1999 Minnesota Statutes

     41A.09 Ethanol development. 

    Subdivision 1.    Appropriation.  A sum sufficient to 
 make the payments required by this section is annually 
 appropriated from the general fund to the commissioner of 
 agriculture and all money so appropriated is available until 
 expended. 

    Subd. 1a.    Ethanol production goal.  It is a goal of 
 the state that ethanol production plants in the state attain a 
 total annual production level of 240,000,000 gallons.  

    Subd. 2. Repealed, 1995 c 220 s 141 

    Subd. 2a.    Definitions.  For the purposes of this 
 section, the terms defined in this subdivision have the meanings 
 given them. 

    (a) "Ethanol" means fermentation ethyl alcohol derived from 
 agricultural products, including potatoes, cereal, grains, 
 cheese whey, and sugar beets; forest products; or other 
 renewable resources, including residue and waste generated from 
 the production, processing, and marketing of agricultural 
 products, forest products, and other renewable resources, that: 

    (1) meets all of the specifications in ASTM specification D 
 4806-88; and 

    (2) is denatured as specified in Code of Federal 
 Regulations, title 27, parts 20 and 21. 

    (b) "Wet alcohol" means agriculturally derived fermentation 
 ethyl alcohol having a purity of at least 50 percent but less 
 than 99 percent. 

    (c) "Anhydrous alcohol" means fermentation ethyl alcohol 
 derived from agricultural products as described in paragraph 
 (a), but that does not meet ASTM specifications or is not 
 denatured and is shipped in bond for further processing. 

    (d) "Ethanol plant" means a plant at which ethanol, 
 anhydrous alcohol, or wet alcohol is produced. 

    Subd. 3. Repealed, 1995 c 220 s 141 

    Subd. 3a.    Payments.  (a) The commissioner of 
 agriculture shall make cash payments to producers of ethanol, 
 anhydrous alcohol, and wet alcohol located in the state.  These 
 payments shall apply only to ethanol, anhydrous alcohol, and wet 
 alcohol fermented in the state and produced at plants that have 
 begun production by June 30, 2000.  For the purpose of this 
 subdivision, an entity that holds a controlling interest in more 
 than one ethanol plant is considered a single producer.  The 
 amount of the payment for each producer's annual production is: 

    (1) except as provided in paragraph (b), for each gallon of 
 ethanol or anhydrous alcohol produced on or before June 30, 
 2000, or ten years after the start of production, whichever is 
 later, 20 cents per gallon; and 

    (2) for each gallon produced of wet alcohol on or before 
 June 30, 2000, or ten years after the start of production, 
 whichever is later, a payment in cents per gallon calculated by 
 the formula "alcohol purity in percent divided by five," and 
 rounded to the nearest cent per gallon, but not less than 11 
 cents per gallon. 

    The producer payments for anhydrous alcohol and wet alcohol 
 under this section may be paid to either the original producer 
 of anhydrous alcohol or wet alcohol or the secondary processor, 
 at the option of the original producer, but not to both. 

    (b) If the level of production at an ethanol plant 
 increases due to an increase in the production capacity of the 
 plant and the increased production begins by June 30, 2000, the 
 payment under paragraph (a), clause (1), applies to the 
 additional increment of production until ten years after the 
 increased production began.  Once a plant's production capacity 
 reaches 15,000,000 gallons per year, no additional increment 
 will qualify for the payment. 

    (c) The commissioner shall make payments to producers of 
 ethanol or wet alcohol in the amount of 1.5 cents for each 
 kilowatt hour of electricity generated using closed-loop biomass 
 in a cogeneration facility at an ethanol plant located in the 
 state.  Payments under this paragraph shall be made only for 
 electricity generated at cogeneration facilities that begin 
 operation by June 30, 2000.  The payments apply to electricity 
 generated on or before the date ten years after the producer 
 first qualifies for payment under this paragraph.  Total 
 payments under this paragraph in any fiscal year may not exceed 
 $750,000.  For the purposes of this paragraph: 

    (1) "closed-loop biomass" means any organic material from a 
 plant that is planted for the purpose of being used to generate 
 electricity or for multiple purposes that include being used to 
 generate electricity; and 

    (2) "cogeneration" means the combined generation of: 

    (i) electrical or mechanical power; and 

    (ii) steam or forms of useful energy, such as heat, that 
 are used for industrial, commercial, heating, or cooling 
 purposes. 

    (d) Except for new production capacity approved under 
 paragraph (i), clause (1), the total payments under paragraphs 
 (a) and (b) to all producers may not exceed $34,000,000 in a 
 fiscal year.  Total payments under paragraphs (a) and (b) to a 
 producer in a fiscal year may not exceed $3,000,000. 

