1.1 	A bill for an act
1.2 	relating to agriculture; changing certain loan
1.3 	provisions; establishing a loan program; changing
1.4 	certain livestock zoning regulations; paying for town
1.5 	road repairs; appropriating money; amending Minnesota
1.6 	Statutes 2004, sections 41B.046, subdivision 5;
1.7 	41B.049, subdivision 2; 174.52, subdivisions 4, 5;
1.8 	394.25, subdivision 3c; 462.355, subdivision 4;
1.9 	462.358, by adding a subdivision; proposing coding for
1.10 	new law in Minnesota Statutes, chapter 41B; repealing
1.11 	Minnesota Statutes 2004, section 41B.046, subdivision
1.12 	3.
1.13 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.14 	Section 1. Minnesota Statutes 2004, section 41B.046,
1.15 	subdivision 5, is amended to read:
1.16 		Subd. 5.Loans.  (a) The authority may participate in a
1.17 	stock loan with an eligible lender to a farmer who is eligible
1.18 	under subdivision 4.  Participation is limited to 45 percent of
1.19 	the principal amount of the loan or $40,000, whichever is less.
1.20 	The interest rates and repayment terms of the authority's
1.21 	participation interest may differ from the interest rates and
1.22 	repayment terms of the lender's retained portion of the loan,
1.23 	but the authority's interest rate must not exceed 50 percent of
1.24 	the lender's interest rate.
1.25 	(b) No more than 95 percent of the purchase price of the
1.26 	stock may be financed under this program.
1.27 	(c) Security for stock loans must be the stock purchased, a
1.28 	personal note executed by the borrower, and whatever other
1.29 	security is required by the eligible lender or the authority.
2.1 	(d) The authority may impose a reasonable nonrefundable
2.2 	application fee for each application for a stock loan.  The
2.3 	authority may review the fee annually and make adjustments as
2.4 	necessary.  The application fee is initially $50.  Application
2.5 	fees received by the authority must be deposited in the
2.6 	value-added agricultural product revolving fund.
2.7 	(e) Stock loans under this program will be made using money
2.8 	in the ~~value-added agricultural product~~ revolving ~~fund~~ loan
2.9 	account established ~~under subdivision 3~~ in section 41B.06.
2.10 	(f) The authority may not grant stock loans in a cumulative
2.11 	amount exceeding $2,000,000 for the financing of stock purchases
2.12 	in any one cooperative.
2.13 	(g) Repayments of financial assistance under this section,
2.14 	including principal and interest, must be deposited into the
2.15 	revolving loan account established in section 41B.06.

2.16 	Sec. 2. Minnesota Statutes 2004, section 41B.049,
2.17 	subdivision 2, is amended to read:
2.18 		Subd. 2.~~revolving fund~~ deposit of repayments. ~~There is~~
2.19 	~~established in the state treasury a revolving fund, which is~~
2.20 	~~eligible to receive appropriations and the transfer of funds~~
2.21 	~~from other services.~~All repayments of financial assistance
2.22 	granted under subdivision 1, including principal and interest,
2.23 	must be deposited into ~~this fund.  Interest earned on money in~~
2.24 	~~the fund accrues to the fund, and money in the fund is~~
2.25 	~~appropriated to the commissioner of agriculture for purposes of~~
2.26 	~~the manure digester loan program, including costs incurred by~~
2.27 	~~the authority to establish and administer the program~~ the
2.28 	revolving loan account established in section 41B.06.

