1.1                          A bill for an act 
  1.2             relating to agriculture; making the farmer-lender 
  1.3             mediation program permanent; expanding eligibility for 
  1.4             ethanol producer payments; creating an agroforestry 
  1.5             loan program; providing funding for farm relief; 
  1.6             appropriating money; amending Minnesota Statutes 1998, 
  1.7             section 41A.09, subdivisions 2a, 3a, and by adding 
  1.8             subdivisions; Laws 1999, chapter 231, section 11, 
  1.9             subdivision 3; proposing coding for new law in 
  1.10            Minnesota Statutes, chapter 17; repealing Minnesota 
  1.11            Statutes 1998, section 583.21; Laws 1986, chapter 398, 
  1.12            article 1, section 18, as amended. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14                             ARTICLE 1 
  1.15                      FARMER-LENDER MEDIATION 
  1.16     Section 1.  [REPEALER.] 
  1.17     (a) Minnesota Statutes 1998, section 583.21, is repealed. 
  1.18     (b) Laws 1986, chapter 398, article 1, section 18, as 
  1.19  amended by Laws 1987, chapter 292, section 37; Laws 1989, 
  1.20  chapter 350, article 16, section 8; Laws 1990, chapter 525, 
  1.21  section 1; Laws 1991, chapter 208, section 2; Laws 1993, First 
  1.22  Special Session chapter 2, article 6, section 2; Laws 1995, 
  1.23  chapter 212, article 2, section 11; Laws 1997, chapter 183, 
  1.24  article 3, section 29; Laws 1998, chapter 395, section 7; Laws 
  1.25  1998, chapter 402, section 6; and Laws 1999, chapter 214, 
  1.26  article 2, section 19, is repealed. 
  1.27     Sec. 2.  [EFFECTIVE DATE.] 
  1.28     Section 1 is effective the day following final enactment. 
  1.29                             ARTICLE 2 
  2.1                      ETHANOL PRODUCER PAYMENTS 
  2.2      Section 1.  Minnesota Statutes 1998, section 41A.09, 
  2.3   subdivision 2a, is amended to read: 
  2.4      Subd. 2a.  [DEFINITIONS.] For the purposes of this section, 
  2.5   the terms defined in this subdivision have the meanings given 
  2.6   them. 
  2.7      (a) "Ethanol" means fermentation ethyl alcohol derived from 
  2.8   agricultural products, including potatoes, cereal, grains, 
  2.9   cheese whey, and sugar beets; forest products; or other 
  2.10  renewable resources, including residue and waste generated from 
  2.11  the production, processing, and marketing of agricultural 
  2.12  products, forest products, and other renewable resources, that: 
  2.13     (1) meets all of the specifications in ASTM specification D 
  2.14  4806-88; and 
  2.15     (2) is denatured as specified in Code of Federal 
  2.16  Regulations, title 27, parts 20 and 21. 
  2.17     (b) "Wet alcohol" means agriculturally derived fermentation 
  2.18  ethyl alcohol having a purity of at least 50 percent but less 
  2.19  than 99 percent. 
  2.20     (c) "Anhydrous alcohol" means fermentation ethyl alcohol 
  2.21  derived from agricultural products as described in paragraph 
  2.22  (a), but that does not meet ASTM specifications or is not 
  2.23  denatured and is shipped in bond for further processing. 
  2.24     (d) "Ethanol plant" means a plant at which ethanol, 
  2.25  anhydrous alcohol, or wet alcohol is produced. 
  2.26     (e) "Closed-loop biomass" means any organic material from a 
  2.27  plant that is planted for the purpose of being used to generate 
  2.28  electricity or for multiple purposes that include being used to 
  2.29  generate electricity. 
  2.30     (f) "Cogeneration" means the combined generation of: 
  2.31     (1) electrical or mechanical power; and 
  2.32     (2) steam or forms of useful energy, such as heat, that are 
  2.33  used for industrial, commercial, heating, or cooling purposes. 
