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            extending the sunset of the dairy producers board, and 
  1.23            conditionally voiding its repeal; providing for 
  1.24            pesticide application on golf courses; changing 
  1.25            certain membership provisions on the state 
  1.26            agricultural society; defining biodiesel fuel and 
  1.27            requiring it in diesel fuel oil; requiring reports on 
  1.28            it; allowing natural gasoline as a petroleum component 
  1.29            in E85 fuel; extending the sunset date for the 
  1.30            farmer-lender mediation program; providing a temporary 
  1.31            waiver of board of animal health rules for use of 
  1.32            biological products on poultry; adding cultivated wild 
  1.33            rice to the agricultural commodities promotion act 
  1.34            provision; repealing obsolete agricultural statutes; 
  1.35            amending Minnesota Statutes 2000, sections 17.101, 
  1.36            subdivision 5; 17.102, subdivision 3; 17.109, 
  1.37            subdivision 3; 17.115; 17.116; 17.117; 17.53, 
  1.38            subdivisions 2, 8, 13; 17.63; 17.76, subdivision 2; 
  1.39            18B.01, by adding a subdivision; 31A.21, subdivision 
  1.40            2; 37.03, subdivision 1; 41B.025, subdivision 1; 
  1.41            41B.03, subdivision 2; 41B.043, subdivisions 1b, 2; 
  1.42            41B.046, subdivision 2; 41D.01, subdivisions 1, 3, 4; 
  1.43            97B.001, subdivision 1; 116O.09, subdivision 1a; 
  1.44            296A.01, subdivision 19; Laws 1986, chapter 398, 
  1.45            article 1, section 18, as amended; proposing coding 
  1.46            for new law in Minnesota Statutes, chapters 18B; 37; 
  2.1             239; repealing Minnesota Statutes 2000, sections 
  2.2             17.987; 24.001; 24.002; 24.12; 24.131; 24.135; 24.141; 
  2.3             24.145; 24.151; 24.155; 24.161; 24.171; 24.175; 24.18; 
  2.4             24.181; 33.09; 33.111. 
  2.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.6      Section 1.  Minnesota Statutes 2000, section 17.101, 
  2.7   subdivision 5, is amended to read: 
  2.8      Subd. 5.  [VALUE-ADDED AGRICULTURAL PRODUCT PROCESSING AND 
  2.9   MARKETING GRANT PROGRAM.] (a) For purposes of this section: 
  2.10     (1) "agricultural commodity" means a material produced for 
  2.11  use in or as food, feed, seed, or fiber and includes crops for 
  2.12  fiber, food, oilseeds, seeds, livestock, livestock products, 
  2.13  dairy, dairy products, poultry, poultry products, and other 
  2.14  products or by-products of the farm produced for the same or 
  2.15  similar use, except ethanol; and 
  2.16     (2) "agricultural product processing facility" means land, 
  2.17  buildings, structures, fixtures, and improvements located or to 
  2.18  be located in Minnesota and used or operated primarily for the 
  2.19  processing or production of marketable products from 
  2.20  agricultural commodities produced in Minnesota.  
  2.21     (b) The commissioner shall establish and implement a 
  2.22  value-added agricultural product processing and marketing grant 
  2.23  program to help farmers finance new cooperatives that organize 
  2.24  for the purposes of operating agricultural product processing 
  2.25  facilities, forming marketing cooperatives, and ~~for~~ marketing 
  2.26  activities related to the sale and distribution of processed 
  2.27  agricultural products.  
  2.28     (c) To be eligible for this program a grantee must:  
  2.29     (1) be a cooperative organized under chapter 308A; 
  2.30     (2) certify that all of the control and equity in the 
  2.31  cooperative is from farmers, family farm partnerships, family 
  2.32  farm limited liability companies, or family farm corporations as 
  2.33  defined in section 500.24, subdivision 2, who are actively 
  2.34  engaged in agricultural commodity production; 
  2.35     (3) be operated primarily for the processing of 
  2.36  agricultural commodities produced in Minnesota; 
  2.37     (4) receive agricultural commodities produced primarily by 
  3.1   shareholders or members of the cooperative; and 
  3.2      (5) have no direct or indirect involvement in the 
  3.3   production of agricultural commodities.  
  3.4      (d) The commissioner may receive applications from and make 
  3.5   grants up to $50,000 for feasibility, marketing analysis, 
  3.6   assistance with organizational development, financing and 
  3.7   managing new cooperatives, product development, development of 
  3.8   business and marketing plans, and predesign of facilities 
  3.9   including site analysis, development of bid specifications, 
  3.10  preliminary blueprints and schematics, and completion of 
  3.11  purchase agreements and other necessary legal documents to 
  3.12  eligible cooperatives.  The commissioner shall give priority to 
  3.13  applicants who use the grants for planning costs related to an 
  3.14  application for financial assistance from the United States 
  3.15  Department of Agriculture, Rural Business - Cooperative Service. 
  3.16     Sec. 2.  Minnesota Statutes 2000, section 17.102, 
  3.17  subdivision 3, is amended to read: 
  3.18     Subd. 3.  [LICENSE.] A person may not use the Minnesota 
  3.19  grown logo or labeling without an annual license from the 
  3.20  commissioner.  The commissioner shall issue licenses for a fee 
  3.21  of $5.  ~~The commissioner shall charge a late fee of $10 for~~ 
  3.22  ~~renewal of a license that has expired.~~ 
  3.23     Sec. 3.  Minnesota Statutes 2000, section 17.109, 
  3.24  subdivision 3, is amended to read: 
  3.25     Subd. 3.  [APPROPRIATIONS MUST BE MATCHED BY PRIVATE 
  3.26  FUNDS.] Appropriations to the Minnesota grown matching account 
  3.27  may be expended only to the extent that they are matched with 
  3.28  contributions to the account from private sources on a basis of 
  3.29  $4 of the appropriation to each $1 of private contributions.  
  3.30  Matching funds are not available after the appropriation is 
  3.31  encumbered.  For the purposes of this subdivision, "private 
  3.32  contributions" includes, but is not limited to, advertising 
  3.33  revenue, listing fees, and revenues from the development and 
  3.34  sale of promotional materials. 
  3.35     Sec. 4.  Minnesota Statutes 2000, section 17.115, is 
  3.36  amended to read: 
  4.1      17.115 [SHARED SAVINGS LOAN PROGRAM.] 
  4.2      Subdivision 1.  [ESTABLISHMENT.] The commissioner shall 
  4.3   establish a shared savings loan program to provide loans that 
  4.4   enable farmers to adopt best management practices that emphasize 
  4.5   sufficiency and self-sufficiency in agricultural inputs, 
  4.6   including energy efficiency, reduction or improved management of 
  4.7   ~~petroleum and chemical~~ inputs, ~~and~~ increasing ~~the~~ energy 
  4.8   ~~self-sufficiency of~~ production by agricultural producers, and 
  4.9   environmental improvements. 
  4.10     Subd. 2.  [LOAN CRITERIA.] (a) The shared savings loan 
  4.11  program must provide loans for purchase of new or used 
  4.12  machinery~~,~~ and installation of equipment~~, and~~ for projects that 
  4.13  ~~reduce or make more efficient farm energy use~~ make environmental 
  4.14  improvements or enhance farm profitability.  Eligible loan uses 
  4.15  do not include seed, fertilizer, or fuel. 
  4.16     (b) Loans may not exceed ~~$15,000~~ $25,000 per individual 
  4.17  applying for a loan and may not exceed ~~$75,000~~ $100,000 for 
  4.18  loans to ~~five~~ four or more individuals on joint projects.  The 
  4.19  loan repayment period may be up to seven years as determined by 
  4.20  project cost and energy savings.  The interest on the loans is 
  4.21  six percent. 
  4.22     (c) Loans may only be made to residents of this state 
  4.23  engaged in farming.  
  4.24     Subd. 3.  [AWARDING OF LOANS.] (a) Applications for loans 
  4.25  must be made to the commissioner on forms prescribed by the 
  4.26  commissioner. 
  4.27     (b) The applications must be reviewed, ranked, and 
  4.28  recommended by a loan review panel appointed by the 
  4.29  commissioner.  The loan review panel shall consist of two 
  4.30  lenders with agricultural experience, two resident farmers of 
  4.31  the state using sustainable agriculture methods, two resident 
  4.32  farmers of the state using organic agriculture methods, a farm 
  4.33  management specialist, a representative from a post-secondary 
  4.34  education institution, and a chair from the department.  
  4.35     (c) The loan review panel shall rank applications according 
  4.36  to the following criteria: 
  5.1      (1) realize savings to the cost of agricultural production 
  5.2   ~~and project savings to repay the cost of the loan~~; 
  5.3      (2) reduce or make more efficient use of energy or 
  5.4   inputs; ~~and~~ 
  5.5      (3) ~~reduce production costs~~ increase overall farm 
  5.6   profitability; and 
  5.7      (4) result in environmental benefits.  
  5.8      (d) A loan application must show that the loan can be 
  5.9   repaid by the applicant.  
  5.10     (e) The commissioner must consider the recommendations of 
  5.11  the loan review panel and may make loans for eligible projects.  
  5.12  ~~Priority must be given based on the amount of savings realized~~ 
  5.13  ~~by adopting the practice implemented by the loan.~~ 
  5.14     Subd. 4.  [ADMINISTRATION; INFORMATION DISSEMINATION.] The 
  5.15  amount in the revolving loan account is appropriated to the 
  5.16  commissioner to make loans under this section and administer the 
  5.17  loan program.  The interest on the money in the revolving loan 
  5.18  account and the interest on loans repaid to the state may be 
  5.19  spent by the commissioner for administrative expenses.  The 
  5.20  commissioner shall collect and disseminate information relating 
  5.21  to projects for which loans are given under this section. 
  5.22     Subd. 5.  [FARM MANURE DIGESTER TECHNOLOGY.] Appropriations 
  5.23  in Laws 1998, chapter 401, section 6, must be used for revolving 
  5.24  loans for demonstration projects of farm manure digester 
  5.25  technology.  Notwithstanding the limitations of subdivision 2, 
  5.26  paragraphs (b) and (c), loans under this subdivision are 
  5.27  no-interest loans in principal amounts not to exceed $200,000 
  5.28  and may be made to any resident of this state.  Loans for one or 
  5.29  more projects must be made only after the commissioner seeks 
  5.30  applications.  Loans under this program may be used as a match 
  5.31  for federal loans or grants.  Money repaid from loans must be 
  5.32  returned to the revolving fund for future projects. 
  5.33     Sec. 5.  Minnesota Statutes 2000, section 17.116, is 
  5.34  amended to read: 
  5.35     17.116 [SUSTAINABLE AGRICULTURE DEMONSTRATION GRANTS.] 