2.29 	Sec. 3. [41B.055] LIVESTOCK EQUIPMENT PILOT LOAN
2.30 	PROGRAM.
2.31 		Subdivision 1.Establishment. The authority must
2.32 	establish and implement a livestock equipment pilot loan program
2.33 	to help finance the first purchase of livestock-related
2.34 	equipment and make livestock facilities improvements.
2.35 		Subd. 2.Eligibility. Notwithstanding section 41B.03, to
2.36 	be eligible for this program a borrower must:
3.1 	(1) be a resident of Minnesota or general partnership or a
3.2 	family farm corporation, authorized farm corporation, family
3.3 	farm partnership, or authorized farm partnership as defined in
3.4 	section 500.24, subdivision 2;
3.5 	(2) be the principal operator of a livestock farm;
3.6 	(3) have a total net worth, including assets and
3.7 	liabilities of the borrower's spouse and dependents, no greater
3.8 	than the amount stipulated in section 41B.03, subdivision 3;
3.9 	(4) demonstrate an ability to repay the loan; and 
3.10 	(5) hold an appropriate feedlot registration or be using
3.11 	the loan under this program to meet registration requirements.
3.12 	In addition to the requirements in clauses (1) to (5),
3.13 	preference must be given to applicants who have farmed less than
3.14 	ten years as evidenced by their filing of schedule F in their
3.15 	federal tax returns.
3.16 		Subd. 3.Loans. (a) The authority may participate in a
3.17 	livestock equipment loan equal to 90 percent of the purchased
3.18 	equipment value with an eligible lender to a farmer who is
3.19 	eligible under subdivision 2.  Participation is limited to 45
3.20 	percent of the principal amount of the loan or $40,000,
3.21 	whichever is less.  The interest rates and repayment terms of
3.22 	the authority's participation interest may differ from the
3.23 	interest rates and repayment terms of the lender's retained
3.24 	portion of the loan, but the authority's interest rate must not
3.25 	exceed three percent.  The authority may review the interest
3.26 	annually and make adjustments as necessary.
3.27 	(b) Standards for loan amortization must be set by the
3.28 	rural finance authority and must not exceed seven years.
3.29 	(c) Security for a livestock equipment loan must be a
3.30 	personal note executed by the borrower and whatever other
3.31 	security is required by the eligible lender or the authority.
3.32 	(d) Refinancing of existing debt is not an eligible purpose.
3.33 	(e) The authority may impose a reasonable, nonrefundable
3.34 	application fee for a livestock equipment loan.  The authority
3.35 	may review the fee annually and make adjustments as necessary.
3.36 	The initial application fee is $50.  Application fees received
4.1 	by the authority must be deposited in the revolving loan account
4.2 	established in section 41B.06.
4.3 	(f) Loans under this program must be made using money in
4.4 	the revolving loan account established in section 41B.06.
4.5 		Subd. 4.Eligible expenditures. Money may be used for
4.6 	loans for the acquisition of equipment for animal housing,
4.7 	confinement, animal feeding, milk production, and waste
4.8 	management, including the following, if related to animal
4.9 	husbandry:
4.10 	(1) fences;
4.11 	(2) watering facilities;
4.12 	(3) feed storage and handling equipment;
4.13 	(4) milking parlors;
4.14 	(5) milking equipment;
4.15 	(6) scales;
4.16 	(7) milk storage and cooling facilities;
4.17 	(8) manure pumping and storage facilities; and 
4.18 	(9) capital investment in pasture.

4.19 	Sec. 4. [41B.06] RURAL FINANCE AUTHORITY REVOLVING LOAN
4.20 	ACCOUNT.
4.21 	There is established in the rural finance administration
4.22 	fund a rural finance authority revolving loan account that is
4.23 	eligible to receive appropriations and the transfer of loan
4.24 	funds from other programs.  All repayments of financial
4.25 	assistance granted from this account, including principal and
4.26 	interest, must be deposited into this account.  Interest earned
4.27 	on money in the account accrues to the account, and the money in
4.28 	the account is appropriated to the commissioner of agriculture
4.29 	for purposes of the rural finance authority, livestock equipment
4.30 	methane digester, and value-added agricultural product loan
4.31 	programs, including costs incurred by the authority to establish
4.32 	and administer the programs.

