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HF 4538

as introduced - 91st Legislature (2019 - 2020) Posted on 04/30/2020 09:53am

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

Bill Text Versions

Engrossments
Introduction Posted on 04/14/2020

Current Version - as introduced

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A bill for an act
relating to agriculture; establishing a farm safety grant and outreach program;
increasing funding for farm and rural mental health services; making policy and
technical changes to various agriculture-related provisions including provisions
related to farm products, loans, and food; appropriating money; amending
Minnesota Statutes 2018, sections 27.001; 27.01; 27.03, subdivisions 3, 4; 27.0405,
subdivision 1; 27.06; 27.07; 27.08; 27.09; 27.10; 27.11; 27.13; 27.131; 27.133;
27.137, subdivisions 5, 7, 9, 10; 27.138; 27.19, subdivision 1; 31.175; 41B.056,
subdivision 4; Laws 2019, First Special Session chapter 1, article 1, section 2,
subdivision 3; proposing coding for new law in Minnesota Statutes, chapter 17;
repealing Minnesota Statutes 2018, sections 13.6435, subdivision 5; 27.03,
subdivision 1; 27.04; 27.041.

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

ARTICLE 1

AGRICULTURE APPROPRIATIONS

Section 1.

Laws 2019, First Special Session chapter 1, article 1, section 2, subdivision 3,
is amended to read:


Subd. 3.

Agricultural Marketing and
Development

3,996,000
deleted text begin 3,996,000
deleted text end new text begin 4,046,000
new text end

(a) $186,000 the first year and $186,000 the
second year are for transfer to the Minnesota
grown account and may be used as grants for
Minnesota grown promotion under Minnesota
Statutes, section 17.102. Grants may be made
for one year. Notwithstanding Minnesota
Statutes, section 16A.28, the appropriations
encumbered under contract on or before June
30, 2021, for Minnesota grown grants in this
paragraph are available until June 30, 2023.

(b) $100,000 the first year and $100,000 the
second year are to expand domestic and
international marketing opportunities for
farmers and value-added processors, including
staffing to facilitate farm-to-school sales and
new markets for Minnesota-grown hemp.

(c) $634,000 the first year and $634,000 the
second year are for continuation of the dairy
development and profitability enhancement
and dairy business planning grant programs
established under Laws 1997, chapter 216,
section 7, subdivision 2, and Laws 2001, First
Special Session chapter 2, section 9,
subdivision 2. The commissioner may allocate
the available sums among permissible
activities, including efforts to improve the
quality of milk produced in the state, in the
proportions that the commissioner deems most
beneficial to Minnesota's dairy farmers. The
commissioner must submit a detailed
accomplishment report and a work plan
detailing future plans for, and anticipated
accomplishments from, expenditures under
this program to the chairs and ranking minority
members of the legislative committees and
divisions with jurisdiction over agriculture
policy and finance on or before the start of
each fiscal year. If significant changes are
made to the plans in the course of the year,
the commissioner must notify the chairs and
ranking minority members.

(d) $50,000 the first year and deleted text begin$50,000deleted text endnew text begin
$100,000
new text end the second year are for additional
community outreach on farms and rural mental
health services including the 24-hour hotline,
service availability, and mental health forums.
Of this appropriation, $12,000 each year is to
provide professional development training for
Farm Business Management instructors in the
Minnesota State system. The appropriations
under this paragraph are onetime.

(e) The commissioner may use funds
appropriated in this subdivision for annual
cost-share payments to resident farmers or
entities that sell, process, or package
agricultural products in this state for the costs
of organic certification. The commissioner
may allocate these funds for assistance to
persons transitioning from conventional to
organic agriculture.

Sec. 2. new text beginFARM SAFETY GRANT AND OUTREACH; APPROPRIATION.
new text end

new text begin $250,000 in fiscal year 2021 is appropriated from the general fund to the commissioner
of agriculture for farm safety grants and outreach programs under Minnesota Statutes,
section 17.1195. This is a onetime appropriation.
new text end

ARTICLE 2

DEPARTMENT OF AGRICULTURE; STATUTORY CHANGES

Section 1.

new text begin [17.1195] FARM SAFETY GRANT AND OUTREACH PROGRAMS.
new text end

new text begin Subdivision 1. new text end

new text begin Tractor rollover grants; eligibility. new text end

new text begin (a) The commissioner must award
grants to Minnesota farmers and Minnesota schools that retrofit eligible tractors with eligible
rollover protective structures.
new text end

new text begin (b) Grants for farmers are limited to 70 percent of the farmer's documented cost to
purchase, ship, and install an eligible rollover protective structure. The commissioner must
increase a farmer's grant award amount over the 70 percent grant limitation requirement if
necessary to limit a farmer's cost per tractor to no more than $500.
new text end

new text begin (c) Schools are eligible for grants that cover the full amount of a school's documented
cost to purchase, ship, and install an eligible rollover protective structure.
new text end

new text begin (d) A rollover protective structure is eligible if it is certified to appropriate national or
international rollover protection structure standards with a seat belt.
new text end

new text begin (e) "Eligible tractor" means a tractor that was built before 1987.
new text end

new text begin Subd. 2. new text end

new text begin Grain storage facility safety grants and outreach programs. new text end

new text begin (a) The
commissioner may award grants to Minnesota farmers who purchase grain storage facility
safety protection equipment. Grants are limited to 75 percent of the farmer's documented
cost to purchase, ship, and install grain storage facility safety protection equipment.
new text end

new text begin (b) Eligible grain storage facility safety protection equipment includes:
new text end

new text begin (1) fall protection systems;
new text end

new text begin (2) engineering controls to prevent contact with an auger or other moving parts;
new text end

