SF 2101

as introduced - 88th Legislature (2013 - 2014) Posted on 03/13/2014 09:48am

A bill for an act
relating to agriculture; creating a renewable chemical and advanced biofuel
capital equipment loan program; creating an advanced biofuel production
incentive program; establishing a renewable chemical production incentive
program; establishing a biomass production incentive program; appropriating
money; proposing coding for new law in Minnesota Statutes, chapter 41A.

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

Section 1.

new text begin [41A.107] RENEWABLE CHEMICAL AND ADVANCED BIOFUEL
CAPITAL EQUIPMENT LOANS.
new text end

new text begin (a) There is established a renewable chemical and advanced biofuel revolving loan
fund that is eligible to receive appropriations and make loans under this section. The
commissioner shall establish a renewable chemical and advanced biofuel loan program
to make loans for capital equipment to persons participating in advanced biofuel and
renewable chemical production facilities. The commissioner, in consultation with the
board established in section 41A.105, subdivision 2, shall establish guidelines for loans
made under this section. All repayments of loans granted from this fund, including
principal and interest, must be deposited into this fund. Interest earned on money in the
fund accrues to the fund, and the money in the fund is appropriated to the commissioner to
make renewable chemical and advanced biofuel capital equipment loans under this section.
new text end

new text begin (b) The definitions in sections 41A.13, subdivision 2, and 41A.14, subdivision
2, apply to this section.
new text end

Sec. 2.

new text begin [41A.13] ADVANCED BIOFUEL DEVELOPMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Appropriation. new text end

new text begin A sum sufficient to make the payments required by
this section is annually appropriated from the general fund to the commissioner, and all
money so appropriated is available until expended.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section and sections 41A.107,
41A.14, and 41A.15, the terms defined in this subdivision have the meanings given them.
new text end

new text begin (b) "Advanced biofuels" has the meaning given in section 239.051, subdivision 1a.
new text end

new text begin (c) "Cellulosic biomass" means material primarily made up of cellulose,
hemicellulose, or lignin, or a combination of those ingredients.
new text end

new text begin (d) "Commissioner" means the commissioner of agriculture.
new text end

new text begin (e) "MMBtu" means one million British thermal units.
new text end

new text begin (f) "Qualifying facility" or "facility" means that a facility eligible for payment under
this program must source at least 80 percent raw materials from Minnesota, and that
raw materials must be from agricultural or forestry sources or from organic content of
municipal solid waste. The production facility must be located in Minnesota and must not
begin operation before January 1, 2015. Eligible facilities include existing companies and
facilities that are adding additional production capacity, as well as new companies and
facilities. For facilities that have previously received ethanol producer payments, only
production capacity above and beyond their capacity at the end of calendar year 2013,
and otherwise eligible, will be able to receive an incentive under this program. Advanced
biofuel facilities must produce at least 950,000 MMBtu per year to be eligible for the
program. Renewable chemical facilities must produce at least 30,000,000 pounds per year
to be eligible for the program. Biomass thermal energy projects must produce at least
7,500 MMBtu per year to be eligible for the program.
new text end

new text begin Subd. 3. new text end

new text begin Advanced biofuel producer payments. new text end

new text begin (a) The commissioner shall
make cash payments to eligible producers of advanced biofuel for a qualifying facility
located in the state that has begun production at a specific location by June 30, 2020. For
the purpose of this subdivision, an entity that holds a controlling interest in more than
one advanced biofuel facility is considered a single eligible producer. 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 or starch at a specific location for ten years after the start
of production. Agriculturally derived cellulosic biomass must be produced in a way that
is consistent with recommendations from the United States Department of Agriculture,
Natural Resources Conservation Service. All forestry-derived cellulosic biomass must
be produced using Minnesota state biomass harvesting guidelines. Forestry-derived
cellulosic biomass that comes from land parcels that are greater than 160 acres must be
certified by the Forest Stewardship Council, Sustainable Forestry Initiative, or American
Tree Farmer. Uncertified land from parcels that are 160 acres or less must participate in
the master logger education program and have a forest stewardship plan.
new text end

new text begin (b) No payments shall be made for advanced biofuel production that occurs after
June 30, 2030, for those eligible biofuel producers under paragraph (a). 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.
new text end

new text begin (c) Payments under paragraphs (a) and (b) to all eligible biofuel producers may
not exceed $30,000,000 in a fiscal year. Total payments under paragraphs (a) and (b) to
an eligible biofuel producer in a fiscal year may not exceed the amount necessary for
2,850,000 MMBtu of biofuel production.
new text end