  5.36     Subdivision 1.  [ESTABLISHMENT.] The commissioner ~~of~~ 
  6.1   ~~agriculture~~ shall establish a grant program for sustainable 
  6.2   agriculture methods that demonstrates best management practices, 
  6.3   including farm input reduction or management, enterprise 
  6.4   diversification including new crops and livestock, farm energy 
  6.5   efficiency~~,~~ or ~~usable on-farm energy~~ production, or the transfer 
  6.6   of technologies that enhance the environment and farm 
  6.7   profitability.  The commissioner shall use the program to 
  6.8   demonstrate and publicize the energy efficiency, environmental 
  6.9   benefit, and profitability of sustainable agriculture techniques 
  6.10  or systems from production through marketing.  The grants must 
  6.11  fund research or demonstrations on farms ~~of external input~~ 
  6.12  ~~reduction techniques or farm scale energy production methods~~ 
  6.13  consistent with the program objectives. 
  6.14     Subd. 2.  [ELIGIBILITY.] (a) Grants may only be made to 
  6.15  farmers, educational institutions, individuals at educational 
  6.16  institutions, or nonprofit organizations residing or located in 
  6.17  the state for research or demonstrations on farms in the state. 
  6.18     (b) Grants may only be made for projects that show: 
  6.19     (1) the ability to maximize direct or indirect energy 
  6.20  savings or production; 
  6.21     (2) a positive effect or reduced adverse effect on the 
  6.22  environment; and 
  6.23     (3) increased profitability for the individual farm by 
  6.24  reducing costs or improving marketing opportunities. 
  6.25     Subd. 3.  [AWARDING OF GRANTS.] (a) Applications for grants 
  6.26  must be made to the commissioner on forms prescribed by the 
  6.27  commissioner. 
  6.28     (b) The applications must be reviewed, ranked, and 
  6.29  recommended by a technical review panel appointed by the 
  6.30  commissioner.  The technical review panel shall consist of a 
  6.31  soil scientist, an agronomist, a representative from a 
  6.32  post-secondary educational institution, an agricultural 
  6.33  marketing specialist, two resident farmers of the state using 
  6.34  sustainable agriculture methods, two resident farmers of the 
  6.35  state using organic agriculture methods, and a chair from the 
  6.36  department.  
  7.1      (c) The technical review panel shall rank applications 
  7.2   according to the following criteria: 
  7.3      (1) direct or indirect energy savings or production; 
  7.4      (2) environmental benefit; 
  7.5      (3) farm profitability; 
  7.6      (4) the number of farms able to apply the techniques or the 
  7.7   technology proposed; 
  7.8      (5) the effectiveness of the project as a demonstration; 
  7.9      (6) the immediate transferability of the project to farms; 
  7.10  and 
  7.11     (7) the ability of the project to accomplish its goals. 
  7.12     (d) The commissioner shall consider the recommendations of 
  7.13  the technical review panel and may award grants for eligible 
  7.14  projects.  Priority must be given to applicants who are farmers 
  7.15  or groups of farmers. 
  7.16     (e) Grants for eligible projects may not exceed $25,000 
  7.17  unless the portion above $25,000 is matched on an equal basis by 
  7.18  the applicant's cash or in-kind land use contribution.  Grant 
  7.19  funding of projects may not exceed $50,000 under this section, 
  7.20  but applicants may utilize other funding sources.  A portion of 
  7.21  each grant must be targeted for public information activities of 
  7.22  the project. 
  7.23     (f) A project may continue for up to three years.  
  7.24  Multiyear projects must be reevaluated by the technical review 
  7.25  panel and the commissioner before second or third year funding 
  7.26  is approved.  A project is limited to one grant for its funding. 
  7.27     Sec. 6.  Minnesota Statutes 2000, section 17.117, is 
  7.28  amended to read: 
  7.29     17.117 [AGRICULTURE BEST MANAGEMENT PRACTICES LOAN 
  7.30  PROGRAM.] 
  7.31     Subdivision 1.  [PURPOSE.] The purpose of the agriculture 
  7.32  best management practices loan program is to provide low or no 
  7.33  interest financing to farmers, agriculture supply businesses, 
  7.34  and rural landowners for the implementation of agriculture and 
  7.35  other best management practices that reduce environmental 
  7.36  pollution. 
  8.1      Subd. 2.  [AUTHORITY.] The commissioner ~~shall~~ may develop 
  8.2   administrative guidelines specifying criteria, standards, and 
  8.3   procedures for making loans and establish, adopt rules for, and 
  8.4   implement a program to make loans or otherwise provide funds to 
  8.5   local units of government, federal authorities, lending 
  8.6   institutions, and other appropriate organizations who will in 
  8.7   turn provide loans to landowners and businesses for facilities, 
  8.8   fixtures, equipment, or other ~~sustainable~~ best management 
  8.9   practices that prevent or mitigate ~~sources of nonpoint source~~ 
  8.10  ~~water~~ pollution or other adverse environmental impacts.  ~~The~~ 
  8.11  ~~commissioner shall establish pilot projects to develop~~ 
  8.12  ~~procedures for implementing the program.  The commissioner shall~~ 
  8.13  ~~develop administrative guidelines to implement the pilot~~ 
  8.14  ~~projects specifying criteria, standards, and procedures for~~ 
  8.15  ~~making loans.~~  The agriculture best management practices loan 
  8.16  program must provide a consistent programmatic framework for the 
  8.17  disbursement and administration of funds available to the 
  8.18  commissioner designated to the program for protection of 
  8.19  environmental quality or remediation or mitigation of adverse 
  8.20  environmental impacts.  The distribution of loans or funds 
  8.21  through the program must comply with all limitations, 
  8.22  provisions, or requirements of the respective funding sources.  
  8.23  Unless otherwise limited by the funding source, the commissioner 
  8.24  shall manage the program using perpetual revolving fund accounts.
  8.25     Subd. 3.  [APPROPRIATIONS.] Up to $140,000,000 of the 
  8.26  balance in the water pollution control revolving fund in section 
  8.27  446A.07, as determined by the public facilities authority, is 
  8.28  appropriated to the commissioner for the establishment of this 
  8.29  program.  In addition, the commissioner may receive 
  8.30  appropriations from the legislature and grants or funds from 
  8.31  other sources for implementation of the program. 
  8.32     Subd. 4.  [DEFINITIONS.] For the purposes of this section, 
  8.33  the terms defined in this subdivision have the meanings given 
  8.34  them. 
  8.35     (a) "Agricultural and environmental revolving accounts" 
  8.36  means accounts in the agricultural fund, controlled by the 
  9.1   commissioner, which hold funds available to the program. 
  9.2      (b) "Agriculture supply business" means a person, 
  9.3   partnership, joint venture, corporation, limited liability 
  9.4   company, association, firm, public service company, or 
  9.5   cooperative that provides materials, equipment, or services to 
  9.6   farmers or agriculture-related enterprises. 
  9.7      (c) "Allocation" means the funds awarded to an applicant 
  9.8   for implementation of best management practices through a 
  9.9   competitive or noncompetitive application process. 
  9.10     ~~(a)~~ (d) "Applicant" means a ~~county or a local government~~ 
  9.11  ~~unit designated by a county under subdivision 8, paragraph~~ 
  9.12  ~~(a)~~ local unit of government eligible to participate in this 
  9.13  program that requests an allocation of funds as provided in 
  9.14  subdivision 6b. 
  9.15     ~~(b) "Authority" means the Minnesota public facilities~~ 
  9.16  ~~authority as established in section 446A.03.~~ 
  9.17     ~~(c)~~ (e) "Best management practices" has the meaning given 
  9.18  in sections 103F.711, subdivision 3, and 103H.151, subdivision 2 
  9.19  or other practices, techniques, and measures that have been 
  9.20  demonstrated to the satisfaction of the commissioner to prevent 
  9.21  or reduce adverse environmental impacts by using the most 
  9.22  effective and practicable means of achieving environmental goals.
  9.23     ~~(d) "Chair" means the chair of the board of water and soil~~ 
  9.24  ~~resources or the designee of the chair.~~ 
  9.25     ~~(e)~~ (f) "Borrower" means ~~an individual~~ a farmer, an 
  9.26  agriculture supply business, or a rural landowner applying for a 
  9.27  low-interest loan. 
  9.28     ~~(f)~~ (g) "Commissioner" means the commissioner of 
  9.29  agriculture, including when the commissioner is acting in the 
  9.30  capacity of chair of the rural finance authority, or the 
  9.31  designee of the commissioner. 
  9.32     (h) "Committed project" means an eligible project scheduled 
  9.33  to be implemented at a future date:  
  9.34     (1) that has been approved and certified by the local 
  9.35  government unit; and 
  9.36     (2) for which a local lender has obligated itself to offer 
 10.1   a loan. 
 10.2      ~~(g)~~ (i) "Comprehensive water management plan" means a state 
 10.3   approved and locally adopted plan authorized under section 
 10.4   103B.231, 103B.255, 103B.311, 103C.331, 103D.401, or 103D.405. 
 10.5      ~~(h) "Local allocation request" means a loan allocation~~ 
 10.6   ~~request from an applicant to implement agriculturally related~~ 
 10.7   ~~best management practices defined in paragraph (c).~~ 
 10.8      (j) "Cost incurred" means expenses for implementation of a 
 10.9   project accrued because the borrower has agreed to purchase 
 10.10  equipment or is obligated to pay for services or materials 
 10.11  already provided as a result of implementing a prior approved 
 10.12  eligible project. 
 10.13     (k) "Farmer" means a person, partnership, joint venture, 
 10.14  corporation, limited liability company, association, firm, 
 10.15  public service company, or cooperative who regularly 
 10.16  participates in physical labor or operations management of 
 10.17  farming and files a Schedule F as part of filing United States 
 10.18  Internal Revenue Service Form 1040 or indicates farming as the 
 10.19  primary business activity under Schedule C, K, or S, or any 
 10.20  other applicable report to the United States Internal Revenue 
 10.21  Service. 
 10.22     ~~(i)~~ (l) "Lender agreement" means ~~a loan agreement entered~~ 
 10.23  ~~into between the commissioner, a local lender, and the~~ 
 10.24  ~~applicant, if different from the local lender.  The agreement~~ 
 10.25  ~~will contain terms and conditions of the loan that will include~~ 
 10.26  ~~but need not be limited to general loan provisions, loan~~ 
 10.27  ~~management requirements, application of payments, loan term~~ 
 10.28  ~~limits, allowable expenses, and fee limitations~~ an agreement 
 10.29  entered into between the commissioner and a local lender which 
 10.30  contains terms and conditions of participation in the program. 
 10.31     ~~(j)~~ (m) "Local government unit" means a county, soil and 
 10.32  water conservation district, or an organization formed for the 
 10.33  joint exercise of powers under section 471.59 with the authority 
 10.34  to participate in the program. 
 10.35     ~~(k)~~ (n) "Local lender" means a local government unit as 
 10.36  defined in paragraph ~~(j)~~ (m), a state or federally chartered 
 11.1   bank, a savings association, a state or federal credit 
 11.2   union, Agribank and its affiliated organizations, or a nonprofit 
 11.3   economic development organization or other financial lending 
 11.4   institution approved by the commissioner~~, or Farm Credit~~ 
 11.5   ~~Services~~. 
