1.1                          A bill for an act 
  1.2             relating to agriculture; establishing a biodiesel 
  1.3             production development program; appropriating money; 
  1.4             proposing coding for new law in Minnesota Statutes, 
  1.5             chapter 41A. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [41A.10] [BIODIESEL DEVELOPMENT.] 
  1.8      Subdivision 1.  [DEFINITION.] "Biodiesel fuel" has the 
  1.9   meaning given in section 239.77, subdivision 1. 
  1.10     Subd. 2.  [BIODIESEL FUEL PRODUCTION GOAL.] It is a goal of 
  1.11  the state that biodiesel fuel production plants in the state 
  1.12  attain a total annual production level of 8,000,000 gallons. 
  1.13     Subd. 3.  [BIODIESEL FUEL PRODUCER PAYMENTS.] (a) The 
  1.14  commissioner of agriculture shall make cash payments to 
  1.15  producers of biodiesel fuel located in the state that have begun 
  1.16  production by June 30, 2004.  For the purpose of this 
  1.17  subdivision, an entity that holds a controlling interest in more 
  1.18  than one biodiesel fuel plant is considered a single producer.  
  1.19  The amount of the payment for each producer's annual production, 
  1.20  except as provided in paragraph (c), is 20 cents per gallon for 
  1.21  each gallon of biodiesel fuel produced on or before June 30, 
  1.22  2004, or ten years after the start of production, whichever is 
  1.23  later.  The claim for production must be accompanied by a 
  1.24  disclosure statement on a form provided by the commissioner of 
  1.25  agriculture.  The disclosure statement must include a detailed 
  2.1   description of the organization of the business structure of the 
  2.2   claimant listing the percentages of ownership by any person or 
  2.3   other entity with an ownership interest of five percent or 
  2.4   greater, the distribution of income received by the claimant, 
  2.5   including operating income and payments under this subdivision.  
  2.6   The disclosure statement must include information sufficient to 
  2.7   demonstrate that a majority of the ultimate beneficial interest 
  2.8   in the entity receiving payments under this section is owned by 
  2.9   farmers or spouses of farmers, as defined in section 500.24, 
  2.10  residing in Minnesota.  Subsequent quarterly claims must report 
  2.11  changes in ownership.  Payments must not be made to a claimant 
  2.12  that has less than a majority of Minnesota farmer control except 
  2.13  that the commissioner may grant an exemption from the farmer 
  2.14  majority ownership requirement to a claimant that, on the 
  2.15  effective date of this section, has demonstrated greater than 40 
  2.16  percent farmer ownership which, when combined with ownership 
  2.17  interests of persons residing within 30 miles of the plant, 
  2.18  exceeds 50 percent.  Information provided under this paragraph 
  2.19  is nonpublic data under section 13.02, subdivision 9. 
  2.20     (b) No payments shall be made for biodiesel fuel production 
  2.21  that occurs after June 30, 2014. 
  2.22     (c) If the level of production at a biodiesel fuel plant 
  2.23  increases due to an increase in the production capacity of the 
  2.24  plant, the payment under paragraph (a) applies to the additional 
  2.25  increment of production until ten years after the increased 
  2.26  production began. 
  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 biodiesel fuel 
  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 biodiesel fuel production in 
  2.34  Minnesota during the quarter covered by the claim.  For each 
  2.35  claim and statement of total biodiesel fuel production filed 
  2.36  under this subdivision, the volume of biodiesel fuel production 
  3.1   must be examined by an independent certified public accountant 
  3.2   in accordance with standards established by the American 
  3.3   Institute of Certified Public Accountants. 
  3.4      (f) Payments must be made November 15, February 15, May 15, 
  3.5   and August 15.  A separate payment shall be made for each claim 
  3.6   filed.  Except as provided in paragraph (g), the total quarterly 
  3.7   payment to a producer under this paragraph may not exceed 
  3.8   $750,000. 
  3.9      (g) Notwithstanding the quarterly payment limits of 
  3.10  paragraph (f), the commissioner of agriculture shall make an 
  3.11  additional payment in the fourth quarter of each fiscal year to 
  3.12  biodiesel fuel producers for the lesser of:  (1) 20 cents per 
  3.13  gallon of production in the fourth quarter of the year that is 
  3.14  greater than 3,750,000 gallons; or (2) the total amount of 
  3.15  payments lost during the first three quarters of the fiscal year 
  3.16  due to plant outages, repair, or major maintenance.  Total 
  3.17  payments to a biodiesel fuel producer in a fiscal year, 
  3.18  including any payment under this paragraph, must not exceed the 
  3.19  total amount the producer is eligible to receive based on the 
  3.20  producer's approved production capacity. 
  3.21     (h) The commissioner of agriculture shall reimburse 
  3.22  biodiesel fuel producers for any deficiency in payments during 
  3.23  earlier quarters if the deficiency occurred because appropriated 
  3.24  money was insufficient to make timely payments in the full 
  3.25  amount provided in paragraph (a).  Notwithstanding the quarterly 
  3.26  or annual payment limitations in this subdivision, the 
  3.27  commissioner shall begin making payments for earlier 
  3.28  deficiencies in each fiscal year that appropriations for 
  3.29  biodiesel fuel payments exceed the amount required to make 
  3.30  eligible scheduled payments.  Payments for earlier deficiencies 
  3.31  must continue until the deficiencies for each producer are paid 
  3.32  in full. 
  3.33     Sec. 2.  [APPROPRIATION.] 
  3.34     $....... is appropriated from the general fund to the 
  3.35  commissioner of agriculture in fiscal year 2005 to make payments 
  3.36  to biodiesel fuel producers under section 1.