Skip to main content Skip to office menu Skip to footer
Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 642-S.F.No. 2168 
                  An act relating to agricultural businesses; providing 
                  for promotion of nontraditional agriculture, 
                  inspection of agricultural operations, ethanol 
                  development, a value-added agricultural product loan 
                  program, sale of stock in cooperatives, and care of 
                  dogs and cats; creating an interest buy-down program; 
                  exempting from the sales tax the gross receipts from 
                  sales of used farm machinery; providing matching money 
                  for federal emergency disaster funds in flood damaged 
                  counties; providing for emergency job creation; 
                  authorizing a grain grading and testing equipment 
                  pilot program; providing supplemental funding for 
                  grain inspection programs, the ethanol development 
                  fund, and small business disaster loan programs; 
                  expanding research on grain diseases and soybeans; 
                  increasing funding for the farm advocates program, 
                  agricultural resource centers, legal assistance to 
                  farmers, legal challenges to the federal milk market 
                  order system, farm and small business management 
                  programs at technical colleges and Minnesota 
                  extension; funding a beaver control program, the dairy 
                  leaders roundtable, the state park road account, an 
                  advisory committee, and a task force; providing 
                  funding to the Agricultural Utilization Research 
                  Institute; requiring a report; appropriating money; 
                  amending Minnesota Statutes 1992, sections 17.03, by 
                  adding a subdivision; 180.03, by adding a subdivision; 
                  and 297A.25, by adding a subdivision; Minnesota 
                  Statutes 1993 Supplement, sections 41B.044, 
                  subdivision 2; and 80A.15, subdivision 2; Laws 1993, 
                  chapter 172, section 7, subdivision 3; proposing 
                  coding for new law in Minnesota Statutes, chapters 17; 
                  41B; and 346. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1992, section 17.03, is 
        amended by adding a subdivision to read: 
           Subd. 7a.  [NONTRADITIONAL AGRICULTURE; PROMOTION.] (a) The 
        commissioner shall devise means of advancing the production and 
        marketing of nontraditional agricultural products of the state.  
        The commissioner shall also seek the cooperation and involvement 
        of every department or agency of the state, and such public and 
        nonpublic organizations as the commissioner deems appropriate, 
        for the promotion of nontraditional agricultural products. 
           (b) The production and marketing of nontraditional 
        agricultural products are considered agricultural pursuits. 
           (c) Except as otherwise provided in law, the commissioner 
        may adopt appropriate rules concerning health standards for 
        nontraditional agriculture. 
           (d) Except as otherwise provided in law, the slaughter of 
        all meat producing animals, fowl, or fish that are 
        nontraditional agriculture intended for sale in commercial 
        outlets must occur at an inspected slaughterhouse. 
           (e) Except as otherwise provided in law, it is the 
        responsibility of an owner to take all reasonable actions to 
        maintain the nontraditional agriculture on property owned or 
        leased by the owner, including the construction of fences, 
        enclosures, or other barriers, and housing of a suitable design. 
           (f) For purposes of this subdivision "nontraditional 
        agriculture" and "nontraditional agricultural products" includes 
        but is not limited to aquaculture as defined in section 17.47, 
        subdivision 2, and the production of animals domesticated from 
        wild stock, either native or nonnative, that are kept in 
        confinement by the owner. 
           Sec. 2.  [17.139] [MEMORANDUM OF AGREEMENT AMONG STATE 
        AGENCIES ON INSPECTIONS OF AGRICULTURAL OPERATIONS.] 
           The commissioner shall develop memoranda of agreement among 
        all state and federal agencies that have authority to inspect 
        property in agricultural use, as defined in section 17.81, 
        subdivision 4, to ensure that reasonable and effective protocols 
        are followed when inspecting sites in agricultural use.  The 
        memorandum shall specify procedures that address, but are not 
        limited to, the following: 
           (1) when appropriate, advance notice to the agricultural 
        use landowner or operator; 
           (2) procedures for notification of the inspection results 
        or conclusions to the owner or operator; and 
           (3) special procedures as might be necessary, such as to 
        prevent the introduction of diseases. 
           Sec. 3.  Minnesota Statutes 1993 Supplement, section 
        41B.044, subdivision 2, is amended to read: 
           Subd. 2.  [ETHANOL DEVELOPMENT FUND.] There is established 
        in the state treasury an ethanol development fund.  All 
        repayments of financial assistance granted under subdivision 1, 
        including principal and interest, must be deposited into this 
        fund.  Interest earned on money in the fund accrues to the fund, 
        and money in the fund is appropriated to the commissioner of 
        agriculture for purposes of the ethanol production facility loan 
        program, including costs incurred by the authority to establish 
        and administer the program. 
           Sec. 4.  [41B.046] [VALUE-ADDED AGRICULTURAL PRODUCT LOAN 
        PROGRAM.] 
           Subdivision 1.  [DEFINITIONS.] For purposes of this section:
           (1) "Agricultural product processing facility" means land, 
        buildings, structures, fixtures, and improvements located or to 
        be located in Minnesota and used or operated primarily for the 
        processing or production of marketable products from agriculture 
        crops, including waste and residues from agriculture crops, but 
        not including livestock or livestock products, poultry or 
        poultry products, or wood or wood products. 
           (2) "Value-added agricultural product" means a product 
        derived from agricultural crops, including waste and residues 
        from agricultural crops, but not including livestock or 
        livestock products, poultry or poultry products, or wood or wood 
        products, which are processed by an agricultural product 
        processing facility. 
