SF 1163

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/26/2021 01:48pm

A bill for an act
relating to energy; establishing a program to provide financial incentives for the
production of wood pellets; appropriating money; proposing coding for new law
in Minnesota Statutes, chapter 216B.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [216B.2427] WOOD PELLET PRODUCTION INCENTIVE.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
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new text begin (b) "Forest residue" means unused portions of harvested trees and materials from diseased,
distressed, or burned trees that are processed into chips or sawdust in the field near the
forested area from which the tree or tree material is supplied.
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new text begin (c) "Residual materials" means forest and wood mill residue.
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new text begin (d) "Wood mill residue" means wood residue generated at a manufacturing plant that
processes harvested trees into products, including but not limited to lumber and sheathing,
that are suitable for processing into chips or sawdust.
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new text begin (e) "Wood pellets" means a pellet manufactured from forest and wood mill residuals
that is burned to produce heat or electricity.
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new text begin Subd. 2. new text end

new text begin Eligible facility. new text end

new text begin (a) To be eligible for payments under this section, a facility
must:
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new text begin (1) be located in Minnesota;
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new text begin (2) dry and process residual materials from Minnesota forests and sawmills into wood
pellets;
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new text begin (3) begin construction no later than December 31, 2022;
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new text begin (4) produce at least 50,000 metric tons of wood pellets annually; and
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new text begin (5) certify that all contractors and subcontractors pay employees constructing the facility
no less than the prevailing wage rate, as defined in section 177.42.
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new text begin (b) An eligible facility is prohibited from transferring eligibility for payments under this
section to a facility at a different location.
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new text begin (c) An eligible facility that ceases production for any reason is prohibited from receiving
payments under this section until the eligible facility resumes production.
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new text begin (d) Payments under this section may be made to no more than two eligible facilities.
Payments must be made to eligible facilities on a first-come, first-served basis.
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new text begin Subd. 3. new text end

new text begin Forest residue; requirements. new text end

new text begin (a) Forest residue harvested from land parcels
larger than 160 acres must be certified by the Forest Stewardship Council, Sustainable
Forestry Initiative, or American Tree Farm System as being harvested from sustainably
managed forests.
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new text begin (b) Forest residue not certified under paragraph (a) must be harvested under a forest
stewardship plan by a logger certified as a qualified logging professional by the Minnesota
logger education program, or an equivalent certification by an independent third-party
organization that teaches sustainable harvesting practices to loggers.
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new text begin Subd. 4. new text end

new text begin Payment; process. new text end

new text begin (a) The commissioner must make payments under this
section to an eligible facility as provided in this subdivision.
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new text begin (b) By the last day of January, April, July, and October, each eligible facility must file
a claim for payment for wood pellets produced by the eligible facility during the preceding
three calendar months. The claim must be filed with the commissioner on a form developed
by the commissioner.
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new text begin (c) A claim submitted under this section must include documentation and verification
by an independent third party that, with respect to an eligible facility's claim filed under
this subdivision:
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new text begin (1) the conditions of subdivision 3 have been met; and
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new text begin (2) the amount of wood pellets, expressed in metric tons, that the eligible facility claims
to have produced during the quarter is accurate.
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new text begin (d) No later than February 15, May 15, August 15, and November 15, the commissioner
must issue payments under this section for the applicable quarter to an eligible facility that
filed a quarterly claim approved by the commissioner.
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new text begin Subd. 5. new text end

new text begin Payment amount; limitation. new text end

new text begin (a) The commissioner must pay an eligible
facility $25 per metric ton of wood pellets produced, subject to the limitations provided
under this subdivision.
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new text begin (b) An eligible facility must not be paid more than $3,750,000 in a calendar year under
this section, irrespective of the number of metric tons of wood pellets produced in a calendar
year.
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new text begin (c) An eligible facility may receive payments under this section for no more than ten
years.
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new text begin (d) A payment must not be made under this section after June 30, 2033.
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Sec. 2. new text begin APPROPRIATIONS.
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new text begin Notwithstanding Minnesota Statutes, section 116C.779, subdivision 1, paragraph (j),
$3,750,000 in fiscal year 2022 and $3,750,000 in fiscal year 2023 are appropriated from
the renewable development account established in Minnesota Statutes, section 116C.779,
subdivision 1, to the commissioner of commerce to pay wood pellet manufacturing incentives
under Minnesota Statutes, section 216B.2427. The base for the program is $3,750,000 in
fiscal years 2024 through 2032. The base in fiscal year 2033 is $0. Unspent funds at the end
of a fiscal year do not cancel to the renewable development account but remain available
to be expended.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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