4.33 	Sec. 5. Minnesota Statutes 2004, section 174.52,
4.34 	subdivision 4, is amended to read:
4.35 		Subd. 4.Local road account for routes of regional
4.36 	significance. (a) A local road account for routes of regional
5.1 	significance is established in the local road improvement fund.
5.2 	Money in the account is annually appropriated to the
5.3 	commissioner of transportation for expenditure as specified in
5.4 	this section.  Money in the account must be used as grants or
5.5 	loans to statutory or home rule charter cities, towns, and
5.6 	counties to assist in paying the costs of constructing or
5.7 	reconstructing city streets, county highways, or town roads with
5.8 	statewide or regional significance that have not been fully
5.9 	funded through other state, federal, or local funding sources.
5.10 	(b) Of the amounts appropriated under this subdivision, up
5.11 	to ten percent is appropriated for grants or loans to towns to
5.12 	assist in paying the costs of constructing or reconstructing
5.13 	town roads with statewide or regional significance that have not
5.14 	been fully funded through other state, federal, or local funding
5.15 	sources and are routes in need of maintenance related to
5.16 	livestock operations permitted after the effective date of this
5.17 	section.

5.18 	Sec. 6. Minnesota Statutes 2004, section 174.52,
5.19 	subdivision 5, is amended to read:
5.20 		Subd. 5.Grant procedures and criteria.  The commissioner
5.21 	shall establish procedures for statutory or home rule charter
5.22 	cities, towns, and counties to apply for grants or loans from
5.23 	the fund and criteria to be used to select projects for funding.
5.24 	The commissioner shall establish these procedures and criteria
5.25 	in consultation with representatives appointed by the
5.26 	Association of Minnesota Counties, League of Minnesota
5.27 	Cities, ~~and~~ Minnesota Township Officers Association, and the
5.28 	Minnesota Department of Agriculture.  The criteria for
5.29 	determining project priority and the amount of a grant or loan
5.30 	must be based upon consideration of:
5.31 	(1) the availability of other state, federal, and local
5.32 	funds;
5.33 	(2) the regional significance of the route;
5.34 	(3) effectiveness of the proposed project in eliminating a
5.35 	transportation system deficiency;
5.36 	(4) the number of persons who will be positively impacted
6.1 	by the project;
6.2 	(5) the project's contribution to other local, regional, or
6.3 	state economic development or redevelopment efforts; and
6.4 	(6) ability of the local unit of government to adequately
6.5 	provide for the safe operation and maintenance of the facility
6.6 	upon project completion.

6.7 	Sec. 7. Minnesota Statutes 2004, section 394.25,
6.8 	subdivision 3c, is amended to read:
6.9 		Subd. 3c.Feedlot zoning ordinances.  (a) A county
6.10 	proposing to adopt a new feedlot ordinance or amend an existing
6.11 	feedlot ordinance must notify the Pollution Control Agency and
6.12 	commissioner of agriculture at the beginning of the process, no
6.13 	later than the notice of the first hearing proposing to adopt or
6.14 	amend an ordinance purporting to address feedlots.
6.15 	(b) Prior to final approval of a feedlot ordinance, a
6.16 	county board may submit a copy of the proposed ordinance to the
6.17 	Pollution Control Agency and to the commissioner of agriculture
6.18 	and request review, comment, and ~~preparation of~~ recommendations.
6.19 	(c) The agencies' response to the county may include:
6.20 	(1) any recommendations for improvements in the ordinance;
6.21 	and 
6.22 	(2) the legal, economic, or scientific justification for
6.23 	each recommendation under clause (1).
6.24 	(d) At the request of any member of the county board, the
6.25 	county must prepare a report on the ~~environmental and~~
6.26 	~~agricultural~~ economic effects from specific provisions in the
6.27 	ordinance. Economic analysis must state whether the ordinance
6.28 	will affect the local economy and describe the kinds of
6.29 	businesses affected and the projected impact the proposal will
6.30 	have on those businesses.  To assist the county, the
6.31 	commissioner of agriculture, in cooperation with the Department
6.32 	of Employment and Economic Development, must develop a template
6.33 	for measuring local economic effects and make it available to
6.34 	the county.  The report must be submitted to the commissioners
6.35 	of employment and economic development and agriculture along
6.36 	with the proposed ordinance.
7.1 	~~(c) The report may include:~~
7.2 	~~(1) any recommendations for improvements in the ordinance;~~
7.3 	~~and~~ 
7.4 	~~(2) the legal, social, economic, or scientific~~
7.5 	~~justification for each recommendation under clause (1).~~
7.6 	~~(d)~~ (e) A local ordinance that contains a setback for new
7.7 	feedlots from existing residences must also provide for a new
7.8 	residence setback from existing feedlots located in areas zoned
7.9 	agricultural at the same distances and conditions specified in
7.10 	the setback for new feedlots, unless the new residence is built
7.11 	to replace an existing residence.  A county may grant a variance
7.12 	from this requirement under section 394.27, subdivision 7.