           Subd. 2.  [ESTABLISHMENT.] The authority shall establish 
        and implement a value-added agricultural product loan program to 
        help farmers finance the purchase of stock in a cooperative 
        proposing to build or purchase and operate an agricultural 
        product processing facility. 
           Subd. 3.  [REVOLVING FUND.] There is established in the 
        state treasury a value-added agricultural product revolving fund 
        which is eligible to receive appropriations.  All repayments of 
        financial assistance granted under subdivision 2, including 
        principal and interest, must be deposited into this fund.  
        Interest earned on money in the fund accrues to the fund, and 
        money in the fund is appropriated to the commissioner of 
        agriculture for purposes of the value-added agricultural loan 
        program, including costs incurred by the authority to establish 
        and administer the program. 
           Subd. 4.  [ELIGIBILITY.] To be eligible for this program a 
        borrower must: 
           (1) be a resident of Minnesota or a domestic family farm 
        corporation as defined in section 500.24, subdivision 2; 
           (2) be a grower of the agricultural product which is to be 
        processed by an agricultural product processing facility; 
           (3) demonstrate an ability to repay the loan; and 
           (4) meet any other requirements which the authority may 
        impose by rule. 
           Subd. 5.  [LOANS.] (a) The authority may participate in a 
        stock loan with an eligible lender to a farmer who is eligible 
        under subdivision 4.  Participation is limited to 45 percent of 
        the principal amount of the loan or $24,000, whichever is less.  
        The interest rates and repayment terms of the authority's 
        participation interest may differ from the interest rates and 
        repayment terms of the lender's retained portion of the loan, 
        but the authority's interest rate must not exceed 50 percent of 
        the lender's interest rate. 
           (b) No more than 95 percent of the purchase price of the 
        stock may be financed under this program. 
           (c) Loans under this program must not be included in the 
        lifetime limitation calculated under section 41B.03, subdivision 
        1. 
           (d) Security for stock loans must be the stock purchased, a 
        personal note executed by the borrower, and whatever other 
        security is required by the eligible lender or the authority. 
           (e) The authority may impose a reasonable nonrefundable 
        application fee for each application for a stock loan.  The 
        authority may review the fee annually and make adjustments as 
        necessary.  The application fee is initially $50.  Application 
        fees received by the authority must be deposited in the 
        value-added agricultural product revolving fund. 
           (f) Stock loans under this program will be made using money 
        in the value-added agricultural product revolving fund 
        established under subdivision 3. 
           (g) The authority may not grant stock loans in a cumulative 
        amount exceeding $2,000,000 for the financing of stock purchases 
        in any one cooperative. 
           Subd. 6.  [RULES.] The authority may adopt rules necessary 
        for the administration of the program including rules which 
        establish a minimum cost of any agricultural product processing 
        facility for which financial assistance may be given to any 
        farmer to help finance the purchase of stock in a cooperative. 
           Sec. 5.  Minnesota Statutes 1993 Supplement, section 
        80A.15, subdivision 2, is amended to read: 
           Subd. 2.  The following transactions are exempted from 
        sections 80A.08 and 80A.16: 
           (a) Any sales, whether or not effected through a 
        broker-dealer, provided that no person shall make more than ten 
        sales of securities of the same issuer pursuant to this 
        exemption during any period of 12 consecutive months; provided 
        further, that in the case of sales by an issuer, except sales of 
        securities registered under the Securities Act of 1933 or 
        exempted by section 3(b) of that act, (1) the seller reasonably 
        believes that all buyers are purchasing for investment, and (2) 
        the securities are not advertised for sale to the general public 
        in newspapers or other publications of general circulation or 
        otherwise, or by radio, television, electronic means or similar 
        communications media, or through a program of general 
        solicitation by means of mail or telephone. 
           (b) Any nonissuer distribution of an outstanding security 
        if (1) either Moody's, Fitch's, or Standard & Poor's Securities 
        Manuals, or other recognized manuals approved by the 
        commissioner contains the names of the issuer's officers and 
        directors, a balance sheet of the issuer as of a date not more 
        than 18 months prior to the date of the sale, and a profit and 
        loss statement for the fiscal year preceding the date of the 
        balance sheet, and (2) the issuer or its predecessor has been in 
        active, continuous business operation for the five-year period 
        next preceding the date of sale, and (3) if the security has a 
        fixed maturity or fixed interest or dividend provision, the 
        issuer has not, within the three preceding fiscal years, 
        defaulted in payment of principal, interest, or dividends on the 
        securities. 
           (c) The execution of any orders by a licensed broker-dealer 
        for the purchase or sale of any security, pursuant to an 
        unsolicited offer to purchase or sell; provided that the 
        broker-dealer acts as agent for the purchaser or seller, and has 
        no direct material interest in the sale or distribution of the 
        security, receives no commission, profit, or other compensation 
        from any source other than the purchaser and seller and delivers 
        to the purchaser and seller written confirmation of the 
        transaction which clearly itemizes the commission, or other 
        compensation. 
           (d) Any nonissuer sale of notes or bonds secured by a 
        mortgage lien if the entire mortgage, together with all notes or 
        bonds secured thereby, is sold to a single purchaser at a single 
        sale. 
           (e) Any judicial sale, exchange, or issuance of securities 
        made pursuant to an order of a court of competent jurisdiction. 
