1.1                          A bill for an act 
  1.2             relating to agriculture; modifying provisions of the 
  1.3             value-added agricultural product processing and 
  1.4             marketing grant program; eliminating the late fee for 
  1.5             the license to use the Minnesota grown label; 
  1.6             clarifying the term "private contributions" for the 
  1.7             Minnesota grown matching account; modifying provisions 
  1.8             of the shared savings loan program and the sustainable 
  1.9             agriculture demonstration grant program; modifying 
  1.10            provisions of the agriculture best management 
  1.11            practices loan program; regulating pesticide 
  1.12            application in certain schools; modifying financing 
  1.13            limitations for the administration of the state meat 
  1.14            inspection program; authorizing the state agricultural 
  1.15            society to establish a nonprofit corporation for 
  1.16            charitable purposes; modifying provisions relating to 
  1.17            the rural finance authority; extending the sunset date 
  1.18            and providing for designation of replacement members 
  1.19            of the Minnesota agriculture education leadership 
  1.20            council; modifying the definition of "agricultural 
  1.21            land" for the purpose of recreational trespass; 
  1.22            providing an additional member of the board of 
  1.23            directors of the agricultural utilization research 
  1.24            institute; allowing natural gasoline as a petroleum 
  1.25            component in E85 fuel; revising and consolidating crop 
  1.26            liens and agricultural liens on livestock; extending 
  1.27            the sunset date for the farmer-lender mediation 
  1.28            program; providing a temporary waiver of board of 
  1.29            animal health rules for use of biological products on 
  1.30            poultry; repealing obsolete agricultural statutes; 
  1.31            amending Minnesota Statutes 2000, sections 17.101, 
  1.32            subdivision 5; 17.102, subdivision 3; 17.109, 
  1.33            subdivision 3; 17.115; 17.116; 17.117; 18B.01, by 
  1.34            adding a subdivision; 31A.21, subdivision 2; 41B.025, 
  1.35            subdivision 1; 41B.03, subdivision 2; 41B.043, 
  1.36            subdivisions 1b, 2; 41B.046, subdivision 2; 41D.01, 
  1.37            subdivisions 1, 3, 4; 97B.001, subdivision 1; 116O.09, 
  1.38            subdivision 1a; 296A.01, subdivision 19; 514.19; Laws 
  1.39            1986, chapter 398, article 1, section 18, as amended; 
  1.40            proposing coding for new law in Minnesota Statutes, 
  1.41            chapters 18B; 37; 514; repealing Minnesota Statutes 
  1.42            2000, sections 17.76; 17.987; 24.001; 24.002; 24.12; 
  1.43            24.131; 24.135; 24.141; 24.145; 24.151; 24.155; 
  1.44            24.161; 24.171; 24.175; 24.18; 24.181; 33.09; 33.111; 
  1.45            514.23; 514.24; 514.25; 514.26; 514.27; 514.28; 
  1.46            514.29; 514.30; 514.31; 514.32; 514.33; 514.34; 
  2.1             514.62; 514.63; 514.65; 514.66; 514.92; 514.950; 
  2.2             514.952; 514.954; 514.956; 514.958; 514.959; 514.960; 
  2.3             557.12; 559.2091; Minnesota Rules, parts 8271.0010; 
  2.4             8271.0020; 8271.0030; 8271.0040; 8271.0050; 8271.0060; 
  2.5             8271.0070; 8271.0080; 8271.0090; 8271.0100; 8271.0200; 
  2.6             8271.0300; 8271.0350. 
  2.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.8      Section 1.  Minnesota Statutes 2000, section 17.101, 
  2.9   subdivision 5, is amended to read: 
  2.10     Subd. 5.  [VALUE-ADDED AGRICULTURAL PRODUCT PROCESSING AND 
  2.11  MARKETING GRANT PROGRAM.] (a) For purposes of this section: 
  2.12     (1) "agricultural commodity" means a material produced for 
  2.13  use in or as food, feed, seed, or fiber and includes crops for 
  2.14  fiber, food, oilseeds, seeds, livestock, livestock products, 
  2.15  dairy, dairy products, poultry, poultry products, and other 
  2.16  products or by-products of the farm produced for the same or 
  2.17  similar use, except ethanol; and 
  2.18     (2) "agricultural product processing facility" means land, 
  2.19  buildings, structures, fixtures, and improvements located or to 
  2.20  be located in Minnesota and used or operated primarily for the 
  2.21  processing or production of marketable products from 
  2.22  agricultural commodities produced in Minnesota.  
  2.23     (b) The commissioner shall establish and implement a 
  2.24  value-added agricultural product processing and marketing grant 
  2.25  program to help farmers finance new cooperatives that organize 
  2.26  for the purposes of operating agricultural product processing 
  2.27  facilities, forming marketing cooperatives, and ~~for~~ marketing 
  2.28  activities related to the sale and distribution of processed 
  2.29  agricultural products.  
  2.30     (c) To be eligible for this program a grantee must:  
  2.31     (1) be a cooperative organized under chapter 308A; 
  2.32     (2) certify that all of the control and equity in the 
  2.33  cooperative is from farmers, family farm partnerships, family 
  2.34  farm limited liability companies, or family farm corporations as 
  2.35  defined in section 500.24, subdivision 2, who are actively 
  2.36  engaged in agricultural commodity production; 
  2.37     (3) be operated primarily for the processing of 
  2.38  agricultural commodities produced in Minnesota; 
  3.1      (4) receive agricultural commodities produced primarily by 
  3.2   shareholders or members of the cooperative; and 
  3.3      (5) have no direct or indirect involvement in the 
  3.4   production of agricultural commodities.  
  3.5      (d) The commissioner may receive applications from and make 
  3.6   grants up to $50,000 for feasibility, marketing analysis, 
  3.7   assistance with organizational development, financing and 
  3.8   managing new cooperatives, product development, development of 
  3.9   business and marketing plans, and predesign of facilities 
  3.10  including site analysis, development of bid specifications, 
  3.11  preliminary blueprints and schematics, and completion of 
  3.12  purchase agreements and other necessary legal documents to 
  3.13  eligible cooperatives.  The commissioner shall give priority to 
  3.14  applicants who use the grants for planning costs related to an 
  3.15  application for financial assistance from the United States 
  3.16  Department of Agriculture, Rural Business - Cooperative Service. 
  3.17     Sec. 2.  Minnesota Statutes 2000, section 17.102, 
  3.18  subdivision 3, is amended to read: 
  3.19     Subd. 3.  [LICENSE.] A person may not use the Minnesota 
  3.20  grown logo or labeling without an annual license from the 
  3.21  commissioner.  The commissioner shall issue licenses for a fee 
  3.22  of $5.  ~~The commissioner shall charge a late fee of $10 for~~ 
  3.23  ~~renewal of a license that has expired.~~ 
  3.24     Sec. 3.  Minnesota Statutes 2000, section 17.109, 
  3.25  subdivision 3, is amended to read: 
  3.26     Subd. 3.  [APPROPRIATIONS MUST BE MATCHED BY PRIVATE 
  3.27  FUNDS.] Appropriations to the Minnesota grown matching account 
  3.28  may be expended only to the extent that they are matched with 
  3.29  contributions to the account from private sources on a basis of 
  3.30  $4 of the appropriation to each $1 of private contributions.  
  3.31  Matching funds are not available after the appropriation is 
  3.32  encumbered.  For the purposes of this subdivision, "private 
  3.33  contributions" includes, but is not limited to, advertising 
  3.34  revenue, listing fees, and revenues from the development and 
  3.35  sale of promotional materials. 
  3.36     Sec. 4.  Minnesota Statutes 2000, section 17.115, is 
  4.1   amended to read: 
  4.2      17.115 [SHARED SAVINGS LOAN PROGRAM.] 
  4.3      Subdivision 1.  [ESTABLISHMENT.] The commissioner shall 
  4.4   establish a shared savings loan program to provide loans that 
  4.5   enable farmers to adopt best management practices that emphasize 
  4.6   sufficiency and self-sufficiency in agricultural inputs, 
  4.7   including energy efficiency, reduction or improved management of 
  4.8   ~~petroleum and chemical~~ inputs, ~~and~~ increasing ~~the~~ energy 
  4.9   ~~self-sufficiency of~~ production by agricultural producers, and 
  4.10  environmental improvements. 
  4.11     Subd. 2.  [LOAN CRITERIA.] (a) The shared savings loan 
  4.12  program must provide loans for purchase of new or used 
  4.13  machinery~~,~~ and installation of equipment~~, and~~ for projects that 
  4.14  ~~reduce or make more efficient farm energy use~~ make environmental 
  4.15  improvements or enhance farm profitability.  Eligible loan uses 
  4.16  do not include seed, fertilizer, or fuel. 
  4.17     (b) Loans may not exceed ~~$15,000~~ $25,000 per individual 
  4.18  applying for a loan and may not exceed ~~$75,000~~ $100,000 for 
  4.19  loans to ~~five~~ four or more individuals on joint projects.  The 
  4.20  loan repayment period may be up to seven years as determined by 
  4.21  project cost and energy savings.  The interest on the loans is 
  4.22  six percent. 
  4.23     (c) Loans may only be made to residents of this state 
  4.24  engaged in farming.  
  4.25     Subd. 3.  [AWARDING OF LOANS.] (a) Applications for loans 
  4.26  must be made to the commissioner on forms prescribed by the 
  4.27  commissioner. 
  4.28     (b) The applications must be reviewed, ranked, and 
  4.29  recommended by a loan review panel appointed by the 
  4.30  commissioner.  The loan review panel shall consist of two 
  4.31  lenders with agricultural experience, two resident farmers of 
  4.32  the state using sustainable agriculture methods, two resident 
  4.33  farmers of the state using organic agriculture methods, a farm 
  4.34  management specialist, a representative from a post-secondary 
  4.35  education institution, and a chair from the department.  
  4.36     (c) The loan review panel shall rank applications according 
  5.1   to the following criteria: 
  5.2      (1) realize savings to the cost of agricultural production 
  5.3   ~~and project savings to repay the cost of the loan~~; 
  5.4      (2) reduce or make more efficient use of energy or 
  5.5   inputs; ~~and~~ 
  5.6      (3) ~~reduce production costs~~ increase overall farm 
  5.7   profitability; and 
  5.8      (4) result in environmental benefits.  
  5.9      (d) A loan application must show that the loan can be 
  5.10  repaid by the applicant.  
  5.11     (e) The commissioner must consider the recommendations of 
  5.12  the loan review panel and may make loans for eligible projects.  
  5.13  ~~Priority must be given based on the amount of savings realized~~ 
  5.14  ~~by adopting the practice implemented by the loan.~~ 
  5.15     Subd. 4.  [ADMINISTRATION; INFORMATION DISSEMINATION.] The 
  5.16  amount in the revolving loan account is appropriated to the 
  5.17  commissioner to make loans under this section and administer the 
  5.18  loan program.  The interest on the money in the revolving loan 
  5.19  account and the interest on loans repaid to the state may be 
  5.20  spent by the commissioner for administrative expenses.  The 
  5.21  commissioner shall collect and disseminate information relating 
  5.22  to projects for which loans are given under this section. 
  5.23     Subd. 5.  [FARM MANURE DIGESTER TECHNOLOGY.] Appropriations 
  5.24  in Laws 1998, chapter 401, section 6, must be used for revolving 
  5.25  loans for demonstration projects of farm manure digester 
  5.26  technology.  Notwithstanding the limitations of subdivision 2, 
  5.27  paragraphs (b) and (c), loans under this subdivision are 
  5.28  no-interest loans in principal amounts not to exceed $200,000 
  5.29  and may be made to any resident of this state.  Loans for one or 
  5.30  more projects must be made only after the commissioner seeks 
  5.31  applications.  Loans under this program may be used as a match 
  5.32  for federal loans or grants.  Money repaid from loans must be 
  5.33  returned to the revolving fund for future projects. 
  5.34     Sec. 5.  Minnesota Statutes 2000, section 17.116, is 
  5.35  amended to read: 
  5.36     17.116 [SUSTAINABLE AGRICULTURE DEMONSTRATION GRANTS.] 