7.13 	Sec. 8. Minnesota Statutes 2004, section 462.355,
7.14 	subdivision 4, is amended to read:
7.15 		Subd. 4.Interim ordinance. (a) If a municipality is
7.16 	conducting studies or has authorized a study to be conducted or
7.17 	has held or has scheduled a hearing for the purpose of
7.18 	considering adoption or amendment of a comprehensive plan or
7.19 	official controls as defined in section 462.352, subdivision 15,
7.20 	or if new territory for which plans or controls have not been
7.21 	adopted is annexed to a municipality, the governing body of the
7.22 	municipality may adopt an interim ordinance applicable to all or
7.23 	part of its jurisdiction for the purpose of protecting the
7.24 	planning process and the health, safety and welfare of its
7.25 	citizens.  The interim ordinance may regulate, restrict or
7.26 	prohibit any use, development, or subdivision within the
7.27 	jurisdiction or a portion thereof for a period not to exceed one
7.28 	year from the date it is effective.
7.29 	(b) If a proposed interim ordinance purports to regulate,
7.30 	restrict, or prohibit activities relating to livestock
7.31 	production, a public hearing must be held following a ten-day
7.32 	notice given by publication in a newspaper of general
7.33 	circulation in the municipality before the interim ordinance
7.34 	takes effect.
7.35 	(c) The period of an interim ordinance applicable to an
7.36 	area that is affected by a city's master plan for a municipal
8.1 	airport may be extended for such additional periods as the
8.2 	municipality may deem appropriate, not exceeding a total
8.3 	additional period of 18 months in the case where the Minnesota
8.4 	Department of Transportation has requested a city to review its
8.5 	master plan for a municipal airport prior to August 1, 2004.  In
8.6 	all other cases, no interim ordinance may halt, delay, or impede
8.7 	a subdivision which has been given preliminary approval, nor may
8.8 	any interim ordinance extend the time deadline for agency action
8.9 	set forth in section 15.99 with respect to any application filed
8.10 	prior to the effective date of the interim ordinance.  The
8.11 	governing body of the municipality may extend the interim
8.12 	ordinance after a public hearing and written findings have been
8.13 	adopted based upon one or more of the conditions in clause (1),
8.14 	(2), or (3).  The public hearing must be held at least 15 days
8.15 	but not more than 30 days before the expiration of the interim
8.16 	ordinance, and notice of the hearing must be published at least
8.17 	ten days before the hearing.  The interim ordinance may be
8.18 	extended for the following conditions and durations, but, except
8.19 	as provided in clause (3), an interim ordinance may not be
8.20 	extended more than an additional 18 months:
8.21 	(1) up to an additional 120 days following the receipt of
8.22 	the final approval or review by a federal, state, or
8.23 	metropolitan agency when the approval is required by law and the
8.24 	review or approval has not been completed and received by the
8.25 	municipality at least 30 days before the expiration of the
8.26 	interim ordinance;
8.27 	(2) up to an additional 120 days following the completion
8.28 	of any other process required by a state statute, federal law,
8.29 	or court order, when the process is not completed at least 30
8.30 	days before the expiration of the interim ordinance; or
8.31 	(3) up to an additional one year if the municipality has
8.32 	not adopted a comprehensive plan under this section at the time
8.33 	the interim ordinance is enacted.

