HF 3719

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 04/18/2018 01:31pm

A bill for an act
relating to agriculture; excluding sales of off-sale alcoholic beverages when
determining a food handler license fee; modifying eligibility criteria for certain
production incentive programs; extending a fertilizer research fee, council, and
grant program; establishing a rural energy feasibility loan program; allowing the
commissioner of agriculture to reimburse extension educators who determine the
fair market value of certain destroyed or crippled livestock; increasing funding for
farmer mental health counseling; creating a loan program; requiring approval of
certain proposed rules; authorizing the sale of certain bonds; making technical
changes; appropriating money; amending Minnesota Statutes 2016, sections
18C.425, subdivision 6; 18C.80, subdivision 2; 28A.16; 41A.16, subdivisions 1,
2; 41A.17, subdivision 1; 41A.18, subdivision 1; 41B.056, subdivision 2; 41B.06;
103H.275, subdivision 1; Minnesota Statutes 2017 Supplement, sections 18C.70,
subdivision 5; 18C.71, subdivision 4; Laws 2017, chapter 88, article 1, section 2,
subdivisions 1, 2, 4, 5; proposing coding for new law in Minnesota Statutes, chapter
41B.

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

ARTICLE 1

AGRICULTURE APPROPRIATIONS

Section 1.

Laws 2017, chapter 88, article 1, section 2, subdivision 1, is amended to read:

Subdivision 1. Total Appropriation

$

53,096,000

$

deleted text begin 53,148,000 deleted text end new text begin 53,395,000 new text end

Appropriations by Fund
	2018	2019
General	52,703,000	deleted text begin 52,751,000 deleted text end new text begin 52,998,000 new text end
Remediation	393,000	397,000

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

Sec. 2.

Laws 2017, chapter 88, article 1, section 2, subdivision 2, is amended to read:

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. new text begin The
commissioner may use up to $5,000 of this
appropriation each year to reimburse expenses
incurred by university extension educators to
provide fair market values of destroyed or
crippled livestock.
new text end

(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.

Sec. 3.

Laws 2017, chapter 88, article 1, section 2, subdivision 4, is amended to read:

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 deleted text begin balance of the appropriation is
available for the agricultural growth, research,
and innovation program. deleted text end new text begin commissioner must
issue incentive payments under Minnesota
Statutes, section 41A.17, to facilities that
otherwise satisfy the criteria and requirements
in that section but began producing renewable
chemical from forestry biomass between
January 1, 2013, and January 1, 2015.
new text end

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.

Sec. 4.

Laws 2017, chapter 88, article 1, section 2, subdivision 5, is amended to read:

Subd. 5. Administration and Financial Assistance

8,698,000

deleted text begin 8,691,000 deleted text end new text begin 8,938,000 new text end

(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 deleted text begin $220,000 deleted text end new text begin
$250,000 new text end 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 deleted text begin $113,000 deleted text end new text begin
$330,000 new text end 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 new text begin through the Minnesota State
Agricultural Centers of Excellence new text end . South
Central College new text begin and Central Lakes College new text end
shall serve as the fiscal deleted text begin agent deleted text end new text begin agents new text end .

(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. 5. new text begin RURAL FINANCE AUTHORITY.
new text end

new text begin Subdivision 1. new text end

new text begin Appropriation. new text end

new text begin $35,000,000 is appropriated from the bond proceeds
fund to the Rural Finance Authority for the purposes set forth in the Minnesota Constitution,
article XI, section 5, paragraph (h), to purchase participation interests in or to make direct
agricultural loans to farmers under Minnesota Statutes, chapter 41B. This appropriation is
from the bond proceeds account in the rural finance administration fund and is for the
beginning farmer program under Minnesota Statutes, section 41B.039; the loan restructuring
program under Minnesota Statutes, section 41B.04; the seller-sponsored program under
Minnesota Statutes, section 41B.042; the agricultural improvement loan program under
Minnesota Statutes, section 41B.043; and the livestock expansion loan program under
Minnesota Statutes, section 41B.045. All debt service on bond proceeds used to finance
this appropriation must be repaid by the Rural Finance Authority under Minnesota Statutes,
section 16A.643. Loan participations must be priced to provide full interest and principal
coverage and a reserve for potential losses. Priority for loans must be given first to basic
beginning farmer loans, second to seller-sponsored loans, and third to agricultural
improvement loans.
new text end

new text begin Subd. 2. new text end

new text begin Bond sale expenses. new text end

new text begin $35,000 is appropriated from the bond proceeds fund to
the commissioner of management and budget for bond sale expenses under Minnesota
Statutes, section 16A.641, subdivision 8.
new text end

new text begin Subd. 3. new text end

new text begin Bond sale. new text end

new text begin To provide the money appropriated in this section from the bond
proceeds fund, the commissioner of management and budget shall sell and issue bonds of
the state in an amount up to $35,035,000 in the manner, upon the terms, and with the effect
prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota
Constitution, article XI, sections 4 to 7.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 2

AGRICULTURE STATUTORY CHANGES

Section 1.