  2.34     Sec. 2.  Minnesota Statutes 1998, section 41A.09, 
  2.35  subdivision 3a, is amended to read: 
  2.36     Subd. 3a.  [PAYMENTS ETHANOL PRODUCER PAYMENT ELIGIBILITY; 
  3.1   MAXIMUM PAYMENT.] (a) The commissioner of agriculture shall make 
  3.2   cash payments to producers of ethanol, anhydrous alcohol, and 
  3.3   wet alcohol located in the state.  These payments shall apply 
  3.4   only to ethanol, anhydrous alcohol, and wet alcohol fermented in 
  3.5   the state and produced at plants that have begun production by 
  3.6   June September 30, 2000.  For the purpose of this subdivision, 
  3.7   an entity that holds a controlling interest in more than one 
  3.8   ethanol plant is considered a single producer.  The amount of 
  3.9   the payment for each producer's annual production is: 
  3.10     (1) except as provided in paragraph (b), for each gallon of 
  3.11  ethanol or anhydrous alcohol produced on or before June 30, 
  3.12  2000, or ten years after the start of production, whichever is 
  3.13  later, 20 cents per gallon; and 
  3.14     (2) for each gallon produced of wet alcohol on or before 
  3.15  June 30, 2000, or ten years after the start of production, 
  3.16  whichever is later, a payment in cents per gallon calculated by 
  3.17  the formula "alcohol purity in percent divided by five," and 
  3.18  rounded to the nearest cent per gallon, but not less than 11 
  3.19  cents per gallon. 
  3.20     The producer payments for anhydrous alcohol and wet alcohol 
  3.21  under this section may be paid to either the original producer 
  3.22  of anhydrous alcohol or wet alcohol or the secondary processor, 
  3.23  at the option of the original producer, but not to both. 
  3.24     (b) If the level of production at an ethanol plant 
  3.25  increases due to an increase in the production capacity of the 
  3.26  plant and the increased production begins by June 30, 2000, the 
  3.27  payment under paragraph (a), clause (1), applies to the 
  3.28  additional increment of production until ten years after the 
  3.29  increased production began.  Once a plant's production capacity 
  3.30  reaches 15,000,000 gallons per year, no additional increment 
  3.31  will qualify for the payment. 
  3.32     (c) The commissioner shall make payments to producers of 
  3.33  ethanol or wet alcohol in the amount of 1.5 cents for each 
  3.34  kilowatt hour of electricity generated using closed-loop biomass 
  3.35  in a cogeneration facility at an ethanol plant located in the 
  3.36  state.  Payments under this paragraph shall be made only for 
  4.1   electricity generated at cogeneration facilities that begin 
  4.2   operation by June 30, 2000.  The payments apply to electricity 
  4.3   generated on or before the date ten years after the producer 
  4.4   first qualifies for payment under this paragraph.  Total 
  4.5   payments under this paragraph in any fiscal year may not exceed 
  4.6   $750,000.  For the purposes of this paragraph: 
  4.7      (1) "closed-loop biomass" means any organic material from a 
  4.8   plant that is planted for the purpose of being used to generate 
  4.9   electricity or for multiple purposes that include being used to 
  4.10  generate electricity; and 
  4.11     (2) "cogeneration" means the combined generation of: 
  4.12     (i) electrical or mechanical power; and 
  4.13     (ii) steam or forms of useful energy, such as heat, that 
  4.14  are used for industrial, commercial, heating, or cooling 
  4.15  purposes. 
  4.16     (d) Except for new production capacity approved under 
  4.17  paragraph (i), clause (1), The total payments under paragraphs 
  4.18  (a) and (b) this subdivision to all producers may not exceed 
  4.19  $34,000,000 $37,000,000 in a fiscal year.  Total payments 
  4.20  under paragraphs (a) and (b) this subdivision to a producer in a 
  4.21  fiscal year may not exceed $3,000,000. 