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

new text begin (e) Payments must be made November 15, February 15, May 15, and August 15. A
separate payment must be made for each claim filed. The total quarterly payment to an
eligible producer under this paragraph may not exceed the amount necessary for 712,500
MMBtu of biofuel production.
new text end

new text begin (f) If an eligible biofuel producer becomes ineligible within five years after the
last payment has been received under paragraph (a), all payments received for biofuel
production must be refunded to the commissioner. Refunded payments received under this
paragraph shall be deposited in the general fund.
new text end

new text begin (g) Annually, within 90 days of the end of its fiscal year, an advanced biofuel
producer receiving payments under this subdivision must file a disclosure statement on
a form provided by the commissioner. The initial disclosure statement must include a
summary description of the organization of the business structure of the claimant, a listing
of the percentages of ownership and governance by any person or other entity with an
ownership interest or governance rights of five percent or greater, and a copy of its
annual audited financial statements, including the auditor's report and footnotes. This
data must be made available to the commissioner upon request. No later than February
15 of each year, the commissioner shall deliver to the chairs of the standing committees
of the senate and the house of representatives with jurisdiction over agricultural policy
and agricultural finance an annual report summarizing aggregated and facility data
from facilities receiving payments under this section during the preceding calendar
year. Audited financial statements and notes and disclosure statements submitted to the
commissioner are nonpublic data under section 13.02, subdivision 9. Notwithstanding the
provisions of chapter 13 relating to nonpublic data, summaries of the submitted audited
financial reports and notes and disclosure statements must be contained in the report to
the committee chairs and are public data.
new text end

new text begin (h) Renewable chemical production for which payment has been received under
section 41A.14, and biomass thermal production for which payment has been received
under section 41A.15, are not eligible for payment under this section.
new text end

Sec. 3.

new text begin [41A.14] RENEWABLE CHEMICAL PRODUCTION INCENTIVE.
new text end

new text begin Subdivision 1. new text end

new text begin Appropriation. new text end

new text begin A sum sufficient to make the payments required by
this section is annually appropriated from the general fund to the commissioner, and all
money so appropriated is available until expended.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) The definitions this subdivision and section 41A.13,
subdivision 2, apply to this section.
new text end

new text begin (b) "Cellulosic sugar" means sugar derived from lignocellulosic materials from
agricultural or forestry resources.
new text end

new text begin (c) "Qualifying facility" or "facility" means that a facility eligible for payment under
this program must source at least 80 percent raw materials from Minnesota, and that
raw materials must be from agricultural or forestry sources or from organic content of
municipal solid waste. The production facility must be located in Minnesota and must not
begin operation before January 1, 2015. Eligible facilities include existing companies and
facilities that are adding additional production capacity, as well as new companies and
facilities. For facilities that have previously received ethanol producer payments, only
production capacity above and beyond their capacity at the end of calendar year 2013, and
otherwise eligible, will be able to receive an incentive under this program.
new text end

new text begin (d) "Renewable chemical" means a chemical with biobased content as defined in
section 41A.105, subdivision 1a.
new text end

new text begin Subd. 3. new text end

new text begin Renewable chemical producer payments. new text end

new text begin (a) The commissioner shall
make cash payments to eligible producers of renewable chemicals for a qualifying facility
located in the state that has begun production at a specific location by June 30, 2020.
For the purpose of this subdivision, an entity that holds a controlling interest in more
than one renewable chemical production facility is considered a single eligible producer.
The amount of the payment for each producer's annual production is $0.03 per pound
of sugar-derived renewable chemical, $0.03 per pound of cellulosic sugar, and $0.06
per pound of cellulosic-derived renewable chemical produced at a specific location for
ten years after the start of production. Agriculturally derived cellulosic biomass must
be produced in a way that is consistent with recommendations from the United States
Department of Agriculture, Natural Resources Conservation Service. All forestry-derived
cellulosic biomass must be produced using Minnesota state biomass harvesting guidelines.
Forestry-derived cellulosic biomass that comes from land parcels that are greater than 160
acres must be certified by the Forest Stewardship Council, Sustainable Forestry Initiative,
or American Tree Farmer. Uncertified land from parcels that are 160 acres or less must
participate in the master logger education program and have a forest stewardship plan.
new text end

new text begin (b) No payments shall be made for renewable chemical production that occurs after
June 30, 2030, for those eligible renewable chemical producers under paragraph (a). 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.
new text end

new text begin (c) Payments under paragraphs (a) and (b) to all eligible renewable chemical
producers may not exceed $30,000,000 in a fiscal year. Total payments under paragraphs
(a) and (b) to an eligible renewable chemical producer in a fiscal year may not exceed the
amount necessary for 99,999,999 pounds of renewable chemicals.
new text end