  6.1      Subdivision 1.  [ESTABLISHMENT.] The commissioner ~~of~~ 
  6.2   ~~agriculture~~ shall establish a grant program for sustainable 
  6.3   agriculture methods that demonstrates best management practices, 
  6.4   including farm input reduction or management, enterprise 
  6.5   diversification including new crops and livestock, farm energy 
  6.6   efficiency~~,~~ or ~~usable on-farm energy~~ production, or the transfer 
  6.7   of technologies that enhance the environment and farm 
  6.8   profitability.  The commissioner shall use the program to 
  6.9   demonstrate and publicize the energy efficiency, environmental 
  6.10  benefit, and profitability of sustainable agriculture techniques 
  6.11  or systems from production through marketing.  The grants must 
  6.12  fund research or demonstrations on farms ~~of external input~~ 
  6.13  ~~reduction techniques or farm scale energy production methods~~ 
  6.14  consistent with the program objectives. 
  6.15     Subd. 2.  [ELIGIBILITY.] (a) Grants may only be made to 
  6.16  farmers, educational institutions, individuals at educational 
  6.17  institutions, or nonprofit organizations residing or located in 
  6.18  the state for research or demonstrations on farms in the state. 
  6.19     (b) Grants may only be made for projects that show: 
  6.20     (1) the ability to maximize direct or indirect energy 
  6.21  savings or production; 
  6.22     (2) a positive effect or reduced adverse effect on the 
  6.23  environment; and 
  6.24     (3) increased profitability for the individual farm by 
  6.25  reducing costs or improving marketing opportunities. 
  6.26     Subd. 3.  [AWARDING OF GRANTS.] (a) Applications for grants 
  6.27  must be made to the commissioner on forms prescribed by the 
  6.28  commissioner. 
  6.29     (b) The applications must be reviewed, ranked, and 
  6.30  recommended by a technical review panel appointed by the 
  6.31  commissioner.  The technical review panel shall consist of a 
  6.32  soil scientist, an agronomist, a representative from a 
  6.33  post-secondary educational institution, an agricultural 
  6.34  marketing specialist, two resident farmers of the state using 
  6.35  sustainable agriculture methods, two resident farmers of the 
  6.36  state using organic agriculture methods, and a chair from the 
  7.1   department.  
  7.2      (c) The technical review panel shall rank applications 
  7.3   according to the following criteria: 
  7.4      (1) direct or indirect energy savings or production; 
  7.5      (2) environmental benefit; 
  7.6      (3) farm profitability; 
  7.7      (4) the number of farms able to apply the techniques or the 
  7.8   technology proposed; 
  7.9      (5) the effectiveness of the project as a demonstration; 
  7.10     (6) the immediate transferability of the project to farms; 
  7.11  and 
  7.12     (7) the ability of the project to accomplish its goals. 
  7.13     (d) The commissioner shall consider the recommendations of 
  7.14  the technical review panel and may award grants for eligible 
  7.15  projects.  Priority must be given to applicants who are farmers 
  7.16  or groups of farmers. 
  7.17     (e) Grants for eligible projects may not exceed $25,000 
  7.18  unless the portion above $25,000 is matched on an equal basis by 
  7.19  the applicant's cash or in-kind land use contribution.  Grant 
  7.20  funding of projects may not exceed $50,000 under this section, 
  7.21  but applicants may utilize other funding sources.  A portion of 
  7.22  each grant must be targeted for public information activities of 
  7.23  the project. 
  7.24     (f) A project may continue for up to three years.  
  7.25  Multiyear projects must be reevaluated by the technical review 
  7.26  panel and the commissioner before second or third year funding 
  7.27  is approved.  A project is limited to one grant for its funding. 
  7.28     Sec. 6.  Minnesota Statutes 2000, section 17.117, is 
  7.29  amended to read: 
  7.30     17.117 [AGRICULTURE BEST MANAGEMENT PRACTICES LOAN 
  7.31  PROGRAM.] 
  7.32     Subdivision 1.  [PURPOSE.] The purpose of the agriculture 
  7.33  best management practices loan program is to provide low or no 
  7.34  interest financing to farmers, agriculture supply businesses, 
  7.35  and rural landowners for the implementation of agriculture and 
  7.36  other best management practices that reduce environmental 
  8.1   pollution. 
  8.2      Subd. 2.  [AUTHORITY.] The commissioner ~~shall~~ may develop 
  8.3   administrative guidelines specifying criteria, standards, and 
  8.4   procedures for making loans and establish, adopt rules for, and 
  8.5   implement a program to make loans or otherwise provide funds to 
  8.6   local units of government, federal authorities, lending 
  8.7   institutions, and other appropriate organizations who will in 
  8.8   turn provide loans to landowners and businesses for facilities, 
  8.9   fixtures, equipment, or other ~~sustainable~~ best management 
  8.10  practices that prevent or mitigate ~~sources of nonpoint source~~ 
  8.11  ~~water~~ pollution or other adverse environmental impacts.  ~~The~~ 
  8.12  ~~commissioner shall establish pilot projects to develop~~ 
  8.13  ~~procedures for implementing the program.  The commissioner shall~~ 
  8.14  ~~develop administrative guidelines to implement the pilot~~ 
  8.15  ~~projects specifying criteria, standards, and procedures for~~ 
  8.16  ~~making loans.~~  The agriculture best management practices loan 
  8.17  program must provide a consistent programmatic framework for the 
  8.18  disbursement and administration of funds available to the 
  8.19  commissioner designated to the program for protection of 
  8.20  environmental quality or remediation or mitigation of adverse 
  8.21  environmental impacts.  The distribution of loans or funds 
  8.22  through the program must comply with all limitations, 
  8.23  provisions, or requirements of the respective funding sources.  
  8.24  Unless otherwise limited by the funding source, the commissioner 
  8.25  shall manage the program using perpetual revolving fund accounts.
  8.26     Subd. 3.  [APPROPRIATIONS.] Up to $140,000,000 of the 
  8.27  balance in the water pollution control revolving fund in section 
  8.28  446A.07, as determined by the public facilities authority, is 
  8.29  appropriated to the commissioner for the establishment of this 
  8.30  program.  In addition, the commissioner may receive 
  8.31  appropriations from the legislature and grants or funds from 
  8.32  other sources for implementation of the program. 
  8.33     Subd. 4.  [DEFINITIONS.] For the purposes of this section, 
  8.34  the terms defined in this subdivision have the meanings given 
  8.35  them. 
  8.36     (a) "Agricultural and environmental revolving accounts" 
  9.1   means accounts in the state treasury, controlled by the 
  9.2   commissioner, which hold funds available to the program. 
  9.3      (b) "Agriculture supply business" means a person, 
  9.4   partnership, joint venture, corporation, limited liability 
  9.5   company, association, firm, public service company, or 
  9.6   cooperative that provides materials, equipment, or services to 
  9.7   farmers or agriculture-related enterprises. 
  9.8      (c) "Allocation" means the funds awarded to an applicant 
  9.9   for implementation of best management practices through a 
  9.10  competitive or noncompetitive application process. 
  9.11     ~~(a)~~ (d) "Applicant" means a ~~county or a local government~~ 
  9.12  ~~unit designated by a county under subdivision 8, paragraph~~ 
  9.13  ~~(a)~~ local unit of government eligible to participate in this 
  9.14  program that requests an allocation of funds as provided in 
  9.15  subdivision 6b. 
  9.16     ~~(b) "Authority" means the Minnesota public facilities~~ 
  9.17  ~~authority as established in section 446A.03.~~ 
  9.18     ~~(c)~~ (e) "Best management practices" has the meaning given 
  9.19  in sections 103F.711, subdivision 3, and 103H.151, subdivision 2 
  9.20  or other practices, techniques, and measures that have been 
  9.21  demonstrated to the satisfaction of the commissioner to prevent 
  9.22  or reduce adverse environmental impacts by using the most 
  9.23  effective and practicable means of achieving environmental goals.
  9.24     ~~(d) "Chair" means the chair of the board of water and soil~~ 
  9.25  ~~resources or the designee of the chair.~~ 
  9.26     ~~(e)~~ (f) "Borrower" means ~~an individual~~ a farmer, an 
  9.27  agriculture supply business, or a rural landowner applying for a 
  9.28  low-interest loan. 
  9.29     ~~(f)~~ (g) "Commissioner" means the commissioner of 
  9.30  agriculture, including when the commissioner is acting in the 
  9.31  capacity of chair of the rural finance authority, or the 
  9.32  designee of the commissioner. 
  9.33     (h) "Committed project" means an eligible project scheduled 
  9.34  to be implemented at a future date:  
  9.35     (1) that has been approved and certified by the local 
  9.36  government unit; and 
 10.1      (2) for which a local lender has obligated itself to offer 
 10.2   a loan. 
 10.3      ~~(g)~~ (i) "Comprehensive water management plan" means a state 
 10.4   approved and locally adopted plan authorized under section 
 10.5   103B.231, 103B.255, 103B.311, 103C.331, 103D.401, or 103D.405. 
 10.6      ~~(h) "Local allocation request" means a loan allocation~~ 
 10.7   ~~request from an applicant to implement agriculturally related~~ 
 10.8   ~~best management practices defined in paragraph (c).~~ 
 10.9      (j) "Cost incurred" means expenses for implementation of a 
 10.10  project accrued because the borrower has agreed to purchase 
 10.11  equipment or is obligated to pay for services or materials 
 10.12  already provided as a result of implementing a prior approved 
 10.13  eligible project. 
 10.14     (k) "Farmer" means a person, partnership, joint venture, 
 10.15  corporation, limited liability company, association, firm, 
 10.16  public service company, or cooperative who regularly 
 10.17  participates in physical labor or operations management of 
 10.18  farming and files a Schedule F as part of filing United States 
 10.19  Internal Revenue Service Form 1040 or indicates farming as the 
 10.20  primary business activity under Schedule C, K, or S, or any 
 10.21  other applicable report to the United States Internal Revenue 
 10.22  Service. 
 10.23     ~~(i)~~ (l) "Lender agreement" means ~~a loan agreement entered~~ 
 10.24  ~~into between the commissioner, a local lender, and the~~ 
 10.25  ~~applicant, if different from the local lender.  The agreement~~ 
 10.26  ~~will contain terms and conditions of the loan that will include~~ 
 10.27  ~~but need not be limited to general loan provisions, loan~~ 
 10.28  ~~management requirements, application of payments, loan term~~ 
 10.29  ~~limits, allowable expenses, and fee limitations~~ an agreement 
 10.30  entered into between the commissioner and a local lender which 
 10.31  contains terms and conditions of participation in the program. 
 10.32     ~~(j)~~ (m) "Local government unit" means a county, soil and 
 10.33  water conservation district, or an organization formed for the 
 10.34  joint exercise of powers under section 471.59 with the authority 
 10.35  to participate in the program. 
 10.36     ~~(k)~~ (n) "Local lender" means a local government unit as 
 11.1   defined in paragraph ~~(j)~~ (m), a state or federally chartered 
 11.2   bank, a savings association, a state or federal credit 
 11.3   union, Agribank and its affiliated organizations, or a nonprofit 
 11.4   economic development organization or other financial lending 
 11.5   institution approved by the commissioner~~, or Farm Credit~~ 
 11.6   ~~Services~~. 
 11.7      (o) "Local revolving loan account" means the account held 
 11.8   by a local government unit and a local lender into which 
 11.9   principal repayments from borrowers are deposited and new loans 
 11.10  are issued in accordance with the requirements of the program 
 11.11  and lender agreements. 
 11.12     ~~(l)~~ (p) "Nonpoint source" has the meaning given in section 
 11.13  103F.711, subdivision 6. 
 11.14     (q) "Program" means the agriculture best management 
 11.15  practices loan program in this section. 
 11.16     (r) "Project" means one or more components or activities 
 11.17  located within Minnesota that are required by the local 
 11.18  government unit to be implemented for satisfactory completion of 
 11.19  an eligible best management practice. 
 11.20     (s) "Rural landowner" means the owner of record of 
 11.21  Minnesota real estate located in an area determined by the local 
 11.22  government unit to be rural after consideration of local land 
 11.23  use patterns, zoning regulations, jurisdictional boundaries, 
 11.24  local community definitions, historical uses, and other 
 11.25  pertinent local factors. 
 11.26     Subd. 5.  [USES OF FUNDS.] Use of funds under this section 
 11.27  must be in compliance with the rules and regulations of the 
 11.28  funding source or appropriation.  Use of funds from the public 
 11.29  facilities authority must comply with the federal Water 
 11.30  Pollution Control Act, section 446A.07, and eligible activities 
 11.31  listed in the intended use plan authorized in section 446A.07, 
 11.32  subdivision 4. 
