1.1                          A bill for an act
  1.2             relating to agricultural economics; providing loans 
  1.3             and incentives for agricultural energy resources 
  1.4             development for family farms and cooperatives; 
  1.5             amending Minnesota Statutes 1994, sections 41B.02, 
  1.6             subdivision 19; 41B.046, subdivision 1, and by adding 
  1.7             a subdivision; and 216C.41, subdivisions 1, 2, 3, 4, 
  1.8             and 5. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1994, section 41B.02, 
  1.11  subdivision 19, is amended to read: 
  1.12     Subd. 19.  [AGRICULTURAL IMPROVEMENTS.] "Agricultural 
  1.13  improvements" means improvements to a farm, including the 
  1.14  purchase and construction or installation of improvements to 
  1.15  land, buildings, and other permanent structures, including 
  1.16  equipment incorporated in or permanently affixed to the land, 
  1.17  buildings, or structures, which are useful for and intended to 
  1.18  be used for the purpose of farming.  "Agricultural improvements" 
  1.19  includes wind energy conversion facilities, as defined in 
  1.20  section 216C.06, subdivision 12, each with an output capacity of 
  1.21  one megawatt or less, as determined by the nameplate capacity.  
  1.22  "Agricultural improvements" does not include equipment not 
  1.23  affixed to real estate or improvements or additions to that 
  1.24  equipment. 
  1.25     Sec. 2.  Minnesota Statutes 1994, section 41B.046, 
  1.26  subdivision 1, is amended to read: 
  1.27     Subdivision 1.  [DEFINITIONS.] For purposes of this section:
  2.1      (1) "Agricultural product processing facility" means land, 
  2.2   buildings, structures, fixtures, and improvements located or to 
  2.3   be located in Minnesota and used or operated primarily for the 
  2.4   processing or production of marketable products from agriculture 
  2.5   crops or agricultural energy resources, including waste and 
  2.6   residues from agriculture crops, but not including livestock or 
  2.7   livestock products, poultry or poultry products, or wood or wood 
  2.8   products. 
  2.9      (2) "Value-added agricultural product" means a product 
  2.10  derived from agricultural crops or agricultural energy 
  2.11  resources, including waste and residues from agricultural crops, 
  2.12  but not including livestock or livestock products, poultry or 
  2.13  poultry products, or wood or wood products, which are processed 
  2.14  by an agricultural product processing facility. 
  2.15     (3) "Agricultural energy resources" means energy products 
  2.16  and resources available on and around agricultural land 
  2.17  including wind, solar, and biomass energy. 
  2.18     (4) "Farm-generated wind energy production facility" means 
  2.19  a wind energy conversion facility for the generation of 
  2.20  electricity and its support structure, base, switch gear, and 
  2.21  associated equipment installed on agricultural land. 
  2.22     Sec. 3.  Minnesota Statutes 1994, section 41B.046, is 
  2.23  amended by adding a subdivision to read: 
  2.24     Subd. 4a.  [FARM-GENERATED WIND ENERGY PRODUCTION 
  2.25  FACILITIES ELIGIBLE.] An applicant is eligible for a loan for a 
  2.26  farm-generated wind energy production facility under this 
  2.27  section if: 
  2.28     (1) the facility is owned and operated by a cooperative 
  2.29  organized under chapter 308A.  For purposes of this subdivision, 
  2.30  "owned and operated" includes a contractual arrangement with 
  2.31  another entity to provide management and operations services for 
  2.32  a facility owned by the cooperative; 
  2.33     (2) all shares and membership in the cooperative are held 
  2.34  by natural persons or estates, at least 51 percent of whom 
  2.35  reside in a county or contiguous to a county where 
  2.36  farm-generated wind energy production facilities of the 
  3.1   cooperative are located; and 
  3.2      (3) its farm-generated wind energy production facilities 
  3.3   are located entirely on agricultural property in Minnesota 
  3.4   principally used for farming as defined in section 500.24, 
  3.5   subdivision 2, paragraph (a), owned by the shareholders of the 
  3.6   cooperative, with no more than two megawatts of nameplate 
  3.7   capacity located on any one shareholder's agricultural property. 
  3.8      Sec. 4.  Minnesota Statutes 1994, section 216C.41, 
  3.9   subdivision 1, is amended to read: 
  3.10     Subdivision 1.  [DEFINITIONS.] ~~For purposes of~~ (a) The 
  3.11  definitions in this subdivision apply to this section~~, a~~: 
  3.12     (b) "Qualified hydroelectric facility" ~~or "facility"~~ means 
  3.13  a hydroelectric generating facility in this state that: 
  3.14     (1) is located at the site of a dam, if the dam was in 
  3.15  existence as of March 31, 1994; and 
  3.16     (2) begins generating electricity after July 1, 1994. 