 11.6      (o) "Local revolving loan account" means the account held 
 11.7   by a local government unit and a local lender into which 
 11.8   principal repayments from borrowers are deposited and new loans 
 11.9   are issued in accordance with the requirements of the program 
 11.10  and lender agreements. 
 11.11     ~~(l)~~ (p) "Nonpoint source" has the meaning given in section 
 11.12  103F.711, subdivision 6. 
 11.13     (q) "Program" means the agriculture best management 
 11.14  practices loan program in this section. 
 11.15     (r) "Project" means one or more components or activities 
 11.16  located within Minnesota that are required by the local 
 11.17  government unit to be implemented for satisfactory completion of 
 11.18  an eligible best management practice. 
 11.19     (s) "Rural landowner" means the owner of record of 
 11.20  Minnesota real estate located in an area determined by the local 
 11.21  government unit to be rural after consideration of local land 
 11.22  use patterns, zoning regulations, jurisdictional boundaries, 
 11.23  local community definitions, historical uses, and other 
 11.24  pertinent local factors. 
 11.25     Subd. 5.  [USES OF FUNDS.] Use of funds under this section 
 11.26  must be in compliance with the rules and regulations of the 
 11.27  funding source or appropriation.  Use of funds from the public 
 11.28  facilities authority must comply with the federal Water 
 11.29  Pollution Control Act, section 446A.07, and eligible activities 
 11.30  listed in the intended use plan authorized in section 446A.07, 
 11.31  subdivision 4. 
 11.32     Subd. 5a.  [AGRICULTURAL AND ENVIRONMENTAL REVOLVING 
 11.33  ACCOUNTS.] (a) There shall be established in the agricultural 
 11.34  fund revolving accounts eligible to receive appropriations and 
 11.35  money from other sources.  All repayments of loans granted under 
 11.36  this section, including principal and interest, must be 
 12.1   deposited into the appropriate revolving account created in this 
 12.2   subdivision or the account created in subdivision 13.  Interest 
 12.3   earned in an account accrues to that account. 
 12.4      (b) The money in the revolving accounts and the account 
 12.5   created in subdivision 13 is appropriated to the commissioner 
 12.6   for the purposes of this section.  
 12.7      Subd. 6.  [APPLICATION.] (a) Only the following local 
 12.8   government units may apply for funds under this program: 
 12.9      (1) counties or their designees; 
 12.10     (2) soil and water conservation districts; and 
 12.11     (3) joint power organizations consisting of counties or 
 12.12  their designees or soil and water conservation districts. 
 12.13     (b) A county may submit an application for an allocation.  
 12.14  A county or a group of counties may designate another local 
 12.15  government unit to submit a local allocation request on their 
 12.16  behalf.  If a county does not submit an application, and does 
 12.17  not designate another local government unit, a soil and water 
 12.18  conservation district may submit an application for an 
 12.19  allocation.  If the local soil and water conservation district 
 12.20  does not submit an application, then an eligible joint powers 
 12.21  organization may submit an application for an allocation.  In 
 12.22  all instances, there may be only one application representing 
 12.23  any geographic area.  The applicant must coordinate and submit 
 12.24  requests on behalf of other units of government within the 
 12.25  geographic jurisdiction of the applicant. 
 12.26     ~~(a)~~ (c) The commissioner must prescribe forms and establish 
 12.27  an application process for applicants to apply for ~~a local~~ an 
 12.28  allocation ~~request~~ of funds.  The application must include but 
 12.29  need not be limited to (1) the geographic area served; (2) the 
 12.30  type and estimated cost of activities or projects for which they 
 12.31  are seeking ~~a loan~~ an allocation; and (3) ~~a ranking~~ 
 12.32  prioritization or targeting of proposed activities or projects~~;~~ 
 12.33  ~~and (4) the designation of the local lender and lending~~ 
 12.34  ~~practices the local lender intends to use to issue the loans to~~ 
 12.35  ~~the borrowers, if a local lender other than the applicant is to~~ 
 12.36  ~~be used~~. 
 13.1      ~~(b)~~ (d) If ~~a local allocation request~~ an application is 
 13.2   rejected, the applicant must be notified in writing as to the 
 13.3   reasons for the rejection and given 30 days to submit a revised 
 13.4   application.  The revised application shall be reviewed 
 13.5   according to the same procedure used to review the initial 
 13.6   application.  Failure of an applicant to be awarded funds does 
 13.7   not constitute a rejection of the application. 
 13.8      Subd. 6a.  [REVIEW AND RANKING OF APPLICATIONS.] (a) The 
 13.9   commissioner shall chair the subcommittee established in section 
 13.10  103F.761, subdivision 2, paragraph (b), for purposes of 
 13.11  reviewing and ranking applications and recommending to the 
 13.12  commissioner allocation amounts.  The subcommittee consists of 
 13.13  representatives of the departments of agriculture, natural 
 13.14  resources, and health; the pollution control agency; the board 
 13.15  of water and soil resources; the Farm Service Agency and the 
 13.16  Natural Resource Conservation Service of the United States 
 13.17  Department of Agriculture; the Association of Minnesota 
 13.18  Counties; the Minnesota Association of Soil and Water 
 13.19  Conservation Districts; and other agencies or associations the 
 13.20  commissioner determines are appropriate. 
 13.21     (b) The subcommittee must use the criteria in clauses (1) 
 13.22  to (9) as well as other criteria it determines appropriate in 
 13.23  carrying out the review and ranking: 
 13.24     (1) whether the proposed activities are identified in a 
 13.25  comprehensive water management plan or other appropriate local 
 13.26  planning documents as priorities; 
 13.27     (2) the potential that the proposed activities have for 
 13.28  improving or protecting environmental quality; 
 13.29     (3) the extent that the proposed activities support 
 13.30  areawide or multijurisdictional approaches to protecting 
 13.31  environmental quality based on defined watershed or similar 
 13.32  geographic areas; 
 13.33     (4) whether the activities are needed for compliance with 
 13.34  existing environmental laws or rules; 
 13.35     (5) whether the proposed activities demonstrate 
 13.36  participation, coordination, and cooperation between local units 
 14.1   of government and other public agencies; 
 14.2      (6) whether there is coordination with other public and 
 14.3   private funding sources and programs; 
 14.4      (7) whether the applicant has targeted specific best 
 14.5   management practices to resolve specific environmental problems; 
 14.6      (8) past performance of the applicant in completing 
 14.7   projects identified in prior applications and allocation 
 14.8   agreements; and 
 14.9      (9) whether there are off-site public benefits. 
 14.10     Subd. 6b.  [ALLOCATION AMOUNT.] (a) The subcommittee 
 14.11  created in subdivision 6a shall recommend to the commissioner 
 14.12  the amount of allocation for each applicant.  This allocation 
 14.13  must include: 
 14.14     (1) the amount of repayments received by the commissioner 
 14.15  during the previous year from prior completed projects approved 
 14.16  by the local government unit; and 
 14.17     (2) the amount of funds previously designated to committed 
 14.18  projects. 
 14.19     (b) Within the limits of the funds available to the 
 14.20  commissioner, the subcommittee may recommend an increased 
 14.21  allocation award to the applicant based on: 
 14.22     (1) the ranking of the local government unit application 
 14.23  under subdivision 6a; and 
 14.24     (2) the amount of unallocated or uncommitted funds in, or 
 14.25  that will be received by, the agricultural and environmental 
 14.26  revolving accounts within one year. 
 14.27     (c) Notwithstanding paragraphs (a) and (b), the 
 14.28  commissioner may reserve up to two percent of all funds 
 14.29  appropriated to the agricultural and environmental revolving 
 14.30  accounts to be allocated to applicants that disburse or commit 
 14.31  all of their current allocations or to local lenders who wish to 
 14.32  provide financial assistance.  
 14.33     The commissioner may add, for the purposes of calculating 
 14.34  future allocations under paragraphs (a) and (b), the loan amount 
 14.35  for projects financed from these reserved funds to the 
 14.36  allocation for the respective local government units in which 
 15.1   jurisdiction the project was completed.  
 15.2      Subd. 7.  [PAYMENTS TO LOCAL LENDERS.] (a) Payments made 
 15.3   from the ~~water pollution control revolving fund~~ commissioner to 
 15.4   the local lender must be made in accordance with applicable 
 15.5   state and federal laws and rules governing the payments and the 
 15.6   lender agreement. 
 15.7      (b) Payments from the commissioner to the local lender must 
 15.8   be disbursed on a cost-incurred basis.  ~~Local lenders shall~~ 
 15.9   ~~submit payment requests at least quarterly but not more than~~ 
 15.10  ~~monthly.  Payment requests must be reviewed and approved by the~~ 
 15.11  ~~commissioner.  The payment request form must itemize all costs~~ 
 15.12  ~~by major elements and show eligible and ineligible costs.~~  The 
 15.13  request must be made in accordance with requirements and 
 15.14  procedures established by the commissioner.  Payment requests 
 15.15  must be reviewed and approved by the commissioner. 
 15.16     ~~(c) The commissioner may initiate recision of an allocation~~ 
 15.17  ~~granted in a lender agreement as provided in subdivision 11,~~ 
 15.18  ~~paragraph (d), if the local lender fails to enter into loans~~ 
 15.19  ~~with borrowers equaling the total allocation granted within one~~ 
 15.20  ~~year from the date of the lender agreement or fails to have the~~ 
 15.21  ~~total amount of allocated funds drawn down through payment~~ 
 15.22  ~~requests within two years.  An additional year to draw down the~~ 
 15.23  ~~undisbursed portion of an allocation may be granted by the~~ 
 15.24  ~~commissioner under extenuating circumstances.~~  
 15.25     Subd. 8.  [~~APPLICANT; BORROWERS~~ ALLOCATION AGREEMENT.] ~~(a)~~ 
 15.26  ~~A county may submit a local allocation request.  A county or a~~ 
 15.27  ~~group of counties may designate another local government unit to~~ 
 15.28  ~~submit a local allocation request.~~ 
 15.29     ~~(b) If a county does not submit a local allocation request,~~ 
 15.30  ~~and does not designate another local government unit, a soil and~~ 
 15.31  ~~water conservation district may submit a local allocation~~ 
 15.32  ~~request.  In all instances, there may be only one request from a~~ 
 15.33  ~~county.  The applicant must coordinate and submit requests on~~ 
 15.34  ~~behalf of other units of government within the geographic~~ 
 15.35  ~~jurisdiction of the applicant.~~ (a) Eligible local government 
 15.36  units with an allocation award may enter into an allocation 
 16.1   agreement with the commissioner and participate in this program. 
 16.2      (b) The allocation agreement must contain terms and 
 16.3   conditions for participation in this program and providing of 
 16.4   funds through this program, including, but not limited to:  
 16.5   program requirements, reporting requirements, project 
 16.6   eligibility and limitations, allowable expenses, limitations, 
 16.7   rescission and cancellation provisions, and the responsibilities 
 16.8   of the commissioner, local government unit, and local lender. 
 16.9      (c) If the commissioner determines that a local government 
 16.10  unit is not in compliance with the terms of the allocation 
 16.11  agreement, the commissioner may rescind all or part of any 
 16.12  allocation awarded through this program. 