           (f) The sale, by a pledge holder, of a security pledged in 
        good faith as collateral for a bona fide debt. 
           (g) Any offer or sale to a bank, savings institution, trust 
        company, insurance company, investment company as defined in the 
        Investment Company Act of 1940, pension or profit sharing trust, 
        or other financial institution or institutional buyer, or to a 
        broker-dealer, whether the purchaser is acting for itself or in 
        some fiduciary capacity. 
           (h) Any sales by an issuer to the number of persons that 
        shall not exceed 25 persons in this state, or 35 persons if the 
        sales are made in compliance with Regulation D promulgated by 
        the Securities and Exchange Commission, Code of Federal 
        Regulations, title 17, sections 230.501 to 230.506, (other than 
        those designated in paragraph (a) or (g)), whether or not any of 
        the purchasers is then present in this state, if (1) the issuer 
        reasonably believes that all of the buyers in this state (other 
        than those designated in clause (g)) are purchasing for 
        investment, and (2) no commission or other remuneration is paid 
        or given directly or indirectly for soliciting any prospective 
        buyer in this state (other than those designated in clause (g)), 
        except reasonable and customary commissions paid by the issuer 
        to a broker-dealer licensed under this chapter, and (3) the 
        issuer has, ten days prior to any sale pursuant to this 
        paragraph, supplied the commissioner with a statement of issuer 
        on forms prescribed by the commissioner, containing the 
        following information:  (i) the name and address of the issuer, 
        and the date and state of its organization; (ii) the number of 
        units, price per unit, and a description of the securities to be 
        sold; (iii) the amount of commissions to be paid and the persons 
        to whom they will be paid; (iv) the names of all officers, 
        directors and persons owning five percent or more of the equity 
        of the issuer; (v) a brief description of the intended use of 
        proceeds; (vi) a description of all sales of securities made by 
        the issuer within the six-month period next preceding the date 
        of filing; and (vii) a copy of the investment letter, if any, 
        intended to be used in connection with any sale.  Sales that are 
        made more than six months before the start of an offering made 
        pursuant to this exemption or are made more than six months 
        after completion of an offering made pursuant to this exemption 
        will not be considered part of the offering, so long as during 
        those six-month periods there are no sales of unregistered 
        securities (other than those made pursuant to paragraph (a) or 
        (g)) by or for the issuer that are of the same or similar class 
        as those sold under this exemption.  The commissioner may by 
        rule or order as to any security or transaction or any type of 
        security or transaction, withdraw or further condition this 
        exemption, or increase the number of offers and sales permitted, 
        or waive the conditions in clause (1), (2), or (3) with or 
        without the substitution of a limitation or remuneration. 
           (i) Any offer (but not a sale) of a security for which a 
        registration statement has been filed under sections 80A.01 to 
        80A.31, if no stop order or refusal order is in effect and no 
        public proceeding or examination looking toward an order is 
        pending; and any offer of a security if the sale of the security 
        is or would be exempt under this section.  The commissioner may 
        by rule exempt offers (but not sales) of securities for which a 
        registration statement has been filed as the commissioner deems 
        appropriate, consistent with the purposes of sections 80A.01 to 
        80A.31. 
           (j) The offer and sale by a cooperative association 
        organized under chapter 308A or under the laws of another state, 
        of its securities when the securities are offered and sold only 
        to its members, or when the purchase of the securities is 
        necessary or incidental to establishing membership in such 
        association the cooperative, or when such securities are issued 
        as patronage dividends.  This paragraph applies to a cooperative 
        organized under the laws of another state only if the 
        cooperative has filed with the commissioner a consent to service 
        of process under section 80A.27, subdivision 7, and has, not 
        less than ten days prior to the issuance or delivery, furnished 
        the commissioner with a written general description of the 
        transaction and any other information that the commissioner 
        requires by rule or otherwise.  
           (l) The issuance and delivery of any securities of one 
        corporation to another corporation or its security holders in 
        connection with a merger, exchange of shares, or transfer of 
        assets whereby the approval of stockholders of the other 
        corporation is required to be obtained, provided, that the 
        commissioner has been furnished with a general description of 
        the transaction and with other information as the commissioner 
        by rule prescribes not less than ten days prior to the issuance 
        and delivery. 
           (m) Any transaction between the issuer or other person on 
        whose behalf the offering is made and an underwriter or among 
        underwriters. 
           (n) The distribution by a corporation of its or other 
        securities to its own security holders as a stock dividend or as 
        a dividend from earnings or surplus or as a liquidating 
        distribution; or upon conversion of an outstanding convertible 
        security; or pursuant to a stock split or reverse stock split. 
           (o) Any offer or sale of securities by an affiliate of the 
        issuer thereof if:  (1) a registration statement is in effect 
        with respect to securities of the same class of the issuer and 
        (2) the offer or sale has been exempted from registration by 
        rule or order of the commissioner.  
           (p) Any transaction pursuant to an offer to existing 
        security holders of the issuer, including persons who at the 
        time of the transaction are holders of convertible securities, 
        nontransferable warrants, or transferable warrants exercisable 
        within not more than 90 days of their issuance, if:  (1) no 
        commission or other remuneration (other than a standby 
        commission) is paid or given directly or indirectly for 
        soliciting any security holder in this state; and (2) the 
        commissioner has been furnished with a general description of 
        the transaction and with other information as the commissioner 
        may by rule prescribe no less than ten days prior to the 
        transaction. 
