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Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1987 

                        CHAPTER 396-H.F.No. 303 
           An act relating to agriculture; regulating the 
          functions of the rural finance authority; fixing 
          conditions for certain land sales and foreclosures; 
          providing programs for the agricultural economy; 
          regulating agriculture related commerce; appropriating 
          money; amending Minnesota Statutes 1986, sections 
          17.03, by adding subdivisions; 17.101, subdivision 1; 
          17.102; 17.103; 17B.15, subdivision 1; 18.023, 
          subdivision 1; 19.58, subdivision 1; 28A.08; 31.101, 
          subdivisions 3, 4, 5, 6, 7, and 8; 32.394, 
          subdivisions 8, 8b, and 9; 40.071; 40A.03, subdivision 
          2; 40A.152, subdivisions 1 and 2; 41.56, subdivision 
          4; 41B.01, subdivision 2; 41B.02, subdivisions 4, 5, 
          6, 9, 11, 13, 14, and 15; 41B.03; 41B.035, subdivision 
          5, and by adding a subdivision; 41B.04, subdivisions 
          7, 8, 9, 10, 11, and 12; 41B.05; 41B.08, subdivision 
          4; 41B.12; 41B.19, subdivisions 5 and 6; 223.17, 
          subdivision 1; 308.58, subdivision 2; 308.62; 308.77; 
          308.83; 308.85; 473H.10, subdivision 3; 473H.17, 
          subdivisions 1, 2, and by adding a subdivision; 
          500.24, subdivisions 2, 6, and by adding a 
          subdivision; 582.041, subdivisions 1, 2, 3, and 5; 
          Laws 1985, chapter 19, section 2, subdivision 2, as 
          amended, and section 6, subdivision 6, as amended; 
          proposing coding for new law in Minnesota Statutes, 
          chapters 17; 41; 41B; 116J; 236A; 550; and 582; 
          repealing Minnesota Statutes 1986, sections 17.03, 
          subdivision 5; 18.023, subdivision 1a; 41B.02, 
          subdivision 17; 41B.035, subdivision 4; 41B.04, 
          subdivisions 6, 13, 14, 15, and 16. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                               ARTICLE 1 