  4.22     (e) By the last day of October, January, April, and July, 
  4.23  each producer shall file a claim for payment for ethanol, 
  4.24  anhydrous alcohol, and wet alcohol production during the 
  4.25  preceding three calendar months.  A producer with more than one 
  4.26  plant shall file a separate claim for each plant.  A producer 
  4.27  shall file a separate claim for the original production capacity 
  4.28  of each plant and for each additional increment of production 
  4.29  that qualifies under paragraph (b).  A producer that files a 
  4.30  claim under this subdivision shall include a statement of the 
  4.31  producer's total ethanol, anhydrous alcohol, and wet alcohol 
  4.32  production in Minnesota during the quarter covered by the claim, 
  4.33  including anhydrous alcohol and wet alcohol produced or received 
  4.34  from an outside source.  A producer shall file a separate claim 
  4.35  for any amount claimed under paragraph (c).  For each claim and 
  4.36  statement of total ethanol, anhydrous alcohol, and wet alcohol 
  5.1   production filed under this subdivision, the volume of ethanol, 
  5.2   anhydrous alcohol, and wet alcohol production or amounts of 
  5.3   electricity generated using closed-loop biomass must be examined 
  5.4   by an independent certified public accountant in accordance with 
  5.5   standards established by the American Institute of Certified 
  5.6   Public Accountants. 
  5.7      (f) Payments shall be made November 15, February 15, May 
  5.8   15, and August 15.  A separate payment shall be made for each 
  5.9   claim filed.  The total quarterly payment to a producer under 
  5.10  this paragraph, excluding amounts paid under paragraph (c), may 
  5.11  not exceed $750,000.  Except for new production capacity 
  5.12  approved under paragraph (i), clause (1), if the total amount 
  5.13  for which all other producers are eligible in a quarter under 
  5.14  paragraphs (a) and (b) exceeds $8,500,000, the commissioner 
  5.15  shall make payments for production capacity that is subject to 
  5.16  this restriction in the order in which the portion of production 
  5.17  capacity covered by each claim went into production.  
  5.18     (g) If the total amount for which all producers are 
  5.19  eligible in a quarter under paragraph (c) exceeds the amount 
  5.20  available for payments, the commissioner shall make payments in 
  5.21  the order in which the plants covered by the claims began 
  5.22  generating electricity using closed-loop biomass. 
  5.23     (h) After July 1, 1997, new production capacity is only 
  5.24  eligible for payment under this subdivision if the commissioner 
  5.25  receives: 
  5.26     (1) an application for approval of the new production 
  5.27  capacity; 
  5.28     (2) an appropriate letter of long-term financial commitment 
  5.29  for construction of the new production capacity; and 
  5.30     (3) copies of all necessary permits for construction of the 
  5.31  new production capacity. 
  5.32     The commissioner may approve new production capacity based 
  5.33  on the order in which the applications are received.  
  5.34     (i) After April 22, 1998, the commissioner may only 
  5.35  approve:  (1) up to 12,000,000 gallons of new production 
  5.36  capacity at one plant that has not previously received approval 
  6.1   or payment for any production capacity; or (2) new production 
  6.2   capacity at existing plants not to exceed planned expansions 
  6.3   reported to the commissioner by February 1997.  The commissioner 
  6.4   may not approve any new production capacity after July 1, 1998.  
  6.5      (j) For the purposes of this subdivision "new production 
  6.6   capacity" means annual ethanol production capacity that was not 
  6.7   allowed under a permit issued by the pollution control agency 
  6.8   prior to July 1, 1997, or for which construction did not begin 
  6.9   prior to July 1, 1997. 
  6.10     (d) The commissioner may not approve any new ethanol plants 
  6.11  in the program after January 1, 2000. 