 16.13     Subd. 9.  [~~REVIEW AND RANKING OF ALLOCATION REQUESTS~~ 
 16.14  ALLOCATION RESCISSION.] ~~(a) The commissioner shall chair the~~ 
 16.15  ~~subcommittee established in section 103F.761, subdivision 2,~~ 
 16.16  ~~paragraph (b), for purposes of reviewing and ranking local~~ 
 16.17  ~~allocation requests.  The rankings must be in order of priority~~ 
 16.18  ~~and shall provide financial assistance within the limits of the~~ 
 16.19  ~~funds available.  In carrying out the review and ranking, the~~ 
 16.20  ~~subcommittee must consist of, at a minimum, the chair,~~ 
 16.21  ~~representatives of the pollution control agency, United States~~ 
 16.22  ~~Department of Agricultural Stabilization and Conservation~~ 
 16.23  ~~Service, United States Department of Agriculture Soil~~ 
 16.24  ~~Conservation Service, Association of Minnesota Counties, and~~ 
 16.25  ~~other agencies or associations as the commissioner, the chair,~~ 
 16.26  ~~and agency determine are appropriate.  The review and ranking~~ 
 16.27  ~~shall take into consideration other related state or federal~~ 
 16.28  ~~programs.~~ 
 16.29     ~~(b) The subcommittee shall use the criteria listed below in~~ 
 16.30  ~~carrying out the review and ranking:~~ 
 16.31     ~~(1) whether the proposed activities are identified in a~~ 
 16.32  ~~comprehensive water management plan as priorities;~~ 
 16.33     ~~(2) whether the applicant intends to establish a revolving~~ 
 16.34  ~~loan program under subdivision 10, paragraph (b);~~ 
 16.35     ~~(3) the potential that the proposed activities have for~~ 
 16.36  ~~improving or protecting surface and groundwater quality;~~ 
 17.1      ~~(4) the extent that the proposed activities support~~ 
 17.2   ~~areawide or multijurisdictional approaches to protecting water~~ 
 17.3   ~~quality based on defined watershed;~~ 
 17.4      ~~(5) whether the activities are needed for compliance with~~ 
 17.5   ~~existing water related laws or rules;~~ 
 17.6      ~~(6) whether the proposed activities demonstrate~~ 
 17.7   ~~participation, coordination, and cooperation between local units~~ 
 17.8   ~~of government and other public agencies;~~ 
 17.9      ~~(7) whether there is coordination with other public and~~ 
 17.10  ~~private funding sources and programs;~~ 
 17.11     ~~(8) whether there are off-site public benefits such as~~ 
 17.12  ~~preventing downstream degradation and siltation; and~~ 
 17.13     ~~(9) the proposed interest rate.~~ (a) Continued availability 
 17.14  of allocations granted to a local government unit is contingent 
 17.15  upon the commissioner's approval of the local government unit's 
 17.16  annual report.  The commissioner shall review this annual report 
 17.17  to ensure that the past and future uses of the funds are 
 17.18  consistent with the comprehensive water management plan, other 
 17.19  local planning documents, the requirements of the funding 
 17.20  source, and compliance to program requirements.  If the 
 17.21  commissioner concludes the past or intended uses of the money 
 17.22  are not consistent with these requirements, the commissioner 
 17.23  shall rescind all or part of the allocation awarded to a local 
 17.24  government unit. 
 17.25     (b) The commissioner may rescind funds allocated to the 
 17.26  local government unit that are not designated to committed 
 17.27  projects or disbursed within one year from the date of the 
 17.28  allocation agreement. 
 17.29     (c) An additional year to use the undisbursed portion of an 
 17.30  allocation may be granted by the commissioner under extenuating 
 17.31  circumstances. 
 17.32     Subd. 9a.  [AUTHORITY AND RESPONSIBILITIES OF ~~APPLICANTS~~ 
 17.33  THE LOCAL GOVERNMENT UNITS.] ~~Applicants may enter into a lender~~ 
 17.34  ~~agreement designating a local lender.  Applicants designating~~ 
 17.35  ~~themselves as the local lender may enter into contracts for loan~~ 
 17.36  ~~review, processing, and servicing.~~ (a) A local government unit 
 18.1   that enters into an allocation agreement with the commissioner: 
 18.2      (1) is responsible for the local administration and 
 18.3   implementation of the program in accordance with this section; 
 18.4      (2) may submit applications for allocations to the 
 18.5   commissioner; 
 18.6      (3) shall identify, develop, determine eligibility, define 
 18.7   and approve projects, designate maximum loan amounts for 
 18.8   projects, and certify completion of projects implemented under 
 18.9   this program.  In areas where no local government unit has 
 18.10  applied for funds under this program, the commissioner may 
 18.11  appoint a local government unit to review and certify projects 
 18.12  or the commissioner may assume the authority and responsibility 
 18.13  of the local government unit; 
 18.14     (4) shall certify as eligible only projects that are within 
 18.15  its geographic jurisdiction or within the geographic area 
 18.16  identified in its local comprehensive water management plans or 
 18.17  other local planning documents; 
 18.18     (5) may require withholding by the local lender of all or a 
 18.19  portion of the loan to the borrower until satisfactory 
 18.20  completion of all required components of a certified project; 
 18.21     (6) must identify which account is used to finance an 
 18.22  approved project if the local government unit has allocations 
 18.23  from multiple accounts in the agricultural and environmental 
 18.24  revolving accounts; 
 18.25     (7) shall report to the commissioner annually the past and 
 18.26  intended uses of allocations awarded; and 
 18.27     (8) may request additional funds in excess of their 
 18.28  allocation when funds are available in the agricultural and 
 18.29  environmental revolving accounts, as long as all other 
 18.30  allocation awards to the local government unit have been used or 
 18.31  committed. 
 18.32     (b) If a local government unit withdraws from participation 
 18.33  in this program, the local government unit, or the commissioner 
 18.34  in accordance with the priorities established under subdivision 
 18.35  6a, may designate another local government unit that is eligible 
 18.36  under subdivision 6, as the new local government unit 
 19.1   responsible for local administration of this program.  This 
 19.2   designated local government unit may accept responsibility and 
 19.3   administration of allocations awarded to the former responsible 
 19.4   local government unit. 
 19.5      Subd. 9b.  [LENDER AGREEMENT.] (a) Any local lender 
 19.6   entering into a lender agreement with the commissioner may 
 19.7   participate in this program. 
 19.8      (b) The lender agreement will contain terms and conditions 
 19.9   for participation in this program and providing funds to the 
 19.10  local lenders, including but not limited to, program 
 19.11  requirements, loan and account management requirements, 
 19.12  payments, repayments, term limits, allowable expenses, fee 
 19.13  limitations, rescission and cancellation provisions, collateral 
 19.14  and security requirements, reporting requirements, review and 
 19.15  appeal procedure for cancellation of the loan agreement or 
 19.16  disqualification as a local lender, and the responsibilities of 
 19.17  the commissioner, local government unit, and local lender. 
 19.18     (c) If the commissioner determines that a local lender is 
 19.19  not in compliance with the terms of the lender agreement, the 
 19.20  commissioner may take the following actions: 
 19.21     (1) disqualifying the local lender as a participating 
 19.22  lender in this program for a period of up to five years from the 
 19.23  date that the commissioner determines noncompliance to the 
 19.24  lender agreement; and 
 19.25     (2) requiring immediate or accelerated repayment of all or 
 19.26  part of all funds provided to the local lender. 
 19.27     (d) Existing lender agreements, executed prior to July 1, 
 19.28  2001, may be amended by mutual consent of all signatory parties, 
 19.29  to comply with this section, to establish a single allocation 
 19.30  agreement that includes the amount of prior allocation awards 
 19.31  and defines the terms and conditions required under subdivision 
 19.32  8, or to modify the amount of allocation awarded. 
 19.33     Subd. 10.  [AUTHORITY AND RESPONSIBILITIES OF LOCAL 
 19.34  LENDERS.] (a) Local lenders may enter into lender agreements 
 19.35  with the commissioner. 
 19.36     (b) Local lenders may enter into loan agreements with 
 20.1   borrowers to finance eligible projects under this section. 
 20.2      (c) ~~Local lenders may establish revolving loan programs to~~ 
 20.3   ~~finance projects under this section~~ The local lender shall 
 20.4   notify the local government unit of the loan amount issued to 
 20.5   the borrower after the closing of each loan. 
 20.6      (d) Local lenders with local revolving loan accounts 
 20.7   created before July 1, 2001, may continue to retain and use 
 20.8   those accounts in accordance with their lending agreements for 
 20.9   the full term of those agreements. 
 20.10     (e) Local lenders, including ~~applicants~~ local government 
 20.11  units designating themselves as the local lender, may enter into 
 20.12  participation agreements with other lenders. 
 20.13     (f) Local lenders may ~~also~~ enter into contracts with other 
 20.14  lenders for the limited purposes of loan review, processing and 
 20.15  servicing, or to enter into loan agreements with borrowers to 
 20.16  finance projects under this section.  Other lenders entering 
 20.17  into contracts with local lenders under this section must meet 
 20.18  the definition of local lender in subdivision 4, must comply 
 20.19  with all provisions of the lender agreement and this section, 
 20.20  and must guarantee repayment of the loan funds to the local 
 20.21  lender.  ~~In no case may there be more than one local lender per~~ 
 20.22  ~~county or more than one revolving fund per county.~~ 
 20.23     (g) When required by the local government unit, a local 
 20.24  lender must withhold all or a portion of the loan disbursement 
 20.25  for a project until notified by the local government unit that 
 20.26  the project has been satisfactorily completed. 
 20.27     (h) The local lender is responsible for repaying all funds 
 20.28  provided by the commissioner to the local lender. 
 20.29     (i) The local lender is responsible for collecting 
 20.30  repayments from borrowers.  If a borrower defaults on a loan 
 20.31  issued by the local lender, it is the responsibility of the 
 20.32  local lender to obtain repayment from the borrower.  Default on 
 20.33  the part of borrowers shall have no effect on the local lender's 
 20.34  responsibility to repay its obligations to the commissioner 
 20.35  whether or not the local lender fully recovers defaulted amounts 
 20.36  from borrowers. 
 21.1      (j) The local lender shall provide sufficient collateral or 
 21.2   protection to the commissioner for the funds provided to the 
 21.3   local lender.  The commissioner must approve the collateral or 
 21.4   protection provided. 
 21.5      Subd. 11.  [LOANS ISSUED TO BORROWER ~~ELIGIBILITY; TERMS;~~ 
 21.6   ~~REPAYMENT; RECISION~~.] (a) Local lenders ~~shall use the following~~ 
 21.7   ~~criteria in addition to other criteria they deem necessary in~~ 
 21.8   ~~determining the eligibility of borrowers for loans:~~ 
 21.9      ~~(1) whether the activity is certified by a local unit of~~ 
 21.10  ~~government~~ may issue loans only for projects that are approved 
 21.11  and certified by the local government unit as meeting priority 
 21.12  needs identified in a comprehensive water management plan ~~and is~~ 
 21.13  or other local planning documents, are in compliance with 
 21.14  accepted practices, standards, specifications, or criteria~~;~~ 
 21.15     ~~(2) whether the activity is certified as~~, and are eligible 
 21.16  for financing under Environmental Protection Agency or other 
 21.17  applicable guidelines~~; and~~ 
 21.18     ~~(3) whether the repayment is assured from the borrower~~. 