                        RURAL FINANCE AUTHORITY 
    Section 1.  Minnesota Statutes 1986, section 41.56, 
subdivision 4, is amended to read:  
    Subd. 4.  [SALE OF DEFAULTED PROPERTY.] In the event that 
title to any property is acquired by the state, upon conveyance 
of title to the state and expiration of the period of 
redemption, the commissioner shall undertake to sell the 
property by publishing a notice of the impending sale at least 
once each week for four successive weeks in a legal newspaper 
and also in a newspaper of general distribution in the county in 
which the property to be sold is situated.  The notice must 
describe the lots or tracts to be offered and the terms of 
sale.  Except as further provided, the terms and method of sale 
shall be determined by the commissioner.  
    The commissioner shall first attempt to sell the property 
to a person who is eligible for a family farm security loan.  If 
the commissioner is unable to effect a sale to an eligible 
person, the commissioner shall attempt to sell the property for 
cash as provided in subdivision 4a.  If the commissioner is 
unable to effect a sale to an eligible person or for cash, or if 
the commissioner finds that sale to an eligible person or for 
cash would not best protect the interests of the state, the 
commissioner may sell the property on terms which the 
commissioner finds will best protect the interests of the state. 
The commissioner may lease any real property which the 
commissioner is unable to sell with reasonable promptness.  In 
any event, any acquired farm property must be sold within three 
years after the conveyance of title to the state or after the 
expiration of the period of redemption.  The commissioner may 
contract for the services of a licensed real estate agent or 
broker to assist in selling any property acquired under this 
section and may pay for the services from the proceeds of the 
sale before proceeds are distributed under subdivision 4b. 
    In lieu of selling property under this subdivision, the 
commissioner may utilize participation under the beginning 
farmer program under chapter 41B. 
    In selling property acquired under this section, the 
commissioner may not sell the property to a relative within the 
second degree of kindred according to common law of a person who 
has defaulted. 
    Sec. 2.  [41.65] [USE AND DISPOSITION OF PROPERTY.] 
    Subdivision 1.  [COMMISSIONER MAY SELL OR LEASE 
PROPERTY.] The commissioner may sell or lease property acquired 
by the state in a manner that protects the interests of the 
state.  Persons desiring to purchase or lease property must 
apply to the commissioner.  
    Subd. 2.  [MANAGING AND SELLING PROPERTY.] (a) The 
commissioner must attempt to sell agricultural property to 
persons entering farming and farmers that need additional 
property to continue their farming operations.  
    (b) The commissioner must give priority to applicants 
desiring to purchase or lease property who: 
    (1) are residents of the state of Minnesota; 
    (2) have sufficient education, training, or experience in 
the type of farming for which the property is desired and agree 
to continued participation in a farm management program, 
approved by the commissioner for at least the first ten years; 
    (3) have, including the applicant's dependents and spouse, 
a total net worth valued at less than $100,000 and have 
demonstrated a need for acquiring property from the commissioner;
    (4) intend to purchase farm land to be used by the 
applicant for agricultural purposes; and 
    (5) are credit worthy according to standards prescribed by 
the commissioner. 
    (c) The commissioner must attempt to sell the property by a 
cash sale.  Agricultural property may be leased with an option 
to purchase to accommodate a sale.  The commissioner should 
avoid long-term leasing of property.  
    Subd. 3.  [RESTRICTED AGRICULTURAL USE.] (a) Acquired 
property that has marginal land as defined in section 40.42, 
subdivision 6, or wetlands must be restricted from agricultural 
use on the marginal land or wetlands.  
    (b) If the commissioner determines that all or a portion of 
acquired property should be taken out of agricultural use or 
particular agricultural uses should be restricted, the 
commissioner shall have the attorney general prepare an easement 
restricting the agricultural use and file the easement with the 
county recorder where the property is located.  
    Subd. 4.  [EXCLUSIVE AGRICULTURAL USE.] The commissioner 
may place easements on acquired property restricting development 
and allowing only agricultural or conservation use. 
    Sec. 3.  Minnesota Statutes 1986, section 41B.01, 
subdivision 2, is amended to read: 
    Subd. 2.  [PURPOSE.] Sections 41B.01 to 41B.23 create and 
establish the Minnesota rural finance administration authority 
and establish a program under which state bonds are authorized 
to be issued and proceeds of their sale are appropriated under 
the authority of article XI, section 5, clause (h) of the 
Minnesota Constitution, to develop the state's agricultural 
resources by extending credit on real estate security.  The 
purpose of the program rural finance authority's programs and of 
the bonds issued to finance or provide security for the program 
programs is to purchase participation interests in loans to be 
made available by agricultural lenders to farmers in order to 
restructure existing debt and to make available additional 
credit to farmers who own or purchase agricultural properties on 
terms and conditions not otherwise available from other credit 
sources.  It is hereby found and declared that there presently 
exist in the state economic conditions which have severely 
adversely affected the economic viability of farms to the 
detriment of the rural economy and to the detriment of the 
economy of the state of Minnesota as a whole.  It is further 
found and declared that as a result of public agricultural 
policies, agricultural market conditions, and other causes, the 
condition of the farm economy of the state of Minnesota is such 
as to jeopardize the continued existence and successful 
operation of farms in this state, necessitating the 
establishment of the program programs in sections 41B.01 to 
41B.23 to provide new sources of credit on favorable terms and 
conditions.  It is further found and declared that providing 
credit for farmers on favorable terms and conditions will serve 
and promote the public welfare by assuring the viability of farm 
operations, by preventing erosion of the tax base in rural 
areas, by reducing foreclosures on farm property, and by 
enhancing the financial stability of farmers and of the 
businesses which depend on farmers as customers.  It is further 
found and declared that in establishing a Minnesota rural 
finance administration authority and in authorizing the programs 
in sections 41B.01 to 41B.23, the legislature is acting in all 
respects for the benefit of the people of the state of Minnesota 
to serve the public purpose of improving and otherwise promoting 
their health, welfare, and prosperity and that the Minnesota 
rural finance administration authority, as created and 
established, is empowered to act on behalf of the people of the 
state of Minnesota in serving this public purpose for the 
benefit of the general public. 
    Sec. 4.  Minnesota Statutes 1986, section 41B.02, 
subdivision 4, is amended to read: 
    Subd. 4.  [ELIGIBLE AGRICULTURAL LENDER; ELIGIBLE LENDER.] 
"Eligible agricultural lender" or "eligible lender" means an 
entity of the kind described in section 41B.04, subdivision 6, 
which enters into an agreement with the administration providing 
for the purchase by the administration of participation 
interests in eligible agricultural loans originated and serviced 
by the qualified agricultural lender a bank, credit union, or 
savings and loan association chartered by the state or federal 
government, a subdivision of the Farm Credit System, the Federal 
Deposit Insurance Corporation, the Federal Savings and Loan 
Insurance Corporation, or any insurance company, fund, or other 
financial institution doing business as an agricultural lender 
within the state, if the authority determines that the 
agricultural lender has sufficient personnel and other resources 
to efficiently and properly originate and service qualified 
agricultural loans.  An eligible agricultural lender must enter 
into one or more agreements with the authority providing for the 
origination and servicing of qualified agricultural loans on the 
terms and conditions the authority determines to be appropriate. 
    Sec. 5.  Minnesota Statutes 1986, section 41B.02, 
subdivision 5, is amended to read: 
    Subd. 5.  [ELIGIBLE BORROWER.] "Eligible borrower" means a 
borrower who meets the eligibility criteria for a program in 
section 41B.03. 
    Sec. 6.  Minnesota Statutes 1986, section 41B.02, 
subdivision 6, is amended to read: 
    Subd. 6.  [QUALIFIED AGRICULTURAL LOAN.] "Qualified 
agricultural loan" means a loan to an eligible borrower made by 
an eligible agricultural lender which the administration 
purchases or in which the administration purchases a 
participation interest under agricultural programs established 
and implemented by the authority. 
    Sec. 7.  Minnesota Statutes 1986, section 41B.02, 
subdivision 9, is amended to read: 
    Subd. 9.  [PRIMARY PRINCIPAL.] "Primary principal" means 
that portion of the principal outstanding balance on a loan 
covered by sections 41B.01 to 41B.23 that is equal to the 
current market value of the property secured by the loan.  
    Sec. 8.  Minnesota Statutes 1986, section 41B.02, 
subdivision 11, is amended to read: 
    Subd. 11.  [BASIC INTEREST.] "Basic interest" means that 
part of interest on primary principal that is payable annually 
while the loan is in effect.  
    Sec. 9.  Minnesota Statutes 1986, section 41B.02, 
subdivision 13, is amended to read: 
    Subd. 13.  [CURRENT MARKET VALUE.] "Current market value" 
means, for the purposes of section 41B.04, the value determined 
by an appraisal considering comparable sales in the area where 
the real estate is located and the reasonable productive value 
of the property based on past production history.  The state and 
the eligible agricultural lender must mutually agree on the 
current market value.  
    Sec. 10.  Minnesota Statutes 1986, section 41B.02, 
subdivision 14, is amended to read: 
    Subd. 14.  [BORROWER.] "Borrower" means the person or 
persons liable on a restructured note qualified agricultural 
loan.  
    Sec. 11.  Minnesota Statutes 1986, section 41B.02, 
subdivision 15, is amended to read: 
    Subd. 15.  [ORIGINAL LOAN.] "Original loan" means a loan 
prior to restructuring as provided in section 41B.04.  
    Sec. 12.  Minnesota Statutes 1986, section 41B.03, is 
amended to read:  
    41B.03 [BORROWER ELIGIBILITY CRITERIA.] 
    Subdivision 1.  [ELIGIBILITY GENERALLY.] To be eligible for 
a program in sections 41B.01 to 41B.23: 
    (a) (1) a borrower must be a resident of Minnesota or a 
domestic family farm corporation, as defined in section 500.24, 
subdivision 2.;  
    (b) (2) the borrower or one of the borrowers must be the 
principal operator of the farm. or, for a prospective homestead 
redemption borrower, must have at one time been the principal 
operator of a farm; and 
    (3) the borrower must not previously have received 
assistance under sections 41B.01 to 41B.23. 
    Subd. 2.  [ELIGIBILITY FOR RESTRUCTURED LOAN.] In addition 
to the eligibility requirements of subdivision 1, a prospective 
borrower for a restructured loan must:  
    (c) the borrower or one of the borrowers must (1) have 
received at least 50 percent of average annual gross income from 
farming for the past three years or, for homesteaded property, 
received at least 40 percent of average gross income from 
farming in the past three years, and farming must be the 
principal occupation of the borrower.;  
    (d) The borrower must (2) have a debt-to-asset ratio equal 
to or greater than 50 percent. and in determining this ratio, 
the assets must be determined by the valued at their current 
market value of the assets.;  
    (e) The borrower's (3) have projected annual expenses, 
including operating expenses, family living, and interest 
expenses after the restructuring, must that do not exceed 95 
percent of the borrower's projected annual income considering 
prior production history and projected prices for farm 
production., except that the authority may reduce the 95 percent 
requirement if it finds that other significant factors in the 
loan application support the making of the loan; and 
    (f) The borrower must be unable to meet (4) demonstrate 
substantial difficulty in meeting projected annual expenses 
without restructuring the loan.  
    (g) The borrower must not previously have received 
restructuring assistance pursuant to sections 41B.01 to 41B.23.  
     Subd. 3.  [BEGINNING FARMER LOANS.] In addition to the 
requirements under subdivision 1 a prospective borrower for a 
beginning farm loan must:  
    (1) have sufficient education, training, or experience in 
the type of farming for which the loan is desired; 
    (2) have a total net worth, including assets and 
liabilities of the borrower's spouse and dependents, of less 
than $100,000; 
    (3) demonstrate a need for the loan; 
    (4) demonstrate an ability to repay the loan; 
    (5) demonstrate that the agricultural land to be purchased 
will be used by the borrower for agricultural purposes; and 
    (6) demonstrate that farming will be the principal 
occupation of the borrower. 
    Subd. 4.  [CONTINUING ELIGIBILITY REQUIREMENTS.] After 
qualifying for a restructured loan, a borrower must continue to 
meet only the requirements of subdivision 1, clauses (1) and (2).
    Sec. 13.  Minnesota Statutes 1986, section 41B.035, 
subdivision 5, is amended to read: 
    Subd. 5.  [BOARD ACTIONS OF THE AUTHORITY.] The powers of 
the board are vthe members in office from time to time.  A 
majority of the members of the board authority, excluding 
vacancies, constitutes a quorum for the purpose of conducting 
its business and exercising its powers and for all other 
purposes.  Action may be taken by the board authority upon a 
vote of a majority of a quorum present. 
    Sec. 14.  Minnesota Statutes 1986, section 41B.035, is 
amended by adding a subdivision to read:  
    Subd. 8.  [TECHNICAL ASSISTANCE.] The authority must make 
technical assistance available to potential lenders and 
applicants to encourage applications for loans.  
    Sec. 15.  [41B.037] [HOMESTEAD REDEMPTION PROGRAM.] 
    The authority may establish and implement a homestead 
redemption program under sections 41B.01 to 41B.23.  The purpose 
of the program is to assist persons who have lost their farms 
due to foreclosure, granting a deed in lieu of foreclosure, or 
other actions necessary to settle their agricultural debts, and 
who are otherwise unable to secure the credit necessary to 
repurchase their farm homestead.  The authority may enter into 
agreements with an eligible lender for the purposes of the 
program.  The authority may, by rule, establish eligibility 
standards for the program that are different from those 
established for other programs of the authority.  The 
authority's interest in a homestead redemption loan may not 
exceed one-half of the loan amount or $25,000, whichever is less.
    Sec. 16.  [41B.038] [PROGRAMS FOR COMMITMENTS TO OTHER 
ENTITIES.] 
    The authority may establish programs to make or purchase 
and enter into commitments to make or purchase qualified 
agricultural loans or portions of the loans issued to persons 
described in section 41B.03, subdivision 1.  The agricultural 
loans must be insured or guaranteed by the United States 
Department of Agriculture, Farmers Home Administration, Farm 
Credit System, a subdivision of the Farm Credit System, or any 
similar federal agency or federally chartered institution whose 
obligations are directly or indirectly guaranteed or insured by 
the United States.  The commissioner of finance may not issue 
general obligation bonds pursuant to sections 41B.19 or 41B.195 
to finance any programs established under this section. 
    Sec. 17.  [41B.039] [BEGINNING FARMER PROGRAM.] 
    Subdivision 1.  [ESTABLISHMENT.] The authority may 
establish, develop criteria, and implement a beginning farmer 
program.  The program must assist persons entering farming who 
have not owned a farm before entering the beginning farmer 
program.  
    Subd. 2.  [STATE PARTICIPATION.] The state may participate 
in a new real estate loan with an eligible lender to a beginning 
farmer to the extent of one-fourth of the principal of the loan 
or $25,000, whichever is less.  The interest rates and repayment 
terms of the authority's participation interest may be different 
than the interest rates and repayment terms of the lender's 
retained portion of the loan. 
    Subd. 3.  [SOIL AND WATER CONSERVATION AGREEMENTS.] (a) As 
a condition of receiving a beginning farmer loan the borrower 
must agree to implement an approved soil and water conservation 
plan on the land.  
    (b) The borrower must place marginal land as defined in 
section 40.42, subdivision 6, in a permanent conservation 
easement as provided in section 40.43.  The authority may 
compensate the borrower for the easement as provided in section 
40.43, subdivision 6.  
    Subd. 4.  [FARM MANAGEMENT.] A borrower must agree to 
participate in a farm management program approved by the 
commissioner of agriculture for at least the first eight years 
of the loan.  
    Subd. 5.  [LOAN REVIEW.] The authority shall refer all 
applications for the beginning farmer program to the family farm 
advisory council to review the loan with the beginning farmer 
and make recommendations to the authority.  
    Sec. 18.  Minnesota Statutes 1986, section 41B.04, 
subdivision 7, is amended to read: 
    Subd. 7.  [RESTRUCTURING PROCEDURE.] (a) The eligible 
agricultural lender or borrower shall propose restructuring a 
loan to the administration authority.  Within 30 days of 
receiving adequate information concerning a proposal, the 
administration authority and the eligible lender shall notify 
the borrower of their determination of eligibility.  An eligible 
agricultural lender shall then expeditiously conduct necessary 
appraisals and draft the loan restructuring agreement which must 
be consistent with this section and documents previously 
approved by the administration and eligible lenders authority.  
The loan restructuring agreement must be approved by the 
eligible lender, the administration, and the borrower. 
    (b) An eligible borrower may participate in the 
restructured loan or the homestead redemption loan, but not both 
loans. 
    Sec. 19.  Minnesota Statutes 1986, section 41B.04, 
subdivision 8, is amended to read:  
    Subd. 8.  [STATE'S PARTICIPATION.] With respect to loans 
that are eligible for restructuring under sections 41B.01 to 
41B.23 and upon acceptance by the administration authority, 
the administration authority shall enter into a participation 
agreement or other financial arrangement whereby it shall 
participate in a restructured loan to the extent of one-quarter 
of the primary principal or $50,000, whichever is less, except 
that the administration may participate in restructured loans 
made for the redemption of homesteads to the extent of one-half 
of the primary principal or $25,000, whichever is less.  The 
administration's authority's portion of the loan must thereafter 
be protected during the authority's participation by the first 
mortgage held by the eligible lender to the extent of its 
participation in the loan.  
    Sec. 20.  Minnesota Statutes 1986, section 41B.04, 
subdivision 9, is amended to read:  
    Subd. 9.  [RESTRUCTURED LOAN AGREEMENT.] (a) All payments 
on the primary and secondary principal of the restructured loan, 
all payments of interest on the secondary principal, and an 
agreed portion of the interest payable to the eligible 
agricultural lender on the primary principal must be deferred to 
the end of the term of the loan. 
    (b)  A borrower may prepay the restructured loan, with all 
primary and secondary principal and interest and deferred 
interest at any time without prepayment penalty.  
    (c) Interest on secondary principal must accrue at a below 
market interest rate.  
    (d) At the conclusion of the term of the restructured loan, 
the borrower owes primary principal, secondary principal, and 
deferred interest on primary and secondary principal.  However, 
part of this balloon payment may be forgiven following an 
appraisal by the lender and the administration authority to 
determine the current market value of the real estate subject to 
the mortgage.  If the current market value of the land after 
appraisal is less than the amount of debt owed by the borrower 
to the lender and administration authority on this obligation, 
that portion of the obligation that exceeds the current market 
value of the real property must be forgiven by the lender and 
the administration authority in the following order:  
    (1) deferred interest on secondary principal;  
    (2) secondary principal;  
    (3) deferred interest on primary principal;  
    (4) primary principal as provided in an agreement between 
the administration and the lender; and 
    (5) accrued but not deferred interest on primary principal. 
    The debt forgiveness may be combined with a renegotiated 
loan on the unforgiven balance due if the borrower is able to 
establish that there are reasonable prospects of repayment on a 
debt equal to the current market value of real estate at then 
existing interest rates.  If so, the loan must be reamortized on 
terms and conditions acceptable to the lender, the 
administration, and the farmer.  
    (e) The authority may not participate in refinancing a 
restructured loan at the conclusion of the restructured loan. 
    Sec. 21.  Minnesota Statutes 1986, section 41B.04, 
subdivision 10, is amended to read:  
    Subd. 10.  [INTEREST RATE.] Unless the authority determines 
that it is not in the best interests of the restructured loan 
program, the interest rate per annum on the portion of 
the restructuring restructured loan represented by the 
participation interest purchased by the administration authority 
must be that rate of interest determined by the 
administration authority to be necessary to provide for the 
timely payment of principal and interest when due on bonds or 
other obligations issued by the administration authority, and to 
provide for the reasonable and necessary costs of issuing, 
carrying, administering, and securing the bonds or notes and to 
pay the costs incurred and to be incurred by the administration 
authority in the implementation of the program.  The interest 
rate per annum borne by the primary principal portion of the 
restructuring loan retained by the eligible agricultural lender 
must be a rate of interest approved by the administration 
authority.  The administration authority may specify the points, 
fees, and other charges which the eligible agricultural lender 
may charge to the eligible borrower. 
    Sec. 22.  Minnesota Statutes 1986, section 41B.04, 
subdivision 11, is amended to read:  
    Subd. 11.  [ADMINISTRATION.] The eligible lender shall 
administer the loans and shall bear all costs of the loan 
administration.  Ordinary costs of administration include 
appraisals, litigation, abstracts of title, and similar 
costs.  The administration agrees to share in any other 
responsibilities common to a loan participation agreement.  
    Sec. 23.  Minnesota Statutes 1986, section 41B.04, 
subdivision 12, is amended to read:  
    Subd. 12.  [ASSIGNABILITY.] Loans restructured under this 
section may not be assigned to anyone other than a direct 
descendant of the original borrower and the assignee must intend 
to engage in the direct operation and management of the farm 
which is subject to the mortgage meeting the eligibility 
requirements of section 41B.03, subdivision 1, and any other 
requirements imposed or approved by the authority.  If such an 
assignment is contemplated, the borrower must obtain prior 
written approval of the eligible lender and the administration 
and the assignee shall thereafter be subject to the same terms 
and conditions and events of default as the original borrower.  
If assigned to some other party, the eligible agricultural 
lender may exercise its foreclosure remedies as provided by its 
contracts and by law. 
    Sec. 24.  Minnesota Statutes 1986, section 41B.05, is 
amended to read:  
    41B.05 [GENERAL POWERS OF THE ADMINISTRATION AUTHORITY.] 
    For the purpose of exercising the specific powers granted 
in section 41B.04 and effectuating the other purposes of 
sections 41B.01 to 41B.23 the administration authority has the 
general powers granted in this section. 
    (a) It may sue and be sued. 
    (b) It may have a seal and alter the seal. 
    (c) It may make, and from time to time, amend and repeal 
rules consistent with sections 41B.01 to 41B.23. 
    (d) It may acquire, hold, and dispose of personal property 
for its corporate purposes. 
    (e) It may enter into agreements, contracts, or other 
transactions with any federal or state agency, any person and 
any domestic or foreign partnership, corporation, association, 
or organization, including contracts or agreements for 
administration and implementation of all or part of sections 
41B.01 to 41B.23. 
    (f) It may acquire real property, or an interest therein, 
in its own name, by purchase or foreclosure, where such 
acquisition is necessary or appropriate. 
    (g) It may provide general technical services related to 
rural finance. 
    (h) It may provide general consultative assistance services 
related to rural finance, and shall make available technical 
assistance to potential lenders and applicants to encourage 
applications for loans. 
    (i) It may promote research and development in matters 
related to rural finance. 
    (j) It may enter into agreements with lenders, borrowers, 
or the issuers of securities for the purpose of regulating the 
development and management of farms financed in whole or in part 
by the proceeds of qualified agricultural loans. 
    (k) It may enter into agreements with other appropriate 
federal, state, or local governmental units to foster rural 
finance.  It may give advance reservations of loan financing as 
part of the agreements, with the understanding that the 
administration authority will only approve the loans pursuant to 
normal procedures, and may adopt special procedures designed to 
meet problems inherent in such programs. 
    (l) It may undertake and carry out studies and analyses of 
rural financing needs within the state and ways of meeting such 
needs including:  data with respect to geographical 
distribution; farm size; the distribution of farm credit needs 
according to debt ratios and similar factors; the amount and 
quality of available financing and its distribution according to 
factors affecting rural financing needs and the meeting thereof; 
and may make the results of such studies and analyses available 
to the public and may engage in research and disseminate 
information on rural finance. 
    (m) It may survey and investigate the rural financing needs 
throughout the state and make recommendations to the governor 
and the legislature as to legislation and other measures 
necessary or advisable to alleviate any existing shortage in the 
state. 
    (n) It may establish cooperative relationships with such 
county and multicounty authorities as may be established and may 
develop priorities for the utilization of administration 
authority resources and assistance within a region in 
cooperation with county and multicounty authorities. 
    (o) It may contract with, use, or employ any federal, 
state, regional, or local public or private agency or 
organization, legal counsel, financial advisors, investment 
bankers or others, upon terms it deems necessary or desirable, 
to assist in the exercise of any of the powers granted in 
sections 41B.01 to 41B.23 and to carry out the objectives of 
sections 41B.01 to 41B.23 and may pay for the services from 
administration authority funds. 
    (p) It may establish cooperative relationships with 
counties to develop priorities for the use of administration 
authority resources and assistance within counties and to 
consider county plans and programs in the process of setting the 
priorities. 
    (q) It may delegate any of its powers to its officers or 
staff. 
    (r) It may enter into agreements with qualified 
agricultural lenders or others insuring or guaranteeing to the 
state the payment of all or a portion of qualified agricultural 
loans. 
    (s) It may enter into agreements with eligible agricultural 
lenders providing for advance reservations of purchases of 
participation interests in restructuring loans, if the 
agreements provide that the authority may only purchase 
participation interests in restructuring loans under the normal 
procedure.  The authority may provide in an agreement for 
special procedures or requirements designed to meet specific 
conditions or requirements. 
    Sec. 25.  Minnesota Statutes 1986, section 41B.08, 
subdivision 4, is amended to read:  
    Subd. 4.  [REQUIRED RATING.] No bonds may be issued unless 
a rating of "A" or better has been awarded to the bonds by a 
national bond rating agency.  The "A" rating is not required if 
the bonds are initially sold to corporations or financial 
institutions for investment purposes and not for the purpose of 
remarketing the bonds to the public. 
    Sec. 26.  Minnesota Statutes 1986, section 41B.12, is 
amended to read:  
    41B.12 [REVENUE BONDS; NONLIABILITY OF INDIVIDUALS.] 
    Neither The members of the administration nor authority and 
its staff and any person executing the bonds is liable are not 
personally liable on the bonds or subject to any personal 
liability or accountability by reason of their issuance. 
    Sec. 27.  Minnesota Statutes 1986, section 41B.19, 
subdivision 5, is amended to read:  
    Subd. 5.  [RURAL FINANCE ADMINISTRATION AUTHORITY SECURITY 
ACCOUNT.] The commissioner of finance shall maintain a separate 
state building fund account designated as the rural finance 
administration authority security account, into which must be 
deposited the proceeds of the rural renewal general obligation 
bonds issued as provided in this section.  The commissioner of 
finance shall maintain a separate bookkeeping account to record 
receipts and disbursements of money transferred to or from the 
security account and to record income from the investment of 
money in the account.  Upon the written request of 
the administration authority, the commissioner of finance shall 
transfer from the security account to an account or accounts the 
administration authority shall designate, a sum of money 
sufficient in amount, if available, when added to the balances 
then on hand in the designated accounts, to pay bonds issued by 
the administration authority under sections 41B.01 to 41B.23 and 
the interest on them due and to become due on the next 
succeeding date for the payment of the principal of and interest 
on the bonds of the administration or to restore to any debt 
service reserve fund established in connection with the bonds 
any amount withdrawn from the debt service reserve account to 
pay the bonds.  When no revenue bonds secured by the security 
account are outstanding under the resolution authorizing their 
issuance, the commissioner of finance shall further transfer 
from all money and securities on hand in the security account on 
or before the date on which any installment of the principal of 
and interest on bonds authorized by this section is due, a sum 
sufficient in amount, when added to the balance then on hand in 
the rural renewal bond account, to pay all bonds issued under 
this section and the interest on them due and to become due on 
the next succeeding date for payment of the bonds to the state 
bond fund. 
    Sec. 28.  Minnesota Statutes 1986, section 41B.19, 
subdivision 6, is amended to read:  
    Subd. 6.  [INVESTMENT OF SECURITY ACCOUNT.] (a) Money from 
time to time on deposit in the security account must be invested 
by the state board of investment at the request of the 
administration authority in any investment authorized by this 
subdivision.  Money on deposit in the security account may be 
invested in: 
    (1) certificates of deposit insured by the Federal Deposit 
Insurance Corporation or Federal Savings and Loan Insurance 
Corporation; (2) certificates of deposit issued by eligible 
agricultural lenders, whether or not fully insured or 
secured issued by or interest-bearing time deposits with a 
national banking association or a bank and trust company 
organized under the laws of any state;  
    (3) (2) deposits secured by obligations of the United 
States or of the state of a market value equal at all times to 
the amount of the deposit and all banks and trust companies are 
authorized to give security for those deposits; 
    (4) (3) qualified agricultural loans or in participation 
interests in qualified agricultural loans; or 
    (5) (4) qualified restructured loans.  
    (b) The principal amount of the investment under paragraph 
(a), clause (1), must be fully insured by the Federal Deposit 
Insurance Corporation or Federal Savings and Loan Insurance 
Corporation; or if not fully insured, the institution issuing 
the certificate of deposit or accepting the time deposit must be 
rated in the AA or a higher category as defined by a nationally 
recognized bond rating agency or in an equivalent or higher 
rating category based on any later redefinition. 
    (c) If and to the extent money has been transferred from 
the security account to provide for the timely payment of the 
principal of and interest on bonds issued by the administration 
authority, or to transfer money to a debt service reserve fund 
established in connection with the bonds, the administration 
authority shall transfer to the security account on or before 
December 1 of each succeeding year an amount equal to that 
previously transferred from the security account, provided that 
the administration's authority's obligation to transfer money to 
the security account is limited to money then on hand in funds 
or accounts of the administration authority in excess of those 
appropriated to other purposes or required to provide for the 
payment of the principal of and interest on bonds issued by 
the administration authority and to pay the costs of issuing, 
carrying, administering, and securing the bonds of 
the administration authority and of administering and 
implementing the programs of the administration authority 
financed by the bonds. 
    Sec. 29.  [41B.195] [ADDITIONAL USE OF GENERAL OBLIGATION 
BONDS.] 
    Notwithstanding the limit set forth in section 41B.19, 
subdivision 1, the commissioner of finance, upon the request of 
the rural finance authority, may issue the general obligation 
bonds authorized by section 41B.19 and use the proceeds of the 
bonds to purchase participations in qualified agricultural loans 
if the commissioner determines that it is not practical or 
efficient to issue revenue bonds under section 41B.08 for the 
purpose of section 41B.04 and sections 13, 15, and 16 as a 
result of reduced program size or increased program costs.  
Subject to the other provisions of this section, the proceeds of 
the bonds must be deposited, held, and disbursed from a separate 
state building fund account, the bonds are payable from the bond 
account established by section 41B.19, subdivision 4, and the 
participations purchased with the bond proceeds must be held as 
assets of the bond account.  If the rural finance authority 
later determines to issue revenue bonds under section 41B.08 for 
the purposes specified in section 41B.04, the commissioner may 
by order provide for the transfer of all or a portion of the 
remaining bond proceeds and interest on them, and all or a 
portion of the participations purchased with the bond proceeds 
and proceeds of them, to be transferred to the security account 
established in section 41B.19, subdivision 5, and used for the 
purposes specified in section 41B.19, subdivisions 1 and 5. 
    Sec. 30.  [41B.211] [DATA PRIVACY.] 
    Financial information, including credit reports, financial 
statements, and net worth calculations, received or prepared by 
the authority regarding any authority loan and the name of each 
individual who is the recipient of a loan are private data on 
individuals, under chapter 13. 
    Sec. 31.  [INSTRUCTIONS TO REVISOR.] 
    The revisor of statutes is instructed to change the phrases 
"rural finance administration" and "administration" when the 
term is applied to the rural finance administration to "rural 
finance authority" and "authority" respectively in Minnesota 
Statutes.  The revisor is further instructed to rearrange the 
subdivisions of Minnesota Statutes 1986, section 41B.02, so that 
the terms defined therein are in alphabetical order. 
    The revisor of statutes shall renumber each section of 
Minnesota Statutes specified in column A with the number set 
forth in column B.  The revisor shall also make necessary 
cross-reference changes consistent with the renumbering. 
     Column A                        Column B 
     41B.035                         41B.025 
     41B.05                          41B.036 
    Sec. 32.  [REPEALER.] 
    Minnesota Statutes 1986, sections 41B.02, subdivision 17; 
41B.035, subdivision 4; and 41B.04, subdivisions 6, 13, 14, 15, 
and 16, are repealed. 
    Sec. 33.  [EFFECTIVE DATE.] 
    This article is effective on the day following final 
enactment. 

