HF 3836

as introduced - 90th Legislature (2017 - 2018) Posted on 03/15/2018 02:22pm

A bill for an act
relating to natural resources; modifying conditions for agricultural best management
practice loans to include environmental service providers; modifying drainage law
to accelerate ditch buffer strip implementation; amending Minnesota Statutes 2016,
sections 17.117, subdivisions 1, 4, 11; 103E.021, subdivision 6; 103E.071;
103E.351, subdivision 1.

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

Section 1.

Minnesota Statutes 2016, section 17.117, subdivision 1, is amended to read:

Subdivision 1.

Purpose.

The purpose of the agriculture best management practices loan
program is to provide low or no interest financing to farmers, agriculture supply businesses,
rural landowners, and deleted text begin water-quality cooperatives deleted text end new text begin approved environmental service providers new text end
for the implementation of agriculture and other best management practices that reduce
environmental pollution.

Sec. 2.

Minnesota Statutes 2016, section 17.117, subdivision 4, is amended to read:

Subd. 4.

Definitions.

(a) For the purposes of this section, the terms defined in this
subdivision have the meanings given them.

(b) "Agricultural and environmental revolving accounts" means accounts in the
agricultural fund, controlled by the commissioner, which hold funds available to the program.

(c) "Agriculture supply business" means a person, partnership, joint venture, corporation,
limited liability company, association, firm, public service company, or cooperative that
provides materials, equipment, or services to farmers or agriculture-related enterprises.

(d) "Allocation" means the funds awarded to an applicant for implementation of best
management practices through a competitive or noncompetitive application process.

(e) "Applicant" means a local unit of government eligible to participate in this program
that requests an allocation of funds as provided in subdivision 6b.

(f) "Best management practices" has the meaning given in sections 103F.711, subdivision
3, and 103H.151, subdivision 2. Best management practices also means other practices,
techniques, and measures that have been demonstrated to the satisfaction of the
commissioner: (1) to prevent or reduce adverse environmental impacts by using the most
effective and practicable means of achieving environmental goals; or (2) to achieve drinking
water quality standards under chapter 103H or under Code of Federal Regulations, title 40,
parts 141 and 143, as amended.

(g) "Borrower" means a farmer, an agriculture supply business, or a rural landowner
applying for a low-interest loan.

(h) "Commissioner" means the commissioner of agriculture, including when the
commissioner is acting in the capacity of chair of the Rural Finance Authority, or the designee
of the commissioner.

(i) "Committed project" means an eligible project scheduled to be implemented at a
future date:

(1) that has been approved and certified by the local government unit; and

(2) for which a local lender has obligated itself to offer a loan.

(j) "Comprehensive water management plan" means a state-approved and locally adopted
plan authorized under section 103B.231, 103B.255, 103B.311, 103C.331, 103D.401, or
103D.405.

(k) "Cost incurred" means expenses for implementation of a project accrued because
the borrower has agreed to purchase equipment or is obligated to pay for services or materials
already provided as a result of implementing an approved eligible project.

new text begin (l) "Environmental service providers" means public or private organizations and
businesses approved by the commissioner that provide services or materials for
implementation of eligible best management practices for, or on behalf of, eligible individuals
or multiple individuals, including but not limited to drainage authorities, watershed districts,
municipalities, counties, water-quality cooperatives, or private businesses providing
environment-related services or materials, except as expressly limited in this section.
new text end

deleted text begin (l) deleted text end new text begin (m) new text end "Farmer" means a person, partnership, joint venture, corporation, limited liability
company, association, firm, public service company, or cooperative that regularly participates
in physical labor or operations management of farming and files a Schedule F as part of
filing United States Internal Revenue Service Form 1040 or indicates farming as the primary
business activity under Schedule C, K, or S, or any other applicable report to the United
States Internal Revenue Service.

deleted text begin (m) deleted text end new text begin (n) new text end "Lender agreement" means an agreement entered into between the commissioner
and a local lender which contains terms and conditions of participation in the program.