new text begin (3) dust collection systems to minimize explosion hazards; and
new text end

new text begin (4) other grain storage facility safety protection equipment approved by the commissioner.
new text end

new text begin (c) The commissioner may create a farm safety outreach campaign, including but not
limited to development and distribution of safety educational materials related to grain bins,
silos, and other agricultural confined spaces.
new text end

new text begin Subd. 3. new text end

new text begin Promotion; administration. new text end

new text begin The commissioner may spend up to six percent
of total program dollars each fiscal year to promote and administer the program to Minnesota
farmers and schools.
new text end

new text begin Subd. 4. new text end

new text begin Nonstate sources; appropriation. new text end

new text begin The commissioner must accept contributions
from nonstate sources to supplement state appropriations for this program. Contributions
received under this subdivision are appropriated to the commissioner for purposes of this
section.
new text end

Sec. 2.

Minnesota Statutes 2018, section 27.001, is amended to read:


27.001 PUBLIC POLICY.

The legislature recognizes that perishable deleted text beginagriculturaldeleted text endnew text begin farmnew text end products are important
sources of revenue to a large number of citizens of this state engaged in producing,
processing, manufacturing, or selling such products and that such products cannot be
repossessed in case of default. It is therefore declared to be the policy of the legislature that
certain financial protection be afforded those who are producers on the farmdeleted text begin; farmer
cooperatives which are not wholesale produce dealers as described in section 27.01,
subdivision 8
; and licensed wholesale produce dealers, including the retail merchant
purchasing produce directly from farmers
deleted text endnew text begin and suppliers of perishable farm productsnew text end. The
provisions of this chapter which relate to perishable agricultural commodities shall be
liberally construed to achieve these ends and shall be administered and enforced with a view
to carrying out the above declaration of policy.new text begin A person who handles perishable farm
products in a manner described under this chapter is required to comply with all applicable
rules adopted by the commissioner.
new text end

Sec. 3.

Minnesota Statutes 2018, section 27.01, is amended to read:


27.01 DEFINITIONS.

Subd. 2.

deleted text beginProducedeleted text endnew text begin Perishable farm productsnew text end.

deleted text begin"Produce"deleted text endnew text begin "Perishable farm products"new text end
means:

(1) deleted text beginperishabledeleted text endnew text begin produce, includingnew text end fresh fruits deleted text beginanddeleted text endnew text begin,new text end vegetablesnew text begin, and mushroomsnew text end;

(2) milk and cream and products manufactured from milk and cream; and

(3) poultry and poultry productsnew text begin, including eggsnew text end.

Subd. 4.

Voluntary extension of credit.

The term "voluntary extension of credit" means
a written agreement between deleted text beginthedeleted text endnew text begin anew text end seller and deleted text beginthe licenseedeleted text endnew text begin a buyernew text end wherein the time of payment
for the purchase price of deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end is extended beyond deleted text beginthedeleted text endnew text begin anew text end due
date.

Subd. 5.

Due date.

new text begin(a) new text end"Due date" means deleted text begintendeleted text endnew text begin 30new text end days from the date of delivery of deleted text beginproducedeleted text endnew text begin
perishable farm products
new text end by deleted text beginthedeleted text endnew text begin anew text end seller to deleted text beginthe licenseedeleted text endnew text begin a buyernew text end if the due date is not specified
in the contract. For purposes of this definition a signed invoice with a due date is a contract.

new text begin (b) new text endIf deleted text beginproduce isdeleted text endnew text begin perishable farm products arenew text end consigned, "due date" means deleted text begintendeleted text endnew text begin 30new text end days
from the date the sale is made by the broker or handler, except as to milk processing plants,
where the due date means 15 days following the monthly day of accounting subsequent to
deliveries following the date fixed by each milk processing plant for that accounting.

Subd. 7.

Commissioner.

"Commissioner" means the commissioner of deleted text beginthe Department
of
deleted text end agriculture.

Subd. 8.

deleted text beginWholesale producedeleted text endnew text begin Farm productsnew text end dealer.

(a) deleted text begin"Wholesale produce dealer"
or "dealer at wholesale"
deleted text endnew text begin "Farm products dealer," "dealer of farm products," or "dealer"new text end
means:

deleted text begin (1) adeleted text endnew text begin anynew text end personnew text begin operating as a retail food handler, wholesale food handler, wholesale
food processor or manufacturer, or food broker
new text end who buys from or contracts with a seller
for production or sale of deleted text beginproduce in wholesale lotsdeleted text endnew text begin perishable farm productsnew text end for resaledeleted text begin;deleted text endnew text begin.
new text end

deleted text begin (2) a person engaging in the business of a broker or agent, who handles or deals in
produce for a commission or fee;
deleted text end

deleted text begin (3) a truck owner or operator who buys produce in wholesale lots for resale; and
deleted text end

deleted text begin (4) a person engaged in the business of a cannery, food manufacturer, or food processor,
who purchases produce in wholesale lots as a part of that business.
deleted text end

deleted text begin (b) For purposes of paragraph (a), "wholesale lots" means purchases from Minnesota
sellers must total more than $12,000 annually.
deleted text end

deleted text begin (c) "Wholesale produce dealer" or "dealer at wholesale"deleted text endnew text begin (b) "Farm products dealer,"
"dealer of farm products," or "dealer"
new text end does not include:

(1) a truck owner and operator who regularly engages in the business of transporting
freight, including deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end, for a transportation fee only, and who
does not purchase, contract to purchase, or sell produce;

deleted text begin (2) a marketing cooperative association in which substantially all of the voting stock is
held by patrons who patronize the association and in which at least 75 percent of the business
of the association is transacted with member or stockholder patrons;
deleted text end

deleted text begin (3)deleted text endnew text begin (2)new text end a person who purchases deleted text beginMinnesota seasonally grown perishable fresh fruits and
vegetables,
deleted text endnew text begin perishable farm productsnew text end and paysnew text begin innew text end cash, including lawful money of the United
States, a cashier's check, a certified check, or a bank draft;new text begin or
new text end

deleted text begin (4)deleted text endnew text begin (3)new text end a person who handles and deals in only canned, packaged, or processed deleted text beginproduce
or packaged dairy
deleted text endnew text begin perishable farmnew text end products that are no longer perishable as determined by
the commissioner by ruledeleted text begin; ordeleted text endnew text begin.
new text end

deleted text begin (5) retail merchants who purchase produce, defined in subdivision 2, directly from
farmers, which in the aggregate does not exceed $500 per month.
deleted text end

Subd. 10.

Seller.

"Seller" means a farmer or deleted text beginwholesale produce dealerdeleted text endnew text begin perishable farm
products supplier
new text end, whether the person is the owner of the deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end
or produces it for another person who holds title to it.

new text begin Subd. 11. new text end

new text begin Person. new text end

new text begin "Person" has the meaning given in section 34A.01, subdivision 10.
new text end

new text begin Subd. 12. new text end

new text begin Miscellaneous terms. new text end

new text begin "Retail food handler," "wholesale food handler,"
"wholesale food processor or manufacturer," and "food broker" have the meanings given
in section 28A.05.
new text end

Sec. 4.

Minnesota Statutes 2018, section 27.03, subdivision 3, is amended to read:


Subd. 3.

Brokers.

(a) A deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer operating as a broker,
upon negotiating the sale ofnew text begin perishablenew text end farm products, deleted text beginshalldeleted text endnew text begin mustnew text end issue to both buyer and
seller a written memorandum of sale before the close of the next business day showingnew text begin thenew text end
price, date of delivery, quality, and other details of the transaction.

(b) The memorandum required in paragraph (a) must have an individual identifying
number printed upon it. Numbers must be organized and printed on the memoranda so that
each memorandum can be identified and accounted for sequentially. Unused or damaged
memoranda must be retained by the broker for accounting purposes.

(c) A deleted text beginwholesale producedeleted text end dealer operating as a broker may not alter the terms of a
transaction specified on the original memorandum of sale required in paragraph (a) without
the consent of both parties to the transaction. Upon making a change, the broker is required
to issue a clearly marked corrected memorandum of sale indicating the date and time when
the adjustment or change was made. The broker shall transmit the corrected memorandum
to both the buyer and seller before the close of the next business day.

Sec. 5.

Minnesota Statutes 2018, section 27.03, subdivision 4, is amended to read:


Subd. 4.

Payments for deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end.

If there is a contract between
a seller and a deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer to buy deleted text beginproducedeleted text endnew text begin perishable farm
products
new text end, the deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer must pay for the deleted text beginproduce that isdeleted text endnew text begin
perishable farm products
new text end delivered to the deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer at the
time and in the manner specified in the contract with the seller. If the due date is not set by
the contract, the deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer deleted text beginshalldeleted text endnew text begin mustnew text end pay for the deleted text beginproduce by
ten
deleted text endnew text begin perishable farm products within 30new text end days after delivery or taking possession of the deleted text beginproducedeleted text endnew text begin
perishable farm products
new text end. A payment received after the due date must include payment of
12 percent annual interest prorated for the number of days past the due date.

Sec. 6.

Minnesota Statutes 2018, section 27.0405, subdivision 1, is amended to read:


Subdivision 1.

Production and review of information.

(a) Upon special order, the
commissioner may require deleted text beginpersons engaged in the business ofdeleted text end anew text begin farm productsnew text end dealer deleted text beginat
wholesale
deleted text end to file at the time and in the manner the commissioner directs, sworn or unsworn
reports or answers in writing to specific questions on any matter which the commissioner
may investigate.

(b) For the purposes of this section, the commissioner or the commissioner's authorized
agents may audit and review any records relating to the financial condition of anynew text begin farm
products
new text end dealer deleted text beginat wholesaledeleted text end and any transactions between the dealer and persons entitled
to the protections of this chapter, if the records are in the possession of or under the case,
custody, or control of the dealer or the dealer's authorized agent.

Sec. 7.

Minnesota Statutes 2018, section 27.06, is amended to read:


27.06 COMPLAINTS TO COMMISSIONER, HEARING; ACTION ON BOND.

A person claiming to be damaged by a breach of the conditions of a deleted text beginbond given by a
licensee
deleted text endnew text begin sales contractnew text end may submit a complaint to the commissioner within 40 days after
the due date. The complaint must be a written statement of the facts constituting the
complaint. After receiving a filed complaint, the commissioner deleted text beginshalldeleted text endnew text begin mustnew text end investigate the
charges made and may have the matter heard as a contested case pursuant to chapter 14 if
an affected party requests a hearing.

Sec. 8.

Minnesota Statutes 2018, section 27.07, is amended to read:


27.07 GRADES ESTABLISHED; INSPECTION.

Subdivision 1.

Commissioner's power.

The commissioner shall have power to establish
grades on all deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end and when deleted text begindeemeddeleted text end necessary shall provide
for inspecting and grading deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end subject to sale at deleted text beginsuchdeleted text end marketing
points within the state as the commissioner may designate.

Subd. 2.

Certificates.