                               ARTICLE 2 

                         RIGHT OF FIRST REFUSAL 
    Section 1.  Minnesota Statutes 1986, section 500.24, 
subdivision 2, is amended to read: 
    Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
the terms defined in this subdivision have the meanings here 
given them: 
    (a) "Farming" means the production of (1) agricultural 
products; (2) livestock or livestock products; (3) milk or milk 
products; or (4) fruit or other horticultural products.  It does 
not include the processing, refining or packaging of said 
products, nor the provision of spraying or harvesting services 
by a processor or distributor of farm products.  It does not 
include the production of timber or forest products or the 
production of poultry or poultry products. 
    (b) "Family farm" means an unincorporated farming unit 
owned by one or more persons residing on the farm or actively 
engaging in farming. 
    (c) "Family farm corporation" means a corporation founded 
for the purpose of farming and the ownership of agricultural 
land in which the majority of the voting stock is held by and 
the majority of the stockholders are persons or the spouses of 
persons related to each other within the third degree of kindred 
according to the rules of the civil law, and at least one of 
said related persons is residing on or actively operating the 
farm, and none of whose stockholders are corporations; provided 
that a family farm corporation shall not cease to qualify as 
such hereunder by reason of any devise or bequest of shares of 
voting stock. 
    (d) "Authorized farm corporation" means a corporation 
meeting the following standards: 
    (1) Its shareholders do not exceed five in number; 
    (2) All its shareholders, other than any estate are natural 
persons; 
    (3) It does not have more than one class of shares; and 
    (4) Its revenues from rent, royalties, dividends, interest 
and annuities does not exceed 20 percent of its gross receipts; 
and 
    (5) Shareholders holding a majority of the shares must be 
residing on the farm or actively engaging in farming. 
    (e) "Agricultural land" means land used for farming. 
    (f) "Pension or investment fund" means a pension or 
employee welfare benefit fund, however organized, a mutual fund, 
a life insurance company separate account, a common trust of a 
bank or other trustee established for the investment and 
reinvestment of money contributed to it, a real estate 
investment trust, or an investment company as defined in United 
States Code, title 15, section 80a-3.  "Pension or investment 
fund" does not include a benevolent trust established by the 
owners of a family farm, authorized farm corporation or family 
farm corporation.  
     (g) "Farm homestead" means a house including adjoining 
buildings that has been used as part of a farming operation or 
is part of the agricultural land used for a farming operation. 
    Sec. 2.  Minnesota Statutes 1986, section 500.24, 
subdivision 6, is amended to read:  
    Subd. 6.  [DISPOSAL OF LAND.] (a) A state or federal agency 
or a corporation, other than a family farm corporation or an 
authorized farm corporation, when leasing may not lease or 
selling farm sell agricultural land or a farm homestead must 
offer that was acquired by enforcing a debt against the 
agricultural land or farm homestead, including foreclosure of a 
mortgage, accepting a deed in lieu of foreclosure, terminating a 
contract for deed, or accepting a deed in lieu of terminating a 
contract for deed, before offering or make making a good faith 
effort to offer the land for sale or lease to the immediately 
preceding former owner at a price no higher than the highest 
price offered by a third party that is acceptable to the seller 
or lessor.  The offer must be made on the notice to offer form 
under section 3.  Selling or leasing property to a third party 
at a price is prima facie evidence that the price is acceptable 
to the seller or lessor.  
    (b) For purposes of this subdivision, the term "a price no 
higher than the highest price offered by a third party" means 
the acceptable cash price offered by a third party or the 
acceptable time-price offer made by a third party.  A cash price 
offer is one that involves simultaneous transfer of title for 
payment of the entire amount of the offer.  If the acceptable 
offer made by a third party is a time-price offer, the seller or 
lessor must make the same time-price offer or an equivalent cash 
offer to the immediately preceding former owner.  An equivalent 
cash offer is equal to the total of the payments made over a 
period of the time-price offer discounted by yield curve of the 
United States treasury notes and bonds on the first business day 
of the month in which the offer is personally delivered or 
mailed for time periods similar to the time period covered by 
the time-price offer, plus 2.0 percent.  A time-price offer is 
an offer that defers payment of a portion of the price and does 
not involve a transfer of fee title until payment of the entire 
amount of the offer is made.  
    (c) This subdivision applies to a seller when the property 
is sold and to a lessor each time the property is leased, for 
five years after the agricultural land is acquired except:  
    (1) an offer to lease to the immediately preceding former 
owner is required only on the first occasion on which the 
property is leased. until the immediately preceding owner fails 
to accept an offer to lease the property or the property is 
sold; and 
    (2) an offer to sell to the immediately preceding former 
owner is required only on until the first occasion on which the 
property is sold.  
    (d) The notice of an offer delivered under section 3 that 
is personally delivered with a signed receipt or sent by 
certified mail with a receipt of mailing to the immediately 
preceding former owner's last known address is a good faith 
offer.  
    (e) This subdivision does not apply to a sale or lease that 
occurs after the seller or lessor has held the property for five 
years or longer.  
    (f) For purposes of this subdivision, if the immediately 
preceding former owner is a bankruptcy estate the debtor in the 
bankruptcy is the immediately preceding owner.  
    (g) The immediately preceding former owner must exercise 
the right to lease farm agricultural land or a homestead located 
on agricultural land in writing within ten 15 days after 
receiving an offer to lease under this subdivision is mailed 
with a receipt of mailing or personally delivered.  
The immediately preceding former owner must exercise the right 
to buy farm the agricultural land or farm homestead located on 
agricultural land, in writing, within 60 65 days after receiving 
an offer to buy under this subdivision.  This subdivision does 
not apply if the former owner is a bankruptcy estate. is mailed 
with a receipt of mailing or is personally delivered.  Within 
ten days after exercising the right to lease or buy by accepting 
the offer, the immediately preceding owner must fully perform 
according to the terms of the offer including paying the amounts 
due.  A seller may sell and a lessor may lease the agricultural 
land or farm homestead subject to this subdivision to the third 
party in accordance with their lease or purchase agreement if: 
    (1) the immediately preceding former owner does not accept 
an offer to lease or buy before the offer terminates; or 
    (2) the immediately preceding former owner does not perform 
the obligations of the offer, including paying the amounts due, 
within ten days after accepting the offer. 
    (h) A certificate indicating whether or not the property 
contains agricultural land or a farm homestead that is signed by 
the county assessor where the property is located and recorded 
in the office of the county recorder or the registrar of titles 
where the property is located is prima facie evidence of whether 
the property is agricultural land or a farm homestead.  
    (i) As prima facie evidence that an offer to sell or lease 
agricultural land or a farm homestead has terminated, a receipt 
of mailing the notice under section 3 and an affidavit, signed 
by a person authorized to act on behalf of a state, federal 
agency, or corporation selling or leasing the agricultural land 
or a farm homestead may be filed in the office of the county 
recorder or registrar of titles of the county where the 
agricultural land or farm homestead is located.  The affidavit 
must state that: 
    (1) notice of an offer to buy or lease the agricultural 
land or farm homestead was provided to the immediately preceding 
former owner at a price not higher than the highest price 
offered by a third party that is acceptable; 
    (2) the time during which the immediately preceding former 
owner is required to exercise the right to buy or lease the 
agricultural land or farm homestead has expired; 
    (3) the immediately preceding former owner has not 
exercised the right to buy or lease the agricultural land or 
farm homestead as provided in this subdivision or has accepted 
an offer and has not fully performed according to the terms of 
the offer; and 
    (4) the offer to the immediately preceding former owner has 
terminated. 
    (j) The right of an immediately preceding former owner to 
receive an offer to lease or purchase agricultural land under 
this subdivision or to lease or purchase at a price no higher 
than the highest price offered by a third party that is 
acceptable to the seller or lessor may be extinguished or 
limited by an express statement signed by the immediately 
preceding owner that complies with the plain language 
requirements of section 325G.31.  The right may not be 
extinguished or limited except by the express statement in a 
deed in lieu of foreclosure or in a deed in lieu of a 
termination of a contract for deed for the agricultural land.  
    (k) The right of an immediately preceding former owner to 
receive an offer to lease or purchase agricultural land under 
this subdivision may not be assigned or transferred, but may be 
inherited. 
    Sec. 3.  Minnesota Statutes 1986, section 500.24, is 
amended by adding a subdivision to read: 
    Subd. 7.  [NOTICE OF OFFER.] (a) The state, a federal 
agency, or a corporation subject to subdivision 6 must provide a 
notice of an offer to sell or lease agricultural land 
substantially as follows, after inserting the appropriate terms 
within the parentheses:  
 "NOTICE OF OFFER TO (LEASE, BUY) AGRICULTURAL LAND 
TO:    (...Immediately preceding former owner...) 
FROM:  (...The state, federal agency, or corporation 
       subject to subdivision 6...) 
DATE:  (...date notice is mailed or personally delivered...) 
    (...The state, federal agency, or corporation...) HAS 
ACQUIRED THE AGRICULTURAL LAND DESCRIBED BELOW AND HAS RECEIVED 
AN ACCEPTABLE OFFER TO (LEASE, SELL) THE AGRICULTURAL LAND FROM 
ANOTHER PARTY.  UNDER MINNESOTA STATUTES, SECTION 500.24, 
SUBDIVISION 6, AN OFFER FROM (...the state, federal agency, or 
corporation...) MUST BE MADE TO YOU AT A PRICE NO HIGHER THAN 
THE HIGHEST OFFER MADE BY ANOTHER PARTY.  
    THE AGRICULTURAL LAND BEING OFFERED CONTAINS APPROXIMATELY 
(...approximate number of acres...) ACRES AND IS INFORMALLY 
DESCRIBED AS FOLLOWS: 
 (Informal description of the agricultural land being 
offered that reasonably describes the land.  This 
description does not need to be a legal description.) 
    (...The state, federal agency, or corporation...) OFFERS TO 
(SELL, LEASE) THE AGRICULTURAL LAND DESCRIBED ABOVE FOR A CASH 
PRICE OF $(...cash price or equivalent cash price for lease and 
lease period, or cash price or equivalent cash price for sale of 
land...), WHICH IS NOT HIGHER THAN THE PRICE OFFERED BY ANOTHER 
PARTY.  THE PRICE IS OFFERED ON THE FOLLOWING TERMS:  
 (Terms, if any, of acceptable offer)  
    IF YOU WANT TO ACCEPT THIS OFFER YOU MUST NOTIFY (...the 
state, federal agency, or corporation...) IN WRITING THAT YOU 
ACCEPT THE OFFER OR SIGN UNDERNEATH THE FOLLOWING PARAGRAPH AND 
RETURN A COPY OF THIS NOTICE BY (15 for a lease, 65 for a sale) 
DAYS AFTER THIS NOTICE IS PERSONALLY DELIVERED OR MAILED TO 
YOU.  THE OFFER IN THIS NOTICE TERMINATES ON (...date of 
termination - 15 days for lease and 65 days for sale after date 
of mailing or personal delivery...). 