 11.33     Subd. 5a.  [AGRICULTURAL AND ENVIRONMENTAL REVOLVING 
 11.34  ACCOUNTS.] (a) There shall be established in the state treasury 
 11.35  revolving accounts eligible to receive appropriations, 
 11.36  allocations from the public facilities authority, and money from 
 12.1   other sources.  All repayments of loans granted under this 
 12.2   section, including principal and interest, must be deposited 
 12.3   into the appropriate revolving account.  Interest earned in an 
 12.4   account accrues to that account. 
 12.5      (b) The money in these accounts is appropriated and 
 12.6   allocated to the commissioner for the purposes of this section, 
 12.7   provided the source of funds within the accounts allow for those 
 12.8   expenditures. 
 12.9      Subd. 6.  [APPLICATION.] (a) Only the following local 
 12.10  government units may apply for funds under this program: 
 12.11     (1) counties or their designees; 
 12.12     (2) soil and water conservation districts; and 
 12.13     (3) joint power organizations consisting of counties or 
 12.14  their designees or soil and water conservation districts. 
 12.15     (b) A county may submit an application for an allocation.  
 12.16  A county or a group of counties may designate another local 
 12.17  government unit to submit a local allocation request on their 
 12.18  behalf.  If a county does not submit an application, and does 
 12.19  not designate another local government unit, a soil and water 
 12.20  conservation district may submit an application for an 
 12.21  allocation.  If the local soil and water conservation district 
 12.22  does not submit an application, then an eligible joint powers 
 12.23  organization may submit an application for an allocation.  In 
 12.24  all instances, there may be only one application representing 
 12.25  any geographic area.  The applicant must coordinate and submit 
 12.26  requests on behalf of other units of government within the 
 12.27  geographic jurisdiction of the applicant. 
 12.28     ~~(a)~~ (c) The commissioner must prescribe forms and establish 
 12.29  an application process for applicants to apply for ~~a local~~ an 
 12.30  allocation ~~request~~ of funds.  The application must include but 
 12.31  need not be limited to (1) the geographic area served; (2) the 
 12.32  type and estimated cost of activities or projects for which they 
 12.33  are seeking ~~a loan~~ an allocation; and (3) ~~a ranking~~ 
 12.34  prioritization or targeting of proposed activities or projects~~;~~ 
 12.35  ~~and (4) the designation of the local lender and lending~~ 
 12.36  ~~practices the local lender intends to use to issue the loans to~~ 
 13.1   ~~the borrowers, if a local lender other than the applicant is to~~ 
 13.2   ~~be used~~. 
 13.3      ~~(b)~~ (d) If ~~a local allocation request~~ an application is 
 13.4   rejected, the applicant must be notified in writing as to the 
 13.5   reasons for the rejection and given 30 days to submit a revised 
 13.6   application.  The revised application shall be reviewed 
 13.7   according to the same procedure used to review the initial 
 13.8   application.  Failure of an applicant to be awarded funds does 
 13.9   not constitute a rejection of the application. 
 13.10     Subd. 6a.  [REVIEW AND RANKING OF APPLICATIONS.] (a) The 
 13.11  commissioner shall chair the subcommittee established in section 
 13.12  103F.761, subdivision 2, paragraph (b), for purposes of 
 13.13  reviewing and ranking applications and recommending to the 
 13.14  commissioner allocation amounts.  The subcommittee consists of 
 13.15  representatives of the departments of agriculture, natural 
 13.16  resources, and health; the pollution control agency; the board 
 13.17  of water and soil resources; the Farm Service Agency and the 
 13.18  Natural Resource Conservation Service of the United States 
 13.19  Department of Agriculture; the Association of Minnesota 
 13.20  Counties; the Minnesota Association of Soil and Water 
 13.21  Conservation Districts; and other agencies or associations the 
 13.22  commissioner determines are appropriate. 
 13.23     (b) The subcommittee must use the criteria in clauses (1) 
 13.24  to (9) as well as other criteria it determines appropriate in 
 13.25  carrying out the review and ranking: 
 13.26     (1) whether the proposed activities are identified in a 
 13.27  comprehensive water management plan or other appropriate local 
 13.28  planning documents as priorities; 
 13.29     (2) the potential that the proposed activities have for 
 13.30  improving or protecting environmental quality; 
 13.31     (3) the extent that the proposed activities support 
 13.32  areawide or multijurisdictional approaches to protecting 
 13.33  environmental quality based on defined watershed or similar 
 13.34  geographic areas; 
 13.35     (4) whether the activities are needed for compliance with 
 13.36  existing environmental laws or rules; 
 14.1      (5) whether the proposed activities demonstrate 
 14.2   participation, coordination, and cooperation between local units 
 14.3   of government and other public agencies; 
 14.4      (6) whether there is coordination with other public and 
 14.5   private funding sources and programs; 
 14.6      (7) whether the applicant has targeted specific best 
 14.7   management practices to resolve specific environmental problems; 
 14.8      (8) past performance of the applicant in completing 
 14.9   projects identified in prior applications and allocation 
 14.10  agreements; and 
 14.11     (9) whether there are off-site public benefits. 
 14.12     Subd. 6b.  [ALLOCATION AMOUNT.] (a) The subcommittee 
 14.13  created in subdivision 6a shall recommend to the commissioner 
 14.14  the amount of allocation for each applicant.  This allocation 
 14.15  must include: 
 14.16     (1) the amount of repayments received by the commissioner 
 14.17  during the previous year from prior completed projects approved 
 14.18  by the local government unit; and 
 14.19     (2) the amount of funds previously designated to committed 
 14.20  projects. 
 14.21     (b) Within the limits of the funds available to the 
 14.22  commissioner, the subcommittee may recommend an increased 
 14.23  allocation award to the applicant based on: 
 14.24     (1) the ranking of the local government unit application 
 14.25  under subdivision 6a; and 
 14.26     (2) the amount of unallocated or uncommitted funds in, or 
 14.27  that will be received by, the agricultural and environmental 
 14.28  revolving accounts within one year. 
 14.29     (c) Notwithstanding paragraphs (a) and (b), the 
 14.30  commissioner may reserve up to two percent of all funds 
 14.31  appropriated to the agricultural and environmental revolving 
 14.32  accounts to be allocated to applicants that disburse or commit 
 14.33  all of their current allocations or to local lenders who wish to 
 14.34  provide financial assistance.  
 14.35     The commissioner may add, for the purposes of calculating 
 14.36  future allocations under paragraphs (a) and (b), the loan amount 
 15.1   for projects financed from these reserved funds to the 
 15.2   allocation for the respective local government units in which 
 15.3   jurisdiction the project was completed.  
 15.4      Subd. 7.  [PAYMENTS TO LOCAL LENDERS.] (a) Payments made 
 15.5   from the ~~water pollution control revolving fund~~ commissioner to 
 15.6   the local lender must be made in accordance with applicable 
 15.7   state and federal laws and rules governing the payments and the 
 15.8   lender agreement. 
 15.9      (b) Payments from the commissioner to the local lender must 
 15.10  be disbursed on a cost-incurred basis.  ~~Local lenders shall~~ 
 15.11  ~~submit payment requests at least quarterly but not more than~~ 
 15.12  ~~monthly.  Payment requests must be reviewed and approved by the~~ 
 15.13  ~~commissioner.  The payment request form must itemize all costs~~ 
 15.14  ~~by major elements and show eligible and ineligible costs.~~  The 
 15.15  request must be made in accordance with requirements and 
 15.16  procedures established by the commissioner.  Payment requests 
 15.17  must be reviewed and approved by the commissioner. 
 15.18     ~~(c) The commissioner may initiate recision of an allocation~~ 
 15.19  ~~granted in a lender agreement as provided in subdivision 11,~~ 
 15.20  ~~paragraph (d), if the local lender fails to enter into loans~~ 
 15.21  ~~with borrowers equaling the total allocation granted within one~~ 
 15.22  ~~year from the date of the lender agreement or fails to have the~~ 
 15.23  ~~total amount of allocated funds drawn down through payment~~ 
 15.24  ~~requests within two years.  An additional year to draw down the~~ 
 15.25  ~~undisbursed portion of an allocation may be granted by the~~ 
 15.26  ~~commissioner under extenuating circumstances.~~  
 15.27     Subd. 8.  [~~APPLICANT; BORROWERS~~ ALLOCATION AGREEMENT.] ~~(a)~~ 
 15.28  ~~A county may submit a local allocation request.  A county or a~~ 
 15.29  ~~group of counties may designate another local government unit to~~ 
 15.30  ~~submit a local allocation request.~~ 
 15.31     ~~(b) If a county does not submit a local allocation request,~~ 
 15.32  ~~and does not designate another local government unit, a soil and~~ 
 15.33  ~~water conservation district may submit a local allocation~~ 
 15.34  ~~request.  In all instances, there may be only one request from a~~ 
 15.35  ~~county.  The applicant must coordinate and submit requests on~~ 
 15.36  ~~behalf of other units of government within the geographic~~ 
 16.1   ~~jurisdiction of the applicant.~~ (a) Eligible local government 
 16.2   units with an allocation award may enter into an allocation 
 16.3   agreement with the commissioner and participate in this program. 
 16.4      (b) The allocation agreement must contain terms and 
 16.5   conditions for participation in this program and providing of 
 16.6   funds through this program, including, but not limited to:  
 16.7   program requirements, reporting requirements, project 
 16.8   eligibility and limitations, allowable expenses, limitations, 
 16.9   rescission and cancellation provisions, and the responsibilities 
 16.10  of the commissioner, local government unit, and local lender. 
 16.11     (c) If the commissioner determines that a local government 
 16.12  unit is not in compliance with the terms of the allocation 
 16.13  agreement, the commissioner may rescind all or part of any 
 16.14  allocation awarded through this program. 
 16.15     Subd. 9.  [~~REVIEW AND RANKING OF ALLOCATION REQUESTS~~ 
 16.16  ALLOCATION RESCISSION.] ~~(a) The commissioner shall chair the~~ 
 16.17  ~~subcommittee established in section 103F.761, subdivision 2,~~ 
 16.18  ~~paragraph (b), for purposes of reviewing and ranking local~~ 
 16.19  ~~allocation requests.  The rankings must be in order of priority~~ 
 16.20  ~~and shall provide financial assistance within the limits of the~~ 
 16.21  ~~funds available.  In carrying out the review and ranking, the~~ 
 16.22  ~~subcommittee must consist of, at a minimum, the chair,~~ 
 16.23  ~~representatives of the pollution control agency, United States~~ 
 16.24  ~~Department of Agricultural Stabilization and Conservation~~ 
 16.25  ~~Service, United States Department of Agriculture Soil~~ 
 16.26  ~~Conservation Service, Association of Minnesota Counties, and~~ 
 16.27  ~~other agencies or associations as the commissioner, the chair,~~ 
 16.28  ~~and agency determine are appropriate.  The review and ranking~~ 
 16.29  ~~shall take into consideration other related state or federal~~ 
 16.30  ~~programs.~~ 
 16.31     ~~(b) The subcommittee shall use the criteria listed below in~~ 
 16.32  ~~carrying out the review and ranking:~~ 
 16.33     ~~(1) whether the proposed activities are identified in a~~ 
 16.34  ~~comprehensive water management plan as priorities;~~ 
 16.35     ~~(2) whether the applicant intends to establish a revolving~~ 
 16.36  ~~loan program under subdivision 10, paragraph (b);~~ 
 17.1      ~~(3) the potential that the proposed activities have for~~ 
 17.2   ~~improving or protecting surface and groundwater quality;~~ 
 17.3      ~~(4) the extent that the proposed activities support~~ 
 17.4   ~~areawide or multijurisdictional approaches to protecting water~~ 
 17.5   ~~quality based on defined watershed;~~ 
 17.6      ~~(5) whether the activities are needed for compliance with~~ 
 17.7   ~~existing water related laws or rules;~~ 
 17.8      ~~(6) whether the proposed activities demonstrate~~ 
 17.9   ~~participation, coordination, and cooperation between local units~~ 
 17.10  ~~of government and other public agencies;~~ 
 17.11     ~~(7) whether there is coordination with other public and~~ 
 17.12  ~~private funding sources and programs;~~ 
 17.13     ~~(8) whether there are off-site public benefits such as~~ 
 17.14  ~~preventing downstream degradation and siltation; and~~ 
 17.15     ~~(9) the proposed interest rate.~~ (a) Continued availability 
 17.16  of allocations granted to a local government unit is contingent 
 17.17  upon the commissioner's approval of the local government unit's 
 17.18  annual report.  The commissioner shall review this annual report 
 17.19  to ensure that the past and future uses of the funds are 
 17.20  consistent with the comprehensive water management plan, other 
 17.21  local planning documents, the requirements of the funding 
 17.22  source, and compliance to program requirements.  If the 
 17.23  commissioner concludes the past or intended uses of the money 
 17.24  are not consistent with these requirements, the commissioner 
 17.25  shall rescind all or part of the allocation awarded to a local 
 17.26  government unit. 