The commissioner shall deleted text beginprovide for the issuing ofdeleted text endnew text begin issuenew text end certificates
of inspection showing the grade, quality, and conditions of deleted text beginthe producedeleted text endnew text begin perishable farm
products
new text end, and may charge and collect a reasonable fee deleted text begintherefor, a schedule thereof to be
adopted and published from time to time. Such certificates
deleted text endnew text begin for the issuance of a certificate
of inspection. A certificate
new text end of inspection deleted text beginshall bedeleted text endnew text begin isnew text end prima facie evidence in all courts of this
state as to the grade, quality, and condition of deleted text beginthe producedeleted text endnew text begin perishable farm productsnew text end at the
time the inspection was made.

Subd. 3.

Application for inspector's services.

Any person who wants deleted text beginproducedeleted text endnew text begin perishable
farm products or a perishable farm products sales transaction
new text end to be inspected may apply to
the commissioner for the service of an inspector and, if it appears to the commissioner that
thenew text begin perishable farm productsnew text end volume deleted text beginof the producedeleted text end is sufficient to justify the request, the
commissioner may grant the service upon terms and conditions fixed by the commissioner
and this section.

Subd. 4.

Deposit agreement.

The commissioner may require an agreement, prior to the
establishment of the inspection service, requiring the user of the inspection service to at all
times have on deposit with the department a sufficient amount of money to pay the estimated
costs of such inspection service for a period of not less than 15 days in advance. When any
such agreement shall terminate by action of either party thereto, the commissioner shall pay
to the depositor any money remaining to the depositor's credit after the deduction of the
costs at the time such agreement terminates.

Subd. 5.

Fees.

Fees for inspection shall be determined by the commissioner and shall
be reviewed and adjusted every six months. In determining the fees to be charged, the
commissioner shall take into consideration fees charged in other states offering similar
inspection services to the end that the fees charged will provide a competitive marketing
position for Minnesota deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end.

Subd. 6.

Cooperative agreements; fees; account.

The commissioner may collect fees
as provided for in cooperative agreements between the commissioner and the United States
Department of Agriculture for the inspection of deleted text beginfresh fruits, vegetables, and otherdeleted text endnew text begin perishable
farm
new text end products. The fees and interest attributable to money in the account must be deposited
in the agricultural fund and credited to a fruit and vegetables inspection account. Money in
the account, including interest earned, is appropriated to the commissioner to administer
the cooperative agreements.

Sec. 9.

Minnesota Statutes 2018, section 27.08, is amended to read:


27.08 FILING BRAND OR LABEL; PERMIT.

Any person producing, manufacturing, or handlingdeleted text begin,deleted text endnew text begin perishable farm productsnew text end in this
statedeleted text begin, any of the products mentioned in section 27.01deleted text end, except cheese and butter, and preparing,
packing, and offering deleted text beginthe samedeleted text endnew text begin perishable farm productsnew text end for sale, may file with the
commissioner a brand or labeldeleted text begin, anddeleted text endnew text begin.new text end The applicant may place upon this brand or label deleted text beginsuchdeleted text endnew text begin
a
new text end descriptive or locative matternew text begin,new text end as deleted text beginshall bedeleted text end approved by the commissioner. The commissioner
may issue to deleted text beginsuchdeleted text endnew text begin annew text end applicant for brands and labels a permit to use the same, subject to
deleted text begin suchdeleted text endnew text begin thenew text end rules and restrictions as to quality of product so branded as the commissioner may
determine. The brand or label shall be recorded in the office of the commissioner and any
person who shall, without authority of the commissioner, brand and label therewith products
or commodities of a quality below the standard permitted under the brand or label, shall be
subject to the penal provisions of section 27.19.

Sec. 10.

Minnesota Statutes 2018, section 27.09, is amended to read:


27.09 INSPECTION CERTIFICATE.

When deleted text beginproduce isdeleted text endnew text begin perishable farm products arenew text end ready for sale, or deleted text beginis on itsdeleted text endnew text begin are on thenew text end way
to market, the owner deleted text beginthereofdeleted text end, deleted text beginor thedeleted text end conveyor, deleted text beginor thedeleted text end prospective buyer, or any other deleted text begininterested
party,
deleted text endnew text begin person with an interest in the perishable farm productsnew text end may deleted text begincall for and shall be
entitled to
deleted text endnew text begin request an new text endinspection of deleted text beginsuch produce and to an inspection certificate, as provided
for in
deleted text end new text beginthe perishable farm products under new text endsection 27.07.

Sec. 11.

Minnesota Statutes 2018, section 27.10, is amended to read:


27.10 deleted text beginPRODUCE EXAMINED, WHENdeleted text endnew text begin PERISHABLE FARM PRODUCTS
EXAMINATION
new text end.

new text begin (a) new text endWhen deleted text beginproduce isdeleted text endnew text begin perishable farm products arenew text end shipped to or received by anew text begin farm
products
new text end dealer deleted text beginat wholesaledeleted text end for handling, purchase, or sale in this state deleted text beginat any market point
therein giving inspection service, as provided for in section 27.07,
deleted text end and thenew text begin farm productsnew text end
dealer deleted text beginat wholesaledeleted text end finds the deleted text beginsamedeleted text endnew text begin perishable farm productsnew text end to be in a spoiled, damaged,
unmarketable, or unsatisfactory condition, deleted text beginunless both parties shall waive inspection before
sale or other disposition thereof,
deleted text end the dealer deleted text beginshall cause the same to bedeleted text endnew text begin must have the
perishable farm products
new text end examined by an inspector assigned by the commissioner for that
purposedeleted text begin, anddeleted text endnew text begin.new text end The inspector deleted text beginshalldeleted text endnew text begin mustnew text end execute and deliver a certificate to the deleted text beginapplicant
thereof
deleted text endnew text begin farm products dealernew text end stating the day, the time and place of the inspection, and the
condition of the produce and mail or deliver a copy of the certificate to the shipper deleted text beginthereofdeleted text endnew text begin
of the perishable farm products
new text end.

new text begin (b) This section does not apply when the parties to the perishable farm products sales
contract waive the inspection requirement.
new text end

Sec. 12.