                          ACCEPTANCE OF OFFER 
    I ACCEPT THE OFFER TO (BUY, LEASE) THE AGRICULTURAL LAND 
DESCRIBED ABOVE AT THE PRICE OFFERED TO ME IN THIS NOTICE.  AS 
PART OF ACCEPTING THIS OFFER I WILL PERFORM ACCORDING TO THE 
TERMS OF THE OFFER, INCLUDING MAKING PAYMENTS DUE UNDER THE 
OFFER, WITHIN TEN DAYS AFTER THE DATE I ACCEPT THIS OFFER. 

                     ......................................... 
                     Signature of Former Owner Accepting Offer 
                     .........................................  
                     Date"
    (b) For an offer to sell, a copy of the purchase agreement 
containing the price and terms of the highest offer made by a 
third party that is acceptable to the seller and a signed 
affidavit by the seller affirming that the purchase agreement is 
true, accurate, and made in good faith must be included with the 
notice under this subdivision.  At the seller's discretion, 
reference to the third party's identity may be deleted from the 
copy of the purchase agreement. 
    (c) For an offer to lease, a copy of the lease containing 
the price and terms of the highest offer made by a third party 
that is acceptable to the lessor and a signed affidavit by the 
lessor affirming that the lease is true, accurate, and made in 
good faith must be included with the notice under this 
subdivision.  At the lessor's discretion, reference to the third 
party's identity may be deleted from the copy of the lease 
agreement.  
    (d) The affidavit under paragraphs (b) and (c) is subject 
to section 609.48.  
    Sec. 4.  [EFFECTIVE DATE.] 
    This article is effective July 1, 1987, and applies to 
property with initial offers made under section 500.24, 
subdivision 6, after July 1, 1987. 

                               ARTICLE 3 

                       WAIVER OF DEBTOR'S RIGHTS 
    Section 1.  [550.42] [WAIVER OF AGRICULTURAL DEBTOR'S 
RIGHTS.] 
    Subdivision 1.  [WAIVER IS VOID.] (a) A waiver of statutory 
rights of a debtor in a contract, loan agreement, or security 
agreement as a condition for a loan of money for agricultural 
production is void unless the waiver is expressly authorized by 
law.  
    (b) A waiver of mediation rights under chapter 583, the 
right to an offer under section 500.24, subdivision 6, or the 
debtor's statutory rights under chapter 580, 581, or 582 for a 
mortgage on agricultural property, is void unless the waiver is 
expressly authorized by law. 
    Subd. 2.  [PENALTY.] A person, corporation, financial 
institution, or other legal entity is liable to a debtor for up 
to $2,500 plus attorney fees if the person or entity: 
    (1) requires a waiver subject to subdivision 1 in a 
contract, loan agreement, or security agreement, and does not 
acknowledge that the waiver subject to subdivision 1 is void; or 
    (2) attempts to enforce a waiver that is void under 
subdivision 1. 
    Sec. 2.  [EFFECTIVE DATE.] 
    This article is effective July 1, 1987, except:  section 1, 
subdivision 1, is effective the day after final enactment; and 
section 1, subdivision 2, applies to contracts, loan agreements, 
and security agreements entered into after July 1, 1987. 

                               ARTICLE 4 

       DESIGNATION OF HOMESTEADS AND SEPARATE AGRICULTURAL TRACTS 
    Section 1.  Minnesota Statutes 1986, section 582.041, 
subdivision 1, is amended to read:  
    Subdivision 1.  [NOTIFICATION OF HOMESTEAD DESIGNATION.] If 
a mortgage on real property is foreclosed and the property 
contains a portion of the a homestead of the mortgagor, 
the mortgagor person in possession of the real property must be 
notified by the foreclosing mortgagee that the homestead may be 
sold and redeemed separately from the remaining property.  The 
notice in subdivision 2 must be included in served with the 
notice of foreclosure that is served on the mortgagor 
under person in possession of the real property with the 
requirements in section 580.04 580.03 or for a foreclosure by 
action under chapter 581, in the summons and complaint served on 
the person in possession of the real property. 
    Sec. 2.  Minnesota Statutes 1986, section 582.041, 
subdivision 2, is amended to read: 
    Subd. 2.  [HOMESTEAD DESIGNATION NOTICE.] (a) The following 
notice must be included in served with the foreclosure notice of 
property containing a homestead that is served on the mortgagor 
person in possession of the real property under section 580.04 
580.03.  The notice is not to be published.  The notice must be 
in 10-point capitalized letters. 
    "IF PART OF THE PROPERTY TO BE SOLD CONTAINS YOUR HOUSE., 
YOU MAY DESIGNATE AN AREA AS A HOMESTEAD TO BE SOLD AND REDEEMED 
SEPARATELY.  
    YOU MAY DESIGNATE THE HOUSE YOU OCCUPY AND ANY AMOUNT OF 
THE PROPERTY AS A HOMESTEAD.  THE DESIGNATED HOMESTEAD PROPERTY 
MUST CONFORM TO THE LOCAL ZONING ORDINANCES AND BE COMPACT SO 
THAT IT DOES NOT UNREASONABLY REDUCE THE VALUE OF THE REMAINING 
PROPERTY.  
    YOU MUST PROVIDE THE PERSON FORECLOSING ON THE PROPERTY, 
THE SHERIFF, AND THE COUNTY RECORDER WITH A COPY OF THE LEGAL 
DESCRIPTION OF THE HOMESTEAD YOU HAVE DESIGNATED BY TEN BUSINESS 
DAYS BEFORE THE DATE THE PROPERTY IS TO BE SOLD."  
    (b) The following notice must be served with the summons 
and complaint in an action to foreclose a mortgage of property 
containing a homestead under chapter 581.  The notice must be in 
10-point capitalized letters and is not to be published with the 
summons if the summons is published.  
    "IF PART OF THE PROPERTY TO BE SOLD CONTAINS YOUR HOUSE., 
YOU MAY DESIGNATE AN AREA AS A HOMESTEAD TO BE SOLD AND REDEEMED 
SEPARATELY.  
    YOU MAY DESIGNATE THE HOUSE YOU OCCUPY AND ANY AMOUNT OF 
THE PROPERTY AS A HOMESTEAD.  THE DESIGNATED HOMESTEAD PROPERTY 
MUST CONFORM TO THE LOCAL ZONING ORDINANCES AND BE COMPACT SO 
THAT IT DOES NOT UNREASONABLY REDUCE THE VALUE OF THE REMAINING 
PROPERTY.  
    YOU MUST PROVIDE THE COURT WITH A LEGAL DESCRIPTION OF THE 
HOMESTEAD YOU HAVE DESIGNATED." 
    Sec. 3.  Minnesota Statutes 1986, section 582.041, 
subdivision 3, is amended to read: 
    Subd. 3.  [DESIGNATION OF HOMESTEAD PROPERTY.] The 
mortgagor person who is homesteading the property must designate 
a legal description of the homestead property to be sold 
separately.  The homestead property designated may include any 
amount of the property.  The designation must conform to local 
zoning, include the dwelling occupied by the mortgagor person 
homesteading the property, and be compact so that it does not 
unreasonably affect the value of the remaining property.  
The mortgagor person homesteading the property must serve a copy 
of the designation on the foreclosing mortgagee, the sheriff, 
and the county recorder or registrar of titles by ten business 
days before the sale is scheduled, or for a foreclosure by 
action under chapter 581, a copy of the designation must be 
provided to the court.  
    Sec. 4.  Minnesota Statutes 1986, section 582.041, 
subdivision 5, is amended to read: 
    Subd. 5.  [REDEMPTION.] The mortgagor A party who has a 
right of redemption may redeem the designated homestead, the 
remaining property, or the entire property including the 
homestead.  The period of redemption is the period for the 
entire property including the designated homestead. 
    Sec. 5.  [582.042] [FORECLOSURE OF AGRICULTURAL LAND THAT 
INCLUDES SEPARATE TRACTS.] 
    Subdivision 1.  [NOTIFICATION OF SEPARATE TRACT 
DESIGNATION.] If a mortgage on real property that is 
agricultural land is foreclosed and the property contains 
separate tracts, the person in possession of the real property 
must be notified by the foreclosing mortgagee that the separate 
tracts may be sold and redeemed separately.  The notice in 
subdivision 2 must be served with the notice of foreclosure that 
is served on the person in possession of the property under 
section 580.03, or for a foreclosure by action under chapter 
581, in the summons and complaint. 
     Subd. 2.  [DESIGNATION NOTICE.] (a) The following notice 
must be served with the foreclosure notice of the property that 
is served on the person in possession of the real property under 
section 580.03.  The notice must be in 10-point capitalized 
letters and the notice is not to be published. 
    "IF THE PROPERTY TO BE SOLD CONTAINS SEPARATE TRACTS, YOU 
MAY REQUEST THAT THE TRACTS BE SOLD AND REDEEMED SEPARATELY.  
EACH OF THE SEPARATE TRACTS MUST CONFORM TO LOCAL ZONING 
ORDINANCES, MUST HAVE AN ENTRANCE BY DIRECT ACCESS TO A PUBLIC 
ROAD OR BY PERMANENT EASEMENT, AND MUST NOT UNREASONABLY AFFECT 
THE VALUE OF THE REMAINING PROPERTY. 
    YOU MUST PROVIDE THE PERSON FORECLOSING ON THE PROPERTY, 
THE SHERIFF, AND THE COUNTY RECORDER WITH A COPY OF THE LEGAL 
DESCRIPTIONS OF EACH OF THE TRACTS YOU HAVE DESIGNATED TO BE 
SOLD SEPARATELY BY TEN BUSINESS DAYS BEFORE THE DATE THE 
PROPERTY IS TO BE SOLD."  
    (b) The following notice must be served with the summons 
and complaint in an action to foreclose a mortgage of real 
property containing separate tracts under chapter 581.  The 
notice must be in 10-point capitalized letters and is not to be 
published with the summons if the summons is published.  
    "IF THE PROPERTY TO BE SOLD CONTAINS SEPARATE TRACTS, YOU 
MAY REQUEST THAT THE TRACTS BE SOLD AND REDEEMED SEPARATELY.  
EACH OF THE SEPARATE TRACTS MUST CONFORM TO LOCAL ZONING 
ORDINANCES. 
    YOU MUST PROVIDE THE COURT WITH A COPY OF THE LEGAL 
DESCRIPTIONS OF EACH OF THE TRACTS YOU HAVE DESIGNATED TO BE 
SOLD SEPARATELY." 
    Subd. 3.  [DESIGNATION OF SEPARATE TRACTS.] The person 
being foreclosed must designate by legal description each of the 
tracts to be sold separately.  The tracts designated must be 
previously recorded as separate tracts.  Each of the separate 
tracts must conform to local zoning ordinances, must have an 
entrance by direct access to a public road or by permanent 
easement, and must not unreasonably affect the value of the 
remaining property.  The person being foreclosed must serve a 
copy of the legal descriptions of the tracts to be sold 
separately on the foreclosing mortgagee, the sheriff, and the 
county recorder or registrar of titles by ten business days 
before the sale is scheduled, or for a foreclosure by action 
under chapter 581, a copy of the legal descriptions of the 
tracts to be sold separately must be provided to the court.  
    Subd. 4.  [SALE OF PROPERTY.] If the sheriff receives a 
designation of separate tracts under subdivision 3, or is 
ordered by the court, the sheriff must offer and sell the tracts 
separately.  
    Subd. 5.  [REDEMPTION.] The designated tracts may be 
redeemed separately or the entire foreclosed property may be 
redeemed.  The period of redemption is the period for the entire 
property including all of the designated tracts. 
     Sec. 6.  [EFFECTIVE DATE.] 
    This article is effective July 1, 1987, and applies to 
foreclosures where the first publication occurs on or after July 
1, 1987, and to foreclosures under chapter 581 where the first 
service or publication occurs on or after July 1, 1987. 