  6.12     Sec. 3.  Minnesota Statutes 1998, section 41A.09, is 
  6.13  amended by adding a subdivision to read: 
  6.14     Subd. 3b.  [CLOSED-LOOP BIOMASS COGENERATION PAYMENT 
  6.15  ELIGIBILITY; MAXIMUM PAYMENT.] The commissioner shall make 
  6.16  payments to producers of ethanol or wet alcohol in the amount of 
  6.17  1.5 cents for each kilowatt hour of electricity generated using 
  6.18  closed-loop biomass in a cogeneration facility at an ethanol 
  6.19  plant located in the state.  Payments under this subdivision 
  6.20  shall be made only for electricity generated at cogeneration 
  6.21  facilities that begin operation by June 30, 2000.  The payments 
  6.22  apply to electricity generated on or before the date ten years 
  6.23  after the producer first qualifies for payment under this 
  6.24  paragraph.  Total payments under this subdivision in any fiscal 
  6.25  year may not exceed $750,000. 
  6.26     Sec. 4.  Minnesota Statutes 1998, section 41A.09, is 
  6.27  amended by adding a subdivision to read: 
  6.28     Subd. 5b.  [CLAIMS; PAYMENTS.] (a) By the last day of 
  6.29  October, January, April, and July, each producer shall file a 
  6.30  claim for payment for ethanol, anhydrous alcohol, and wet 
  6.31  alcohol production during the preceding three calendar months.  
  6.32  A producer with more than one plant shall file a separate claim 
  6.33  for each plant.  A producer shall file a separate claim for the 
  6.34  original production capacity of each plant and for each 
  6.35  additional increment of production that qualifies under 
  6.36  subdivision 3a, paragraph (b).  A producer that files a claim 
  7.1   under this subdivision shall include a statement of the 
  7.2   producer's total ethanol, anhydrous alcohol, and wet alcohol 
  7.3   production in this state during the quarter covered by the 
  7.4   claim, including anhydrous alcohol and wet alcohol produced or 
  7.5   received from an outside source.  A producer shall file a 
  7.6   separate claim for any amount claimed under subdivision 3b.  For 
  7.7   each claim and statement of total ethanol, anhydrous alcohol, 
  7.8   and wet alcohol production filed under this subdivision, the 
  7.9   volume of ethanol, anhydrous alcohol, and wet alcohol production 
  7.10  or amounts of electricity generated using closed-loop biomass 
  7.11  must be examined by an independent certified public accountant 
  7.12  in accordance with standards established by the American 
  7.13  Institute of Certified Public Accountants. 
  7.14     (b) Payments must be made November 15, February 15, May 15, 
  7.15  and August 15.  A separate payment must be made for each claim 
  7.16  filed.  Except as provided in paragraph (d), the total quarterly 
  7.17  payment to a producer under subdivision 3a may not exceed 
  7.18  $750,000.  
  7.19     (c) If the total amount for which all producers are 
  7.20  eligible in a quarter under subdivision 3a or 3b exceeds the 
  7.21  amount available for payments, the commissioner shall make 
  7.22  payments for production capacity in the order in which the 
  7.23  portion of the production capacity covered by each claim went 
  7.24  into production. 
  7.25     (d) If, at the end of a biennium, a producer has not 
  7.26  received the full amount of its maximum claim for its approved 
  7.27  capacity and actual production due to a shortfall of production 
  7.28  in any quarter, the commissioner shall make payments to the 
  7.29  producer from available funds for that biennium in an amount 
  7.30  without regard to the quarterly limits after payments for 
  7.31  production of the immediately preceding quarter have been paid 
  7.32  in full. 
  7.33     Sec. 5.  Laws 1999, chapter 231, section 11, subdivision 3, 
  7.34  is amended to read: 
  7.35  Subd. 3.  Agricultural Marketing and Development
  7.36        6,521,000      5,410,000
  8.1   Notwithstanding Minnesota Statutes, 
  8.2   section 41A.09, subdivision 3a, the 
  8.3   total payments from the ethanol 
  8.4   development account to all producers 
  8.5   may not exceed $68,447,000 $72,701,022 
  8.6   for the biennium ending June 30, 2001.  