Minnesota Statutes 2018, section 27.11, is amended to read:


27.11 SHIPMENTS ON CONSIGNMENT.

When anynew text begin farm productsnew text end dealer deleted text beginat wholesaledeleted text end to whom deleted text beginproduce hasdeleted text endnew text begin perishable farm
products have
new text end been shipped or consigned for sale on a commission basis or on consignment
or under any circumstances deleted text beginwhereindeleted text endnew text begin wherenew text end the title to the deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end
remains with the shipper, deleted text beginhas received the same,deleted text end the dealer deleted text beginshalldeleted text endnew text begin mustnew text end, within a reasonable
time deleted text beginthereafter, make a writtendeleted text endnew text begin,new text end report to the shipperdeleted text begin, which report shall includedeleted text end the exact
time of arrival,new text begin andnew text end the quantity, quality, and price per unit of the deleted text beginproduce and at the same
time shall
deleted text endnew text begin perishable farm products. The dealer mustnew text end pay the shipper the net amount duenew text begin at
the time the report required under this section is made
new text end.

Sec. 13.

Minnesota Statutes 2018, section 27.13, is amended to read:


27.13 INVESTIGATION OF COMPLAINTSdeleted text begin; SUSPENSION OR REVOCATION
OF LICENSE
deleted text end.

new text begin (a) new text endThe commissioner is authorized tonew text begin: (1)new text end receive complaints against any deleted text beginpersonsdeleted text endnew text begin personnew text end
dealing in, shipping, transporting, storing, or selling deleted text beginproduce, and shall have authority todeleted text endnew text begin
perishable farm products; (2)
new text end make any and all necessary investigations relative to the
handling of, or storing, shipping, or dealing in deleted text beginproduce at wholesale and shall, at all times,
have access to
deleted text endnew text begin perishable farm products; and (3) enter with reasonable noticenew text end all buildings,
yards, warehouses, storage and transportation facilities in which deleted text beginany produce isdeleted text endnew text begin perishable
farm products are
new text end kept, stored, handled or transacted. deleted text beginFor the purpose of enforcing the
provisions of sections 27.01 to 27.14 and 27.19, the commissioner shall have the authority,
upon complaint being filed for any alleged violation of the provisions thereof, or the rules
issued thereunder, or upon information furnished by an inspector of the Department of
Agriculture, to suspend while violation continues or revoke any license issued by the
commissioner upon ten days notice to the licensee and an opportunity to be heard. Where
the public interest requires it the commissioner may suspend a license after such notice
pending hearing and decision.
deleted text end

new text begin (b)new text end The commissioner deleted text beginshall have, and is hereby granted, full authority todeleted text endnew text begin may: (1)new text end issue
subpoenas requiring the attendance of witnesses before the commissioner, with books,
papers, and other documents, articles, or instrumentsdeleted text begin, and todeleted text endnew text begin; (2)new text end compel the disclosure by
such witnesses of all facts known to them relative to deleted text beginthedeleted text endnew text begin anew text end matter under investigationdeleted text begin, and
shall have full authority to
deleted text endnew text begin; and (3)new text end administer oaths and deleted text begintodeleted text end take testimonydeleted text begin; anddeleted text endnew text begin.
new text end

new text begin (c)new text end The commissioner deleted text beginshall thereafter give thedeleted text endnew text begin must provide anew text end complainant a written
report of the investigationnew text begin conducted under this sectionnew text end. deleted text beginSuch report shall bedeleted text endnew text begin The report isnew text end
prima facie evidence of the matters deleted text beginthereindeleted text end containednew text begin in the reportnew text end. deleted text beginAll parties disobeying
the orders or subpoenas of the commissioner shall be
deleted text endnew text begin A party violating a commissioner's
order or subpoena is
new text end guilty of contempt as in proceedings in district courts of the state and
may be punished in like manner.

Sec. 14.

Minnesota Statutes 2018, section 27.131, is amended to read:


27.131 MEDIATION AND ARBITRATION.

A contract for deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end between a buyer and a seller must
contain language providing for resolution of contract disputes by either mediation or
arbitration. If there is a contract dispute, either party may make a written request to the
deleted text begin departmentdeleted text endnew text begin commissionernew text end for mediation or arbitration, as specified in the contract to facilitate
resolution of the dispute.

Sec. 15.

Minnesota Statutes 2018, section 27.133, is amended to read:


27.133 PARENT COMPANY LIABILITY.

If a deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer is a subsidiary of another corporation,
partnership, or association, the parent corporation, partnership, or association is liable to a
seller for the amount of any unpaid claim or contract performance claim if the deleted text beginwholesale
produce
deleted text endnew text begin farm productsnew text end dealer fails to pay or perform according to the terms of the contract
and this chapter.

Sec. 16.

Minnesota Statutes 2018, section 27.137, subdivision 5, is amended to read:


Subd. 5.

Proceeds.

"Proceeds" means whatever is received upon the sale, exchange,
collection, or transfer of deleted text beginproduce, products of produce, or proceeds from the produce or
products of produce
deleted text endnew text begin perishable farm products or manufactured farm productsnew text end.

Sec. 17.

Minnesota Statutes 2018, section 27.137, subdivision 7, is amended to read:


Subd. 7.

deleted text beginProducts of producedeleted text endnew text begin Manufactured farm productsnew text end.

deleted text begin"Products of produce"deleted text endnew text begin
"Manufactured farm products"
new text end means products derived from deleted text beginproducedeleted text endnew text begin perishable farm
products
new text end through manufacturing, processing, or packaging.