deleted text begin (n) deleted text end new text begin (o) new text end "Local government unit" means a county, soil and water conservation district, or
an organization formed for the joint exercise of powers under section 471.59 with the
authority to participate in the program.

deleted text begin (o) deleted text end new text begin (p) new text end "Local lender" means a local government unit as defined in paragraph (n), a state
or federally chartered bank, a savings association, a state or federal credit union, Agribank
and its affiliated organizations, or a nonprofit economic development organization or other
financial lending institution approved by the commissioner.

deleted text begin (p) deleted text end new text begin (q) new text end "Local revolving loan account" means the account held by a local government
unit and a local lender into which principal repayments from borrowers are deposited and
new loans are issued in accordance with the requirements of the program and lender
agreements.

deleted text begin (q) deleted text end new text begin (r) new text end "Nonpoint source" has the meaning given in section 103F.711, subdivision 6.

deleted text begin (r) deleted text end new text begin (s) new text end "Program" means the agriculture best management practices loan program in this
section.

deleted text begin (s) deleted text end new text begin (t) new text end "Project" means one or more components or activities located within Minnesota
that are required by the local government unit to be implemented for satisfactory completion
of an eligible best management practice.

deleted text begin (t) deleted text end new text begin (u) new text end "Rural landowner" means the owner of record of Minnesota real estate located in
an area determined by the local government unit to be rural after consideration of local land
use patterns, zoning regulations, jurisdictional boundaries, local community definitions,
historical uses, and other pertinent local factors.

deleted text begin (u) "Water-quality cooperative" has the meaning given in section 115.58, paragraph (d),
except as expressly limited in this section.
deleted text end

Sec. 3.

Minnesota Statutes 2016, section 17.117, subdivision 11, is amended to read:

Subd. 11.

Loans issued to borrower.

(a) Local lenders may issue loans only for projects
that are approved and certified by the local government unit as meeting priority needs
identified in a comprehensive water management plan or other local planning documents,
are in compliance with accepted practices, standards, specifications, or criteria, and are
eligible for financing under Environmental Protection Agency or other applicable guidelines.

(b) The local lender may use any additional criteria considered necessary to determine
the eligibility of borrowers for loans.

(c) Local lenders shall set the terms and conditions of loans to borrowers, except that:

(1) no loan to a borrower may exceed $200,000;

(2) no loan for a project may exceed $200,000; and

(3) no borrower shall, at any time, have multiple loans from this program with a total
outstanding loan balance of more than $200,000.

(d) The maximum term length for projects in this paragraph is ten years.

(e) Fees charged at the time of closing must:

(1) be in compliance with normal and customary practices of the local lender;

(2) be in accordance with published fee schedules issued by the local lender;

(3) not be based on participation program; and

(4) be consistent with fees charged other similar types of loans offered by the local
lender.

(f) The interest rate assessed to an outstanding loan balance by the local lender must not
exceed three percent per year.

new text begin (g) Environmental service providers may request loans to finance projects implemented
on behalf of multiple eligible individuals in excess of the limits in paragraph (c), not to
exceed the total of the number of represented landowners multiplied by the limit in paragraph
(c), clause (1).
new text end

Sec. 4.

Minnesota Statutes 2016, section 103E.021, subdivision 6, is amended to read:

Subd. 6.

Incremental deleted text begin implementation deleted text end new text begin establishment new text end of vegetated ditch buffer strips
and side inlet controls.