 17.27     (b) The commissioner may rescind funds allocated to the 
 17.28  local government unit that are not designated to committed 
 17.29  projects or disbursed within one year from the date of the 
 17.30  allocation agreement. 
 17.31     (c) An additional year to use the undisbursed portion of an 
 17.32  allocation may be granted by the commissioner under extenuating 
 17.33  circumstances. 
 17.34     Subd. 9a.  [AUTHORITY AND RESPONSIBILITIES OF ~~APPLICANTS~~ 
 17.35  THE LOCAL GOVERNMENT UNITS.] ~~Applicants may enter into a lender~~ 
 17.36  ~~agreement designating a local lender.  Applicants designating~~ 
 18.1   ~~themselves as the local lender may enter into contracts for loan~~ 
 18.2   ~~review, processing, and servicing.~~ (a) A local government unit 
 18.3   that enters into an allocation agreement with the commissioner: 
 18.4      (1) is responsible for the local administration and 
 18.5   implementation of the program in accordance with this section; 
 18.6      (2) may submit applications for allocations to the 
 18.7   commissioner; 
 18.8      (3) shall identify, develop, determine eligibility, define 
 18.9   and approve projects, designate maximum loan amounts for 
 18.10  projects, and certify completion of projects implemented under 
 18.11  this program.  In areas where no local government unit has 
 18.12  applied for funds under this program, the commissioner may 
 18.13  appoint a local government unit to review and certify projects 
 18.14  or the commissioner may assume the authority and responsibility 
 18.15  of the local government unit; 
 18.16     (4) shall certify as eligible only projects that are within 
 18.17  its geographic jurisdiction or within the geographic area 
 18.18  identified in its local comprehensive water management plans or 
 18.19  other local planning documents; 
 18.20     (5) may require withholding by the local lender of all or a 
 18.21  portion of the loan to the borrower until satisfactory 
 18.22  completion of all required components of a certified project; 
 18.23     (6) must identify which account is used to finance an 
 18.24  approved project if the local government unit has allocations 
 18.25  from multiple accounts in the agricultural and environmental 
 18.26  revolving accounts; 
 18.27     (7) shall report to the commissioner annually the past and 
 18.28  intended uses of allocations awarded; and 
 18.29     (8) may request additional funds in excess of their 
 18.30  allocation when funds are available in the agricultural and 
 18.31  environmental revolving accounts, as long as all other 
 18.32  allocation awards to the local government unit have been used or 
 18.33  committed. 
 18.34     (b) If a local government unit withdraws from participation 
 18.35  in this program, the local government unit, or the commissioner 
 18.36  in accordance with the priorities established under subdivision 
 19.1   6a, may designate another local government unit that is eligible 
 19.2   under subdivision 6, as the new local government unit 
 19.3   responsible for local administration of this program.  This 
 19.4   designated local government unit may accept responsibility and 
 19.5   administration of allocations awarded to the former responsible 
 19.6   local government unit. 
 19.7      Subd. 9b.  [LENDER AGREEMENT.] (a) Any local lender 
 19.8   entering into a lender agreement with the commissioner may 
 19.9   participate in this program. 
 19.10     (b) The lender agreement will contain terms and conditions 
 19.11  for participation in this program and providing funds to the 
 19.12  local lenders, including but not limited to, program 
 19.13  requirements, loan and account management requirements, 
 19.14  payments, repayments, term limits, allowable expenses, fee 
 19.15  limitations, rescission and cancellation provisions, collateral 
 19.16  and security requirements, reporting requirements, review and 
 19.17  appeal procedure for cancellation of the loan agreement or 
 19.18  disqualification as a local lender, and the responsibilities of 
 19.19  the commissioner, local government unit, and local lender. 
 19.20     (c) If the commissioner determines that a local lender is 
 19.21  not in compliance with the terms of the lender agreement, the 
 19.22  commissioner may take the following actions: 
 19.23     (1) disqualifying the local lender as a participating 
 19.24  lender in this program for a period of up to five years from the 
 19.25  date that the commissioner determines noncompliance to the 
 19.26  lender agreement; and 
 19.27     (2) requiring immediate or accelerated repayment of all or 
 19.28  part of all funds provided to the local lender. 
 19.29     (d) Existing lender agreements, executed prior to July 1, 
 19.30  2001, may be amended by mutual consent of all signatory parties, 
 19.31  to comply with this section, to establish a single allocation 
 19.32  agreement that includes the amount of prior allocation awards 
 19.33  and defines the terms and conditions required under subdivision 
 19.34  8, or to modify the amount of allocation awarded. 
 19.35     Subd. 10.  [AUTHORITY AND RESPONSIBILITIES OF LOCAL 
 19.36  LENDERS.] (a) Local lenders may enter into lender agreements 
 20.1   with the commissioner. 
 20.2      (b) Local lenders may enter into loan agreements with 
 20.3   borrowers to finance eligible projects under this section. 
 20.4      (c) ~~Local lenders may establish revolving loan programs to~~ 
 20.5   ~~finance projects under this section~~ The local lender shall 
 20.6   notify the local government unit of the loan amount issued to 
 20.7   the borrower after the closing of each loan. 
 20.8      (d) Local lenders with local revolving loan accounts 
 20.9   created before July 1, 2001, may continue to retain and use 
 20.10  those accounts in accordance with their lending agreements for 
 20.11  the full term of those agreements. 
 20.12     (e) Local lenders, including ~~applicants~~ local government 
 20.13  units designating themselves as the local lender, may enter into 
 20.14  participation agreements with other lenders. 
 20.15     (f) Local lenders may ~~also~~ enter into contracts with other 
 20.16  lenders for the limited purposes of loan review, processing and 
 20.17  servicing, or to enter into loan agreements with borrowers to 
 20.18  finance projects under this section.  Other lenders entering 
 20.19  into contracts with local lenders under this section must meet 
 20.20  the definition of local lender in subdivision 4, must comply 
 20.21  with all provisions of the lender agreement and this section, 
 20.22  and must guarantee repayment of the loan funds to the local 
 20.23  lender.  ~~In no case may there be more than one local lender per~~ 
 20.24  ~~county or more than one revolving fund per county.~~ 
 20.25     (g) When required by the local government unit, a local 
 20.26  lender must withhold all or a portion of the loan disbursement 
 20.27  for a project until notified by the local government unit that 
 20.28  the project has been satisfactorily completed. 
 20.29     (h) The local lender is responsible for repaying all funds 
 20.30  provided by the commissioner to the local lender. 
 20.31     (i) The local lender is responsible for collecting 
 20.32  repayments from borrowers.  If a borrower defaults on a loan 
 20.33  issued by the local lender, it is the responsibility of the 
 20.34  local lender to obtain repayment from the borrower.  Default on 
 20.35  the part of borrowers shall have no effect on the local lender's 
 20.36  responsibility to repay its obligations to the commissioner 
 21.1   whether or not the local lender fully recovers defaulted amounts 
 21.2   from borrowers. 
 21.3      (j) The local lender shall provide sufficient collateral or 
 21.4   protection to the commissioner for the funds provided to the 
 21.5   local lender.  The commissioner must approve the collateral or 
 21.6   protection provided. 
 21.7      Subd. 11.  [LOANS ISSUED TO BORROWER ~~ELIGIBILITY; TERMS;~~ 
 21.8   ~~REPAYMENT; RECISION~~.] (a) Local lenders ~~shall use the following~~ 
 21.9   ~~criteria in addition to other criteria they deem necessary in~~ 
 21.10  ~~determining the eligibility of borrowers for loans:~~ 
 21.11     ~~(1) whether the activity is certified by a local unit of~~ 
 21.12  ~~government~~ may issue loans only for projects that are approved 
 21.13  and certified by the local government unit as meeting priority 
 21.14  needs identified in a comprehensive water management plan ~~and is~~ 
 21.15  or other local planning documents, are in compliance with 
 21.16  accepted practices, standards, specifications, or criteria~~;~~ 
 21.17     ~~(2) whether the activity is certified as~~, and are eligible 
 21.18  for financing under Environmental Protection Agency or other 
 21.19  applicable guidelines~~; and~~ 
 21.20     ~~(3) whether the repayment is assured from the borrower~~. 
 21.21     (b) The local lender may use any additional criteria 
 21.22  considered necessary to determine the eligibility of borrowers 
 21.23  for loans. 
 21.24     (c) Local lenders shall set the terms and conditions of 
 21.25  loans to borrowers, except that: 
 21.26     (1) no loan to ~~an individual~~ a borrower may exceed $50,000; 
 21.27     (2) no loan for a project may exceed $50,000; and 
 21.28     (3) no borrower shall, at any time, have multiple loans 
 21.29  from this program with a total outstanding loan balance of more 
 21.30  than $50,000.  ~~In all instances, local lenders must provide for~~ 
 21.31  ~~sufficient collateral or protection for the loan principal.~~  
 21.32  ~~They are responsible for collecting repayments by borrowers.~~  
 21.33     ~~(c) The local lender is responsible for repaying the~~ 
 21.34  ~~principal of a loan to the commissioner.  The terms of repayment~~ 
 21.35  ~~will be identified in the lender agreement.  If defaults occur,~~ 
 21.36  ~~it is the responsibility of the local lender to obtain repayment~~ 
 22.1   ~~from the borrower.  Default on the part of individual borrowers~~ 
 22.2   ~~shall have no effect on the local lender's responsibility to~~ 
 22.3   ~~repay its loan from the commissioner whether or not the local~~ 
 22.4   ~~lender fully recovers defaulted amounts from individual~~ 
 22.5   ~~borrowers.  For revolving loan programs established under~~ 
 22.6   ~~subdivision 10, paragraph (c), the lender agreement must provide~~ 
 22.7   ~~that:~~ 
 22.8      ~~(1) repayment of principal to the commissioner must begin~~ 
 22.9   ~~no later than ten years after the date of the lender agreement~~ 
 22.10  ~~and must be repaid in full no later than 20 years after the date~~ 
 22.11  ~~of the lender agreement;~~ 
 22.12     ~~(2) after the initial ten-year period, the local lender~~ 
 22.13  ~~shall not write any additional loans, and any existing principal~~ 
 22.14  ~~balance held by the local lender shall be immediately repaid to~~ 
 22.15  ~~the commissioner;~~ 
 22.16     ~~(3) after the initial ten-year period, all principal~~ 
 22.17  ~~received by the local lender from borrowers shall be repaid to~~ 
 22.18  ~~the commissioner as it is received; and~~ 
 22.19     ~~(4) the applicant shall report to the commissioner annually~~ 
 22.20  ~~regarding the past and intended uses of the money in the~~ 
 22.21  ~~revolving loan program.~~ 
 22.22     ~~(d) Continued availability of the allocation granted in the~~ 
 22.23  ~~lender agreement is contingent upon commissioner approval of the~~ 
 22.24  ~~annual report.  The commissioner shall review the annual report~~ 
 22.25  ~~to ensure the past and future uses of the funds are consistent~~ 
 22.26  ~~with the comprehensive water management plan and the lender~~ 
 22.27  ~~agreement.  If the commissioner concludes the past or intended~~ 
 22.28  ~~uses of the money are not consistent with the comprehensive~~ 
 22.29  ~~water management plan or the lender agreement, the commissioner~~ 
 22.30  ~~shall rescind the allocation granted under the lender agreement.~~ 
 22.31  ~~Such recision shall result in termination of available~~ 
 22.32  ~~allocation, the immediate repayment of any unencumbered funds~~ 
 22.33  ~~held by the local lender in a revolving loan fund, and the~~ 
 22.34  ~~repayment of the principal portion of loan repayments to the~~ 
 22.35  ~~commissioner as they are received.  The lender agreement shall~~ 
 22.36  ~~reflect the commissioner's rights under this paragraph.~~ 
 23.1      ~~(e) A local lender shall receive certification from local~~ 
 23.2   ~~government unit staff that a project has been satisfactorily~~ 
 23.3   ~~completed prior to releasing the final loan disbursement.~~ 
 23.4      (d) The maximum term length for conservation tillage and 
 23.5   individual sewage treatment system projects is five years.  The 
 23.6   maximum term length for other projects in this paragraph is ten 
 23.7   years. 