Minnesota Statutes 2016, 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 2017 Supplement, 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 2017 Supplement, 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 2016, 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 2016, section 28A.16, is amended to read:

28A.16 PERSONS SELLING LIQUOR.

new text begin (a) new text end The provisions of the Minnesota consolidated food licensing law, sections 28A.01
to 28A.16 and acts amendatory thereto, shall not apply to persons licensed to sell 3.2 percent
malt liquor "on-sale" as provided in section 340A.403, or to persons licensed to sell
intoxicating liquors "on-sale" or "off-sale" as provided in sections 340A.404 to 340A.407,
provided that these persons sell only ice manufactured and packaged by another, or bottled
or canned soft drinks and prepacked candy at retail.

new text begin (b) When an exclusive liquor store is not exempt under paragraph (a), the commissioner
must exclude all gross sales of off-sale alcoholic beverages when determining the applicable
license fee under section 28A.08, subdivision 3. For purposes of this paragraph, "exclusive
liquor store" and "alcoholic beverage" have the meanings given in section 340A.101.
new text end

Sec. 6.

Minnesota Statutes 2016, 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 deleted text begin 23,750 deleted text end new text begin 1,500 new 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. 7.

Minnesota Statutes 2016, 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 or deleted text end new text begin , new text end
starch new text begin , oil, or animal fat new 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. The commissioner shall award
payments on a first-come, first-served basis within the limits of available funding.

(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. 8.

Minnesota Statutes 2016, 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 deleted text begin 750,000 deleted text end new text begin 250,000 new 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 750,000 deleted text end new text begin 250,000 new 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. 9.

Minnesota Statutes 2016, 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. 10.

Minnesota Statutes 2016, section 41B.056, subdivision 2, is amended to read:

Subd. 2.

Definitions.

(a) The definitions in this subdivision apply to this section.

(b) "Intermediary" means any lending institution or other organization of a for-profit or
nonprofit nature that is in good standing with the state of Minnesota that has the appropriate
business structure and trained personnel suitable to providing efficient disbursement of loan
funds and the servicing and collection of loans.

(c) "Specialty crops" means new text begin crops produced in an aquaculture system and new text end agricultural
crops, such as annuals, flowers, perennials, and other horticultural products, that are
intensively cultivated.

(d) "Eligible livestock" means new text begin fish produced in an aquaculture system, new text end beef cattle, dairy
cattle, swine, poultry, goats, mules, farmed Cervidae, Ratitae, bison, sheep, horses, and
llamas.

Sec. 11.

new text begin [41B.058] RURAL ENERGY FEASIBILITY PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The authority must establish a rural energy feasibility
loan program to provide feasibility study loans to farmers, local units of government,
municipalities, and nonprofit entities to explore feasibility of renewable energy projects.
new text end

new text begin Subd. 2. new text end

new text begin Loan criteria. new text end

new text begin (a) The authority may impose a reasonable, nonrefundable
application fee for a rural energy feasibility 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.
new text end

new text begin (b) Standards for loan amortization must be set by the authority and must not exceed
five years.
new text end

new text begin (c) The borrower must demonstrate ability to repay the loan.
new text end

new text begin (d) Loans under this program must be made using money in the revolving loan account
established in section 41B.06.
new text end

new text begin Subd. 3. new text end

new text begin Loan participation. new text end

new text begin The authority may participate in a rural energy feasibility
loan with an eligible lender, as defined in section 41B.02, subdivision 8. Participation is
limited to 90 percent of the principal amount of the loan or $50,000 per project, whichever
is less.
new text end

Sec. 12.

Minnesota Statutes 2016, section 41B.06, is amended to read:

41B.06 RURAL FINANCE AUTHORITY REVOLVING LOAN ACCOUNT.

There is established in the rural finance administration fund a Rural Finance Authority
revolving loan account that is eligible to receive appropriations and the transfer of loan
funds from other programs. All repayments of financial assistance granted from this account,
including principal and interest, must be deposited into this account. Interest earned on
money in the account accrues to the account, and the money in the account is appropriated
to the commissioner of agriculture for purposes of the Rural Finance Authority livestock
equipment, methane digester, disaster recovery, value-added agricultural product,
agroforestry, agricultural microloan, deleted text begin and deleted text end farm opportunity loan new text begin , and rural energy feasibility new text end
programs, including costs incurred by the authority to establish and administer the programs.

Sec. 13.

Minnesota Statutes 2016, section 103H.275, subdivision 1, is amended to read:

Subdivision 1.

Areas where groundwater pollution is detected.

(a) If groundwater
pollution is detected, a state agency or political subdivision that regulates an activity causing
or potentially causing a contribution to the pollution identified shall promote implementation
of best management practices to prevent or minimize the source of pollution to the extent
practicable.

(b) The Pollution Control Agency, or for agricultural chemicals and practices, the
commissioner of agriculture may adopt water source protection requirements under
subdivision 2 that are consistent with the goal of section 103H.001 and are commensurate
with the groundwater pollution if the implementation of best management practices has
proven to be ineffective.

(c) The water resources protection requirements must be:

(1) designed to prevent and minimize the pollution to the extent practicable;

(2) designed to prevent the pollution from exceeding the health risk limits; and

(3) submitted to the house of representatives and senate committees with jurisdiction
over the environment, natural resources, and agriculture.

new text begin (d) The commissioner of agriculture shall not adopt water resource protection
requirements under subdivision 2 for nitrogen fertilizer unless the water resource protection
requirements are specifically approved by law.
new text end