(a) Notwithstanding other provisions of this chapter requiring
appointment of viewers and redetermination of benefits and damages, a drainage authority
may deleted text begin implement deleted text end new text begin make findings and order the establishment of new text end permanent buffer strips of
perennial vegetation deleted text begin approved by the drainage authority deleted text end or side inlet controls, or both,
adjacent to a public drainage ditch, where necessary to control erosion and sedimentation,
improve water quality, or maintain the efficiency of the drainage system. new text begin The drainage
authority's finding that the establishment of permanent buffer strips of perennial vegetation
or side inlet controls is necessary to control erosion and sedimentation, improve water
quality, or maintain the efficiency of the drainage system is sufficient to confer jurisdiction
under this subdivision. new text end Preference should be given to planting native species of a local
ecotype. The approved perennial vegetation shall not impede future maintenance of the
ditch. The permanent strips of perennial vegetation shall be 16-1/2 feet in width measured
outward from the top edge of the existing constructed channel. Drainage system rights-of-way
for the acreage and additional property required for the permanent strips must be acquired
by the authority having jurisdiction.

(b) A project under this subdivision shall be implemented as a repair according to section
103E.705, except that the drainage authority may appoint an engineer to examine the drainage
system and prepare an engineer's repair report for the project.

(c) Damages shall be determined by the drainage authority, or viewers, appointed by
the drainage authority, according to section 103E.315, subdivision 8. A damages statement
shall be prepared, including an explanation of how the damages were determined for each
property affected by the project, and filed with the auditor or watershed district. Within 30
days after the damages statement is filed, the auditor or watershed district shall prepare
property owners' reports according to section 103E.323, subdivision 1, clauses (1), (2), (6),
(7), and (8), and mail a copy of the property owner's report and damages statement to each
owner of property affected by the proposed project.

(d) After a damages statement is filed, the drainage authority shall set a time, by order,
not more than 30 days after the date of the order, for a hearing on the project. At least ten
days before the hearing, the auditor or watershed district shall give notice by mail of the
time and location of the hearing to the owners of property and political subdivisions likely
to be affected by the project.

(e) The drainage authority shall make findings and order the repairs to be made if the
drainage authority determines from the evidence presented at the hearing and by the viewers
and engineer, if appointed, that the repairs are necessary for the drainage system and the
costs of the repairs are within the limitations of section 103E.705.

Sec. 5.

Minnesota Statutes 2016, section 103E.071, is amended to read:

103E.071 COUNTY ATTORNEY.

The county attorney shall represent the county in all drainage proceedings and related
matters without special compensation new text begin , except as provided in section 388.09, subdivision 1 new text end .
A county attorney, the county attorney's assistant, or any attorney associated with the county
attorney in business, may not otherwise appear in any drainage proceeding for any interested
person.

Sec. 6.

Minnesota Statutes 2016, section 103E.351, subdivision 1, is amended to read:

Subdivision 1.

Conditions to redetermine benefits and damages; appointment of
viewers.

If the drainage authority determines that the deleted text begin original deleted text end benefits or damages new text begin of record
new text end determined in a drainage proceeding do not reflect reasonable present day land values or
that the benefited or damaged areas have changed, or if more than deleted text begin 50 deleted text end new text begin 26 new text end percent of the
owners of property new text begin , or owners of 26 percent of the property, new text end benefited or damaged by a
drainage system petition for deleted text begin correction of an error that was made at the time of the
proceedings that established the drainage system deleted text end new text begin a redetermination of benefits and damages new text end ,
the drainage authority may appoint three viewers to redetermine and report the benefits and
damages and the benefited and damaged areas.

Sec. 7. new text begin PUBLIC DRAINAGE DITCH BUFFER STRIP; PLANTING AND
MAINTENANCE.
new text end

new text begin With the consent of the property owner where the drainage ditch buffer will be located,
a drainage authority, as defined in Minnesota Statutes, section 103E.005, subdivision 9,
may plant and maintain 16-1/2-foot ditch buffer strips that meet the width and vegetation
requirements of Minnesota Statutes, section 103E.021, before acquiring and compensating
for the buffer strip land rights according to Minnesota Statutes, chapter 103E. Planting and
maintenance costs may be paid in accordance with Minnesota Statutes, chapter 103E. This
section expires June 30, 2019.
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