  3.17     (c) "Qualified wind energy conversion facility" means a 
  3.18  wind energy conversion system that: 
  3.19     (1) is located within one county and owned by a natural 
  3.20  person who owns the land where the facility is sited, or is a 
  3.21  farm-generated wind energy production facility qualifying under 
  3.22  section 41B.046, subdivision 1; 
  3.23     (2) produces two megawatts or less of electricity as 
  3.24  measured by nameplate rating; and 
  3.25     (3) begins generating electricity after June 30, 1997.  
  3.26     Sec. 5.  Minnesota Statutes 1994, section 216C.41, 
  3.27  subdivision 2, is amended to read: 
  3.28     Subd. 2.  [INCENTIVE PAYMENT.] Incentive payments shall be 
  3.29  made according to this section to the owner or operator of a 
  3.30  qualified hydropower facility or qualified wind energy 
  3.31  conversion facility for electric energy generated and sold by 
  3.32  the facility.  Payment may only be made upon receipt by the 
  3.33  commissioner of finance of an incentive payment application that 
  3.34  establishes that the applicant is eligible to receive an 
  3.35  incentive payment and that satisfies other requirements the 
  3.36  commissioner deems necessary.  The application shall be in a 
  4.1   form and submitted at a time the commissioner establishes.  
  4.2   There is annually appropriated from the general fund sums 
  4.3   sufficient to make the payments required under this section.  
  4.4      Sec. 6.  Minnesota Statutes 1994, section 216C.41, 
  4.5   subdivision 3, is amended to read: 
  4.6      Subd. 3.  [ELIGIBILITY WINDOW.] Payments may be made under 
  4.7   this section only for electricity generated: 
  4.8      (a) from a qualified hydroelectric facility that is 
  4.9   operational and generating electricity before January 1, 2001; 
  4.10  or 
  4.11     (b) from a qualified wind energy conversion facility that 
  4.12  is operational and generating electricity before January 1, 2005.
  4.13     Sec. 7.  Minnesota Statutes 1994, section 216C.41, 
  4.14  subdivision 4, is amended to read: 
  4.15     Subd. 4.  [PAYMENT PERIOD.] A facility may receive payments 
  4.16  under this section for a ten-year period.  No payment under this 
  4.17  section may be made for electricity generated: 
  4.18     (a) by a qualified hydroelectric facility after December 
  4.19  31, 2010; or 
  4.20     (b) by a qualified wind energy conversion facility after 
  4.21  December 31, 2015.  
  4.22     The payment period begins and runs consecutively from the 
  4.23  first year in which electricity generated from the facility is 
  4.24  eligible for incentive payment. 
  4.25     Sec. 8.  Minnesota Statutes 1994, section 216C.41, 
  4.26  subdivision 5, is amended to read: 
  4.27     Subd. 5.  [AMOUNT OF PAYMENT.] An incentive payment is 
  4.28  based on the number of kilowatt hours of electricity generated. 
  4.29  The amount of the payment is 1.5 cents per kilowatt hour.  For 
  4.30  electricity generated by qualified wind energy conversion 
  4.31  facilities, the incentive payment under this section is limited 
  4.32  to no more than 100 megawatts of nameplate capacity.  During any 
  4.33  period in which qualifying claims for incentive payments exceed 
  4.34  100 megawatts of nameplate capacity, the payments must be made 
  4.35  to producers in the order in which the production capacity was 
  4.36  brought into production.  
  5.1      Sec. 9.  [ADDITIONAL LIMIT ON INCENTIVE PAYMENTS TO WIND 
  5.2   ENERGY CONVERSION FACILITIES.] 
  5.3      During the biennium ending June 30, 1999, incentive 
  5.4   payments for wind energy conversion facilities under Minnesota 
  5.5   Statutes, section 216C.41, are limited to no more than 7.5 
  5.6   megawatts of nameplate capacity.  During a period in which 
  5.7   qualifying claims for incentive payments exceed 7.5 megawatts of 
  5.8   nameplate capacity, the payments must be made to producers in 
  5.9   the order in which the production capacity was brought into 
  5.10  production. 
  5.11     Sec. 10.  [EFFECTIVE DATE.] 
  5.12     Sections 1 to 9 are effective the day after final enactment.