text end .

Sec. 18.

Minnesota Statutes 2018, section 32D.22, is amended to read:

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

new text begin (a) new text end 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.

new text begin (b) Any cheese described in paragraph (a), clause (3), that has been made from
unpasteurized milk must be labeled with a statement that the cheese has been aged for 60
days or more.
new text end

Sec. 19.

Minnesota Statutes 2018, section 34A.11, subdivision 7, is amended to read:

Subd. 7.

Emergency powers.

After an emergency declaration issued under chapter 12,
chapter 35, or the federal Stafford Act, the commissioner may restrict the movement of food
if the commissioner has probable cause to believe that the movement of food may: threaten
the agricultural economy; transport a dangerous, infectious, or communicable disease; or
threaten the health of animals. The commissioner may provide for the issuance of permits
to allow for the continued movement of food upon meeting the deleted text begin disease deleted text end control measures
established by the commissioner.

Sec. 20.

Minnesota Statutes 2018, section 41A.15, subdivision 2, is amended to read:

Subd. 2.

Advanced biofuel.

"Advanced biofuel" deleted text begin has the meaning given in section
239.051, subdivision 1a. deleted text end new text begin means a renewable fuel, other than ethanol derived from corn
starch, that has lifecycle greenhouse gas emissions that are at least 50 percent less than
baseline lifecycle greenhouse gas emissions.
new text end

Sec. 21.

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, fibers, animal waste, and the organic
portion of solid wastes.
new text end

Sec. 22.

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. 23.

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 materials deleted text end new text begin biomass used to produce an advanced biofuel new 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 radius new text begin of the facility or from within Minnesota new 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 23,750 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. 24.

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

Subd. 4.

Cellulosic forestry biomass requirements.

All forestry-derived cellulosic
biomass new text begin used for advanced biofuel production new text end must be produced using Minnesota deleted text begin state deleted 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 harvesting deleted text end biomass deleted text begin harvest deleted text end 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, new text begin the
new text end Sustainable Forestry Initiative, or new text begin the new text end American Tree Farm System. Uncertified land from
parcels of 160 acres or less new text begin , tribal lands, new text end and federal land must deleted text begin be harvested by a logger
who has completed training for biomass harvesting from the Minnesota logger education
program or the equivalent and deleted text end have a forest deleted text begin stewardship deleted text end new text begin management new text end plan deleted text begin . deleted text end new text begin , as defined in
section 290C.02, subdivision 7, or the equivalent, and be harvested by a logger who has
completed training for biomass harvesting from the Minnesota logger education program
or the equivalent.
new text end

Sec. 25.

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 program deleted text end new text begin section new 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 must deleted 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 radius new text begin of the facility or from within Minnesota new 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 750,000 pounds of chemicals quarterly before
January 1, 2015. Eligible facilities include existing companies and facilities that are adding
production capacity, or retrofitting existing capacity, as well as new companies and facilities.
Eligible renewable chemical facilities must produce at least 750,000 pounds of renewable
chemicals quarterly. Renewable chemicals produced through processes that are fully
commercial before January 1, 2000, are not eligible.

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

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

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

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

Sec. 26.

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, new text begin starch, oil, or animal fat, new text end 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. The commissioner shall award payments on a first-come,
first-served basis within the limits of available funding.

(d) 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. 27.

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
biomass new text begin used for renewable chemical production new text end must be produced using Minnesota deleted text begin state deleted 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 harvesting deleted text end biomass deleted text begin harvest deleted text end 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, new text begin the
new text end Sustainable Forestry Initiative, or new text begin the new text end American Tree Farm System. Uncertified land from
parcels of 160 acres or less new text begin , tribal lands, new text end and federal land must deleted text begin be harvested by a logger
who has completed training for biomass harvesting from the Minnesota logger education
program or the equivalent and deleted text end have a forest deleted text begin stewardship deleted text end new text begin management new text end plan new text begin , as defined in
section 290C.02, subdivision 7, or the equivalent, and be harvested by a logger who has
completed training for biomass harvesting from the Minnesota logger education program
or the equivalent new text end .