 21.19     (b) The local lender may use any additional criteria 
 21.20  considered necessary to determine the eligibility of borrowers 
 21.21  for loans. 
 21.22     (c) Local lenders shall set the terms and conditions of 
 21.23  loans to borrowers, except that: 
 21.24     (1) no loan to ~~an individual~~ a borrower may exceed $50,000; 
 21.25     (2) no loan for a project may exceed $50,000; and 
 21.26     (3) no borrower shall, at any time, have multiple loans 
 21.27  from this program with a total outstanding loan balance of more 
 21.28  than $50,000.  ~~In all instances, local lenders must provide for~~ 
 21.29  ~~sufficient collateral or protection for the loan principal.~~  
 21.30  ~~They are responsible for collecting repayments by borrowers.~~  
 21.31     ~~(c) The local lender is responsible for repaying the~~ 
 21.32  ~~principal of a loan to the commissioner.  The terms of repayment~~ 
 21.33  ~~will be identified in the lender agreement.  If defaults occur,~~ 
 21.34  ~~it is the responsibility of the local lender to obtain repayment~~ 
 21.35  ~~from the borrower.  Default on the part of individual borrowers~~ 
 21.36  ~~shall have no effect on the local lender's responsibility to~~ 
 22.1   ~~repay its loan from the commissioner whether or not the local~~ 
 22.2   ~~lender fully recovers defaulted amounts from individual~~ 
 22.3   ~~borrowers.  For revolving loan programs established under~~ 
 22.4   ~~subdivision 10, paragraph (c), the lender agreement must provide~~ 
 22.5   ~~that:~~ 
 22.6      ~~(1) repayment of principal to the commissioner must begin~~ 
 22.7   ~~no later than ten years after the date of the lender agreement~~ 
 22.8   ~~and must be repaid in full no later than 20 years after the date~~ 
 22.9   ~~of the lender agreement;~~ 
 22.10     ~~(2) after the initial ten-year period, the local lender~~ 
 22.11  ~~shall not write any additional loans, and any existing principal~~ 
 22.12  ~~balance held by the local lender shall be immediately repaid to~~ 
 22.13  ~~the commissioner;~~ 
 22.14     ~~(3) after the initial ten-year period, all principal~~ 
 22.15  ~~received by the local lender from borrowers shall be repaid to~~ 
 22.16  ~~the commissioner as it is received; and~~ 
 22.17     ~~(4) the applicant shall report to the commissioner annually~~ 
 22.18  ~~regarding the past and intended uses of the money in the~~ 
 22.19  ~~revolving loan program.~~ 
 22.20     ~~(d) Continued availability of the allocation granted in the~~ 
 22.21  ~~lender agreement is contingent upon commissioner approval of the~~ 
 22.22  ~~annual report.  The commissioner shall review the annual report~~ 
 22.23  ~~to ensure the past and future uses of the funds are consistent~~ 
 22.24  ~~with the comprehensive water management plan and the lender~~ 
 22.25  ~~agreement.  If the commissioner concludes the past or intended~~ 
 22.26  ~~uses of the money are not consistent with the comprehensive~~ 
 22.27  ~~water management plan or the lender agreement, the commissioner~~ 
 22.28  ~~shall rescind the allocation granted under the lender agreement.~~ 
 22.29  ~~Such recision shall result in termination of available~~ 
 22.30  ~~allocation, the immediate repayment of any unencumbered funds~~ 
 22.31  ~~held by the local lender in a revolving loan fund, and the~~ 
 22.32  ~~repayment of the principal portion of loan repayments to the~~ 
 22.33  ~~commissioner as they are received.  The lender agreement shall~~ 
 22.34  ~~reflect the commissioner's rights under this paragraph.~~ 
 22.35     ~~(e) A local lender shall receive certification from local~~ 
 22.36  ~~government unit staff that a project has been satisfactorily~~ 
 23.1   ~~completed prior to releasing the final loan disbursement.~~ 
 23.2      (d) The maximum term length for conservation tillage and 
 23.3   individual sewage treatment system projects is five years.  The 
 23.4   maximum term length for other projects in this paragraph is ten 
 23.5   years. 
 23.6      (e) Fees charged at the time of closing must: 
 23.7      (1) be in compliance with normal and customary practices of 
 23.8   the local lender; 
 23.9      (2) be in accordance with published fee schedules issued by 
 23.10  the local lender; 
 23.11     (3) not be based on participation program; and 
 23.12     (4) be consistent with fees charged other similar types of 
 23.13  loans offered by the local lender. 
 23.14     (f) The interest rate assessed to outstanding loan balance 
 23.15  by the local lender must not exceed three percent per year. 
 23.16     Subd. 11a.  [ELIGIBLE PROJECTS.] All projects that 
 23.17  remediate or mitigate adverse environmental impacts are eligible 
 23.18  if: 
 23.19     (1) the project is eligible under the allocation agreement 
 23.20  and funding sources designated by the local government unit to 
 23.21  finance the project; and 
 23.22     (2) manure management projects remediate or mitigate 
 23.23  impacts from facilities with less than 1,000 animal units as 
 23.24  defined in Minnesota Rules, chapter 7020. 
 23.25     Subd. 12.  [DATA PRIVACY.] The following data on ~~applicants~~ 
 23.26  local government units, local lenders, or borrowers collected by 
 23.27  the commissioner under this section are private for data on 
 23.28  individuals as provided in section 13.02, subdivision 12, or 
 23.29  nonpublic for data not on individuals as provided in section 
 23.30  13.02, subdivision 9:  financial information, including, but not 
 23.31  limited to, credit reports, financial statements, tax returns 
 23.32  and net worth calculations received or prepared by the 
 23.33  commissioner. 
 23.34     Subd. 13.  [ESTABLISHMENT OF ACCOUNT.] The public 
 23.35  facilities authority shall establish an account called the 
 23.36  agriculture best management practices revolving ~~fund~~ account to 
 24.1   provide loans and other forms of financial assistance authorized 
 24.2   under section 446A.07.  The ~~fund~~ account must be credited with 
 24.3   repayments. 
 24.4      ~~Subd. 14.  [FEES AND INTEREST.] (a) Origination fees~~ 
 24.5   ~~charged directly to borrowers by local lenders upon executing a~~ 
 24.6   ~~loan shall not exceed one-half of one percent of the loan~~ 
 24.7   ~~amount.  Interest assessed to loan repayments by the local~~ 
 24.8   ~~lender must not exceed three percent.~~  
 24.9      ~~(b) The local lender shall create a principal account to~~ 
 24.10  ~~which the principal portions of individual borrower loan~~ 
 24.11  ~~repayments will be credited.~~ 
 24.12     ~~(c) Any interest earned on outstanding loan balances not~~ 
 24.13  ~~separated as repayments are received and before the principal~~ 
 24.14  ~~amounts are deposited in the principal account shall be added to~~ 
 24.15  ~~the principal portion of the loan to the local lender and must~~ 
 24.16  ~~be paid to the commissioner when the principal is due under the~~ 
 24.17  ~~lender agreement.~~ 
 24.18     ~~(d) Any interest earned on the principal account must be~~ 
 24.19  ~~added to the principal portion of the loan to the local lender~~ 
 24.20  ~~and must be paid to the commissioner when the principal is due~~ 
 24.21  ~~under the lender agreement.~~ 
 24.22     Subd. 15.  [COMMISSIONER'S REPORT.] (a) The commissioner 
 24.23  ~~and chair~~ shall prepare and submit a report to the house of 
 24.24  representatives and senate committees with jurisdiction over the 
 24.25  environment, natural resources, and agriculture by October 15 of 
 24.26  each odd-numbered year. 
 24.27     (b) The report shall include, but need not be limited to, 
 24.28  matters such as loan allocations and uses, the extent to which 
 24.29  the financial assistance is helping implement local water and 
 24.30  other environmental planning priorities, the integration or 
 24.31  coordination that has occurred with related programs, and other 
 24.32  matters deemed pertinent to the implementation of the program. 
 24.33     Subd. 16.  [LIENS AGAINST PROPERTY.] (a) ~~Unless a county~~ 
 24.34  ~~determines otherwise, at the time of the disbursement of funds~~ 
 24.35  ~~on a loan to a borrower under this section, the principal~~ 
 24.36  ~~balance due plus accrued interest on the principal balance as~~ 
 25.1   ~~provided by this section becomes a lien in favor of the county~~ 
 25.2   ~~making the loan upon the real property on which the project is~~ 
 25.3   ~~located.  The lien must be first and prior to all other liens~~ 
 25.4   ~~against the property, including state tax liens, whether filed~~ 
 25.5   ~~before or after the placing of a lien under this subdivision,~~ 
 25.6   ~~except liens for special assessments by the county under~~ 
 25.7   ~~applicable special assessments laws, which liens shall be of~~ 
 25.8   ~~equal rank with the lien created under this subdivision.  A lien~~ 
 25.9   ~~in favor of the county shall be first and prior as provided in~~ 
 25.10  ~~this subdivision only if the county making the loan gives~~ 
 25.11  ~~written notice of the intent to make the loan under this~~ 
 25.12  ~~subdivision to all other persons having a recorded interest in~~ 
 25.13  ~~the real property subject to the lien, no less than 30 days~~ 
 25.14  ~~prior to the disbursement of the funds, and receives an~~ 
 25.15  ~~agreement to subordinate superior lien positions held by all~~ 
 25.16  ~~other lenders having a recorded interest in the real property~~ 
 25.17  ~~subject to the lien.  This lien and subordination agreement must~~ 
 25.18  ~~be recorded against the real estate in the county recorder's~~ 
 25.19  ~~office or filed with the registrar of titles for the county or~~ 
 25.20  ~~counties in which the property is located.  The county may bill~~ 
 25.21  ~~amounts due on the loan on the tax statement for the property.~~  
 25.22  ~~Enforcement of the lien created by this subdivision shall, at~~ 
 25.23  ~~the county's option, be in the manner set forth in chapter 580~~ 
 25.24  ~~or 581.  When the amount due plus interest has been paid, the~~ 
 25.25  ~~county shall file a satisfaction of the lien created under this~~ 
 25.26  ~~subdivision.~~  The amount of loans and accruing interest made by 
 25.27  counties acting as local lenders under this section is a lien 
 25.28  against the real property for which the improvement was made and 
 25.29  must be assessed against the property or properties benefited 
 25.30  unless the amount is prepaid.  An amount loaned under the 
 25.31  program and its accruing interest assessed against the property 
 25.32  is a priority lien only against subsequent liens. 