 23.8      (e) Fees charged at the time of closing must: 
 23.9      (1) be in compliance with normal and customary practices of 
 23.10  the local lender; 
 23.11     (2) be in accordance with published fee schedules issued by 
 23.12  the local lender; 
 23.13     (3) not be based on participation program; and 
 23.14     (4) be consistent with fees charged other similar types of 
 23.15  loans offered by the local lender. 
 23.16     (f) The interest rate assessed to outstanding loan balance 
 23.17  by the local lender must not exceed three percent per year. 
 23.18     Subd. 11a.  [ELIGIBLE PROJECTS.] All projects that 
 23.19  remediate or mitigate adverse environmental impacts are eligible 
 23.20  if: 
 23.21     (1) the project is eligible under the allocation agreement 
 23.22  and provisions of the originating appropriation or funding 
 23.23  sources designated by the local government unit to finance the 
 23.24  project; and 
 23.25     (2) manure management projects remediate or mitigate 
 23.26  impacts from facilities with less than 1,000 animal units as 
 23.27  defined in Minnesota Rules, chapter 7020. 
 23.28     Subd. 12.  [DATA PRIVACY.] The following data on ~~applicants~~ 
 23.29  local government units, local lenders, or borrowers collected by 
 23.30  the commissioner under this section are private for data on 
 23.31  individuals as provided in section 13.02, subdivision 12, or 
 23.32  nonpublic for data not on individuals as provided in section 
 23.33  13.02, subdivision 9:  financial information, including, but not 
 23.34  limited to, credit reports, financial statements, tax returns 
 23.35  and net worth calculations received or prepared by the 
 23.36  commissioner. 
 24.1      ~~Subd. 13.  [ESTABLISHMENT OF ACCOUNT.] The authority shall~~ 
 24.2   ~~establish an account called the agriculture best management~~ 
 24.3   ~~practices revolving fund to provide loans and other forms of~~ 
 24.4   ~~financial assistance authorized under section 446A.07.  The fund~~ 
 24.5   ~~must be credited with repayments.~~ 
 24.6      ~~Subd. 14.  [FEES AND INTEREST.] (a) Origination fees~~ 
 24.7   ~~charged directly to borrowers by local lenders upon executing a~~ 
 24.8   ~~loan shall not exceed one-half of one percent of the loan~~ 
 24.9   ~~amount.  Interest assessed to loan repayments by the local~~ 
 24.10  ~~lender must not exceed three percent.~~  
 24.11     ~~(b) The local lender shall create a principal account to~~ 
 24.12  ~~which the principal portions of individual borrower loan~~ 
 24.13  ~~repayments will be credited.~~ 
 24.14     ~~(c) Any interest earned on outstanding loan balances not~~ 
 24.15  ~~separated as repayments are received and before the principal~~ 
 24.16  ~~amounts are deposited in the principal account shall be added to~~ 
 24.17  ~~the principal portion of the loan to the local lender and must~~ 
 24.18  ~~be paid to the commissioner when the principal is due under the~~ 
 24.19  ~~lender agreement.~~ 
 24.20     ~~(d) Any interest earned on the principal account must be~~ 
 24.21  ~~added to the principal portion of the loan to the local lender~~ 
 24.22  ~~and must be paid to the commissioner when the principal is due~~ 
 24.23  ~~under the lender agreement.~~ 
 24.24     Subd. 15.  [COMMISSIONER'S REPORT.] (a) The commissioner 
 24.25  ~~and chair~~ shall prepare and submit a report to the house of 
 24.26  representatives and senate committees with jurisdiction over the 
 24.27  environment, natural resources, and agriculture by October 15 of 
 24.28  each odd-numbered year. 
 24.29     (b) The report shall include, but need not be limited to, 
 24.30  matters such as loan allocations and uses, the extent to which 
 24.31  the financial assistance is helping implement local water and 
 24.32  other environmental planning priorities, the integration or 
 24.33  coordination that has occurred with related programs, and other 
 24.34  matters deemed pertinent to the implementation of the program. 
 24.35     Subd. 16.  [LIENS AGAINST PROPERTY.] (a) ~~Unless a county~~ 
 24.36  ~~determines otherwise, at the time of the disbursement of funds~~ 
 25.1   ~~on a loan to a borrower under this section, the principal~~ 
 25.2   ~~balance due plus accrued interest on the principal balance as~~ 
 25.3   ~~provided by this section becomes a lien in favor of the county~~ 
 25.4   ~~making the loan upon the real property on which the project is~~ 
 25.5   ~~located.  The lien must be first and prior to all other liens~~ 
 25.6   ~~against the property, including state tax liens, whether filed~~ 
 25.7   ~~before or after the placing of a lien under this subdivision,~~ 
 25.8   ~~except liens for special assessments by the county under~~ 
 25.9   ~~applicable special assessments laws, which liens shall be of~~ 
 25.10  ~~equal rank with the lien created under this subdivision.  A lien~~ 
 25.11  ~~in favor of the county shall be first and prior as provided in~~ 
 25.12  ~~this subdivision only if the county making the loan gives~~ 
 25.13  ~~written notice of the intent to make the loan under this~~ 
 25.14  ~~subdivision to all other persons having a recorded interest in~~ 
 25.15  ~~the real property subject to the lien, no less than 30 days~~ 
 25.16  ~~prior to the disbursement of the funds, and receives an~~ 
 25.17  ~~agreement to subordinate superior lien positions held by all~~ 
 25.18  ~~other lenders having a recorded interest in the real property~~ 
 25.19  ~~subject to the lien.  This lien and subordination agreement must~~ 
 25.20  ~~be recorded against the real estate in the county recorder's~~ 
 25.21  ~~office or filed with the registrar of titles for the county or~~ 
 25.22  ~~counties in which the property is located.  The county may bill~~ 
 25.23  ~~amounts due on the loan on the tax statement for the property.~~  
 25.24  ~~Enforcement of the lien created by this subdivision shall, at~~ 
 25.25  ~~the county's option, be in the manner set forth in chapter 580~~ 
 25.26  ~~or 581.  When the amount due plus interest has been paid, the~~ 
 25.27  ~~county shall file a satisfaction of the lien created under this~~ 
 25.28  ~~subdivision.~~  The amount of loans and accruing interest made by 
 25.29  counties acting as local lenders under this section is a lien 
 25.30  against the real property for which the improvement was made and 
 25.31  must be assessed against the property or properties benefited 
 25.32  unless the amount is prepaid.  An amount loaned under the 
 25.33  program and its accruing interest assessed against the property 
 25.34  is a priority lien only against subsequent liens. 
 25.35     (b) The county may bill amounts due on the loan on the tax 
 25.36  statement for the property.  Enforcement of the lien created by 
 26.1   this subdivision must, at the county's option, be in the manner 
 26.2   set forth in chapter 580 or 581.  When the amount due and all 
 26.3   interest has been paid, the county shall file a satisfaction of 
 26.4   the lien created under this subdivision. 
 26.5      ~~(b)~~ (c) A county may also secure amounts due on a loan 
 26.6   under this section by taking a purchase money security interest 
 26.7   in equipment in accordance with chapter 336, article 9, and may 
 26.8   enforce the purchase money security interest in accordance with 
 26.9   chapters 336, article 9, and 565. 
 26.10     Subd. 17.  [REFERENDUM EXEMPTION.] For the purpose of 
 26.11  obtaining a loan from the commissioner, a local government unit 
 26.12  acting as a local lender may provide to the commissioner its 
 26.13  general obligation note.  All obligations incurred by a local 
 26.14  government unit in obtaining a loan from the commissioner must 
 26.15  be in accordance with chapter 475, except that so long as the 
 26.16  obligations are issued to evidence a loan from the commissioner 
 26.17  to the local government unit, an election is not required to 
 26.18  authorize the obligations issued, and the amount of the 
 26.19  obligations shall not be included in determining the net 
 26.20  indebtedness of the local government unit under the provisions 
 26.21  of any law or chapter limiting the indebtedness. 
 26.22     Sec. 7.  Minnesota Statutes 2000, section 18B.01, is 
 26.23  amended by adding a subdivision to read: 
 26.24     Subd. 26a.  [SCHOOL PEST MANAGEMENT COORDINATOR.] "School 
 26.25  pest management coordinator" means a person employed by a school 
 26.26  district, private other than home-schooled, or parochial school 
 26.27  who is responsible for the planning, training, coordination, 
 26.28  communication, and implementation of a school's integrated pest 
 26.29  management program, including the application of pesticides to 
 26.30  the inside or outdoor property of the school as part of that 
 26.31  program. 
 26.32     Sec. 8.  [18B.095] [PESTICIDE APPLICATION IN SCHOOLS.] 
 26.33     Subdivision 1.  [AUTHORIZED APPLICATORS.] Application of a 
 26.34  pesticide to the inside or outdoor property of a school 
 26.35  district, private other than home-schooled, or parochial school 
 26.36  must be performed by: 
 27.1      (1) a structural pest control applicator; 
 27.2      (2) a commercial or noncommercial pesticide applicator with 
 27.3   appropriate use category certification; or 
 27.4      (3) a registered school pest management coordinator or a 
 27.5   school employee under the direction of a registered school pest 
 27.6   management coordinator. 
 27.7      Subd. 2.  [EXEMPTION.] Pesticides determined by the 
 27.8   commissioner to be sanitizers or disinfectants are exempt from 
 27.9   subdivision 1. 
 27.10     Subd. 3.  [REGISTRY AND INFORMATION.] The commissioner, in 
 27.11  consultation with the departments of health; administration; and 
 27.12  children, families, and learning; the University of Minnesota 
 27.13  Extension Service; the Minnesota School Boards Association; and 
 27.14  other persons as necessary and appropriate, must: 
 27.15     (1) establish and maintain a registry of school pest 
 27.16  management coordinators; and 
 27.17     (2) provide information on a regular and periodic basis to 
 27.18  registered school pest management coordinators on integrated 
 27.19  pest management techniques and programs, including model school 
 27.20  policies; proper pesticide use, storage, handling, and disposal; 
 27.21  and other relevant pesticide and pest management information. 
 27.22     Sec. 9.  Minnesota Statutes 2000, section 31A.21, 
 27.23  subdivision 2, is amended to read: 
 27.24     Subd. 2.  [FEDERAL ASSISTANCE.] In its cooperative efforts, 
 27.25  the Minnesota department of agriculture may accept from the 
 27.26  United States Secretary of Agriculture (1) advisory assistance 
 27.27  in planning and otherwise developing the state program, (2) 
 27.28  technical and laboratory assistance and training, including 
 27.29  necessary curricular and instructional materials and equipment, 
 27.30  and (3) financial and other aid for the administration of the 
 27.31  program.  ~~The Minnesota department of agriculture may spend a~~ 
 27.32  ~~sum for administration of this chapter equal to 50 percent of~~ 
 27.33  ~~the estimated total cost of the cooperative program.~~ 
 27.34     Sec. 10.  [37.27] [FAIR FOUNDATION.] 
 27.35     The state agricultural society may establish a nonprofit 
 27.36  corporation to be operated exclusively for charitable purposes 
 28.1   as contemplated by sections 170(c)(2) and 501(c)(3) of the 
 28.2   United States Internal Revenue Code.  Subject to those sections, 
 28.3   the corporation must be organized and operated exclusively for 
 28.4   the benefit and to carry out the purposes of the state 
 28.5   agricultural society for so long as the state agricultural 
 28.6   society is and remains an organization as described in section 
 28.7   509(a)(1) or 509(a)(2) of the Internal Revenue Code.  The 
 28.8   corporation shall solicit, receive, hold, invest, and contribute 
 28.9   funds and property for the use and benefit of the state 
 28.10  agricultural society in a manner consistent with the public good 
 28.11  and primarily for capital expenditures and other needs not 
 28.12  funded by other means.  The corporation may be known as the 
 28.13  Minnesota state fair foundation. 
 28.14     Sec. 11.  Minnesota Statutes 2000, section 41B.025, 
 28.15  subdivision 1, is amended to read: 
 28.16     Subdivision 1.  [ESTABLISHMENT.] There is created a public 
 28.17  body corporate and politic to be known as the "Minnesota rural 
 28.18  finance authority," which shall perform the governmental 
 28.19  functions and exercise the sovereign powers delegated to it in 
 28.20  sections 41B.01 to 41B.23 and chapter 41C in furtherance of the 
 28.21  public policies and purposes declared in section 41B.01.  The 
 28.22  board of the authority consists of the commissioners of 
 28.23  agriculture, commerce, trade and economic development, and 
 28.24  finance, the state auditor, and six public members appointed by 
 28.25  the governor with the advice and consent of the senate.  The 
 28.26  state auditor may designate one staff member to serve in the 
 28.27  auditor's place.  No public member may reside within the 
 28.28  metropolitan area, as defined in section 473.121, subdivision 
 28.29  2.  Each member shall hold office until a successor has been 
 28.30  appointed and has qualified.  A certificate of appointment or 
 28.31  reappointment of any member is conclusive evidence of the proper 
 28.32  appointment of the member. 