  8.7   If, prior to the end of the biennium, 
  8.8   the total amount for which all 
  8.9   producers are eligible in a quarter 
  8.10  exceeds the amount available for 
  8.11  payments remaining in the 
  8.12  appropriation, the commissioner shall 
  8.13  make the payments for the quarter in 
  8.14  which the shortfall occurs on a pro 
  8.15  rata basis.  In fiscal year 2000, the 
  8.16  commissioner shall first reimburse 
  8.17  producers for eligible unpaid claims 
  8.18  accumulated through June 30, 1999.  
  8.19  $500,000 the first year is appropriated 
  8.20  to the rural finance authority for 
  8.21  making a loan under Minnesota Statutes, 
  8.22  section 41B.044.  Principal and 
  8.23  interest payments on the loan must be 
  8.24  deposited in the ethanol development 
  8.25  account for producer payments under 
  8.26  Minnesota Statutes, section 41B.09. 
  8.27  By July 15, 1999, the commissioner 
  8.28  shall transfer the unencumbered cash 
  8.29  balance in the ethanol development fund 
  8.30  established in Minnesota Statutes, 
  8.31  section 41B.044, to the general fund. 
  8.32  $200,000 the first year is for a grant 
  8.33  from the commissioner to the Minnesota 
  8.34  Turkey Growers Association for 
  8.35  assistance to an entity that constructs 
  8.36  a facility that uses poultry litter as 
  8.37  a fuel for the generation of 
  8.38  electricity.  This amount must be 
  8.39  matched by $1 of nonstate money for 
  8.40  each dollar of state money.  This is a 
  8.41  one-time appropriation. 
  8.42  $50,000 the first year is for the 
  8.43  commissioner, in consultation with the 
  8.44  commissioner of economic development, 
  8.45  to conduct a study of the need for a 
  8.46  commercial shipping port at which 
  8.47  agricultural cooperatives or individual 
  8.48  farmers would have access to port 
  8.49  facilities.  This is a one-time 
  8.50  appropriation.  
  8.51  $71,000 the first year and $71,000 the 
  8.52  second year are for transfer to the 
  8.53  Minnesota grown matching account and 
  8.54  may be used as grants for Minnesota 
  8.55  grown promotion under Minnesota 
  8.56  Statutes, section 17.109. 
  8.57  $100,000 the first year is for a grant 
  8.58  to the University of Minnesota 
  8.59  extension service for its farm safety 
  8.60  and health program.  This is a one-time 
  8.61  appropriation. 
  8.62  $225,000 the first year and $75,000 the 
  8.63  second year are for grants to the 
  8.64  Minnesota agricultural education 
  9.1   leadership council for the planning and 
  9.2   implementation of initiatives enhancing 
  9.3   and expanding agricultural education in 
  9.4   rural and urban areas of the state.  
  9.5   Funds not used in the first year are 
  9.6   available for the second year.  This is 
  9.7   a one-time appropriation.  
  9.8   $480,000 the first year and $420,000 
  9.9   the second year are to the commissioner 
  9.10  of agriculture for programs to 
  9.11  aggressively promote, develop, expand, 
  9.12  and enhance the marketing of 
  9.13  agricultural products from Minnesota 
  9.14  producers and processors.  The 
  9.15  commissioner must enter into 
  9.16  collaborative efforts with the 
  9.17  department of trade and economic 
  9.18  development, the world trade center 
  9.19  corporation, and other public or 
  9.20  private entities knowledgeable in 
  9.21  market identification and development.  