 25.33     (b) The county may bill amounts due on the loan on the tax 
 25.34  statement for the property.  Enforcement of the lien created by 
 25.35  this subdivision must, at the county's option, be in the manner 
 25.36  set forth in chapter 580 or 581.  When the amount due and all 
 26.1   interest has been paid, the county shall file a satisfaction of 
 26.2   the lien created under this subdivision. 
 26.3      ~~(b)~~ (c) A county may also secure amounts due on a loan 
 26.4   under this section by taking a purchase money security interest 
 26.5   in equipment in accordance with chapter 336, article 9, and may 
 26.6   enforce the purchase money security interest in accordance with 
 26.7   chapters 336, article 9, and 565. 
 26.8      Subd. 17.  [REFERENDUM EXEMPTION.] For the purpose of 
 26.9   obtaining a loan from the commissioner, a local government unit 
 26.10  acting as a local lender may provide to the commissioner its 
 26.11  general obligation note.  All obligations incurred by a local 
 26.12  government unit in obtaining a loan from the commissioner must 
 26.13  be in accordance with chapter 475, except that so long as the 
 26.14  obligations are issued to evidence a loan from the commissioner 
 26.15  to the local government unit, an election is not required to 
 26.16  authorize the obligations issued, and the amount of the 
 26.17  obligations shall not be included in determining the net 
 26.18  indebtedness of the local government unit under the provisions 
 26.19  of any law or chapter limiting the indebtedness. 
 26.20     Sec. 7.  Minnesota Statutes 2000, section 17.53, 
 26.21  subdivision 2, is amended to read: 
 26.22     Subd. 2.  [AGRICULTURAL COMMODITY.] (a) Except as provided 
 26.23  in paragraph (b), "agricultural commodity" means any 
 26.24  agricultural product, including, without limitation, animals and 
 26.25  animal products, grown, raised, produced, or fed within 
 26.26  Minnesota for use as food, feed, seed, or any industrial or 
 26.27  chemurgic purpose. 
 26.28     (b) For wheat ~~and~~, barley, and cultivated wild 
 26.29  rice, "agricultural commodity" means wheat ~~and~~, barley, and 
 26.30  cultivated wild rice, including, without limitation, wheat ~~and~~, 
 26.31  barley, and cultivated wild rice grown or produced within or 
 26.32  outside Minnesota, for use as food, feed, seed, or any 
 26.33  industrial or chemurgic purpose.  
 26.34     Sec. 8.  Minnesota Statutes 2000, section 17.53, 
 26.35  subdivision 8, is amended to read: 
 26.36     Subd. 8.  [FIRST PURCHASER.] (a) Except as provided in 
 27.1   paragraph (b), "first purchaser" means any person that buys 
 27.2   agricultural commodities for movement into commercial channels 
 27.3   from the producer; or any lienholder, secured party or pledgee, 
 27.4   public or private, or assignee of said lienholder, secured party 
 27.5   or pledgee, who gains title to the agricultural commodity from 
 27.6   the producer as the result of exercising any legal rights by the 
 27.7   lienholder, secured party, pledgee, or assignee thereof, 
 27.8   regardless of when the lien, security interest or pledge was 
 27.9   created and regardless of whether the first purchaser is 
 27.10  domiciled within the state or without.  "First purchaser" does 
 27.11  not mean the commodity credit corporation when a commodity is 
 27.12  used as collateral for a federal nonrecourse loan unless the 
 27.13  commissioner determines otherwise.  
 27.14     (b) For wheat ~~and~~, barley, and cultivated wild rice, "first 
 27.15  purchaser" means a person who buys, receives delivery of, or 
 27.16  provides storage for the agricultural commodity from a producer 
 27.17  for movement into commercial channels; or a lienholder, secured 
 27.18  party, or pledgee, who gains title to the agricultural commodity 
 27.19  from the producers as the result of exercising any legal rights 
 27.20  by the lienholder, secured party, pledgee, or assignee, 
 27.21  regardless of when the lien, security interest, or pledge was 
 27.22  created and regardless of whether or not the first purchaser is 
 27.23  domiciled in the state.  "First purchaser" does not mean the 
 27.24  commodity credit corporation when the wheat ~~or~~, barley, or 
 27.25  cultivated wild rice is used as collateral for a federal 
 27.26  nonrecourse loan unless the commissioner determines otherwise. 
 27.27     Sec. 9.  Minnesota Statutes 2000, section 17.53, 
 27.28  subdivision 13, is amended to read: 
 27.29     Subd. 13.  [PRODUCER.] (a) Except as provided in paragraph 
 27.30  (b), "producer" means any person who owns or operates an 
 27.31  agricultural producing or growing facility for an agricultural 
 27.32  commodity and shares in the profits and risk of loss from such 
 27.33  operation, and who grows, raises, feeds or produces the 
 27.34  agricultural commodity in Minnesota during the current or 
 27.35  preceding marketing year. 
 27.36     (b) For wheat ~~and~~, barley, and cultivated wild 
 28.1   rice, "producer" means in addition to the meaning in paragraph 
 28.2   (a) and for the purpose of the payment or the refund of the 
 28.3   checkoff fee paid pursuant to sections 17.51 to 17.69 only, a 
 28.4   person who delivers into, stores within, or makes the first sale 
 28.5   of the agricultural commodity in Minnesota. 
 28.6      Sec. 10.  Minnesota Statutes 2000, section 17.63, is 
 28.7   amended to read: 
 28.8      17.63 [REFUND OF FEES.] 
 28.9      (a) Any producer, except a producer of potatoes in area 
 28.10  number one, as listed in section 17.54, subdivision 9, a 
 28.11  producer of wheat or barley, or a producer of ~~paddy~~ cultivated 
 28.12  wild rice, may, by the use of forms to be provided by the 
 28.13  commissioner and upon presentation of such proof as the 
 28.14  commissioner requires, have the checkoff fee paid pursuant to 
 28.15  sections 17.51 to 17.69 fully or partially refunded, provided 
 28.16  the checkoff fee was remitted on a timely basis.  The request 
 28.17  for refund must be received in the office of the commissioner 
 28.18  within the time specified in the promotion order following the 
 28.19  payment of the checkoff fee.  In no event shall these requests 
 28.20  for refund be accepted more often than 12 times per year.  
 28.21  Refund shall be made by the commissioner and council within 30 
 28.22  days of the request for refund provided that the checkoff fee 
 28.23  sought to be refunded has been received.  Rules governing the 
 28.24  refund of checkoff fees for all commodities shall be formulated 
 28.25  by the commissioner, shall be fully outlined in the promotion 
 28.26  order, and shall be available for the information of all 
 28.27  producers concerned with the referendum. 
 28.28     (b) The commissioner must allow partial refund requests 
 28.29  from corn producers who have checked off and must allow for 
 28.30  assignment of payment to the Minnesota corn growers association 
 28.31  if the Minnesota corn research and promotion council requests 
 28.32  such action by the commissioner.  
 28.33     (c) The Minnesota corn research and promotion council shall 
 28.34  not elect to impose membership on any individual producer not 
 28.35  requesting a partial refund or assignment of payment to the 
 28.36  association. 
 29.1      (d) For any wheat ~~or~~, barley, or cultivated wild rice for 
 29.2   which the checkoff fee must be paid pursuant to sections 17.51 
 29.3   to 17.69 and for which a checkoff fee or fee that serves a 
 29.4   comparable purpose in a jurisdiction outside Minnesota had been 
 29.5   previously paid for the same wheat ~~or~~, barley, or cultivated 
 29.6   wild rice, the producer of the wheat ~~or~~, barley, or cultivated 
 29.7   wild rice is exempt from payment of the checkoff fee.  The 
 29.8   commissioner, in consultation with the wheat research and 
 29.9   promotion council ~~and~~, barley research and promotion 
 29.10  council, and cultivated wild rice research and promotion 
 29.11  council, shall determine jurisdictions outside of Minnesota 
 29.12  which collect a checkoff fee or fee that serves a comparable 
 29.13  purpose.  In order to qualify for the exemption, the producer 
 29.14  must demonstrate to the first purchaser that a checkoff fee or 
 29.15  fee has been paid to such a jurisdiction. 
 29.16     Sec. 11.  Minnesota Statutes 2000, section 17.76, 
 29.17  subdivision 2, is amended to read: 
 29.18     Subd. 2.  [APPOINTMENT; TERMS; COMPENSATION.] (a) Two 
 29.19  members of the board shall be appointed by each of seven 
 29.20  organizations representing agriculture in Minnesota.  The 
 29.21  organizations are: 
 29.22     Minnesota Farmers Union; 
 29.23     National Farmers Organization; 
 29.24     Farmers Union Milk Marketing Cooperative; 
 29.25     Minnesota Milk Producers; 
 29.26     Sustainable Farming Association of Minnesota; 
 29.27     Minnesota Farm Bureau; and 
 29.28     Minnesota COACT. 
 29.29     Two members of the board shall be appointed by each of two 
 29.30  organizations representing consumers in Minnesota.  The 
 29.31  organizations are: 
 29.32     Minnesota Food Association; and 
 29.33     Minnesota Senior Federation. 
 29.34     To the extent practicable, the members must be selected to 
 29.35  represent the broad diversity of Minnesota's dairy producers. 
 29.36     (b) The terms and compensation of members and reimbursement 
 30.1   for their expenses is governed by section 15.059. 
 30.2      (c) The board expires on June 30, ~~2001~~ 2003. 
 30.3      Sec. 12.  Minnesota Statutes 2000, section 18B.01, is 
 30.4   amended by adding a subdivision to read: 
 30.5      Subd. 26a.  [SCHOOL PEST MANAGEMENT COORDINATOR.] "School 
 30.6   pest management coordinator" means a person employed by a school 
 30.7   district, private other than home-schooled, or parochial school 
 30.8   who is responsible for the planning, training, coordination, 
 30.9   communication, and implementation of a school's integrated pest 
 30.10  management program, including the application of pesticides to 
 30.11  the inside or outdoor property of the school as part of that 
 30.12  program. 
 30.13     Sec. 13.  [18B.095] [PESTICIDE APPLICATION IN SCHOOLS.] 
 30.14     Subdivision 1.  [AUTHORIZED APPLICATORS.] Application of a 
 30.15  pesticide to the inside or outdoor property of a school 
 30.16  district, private other than home-schooled, or parochial school 
 30.17  must be performed by: 
 30.18     (1) a structural pest control applicator; 
 30.19     (2) a commercial or noncommercial pesticide applicator with 
 30.20  appropriate use category certification; or 
 30.21     (3) a registered school pest management coordinator or a 
 30.22  school employee under the direction of a registered school pest 
 30.23  management coordinator. 
 30.24     Subd. 2.  [EXEMPTION.] Pesticides determined by the 
 30.25  commissioner to be sanitizers or disinfectants are exempt from 
 30.26  subdivision 1. 
 30.27     Subd. 3.  [REGISTRY AND INFORMATION.] The commissioner, in 
 30.28  consultation with the departments of health; administration; and 
 30.29  children, families, and learning; the University of Minnesota 
 30.30  Extension Service; the Minnesota School Boards Association; and 
 30.31  other persons as necessary and appropriate, must: 
 30.32     (1) establish and maintain a registry of school pest 
 30.33  management coordinators; and 
 30.34     (2) provide information on a regular and periodic basis to 
 30.35  registered school pest management coordinators on integrated 
 30.36  pest management techniques and programs, including model school 
 31.1   policies; proper pesticide use, storage, handling, and disposal; 
 31.2   and other relevant pesticide and pest management information. 
