1.1                          A bill for an act 
  1.2             relating to ethanol producer payments; eliminating a 
  1.3             requirement for ownership disclosure; amending 
  1.4             Minnesota Statutes 2003 Supplement, section 41A.09, 
  1.5             subdivision 3a. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2003 Supplement, section 
  1.8   41A.09, subdivision 3a, is amended to read: 
  1.9      Subd. 3a.  [ETHANOL PRODUCER PAYMENTS.] (a) The 
  1.10  commissioner shall make cash payments to producers of ethanol 
  1.11  located in the state that have begun production by June 30, 2000.
  1.12  For the purpose of this subdivision, an entity that holds a 
  1.13  controlling interest in more than one ethanol plant is 
  1.14  considered a single producer.  The amount of the payment for 
  1.15  each producer's annual production, except as provided in 
  1.16  paragraph (c), is 20 cents per gallon for each gallon of ethanol 
  1.17  produced on or before June 30, 2000, or ten years after the 
  1.18  start of production, whichever is later.  The first claim for 
  1.19  production after June 30, 2003, must be accompanied by a 
  1.20  disclosure statement on a form provided by the commissioner.  
  1.21  The disclosure statement must include a detailed description of 
  1.22  the organization of the business structure of the claimant 
  1.23  listing the percentages of ownership by any person or other 
  1.24  entity with an ownership interest of five percent or greater, 
  1.25  the distribution of income received by the claimant, including 
  2.1   operating income and payments under this subdivision.  The 
  2.2   disclosure statement must include information sufficient to 
  2.3   demonstrate that a majority of the ultimate beneficial interest 
  2.4   in the entity receiving payments under this section is owned by 
  2.5   farmers or spouses of farmers, as defined in section 500.24, 
  2.6   residing in Minnesota.  Subsequent quarterly claims must report 
  2.7   changes in ownership.  Payments must not be made to a claimant 
  2.8   that has less than a majority of Minnesota farmer control except 
  2.9   that the commissioner may grant an exemption from the farmer 
  2.10  majority ownership requirement to a claimant that, on May 29, 
  2.11  2003, has demonstrated greater than 40 percent farmer ownership 
  2.12  which, when combined with ownership interests of persons 
  2.13  residing within 30 miles of the plant, exceeds 50 percent.  In 
  2.14  addition, a claimant located in a city of the first class which 
  2.15  qualifies for payments in all other respects is not subject to 
  2.16  this condition.  Information provided under this paragraph is 
  2.17  nonpublic data under section 13.02, subdivision 9. 
  2.18     (b) No payments shall be made for ethanol production that 
  2.19  occurs after June 30, 2010.  
  2.20     (c) If the level of production at an ethanol plant 
  2.21  increases due to an increase in the production capacity of the 
  2.22  plant, the payment under paragraph (a) applies to the additional 
  2.23  increment of production until ten years after the increased 
  2.24  production began.  Once a plant's production capacity reaches 
  2.25  15,000,000 gallons per year, no additional increment will 
  2.26  qualify for the payment. 
  2.27     (d) Total payments under paragraphs (a) and (c) to a 
  2.28  producer in a fiscal year may not exceed $3,000,000. 
  2.29     (e) By the last day of October, January, April, and July, 
  2.30  each producer shall file a claim for payment for ethanol 
  2.31  production during the preceding three calendar months.  A 
  2.32  producer that files a claim under this subdivision shall include 
  2.33  a statement of the producer's total ethanol production in 
  2.34  Minnesota during the quarter covered by the claim.  For each 
  2.35  claim and statement of total ethanol production filed under this 
  2.36  subdivision, the volume of ethanol production must be examined 
  3.1   by an independent certified public accountant in accordance with 
  3.2   standards established by the American Institute of Certified 
  3.3   Public Accountants. 
  3.4      (f) Payments shall be made November 15, February 15, May 
  3.5   15, and August 15.  A separate payment shall be made for each 
  3.6   claim filed.  Except as provided in paragraph (g), the total 
  3.7   quarterly payment to a producer under this paragraph may not 
  3.8   exceed $750,000.  
  3.9      (g) Notwithstanding the quarterly payment limits of 
  3.10  paragraph (f), the commissioner shall make an additional payment 
  3.11  in the fourth quarter of each fiscal year to ethanol producers 
  3.12  for the lesser of:  (1) 20 cents per gallon of production in the 
  3.13  fourth quarter of the year that is greater than 3,750,000 
  3.14  gallons; or (2) the total amount of payments lost during the 
  3.15  first three quarters of the fiscal year due to plant outages, 
  3.16  repair, or major maintenance.  Total payments to an ethanol 
  3.17  producer in a fiscal year, including any payment under this 
  3.18  paragraph, must not exceed the total amount the producer is 
  3.19  eligible to receive based on the producer's approved production 
  3.20  capacity.  The provisions of this paragraph apply only to 
  3.21  production losses that occur in quarters beginning after 
  3.22  December 31, 1999. 
  3.23     (h) The commissioner shall reimburse ethanol producers for 
  3.24  any deficiency in payments during earlier quarters if the 
  3.25  deficiency occurred because appropriated money was insufficient 
  3.26  to make timely payments in the full amount provided in paragraph 
  3.27  (a).  Notwithstanding the quarterly or annual payment 
  3.28  limitations in this subdivision, the commissioner shall begin 
  3.29  making payments for earlier deficiencies in each fiscal year 
  3.30  that appropriations for ethanol payments exceed the amount 
  3.31  required to make eligible scheduled payments.  Payments for 
  3.32  earlier deficiencies must continue until the deficiencies for 
  3.33  each producer are paid in full. 
  3.34     Sec. 2.  [EFFECTIVE DATE.] 
  3.35     Section 1 is effective retroactive to July 1, 2003.