Sec. 18.

Minnesota Statutes 2018, section 27.137, subdivision 9, is amended to read:


Subd. 9.

Trust assets.

"Trust assets" means deleted text beginproduce, products of produce, and proceeds
from the produce or products of produce
deleted text endnew text begin perishable farm products or manufactured farm
products and proceeds from the perishable or manufactured farm products
new text end.

Sec. 19.

Minnesota Statutes 2018, section 27.137, subdivision 10, is amended to read:


Subd. 10.

deleted text beginWholesale producedeleted text endnew text begin Farm productsnew text end dealer.

"deleted text beginWholesale producedeleted text endnew text begin Farm
products
new text end dealer" has the meaning given in section 27.01, subdivision 8deleted text begin, and includes the
person whether or not the person is licensed
deleted text end.

Sec. 20.

Minnesota Statutes 2018, section 27.138, is amended to read:


27.138 deleted text beginWHOLESALE PRODUCEdeleted text endnew text begin FARM PRODUCTSnew text end DEALERS' TRUST.

Subdivision 1.

Trust establishment and maintenance.

(a) deleted text beginThe produce and products
of produce of a wholesale produce dealer
deleted text endnew text begin A farm products dealer's perishable farm products
and manufactured farm products
new text end and proceedsnew text begin related to the sale of a farm products dealer's
perishable farm products or manufactured farm products
new text end are held in trust for the benefit of
unpaid sellers.

(b) The trust assets are to be maintained as a nonsegregated floating trust. Commingling
of the trust assets is contemplated.

(c) The deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer must maintain the trust assets in a
manner that makes the trust assets freely available to satisfy the amounts owed to unpaid
sellers and may not divert trust assets in a manner that impairs the ability of unpaid sellers
to recover amounts due.

(d) A deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer must maintain the trust assets in trust until
payment has been made in full to unpaid sellers. Payment is not made if a seller receives a
payment instrument that is dishonored.

(e) A deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer holds trust assets in trust for the seller,
except that the deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer may transfer title to trust assets if
the proceeds of the transfer are maintained as trust assets. Until a seller is paid, a deleted text beginwholesale
produce
deleted text endnew text begin farm productsnew text end dealer deleted text begindoesdeleted text endnew text begin mustnew text end not transfer title to trust assets:

(1) in a transaction made to another deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer;

(2) in a transaction intended to impair the ability of unpaid sellers to recover amounts
due; or

(3) for which the value is inadequate to satisfy filed beneficiaries notices.

Subd. 2.

Sellers' rights to trust assets.

(a) An unpaid seller may recover trust assets for
the net amount unpaid after the due date after allowing deductions of contemplated expenses
or advances made in connection with the transaction. An amount is considered unpaid if a
seller receives a payment instrument that is dishonored.

(b) An unpaid seller may recover trust assets after filing a beneficiaries notice with the
deleted text begin wholesale producedeleted text endnew text begin farm productsnew text end dealer to whom the deleted text beginproduce wasdeleted text endnew text begin perishable farm products
were
new text end transferred and the commissioner, and after filing in the central filing system under
section 336.9-501 as if the trust were a security interest in the trust assets by 40 days after
the due date for the payment to the seller or 40 days after a payment instrument to the seller
for the deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end is dishonored, whichever is later.

Subd. 3.

Beneficiaries notice.

(a) A beneficiaries notice must be in writing and in a
form prescribed by the commissioner.

(b) The beneficiaries notice must contain:

(1) the name and address of the seller;

(2) the name and address of the deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer maintaining
the trust assets;

(3) the deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end, amount of deleted text beginproducedeleted text endnew text begin productnew text end, amount to be paid
the seller, and the due date of transactions that are unpaid or, if appropriate, the date a
payment instrument was dishonored; and

(4) a description of the trust assets.

(c) The filing officer deleted text beginshalldeleted text endnew text begin mustnew text end enter on the initial financing statement filed pursuant
to this section the time of day and date of filing. The filing officer deleted text beginshalldeleted text endnew text begin mustnew text end accept filings,
amendments, and terminations of an initial financing statement filed pursuant to this section
and charge the same filing fees as provided in section 336.9-525. An initial financing
statement filed pursuant to this section is void and may be removed from the filing system
18 months after the date of filing. The beneficiaries notice may be physically destroyed 30
months after the date of filing.

Subd. 4.

Priority of unpaid sellers' interests in trust assets.

(a) The unpaid seller's
interest in trust assets is paramount to all other liens, security interests, and encumbrances
in the trust assets. An unpaid seller who recovers trust assets recovers them free of any liens,
security interests, or encumbrances.

(b) If the trust assets are inadequate to pay unpaid sellers the amount due, the unpaid
sellers shall share proportionately in the trust assets.

Subd. 5.

Recovery actions.

An action to recover trust assets may be brought in district
court in a county where trust assets are located after the beneficiaries notice is filed. The
beneficiaries notice may be amended, except the amount due, by leave of the court in
furtherance of justice. An action to recover trust assets is barred if it is not brought by 18
months after the date the beneficiaries notice is filed.

Subd. 6.

Terminations of beneficiaries notice.

A seller must terminate a beneficiaries
notice by ten days after the amount due for the deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer is
paid. The commissioner may terminate a beneficiaries notice upon request and demonstration
by the deleted text beginwholesale producedeleted text endnew text begin farm productsnew text end dealer that the amounts due under the beneficiaries
notice have been paid.

Sec. 21.

Minnesota Statutes 2018, section 27.19, subdivision 1, is amended to read:


Subdivision 1.