 28.33     Sec. 12.  Minnesota Statutes 2000, section 41B.03, 
 28.34  subdivision 2, is amended to read: 
 28.35     Subd. 2.  [ELIGIBILITY FOR RESTRUCTURED LOAN.] In addition 
 28.36  to the eligibility requirements of subdivision 1, a prospective 
 29.1   borrower for a restructured loan must:  
 29.2      (1) have received at least 50 percent of average annual 
 29.3   gross income from farming for the past three years or, for 
 29.4   homesteaded property, received at least 40 percent of average 
 29.5   gross income from farming in the past three years, and farming 
 29.6   must be the principal occupation of the borrower; 
 29.7      (2) ~~have a debt-to-asset ratio equal to or greater than 50~~ 
 29.8   ~~percent and in determining this ratio, the assets must be valued~~ 
 29.9   ~~at their current market value;~~ 
 29.10     ~~(3)~~ have projected annual expenses, including operating 
 29.11  expenses, family living, and interest expenses after the 
 29.12  restructuring, that do not exceed 95 percent of the borrower's 
 29.13  projected annual income considering prior production history and 
 29.14  projected prices for farm production, except that the authority 
 29.15  may reduce the 95 percent requirement if it finds that other 
 29.16  significant factors in the loan application support the making 
 29.17  of the loan; 
 29.18     ~~(4)~~ (3) demonstrate substantial difficulty in meeting 
 29.19  projected annual expenses without restructuring the loan; and 
 29.20     ~~(5)~~ (4) must have a total net worth, including assets and 
 29.21  liabilities of the borrower's spouse and dependents, of less 
 29.22  than $400,000 in 1999 and an amount in subsequent years which is 
 29.23  adjusted for inflation by multiplying $400,000 by the cumulative 
 29.24  inflation rate as determined by the United States All-Items 
 29.25  Consumer Price Index. 
 29.26     Sec. 13.  Minnesota Statutes 2000, section 41B.043, 
 29.27  subdivision 1b, is amended to read: 
 29.28     Subd. 1b.  [LOAN PARTICIPATION.] The authority may 
 29.29  participate in an agricultural improvement loan with an eligible 
 29.30  lender to a farmer who meets the requirements of section 41B.03, 
 29.31  subdivision 1, clauses (1) and (2), and who are actively engaged 
 29.32  in farming.  Participation is limited to 45 percent of the 
 29.33  principal amount of the loan or ~~$100,000~~ $125,000, whichever is 
 29.34  less.  The interest rates and repayment terms of the authority's 
 29.35  participation interest may be different than the interest rates 
 29.36  and repayment terms of the lender's retained portion of the loan.
 30.1      Sec. 14.  Minnesota Statutes 2000, section 41B.043, 
 30.2   subdivision 2, is amended to read: 
 30.3      Subd. 2.  [SPECIFICATIONS.] No direct loan may exceed 
 30.4   $35,000 or $125,000 for a loan participation ~~or be made to~~ 
 30.5   ~~refinance an existing debt~~.  Each direct loan and participation 
 30.6   must be secured by a mortgage on real property and such other 
 30.7   security as the authority may require. 
 30.8      Sec. 15.  Minnesota Statutes 2000, section 41B.046, 
 30.9   subdivision 2, is amended to read: 
 30.10     Subd. 2.  [ESTABLISHMENT.] The authority shall establish 
 30.11  and implement a value-added agricultural product loan program to 
 30.12  help farmers finance the purchase of stock in a cooperative that 
 30.13  is proposing to build or purchase and operate an agricultural 
 30.14  product processing facility or already owns and operates an 
 30.15  agricultural product processing facility. 
 30.16     Sec. 16.  Minnesota Statutes 2000, section 41D.01, 
 30.17  subdivision 1, is amended to read: 
 30.18     Subdivision 1.  [ESTABLISHMENT; MEMBERSHIP.] (a) The 
 30.19  Minnesota agriculture education leadership council is 
 30.20  established.  The council is composed of 16 members as follows: 
 30.21     (1) the chair of the University of Minnesota agricultural 
 30.22  education program; 
 30.23     (2) a representative of the commissioner of children, 
 30.24  families, and learning; 
 30.25     (3) a representative of the Minnesota state colleges and 
 30.26  universities recommended by the chancellor; 
 30.27     (4) the president and the president-elect of the Minnesota 
 30.28  ~~vocational agriculture instructors association~~ Association of 
 30.29  Agriculture Educators; 
 30.30     (5) a representative of the Future Farmers of America 
 30.31  Foundation; 
 30.32     (6) a representative of the commissioner of agriculture; 
 30.33     (7) the dean of the college of agriculture, food, and 
 30.34  environmental sciences at the University of Minnesota; 
 30.35     (8) two members representing agriculture education and 
 30.36  agriculture business appointed by the governor; 
 31.1      (9) the chair of the senate committee on agriculture ~~and~~ 
 31.2   ~~rural development;~~, general legislation and veterans affairs; 
 31.3      (10) the chair of the house committee on agriculture; 
 31.4      (11) the ranking minority member of the senate committee on 
 31.5   agriculture ~~and rural development~~, general legislation and 
 31.6   veterans affairs, and a member of the senate ~~committee on~~ 
 31.7   ~~children, families and learning~~ education committee designated 
 31.8   by the subcommittee on committees of the committee on rules and 
 31.9   administration; and 
 31.10     (12) the ranking minority member of the house agriculture 
 31.11  committee, and a member of the house education committee 
 31.12  designated by the speaker. 
 31.13     (b) An ex officio member of the council under paragraph 
 31.14  (a), clause (1), (4), (7), (9), (10), (11), or (12), may 
 31.15  designate a permanent or temporary replacement member 
 31.16  representing the same constituency. 
 31.17     Sec. 17.  Minnesota Statutes 2000, section 41D.01, 
 31.18  subdivision 3, is amended to read: 
 31.19     Subd. 3.  [COUNCIL OFFICERS; TERMS AND COMPENSATION OF 
 31.20  APPOINTEES; STAFF.] (a) The chair of the senate agriculture ~~and~~ 
 31.21  ~~rural development~~, general legislation and veterans affairs 
 31.22  committee and the chair of the house agriculture committee, or 
 31.23  their designees, are the cochairs of the council. 
 31.24     (b) The council's membership terms, compensation, filling 
 31.25  of vacancies, and removal of members are as provided in section 
 31.26  15.0575. 
 31.27     (c) The council may employ an executive director and any 
 31.28  other staff to carry out its functions. 
 31.29     Sec. 18.  Minnesota Statutes 2000, section 41D.01, 
 31.30  subdivision 4, is amended to read: 
 31.31     Subd. 4.  [EXPIRATION.] This section expires on June 
 31.32  30, ~~2002~~ 2003. 
 31.33     Sec. 19.  Minnesota Statutes 2000, section 97B.001, 
 31.34  subdivision 1, is amended to read: 
 31.35     Subdivision 1.  [AGRICULTURAL LAND DEFINITION.] For 
 31.36  purposes of this section, "agricultural land" means land: 
 32.1      (1) that is plowed or tilled; 
 32.2      (2) that has standing crops or crop residues; ~~or~~ 
 32.3      (3) within a maintained fence for enclosing domestic 
 32.4   livestock; 
 32.5      (4) that is planted and maintained as hayland or grassland 
 32.6   outside of the city limits of a home rule charter or statutory 
 32.7   city; or 
 32.8      (5) that is planted in a row pattern to short rotation 
 32.9   woody crops, as defined in section 41B.048, subdivision 4. 
 32.10     Sec. 20.  Minnesota Statutes 2000, section 116O.09, 
 32.11  subdivision 1a, is amended to read: 
 32.12     Subd. 1a.  [BOARD OF DIRECTORS.] The board of directors of 
 32.13  the agricultural utilization research institute is comprised of: 
 32.14     (1) the chairs of the senate ~~agriculture and rural~~ 
 32.15  ~~development committee~~ and the house of representatives 
 32.16  committees with jurisdiction over agriculture ~~committee~~ policy; 
 32.17     (2) two representatives of statewide farm organizations; 
 32.18     (3) two representatives of agribusiness, one of whom is a 
 32.19  member of the Minnesota Technology, Inc. board representing 
 32.20  agribusiness; ~~and~~ 
 32.21     (4) three representatives of the commodity promotion 
 32.22  councils; and 
 32.23     (5) the commissioner of agriculture. 
 32.24     A member of the board of directors under clauses (1) to 
 32.25  ~~(4)~~ (5) may designate a permanent or temporary replacement 
 32.26  member representing the same constituency. 
 32.27     Sec. 21.  Minnesota Statutes 2000, section 296A.01, 
 32.28  subdivision 19, is amended to read: 
 32.29     Subd. 19.  [E85.] "E85" means a petroleum product that is a 
 32.30  blend of agriculturally derived denatured ethanol and 
 32.31  gasoline or natural gasoline that typically contains 85 percent 
 32.32  ethanol by volume, but at a minimum must contain 60 percent 
 32.33  ethanol by volume.  For the purposes of this chapter, the energy 
 32.34  content of E85 will be considered to be 82,000 BTUs per gallon.  
 32.35  E85 produced for use as a motor fuel in alternative fuel 
 32.36  vehicles as defined in ~~section 296A.01,~~ subdivision 5, must 
 33.1   comply with ASTM specification D 5798-96. 
 33.2      Sec. 22.  Minnesota Statutes 2000, section 514.19, is 
 33.3   amended to read: 
 33.4      514.19 [RIGHT OF DETAINER.] 
 33.5      A lien and right of detainer exists for: 
 33.6      (1) transporting property, other than harvested crops or 
 33.7   livestock, from one place to another but not as a carrier under 
 33.8   article 7 of the Uniform Commercial Code; 
 33.9      (2) keeping or storing property, other than harvested crops 
 33.10  or livestock, as a bailee but not as a warehouse operator under 
 33.11  article 7 of the Uniform Commercial Code; 
 33.12     (3) ~~Keeping, feeding, pasturing, or otherwise caring for~~ 
 33.13  ~~domestic animals or other beasts, including medical or surgical~~ 
 33.14  ~~treatment and shoeing;~~ 
 33.15     ~~(4)~~ the use and storage of molds and patterns in the 
 33.16  possession of the fabricator belonging to the customer for the 
 33.17  balance due from the customer for fabrication work; 
 33.18     ~~(5)~~ (4) making, altering or repairing any article, other 
 33.19  than livestock, or expending any labor, skill or material on it; 
 33.20     ~~(6)~~ (5) reasonable charges for a vehicle rented as a 
 33.21  replacement for a vehicle serviced or repaired and being 
 33.22  retained as provided by this section. 
 33.23     The liens embrace all lawful charges against the property 
 33.24  paid to any other person by the person claiming the lien, and 
 33.25  the price or value of the care, storage or contribution and all 
 33.26  reasonable disbursements occasioned by the detention or sale of 
 33.27  the property. 
 33.28     Sec. 23.  [514.963] [CROP LIEN DEFINITIONS.] 
 33.29     Subdivision 1.  [SCOPE.] For the purposes of this section 
 33.30  and section 514.964, the terms defined in subdivisions 2 to 12 
 33.31  have the meanings given them. 
 33.32     Subd. 2.  [AGRICULTURAL CHEMICAL.] "Agricultural chemical" 
 33.33  means fertilizers or agricultural chemicals that are applied to 
 33.34  crops or to land used for raising crops, including fertilizer 
 33.35  material, plant amendment, and plant food.  The term includes a 
 33.36  soil amendment as defined in section 18C.005, and a pesticide 
 34.1   and a plant regulator as defined in section 18B.01. 