           (q)  Any nonissuer sales of any security, including a 
        revenue obligation, issued by the state of Minnesota or any of 
        its political or governmental subdivisions, municipalities, 
        governmental agencies, or instrumentalities. 
           Sec. 6.  Minnesota Statutes 1992, section 180.03, is 
        amended by adding a subdivision to read: 
           Subd. 5.  Upon written notice to the county mine inspector, 
        a person, firm, or corporation that is actively and exclusively 
        engaged in the business of cold water aquaculture shall be 
        exempt from the requirements of subdivision 3.  The exemption 
        shall only apply to those portions of idle or abandoned open pit 
        mines that are actively being used for aquaculture operations 
        and that are owned by the person, firm, or corporation.  A 
        landowner exempted assumes all responsibility for inspection and 
        safety measures pertaining to the affected parcels of land and 
        the county mine inspector is relieved of inspection 
        requirements.  The notice provided to the county mine inspector 
        pursuant to this subdivision shall be annual and shall be filed 
        with the county mine inspector's office by January 15 of each 
        year.  The notice shall describe the affected parcels of land 
        and shall provide a sworn affidavit by the landowner that the 
        subject property will be actively and exclusively used for 
        aquaculture purposes during the calendar year.  Failure to 
        comply with the notice requirement of this subdivision makes the 
        idle or abandoned open pit mines subject to the provisions of 
        subdivision 3. 
           Sec. 7.  Minnesota Statutes 1992, section 297A.25, is 
        amended by adding a subdivision to read: 
           Subd. 59.  [FARM MACHINERY.] From July 1, 1994, until June 
        30, 1995, the gross receipts from the sale of used farm 
        machinery are exempt. 
           Sec. 8.  [346.58] [DOGS AND CATS; BEST MANAGEMENT STANDARDS 
        FOR CARE BY DEALERS, COMMERCIAL BREEDERS, AND BROKERS.] 
           The commissioner of agriculture shall consult with 
        interested persons, including but not limited to persons 
        representing dog and cat dealers, breeders, and brokers, the 
        Minnesota federated humane society, the Minnesota council for 
        dog clubs, the American dog owners association, the board of 
        animal health, the Minnesota purebred dog breeders association, 
        the Minnesota citizens for animal care, the United States 
        Department of Agriculture, and the Minnesota veterinary medical 
        association.  The commissioner shall issue an order containing 
        best management standards of care for dogs and cats by dealers, 
        commercial breeders, and brokers.  These standards are not 
        subject to chapter 14.  The commissioner shall urge dealers, 
        commercial breeders, and brokers to follow the standards issued 
        in the order. 
           Sec. 9.  [DOGS AND CATS; CARE RECOMMENDATIONS.] 
           The commissioner of agriculture shall make recommendations 
        to the 1995 legislature on changes to statutory dog and cat care 
        standards in relation to the commercial breeding and sale of 
        dogs and cats.  The commissioner shall recommend enacting into 
        law standards that, if violated, are serious enough to warrant a 
        civil or criminal penalty and shall also recommend changes in 
        law to improve the ease of enforcement in Minnesota Statutes, 
        sections 325F.79 to 325F.792, and other laws related to animal 
        cruelty. 
           Sec. 10.  Laws 1993, chapter 172, section 7, subdivision 3, 
        is amended to read: 
        Subd. 3.  Promotion and Marketing 
             2,142,000      1,142,000
                       Summary by Fund
        General              1,959,000      959,000
        Special Revenue        183,000      183,000
        Notwithstanding Minnesota Statutes, 
        section 41A.09, subdivision 3, the 
        total payments from the ethanol 
        development account to all producers 
        may not exceed $15,800,000 for the 
        biennium ending June 30, 1995.  In 
        fiscal year 1994, the commissioner 
        shall first reimburse producers up to 
        $981,024 for eligible, unpaid claims 
        accumulated through June 30, 1993. 
        $1,000,000 is appropriated to the 
        ethanol development fund established in 
        Minnesota Statutes, section 41B.044, 
        subdivision 2, in 1994 for use by the 
        rural finance authority for purposes of 
        assisting in the finance of ethanol 
        production facilities in Minnesota.  
        Any amount of this appropriation that 
        remains unencumbered at the end of any 
        biennium does not revert to the general 
        fund but remains available as a 
        revolving account.  
        $100,000 the first year and $100,000 
        the second year are for ethanol 
        promotion and public education. 
        $100,000 the first year and $100,000 
        the second year must be spent for the 
        WIC coupon program. 
        $45,000 is appropriated in each year 
        for a project to expand agriculture 
        opportunities for the Hmong and other 
        Southeast Asian farmers by expansion of 
        the existing market base and to target 
        new wholesale and retail markets.  The 
        money may also be used to expand the 
        wholesale and retail market for other 
        groups involved in direct marketing 
        efforts such as alternative meat and 
        food products.  The department must 
        report on the project to the finance 
        committees by January 15, 1995. 
        $71,000 the first year and $71,000 the 
        second year are for transfer to the 
        Minnesota grown matching account and 
        may be used as grants for Minnesota 
        grown promotion under Minnesota 
        Statutes, section 17.109. 
        $183,000 the first year and $183,000 
        the second year are from the 
        commodities research and promotion 
        account in the special revenue fund. 
           Sec. 11.  [FARM AND SMALL BUSINESS INTEREST BUY-DOWN 
        PROGRAMS; DEFINITIONS.] 