  9.22  The commissioner may also contract with 
  9.23  or make grants to public or private 
  9.24  organizations involved in efforts to 
  9.25  enhance communication between producers 
  9.26  and markets and organizations that 
  9.27  identify, develop, and promote the 
  9.28  marketing of Minnesota agricultural 
  9.29  crops, livestock, and produce in local, 
  9.30  regional, national, and international 
  9.31  marketplaces.  Grants may be provided 
  9.32  to appropriate organizations including 
  9.33  those functioning as marketing clubs, 
  9.34  to a cooperative known as Minnesota 
  9.35  Marketplace, and to recognized 
  9.36  associations of producers or processors 
  9.37  of organic foods or Minnesota grown 
  9.38  specialty crops.  Beginning October 15, 
  9.39  1999, and 15 days after the close of 
  9.40  each calendar quarter thereafter, the 
  9.41  commissioner shall provide to the 
  9.42  senate and house committees with 
  9.43  jurisdiction over agriculture policy 
  9.44  and funding interim reports of the 
  9.45  progress toward accomplishing the goals 
  9.46  of this item.  The commissioner shall 
  9.47  deliver a final report on March 1, 
  9.48  2001.  If the appropriation for either 
  9.49  year is insufficient, the appropriation 
  9.50  for the other year is available.  This 
  9.51  is a one-time appropriation that 
  9.52  remains available until expended. 
  9.53  $60,000 the second year is for grants 
  9.54  to farmers for demonstration projects 
  9.55  involving sustainable agriculture.  If 
  9.56  a project cost is more than $25,000, 
  9.57  the amount above $25,000 must be 
  9.58  matched at the rate of one state dollar 
  9.59  for each dollar of nonstate money.  
  9.60  Priorities must be given for projects 
  9.61  involving multiple parties.  Up to 
  9.62  $20,000 each year may be used for 
  9.63  dissemination of information about the 
  9.64  demonstration grant projects.  If the 
  9.65  appropriation for either year is 
  9.66  insufficient, the appropriation for the 
  9.67  other is available. 
  9.68  $160,000 each year is for value-added 
 10.1   agricultural product processing and 
 10.2   marketing grants under Minnesota 
 10.3   Statutes, section 17.101, subdivision 5.
 10.4   $450,000 the first year and $300,000 
 10.5   the second year are for continued 
 10.6   research of solutions and alternatives 
 10.7   for manure management and odor 
 10.8   control.  This is a one-time 
 10.9   appropriation. 
 10.10  $50,000 the first year and $50,000 the 
 10.11  second year are for annual cost-share 
 10.12  payments to resident farmers for the 
 10.13  costs of organic certification.  The 
 10.14  annual cost-share payments per farmer 
 10.15  shall be two-thirds of the cost of the 
 10.16  certification or $200, whichever is 
 10.17  less.  A certified farmer is eligible 
 10.18  to receive annual certification 
 10.19  cost-share payments for up to five 
 10.20  years.  $15,000 each year is for 
 10.21  organic market and program 
 10.22  development.  This appropriation is 
 10.23  available until expended. 
 10.24  $30,000 the first year is to assess 
 10.25  producer production contracts under 
 10.26  section 205.  This appropriation is 
 10.27  available until June 30, 2001.  
 10.28     Sec. 6.  [EFFECTIVE DATE.] 
 10.29     Sections 1 to 4 are effective retroactive to July 1, 1999.  
 10.30  Section 5 is effective the day following final enactment.  
 10.31                             ARTICLE 3 
 10.32                     AGROFORESTRY LOAN PROGRAM 
 10.33     Section 1.  [17.118] [AGROFORESTRY LOAN PROGRAM.] 
 10.34     Subdivision 1.  [PURPOSE.] The purpose of the agroforestry 
 10.35  loan program is to provide interest-free financing during the 
 10.36  growing period to farmers converting land to agroforestry. 
 10.37     Subd. 2.  [AUTHORITY.] The commissioner shall establish, 
 10.38  adopt rules for, and implement a program to make loans to 
 10.39  cooperatives who will in turn provide loans to farmers based on 
 10.40  the development of agroforestry plots and the annual growth of 
 10.41  the trees. 
 10.42     Subd. 3.  [DEFINITIONS.] (a) The definitions in this 
 10.43  subdivision apply to this section. 
 10.44     (b) "Agroforestry cooperative" means a cooperative 
 10.45  established under chapter 308A with the purpose of working with 
 10.46  farmers to encourage the development of agroforestry in 
 10.47  Minnesota. 
 11.1      (c) "Borrower" means an individual resident farmer applying 
 11.2   for a loan. 