Prohibited acts.

(a) A person subject to the provisions of this section
and sections 27.01 to 27.14 deleted text beginmaydeleted text endnew text begin mustnew text end not:

deleted text begin (1) operate or advertise to operate as a dealer at wholesale without a license;
deleted text end

deleted text begin (2)deleted text endnew text begin (1)new text end make any false statement or report as to the grade, condition, markings, quality,
or quantity of produce, as defined in section 27.069, received or delivered, or act in any
manner to deceive a consignor or purchaser;

deleted text begin (3)deleted text endnew text begin (2)new text end refuse to accept a shipment contracted for by the person, unless the refusal is
based upon the showing of a state inspection certificate secured with reasonable promptness
after the receipt of the shipment showing that the kind and quality of produce, as defined
in section 27.069, is other than that purchased or ordered by the person;

deleted text begin (4)deleted text endnew text begin (3)new text end fail to account or make a settlement for deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end within
the required time;

deleted text begin (5)deleted text endnew text begin (4)new text end violate or fail to comply with the terms or conditions of a contract entered into
by the person for the purchase, production, or sale of deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end;

deleted text begin (6)deleted text endnew text begin (5)new text end purchase for a person's own account any produce received on consignment, either
directly or indirectly, without the consent of the consignor;

deleted text begin (7)deleted text endnew text begin (6)new text end issue a false or misleading market quotation, or cancel a quotation during the
period advertised by the person;

deleted text begin (8)deleted text endnew text begin (7)new text end increase the sales charges on deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end shipped to the
person by means of "dummy" or fictitious sales;

deleted text begin (9)deleted text endnew text begin (8)new text end receive decorative forest products and the products of farms and waters from
foreign states or countries for sale or resale, either within or outside of the state, and give
the purchaser the impression, through any method of advertising or description, that the
deleted text begin produce isdeleted text endnew text begin perishable farm products arenew text end of Minnesota origin;

deleted text begin (10) fail to notify in writing all suppliers of produce of the protection afforded to suppliers
by the person's licensee bond, including: availability of a bond, notice requirements, and
any other conditions of the bond;
deleted text end

deleted text begin (11) make a false statement to the commissioner on an application for license or bond
or in response to written questions from the commissioner regarding the license or bond;
deleted text end

deleted text begin (12)deleted text endnew text begin (9)new text end commit to pay and not pay in full for all deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end
committed for. A processor may not pay an amount less than the full contract price if the
crop produced is satisfactory for processing and is not harvested for reasons within the
processor's control. If the processor sets the date for planting, then bunching, unusual yields,
and a processor's inability or unwillingness to harvest must be considered to be within the
processor's control. Under this clause growers must be compensated for passed acreage at
the same rate for grade and yield as they would have received had the crop been harvested
in a timely manner minus any contractual provision for green manure or feed value. Both
parties are excused from payment or performance for crop conditions that are beyond the
control of the parties; or

deleted text begin (13)deleted text endnew text begin (10)new text end discriminate between different sections, localities, communities, or cities, or
between persons in the same community, by purchasing deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end
from farmers of the same grade, quality, and kind, at different prices, except that price
differentials are allowed if directly related to the costs of transportation, shipping, and
handling of the deleted text beginproducedeleted text endnew text begin perishable farm productsnew text end and a person is allowed to meet the prices
of a competitor in good faith, in the same locality for the same grade, quality, and kind of
deleted text begin producedeleted text endnew text begin perishable farm productsnew text end. A showing of different prices by the commissioner is
prima facie evidence of discrimination.

new text begin (b) Any person violating any provision of this chapter, or any rule adopted under this
chapter, is guilty of a misdemeanor.
new text end

deleted text begin (b)deleted text endnew text begin (c)new text end A separate violation occurs with respect to each different person involved, each
purchase or transaction involved, and each false statement.

new text begin (d) Any prosecuting officer to whom the commissioner reports a violation of this chapter,
or a violation of any rule adopted under this chapter, must bring appropriate proceedings
in a proper court without delay for the enforcement of the penalties under this chapter.
new text end

Sec. 22.

Minnesota Statutes 2018, section 31.175, is amended to read:


31.175 WATER, PLUMBING, AND SEWAGE.

A person who is required by statutes administered by the Department of Agriculture, or
by rules adopted pursuant to those statutes, to provide a suitable water supply, or plumbing
or sewage disposal system shall not engage in the business of manufacturing, processing,
selling, handling, or storing food at wholesale or retail unless the person's water supply is
satisfactory pursuant to rules adopted by the Department of Health, the person's plumbing
is satisfactory pursuant to rules adopted by the Department of Labor and Industry, and the
person's sewage disposal system satisfies the rules of the Pollution Control Agency.new text begin This
section does not limit the commissioner's ability to issue a food handler's license when an
investigation completed pursuant section 28A.07 has determined the requirements of this
section are not relevant and the applicant is considered fit to engage in business as described
in the license application.
new text end

Sec. 23.

Minnesota Statutes 2018, section 41B.056, subdivision 4, is amended to read:


Subd. 4.

Loans.

(a) The authority may disburse loans through an intermediary to farmers
who are eligible under subdivision 3. The total accumulative loan principal must not exceed
deleted text begin $10,000deleted text endnew text begin $20,000new text end per loan.

(b) Refinancing an existing debt is not an eligible purpose.

(c) The loan may be disbursed over a period not to exceed six years.

(d) A borrower may receive loans, depending on the availability of funds, up to 70
percent of the estimated value of the crop or livestock.

(e) Security for the loan must be a personal note executed by the borrower and any other
security required by the intermediary or the authority.