 31.3      Sec. 14.  [18B.345] [PESTICIDE APPLICATION ON GOLF 
 31.4   COURSES.] 
 31.5      (a) Application of a pesticide to the property of a golf 
 31.6   course must be performed by: 
 31.7      (1) a structural pest control applicator; 
 31.8      (2) a commercial or noncommercial pesticide applicator with 
 31.9   appropriate use certification; or 
 31.10     (3) an aquatic pest control applicator. 
 31.11     (b) Pesticides determined by the commissioner to be 
 31.12  sanitizers and disinfectants are exempt from the requirements in 
 31.13  paragraph (a). 
 31.14     Sec. 15.  Minnesota Statutes 2000, section 31A.21, 
 31.15  subdivision 2, is amended to read: 
 31.16     Subd. 2.  [FEDERAL ASSISTANCE.] In its cooperative efforts, 
 31.17  the Minnesota department of agriculture may accept from the 
 31.18  United States Secretary of Agriculture (1) advisory assistance 
 31.19  in planning and otherwise developing the state program, (2) 
 31.20  technical and laboratory assistance and training, including 
 31.21  necessary curricular and instructional materials and equipment, 
 31.22  and (3) financial and other aid for the administration of the 
 31.23  program.  ~~The Minnesota department of agriculture may spend a~~ 
 31.24  ~~sum for administration of this chapter equal to 50 percent of~~ 
 31.25  ~~the estimated total cost of the cooperative program.~~ 
 31.26     Sec. 16.  Minnesota Statutes 2000, section 37.03, 
 31.27  subdivision 1, is amended to read: 
 31.28     Subdivision 1.  [MEMBERS.] Members of the state 
 31.29  agricultural society must be citizens of this state.  The 
 31.30  membership is as follows: 
 31.31     (a) Three delegates chosen annually by each agricultural 
 31.32  society or association in the state which maintains an active 
 31.33  existence, holds annual fairs, and is entitled to share in the 
 31.34  state appropriation under the provisions of section 38.02.  If 
 31.35  one of those societies or associations fails to choose 
 31.36  delegates, then its president, secretary, and treasurer, by 
 32.1   virtue of their offices, are its delegates.  If two fairs 
 32.2   receiving state aid are operating in one county, each delegate 
 32.3   from each society or association is entitled to one-half vote at 
 32.4   regular or special meetings of the state society.  
 32.5      (b) One delegate appointed by the county board of each 
 32.6   county in which no county or district agricultural society 
 32.7   exists.  
 32.8      (c) Individuals elected by the society as honorary members 
 32.9   for having performed eminent services in agriculture, 
 32.10  horticulture, or related arts and sciences or long and faithful 
 32.11  service in or benefits to the society.  Honorary members must be 
 32.12  elected by two-thirds vote at any annual meeting.  The number of 
 32.13  honorary members may not exceed the society's membership and 
 32.14  only one honorary member may be elected annually.  Each honorary 
 32.15  member is entitled to one vote. 
 32.16     (d) Two elected delegates and the president may represent 
 32.17  each of the following societies and associations:  Red River 
 32.18  Valley Winter Shows, the Minnesota State Horticultural Society, 
 32.19  the State Dairyman's Association, the Minnesota Dairy Goat 
 32.20  Association, the Minnesota Honey Producers Association, Inc., 
 32.21  the Minnesota Livestock Breeders' Association, the Minnesota 
 32.22  Crop Improvement Association, the Minnesota Pork Producers 
 32.23  Association, the Minnesota Lamb and Wool Producers Association, 
 32.24  the Minnesota Horse Breeders' Association, the Minnesota 
 32.25  Veterinary Medical Association, the Minnesota Cattle Breeders' 
 32.26  Association, the Central Livestock Association, the Minnesota 
 32.27  State Poultry Association, the Farm Equipment Association, the 
 32.28  North Central Florist Association, the Minnesota Garden Flower 
 32.29  Society, the State Fair Exhibitors' Organization, the Minnesota 
 32.30  Federation of County Fairs, the State Forestry Association, the 
 32.31  Minnesota Horse Council, Minnesota Nurserymen's Association, 
 32.32  Minnesota Apple Growers' Association, State Grange of Minnesota, 
 32.33  Minnesota Farmers' Union, American Dairy Association of 
 32.34  Minnesota, and the Minnesota Farm Bureau Federation.  
 32.35     (e) The following societies and associations are entitled 
 32.36  to one delegate each:  Central Minnesota Vegetable Growers 
 33.1   Association, the Minnesota Fruit and Vegetable Growers' 
 33.2   Association, Minnesota Shorthorn Breeders' Association, the 
 33.3   Minnesota Milking Shorthorn Association, Minnesota Guernsey 
 33.4   Breeders' Association, Minnesota Jersey Cattle Club, Minnesota 
 33.5   Holstein Association, Minnesota Hereford Association, Minnesota 
 33.6   Aberdeen Angus Breeders', Minnesota Red Polled Breeders', 
 33.7   Minnesota Ayreshire Breeders' Association, Minnesota Brown Swiss 
 33.8   Association, Minnesota Poland China Breeders' Association, 
 33.9   Minnesota Duroc Breeders', Minnesota Chester White Association, 
 33.10  Minnesota Turkey Growers' Association, Minnesota Gladiolus 
 33.11  Society, Minnesota Hampshire Association, Minnesota Suffolk 
 33.12  Association, North American Dairy Sheep Association, and the 
 33.13  Minnesota Berkshire Association. 
 33.14     ~~All of these~~ (f) The societies and associations listed in 
 33.15  paragraphs (d) and (e) must be active and statewide in their 
 33.16  scope and operation, hold annual meetings, and be incorporated 
 33.17  under the laws of the state before they are entitled to a 
 33.18  delegate.  The societies and associations must file with the 
 33.19  secretary of state, on or before December 20, a report showing 
 33.20  that the society or association has held a regular annual 
 33.21  meeting for that year, a summary of its financial transactions 
 33.22  for the current year, and an affidavit of the president and 
 33.23  secretary that it has a paid-up membership of at least 25.  On 
 33.24  or before December 31, the secretary of state shall certify to 
 33.25  the secretary of the state agricultural society the names of the 
 33.26  societies or associations that have complied with these 
 33.27  provisions.  
 33.28     (g) If a society or association ceases to exist or 
 33.29  otherwise fails to comply with the requirements of paragraph 
 33.30  (f), its membership in the state agricultural society and its 
 33.31  right to delegates is terminated and it may be replaced by 
 33.32  another society or association representing the same or similar 
 33.33  interests and chosen by a majority vote of the members of the 
 33.34  society at its next annual meeting. 
 33.35     ~~(f)~~ (h) The members of the board of managers of the state 
 33.36  agricultural society are members of the society and entitled to 
 34.1   one vote each. 
 34.2      Sec. 17.  [37.27] [FAIR FOUNDATION.] 
 34.3      The state agricultural society may establish a nonprofit 
 34.4   corporation to be operated exclusively for charitable purposes 
 34.5   as contemplated by sections 170(c)(2) and 501(c)(3) of the 
 34.6   United States Internal Revenue Code.  Subject to those sections, 
 34.7   the corporation must be organized and operated exclusively for 
 34.8   the benefit and to carry out the purposes of the state 
 34.9   agricultural society for so long as the state agricultural 
 34.10  society is and remains an organization as described in section 
 34.11  509(a)(1) or 509(a)(2) of the Internal Revenue Code.  The 
 34.12  corporation shall solicit, receive, hold, invest, and contribute 
 34.13  funds and property for the use and benefit of the state 
 34.14  agricultural society in a manner consistent with the public good 
 34.15  and primarily for capital expenditures and other needs not 
 34.16  funded by other means.  The corporation may be known as the 
 34.17  Minnesota state fair foundation. 
 34.18     Sec. 18.  Minnesota Statutes 2000, section 41B.025, 
 34.19  subdivision 1, is amended to read: 
 34.20     Subdivision 1.  [ESTABLISHMENT.] There is created a public 
 34.21  body corporate and politic to be known as the "Minnesota rural 
 34.22  finance authority," which shall perform the governmental 
 34.23  functions and exercise the sovereign powers delegated to it in 
 34.24  sections 41B.01 to 41B.23 and chapter 41C in furtherance of the 
 34.25  public policies and purposes declared in section 41B.01.  The 
 34.26  board of the authority consists of the commissioners of 
 34.27  agriculture, commerce, trade and economic development, and 
 34.28  finance, the state auditor, and six public members appointed by 
 34.29  the governor with the advice and consent of the senate.  The 
 34.30  state auditor may designate one staff member to serve in the 
 34.31  auditor's place.  No public member may reside within the 
 34.32  metropolitan area, as defined in section 473.121, subdivision 
 34.33  2.  Each member shall hold office until a successor has been 
 34.34  appointed and has qualified.  A certificate of appointment or 
 34.35  reappointment of any member is conclusive evidence of the proper 
 34.36  appointment of the member. 
 35.1      Sec. 19.  Minnesota Statutes 2000, section 41B.03, 
 35.2   subdivision 2, is amended to read: 
 35.3      Subd. 2.  [ELIGIBILITY FOR RESTRUCTURED LOAN.] In addition 
 35.4   to the eligibility requirements of subdivision 1, a prospective 
 35.5   borrower for a restructured loan must:  
 35.6      (1) have received at least 50 percent of average annual 
 35.7   gross income from farming for the past three years or, for 
 35.8   homesteaded property, received at least 40 percent of average 
 35.9   gross income from farming in the past three years, and farming 
 35.10  must be the principal occupation of the borrower; 
 35.11     (2) ~~have a debt-to-asset ratio equal to or greater than 50~~ 
 35.12  ~~percent and in determining this ratio, the assets must be valued~~ 
 35.13  ~~at their current market value;~~ 
 35.14     ~~(3)~~ have projected annual expenses, including operating 
 35.15  expenses, family living, and interest expenses after the 
 35.16  restructuring, that do not exceed 95 percent of the borrower's 
 35.17  projected annual income considering prior production history and 
 35.18  projected prices for farm production, except that the authority 
 35.19  may reduce the 95 percent requirement if it finds that other 
 35.20  significant factors in the loan application support the making 
 35.21  of the loan; 
 35.22     ~~(4)~~ (3) demonstrate substantial difficulty in meeting 
 35.23  projected annual expenses without restructuring the loan; and 
 35.24     ~~(5)~~ (4) must have a total net worth, including assets and 
 35.25  liabilities of the borrower's spouse and dependents, of less 
 35.26  than $400,000 in 1999 and an amount in subsequent years which is 
 35.27  adjusted for inflation by multiplying $400,000 by the cumulative 
 35.28  inflation rate as determined by the United States All-Items 
 35.29  Consumer Price Index. 
 35.30     Sec. 20.  Minnesota Statutes 2000, section 41B.043, 
 35.31  subdivision 1b, is amended to read: 
 35.32     Subd. 1b.  [LOAN PARTICIPATION.] The authority may 
 35.33  participate in an agricultural improvement loan with an eligible 
 35.34  lender to a farmer who meets the requirements of section 41B.03, 
 35.35  subdivision 1, clauses (1) and (2), and who are actively engaged 
 35.36  in farming.  Participation is limited to 45 percent of the 
 36.1   principal amount of the loan or ~~$100,000~~ $125,000, whichever is 
 36.2   less.  The interest rates and repayment terms of the authority's 
 36.3   participation interest may be different than the interest rates 
 36.4   and repayment terms of the lender's retained portion of the loan.