 11.3      (d) "Commissioner" means the commissioner of agriculture or 
 11.4   the commissioner's designee. 
 11.5      (e) "Lender agreement" means a loan agreement entered into 
 11.6   between the commissioner and a cooperative.  The agreement must 
 11.7   contain terms and conditions of the loan that include, but are 
 11.8   not limited to, general loan provisions, loan management 
 11.9   requirements, application of payments, loan term limits, 
 11.10  allowable expenses, and fee limitations. 
 11.11     Subd. 4.  [APPLICATION.] The commissioner shall prescribe 
 11.12  forms and establish an application process for applicants to 
 11.13  apply for cooperatives. 
 11.14     Subd. 5.  [PAYMENTS.] (a) Payments from the commissioner to 
 11.15  an agroforestry cooperative must be disbursed on a cost-incurred 
 11.16  basis and must be matched by an equal amount of nonstate money.  
 11.17  Cooperatives shall submit payment requests at least quarterly 
 11.18  but not more than monthly.  Payment requests must be reviewed 
 11.19  and approved by the commissioner.  The payment request form must 
 11.20  itemize all costs by major elements and show eligible and 
 11.21  ineligible costs. 
 11.22     (b) The commissioner may initiate rescission of an 
 11.23  allocation granted in the lender agreement as provided in 
 11.24  subdivision 11, paragraph (d), if the agroforestry cooperative 
 11.25  fails to enter into loans with borrowers equaling the total 
 11.26  allocation granted within one year from the date of the lender 
 11.27  agreement or fails to have the total amount of allocated funds 
 11.28  drawn down through payment requests within two years.  An 
 11.29  additional year to draw down the undisbursed portion of an 
 11.30  allocation may be granted by the commissioner under extenuating 
 11.31  circumstances. 
 11.32     Subd. 6.  [LOAN AMOUNTS.] Borrowers may receive loans for 
 11.33  planted areas up to 40 acres for: 
 11.34     (1) the total amount necessary for establishment of the 
 11.35  trees; 
 11.36     (2) the total amount of maintenance costs, including weed 
 12.1   control, during the first three years; and 
 12.2      (3) 70 percent of the value of the growth for the first ten 
 12.3   years. 
 12.4      Subd. 7.  [AUTHORITY OF AGROFORESTRY COOPERATIVES.] (a) 
 12.5   Agroforestry cooperatives may enter into lender agreements with 
 12.6   the commissioner. 
 12.7      (b) Agroforestry cooperatives may enter into loan 
 12.8   agreements with borrowers to finance projects under this section.
 12.9      (c) Agroforestry cooperatives may establish revolving loan 
 12.10  programs to finance projects under this section. 
 12.11     (d) Agroforestry cooperatives may enter into participation 
 12.12  agreements with other lenders, including contracts with other 
 12.13  lenders for the limited purposes of loan review, processing, and 
 12.14  servicing or contracts to enter into loan agreements with 
 12.15  borrowers to finance projects under this section.  Other lenders 
 12.16  entering into contracts with agroforestry cooperatives under 
 12.17  this section must meet the definition of agroforestry 
 12.18  cooperative in subdivision 4, must comply with all provisions of 
 12.19  the lender agreement and this section, and must guarantee 
 12.20  repayment of the loan funds to the cooperative. 