    (e) By the last day of October, January, April, and July, 
 each producer shall file a claim for payment for ethanol, 
 anhydrous alcohol, and wet alcohol production during the 
 preceding three calendar months.  A producer with more than one 
 plant shall file a separate claim for each plant.  A producer 
 shall file a separate claim for the original production capacity 
 of each plant and for each additional increment of production 
 that qualifies under paragraph (b).  A producer that files a 
 claim under this subdivision shall include a statement of the 
 producer's total ethanol, anhydrous alcohol, and wet alcohol 
 production in Minnesota during the quarter covered by the claim, 
 including anhydrous alcohol and wet alcohol produced or received 
 from an outside source.  A producer shall file a separate claim 
 for any amount claimed under paragraph (c).  For each claim and 
 statement of total ethanol, anhydrous alcohol, and wet alcohol 
 production filed under this subdivision, the volume of ethanol, 
 anhydrous alcohol, and wet alcohol production or amounts of 
 electricity generated using closed-loop biomass must be examined 
 by an independent certified public accountant in accordance with 
 standards established by the American Institute of Certified 
 Public Accountants. 

    (f) Payments shall be made November 15, February 15, May 
 15, and August 15.  A separate payment shall be made for each 
 claim filed.  The total quarterly payment to a producer under 
 this paragraph, excluding amounts paid under paragraph (c), may 
 not exceed $750,000.  Except for new production capacity 
 approved under paragraph (i), clause (1), if the total amount 
 for which all other producers are eligible in a quarter under 
 paragraphs (a) and (b) exceeds $8,500,000, the commissioner 
 shall make payments for production capacity that is subject to 
 this restriction in the order in which the portion of production 
 capacity covered by each claim went into production.  

    (g) If the total amount for which all producers are 
 eligible in a quarter under paragraph (c) exceeds the amount 
 available for payments, the commissioner shall make payments in 
 the order in which the plants covered by the claims began 
 generating electricity using closed-loop biomass. 

    (h) After July 1, 1997, new production capacity is only 
 eligible for payment under this subdivision if the commissioner 
 receives: 

    (1) an application for approval of the new production 
 capacity; 

    (2) an appropriate letter of long-term financial commitment 
 for construction of the new production capacity; and 

    (3) copies of all necessary permits for construction of the 
 new production capacity. 

    The commissioner may approve new production capacity based 
 on the order in which the applications are received.  

    (i) After April 22, 1998, the commissioner may only 
 approve:  (1) up to 12,000,000 gallons of new production 
 capacity at one plant that has not previously received approval 
 or payment for any production capacity; or (2) new production 
 capacity at existing plants not to exceed planned expansions 
 reported to the commissioner by February 1997.  The commissioner 
 may not approve any new production capacity after July 1, 1998.  

    (j) For the purposes of this subdivision "new production 
 capacity" means annual ethanol production capacity that was not 
 allowed under a permit issued by the pollution control agency 
 prior to July 1, 1997, or for which construction did not begin 
 prior to July 1, 1997. 

    Subd. 4.    Rulemaking authority.  The commissioner 
 shall adopt rules to implement this section. 

    Subd. 5. Repealed, 1995 c 220 s 141 

    Subd. 5a.    Expiration.  This section expires June 30, 
 2010, and the unobligated balance of each appropriation under 
 this section on that date reverts to the general fund. 

    Subd. 6.    Continued payments.  A plant in production 
 or under construction by January 1, 1990, shall continue to 
 receive uninterrupted payments under subdivision 3 of at least 
 20 cents per gallon of ethanol produced until July 1, 2000. 

    Subd. 7.    Coordination with departments of revenue and 
 public service.  The agriculturally derived ethanol definition 
 and specifications in this section are intended to match the 
 definition and specifications in sections 239.761 and 296A.01. 

    Subd. 8.    Promotional and educational materials; 
 description of multiple sources of ethanol required.  
 Promotional or educational efforts related to ethanol that are 
 financed wholly or partially with state funds and that promote 
 or identify a particular crop or commodity used to produce 
 ethanol must also include a description of the other potential 
 sources of ethanol listed in subdivision 2. 

    HIST: 1Sp1986 c 1 art 8 s 1; 1987 c 390 s 1,2; 1988 c 688 art 
 18 s 1; 1989 c 257 s 1,2; 1989 c 269 s 37; 1989 c 277 art 1 s 2; 
 1989 c 335 art 4 s 106; 1991 c 254 art 3 s 21; 1991 c 302 s 1; 
 1992 c 513 art 2 s 18; 1992 c 575 s 1,2; 1993 c 13 art 1 s 52; 
 1993 c 172 s 30,31; 1993 c 366 s 2; 1994 c 632 art 2 s 15-17; 
 1995 c 220 s 45-48; 1996 c 471 art 5 s 1; 1997 c 7 art 5 s 8; 
 1997 c 216 s 57; 1998 c 299 s 30; 1998 c 401 s 19,20