1.1                          A bill for an act 
  1.2             relating to agriculture; changing provisions of the 
  1.3             shared savings loan program and the sustainable 
  1.4             agriculture demonstration grant program; amending 
  1.5             Minnesota Statutes 2000, sections 17.115; and 17.116. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2000, section 17.115, is 
  1.8   amended to read: 
  1.9      17.115 [SHARED SAVINGS LOAN PROGRAM.] 
  1.10     Subdivision 1.  [ESTABLISHMENT.] The commissioner shall 
  1.11  establish a shared savings loan program to provide loans that 
  1.12  enable farmers to adopt best management practices that emphasize 
  1.13  sufficiency and self-sufficiency in agricultural inputs, 
  1.14  including energy efficiency, reduction or improved management of 
  1.15  petroleum and chemical inputs, and increasing the energy 
  1.16  self-sufficiency of production by agricultural producers, and 
  1.17  environmental improvements. 
  1.18     Subd. 2.  [LOAN CRITERIA.] (a) The shared savings loan 
  1.19  program must provide loans for purchase of new or used 
  1.20  machinery, and installation of equipment, and for projects that 
  1.21  reduce or make more efficient farm energy use make environmental 
  1.22  improvements or enhance farm profitability.  Eligible loan uses 
  1.23  do not include seed, fertilizer, or fuel. 
  1.24     (b) Loans may not exceed $15,000 $25,000 per individual 
  1.25  applying for a loan and may not exceed $75,000 $100,000 for 
  2.1   loans to five four or more individuals on joint projects.  The 
  2.2   loan repayment period may be up to seven years as determined by 
  2.3   project cost and energy savings.  The interest on the loans is 
  2.4   six percent. 
  2.5      (c) Loans may only be made to residents of this state 
  2.6   engaged in farming.  
  2.7      Subd. 3.  [AWARDING OF LOANS.] (a) Applications for loans 
  2.8   must be made to the commissioner on forms prescribed by the 
  2.9   commissioner. 
  2.10     (b) The applications must be reviewed, ranked, and 
  2.11  recommended by a loan review panel appointed by the 
  2.12  commissioner.  The loan review panel shall consist of two 
  2.13  lenders with agricultural experience, two resident farmers of 
  2.14  the state using sustainable agriculture methods, two resident 
  2.15  farmers of the state using organic agriculture methods, a farm 
  2.16  management specialist, a representative from a post-secondary 
  2.17  education institution, and a chair from the department.  
  2.18     (c) The loan review panel shall rank applications according 
  2.19  to the following criteria: 
  2.20     (1) realize savings to the cost of agricultural production 
  2.21  and project savings to repay the cost of the loan; 
  2.22     (2) reduce or make more efficient use of energy or 
  2.23  inputs; and 
  2.24     (3) reduce production costs increase overall farm 
  2.25  profitability; and 
  2.26     (4) result in environmental benefits.  
  2.27     (d) A loan application must show that the loan can be 
  2.28  repaid by the applicant.  
  2.29     (e) The commissioner must consider the recommendations of 
  2.30  the loan review panel and may make loans for eligible projects.  
  2.31  Priority must be given based on the amount of savings realized 
  2.32  by adopting the practice implemented by the loan. 
  2.33     Subd. 4.  [ADMINISTRATION; INFORMATION DISSEMINATION.] The 
  2.34  amount in the revolving loan account is appropriated to the 
  2.35  commissioner to make loans under this section and administer the 
  2.36  loan program.  The interest on the money in the revolving loan 
  3.1   account and the interest on loans repaid to the state may be 
  3.2   spent by the commissioner for administrative expenses.  The 
  3.3   commissioner shall collect and disseminate information relating 
  3.4   to projects for which loans are given under this section. 
  3.5      Subd. 5.  [FARM MANURE DIGESTER TECHNOLOGY.] Appropriations 
  3.6   in Laws 1998, chapter 401, section 6, must be used for revolving 
  3.7   loans for demonstration projects of farm manure digester 
  3.8   technology.  Notwithstanding the limitations of subdivision 2, 
  3.9   paragraphs (b) and (c), loans under this subdivision are 
  3.10  no-interest loans in principal amounts not to exceed $200,000 
  3.11  and may be made to any resident of this state.  Loans for one or 
  3.12  more projects must be made only after the commissioner seeks 
  3.13  applications.  Loans under this program may be used as a match 
  3.14  for federal loans or grants.  Money repaid from loans must be 
  3.15  returned to the revolving fund for future projects. 