 34.2      Subd. 3.  [AGRICULTURAL LIEN.] "Agricultural lien" means an 
 34.3   agricultural lien as defined by section 336.9-102(a)(5), and 
 34.4   includes a landlord's lien, harvester's lien, and crop 
 34.5   production input lien under this section. 
 34.6      Subd. 4.  [AGRICULTURAL LIENHOLDER.] "Agricultural 
 34.7   lienholder" means a person holding an agricultural lien. 
 34.8      Subd. 5.  [CROP PRODUCTION INPUT.] "Crop production input" 
 34.9   means agricultural chemicals, seeds, petroleum products, the 
 34.10  custom application of agricultural chemicals and seeds, and 
 34.11  labor used in preparing the land for planting, cultivating, 
 34.12  growing, producing, harvesting, drying, and storing crops or 
 34.13  crop products. 
 34.14     Subd. 6.  [FARM PRODUCTS.] "Farm products" means farm 
 34.15  products as defined in section 336.9-102(a)(34). 
 34.16     Subd. 7.  [LENDER.] "Lender" means a secured party as 
 34.17  defined in section 336.9-102(a)(72), holding a perfected 
 34.18  security interest in the farm products of the obligor. 
 34.19     Subd. 8.  [OBLIGOR.] "Obligor" means obligor as defined in 
 34.20  section 336.9-102(a)(59). 
 34.21     Subd. 9.  [PERSON.] "Person" means an individual or an 
 34.22  organization as defined in section 336.1-201(30). 
 34.23     Subd. 10.  [PETROLEUM PRODUCTS.] "Petroleum products" means 
 34.24  motor fuels and special fuels used in the production of crops 
 34.25  and livestock, including petroleum products as defined in 
 34.26  section 296A.01, and alcohol fuels, propane, lubes, and oils. 
 34.27     Subd. 11.  [SEED.] "Seed" means agricultural seeds used to 
 34.28  produce crops, including agricultural seeds defined in section 
 34.29  21.72. 
 34.30     Subd. 12.  [SUPPLIER.] "Supplier" means a person furnishing 
 34.31  crop production inputs. 
 34.32     Sec. 24.  [514.964] [AGRICULTURAL LIEN ON CROPS.] 
 34.33     Subdivision 1.  [LANDLORD'S LIEN.] A person leasing real 
 34.34  property for agricultural production has a lien for unpaid rent 
 34.35  on the crops produced on the real property in the crop year that 
 34.36  is the subject of the lease.  A landlord's lien becomes 
 35.1   effective when the crops become growing crops. 
 35.2      Subd. 2.  [HARVESTER'S LIEN.] (a) A person providing 
 35.3   combining, picking, harvesting, hauling, baling, drying, or 
 35.4   storing services in the ordinary course of business has a lien 
 35.5   upon the crops combined, picked, harvested, hauled, baled, 
 35.6   dried, or stored, as the case may be, for the reasonable amount 
 35.7   and kind of service provided.  
 35.8      (b) A harvester's lien becomes effective upon the services 
 35.9   being provided the obligor by the harvester.  
 35.10     (c) A person asserting a harvester's lien may not assert a 
 35.11  crop production input lien for the same goods or services 
 35.12  provided the obligor. 
 35.13     Subd. 3.  [CROP PRODUCTION INPUT LIEN.] (a) A supplier 
 35.14  furnishing crop production inputs in the ordinary course of 
 35.15  business has an agricultural lien for the unpaid retail cost of 
 35.16  the crop production inputs.  The lien attaches to: 
 35.17     (1) the existing crops upon the land where a furnished 
 35.18  agricultural chemical was applied, or if crops are not planted, 
 35.19  to the next production crop within 16 months following the last 
 35.20  date on which the agricultural chemical was applied; 
 35.21     (2) the crops produced from furnished seed; or 
 35.22     (3) the crops produced, harvested, or processed using a 
 35.23  furnished petroleum product. 
 35.24     If the crops are grown on leased land and the lease 
 35.25  provides for payment in crops, the lien does not attach to the 
 35.26  lessor's portion of the crops.  A crop production input lien 
 35.27  becomes effective when the crop production inputs are furnished 
 35.28  by the supplier to the purchaser. 
 35.29     (b) A supplier shall notify a lender of a crop production 
 35.30  input lien by providing a lien-notification statement to the 
 35.31  lender in an envelope marked "IMPORTANT - LEGAL NOTICE."  
 35.32  Delivery of the notice must be made by certified mail or another 
 35.33  verifiable method. 
 35.34     (c) The lien-notification statement must disclose the 
 35.35  following: 
 35.36     (1) the name and address of the lender that is to receive 
 36.1   notification; 
 36.2      (2) the name and address of the supplier claiming the lien; 
 36.3      (3) a description and the date or anticipated date or dates 
 36.4   of the transaction and the retail cost or anticipated costs of 
 36.5   the crop production input; 
 36.6      (4) the name and address of the person to whom the crop 
 36.7   production input was furnished; and 
 36.8      (5) the name and address of the owner.  
 36.9      (d) Within ten calendar days after receiving a 
 36.10  lien-notification statement, the lender must respond to the 
 36.11  supplier with either: 
 36.12     (1) a letter of commitment for part or all of the retail 
 36.13  cost or anticipated costs of the crop production input as set 
 36.14  forth in the lien-notification statement; or 
 36.15     (2) a written refusal to issue a letter of commitment. 
 36.16     A copy of the lender's response must be provided to the 
 36.17  person for whom the financing was requested. 
 36.18     (e) If a lender responds with a letter of commitment for 
 36.19  part or all of the amount in the lien-notification statement, 
 36.20  the supplier may not obtain a lien for the amount stated in the 
 36.21  letter of commitment.  If a lender responds with a refusal to 
 36.22  provide a letter of commitment, the rights of the lender and the 
 36.23  supplier are not affected. 
 36.24     (f) If a lender does not respond under paragraph (d) to the 
 36.25  supplier within ten calendar days after receiving the 
 36.26  lien-notification statement, a perfected crop production input 
 36.27  lien corresponding to the lien-notification statement has 
 36.28  priority over any security interest of the lender in the same 
 36.29  crops or their proceeds for the lesser of: 
 36.30     (1) the amount stated in the lien-notification statement; 
 36.31  or 
 36.32     (2) the unpaid retail cost of the crop production input 
 36.33  identified in the lien-notification statement. 
 36.34     Subd. 4.  [SCOPE.] A landlord's lien, harvester's lien, or 
 36.35  crop production input lien attaches to the crops serviced, 
 36.36  produced, or harvested by the agricultural lienholder, and the 
 37.1   products and proceeds thereof to the extent of the price or 
 37.2   value of the goods or services provided. 
 37.3      Subd. 5.  [PERFECTION.] (a) A landlord's lien, harvester's 
 37.4   lien, or crop production input lien under this section is 
 37.5   perfected if a financing statement is filed pursuant to sections 
 37.6   336.9-501 to 336.9-530 and within the time periods set forth in 
 37.7   paragraphs (b) to (d). 
 37.8      (b) A landlord's lien must be perfected on or before 30 
 37.9   days after the crops become growing crops. 
 37.10     (c) A harvester's lien must be perfected on or before 15 
 37.11  days after the last date that harvesting services are provided 
 37.12  the obligor. 
 37.13     (d) A crop production input lien must be perfected by six 
 37.14  months after the last date that crop production inputs are 
 37.15  furnished the obligor. 
 37.16     Subd. 6.  [GOVERNING LAW.] Except as otherwise provided in 
 37.17  this section, an agricultural lien is subject to the provisions 
 37.18  of the Uniform Commercial Code - Secured Transactions, sections 
 37.19  336.9-101 to 336.9-709. 
 37.20     Subd. 7.  [PRIORITY.] (a) A perfected landlord's lien under 
 37.21  this section has priority over all competing security interests 
 37.22  and all agricultural liens in crops and the products or proceeds 
 37.23  thereof.  
 37.24     (b) Except as provided in paragraph (c), a perfected 
 37.25  harvester's lien under this section has priority over all 
 37.26  competing security interests and all agricultural liens except a 
 37.27  perfected landlord's lien in crops and the products or proceeds 
 37.28  thereof, and except for a perfected crop production input lien 
 37.29  for the reasonable cost of the seed in crops and products and 
 37.30  the proceeds thereof. 
 37.31     (c) If more than one harvester's lien is perfected under 
 37.32  this section, the conflicting perfected harvester's liens rank 
 37.33  equally in proportion to the value of the service provided. 
 37.34     (d) Except as provided in paragraph (e), a perfected crop 
 37.35  production lien under this section has priority against all 
 37.36  competing agricultural liens except a perfected landlord's lien 
 38.1   and a perfected harvester's lien in the crops and products or 
 38.2   proceeds thereof. 
 38.3      (e) If more than one crop production input lien is 
 38.4   perfected under this section, conflicting perfected crop 
 38.5   production input liens have priority in order of the 
 38.6   effectiveness of the liens. 
 38.7      (f) Except as provided in paragraph (g), a perfected crop 
 38.8   production input lien under this section has priority against 
 38.9   all competing security interest as provided in subdivision 3 in 
 38.10  crops and the products and proceeds thereof. 
 38.11     (g) A perfected crop production input lien has priority 
 38.12  over a competing security interest in the crops and proceeds and 
 38.13  products thereof if the crop production input lien is effective 
 38.14  before the secured party has given value to the debtor. 
 38.15     Subd. 8.  [DEFAULT.] Default occurs when an obligor fails 
 38.16  to perform any obligation, whether written or oral, owed to the 
 38.17  agricultural lienholder. 
 38.18     Subd. 9.  [ENFORCEMENT.] The holder of an agricultural lien 
 38.19  under this section may enforce the lien in the manner provided 
 38.20  in sections 336.9-601 to 336.9-628.  
 38.21     Sec. 25.  [514.965] [LIVESTOCK LIEN DEFINITIONS.] 
 38.22     Subdivision 1.  [SCOPE.] For the purposes of this section 
 38.23  and section 514.966, the terms defined in subdivisions 2 to 11 
 38.24  have the meanings given them. 
 38.25     Subd. 2.  [AGRICULTURAL LIEN.] "Agricultural lien" means an 
 38.26  agricultural lien as defined in section 336.9-102(a)(5) and 
 38.27  includes a veterinarian's lien, breeder's lien, livestock 
 38.28  production input lien, and feeder's lien under this section. 
 38.29     Subd. 3.  [AGRICULTURAL LIENHOLDER.] "Agricultural 
 38.30  lienholder" means a person holding an agricultural lien. 
 38.31     Subd. 4.  [EMERGENCY VETERINARY SERVICES.] "Emergency 
 38.32  veterinary services" includes surgical procedures, administering 
 38.33  vaccines, antisera, and antibiotics, and other veterinary 
 38.34  medicines, treatments, and services performed primarily to 
 38.35  protect human health, prevent the spread of animal diseases, or 
 38.36  preserve the health of the animal or animals treated. 
 39.1      Subd. 5.  [FARM PRODUCTS.] "Farm products" means farm 
 39.2   products as defined in section 336.9-102(a)(34). 
 39.3      Subd. 6.  [FEED.] "Feed" means commercial feeds, feed 
 39.4   ingredients, mineral feeds, drugs, animal health products, or 
 39.5   customer-formula feeds used for feeding livestock, including 
 39.6   commercial feed as defined in section 25.33. 
 39.7      Subd. 7.  [LENDER.] "Lender" means a secured party as 
 39.8   defined in section 336.9-102(a)(72) holding a perfected security 
 39.9   interest in the farm products of the obligor. 
 39.10     Subd. 8.  [LIVESTOCK PRODUCTION INPUT.] "Livestock 
 39.11  production input" means feed and labor used in raising livestock.
 39.12     Subd. 9.  [OBLIGOR.] "Obligor" means an obligor as defined 
 39.13  in section 336.9-102(a)(59). 
 39.14     Subd. 10.  [PERSON.] "Person" means an individual or an 
 39.15  organization as defined in section 336.1-201(30). 
 39.16     Subd. 11.  [SUPPLIER.] "Supplier" means a person furnishing 
 39.17  agricultural production inputs. 
 39.18     Sec. 26.  [514.966] [AGRICULTURAL LIEN ON LIVESTOCK.] 
 39.19     Subdivision 1.  [VETERINARIAN'S LIEN.] A licensed 
 39.20  veterinarian performing emergency veterinary services in the 
 39.21  ordinary course of business that cost more than $25 for animals 
 39.22  at the request of the owner or a person in possession of the 
 39.23  animals has a lien on the animals for the value of the 
 39.24  services.  A lien under this section does not secure any 
 39.25  veterinary services performed more than one year before the date 
 39.26  on which the last item of the veterinary service is performed.  