Sec. 28.

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 should deleted 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 radius new text begin of the facility, or from within Minnesota new text end . deleted text begin Raw
materials deleted text end new text begin Biomass new 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. 29.

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. The commissioner
shall award payments on a first-come, first-served basis within the limits of available funding.

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

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

new text begin (f) new text end 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. 30.

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
biomass new text begin used for biomass thermal production new text end must be produced using Minnesota deleted text begin state deleted 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 deleted text begin brushland deleted text end new text begin
brushlands new text end must be produced using Minnesota brushland deleted text begin harvesting deleted 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, or new text begin the new text end American Tree Farm new text begin System new text end . Uncertified land from
parcels of 160 acres or less new text begin , tribal lands, new text end and federal land must deleted text begin be harvested by a logger
who has completed training for biomass harvesting from the Minnesota logger education
program or the equivalent and deleted text end have a forest deleted text begin stewardship deleted text end new text begin management new text end plan deleted text begin . deleted text end new text begin , as defined in
section 290C.02, subdivision 7, or the equivalent and be harvested by a logger who has
completed training for biomass harvesting from the Minnesota logger education program
or the equivalent.
new text end

Sec. 31.

Minnesota Statutes 2018, section 41B.02, subdivision 10a, is amended to read:

Subd. 10a.

Livestock expansion.

"Livestock expansion" means new text begin the purchase of a
livestock farm or new text end improvements to a livestock operation, including the purchase and
construction or installation of improvements to land, buildings, and other permanent
structures, including equipment incorporated in or permanently affixed to the land, buildings,
or structures, which are useful for and intended to be used for the purpose of raising livestock.

Sec. 32.

Minnesota Statutes 2018, 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 $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 deleted text begin commissioner deleted text end new text begin authority new text end may waive this
requirement for any of the programs administered by the authority if the participant requests
a waiver and has deleted text begin either deleted text end a four-year degree in an agricultural program new text begin or related field,
reasonable agricultural job-related experience, new text end 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. 33.

Minnesota Statutes 2018, section 41B.0391, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

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

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

(c) "Beginning farmer" means an individual who:

(1) is a resident of Minnesota;

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

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

(4) is not and whose spouse is not a family member of the owner of the agricultural
assets from whom the beginning farmer is seeking to purchase or rent agricultural assets;

(5) is not and whose spouse is not a family member of a partner, member, shareholder,
or trustee of the owner of agricultural assets from whom the beginning farmer is seeking to
purchase or rent agricultural assets; and

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2018.
new text end

Sec. 34.

Minnesota Statutes 2018, section 41B.047, subdivision 1, is amended to read:

Subdivision 1.

Establishment.

The authority shall establish and implement a disaster
recovery loan program to help farmers:

(1) clean up, repair, or replace farm structures and septic and water systems, as well as
replace seed, other crop inputs, feed, and livestock deleted text begin , when damaged by high winds, hail,
tornado, or flood deleted text end ;

(2) purchase watering systems, irrigation systems, and other drought mitigation systems
and practices when drought is the cause of the purchase;

(3) restore farmland; deleted text begin or
deleted text end

(4) replace flocks, make building improvements, or cover the loss of revenue when the
replacement, improvements, or loss of revenue is due to the confirmed presence of the
highly pathogenic avian influenza in a commercial poultry or game flock located in
Minnesota deleted text begin . deleted text end new text begin ; or
new text end

new text begin (5) replace livestock, make building improvements, or cover the loss of revenue when
the replacement, improvements, or loss of revenue is due to the confirmed presence of a
highly contagious disease in a livestock operation located in Minnesota.
new text end

Sec. 35.

Minnesota Statutes 2018, section 41B.047, subdivision 3, is amended to read:

Subd. 3.

Eligibility.