                               ARTICLE 5 

                AGRICULTURAL DATA COLLECTION TASK FORCE 
    Section 1.  [REACTIVATION OF THE AGRICULTURAL COLLECTION 
DATA TASK FORCE.] 
    The agricultural data collection task force created by Laws 
1985, chapter 19, as reactivated and amended by Laws 1986, 
chapter 398, article 11, is reactivated. 
    Sec. 2.  Laws 1985, chapter 19, section 2, subdivision 2, 
as amended by Laws 1986, chapter 398, article 11, section 2, is 
amended to read: 
    Subd. 2.  [DUTIES.] The duties of the data collection task 
force are to: 
    (1) continue the uniform procedure for collecting data on 
the financial status of agriculture in Minnesota; 
    (2) report the results of the program to the legislature no 
later than December 31, 1986 of each fiscal year the data 
collection task force is funded. 
    Sec. 3.  Laws 1985, chapter 19, section 6, subdivision 6, 
as amended by Laws 1986, chapter 398, article 11, section 4, is 
amended to read: 
    Subd. 6.  [EXPIRATION.] The data collection task force 
expires January April 15, 1987 1989, or 15 days after reporting 
to the legislature whichever date comes later, but in no 
circumstance later than March June 1, 1987 1989. 
    Sec. 3.  [EFFECTIVE DATE.] 
    This article is effective the day following final enactment.

                               ARTICLE 6 

                            MINNESOTA GROWN 
    Section 1.  Minnesota Statutes 1986, section 17.102, is 
amended to read:  
    17.102 [MINNESOTA PRODUCTS, STATE LOGO OR GROWN LABEL.] 
     Subdivision 1.  [ESTABLISHMENT AND USE OF LABEL.] (a) The 
commissioner shall establish a "Minnesota grown" logo or 
labeling statement for use in identifying food agricultural 
products which that are Minnesota grown, processed, or 
manufactured in this state.  The commissioner shall promulgate 
rules authorizing and governing the use of the logo or labeling 
statement.  The Minnesota grown logo or labeling statement may 
be used on raw agricultural products that are not processed into 
a different physical form or frozen, only if 80 percent of the 
agricultural product is produced in this state.  
    (b) The Minnesota grown logo or labeling statement may not 
be used without a license from the commissioner except that 
wholesalers and retailers may use the Minnesota grown logo and 
labeling statement for displaying and advertising products that 
qualify for use of the Minnesota grown logo or labeling 
statement. 
    Subd. 2.  [LABEL DOES NOT REPLACE OTHER REQUIREMENTS.] The 
logo or labeling statement shall does not supersede or replace 
any federal label or grade standard which that is required by 
law and its use shall be discretionary with a grower, processor, 
or manufacturer. 
    Subd. 3.  [LICENSE.] A person may not use the Minnesota 
grown logo or labeling without an annual license from the 
commissioner.  The commissioner shall issue licenses for a fee 
of $5.  The commissioner shall charge a late fee of $10 for 
renewal of a license that has expired. 
    Subd. 4.  [MINNESOTA GROWN ACCOUNT.] The Minnesota grown 
account is established as an account in the state treasury.  
License fee receipts and penalties collected under this section 
must be deposited in the state treasury and credited to the 
Minnesota grown account.  The money in the account is 
continuously appropriated to the commissioner to implement and 
enforce this section and to promote the Minnesota grown logo and 
labeling. 
    Subd. 5.  [PENALTY.] A person who is required to have a 
license and uses the Minnesota grown logo or labeling without a 
license after being notified by the commissioner that a license 
is required is subject to a civil penalty up to $1,000. 
    Subd. 6.  [RULES.] The commissioner shall promulgate rules 
authorizing and licensing the use of the logo or labeling 
statement. 
     Sec. 2.  [MINNESOTA GROWN MATCHING ACCOUNT.] 
    Subdivision 1.  [ESTABLISHMENT.] The Minnesota grown 
matching account is established as a separate account in the 
state treasury.  The account shall be administered by the 
commissioner of agriculture as provided in this section. 
    Subd. 2.  [FUNDING SOURCES.] The Minnesota grown matching 
account shall consist of contributions from private sources and 
appropriations. 
    Subd. 3.  [APPROPRIATIONS MUST BE MATCHED BY PRIVATE 
FUNDS.] (a) Appropriations to the Minnesota grown matching 
account may be expended only to the extent that they are matched 
with contributions to the account from private sources as 
provided in paragraph (b) for fiscal years 1988 and 1989.  
    (b) Private contributions shall be matched on a basis of 
four dollars of the appropriation to each one dollar of private 
contributions.  Matching funds are not available after the 
appropriation is encumbered.  Private contributions made from 
January 1, 1987, until the end of fiscal year 1987 shall be 
matched by the appropriation for fiscal year 1988.  Amounts that 
are not matched in fiscal year 1988 are available to be matched 
in fiscal year 1989. 
    Subd. 4.  [EXPENDITURES.] The amount in the Minnesota grown 
matching account that is matched by private contributions and 
the private contributions are appropriated to the commissioner 
of agriculture for promotion of products using the Minnesota 
grown logo and labeling. 
    Sec. 3.  [EFFECTIVE DATE.] 
    Section 2 is effective the day following final enactment. 

                               ARTICLE 7 

                         AGRICULTURAL PRESERVES 
    Section 1.  Minnesota Statutes 1986, section 40A.03, 
subdivision 2, is amended to read:  
    Subd. 2.  [PLANS AND OFFICIAL CONTROLS.] By July 1 December 
31, 1987, each pilot county selected under subdivision 1 shall 
submit to the commissioner and to the regional development 
commission in which it is located, if one exists, a proposed 
agricultural land preservation plan and proposed official 
controls implementing the plan.  The commissioner, in 
consultation with the regional development commission, shall 
review the plan and controls for consistency with the elements 
in this chapter and shall submit written comments to the county 
within 90 days of receipt of the proposal.  The comments must 
include a determination of whether the plan and controls are 
consistent with the elements in this chapter.  The commissioner 
shall notify the county of its determination.  If the 
commissioner determines that the plan and controls are 
consistent, the county shall adopt the controls within 60 days 
of completion of the commissioner's review. 
    Sec. 2.  Minnesota Statutes 1986, section 40A.152, 
subdivision 1, is amended to read:  
    Subdivision 1.  [FEE.] A county that is a metropolitan 
county under section 473.121, subdivision 4, has allowed 
exclusive agricultural zones to be created under this 
chapter, that has designated lands eligible for agricultural 
preserves under section 473H.04, or that has elected to become 
an agricultural land preservation pilot county, shall impose an 
additional fee of $3 $5 per transaction on the recording or 
registration of a mortgage subject to the tax under section 
287.05 and an additional $3 $5 on the recording or registration 
of a deed subject to the tax under section 287.21.  One-half of 
the fee must be deposited in a special conservation account to 
be created in the county general revenue fund and one-half must 
be transferred to the commissioner of revenue for deposit in the 
state treasury and credited to the Minnesota conservation fund. 
    Sec. 3.  Minnesota Statutes 1986, section 40A.152, 
subdivision 2, is amended to read:  
    Subd. 2.  [USE OF ACCOUNT.] Money from the county 
conservation account must be spent by the county to reimburse 
the county and taxing jurisdictions within the county for 
revenue lost under the conservation tax credit under section 
273.119 or the valuation of agricultural preserves under section 
473H.10.  If expenditures from other county funds for the same 
purposes remain at least equal to the amount spent in the 
previous county budget year, money remaining in the account 
after those payments the reimbursements are made may be spent 
for the following purposes: 
    (1) agricultural land preservation and conservation 
planning and implementation of official controls under this 
chapter or chapter 473H; 
    (2) soil conservation activities and enforcement of soil 
loss ordinances; 
    (3) incentives for landowners who create exclusive 
agricultural use zones; 
    (4) payments to municipalities within the county for the 
purposes of clauses (1) to (3). 
    Sec. 4.  Minnesota Statutes 1986, section 473H.10, 
subdivision 3, is amended to read:  
    Subd. 3.  [COMPUTATION OF TAX; STATE REIMBURSEMENT.] (a) 
After having determined the market value of all land valued 
according to subdivision 2, the assessor shall compute the 
assessed value of those properties by applying the appropriate 
classification percentages.  When computing the rate of tax 
pursuant to section 275.08, the county auditor shall include the 
assessed value of land as provided in this clause.  
    (b) The county auditor shall compute the tax on lands 
valued according to subdivision 2 and nonresidential buildings 
by multiplying the assessed value times the total rate of tax 
for all purposes as provided in clause (a).  
    (c) The county auditor shall then compute the maximum ad 
valorem property tax on lands valued according to subdivision 2 
and nonresidential buildings by multiplying the assessed value 
times 105 percent of the previous year's statewide average mill 
rate levied on property located within townships for all 
purposes.  
    (d) The tax due and payable by the owner of preserve land 
valued according to subdivision 2 and nonresidential buildings 
will be the amount determined in clause (b) or (c), whichever is 
less.  If the gross tax in clause (c) is less than the gross tax 
in clause (b), the state shall reimburse the taxing 
jurisdictions for the amount of difference.  Residential 
buildings shall continue to be valued and classified according 
to the provisions of sections 273.11 and 273.13, as they would 
be in the absence of this section, and the tax on those 
buildings shall not be subject to the limitation contained in 
this clause.  
    The county may transfer money from the county conservation 
account created in section 40A.152 to the county revenue fund to 
reimburse the fund for the tax lost as a result of this 
subdivision or to pay taxing jurisdictions within the county for 
the tax lost.  The county auditor shall certify to the 
commissioner of revenue on or before June 1 the total amount of 
tax lost to the county and taxing jurisdictions located within 
the county as a result of this subdivision and the extent that 
the tax lost exceeds funds available in the county conservation 
account.  Payments shall be made by the state as provided in 
section 273.13, subdivision 15a to each of the affected taxing 
jurisdictions if the county conservation account is insufficient 
to make the reimbursement.  There is annually appropriated from 
the Minnesota conservation fund under section 40A.151 to the 
commissioner of revenue an amount sufficient to make the 
reimbursement provided in this subdivision.  If the amount 
available in the Minnesota conservation fund is insufficient, 
the balance that is needed is appropriated from the general fund.
    Sec. 5.  Minnesota Statutes 1986, section 473H.17, 
subdivision 1, is amended to read:  
    Subdivision 1.  Land within an agricultural preserve shall 
be maintained for agricultural production.  The average maximum 
density of residential structures within an agricultural 
preserve shall not exceed one unit per 40 acres.  The location 
of any new structure shall conform to locally applicable zoning 
regulations.  Commercial and industrial uses shall not be 
permitted except that small on-farm commercial or industrial 
operations normally associated with and important to farming in 
the area may be permitted by the as provided in section 7 after 
the user is issued a permit by the authority.  The authority 
shall be responsible for enforcing this section. 
    Sec. 6.  Minnesota Statutes 1986, section 473H.17, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [ALLOWED COMMERCIAL AND INDUSTRIAL 
OPERATIONS.] (a) Commercial and industrial operations are not 
allowed on land within an agricultural preserve except: 
    (1) small on-farm commercial or industrial operations 
normally associated with and important to farming in the 
agricultural preserve area; 
    (2) storage use of existing farm buildings that does not 
disrupt the integrity of the agricultural preserve; and 
    (3) small commercial use of existing farm buildings for 
trades not disruptive to the integrity of the agricultural 
preserve such as a carpentry shop, small scale mechanics shop, 
and similar activities that a farm operator might conduct. 
    (b) "Existing" in paragraph (a), clauses (2) and (3), means 
existing on August 1, 1987. 
    Sec. 7.  Minnesota Statutes 1986, section 473H.17, 
subdivision 2, is amended to read:  
    Subd. 2.  [DENSITY RESTRICTION AFTER SUBDIVISION.] When a 
separate parcel is created for a residential structure, 
commercial, or industrial use permitted under subdivision 1, the 
parcel shall cease to be an agricultural preserve unless the 
eligibility requirements of section 473H.03 are met.  However, 
the residential unit separate parcel shall continue to be 
included in remain under the maximum residential density 
restrictions in effect for the original preserve at the time it 
was placed into the preserve until the agricultural preserve 
status for the original parcel ends. 
     Sec. 8.  [GRANTS FOR OFFICIAL CONTROLS TO OTHER THAN PILOT 
COUNTIES.] 
    Grants to eligible recipients other than the pilot counties 
under section 40A.15, subdivision 4, are not available until the 
pilot county program has been completed and a report on the 
pilot county experiences has been presented to the legislature.  
The report must be completed by July 1, 1988. 