8.34 	Sec. 9. Minnesota Statutes 2004, section 462.358, is
8.35 	amended by adding a subdivision to read:
8.36 		Subd. 2d.Feedlot zoning controls. (a) A municipality
9.1 	proposing to adopt a new feedlot zoning control or to amend an
9.2 	existing feedlot zoning control must notify the Pollution
9.3 	Control Agency and commissioner of agriculture at the beginning
9.4 	of the process, no later than the date notice is given of the
9.5 	first hearing proposing to adopt or amend a zoning control
9.6 	purporting to address feedlots.
9.7 	(b) Prior to final approval of a feedlot zoning control, a
9.8 	municipality may submit a copy of the proposed zoning control to
9.9 	the Pollution Control Agency and to the commissioner of
9.10 	agriculture and request review, comment, and recommendations.
9.11 	(c) The agencies' response to the municipality may include:
9.12 	(1) any recommendations for improvements in the ordinance;
9.13 	and 
9.14 	(2) the legal, economic, or scientific justification for
9.15 	each recommendation under clause (1).
9.16 	(d) At the request of any member of the municipality's
9.17 	governing body, the municipality must prepare a report on the
9.18 	economic effects from specific provisions in the ordinance.
9.19 	Economic analysis must state whether the ordinance will affect
9.20 	the local economy and describe the kinds of businesses affected
9.21 	and the projected impact the proposal will have on those
9.22 	businesses.  To assist the municipality, the commissioner of
9.23 	agriculture, in cooperation with the Department of Employment
9.24 	and Economic Development, must develop a template for measuring
9.25 	local economic effects and make it available to the
9.26 	municipality.  The report must be submitted to the commissioners
9.27 	of employment and economic development and agriculture along
9.28 	with the proposed ordinance.

9.29 	Sec. 10. APPROPRIATION.
 9.30 	(a) $100,000 in fiscal year 2006 and $100,000 in fiscal
9.31 	year 2007 are appropriated from the general fund to the
9.32 	commissioner of agriculture to provide training and technical
9.33 	assistance to county and town officials relating to livestock
9.34 	siting issues and local zoning and land use planning including a
9.35 	checklist template that would clarify the federal, state, and
9.36 	local government requirements for consideration of an animal
10.1 	agriculture modernization or expansion project.  In developing
10.2 	the training and technical assistance program, the commissioner
10.3 	may seek assistance from the local planning assistance center of
10.4 	the Department of Administration and shall seek guidance,
10.5 	advice, and support of livestock producer organizations, general
10.6 	agricultural organizations, local government associations,
10.7 	academic institutions, other government agencies, and others
10.8 	with expertise in land use and agriculture.
10.9 	(b) $220,000 is appropriated in fiscal year 2006 from the
10.10 	general fund to the commissioner of agriculture to contract with
10.11 	the University of Minnesota for further research and development
10.12 	of livestock odor and air quality management.

10.13 	Sec. 11. TRANSFER OF FUNDS; DEPOSIT OF REPAYMENTS.
 10.14 	The remaining balances in the revolving accounts in
10.15 	Minnesota Statutes, sections 41B.046 and 41B.049, that are
10.16 	dedicated to rural finance authority loan programs under those
10.17 	sections, are transferred to the revolving loan account
10.18 	established in Minnesota Statutes, section 41B.06, on the
10.19 	effective date of this section.  All future receipts from
10.20 	value-added agricultural product loans and methane digester
10.21 	loans originated under Minnesota Statutes, sections 41B.046 and
10.22 	41B.049, must be deposited in the revolving loan account
10.23 	established in Minnesota Statutes, section 41B.06.

10.24 	Sec. 12. REPEALER.
 10.25 	Minnesota Statutes 2004, section 41B.046, subdivision 3, is
10.26 	repealed.

10.27 	Sec. 13. EFFECTIVE DATE.
 10.28 	This act is effective the day following final enactment.