           Subdivision 1.  [APPLICABILITY.] The definitions in this 
        section apply to sections 11 to 18. 
           Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of agriculture. 
           Subd. 3.  [ELIGIBLE BORROWER.] "Eligible borrower" means a 
        farmer or small business operator who applies to a participating 
        lender for a loan and meets all qualifications established in 
        section 12 and any further qualifications that may be announced 
        by the commissioner.  
           Subd. 4.  [FARMER.] "Farmer" means a state resident, a 
        domestic family farm corporation, or a family farm partnership 
        as defined in Minnesota Statutes, section 500.24, subdivision 2, 
        operating a farm within the state. 
           Subd. 5.  [FARM LOAN.] "Farm loan" means an original, 
        extended, or renegotiated loan or line of credit obtained by a 
        farmer from a lender for the purpose of financing the operations 
        of a farm.  A farm loan includes an open line of credit even 
        though the maximum principal amount of the line of credit may 
        not be drawn at any one time.  A farm loan eligible for interest 
        buy-down must have a maturity date of November 30, 1995, or 
        earlier. 
           Subd. 6.  [INTEREST BUY-DOWN.] "Interest buy-down" means a 
        reduction in the effective interest rate on a farm loan or a 
        small business loan to an eligible borrower due to partial 
        payment of interest costs by the commissioner and partial 
        reduction of interest costs by the participating lender. 
           Subd. 7.  [LENDER.] "Lender" means a bank, credit union, or 
        savings and loan association chartered by the state or federal 
        government, a unit of the farm credit system, the Federal 
        Deposit Insurance Corporation, or another financial institution 
        approved by the commissioner. 
           Subd. 8.  [PARTICIPATING LENDER.] "Participating lender" 
        means a lender who has been granted participating lender status 
        by the commissioner. 
           Subd. 9.  [SMALL BUSINESS.] "Small business" means a 
        business entity as defined in Minnesota Statutes, section 
        645.445, with its principal place of business in Minnesota. 
           Subd. 10.  [SMALL BUSINESS LOAN.] "Small business loan" 
        means an original, extended, or renegotiated loan or line of 
        credit obtained by a small business for purposes of financing 
        the operations of a small business.  A small business loan 
        eligible for interest buy-down must have a maturity date of 
        November 30, 1995, or earlier. 
           Sec. 12.  [ELIGIBILITY; FARM LOAN.] 
           A farmer is eligible for the farm loan interest buy-down 
        program under this article if a participating lender determines 
        that the farmer meets the criteria in this section. 
           (a) The farmer suffered significant losses during 1993 from 
        a natural disaster and the farm operation faces economic stress 
        without the assistance of the farm loan interest buy-down 
        program.  A determination of significant loss and economic 
        stress by a lender is deemed reasonable and accurate without 
        further audit or substantiation. 
           (b) The farmer has a reasonable opportunity for long-term 
        financial viability in the farmer's current farm operation.  A 
        determination of financial viability by a lender is deemed to be 
        reasonable and accurate without further audit or substantiation. 
           Sec. 13.  [ELIGIBILITY; SMALL BUSINESS LOAN.] 
           A small business is eligible for the small business loan 
        interest buy-down program if a participating lender determines 
        that the small business meets the criteria in this section. 
           (a) The small business suffered significant losses during 
        1993 from a natural disaster and the small business faces 
        economic stress without the assistance of the small business 
        loan interest buy-down program.  A determination of significant 
        loss and economic stress by a lender is deemed reasonable and 
        accurate without further audit or substantiation. 
           (b) The small business has a reasonable opportunity for 
        long-term financial viability in the small business's current 
        operation.  A determination of financial viability by a lender 
        is deemed to be reasonable and accurate without further audit or 
        substantiation. 
           Sec. 14.  [LENDER ELIGIBILITY; OBLIGATIONS; TIMELY 
        APPLICATION.] 
           Subdivision 1.  [ELIGIBLE PARTICIPATING LENDER STATUS.] A 
        lender who meets the requirements established by the 
        commissioner must be approved as a participating lender. 
           Subd. 2.  [RECEIPT OF APPLICATIONS FOR INTEREST 
        BUY-DOWN.] A participating lender shall receive and evaluate 
        loan applications from a farmer or small business.  An eligible 
        borrower must complete a loan application with a participating 
        lender before December 31, 1994.  In determining whether to make 
        a farm or small business loan, the participating lender may use 
        criteria in addition to those in sections 12 and 13. 
           Subd. 3.  [MAXIMUM INTEREST RATE.] To qualify for interest 
        buy-down payments, a participating lender shall offer to make a 
        farm or small business loan to an eligible borrower at a rate of 
        interest equivalent to that offered to other borrowers having 
        similar security and financial status, less the lender's 
        contribution under the program.  The commissioner, in 
        cooperation with the commissioner of commerce, may use 
        appropriate means to verify that the interest rate available to 
        an eligible borrower is substantially the same as that available 
        to other borrowers. 
           Subd. 4.  [PRIORITY.] Properly completed applications for 
        the interest buy-down program take priority in the order they 
        are received by the commissioner. 
           Sec. 15.  [RESPONSIBILITIES OF COMMISSIONER.] 
           Subdivision 1.  [ANNOUNCEMENT OF PROGRAM 
        PROCEDURES.] Within 30 days after the effective date of sections 
        11 to 18, the commissioner shall announce procedures for the 
        interest buy-down program. 