 36.5      Sec. 21.  Minnesota Statutes 2000, section 41B.043, 
 36.6   subdivision 2, is amended to read: 
 36.7      Subd. 2.  [SPECIFICATIONS.] No direct loan may exceed 
 36.8   $35,000 or $125,000 for a loan participation ~~or be made to~~ 
 36.9   ~~refinance an existing debt~~.  Each direct loan and participation 
 36.10  must be secured by a mortgage on real property and such other 
 36.11  security as the authority may require. 
 36.12     Sec. 22.  Minnesota Statutes 2000, section 41B.046, 
 36.13  subdivision 2, is amended to read: 
 36.14     Subd. 2.  [ESTABLISHMENT.] The authority shall establish 
 36.15  and implement a value-added agricultural product loan program to 
 36.16  help farmers finance the purchase of stock in a cooperative that 
 36.17  is proposing to build or purchase and operate an agricultural 
 36.18  product processing facility or already owns and operates an 
 36.19  agricultural product processing facility. 
 36.20     Sec. 23.  Minnesota Statutes 2000, section 41D.01, 
 36.21  subdivision 1, is amended to read: 
 36.22     Subdivision 1.  [ESTABLISHMENT; MEMBERSHIP.] (a) The 
 36.23  Minnesota agriculture education leadership council is 
 36.24  established.  The council is composed of 16 members as follows: 
 36.25     (1) the chair of the University of Minnesota agricultural 
 36.26  education program; 
 36.27     (2) a representative of the commissioner of children, 
 36.28  families, and learning; 
 36.29     (3) a representative of the Minnesota state colleges and 
 36.30  universities recommended by the chancellor; 
 36.31     (4) the president and the president-elect of the Minnesota 
 36.32  ~~vocational agriculture instructors association~~ Association of 
 36.33  Agriculture Educators; 
 36.34     (5) a representative of the Future Farmers of America 
 36.35  Foundation; 
 36.36     (6) a representative of the commissioner of agriculture; 
 37.1      (7) the dean of the college of agriculture, food, and 
 37.2   environmental sciences at the University of Minnesota; 
 37.3      (8) two members representing agriculture education and 
 37.4   agriculture business appointed by the governor; 
 37.5      (9) the chair of the senate committee on agriculture ~~and~~ 
 37.6   ~~rural development;~~, general legislation and veterans affairs; 
 37.7      (10) the chair of the house committee on agriculture; 
 37.8      (11) the ranking minority member of the senate committee on 
 37.9   agriculture ~~and rural development~~, general legislation and 
 37.10  veterans affairs, and a member of the senate ~~committee on~~ 
 37.11  ~~children, families and learning~~ education committee designated 
 37.12  by the subcommittee on committees of the committee on rules and 
 37.13  administration; and 
 37.14     (12) the ranking minority member of the house agriculture 
 37.15  committee, and a member of the house education committee 
 37.16  designated by the speaker. 
 37.17     (b) An ex officio member of the council under paragraph 
 37.18  (a), clause (1), (4), (7), (9), (10), (11), or (12), may 
 37.19  designate a permanent or temporary replacement member 
 37.20  representing the same constituency. 
 37.21     Sec. 24.  Minnesota Statutes 2000, section 41D.01, 
 37.22  subdivision 3, is amended to read: 
 37.23     Subd. 3.  [COUNCIL OFFICERS; TERMS AND COMPENSATION OF 
 37.24  APPOINTEES; STAFF.] (a) The chair of the senate agriculture ~~and~~ 
 37.25  ~~rural development~~, general legislation and veterans affairs 
 37.26  committee and the chair of the house agriculture committee, or 
 37.27  their designees, are the cochairs of the council. 
 37.28     (b) The council's membership terms, compensation, filling 
 37.29  of vacancies, and removal of members are as provided in section 
 37.30  15.0575. 
 37.31     (c) The council may employ an executive director and any 
 37.32  other staff to carry out its functions. 
 37.33     Sec. 25.  Minnesota Statutes 2000, section 41D.01, 
 37.34  subdivision 4, is amended to read: 
 37.35     Subd. 4.  [EXPIRATION.] This section expires on June 
 37.36  30, ~~2002~~ 2003. 
 38.1      Sec. 26.  Minnesota Statutes 2000, section 97B.001, 
 38.2   subdivision 1, is amended to read: 
 38.3      Subdivision 1.  [AGRICULTURAL LAND DEFINITION.] For 
 38.4   purposes of this section, "agricultural land" means land: 
 38.5      (1) that is plowed or tilled; 
 38.6      (2) that has standing crops or crop residues; ~~or~~ 
 38.7      (3) within a maintained fence for enclosing domestic 
 38.8   livestock; 
 38.9      (4) that is planted and maintained as hayland or grassland 
 38.10  outside of the city limits of a home rule charter or statutory 
 38.11  city; or 
 38.12     (5) that is planted in a row pattern to short rotation 
 38.13  woody crops, as defined in section 41B.048, subdivision 4. 
 38.14     Sec. 27.  Minnesota Statutes 2000, section 116O.09, 
 38.15  subdivision 1a, is amended to read: 
 38.16     Subd. 1a.  [BOARD OF DIRECTORS.] The board of directors of 
 38.17  the agricultural utilization research institute is comprised of: 
 38.18     (1) the chairs of the senate ~~agriculture and rural~~ 
 38.19  ~~development committee~~ and the house of representatives 
 38.20  committees with jurisdiction over agriculture ~~committee~~ policy; 
 38.21     (2) two representatives of statewide farm organizations; 
 38.22     (3) two representatives of agribusiness, one of whom is a 
 38.23  member of the Minnesota Technology, Inc. board representing 
 38.24  agribusiness; and 
 38.25     (4) three representatives of the commodity promotion 
 38.26  councils. 
 38.27     A member of the board of directors under clauses (1) to (4) 
 38.28  may designate a permanent or temporary replacement member 
 38.29  representing the same constituency. 
 38.30     Sec. 28.  [239.77] [BIODIESEL CONTENT REQUIREMENT.] 
 38.31     Subdivision 1.  [BIODIESEL FUEL OIL DESCRIBED.] For the 
 38.32  purpose of this section, "biodiesel fuel oil" means a 
 38.33  biodegradable, combustible liquid fuel derived from vegetable 
 38.34  oils that meets ASTM specification PS 121-99 and is suitable for 
 38.35  blending with diesel fuel oil for use in internal combustion 
 38.36  diesel engines. 
 39.1      Subd. 2.  [CONTENT REQUIREMENT.] On and after July 1, 2003, 
 39.2   all diesel fuel oil sold or offered for sale in Minnesota for 
 39.3   use in internal combustion engines must contain at least 2.0 
 39.4   percent biodiesel fuel oil by volume. 
 39.5      Subd. 3.  [BIODIESEL SUPPLY AND DISTRIBUTION REPORT.] By 
 39.6   February 15 in 2002 and 2003, the commissioner of agriculture 
 39.7   shall report to the senate and house committees with 
 39.8   jurisdiction over agriculture policy on the production and 
 39.9   distribution of biodiesel fuel oil in Minnesota and the adequacy 
 39.10  of biodiesel fuel oil supplies and the distribution system to 
 39.11  achieve the requirement in subdivision 2.  The reports may 
 39.12  include any recommendations of the commissioner for changes to 
 39.13  the biodiesel fuel oil requirement in subdivision 2. 
 39.14     Sec. 29.  Minnesota Statutes 2000, section 296A.01, 
 39.15  subdivision 19, is amended to read: 
 39.16     Subd. 19.  [E85.] "E85" means a petroleum product that is a 
 39.17  blend of agriculturally derived denatured ethanol and 
 39.18  gasoline or natural gasoline that typically contains 85 percent 
 39.19  ethanol by volume, but at a minimum must contain 60 percent 
 39.20  ethanol by volume.  For the purposes of this chapter, the energy 
 39.21  content of E85 will be considered to be 82,000 BTUs per gallon.  
 39.22  E85 produced for use as a motor fuel in alternative fuel 
 39.23  vehicles as defined in ~~section 296A.01,~~ subdivision 5, must 
 39.24  comply with ASTM specification D 5798-96. 
 39.25     Sec. 30.  Laws 1986, chapter 398, article 1, section 18, as 
 39.26  amended by Laws 1987, chapter 292, section 37; Laws 1989, 
 39.27  chapter 350, article 16, section 8; Laws 1990, chapter 525, 
 39.28  section 1; Laws 1991, chapter 208, section 2; Laws 1993, First 
 39.29  Special Session chapter 2, article 6, section 2; Laws 1995, 
 39.30  chapter 212, article 2, section 11; Laws 1997, chapter 183, 
 39.31  article 3, section 29; Laws 1998, chapter 395, section 7; Laws 
 39.32  1998, chapter 402, section 6; and Laws 1999, chapter 214, 
 39.33  article 2, section 19, is amended to read: 
 39.34     Sec. 18.  [REPEALER.] 
 39.35     Sections 1 to 17 and Minnesota Statutes, section 336.9-501, 
 39.36  subsections (6) and (7), and sections 583.284, 583.285, 583.286, 
 40.1   and 583.305, are repealed on July 1, ~~2001~~ 2003. 
 40.2      Sec. 31.  [TEMPORARY WAIVER OF RULE.] 
 40.3      The application of Minnesota Rules, part 1720.0620, is 
 40.4   temporarily waived from January 1, 2001, to June 1, 2002, for 
 40.5   products used exclusively for poultry. 
 40.6      Sec. 32.  [MINNESOTA DAIRY PRODUCERS BOARD.] 
 40.7      The repeal of Minnesota Statutes 2000, section 17.76, in 
 40.8   S.F. No. 1263, if enacted, must not take effect. 
 40.9      Sec. 33.  [REPEALER.] 
 40.10     Minnesota Statutes 2000, sections 17.987; 24.001; 24.002; 
 40.11  24.12; 24.131; 24.135; 24.141; 24.145; 24.151; 24.155; 24.161; 
 40.12  24.171; 24.175; 24.18; 24.181; 33.09; and 33.111, are repealed. 
 40.13     Sec. 34.  [EFFECTIVE DATE.] 
 40.14     Sections 18 to 25, 30, and 31 are effective the day 
 40.15  following final enactment. Section 13 is effective August 1, 
 40.16  2002.  Section 14 is effective January 1, 2002.