                               ARTICLE 8 

                 AGRICULTURAL COMMODITIES UTILIZATION  
    Section 1.  Minnesota Statutes 1986, section 17.03, is 
amended by adding a subdivision to read: 
    Subd. 7.  [AGRICULTURAL DIVERSIFICATION.] The commissioner 
shall establish a program of agricultural diversification.  The 
commissioner must assist the horticultural industry, help 
producers diversify farming operations, and coordinate state 
agency efforts regarding agricultural diversification, after 
consulting with farm groups, the University of Minnesota and 
applicable institutions of higher learning.  The commissioner 
shall report to the governor and legislature annually on 
activities and actions that should be taken in these matters.  
    Sec. 2.  [17.50] [POLICY.] 
    The state must explore alternative uses for agricultural 
products to enable the state's agricultural economy to reach its 
full potential.  The state must promote and encourage 
cooperative efforts between public and private interests in 
conducting basic research and disseminating the results on 
agricultural commodity utilization.  

                                ARTICLE 9
    Section 1.  [RESEARCH STUDY; LOW LIVESTOCK PRODUCTIVITY.] 
    Subdivision 1.  [STUDY CRITERIA; SCOPE.] The University of 
Minnesota or another institution or organization selected by the 
commissioner of agriculture in consultation with the advisory 
board established under subdivision 3 shall perform the study 
required under this article.  The study must provide 
interdisciplinary analysis of issues frequently believed to be 
electrical in nature that affect dairy and livestock 
productivity levels or are manifested in poor animal health.  
The study may include analysis of possible nonelectrical causes 
for low productivity levels or poor animal health at the study 
sites in order to help isolate the specific cause or causes of 
the problem at the sites.  The study must be conducted on 
farmstead sites within the state as determined appropriate by 
the study team.  The interdisciplinary team studying the 
selected sites must consist of researchers from the University 
of Minnesota or elsewhere who have expertise in the following 
fields:  (1) animal sciences; (2) veterinary medicine; (3) 
electrical power distribution; (4) farmstead electrification; 
and (5) any other discipline or field deemed appropriate by 
members of the interdisciplinary team. 
    Subd. 2.  [STUDY SITE SELECTION.] The farmstead sites to be 
studied must be selected by the advisory board established under 
subdivision 3.  Study sites must be selected from among 
farmsteads whose operators request participation in the study.  
For three or more of the sites, preference must be given to 
farmsteads in dairy production areas which have experienced 
persistent problems with low milk production levels and poor 
dairy herd health and where a traditional study of stray voltage 
has failed to identify or solve the problem. 
    Subd. 3.  [ADVISORY BOARD:  COMPOSITION, APPOINTMENT, 
DUTIES.] Not later than 30 days after the effective date of this 
act the governor, in consultation with the commissioner of 
agriculture, shall appoint an advisory board of nine members who 
shall determine farmstead sites to be included in the study.  
The advisory board shall meet at least quarterly to review 
progress reports on the study.  Members of the advisory board 
shall include farmers experiencing conditions similar to those 
to be studied (membership on the advisory board does not 
preclude study of a farmstead operated by a member); farmers 
whose problems with low productivity levels or poor livestock 
health have been resolved; other farmers; a member of the 
Minnesota pollution control agency board; a representative of a 
cooperative electric association; a representative of an 
investor-owned electric utility which serves rural areas of 
Minnesota; a practicing veterinarian; and a representative of 
the University of Minnesota.  Members of the advisory board 
shall serve without compensation but must be reimbursed by the 
commissioner of agriculture for mileage and actual expenses for 
meals related to service on the advisory board.  The advisory 
board expires upon submission of the report required under 
subdivision 4. 
    Subd. 4.  [REPORT.] The interdisciplinary study team shall 
prepare and deliver to the commissioner of agriculture a report 
on the results of the study.  If feasible, the study team shall 
also submit the results of the study in a form appropriate for 
publication in one or more recognized scientific journals.  The 
commissioner shall report results of the study to the house and 
senate committees on agriculture not later than February 1, 1989.
    Sec. 2.  [EFFECTIVE DATE.] 
    This article is effective the day following final enactment.

                                ARTICLE 10

                          AGRICULTURE AND TRADE
    Section 1.  Minnesota Statutes 1986, section 17.03, is 
amended by adding a subdivision to read:  
    Subd. 8.  [COOPERATION WITH MINNESOTA TRADE OFFICE.] The 
commissioner of agriculture, the commissioner of trade and 
economic development, and the director of the Minnesota trade 
office shall cooperate with each other to promote the beneficial 
agricultural interests of the state.  The commissioner of trade 
and economic development and the director of the Minnesota trade 
office have primary responsibility for promoting state 
agricultural interests to international markets.  The 
commissioner of agriculture has primary responsibility for 
promoting the agricultural interests of producers, promoting 
state agricultural markets, and promoting agricultural interests 
of the state in cooperative production and marketing efforts 
with other states and the United States Department of 
Agriculture. 
    Sec. 2.  Minnesota Statutes 1986, section 17.101, 
subdivision 1, is amended to read:  
    Subdivision 1.  [DEPARTMENTAL DUTIES.] For the purposes of 
expanding, improving, and developing the markets for products of 
Minnesota agriculture, the commissioner shall encourage and 
promote the marketing of these products by means of:  
    (a) advertising Minnesota agricultural products;  
    (b) assisting state agricultural commodity organizations;  
    (c) developing methods to increase processing and marketing 
of agricultural commodities including commodities not being 
produced in Minnesota on a commercial scale, but which may have 
economic potential in national and international markets;  
    (d) investigating and identifying new marketing technology 
and methods to enhance the competitive position of Minnesota 
agricultural products;  
    (e) evaluating livestock marketing opportunities;  
    (f) assessing and developing national and international 
markets for Minnesota agricultural products;  
    (g) studying the conversion of raw agricultural products to 
manufactured products including ethanol;  
    (h) hosting the visits of foreign trade teams to Minnesota 
and defraying the teams' expenses;  
    (i) assisting Minnesota agricultural businesses desiring to 
sell their products in national and international markets; and 
    (j) other activities the commissioner deems appropriate to 
promote Minnesota agricultural products in national and 
international markets, provided that the activities do not 
duplicate programs or services provided by the Minnesota trade 
office. 
    Sec. 3.  Minnesota Statutes 1986, section 17.103, is 
amended to read:  
    17.103 [TRADE AND EXPORT DEVELOPMENT.] 
    The commissioner of agriculture shall encourage and develop 
commerce with other states and foreign countries and devise ways 
and means of removing trade barriers hampering the free flow of 
commerce between this and other states.  
    Sec. 4.  [116J.967] [COMMISSIONER'S TRADE PROMOTION 
DUTIES.] 
    Subdivision 1.  [GENERALLY.] (a) The commissioner shall 
promote, develop, and facilitate trade and foreign investment in 
Minnesota.  In furtherance of these goals, and in addition to 
the powers granted by section 116J.035, the commissioner may:  
    (1) locate, develop, and promote international markets for 
Minnesota products and services;  
    (2) arrange and lead trade missions to countries with 
promising international markets for Minnesota goods, technology, 
services, and agricultural products;  
    (3) promote Minnesota products and services at 
international trade shows;  
    (4) organize, promote, and present international trade 
shows featuring Minnesota products and services;  
    (5) host trade delegations and assist foreign traders in 
contacting appropriate Minnesota businesses and investments;  
    (6) develop contacts with Minnesota businesses and gather 
and provide information to assist them in locating and 
communicating with international trading or joint venture 
counterparts;  
    (7) provide information, education, and counseling services 
to Minnesota businesses regarding the economic, commercial, 
legal, and cultural contexts of international trade; 
    (8) provide Minnesota businesses with international trade 
leads and information about the availability and sources of 
services relating to international trade, such as export 
financing, licensing, freight forwarding, international 
advertising, translation, and custom brokering;  
    (9) locate, attract, and promote foreign investment and 
business development in Minnesota to enhance employment 
opportunities in Minnesota;  
    (10) provide foreign businesses and investors desiring to 
locate facilities in Minnesota information regarding sources of 
governmental, legal, real estate, financial, and business 
services;  
    (11) undertake activities to support the world trade 
center; and 
    (12) enter into contracts or other agreements with private 
persons and public entities to carry out the purposes of 
promoting international trade and attracting investment from 
foreign countries to Minnesota and to carry out this section, 
without regard to sections 16B.07 and 16B.09.  
    (b) The programs and activities of the commissioner of 
energy and economic development and the Minnesota trade office 
may not duplicate programs and activities of the commissioner of 
agriculture. 
    Subd. 2.  [AGRICULTURAL PROMOTION.] The commissioner of 
trade and economic development and the director of the Minnesota 
trade office shall cooperate and consult with the commissioner 
of agriculture in promoting the beneficial agricultural 
interests of the state.  The commissioner of trade and economic 
development and the director of the Minnesota trade office shall 
have the primary responsibility for promoting state agricultural 
interests to international markets.  The commissioner of 
agriculture has primary responsibility for promoting the 
agricultural interests of producers, promoting state 
agricultural markets, and promoting the agricultural interests 
of the state in cooperative production and marketing efforts 
with other states and the United States Department of 
Agriculture. 
    Sec. 5.  [236A.02] [ADMINISTRATIVE SUPPORT.] 
    The commissioner of agriculture in consultation with the 
director of the Minnesota trade office shall provide 
administrative staff and support to the Interstate Agricultural 
Grain Marketing Commission members from this state. 
    Sec. 6.  [REORGANIZATION.] 
    The divisions and offices established within the department 
of trade and economic development include the Minnesota trade 
office consisting of the Minnesota trade office in the 
department of agriculture relating to international trade, but 
do not include the functions and positions of the office 
relating to domestic agricultural trade. 
    Sec. 7.  [REPEALER.] 
    Minnesota Statutes 1986, section 17.03, subdivision 5, is 
repealed. 
    Sec. 8.  [INSTRUCTION TO REVISOR.] 
    The revisor of statutes shall renumber each section of 
Minnesota Statutes in column A with the corresponding number in 
column B.  The revisor shall also make necessary cross reference 
changes consistent with the renumbering and change the words 
"commissioner of agriculture" or similar words to "commissioner 
of the department of trade and economic development" or similar 
words. 
          Column A            Column B
          17.103              116J.970 
          17.104              116J.971 
          17.105              116J.972