  3.16     Sec. 2.  Minnesota Statutes 2000, section 17.116, is 
  3.17  amended to read: 
  3.18     17.116 [SUSTAINABLE AGRICULTURE DEMONSTRATION GRANTS.] 
  3.19     Subdivision 1.  [ESTABLISHMENT.] The commissioner of 
  3.20  agriculture shall establish a grant program for sustainable 
  3.21  agriculture methods that demonstrates best management practices, 
  3.22  including farm input reduction or management, enterprise 
  3.23  diversification including new crops and livestock, farm energy 
  3.24  efficiency, or usable on-farm energy production, or the transfer 
  3.25  of technologies that enhance the environment and farm 
  3.26  profitability.  The commissioner shall use the program to 
  3.27  demonstrate and publicize the energy efficiency, environmental 
  3.28  benefit, and profitability of sustainable agriculture techniques 
  3.29  or systems from production through marketing.  The grants must 
  3.30  fund research or demonstrations on farms of external input 
  3.31  reduction techniques or farm scale energy production methods 
  3.32  consistent with the program objectives. 
  3.33     Subd. 2.  [ELIGIBILITY.] (a) Grants may only be made to 
  3.34  farmers, educational institutions, individuals at educational 
  3.35  institutions, or nonprofit organizations residing or located in 
  3.36  the state for research or demonstrations on farms in the state. 
  4.1      (b) Grants may only be made for projects that show: 
  4.2      (1) the ability to maximize direct or indirect energy 
  4.3   savings or production; 
  4.4      (2) a positive effect or reduced adverse effect on the 
  4.5   environment; and 
  4.6      (3) increased profitability for the individual farm by 
  4.7   reducing costs or improving marketing opportunities. 
  4.8      Subd. 3.  [AWARDING OF GRANTS.] (a) Applications for grants 
  4.9   must be made to the commissioner on forms prescribed by the 
  4.10  commissioner. 
  4.11     (b) The applications must be reviewed, ranked, and 
  4.12  recommended by a technical review panel appointed by the 
  4.13  commissioner.  The technical review panel shall consist of a 
  4.14  soil scientist, an agronomist, a representative from a 
  4.15  post-secondary educational institution, an agricultural 
  4.16  marketing specialist, two resident farmers of the state using 
  4.17  sustainable agriculture methods, two resident farmers of the 
  4.18  state using organic agriculture methods, and a chair from the 
  4.19  department.  
  4.20     (c) The technical review panel shall rank applications 
  4.21  according to the following criteria: 
  4.22     (1) direct or indirect energy savings or production; 
  4.23     (2) environmental benefit; 
  4.24     (3) farm profitability; 
  4.25     (4) the number of farms able to apply the techniques or the 
  4.26  technology proposed; 
  4.27     (5) the effectiveness of the project as a demonstration; 
  4.28     (6) the immediate transferability of the project to farms; 
  4.29  and 
  4.30     (7) the ability of the project to accomplish its goals. 
  4.31     (d) The commissioner shall consider the recommendations of 
  4.32  the technical review panel and may award grants for eligible 
  4.33  projects.  Priority must be given to applicants who are farmers 
  4.34  or groups of farmers. 
  4.35     (e) Grants for eligible projects may not exceed $25,000 
  4.36  unless the portion above $25,000 is matched on an equal basis by 
  5.1   the applicant's cash or in-kind land use contribution.  Grant 
  5.2   funding of projects may not exceed $50,000 under this section, 
  5.3   but applicants may utilize other funding sources.  A portion of 
  5.4   each grant must be targeted for public information activities of 
  5.5   the project. 
  5.6      (f) A project may continue for up to three years.  
  5.7   Multiyear projects must be reevaluated by the technical review 
  5.8   panel and the commissioner before second or third year funding 
  5.9   is approved.  A project is limited to one grant for its funding.