           Subd. 2.  [PREPARATION AND DISTRIBUTION OF LENDER 
        PARTICIPATION FORMS.] The commissioner, in cooperation with the 
        commissioner of commerce, shall prepare and distribute forms and 
        instructions, including forms for the statement required under 
        section 18, to all lenders in the state. 
           Subd. 3.  [APPROVAL OF APPLICATIONS FOR INTEREST BUY-DOWN 
        PAYMENT.] (a) The commissioner shall review, within five working 
        days of submission by a participating lender, a properly 
        completed application for interest buy-down payments on a farm 
        or small business loan.  If a participating lender does not 
        receive written notice that the commissioner has denied interest 
        buy-down payments within seven working days, the borrower is an 
        eligible borrower and interest buy-down payments on the farm or 
        small business loan are approved by the commissioner. 
           (b) All applications received by the commissioner after 
        appropriated interest buy-down program funds have been 
        encumbered, plus an amount anticipated to become available 
        because of loans that may be retired early, must be returned 
        immediately to the lender with an explanation that participation 
        in the interest buy-down program is denied due to prior 
        commitment of available program funds. 
           Subd. 4.  [BUY-DOWN PAYMENTS TO PARTICIPATING 
        LENDERS.] Within 60 days after a request by a participating 
        lender, the commissioner shall pay to the participating lender 
        one-half of the expected interest buy-down amount.  The balance 
        of the state contribution must be paid by the commissioner to 
        the participating lender within 30 days after the loan matures 
        or is repaid in full and the request is submitted by the 
        participating lender.  All interest buy-down payments under this 
        article must be made by joint-payee checks in the name of the 
        participating lender and the eligible borrower. 
           Sec. 16.  [STATE CONTRIBUTION; MAXIMUM LOAN.] 
           The commissioner shall pay to a participating lender for 
        the first $50,000 of an approved farm or small business loan 
        made to an eligible borrower an amount equal to an annual rate 
        of three percent interest on the loan, but the payment may not 
        exceed $2,250 per farm or small business loan. 
           Sec. 17.  [LENDER CONTRIBUTION.] 
           A participating lender shall provide a reduction in 
        interest rate for the first $50,000 of an approved farm or small 
        business loan made to an eligible borrower in an amount equal to 
        an annual rate of at least one-half of one percent interest on 
        the loan. 
           Sec. 18.  [BORROWER STATEMENT.] 
           No person may receive a farm or small business loan under 
        sections 11 to 18 until the person has signed a statement 
        acknowledging that the relief provided in the interest buy-down 
        program is a form of government spending that has been made 
        available to the person through the collection of taxes.  The 
        commissioner must retain a copy of the statement from each 
        recipient. 
           Sec. 19.  [APPROPRIATION; INTEREST BUY-DOWN.] 
           (a) 5,000,000 is appropriated from the general fund to the 
        commissioner of agriculture for the interest buy-down program in 
        sections 11 to 18.  Any unencumbered balance remaining on July 
        1, 1995, does not cancel but is transferred to and becomes 
        additional funding for the emergency job creation program in 
        section 22.  Not more than $200,000 of this appropriation may be 
        used by the commissioner for program administrative costs. 
           (b) The commissioner shall not approve an application for a 
        loan under the interest buy-down program after the appropriation 
        for the program, plus an amount anticipated to become available 
        because of loans that may be retired early, has been fully 
        committed.\H* (Section 19 was vetoed by the governor.)\h 
           Sec. 20.  [APPROPRIATION; GRAIN GRADING AND TESTING 
        EQUIPMENT; PILOT CHECK-TEST PROGRAM.] 
           (a) $250,000 is appropriated from the general fund to the 
        commissioner of agriculture as supplemental funding for 
        activities of the grain inspection and weighing programs of the 
        department.  The additional funding is for a thorough, properly 
        documented, review of the accuracy of equipment used by country 
        elevators to test grain for determination of price.  The sample 
        selection, equipment testing, and analytical procedures must be 
        performed using commonly accepted protocols.  Tolerances to be 
        used for determination of a re-test are those adopted in rule 
        pursuant to Minnesota Statutes, section 17B.041.  
           (b) The pilot check-testing program must be conducted 
        throughout the agricultural areas of the state at country 
        elevators selected by the commissioner.  Country elevators in 
        the selected counties must undergo check-testing an average of 
        four times per year, including both peak harvest periods and 
        nonharvest periods.  Check-testing must include all grains the 
        elevator handles in significant quantity.  
           (c) Not later than February 15, 1996, the commissioner 
        shall report to the committees of the Minnesota senate and house 
        of representatives on the activities and findings of the pilot 
        check-test program, along with recommendations for ways to 
        assure increased accuracy in grain testing.  
           (d) This appropriation is available until December 31, 
        1995.\H* (Section 20 was vetoed by the governor.)\h 
           Sec. 21.  [APPROPRIATION; FEDERAL EMERGENCY MANAGEMENT 
        ASSISTANCE MATCH.] 
           $2,908,000 is appropriated from the general fund to the 
        commissioner of public safety to provide matching funds for 
        federal emergency management assistance funds received in flood 
        damaged counties in 1993. 
           Sec. 22.  [APPROPRIATION; EMERGENCY JOB CREATION; 
        DEPARTMENT OF JOBS AND TRAINING.] 