                               ARTICLE 11 

                         AGRICULTURE DEPARTMENT
    Section 1.  Minnesota Statutes 1986, section 17B.15, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ADMINISTRATION; APPROPRIATION.] The fees 
for inspection and weighing shall be fixed by the commissioner 
and be a lien upon the grain.  The commissioner shall set fees 
for all inspection and weighing in an amount adequate to pay the 
expenses of carrying out and enforcing the purposes of sections 
17B.01 to 17B.23, including the portion of general support costs 
and statewide indirect costs of the agency attributable to that 
function, with a reserve sufficient for up to six months, and 
including repayment by the department of any amount appropriated 
from the general fund to establish the grain inspection and 
weighing account.  The commissioner shall review the fee 
schedule twice each year.  Fee adjustments are not subject to 
chapter 14.  Payment shall be required for services rendered.  
If the grain is in transit, the fees shall be paid by the 
carrier and treated as advance charges, and, if received for 
storage, the fees shall be paid by the warehouse operator, and 
added to the storage charges. 
    All fees collected and all fines and penalties for 
violation of any provision of this chapter shall be deposited in 
the grain inspection and weighing account, which is created in 
the state treasury for carrying out the purpose of sections 
17B.01 to 17B.23.  The money in the account is annually 
appropriated to the commissioner of agriculture to administer 
the provisions of sections 17B.01 to 17B.23. 
    Sec. 2.  Minnesota Statutes 1986, section 18.023, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] As used in subdivisions 1 to 
12 the terms defined in this subdivision shall have the meanings 
given them. 
    (a) "Metropolitan area" means the area comprising the 
counties of Hennepin, Ramsey, Anoka, Dakota, Washington, Scott 
and Carver.  
    (b) "Commissioner" means the commissioner of agriculture.  
    (c) "Municipality" means any home rule charter or statutory 
city or any town exercising municipal powers pursuant to section 
368.01, or any general or special law, located in the 
metropolitan area; or any special park district as organized 
under chapter 398; or any special purpose park and recreation 
board organized under the city charter of a city of the first 
class located in the metropolitan area; or any county in the 
metropolitan area for the purposes of county owned property or 
any portion of a county located outside the geographic 
boundaries of a city or town exercising municipal powers; and 
any municipality or county located outside the metropolitan area 
with an approved disease control program.  
    (d) "Shade tree disease" means Dutch elm disease or, oak 
wilt disease, or any disorder affecting the growth and life of 
shade trees.  
    (e) "Wood utilization or disposal system" means facilities, 
equipment or systems used for the removal and disposal of 
diseased shade trees which includes the collection, 
transportation, processing or storage of wood and which aids in 
the recovery of materials or energy from wood.  
    (f) "Approved disease control program" means the municipal 
plan as approved by the commissioner to control shade tree 
disease.  
    (g) "Disease control area" means an area approved by the 
commissioner within which a municipality will conduct an 
approved disease control program.  
    (h) "Sanitation" means the identification, inspection, 
disruption of a common root system, girdling, trimming, removal 
and disposal of dead or diseased wood of elm or oak shade trees, 
including subsidies for trees removed pursuant to subdivision 4, 
on public or private property within a disease control area.  
    (i) "Reforestation" means the replacement of shade trees 
removed from public property and the planting of any species of 
tree as part of a municipal disease control program.  For 
purposes of this clause, "public property" shall include private 
property within five feet of the boulevard or street terrace in 
any city which has enacted an ordinance on or before January 1, 
1977, that prohibits or requires a permit for the planting of 
trees in the public right-of-way.  
     Sec. 3.  Minnesota Statutes 1986, section 19.58, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ENTRY PERMIT.] No person may bring into 
this state any bees on comb, including nuclei, or used bee 
equipment without an entry permit issued by the commissioner.  A 
person who wishes to bring any bees on comb or used bee 
equipment into the state shall apply for an entry permit at 
least 60 days before the date of entry.  The 60-day requirement 
may be waived for a hobbyist beekeeper who intends to become a 
resident of Minnesota and who brings ten colonies or less into 
the state.  
    Ten days before entry, any person required to obtain an 
entry permit shall furnish to the commissioner a copy of a valid 
certificate of inspection signed by a responsible official of 
the state where the bees or equipment originated.  The 
certificate must be based on either an inspection or an 
affidavit.  A person may not bring into the state any bees on 
comb including nuclei, combless bees, or used bee equipment from 
any county or parish where honey bee trachael mites or 
Africanized bees have been found unless it is demonstrated to 
the satisfaction of the commissioner that there will be no risk 
of introduction either of trachael mites or Africanized bees 
into the state.  Bees or equipment brought into the state in 
violation of this subdivision are a public nuisance and may be 
destroyed without notice by the commissioner. 
    This subdivision does not apply to a common carrier 
transporting bees or used bee equipment from a point of origin 
outside of the state to a destination outside of the state. 
    Sec. 4.  Minnesota Statutes 1986, section 28A.08, is 
amended to read: 
    28A.08 [LICENSE FEES; PENALTIES.] 
    The fees for licenses and the License fees, penalties for 
late renewal of licenses, and penalties for not obtaining a 
license before conducting business in food handling that are set 
in this section apply to the sections named except as provided 
under section 28A.09.  Except as specified herein, bonds and 
assessments based on number of units operated or volume handled 
or processed which are provided for in said laws shall not be 
affected, nor shall any penalties for late payment of said 
assessments, nor shall inspection fees, be affected by this 
chapter.  The late penalty may be waived by the commissioner. 
                                                  Penalties 
Type of food handler                    License  Penalty  No
                                        Fee      Late     License
                                                 Renewal 
1.   Retail food handler
     (a) Having gross sales of
     less than $50,000 for 
     the immediately previous 
     license or fiscal year            $ 25 $ 40  $10      $ 13
     (b) Having $50,000 to $250,000 
     gross sales for the immediately 
     previous license or fiscal year   $ 50 $ 75  $13 $ 25 $ 25
     (c) Having $250,000 to $1,000,000
     gross sales for the immediately
     previous license or fiscal year   $100 $125  $25 $ 50 $ 50
     (d) Having over $1,000,000 gross
     sales for the immediately
     previous license or fiscal year   $200 $250  $50 $ 75 $100
2.   Wholesale food handler
     (a) Having gross sales or
     service of less than $250,000
     for the immediately previous 
     license or fiscal year            $100       $25      $ 50
     (b) Having $250,000 to
     $1,000,000 gross sales or
     service for the immediately
     previous license or fiscal year   $150       $38      $ 75
     (c) Having over $1,000,000
     gross sales or service for the  
     immediately previous license 
     or fiscal year                    $200       $50      $100
3.   Food broker                       $ 50 $ 75  $13 $ 25 $ 25
4.   Wholesale food processor
     or manufacturer 
     (a) Having gross sales of less 
     than $250,000 for the immediately 
     previous license or fiscal year   $150 $200  $38 $ 50 $ 75
     (b) Having $250,000 to $1,000,000 
     gross sales for the immediately 
     previous license or fiscal year   $200 $275  $50 $ 75 $100
     (c) Having over $1,000,000 
     gross sales for the immediately 
     previous license or fiscal year   $250 $375  $63 $100 $125
5.   Wholesale food processor of
     meat or poultry products
     under supervision of the
     U. S. Department of Agriculture 
     (a) Having gross sales of less 
     than $250,000 for the immediately
     previous license of fiscal year   $ 75 $100  $19 $ 25 $ 38
     (b) Having $250,000 to $1,000,000 
     gross sales for the immediately 
     previous license or fiscal year   $ 90 $150  $23 $ 50 $ 45
     (c) Having over $1,000,000 
     gross sales for the immediately
     previous license or fiscal year   $105 $175  $27 $ 50 $ 53
6.   Wholesale food manufacturer
     having the permission of the
     commissioner to use the name
     Minnesota farmstead cheese        $ 30       $10      $ 15
     Sec. 5.  Minnesota Statutes 1986, section 31.101, 
subdivision 3, is amended to read:  
    Subd. 3.  Federal pesticide chemical regulations and 
amendments thereto in effect on April 1, 1982 1987 adopted under 
authority of the Federal Insecticide, Fungicide and Rodenticide 
Act, as provided by United States Code, title 7, chapter 6, are 
the pesticide chemical rules in this state.  Such rules may be 
amended by the commissioner proceeding in accordance with the 
administrative procedure act.  
    Sec. 6.  Minnesota Statutes 1986, section 31.101, 
subdivision 4, is amended to read: 
    Subd. 4.  Federal food additive regulations and amendments 
thereto in effect on April 1, 1982 1987, as provided by Code of 
Federal Regulations, title 21, parts 170 to 199, are the food 
additive rules in this state.  Such rules may be amended by the 
commissioner proceeding in accordance with the administrative 
procedure act.  
    Sec. 7.  Minnesota Statutes 1986, section 31.101, 
subdivision 5, is amended to read: 
    Subd. 5.  Federal color additive regulations and amendments 
thereto in effect on April 1, 1982 1987, as provided by Code of 
Federal Regulations, title 21, parts 70 to 82, are the color 
additive rules in this state.  Such rules may be amended by the 
commissioner proceeding in accordance with the administrative 
procedure act.  
    Sec. 8.  Minnesota Statutes 1986, section 31.101, 
subdivision 6, is amended to read: 
    Subd. 6.  Federal special dietary use regulations and 
amendments thereto in effect on April 1, 1982 1987, as provided 
by Code of Federal Regulations, title 21, parts 104 and 105, are 
the special dietary use rules in this state.  Such rules may be 
amended by the commissioner proceeding in accordance with the 
administrative procedure act.  
    Sec. 9.  Minnesota Statutes 1986, section 31.101, 
subdivision 7, is amended to read: 
    Subd. 7.  Federal regulations and amendments thereto in 
effect on April 1, 1982 1987 adopted under the Fair Packaging 
and Labeling Act, as provided by United States Code, title 15, 
sections 1451 to 1461, are the rules in this state.  Such rules 
may be amended by the commissioner proceeding in accordance with 
the administrative procedure act; provided that the commissioner 
shall not adopt amendments to such rules or adopt other rules 
which are contrary to the labeling requirements for the net 
quantity of contents required pursuant to section 4 of the Fair 
Packaging and Labeling Act and the regulations promulgated 
thereunder.  
    Sec. 10.  Minnesota Statutes 1986, section 31.101, 
subdivision 8, is amended to read: 
    Subd. 8.  Applicable federal regulations including 
recodification contained in Code of Federal Regulations, title 
21, parts 0-1299, Food and Drugs, in effect April 1, 1982 1987, 
and not otherwise adopted herein, also are adopted as food rules 
of this state.  Such rules may be amended by the commissioner in 
accordance with the administrative procedure act. 
    Sec. 11.  Minnesota Statutes 1986, section 32.394, 
subdivision 8, is amended to read: 
    Subd. 8.  [EXPLORATORY PRELIMINARY INSPECTIONS GRADE A 
INSPECTION FEES.] Any A processor or marketing organization of 
milk, milk products, sheep milk, or goat milk who wishes to 
learn about and acquaint producers with market Grade A 
requirements may make a request to the commissioner for 
exploratory inspections and meetings for this purpose.  Upon 
receipt of such request, the commissioner at a convenient time 
shall cause such exploratory inspections to be made and such 
meetings to be held as are necessary to acquaint said processor 
and producers with such requirements.  If, after such 
exploratory inspections are made and such meetings are held and 
when in the processor's opinion the processor's field service 
has brought producers into compliance with said requirements, 
said processor wishes further inspection service, the processor 
shall so milk or use the Grade A label must apply on a form 
furnished by for Grade A inspection service from the 
commissioner, stating the number of farms to be inspected.  Such 
applications shall be accompanied by a fee payable to the state 
treasurer in an amount of not less than $50 and not more than 
$300, which fee is to be charged for preliminary inspection 
prior to continuous inspection, and assessments over $50 are to 
be determined by charging $1 for each farm over 50, but shall 
not exceed $300 if more than 300 farms are inspected; provided 
that, if the plant and farms are accepted for continuous 
inspection, this charge shall be made only once.  If the 
preliminary inspection discloses that the processor is eligible 
for use of the Grade A label on products and before the 
processor so labels said products, the processor shall apply for 
continuous inspection on a form furnished by the commissioner 
and shall hold a Grade A permit.  Such application shall be 
accompanied by a fee of not less than $100 nor more than $500 
per plant and of not less than $15 nor more than $50 per farm, 
said fee to be paid annually.  A pasteurization plant requesting 
Grade A inspection service must hold a Grade A permit and pay an 
annual inspection fee of no more than $500.  For Grade A farm 
inspection service, the fee must be no more than $66 per farm, 
paid annually by the processor or by the marketing organization 
on behalf of its patrons.  For a farm requiring a reinspection 
in addition to the required biannual inspections, an additional 
fee of no more than $33 per reinspection must be paid by the 
processor or by the marketing organization on behalf of its 
patrons.  If the commissioner deems it necessary to more nearly 
meet the cost of the service, the commissioner may annually 
adjust the assessments within the limits set herein in this 
subdivision. 
    Sec. 12.  Minnesota Statutes 1986, section 32.394, 
subdivision 8b, is amended to read: 
    Subd. 8b.  [MANUFACTURING GRADE FARM CERTIFICATION.] A 
processor or marketing organization of milk, milk products, 
sheep milk, or goat milk, other than Grade A, who wishes to 
obtain market other than Grade A milk must apply for a 
manufacturing grade farm certification, shall make a request 
to inspection from the commissioner for a farm certification 
inspection.  A processor who requests and receives a farm 
certification inspection shall pay a fee to the commissioner for 
the certification of the milk supply.  A manufacturing plant 
that pasteurizes milk or milk byproducts must pay an annual fee 
based on the number of pasteurization units.  This fee must not 
exceed $140 per unit.  The fee for farm certification inspection 
must not be more than $33 per farm to be paid annually by the 
processor or by the marketing organization on behalf of its 
patrons.  For a farm requiring more than the one annual 
inspection required for certification, an additional fee of no 
more than $33 must be paid by the processor or by the marketing 
organization on behalf of its patrons.  The fee shall must be 
set by the commissioner in an amount necessary to meet the cost 
of the service for farm certification, which fee shall but must 
not exceed 50 percent of the fees charged for Grade A 
permits the limits in this subdivision. 
    Sec. 13.  Minnesota Statutes 1986, section 32.394, 
subdivision 9, is amended to read: 
    Subd. 9.  [PAYMENTS; REFUNDS; DISPOSITION.] The amount of 
such assessments shall be Fees are payable by the a processor 
on or before or marketing organization by July 1, of each year 
for Grade A, and by January 1 of each year for manufacturing 
grade, and if not paid on or before July 31, following within 30 
days of the due date, the service shall must be discontinued, 
and permission to market manufacturing grade or Grade A milk or 
milk products or use the Grade A label shall must be withdrawn; 
provided, that such.  A processor may terminate such payment and 
such service without loss of the Grade A label if written notice 
of such that intention is given prior to the due date of the 
payment of said an assessment and if the continuous inspection 
of said the plant and farms is assumed by a city whose milk 
control ordinance is substantially equivalent to Minnesota law 
and rule and is enforced with equal effectiveness.  When such 
written notice is given by the processor on or before December 
31 preceding the due date, that portion of the assessment for 
the period January 1 through June 30, immediately following, 
shall be refunded to the processor If a farm discontinues the 
production of milk within six months of the billing date, a 
request for a refund based on inspection services not received 
may be made by the processor or by the marketing organization on 
behalf of its patrons.  This request must be made in writing by 
July 1 for manufacturing grade, or by December 31 for Grade A, 
and on approval by the commissioner refunds must be made to the 
processor or marketing organization.  
    The fees for services performed by the activities of this 
section shall must be deposited in the state treasury and shall 
constitute a separate account to be known as the milk inspection 
service account, which is hereby created, set aside, and 
appropriated as a revolving fund to be used to help to defray 
the cost of administration, refunds and expenses of the 
preliminary and continuous milk inspection services and shall be 
is in addition to and not in substitution for the sums 
appropriated or otherwise made available for this purpose to the 
department of agriculture. 
    Sec. 14.  Minnesota Statutes 1986, section 40.071, is 
amended to read: 
    40.071 [ADDITIONAL POWERS OF A DISTRICT.] 
    In addition to powers and duties otherwise provided by law, 
a soil and water conservation district may procure liability 
insurance as provided in section 466.06, automobile insurance on 
personal cars while used on official business, insurance on the 
contents of district offices up to a maximum of $7,500 per 
office, and workers' compensation insurance, or may require the 
county or counties in which the district is located to include 
the district in the county's or counties' insurance coverage for 
these purposes. 
    Sec. 15.  Minnesota Statutes 1986, section 223.17, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LICENSES.] An application for a grain 
buyer's license must be filed with the commissioner and the 
license issued before any grain may be purchased.  The 
commissioner must provide application forms and licenses that 
state the restrictions and authority to purchase and store grain 
under the license being applied for and issued.  The types 
categories of grain buyers' licenses are:  
    (a) private grain warehouse operator's license;  
    (b) public grain warehouse operator's license; and 
    (c) independent grain buyer's license. 
    The applicant for a grain buyer's license shall identify 
all grain buying locations owned or controlled by the grain 
buyer and all vehicles owned or controlled by the grain buyer 
used to transport purchased grain.  Every applicant for a grain 
buyer's license shall have a permanent established place of 
business at each licensed location.  An "established place of 
business" means a permanent enclosed building, including a house 
or a farm, either owned by the applicant or leased by the 
applicant for a period of at least one year, and where the 
books, records, and files necessary to conduct the business are 
kept and maintained.  The commissioner may maintain information 
on grain buyers by categories including, but not limited to, the 
categories provided in clauses (a) to (c) and grain buyers that 
are licensed to purchase grain using trucks but that do not have 
a public or private warehouse license. 
    Sec. 16.  Minnesota Statutes 1986, section 308.58, 
subdivision 2, is amended to read: 
    Subd. 2.  [WHERE FILED; EVIDENCE.] The articles must be 
subscribed by the several incorporators and acknowledged by one 
of them before an officer authorized by the law of this state to 
take and certify acknowledgment of deeds and conveyances; and 
shall be filed in the office of the secretary of state, and when 
so filed such incorporation shall be complete and a certified 
copy of the articles shall be filed with the commissioner of 
agriculture.  The articles, or certified copies thereof, shall 
be received in all the courts of this state, and other places, 
as prima facie evidence of the facts contained therein and of 
the due incorporation of such association.  
    Sec. 17.  Minnesota Statutes 1986, section 308.62, is 
amended to read: 
    308.62 [DIRECTORS; ELECTION.] 
    The affairs of the association shall be managed by a board 
of not less than five directors, elected by the members or 
stockholders from their own number, except as hereinafter 
provided.  The bylaws may provide that the territory in which 
the association has members shall be divided into districts and 
that the directors shall be elected according to such 
districts.  In such case the bylaws shall specify the number of 
directors to be elected by each district, the manner and method 
of apportioning or reapportioning the directors, and of 
districting or redistricting the territory covered by the 
association.  The bylaws may provide that primary elections 
should be held in each district to elect the directors 
apportioned to such districts, and the result of all such 
primary elections must be ratified by the next regular meeting 
of the association, or may be considered final by the 
association.  
    The bylaws shall provide that one or more directors may be 
appointed by the commissioner or any other public official or 
commission.  The director or directors so appointed need not be 
members or stockholders of the association, but shall have the 
same powers and rights as other directors.  Such directors shall 
not number more than one-fifth of the entire number of directors.
    An association may provide a fair remuneration for the time 
actually spent by its officials and directors in its service.  
No director, while serving in office, shall be a party to a 
contract for profit with the association differing in any way 
from the business relations accorded regular members or holders 
of common stock of the association, or to any other kind of 
contract differing from terms generally current in that district.
    The bylaws may provide that no director shall occupy any 
position in the association, except the president and secretary 
on regular salary or substantially full-time pay. 
    The bylaws may provide for an executive committee and may 
allot to such committee all the functions and powers of the 
board of directors, subject to the general direction and control 
of the board.  
    When a vacancy on the board of directors occurs, other than 
by expiration of term, the remaining members of the board, by a 
majority vote, shall fill the vacancy, unless the bylaws provide 
for an election of directors by district.  In such a case the 
board of directors shall immediately call a special meeting of 
the members or stockholders in that district to fill the vacancy.
    Sec. 18.  Minnesota Statutes 1986, section 308.77, is 
amended to read: 
    308.77 [ASSOCIATION HERETOFORE ORGANIZED MAY ADOPT 
PROVISIONS.] 
    Any corporation or association organized under previously 
existing statutes may, by a majority vote of its stockholders or 
members, be brought under the provisions of sections 308.53 to 
308.85 by limiting its membership and adopting the other 
restrictions, as provided therein.  It shall make out, in 
duplicate, a statement signed and sworn to by its directors, 
upon forms supplied by the commissioner of agriculture, to the 
effect that the corporation or association has, by a majority 
vote of its stockholders or members, decided to accept the 
benefits and be bound by the provisions of sections 308.53 to 
308.85.  Articles of incorporation shall be filed as required in 
section 308.58, except that they shall be signed by the members 
of the board of directors.  The filing fee shall be the same as 
for filing an amendment to the articles of incorporation.  Where 
any association or corporation may be incorporated or brought 
under sections 308.53 to 308.85, all contracts heretofore made 
by or on behalf of the same by the promoters thereof in 
anticipation of such association becoming incorporated under the 
laws of this state or otherwise, including such contracts made 
by or in the name of some corporation organized elsewhere, and 
when same would have been valid, if entered into subsequent to 
the passage of Laws 1923, chapter 264, are hereby accepted and 
validated as if made after that date.  Cooperative corporations 
and associations heretofore or hereafter organized and doing 
business under the existing law or laws supplementary thereto or 
amendatory thereof shall continue to be governed thereby unless 
and until they shall elect to be brought under the provisions of 
sections 308.53 to 308.85 in the manner provided in this section.
    Sec. 19.  Minnesota Statutes 1986, section 308.83, is 
amended to read: 
    308.83 [GOVERNOR TO ACT UPON REPORT.] 
    The governor shall have the power to remove from office any 
officer or director of any association, such removal to be upon 
such notice to the association and to the officers or directors 
thereof as shall be prescribed by the governor.  In case the 
commissioner has decided that the further operation of any such 
association is deemed hazardous to the public interest, and so 
reports to the governor, the governor may refer the matter of 
winding up the affairs of such association to the attorney 
general and it shall thereupon be the duty of the attorney 
general to proceed to wind up the affairs of any such 
association in the manner provided by law for winding up the 
business of insolvent banking institutions in the state.  
    Sec. 20.  Minnesota Statutes 1986, section 308.85, is 
amended to read:  
    308.85 [FEES.] 
    For filing articles of incorporation, or amendments 
thereto, any association organized under sections 308.29 to 
308.84 308.85 shall pay $15.  
    Sec. 21.  [REPEALER.] 
    Minnesota Statutes 1986, section 18.023, subdivision 1a, is 
repealed.  
    Sec. 22.  [EFFECTIVE DATE.] 
    This article is effective the day after final enactment. 