To be eligible for this program, a borrower must:

(1) meet the requirements of section 41B.03, subdivision 1;

(2) certify that the damage or loss was (i) sustained within a county that was the subject
of a state or federal disaster declaration deleted text begin or deleted text end new text begin ; new text end (ii) due to the confirmed presence of the highly
pathogenic avian influenza in a commercial poultry or game flock located in Minnesota; new text begin or
(iii) due to a market disaster or emergency as determined by the authority;
new text end

(3) demonstrate an ability to repay the loan; and

(4) have received at least 50 percent of average annual gross income from farming for
the past three years.

Sec. 36.

Minnesota Statutes 2018, section 41B.049, subdivision 5, is amended to read:

Subd. 5.

Loan criteria.

(a) To be eligible, a borrower must be a resident of Minnesota
or an entity that is not prohibited from owning agricultural land under section 500.24.

(b) State participation in a participation loan is limited to 45 percent of the principal
amount of the loan. A direct loan or loan participation may not exceed $250,000.

(c) Loans under this program may be used as a match for federal loans or grants.

deleted text begin (d) A borrower who has previously received a loan under subdivision 1 is prohibited
from receiving another methane digester loan under subdivision 1.
deleted text end

Sec. 37.

Minnesota Statutes 2018, section 41B.055, subdivision 3, is amended to read:

Subd. 3.

Loans.

(a) The authority may participate in a livestock equipment loan equal
to 90 percent of the purchased equipment value with an eligible lender to a farmer who is
eligible under subdivision 2. Participation is limited to 45 percent of the principal amount
of the loan or deleted text begin $40,000 deleted text end new text begin $100,000 new text end , whichever is less. The interest rates and repayment terms
of the authority's participation interest may differ from the interest rates and repayment
terms of the lender's retained portion of the loan, but the authority's interest rate must not
exceed three percent. The authority may review the interest annually and make adjustments
as necessary.

(b) Standards for loan amortization must be set by the Rural Finance Authority and must
not exceed ten years.

(c) Security for a livestock equipment loan must be a personal note executed by the
borrower and whatever other security is required by the eligible lender or the authority.

(d) Refinancing of existing debt is not an eligible purpose.

(e) The authority may impose a reasonable, nonrefundable application fee for a livestock
equipment loan. The authority may review the fee annually and make adjustments as
necessary. The initial application fee is $50. Application fees received by the authority must
be deposited in the Rural Finance Authority administrative account established in section
41B.03.

(f) Loans under this program must be made using money in the revolving loan account
established in section 41B.06.

Sec. 38.

Minnesota Statutes 2018, section 41B.057, subdivision 3, is amended to read:

Subd. 3.

Loan participation.

The authority may participate in a farm opportunity loan
with an eligible lender, as defined in section 41B.02, subdivision 8, to a farmer or a group
of farmers on joint projects who are eligible under subdivision 2, paragraph (c), and who
are actively engaged in farming. Participation is limited to 45 percent of the principal amount
of the loan or deleted text begin $45,000 deleted text end new text begin $100,000 new text end per individual, whichever is less. For loans to a group made
up of four or more individuals, participation is limited to 45 percent of the principal amount
of the loan or deleted text begin $180,000 deleted text end new text begin $250,000 new text end , whichever is less. The interest rate on the loans must not
exceed six percent.

Sec. 39. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2018, section 41A.15, subdivisions 2a and 2b, new text end new text begin are repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 19-0236

41A.15 DEFINITIONS.

Subd. 2a.

Biobased content.

"Biobased content" means a chemical, polymer, monomer, or plastic that is not sold primarily for use as food, feed, or fuel and that has a biobased percentage of at least 51 percent as determined by testing representative samples using American Society for Testing and Materials specification D6866.

Subd. 2b.

Biobased formulated product.

"Biobased formulated product" means a product that is not sold primarily for use as food, feed, or fuel and that has a biobased content percentage of at least ten percent as determined by testing representative samples using American Society for Testing and Materials specification D6866, or that contains a biobased chemical constituent that displaces a known hazardous or toxic constituent previously used in the product formulation.