(f) The authority may prescribe forms and establish an application process for applicants
to apply for a loan.

(g) The interest payable on loans for the pilot agricultural microloan program must be
at a rate determined by the authority.

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

(i) Repayments of financial assistance under this section, including principal and interest,
must be deposited into the revolving loan account established under section 41B.06.

Sec. 24. new text beginREPEALER.
new text end

new text begin Minnesota Statutes 2018, sections 13.6435, subdivision 5; 27.03, subdivision 1; 27.04;
and 27.041,
new text end new text begin are repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 20-7717

13.6435 AGRICULTURAL DATA CODED ELSEWHERE.

Subd. 5.

Wholesale produce dealers.

Financial data submitted by a license applicant are classified under section 27.04, subdivision 2.

27.03 DEALER REGULATION.

Subdivision 1.

License.

A person may not engage in, or purport to be engaged in, or hold out as being engaged in, the business of a dealer at wholesale, or as being a dealer at wholesale, unless licensed and bonded by the commissioner.

27.04 APPLICATION FOR LICENSE.

Subdivision 1.

Issuance.

The commissioner shall issue a wholesale produce dealer's license to engage in the business of a dealer at wholesale to persons submitting an application, paying the prescribed fee, and complying with the conditions in this section.

Subd. 2.

Application contents.

(a) The application must be in writing, accompanied by the prescribed fee, and state:

(1) the place or places where the applicant intends to carry on the business for which the license is desired;

(2) the estimated amount of business to be done monthly;

(3) the amount of business done during the preceding year, if any;

(4) the full names of the persons constituting the firm for a partnership, and for a corporation the names of the officers of the corporation and where incorporated; and

(5) any other information relevant to the conduct of its business as a wholesale produce dealer in the previous five years, as the commissioner may require.

(b) If a contract is used in a transaction, a copy of the contract must also be filed with the commissioner.

(c) Financial data required of an applicant under this section is classified as private data with regard to data on individuals and as nonpublic data with regard to data not on individuals under section 13.02.

Subd. 3.

Filing.

Applications shall be filed annually.

27.041 BONDS; LICENSES.

Subdivision 1.

Bonds.

(a) The applicant required to be bonded shall execute and file with the commissioner a surety bond to the state of Minnesota to be approved by the commissioner, the amount, form, and effective date to be determined by the commissioner with the maximum not to exceed $1,000,000. In lieu of the surety bond, the commissioner may accept a duly executed letter of credit. The bond or letter of credit shall be conditioned on the faithful performance of the applicant's duties as a dealer at wholesale, including:

(1) the observance of all laws relating to the carrying on of the business of a dealer at wholesale;

(2) payment when due, unless it appears to the commissioner that a voluntary extension of credit has been given on the produce by the seller to the licensee beyond the due date;

(3) the prompt settlement and payment of all claims and charges due the state for services rendered or otherwise;

(4) the prompt reporting of sales as required by law to all persons consigning produce to the licensee for sale on commission; and

(5) the prompt payment to the persons entitled thereto of the proceeds of the sales, less lawful charges, disbursements, and commissions.

(b) The bond shall cover all wholesale produce business subject to the protection outlined in section 27.001 which is:

(1) transacted within this state; or

(2) transacted in part within this state and in part within the states and provinces contiguous with this state and sold by Minnesota sellers.

Subd. 1a.

Additional bonds.

(a) The commissioner, after determining a bond given by a licensee is inadequate for the proper protection of the public, may require the licensee to give additional bonds in amounts as determined by the commissioner, with sureties to be approved by the commissioner, and conditioned as provided in this section.

(b) To set or change the amount of a bond, the commissioner may require a licensee to provide verified statements of the licensee's business.

(c) Failure of the licensee to furnish the information or to give a new or additional bond is cause for:

(1) suspension of the licensee's license for as long as the failure continues; or

(2) revocation of the license, on ten days' notice to the licensee and opportunity to be heard.

(d) If the commissioner determines it is in the public's interest, the commissioner may suspend the license after giving notice and holding a hearing.

Subd. 2.

Licenses.

(a) The license, or a certified copy of the license, must be kept posted in the office of the licensee at each place within the state where the licensee transacts business. A wholesale produce dealer may not appoint, delegate, or authorize a person, firm, or company to purchase produce unless a certified copy, identification card, or truck decal has been issued at the request of the wholesale produce dealer to that person, firm, or company acting as the buyer or agent.

(b) A license expires June 30 following its issuance and must be renewed July 1 of each year.

(c) A license issued under this subdivision is automatically void upon the termination of the surety bond covering the licensed operation.

(d) The fee for each license must include a $75 registration fee and an additional fee of .045 percent of the total annual dollar amount of produce purchased the previous year from sellers within the state of Minnesota subject to this chapter. Fees may not exceed $2,000 per license. In addition, a fee of $20 shall be charged for each certified copy of a license, $5 for each license identification card, and $10 for each license identification truck decal.

(e) A penalty amounting to ten percent of the fees due may be imposed by the commissioner for each month for which the fees are delinquent.

(f) A licensee who sells, disposes of, or discontinues the licensee's business during the lifetime of a license shall, at the time the action is taken, notify the commissioner in writing, and upon demand produce before the commissioner a full statement of all assets and liabilities as of the date of transfer or discontinuance of the business.

Subd. 3.

Account; appropriation.

A wholesale produce dealers account is created in the agricultural fund. All fees, charges, and penalties collected under sections 27.01 to 27.069 and 27.11 to 27.19, including interest attributable to that money, must be deposited in the wholesale produce dealers account. Money in the account is appropriated to the commissioner for the purposes of sections 27.01 to 27.069 and 27.11 to 27.19.