           $2,000,000 is appropriated from the general fund to the 
        commissioner of jobs and training to supplement the federal 
        emergency job creation program.  This appropriation is available 
        when federal funding for the emergency job creation program in 
        Minnesota is exhausted.  The commissioner may allow projects 
        that would not have been funded by the federal government in 
        order to fund public projects, employing flood victims, that are 
        not necessarily related to flood damage, but which local 
        governments are unable to undertake because of flood expenses.  
        The commissioner may also fund the leasing or other use of 
        specialized equipment and services for projects undertaken with 
        this appropriation.  This appropriation is available until 
        August 31, 1995.\H* (Section 22 was vetoed by the governor.)\h 
           Sec. 23.  [APPROPRIATION; WHEAT SCAB RESEARCH.] 
           $477,000 is appropriated from the general fund to the 
        University of Minnesota for the fiscal biennium ending June 30, 
        1995, for research into the problem of wheat scab (vomitoxin) in 
        Minnesota.  The research should be designed to minimize the 
        adverse effects of future wheat scab infestations in the short 
        term while seeking to fully eliminate the problem in the long 
        term. 
           Sec. 24.  [APPROPRIATION; FARM ADVOCATES.] 
           $100,000 is appropriated from the general fund to the 
        commissioner of agriculture to supplement other sources of 
        funding for the farm advocates program.  This appropriation is 
        available until June 30, 1995. 
           Sec. 25.  [APPROPRIATION; AGRICULTURAL RESOURCE CENTERS.] 
           (a) $100,000 is appropriated from the general fund to the 
        commissioner of agriculture for supplemental funding for grants 
        to agricultural information centers.  No match is needed for the 
        release of these supplemental state dollars.  This appropriation 
        is available until June 30, 1995.\H* (The preceding material\h 
        \Hbeginning "Sec. 25." and ending "1995" was vetoed by the\h 
        \Hgovernor.)\h 
           (b) For money appropriated in Laws 1993, chapter 172, 
        section 7, subdivision 4, for agricultural information centers, 
        a match is not required for fiscal year 1994 appropriations and 
        a match of four state dollars for each $1 of matching nonstate 
        money is required for fiscal year 1995 appropriations. 
           Sec. 26.  [APPROPRIATION; LEGAL ASSISTANCE TO FARMERS.] 
           $200,000 is appropriated from the general fund to the 
        supreme court as supplemental funding for legal assistance to 
        farmers in accordance with Minnesota Statutes, section 480.242, 
        subdivision 5.  This appropriation is available until June 30, 
        1995.  This appropriation shall be in addition to other 
        appropriations received for legal assistance.  An entity 
        receiving funding under this section may not have other sources 
        of state funding reduced based on the funding received.\H*\h 
        \H(Section 26 was vetoed by the governor.)\h  
           Sec. 27.  [APPROPRIATION; FARM FINANCIAL ASSISTANCE; STATE 
        BOARD OF TECHNICAL COLLEGES.] 
           (a) $150,000 is appropriated from the general fund to the 
        state board of technical colleges for farm and small business 
        management programs using the FINPAK computer software program 
        and other training and assistance to provide financial 
        information to farmers affected by adverse weather conditions in 
        1993 to be used: 
           (1) for teleconferencing to provide information to farm and 
        small business operators from federal and state agencies; and 
           (2) for support, assistance, and travel expenses for 
        educators to target emergency assistance to persons in counties 
        affected by adverse weather conditions in 1993. 
           (b) The board must coordinate the delivery of services with 
        the Minnesota extension service to ensure broad coverage of the 
        state for areas affected by adverse weather conditions in 1993.  
        This appropriation is available until June 30, 1995. 
           Sec. 28.  [APPROPRIATION; FARM FINANCIAL ASSISTANCE; 
        MINNESOTA EXTENSION SERVICE.] 
           (a) $100,000 is appropriated from the general fund to the 
        University of Minnesota for the Minnesota extension service for 
        farm and small business management programs using the FINPAK 
        computer software program and other training and assistance to 
        provide financial information to farmers affected by adverse 
        weather conditions in 1993 to be used: 
           (1) by the center for farm financial management for 
        computer software upgrades and support of educators providing 
        financial information to farmers; and 
           (2) for support, assistance, and travel expenses for 
        educators to target emergency assistance to persons in counties 
        affected by adverse weather conditions in 1993. 
           (b) The Minnesota extension service must coordinate the 
        delivery of services with the state board of technical colleges 
        to ensure broad coverage of the state for areas affected by 
        adverse weather conditions in 1993.  This appropriation is 
        available until June 30, 1995.\H* (Section 28 was vetoed by the\h 
        \Hgovernor.)\h 
           Sec. 29.  [APPROPRIATION; SMALL BUSINESS DISASTER REVOLVING 
        LOAN FUND.] 
           $900,000 is appropriated from the general fund to the 
        commissioner of trade and economic development to supplement 
        funding of programs through the federal Economic Development 
        Administration.  Use of these funds may include providing local 
        matches to federal dollars through the regional development 
        commissions or alternative groups.  This appropriation is 
        available until June 30, 1995.  
           Sec. 30.  [APPROPRIATION; ETHANOL PRODUCTION.] 
           $1,475,000 is appropriated from the general fund to the 
        ethanol development fund.  
           Sec. 31.  [APPROPRIATION; AGRICULTURAL UTILIZATION RESEARCH 
        INSTITUTE.] 