                               ARTICLE 12 

                             APPROPRIATIONS 
    Section 1.  [AGRICULTURAL DATA COLLECTION TASK FORCE.] 
    $50,000 is appropriated from the general fund to the 
legislative advisory commission to fund the activities of the 
agricultural data collection task force to be available until 
June 30, 1989. 
    Sec. 2.  [MINNESOTA GROWN MATCHING ACCOUNT.] 
    $360,000 is appropriated from the general fund to the 
Minnesota grown matching account to be available in the amounts 
for the fiscal years indicated 
                                            1988         1989
                                          $160,000     $200,000
    Sec. 3.  [METROPOLITAN AGRICULTURAL PRESERVE DEFICIENCY.] 
    The amount necessary to pay the deficiency in reimbursement 
under Minnesota Statutes, section 473H.10, subdivision 3, in 
fiscal year 1987 is appropriated to the commissioner of revenue 
from the Minnesota conservation fund to reimburse counties.  The 
amount of the deficiency must be certified by the county auditor 
on or before June 1, 1988, with the amount of tax lost in fiscal 
year 1988. 
    Sec. 4.  [AGRICULTURAL LAND PRESERVATION PLANNING GUIDE.] 
    $30,000 is appropriated from the general fund to the 
commissioner of agriculture to provide technical assistance for 
agricultural land preservation and conservation activities, 
including preparation and publication of an agricultural land 
preservation planning handbook for use by local units of 
government, and for a study and report on the costs of providing 
public services to agricultural and other land uses. 
    Sec. 5.  [INTERSTATE COMPACT ON GRAIN MARKETING.] 
    $50,000 is appropriated from the general fund to the 
commissioner of agriculture for payment of financing the 
operations of the state's portion of the interstate compact on 
grain marketing. 
    Sec. 6.  [SUSTAINABLE AGRICULTURE CHAIR.] 
    Subdivision 1.  [APPROPRIATION.] $75,000 is appropriated 
from the general fund to the University of Minnesota to 
establish an endowment for a chair in sustainable agriculture 
subject to the conditions of subdivision 2.  This appropriation 
is to be included in the nonstate sources of endowment under 
section 137.022, subdivision 3.  Sustainable agriculture 
represents the best aspects of traditional and modern 
agriculture by utilizing a fundamental understanding of nature, 
as well as the latest scientific advances to create integrated, 
self-reliant, resource conserving practices that enhance the 
enrichment of the environment and provide short- and long-term 
productive agriculture. 
    Subd. 2.  [PRIVATE CONTRIBUTIONS REQUIRED.] The 
appropriation under subdivision 1 is not effective until 
sufficient private contributions or pledges have been made so 
that the private contributions and pledges, plus the 
appropriation under subdivision 1, are sufficient to establish 
the endowment for a chair in sustainable agriculture.  The 
appropriation cancels on June 30, 1992, if sufficient private 
contributions and pledges have not been made.  
    Sec. 7.  [SWEET SORGHUM RESEARCH.] 
    $300,000 is appropriated from the general fund to the state 
board of vocational technical education for a demonstration 
project at the Mankato vocational technical institute involving 
butanol and ethanol production from sweet sorghum, for the 
biennium ending June 30, 1989. 
    Sec. 8.  [WILD RICE RESEARCH.] 
    $38,000 is appropriated from the general fund to the 
University of Minnesota for the agricultural experimental 
station to conduct wild rice research to be available until June 
30, 1989, as follows: 
(a) for experiments on use of fertilizers         $ 8,000 
(b) for experiments on the influence of
    rotation and residue removal on 
    diseases, weeds, and yield                    $ 8,000 
(c) to evaluate cost advantages and
    effect on yields of leveling and
    tiling                                        $ 6,000 
(d) to conduct controlled-site experiments
    into the advantages of existing and 
    future varieties of wild rice                 $16,000
    Sec. 9.  [STATE BOARD OF VOCATIONAL TECHNICAL EDUCATION.] 
    $1,450,000 is appropriated from the general fund to the 
state board of vocational technical education for the biennium 
ending June 30, 1989, to provide the following services: 
     (1) support staff for farm business
         management instructors                  $  160,000 
     (2) additional farm business and  
         small business management 
         programs                                $1,175,500 
     (3) workshops for farmers for 
         marketing, alternative 
         enterprises, and financial 
         management and staff                               
         development workshops                   $   50,000 
     (4) beginning farmer programs               $   64,500 
    Sec. 10.  [RURAL FINANCE AUTHORITY.] 
    Subdivision 1.  [RURAL FINANCE AUTHORITY.] $300,000 is 
appropriated from the general fund to the rural finance 
authority for administering the beginning farmer loan program.  
    The complement of the authority is increased by three 
positions. 
    Subd. 2.  [DEBT SERVICE.] $270,000 is appropriated from the 
general fund to the rural finance authority for debt service on 
general obligation bonds issued for the beginning farmer program.
    Sec. 11.  [AGRICULTURAL PROMOTION AND MARKETING.] 
    $858,000 is appropriated from the general fund to the 
commissioner of agriculture in the fiscal years indicated for 
promoting the agricultural interests of producers, promoting 
state agricultural markets, and promoting the agricultural 
interests of the state in cooperative production and marketing 
with other states. 
                                            1988      1989  
                                         $408,000   $450,000 
    The complement of the department of agriculture is 
increased by nine positions to reflect the programs and 
positions remaining in the department of agriculture.  
    Sec. 12.  [DAIRY SHEEP DEMONSTRATION PROJECT.] 
    $35,000 is appropriated from the general fund to the 
University of Minnesota for purposes of continuing the dairy 
sheep experiment project being performed at the Rosemount 
Experiment Station. 
    Sec. 13.  [PSEUDORABIES CONTROL.] 
    $185,000 is appropriated from the general fund to the board 
of animal health in the fiscal years indicated, to be available 
until June 30, 1989, to be used for a control program for 
pseudorabies in swine in which the state will pay costs of a 
program for testing of blood samples.  Blood samples must be 
drawn from swine herds by practicing veterinarians.  The program 
must be coordinated by board of animal health personnel.  This 
appropriation is in addition to other appropriations to the 
board of animal health for pseudorabies control.  
    Sec. 14.  [APPROPRIATION; LOW LIVESTOCK PRODUCTIVITY 
STUDY.] 
    $50,000 is appropriated from the general fund to the 
commissioner of agriculture for purposes of the study required 
under article 9.  Of this appropriation not more than $4,000 is 
available for administrative costs of the department of 
agriculture and mileage and expense reimbursements to members of 
the advisory board.  This appropriation is available until June 
30, 1989. 
    Approved June 4, 1987