 39.27  A veterinarian's lien becomes effective upon the services being 
 39.28  provided the obligor by the veterinarian. 
 39.29     Subd. 2.  [BREEDER'S LIEN.] The owner of any livestock used 
 39.30  for breeding services in the ordinary course of business, or any 
 39.31  provider, in the ordinary course of business, of semen or ova 
 39.32  used in fertilizer, artificial insemination, or any other 
 39.33  artificial means of impregnating livestock, has a lien upon the 
 39.34  livestock bred and any resulting offspring for the price or 
 39.35  value of the service provided.  A breeder's lien becomes 
 39.36  effective when the services are provided the obligor by the 
 40.1   breeder. 
 40.2      Subd. 3.  [LIVESTOCK PRODUCTION INPUT LIEN.] (a) A supplier 
 40.3   furnishing livestock production inputs in the ordinary course of 
 40.4   business has a livestock production input lien for the unpaid 
 40.5   retail cost of the livestock production input.  A perfected 
 40.6   livestock production input lien that attaches to livestock may 
 40.7   not exceed the amount, if any, that the sales price of the 
 40.8   livestock exceeds the greater of the fair market value of the 
 40.9   livestock at the time the lien attaches or the acquisition price 
 40.10  of the livestock.  A livestock production input lien becomes 
 40.11  effective when the agricultural production inputs are furnished 
 40.12  by the supplier to the purchaser. 
 40.13     (b) A supplier shall notify a lender of a livestock 
 40.14  production input lien by providing a lien-notification statement 
 40.15  to the lender in an envelope marked "IMPORTANT - LEGAL NOTICE."  
 40.16  Delivery of the notice must be made by certified mail or another 
 40.17  verifiable method. 
 40.18     (c) The lien-notification statement must be in a form 
 40.19  approved by the secretary of state and disclose the following: 
 40.20     (1) the name and business address of the lender that is to 
 40.21  receive notification; 
 40.22     (2) the name and address of the supplier claiming the lien; 
 40.23     (3) a description and the date or anticipated date or dates 
 40.24  of the transaction and the retail cost or anticipated costs of 
 40.25  the livestock production input; 
 40.26     (4) the name, residential address, and signature of the 
 40.27  person to whom the livestock production input was furnished; 
 40.28     (5) the name and residential address of the owner of the 
 40.29  livestock, the location where the livestock will be raised, and 
 40.30  a description of the livestock; and 
 40.31     (6) a statement that products and proceeds of the livestock 
 40.32  are covered by the livestock input lien. 
 40.33     (d) Within ten calendar days after receiving a 
 40.34  lien-notification statement, the lender must respond to the 
 40.35  supplier with either: 
 40.36     (1) a letter of commitment for part or all of the amount in 
 41.1   the lien-notification statement; or 
 41.2      (2) a written refusal to issue a letter of commitment. 
 41.3   A copy of the response must be mailed to the person for whom the 
 41.4   financing was requested. 
 41.5      (e) If a lender responds with a letter of commitment for 
 41.6   part or all of the amount in the lien-notification statement, 
 41.7   the supplier may not obtain a lien for the amount stated in the 
 41.8   letter of commitment.  If a lender responds with a refusal to 
 41.9   provide a letter of commitment, the rights of the lender and the 
 41.10  supplier are not affected. 
 41.11     (f) If a lender does not respond under paragraph (d) to the 
 41.12  supplier within ten calendar days after receiving the 
 41.13  lien-notification statement, a perfected livestock production 
 41.14  input lien corresponding to the lien-notification statement has 
 41.15  priority over any security interest of the lender in the same 
 41.16  livestock or their proceeds for the lesser of: 
 41.17     (1) the amount stated in the lien-notification statement; 
 41.18  or 
 41.19     (2) the unpaid retail cost of the livestock production 
 41.20  input identified in the lien-notification statement, subject to 
 41.21  any limitation in paragraph (a). 
 41.22     Subd. 4.  [FEEDER'S LIEN.] (a) A person has a feeder's lien 
 41.23  on livestock if the person (1) stores, cares for, or contributes 
 41.24  to the keeping, feeding, pasturing, or other care of livestock, 
 41.25  including medical or surgical treatment and shoeing, and (2) 
 41.26  does so in the ordinary course of business, at the request of 
 41.27  the owner or legal possessor of the livestock. 
 41.28     (b) A feeder's lien is a lien upon the livestock for the 
 41.29  price or value of the storage, care, or contribution, and for 
 41.30  any legal charges against the same paid by the person to any 
 41.31  other person.  
 41.32     (c) A feeder's lien becomes effective when the services or 
 41.33  contributions are provided the obligor. 
 41.34     Subd. 5.  [SCOPE.] A veterinarian's lien, breeder's lien, 
 41.35  livestock production input lien, or feeder's lien attaches to 
 41.36  the livestock serviced by the agricultural lienholder, and 
 42.1   products and proceeds thereof to the extent of the price or 
 42.2   value of the service provided. 
 42.3      Subd. 6.  [PERFECTION.] (a) An agricultural lien under this 
 42.4   section is perfected if a financing statement is filed pursuant 
 42.5   to sections 336.9-501 to 336.9-530 and within the time periods 
 42.6   set forth in paragraphs (b) to (e). 
 42.7      (b) A veterinarian's lien must be perfected on or before 
 42.8   180 days after the last item of the veterinary service is 
 42.9   performed. 
 42.10     (c) A breeder's lien must be perfected by six months after 
 42.11  the last date that breeding services are provided the obligor. 
 42.12     (d) A livestock production input lien must be perfected by 
 42.13  six months after the last date that livestock production inputs 
 42.14  are furnished the obligor. 
 42.15     (e) A feeder's lien must be perfected on or before 60 days 
 42.16  after the last date that feeding services are furnished the 
 42.17  obligor. 
 42.18     Subd. 7.  [GOVERNING LAW.] Except as otherwise provided in 
 42.19  this section, an agricultural lien is subject to the provisions 
 42.20  of the Uniform Commercial Code - Secured Transactions, sections 
 42.21  336.9-101 to 336.9-709. 
 42.22     Subd. 8.  [PRIORITY.] (a) Except as provided in paragraph 
 42.23  (b), a perfected veterinarian's lien under this section has 
 42.24  priority over all competing security interests and all 
 42.25  agricultural liens on the same animals. 
 42.26     (b) If more than one veterinarian's lien is perfected under 
 42.27  this section, the conflicting perfected veterinarian's liens 
 42.28  have priority in order of the effectiveness of the liens. 
 42.29     (c) Except as provided in paragraph (d), a perfected 
 42.30  feeder's lien under this section has priority over all competing 
 42.31  security interests and all agricultural liens except a perfected 
 42.32  veterinarian's lien in the livestock and the products or 
 42.33  proceeds thereof. 
 42.34     (d) If more than one feeder's lien is perfected under this 
 42.35  section, the conflicting perfected feeder's liens have priority 
 42.36  in order of the effectiveness of the liens. 
 43.1      (e) A perfected breeder's lien under this section has 
 43.2   priority over all competing security interests and all 
 43.3   agricultural liens except a perfected veterinarian's lien and a 
 43.4   perfected feeder's lien in the livestock and the products and 
 43.5   proceeds thereof. 
 43.6      (f) Except as provided in paragraph (g), a perfected 
 43.7   livestock production input lien under this section has priority 
 43.8   against all agricultural liens except a perfected veterinarian's 
 43.9   lien, feeder's lien, and breeder's lien in the livestock and the 
 43.10  products or proceeds thereof. 
 43.11     (g) If more than one livestock production input lien is 
 43.12  perfected under this section, conflicting perfected livestock 
 43.13  production input liens have priority in order of the 
 43.14  effectiveness of the liens. 
 43.15     (h) Except as provided in paragraph (i), a perfected 
 43.16  livestock production input lien under this section has priority 
 43.17  against all competing security interests as provided in 
 43.18  subdivision 3 in livestock and the products and proceeds thereof.
 43.19     (i) A perfected livestock production input lien has 
 43.20  priority over a competing security interest in the livestock and 
 43.21  proceeds and products thereof if the livestock production input 
 43.22  lien is effective before the secured party has given value to 
 43.23  the debtor. 
 43.24     Subd. 9.  [DEFAULT.] Default occurs when an obligor fails 
 43.25  to perform any obligation, whether written or oral, owed to the 
 43.26  agricultural lienholder. 
 43.27     Subd. 10.  [ENFORCEMENT.] The holder of an agricultural 
 43.28  lien under this section may enforce the lien in the manner 
 43.29  provided in sections 336.9-601 to 336.9-628. 
 43.30     Sec. 27.  Laws 1986, chapter 398, article 1, section 18, as 
 43.31  amended by Laws 1987, chapter 292, section 37; Laws 1989, 
 43.32  chapter 350, article 16, section 8; Laws 1990, chapter 525, 
 43.33  section 1; Laws 1991, chapter 208, section 2; Laws 1993, First 
 43.34  Special Session chapter 2, article 6, section 2; Laws 1995, 
 43.35  chapter 212, article 2, section 11; Laws 1997, chapter 183, 
 43.36  article 3, section 29; Laws 1998, chapter 395, section 7; Laws 
 44.1   1998, chapter 402, section 6; and Laws 1999, chapter 214, 
 44.2   article 2, section 19, is amended to read: 
 44.3      Sec. 18.  [REPEALER.] 
 44.4      Sections 1 to 17 and Minnesota Statutes, section 336.9-501, 
 44.5   subsections (6) and (7), and sections 583.284, 583.285, 583.286, 
 44.6   and 583.305, are repealed on July 1, ~~2001~~ 2003. 
 44.7      Sec. 28.  [TRANSITION RULE FOR LIVESTOCK AND CROP 
 44.8   STATUTES.] 
 44.9      (a) Agricultural liens in crops or livestock or the 
 44.10  products or proceeds thereof created before July 1, 2001, based 
 44.11  on statutes repealed by this act, or based on Minnesota 
 44.12  Statutes, section 514.19, prior to its amendment by this act, 
 44.13  remain in effect for the duration provided by the law in effect 
 44.14  before July 1, 2001. 
 44.15     (b) Lien statements properly filed prior to July 1, 2001, 
 44.16  under statutes repealed by this act remain effective for the 
 44.17  period of time allowed under those statutes. 
 44.18     (c) Records of agricultural liens based upon statutes 
 44.19  repealed by this act will exist in the central filing system 
 44.20  operated by the office of the secretary of state. 
 44.21     Sec. 29.  [TEMPORARY WAIVER OF RULE.] 
 44.22     The application of Minnesota Rules, part 1720.0620, is 
 44.23  temporarily waived from January 1, 2001, to June 1, 2002, for 
 44.24  products used exclusively for poultry. 
 44.25     Sec. 30.  [REPEALER.] 
 44.26     (a) Minnesota Statutes 2000, sections 17.76; 17.987; 
 44.27  24.001; 24.002; 24.12; 24.131; 24.135; 24.141; 24.145; 24.151; 
 44.28  24.155; 24.161; 24.171; 24.175; 24.18; 24.181; 33.09; and 
 44.29  33.111, are repealed. 
 44.30     (b) Minnesota Statutes 2000, sections 514.23; 514.24; 
 44.31  514.25; 514.26; 514.27; 514.28; 514.29; 514.30; 514.31; 514.32; 
 44.32  514.33; 514.34; 514.62; 514.63; 514.65; 514.66; 514.92; 514.950; 
 44.33  514.952; 514.954; 514.956; 514.958; 514.959; 514.960; 557.12; 
 44.34  and 559.2091, are repealed. 
 44.35     (c) Minnesota Rules, parts 8271.0010; 8271.0020; 8271.0030; 
 44.36  8271.0040; 8271.0050; 8271.0060; 8271.0070; 8271.0080; 
 45.1   8271.0090; 8271.0100; 8271.0200; 8271.0300; and 8271.0350, are 
 45.2   repealed. 
 45.3      Sec. 31.  [EFFECTIVE DATE.] 
 45.4      Sections 11 to 18, 27, and 29 are effective the day 
 45.5   following final enactment.  Sections 22 to 26, 28, and 30, 
 45.6   paragraphs (b) and (c), are effective July 1, 2001.  Section 8 
 45.7   is effective August 1, 2002.