           $1,000,000 is appropriated from the general fund to the 
        agricultural utilization research institute for programs 
        targeted to crops or regions that suffered losses in 1993.  This 
        appropriation is available until June 30, 1995.\H* (Section 31 was\h 
        \Hvetoed by the governor.)\h 
           Sec. 32.  [APPROPRIATION; DAIRY LITIGATION.] 
           (a) $55,000 is appropriated from the general fund to the 
        supreme court as a one-time appropriation for family farm legal 
        assistance for financially distressed dairy farmers' 
        difficulties with the federal milk marketing order system under 
        Minnesota Statutes, section 480.242, subdivision 5, clause (2).  
        This appropriation shall be in addition to other appropriations 
        received for legal assistance.  An entity receiving funding 
        under this section may not have other sources of state funding 
        reduced based on the funding received.  This appropriation is 
        available until June 30, 1995.  The income eligibility rules 
        described in Minnesota Statutes, section 480.242, subdivision 2, 
        paragraph (b), are waived for purposes of this appropriation. 
           (b) The $20,000 balance on May 22, 1993, of amounts 
        authorized under Laws 1992, chapter 513, article 2, section 6, 
        subdivision 5, is transferred to the general fund and is 
        appropriated to the supreme court for family farm legal 
        assistance rendered from July 1, 1993, through June 30, 1995, 
        for financially distressed dairy farmers' difficulties with the 
        federal milk marketing order system under Minnesota Statutes, 
        section 480.242, subdivision 5, clause (2).  The income 
        eligibility rules described in Minnesota Statutes, section 
        480.242, subdivision 2, paragraph (b), are waived for purposes 
        of this appropriation. 
           Sec. 33.  [APPROPRIATION; BEAVER CONTROL.] 
           $50,000 is appropriated to the commissioner of agriculture 
        for a grant to the beaver damage control joint powers board 
        formed by Beltrami, Clearwater, Marshall, Pennington, Polk, and 
        Red Lake counties, for the purpose of beaver damage control.  
        The grant must be matched by at least $30,000 from the joint 
        powers board.  This appropriation is available until June 30, 
        1995. 
           Sec. 34.  [APPROPRIATION; GRAIN INSPECTION AND WEIGHING 
        ACCOUNT DEFICIT.] 
           $200,000 is appropriated from the general fund to the grain 
        inspection and weighing account established in Minnesota 
        Statutes, chapter 17B, and from the account to the commissioner 
        of agriculture as needed for carrying out the purposes of 
        Minnesota Statutes, chapter 17B. 
           Sec. 35.  [APPROPRIATION; VALUE-ADDED AGRICULTURAL PRODUCT 
        LOAN PROGRAM.] 
           $1,000,000 is appropriated from the general fund to the 
        value-added agricultural product revolving fund for use by the 
        rural finance authority as provided in section 4.  The 
        commissioner of agriculture may use any portion of the fund as a 
        grant to a city to attract and provide an incentive to locate an 
        agricultural product processing facility whose project cost is 
        estimated to be at least $100,000,000.  $750,000 of the amount 
        appropriated to the fund shall be available to make such a grant 
        to a city until December 31, 1994, and after that date any 
        unused portion of this available grant money shall be 
        transferred to the commissioner for the interest buy-down 
        program in sections 11 to 18.  
           Sec. 36.  [APPROPRIATION; CORPORATE FARMING LAW TASK 
        FORCE.] 
           $40,000 is appropriated from the general fund to the 
        commissioner of agriculture to provide staff and research 
        support for the corporate farming law task force. 
           Sec. 37.  [APPROPRIATION; HIGH OIL SOYBEANS RESEARCH.] 
           $150,000 is appropriated from the general fund to the 
        commissioner of agriculture for the fiscal biennium ending June 
        30, 1995, to make research grants to the University of Minnesota 
        or other educational institutions in Minnesota to develop higher 
        protein, higher oil content varieties of soybeans that would 
        grow in Minnesota. 
           Sec. 38.  [APPROPRIATION; STATE PARK ROAD ACCOUNT.] 
           $250,000 is appropriated from the general fund to the 
        commissioner of transportation with instructions that it be 
        added to the state park road account under Minnesota Statutes, 
        section 162.06, subdivision 5.\H* (Section 38 was vetoed by the\h 
        \Hgovernor.)\h 
           Sec. 39.  [APPROPRIATION; DAIRY LEADERS ROUNDTABLE.] 
           $50,000 is appropriated from the general fund to the 
        commissioner of agriculture for a grant to the dairy leaders 
        round table.  This appropriation must be matched with nonstate 
        funds.  
           Sec. 40.  [APPROPRIATION; FEEDLOT MANURE MANAGEMENT 
        ADVISORY COMMITTEE.] 
           $5,000 is appropriated from the general fund to the 
        commissioner of agriculture for payment of expenses for the 
        feedlot and manure management advisory committee. 
           Sec. 41.  [REPORT OF AGENCIES.] 
           Before January 1, 1996, the commissioner of public safety 
        shall coordinate and present to the legislature a report from 
        all departments, agencies, and organizations receiving funding 
        under this act regarding the specific uses of such funding and 
        the effects of assistance provided under this act to the 
        agricultural economy and rural communities affected by natural 
        disasters in 1993. 
           Sec. 42.  [EFFECTIVE DATE.] 
           Sections 3 and 10 are effective retroactive to July 1, 1993.
        Sections 1, 2, 4 to 9, and 11 to 42 are effective the day after 
        final enactment. 
           Presented to the governor May 6, 1994 
           Signed by the governor May 10, 1994, 5:58 p.m.