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

new text begin (e) Payments must be made November 15, February 15, May 15, and August 15.
A separate payment must be made for each claim filed. The total quarterly payment
to an eligible producer under this paragraph may not exceed the amount necessary for
25,000,000 pounds of production.
new text end

new text begin (f) If an eligible renewable chemical producer becomes ineligible within five years
after the last payment has been received under paragraph (a), all payments received
for renewable chemical production must be refunded to the commissioner. Refunded
payments received under this paragraph shall be deposited in the general fund.
new text end

new text begin (g) Annually, within 90 days of the end of its fiscal year, a renewable chemical
producer receiving payments under this subdivision must file a disclosure statement on
a form provided by the commissioner. The initial disclosure statement must include a
summary description of the organization of the business structure of the claimant, a listing
of the percentages of ownership and governance by any person or other entity with an
ownership interest or governance rights of five percent or greater, and a copy of its
annual audited financial statements, including the auditor's report and footnotes. This
data must be made available to the commissioner upon request. No later than February
15 of each year, the commissioner shall deliver to the chairs of the standing committees
of the senate and the house of representatives with jurisdiction over agricultural policy
and agricultural finance an annual report summarizing aggregated and facility data
from facilities receiving payments under this section during the preceding calendar
year. Audited financial statements and notes and disclosure statements submitted to the
commissioner are nonpublic data under section 13.02, subdivision 9. Notwithstanding the
provisions of chapter 13 relating to nonpublic data, summaries of the submitted audited
financial reports and notes and disclosure statements must be contained in the report to
the committee chairs and are public data.
new text end

new text begin (h) Advanced biofuel production for which payment has been received under section
41A.13, and biomass thermal production for which payment has been received under
section 41A.15, are not eligible for payment under this section.
new text end

Sec. 4.

new text begin [41A.15] BIOMASS THERMAL PRODUCTION INCENTIVE.
new text end

new text begin Subdivision 1. new text end

new text begin Appropriation. new text end

new text begin A sum sufficient to make the payments required by
this section is annually appropriated from the general fund to the commissioner, and all
money so appropriated is available until expended.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) The definitions in this subdivision and section 41A.13,
subdivision 2, apply to this section.
new text end

new text begin (b) "Biomass thermal production" means the generation of energy for commercial
heat or industrial process heat from a cellulosic material or other material composed of
forestry or agricultural feedstocks for a new or expanding capacity facility or a facility that
is displacing existing use of fossil fuel after the effective date of this section.
new text end

new text begin (c) "Qualifying facility" or "facility" means that a facility eligible for payment under
this program must source at least 80 percent raw materials from Minnesota, and that
raw materials must be from agricultural or forestry sources or from organic content of
municipal solid waste. The production facility must be located in Minnesota and must not
begin operation before January 1, 2015. Eligible facilities include existing companies and
facilities that are adding additional production capacity, as well as new companies and
facilities. For facilities that have previously received ethanol producer payments, only
production capacity above and beyond their capacity at the end of calendar year 2013, and
otherwise eligible, will be able to receive an incentive under this program.
new text end

new text begin Subd. 3. new text end

new text begin Biomass thermal producer payments. new text end

new text begin (a) The commissioner shall
make cash payments to eligible producers of biomass thermal for a qualifying facility
located in the state that has begun production at a specific location by June 30, 2020.
For the purpose of this subdivision, an entity that holds a controlling interest in more
than one biomass thermal production facility is considered a single eligible producer.
The amount of the payment for each producer's annual production is $5 per MMBtu of
biomass thermal production produced at a specific location for three years after the start of
production. Agriculturally derived cellulosic materials must be produced in a way that
is consistent with recommendations from the United States Department of Agriculture,
Natural Resources Conservation Service. All forestry-derived cellulosic biomass must
be produced using Minnesota state biomass harvesting guidelines. Forestry-derived
cellulosic biomass that comes from land parcels that are greater than 160 acres must
be certified by the Forest Stewardship Council or the Sustainable Forestry Initiative.
Uncertified land from parcels that are 160 acres or less must participate in the master
logger education program and have a forest stewardship plan.
new text end

new text begin (b) No payments shall be made for biomass thermal production that occurs after June
30, 2030, for those eligible biomass thermal producers under paragraph (a). A 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.
new text end

new text begin (c) Total payments under paragraphs (a) and (b) to all producers may not exceed
$1,000,000 in a fiscal year. Total payments under paragraphs (a) and (b) to a producer
in a fiscal year may not exceed $100,000.
new text end

new text begin (d) A qualifying facility may blend a cellulosic biomass with other fuels in the
biomass thermal production facility, but only the percentage attributable to cellulosic
material listed is eligible to receive the producer payment.
new text end

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

new text begin (f) Payments shall be made November 15, February 15, May 15, and August 15. A
separate payment shall be made for each claim filed.
new text end

new text begin (g) Advanced biofuel production for which payment has been received under section
41A.13, and renewable chemical production for which payment has been received under
section 41A.14, are not eligible for payment under this section.
new text end