 12.21     Subd. 8.  [BORROWER ELIGIBILITY; TERMS; REPAYMENT; 
 12.22  RESCISSION.] (a) An agroforestry cooperative is responsible for 
 12.23  repaying the principal of a loan to the commissioner.  The terms 
 12.24  of repayment must be identified in the lender agreement.  If 
 12.25  defaults occur, it is the responsibility of the agroforestry 
 12.26  cooperative to obtain repayment from the borrower.  Default on 
 12.27  the part of individual borrowers does not affect the 
 12.28  agroforestry cooperative's responsibility to repay its loan from 
 12.29  the commissioner whether or not the agroforestry cooperative 
 12.30  fully recovers defaulted amounts from individual borrowers.  For 
 12.31  revolving loan programs established under subdivision 10, 
 12.32  paragraph (c), the lender agreement must provide that: 
 12.33     (1) repayment of principal to the commissioner must begin 
 12.34  no later than ten years after the date of the lender agreement 
 12.35  and must be repaid in full no later than 20 years after the date 
 12.36  of the lender agreement; 
 13.1      (2) after the initial ten-year period, the agroforestry 
 13.2   cooperative shall not write any additional loans and any 
 13.3   existing principal balance held by the agroforestry cooperative 
 13.4   must be immediately repaid to the commissioner; 
 13.5      (3) after the initial ten-year period, all principal 
 13.6   received by the agroforestry cooperative from borrowers must be 
 13.7   repaid to the commissioner as it is received; and 
 13.8      (4) the applicant shall report to the commissioner annually 
 13.9   regarding the past and intended uses of the money in the 
 13.10  revolving loan program. 
 13.11     (b) Continued availability of the allocation granted in the 
 13.12  lender agreement is contingent upon commissioner approval of the 
 13.13  annual report.  The commissioner shall review the annual report 
 13.14  to ensure that the past and future uses of the funds are 
 13.15  consistent with the comprehensive water management plan and the 
 13.16  lender agreement.  If the commissioner concludes that the past 
 13.17  or intended uses of the money are not consistent with the 
 13.18  comprehensive water management plan or the lender agreement, the 
 13.19  commissioner shall rescind the allocation granted under the 
 13.20  lender agreement.  The rescission results in termination of the 
 13.21  available allocation, the immediate repayment of any 
 13.22  unencumbered funds held by the agroforestry cooperative in a 
 13.23  revolving loan fund, and the repayment of the principal portion 
 13.24  of loan repayments to the commissioner as they are received.  
 13.25  The lender agreement must reflect the commissioner's rights 
 13.26  under this paragraph. 
 13.27     Subd. 9.  [DATA PRIVACY.] The following data on applicants 
 13.28  or borrowers collected by the commissioner under this section 
 13.29  are private for data on individuals as provided in section 
 13.30  13.02, subdivision 12, or nonpublic for data not on individuals 
 13.31  as provided in section 13.02, subdivision 9:  financial 
 13.32  information, including, but not limited to, credit reports, 
 13.33  financial statements, tax returns, and net worth calculations 
 13.34  received or prepared by the commissioner. 
 13.35     Subd. 10.  [ESTABLISHMENT OF ACCOUNT.] An account must be 
 13.36  established in the state treasury called the agroforestry 
 14.1   revolving fund.  Money in the account, including interest 
 14.2   earned, is appropriated to the commissioner for payments under 
 14.3   subdivision 5.  The fund must be credited with repayments. 
 14.4      Subd. 11.  [FEES AND INTEREST.] (a) The agroforestry 
 14.5   cooperative must not assess fees or interest on loan repayments. 
 14.6      (b) The agroforestry cooperative shall create a principal 
 14.7   account to which the principal portions of individual borrower 
 14.8   loan repayments must be credited. 
 14.9      (c) Any interest earned on outstanding loan balances not 
 14.10  separated as the repayments are received and before the 
 14.11  principal amounts are deposited in the principal account must be 
 14.12  added to the principal portion of the loan to the agroforestry 
 14.13  cooperative and must be paid to the commissioner when the 
 14.14  principal is due under the lender agreement. 
 14.15     (d) Any interest earned on the principal account must be 
 14.16  added to the principal portion of the loan to the agroforestry 
 14.17  cooperative and must be paid to the commissioner when the 
 14.18  principal is due under the lender agreement. 
 14.19     Subd. 12.  [REPORT.] (a) The commissioner shall prepare and 
 14.20  submit a report to the legislature by October 15 of each 
 14.21  odd-numbered year. 
 14.22     (b) The report must include, but need not be limited to, 
 14.23  matters such as loan allocations and uses, the extent to which 
 14.24  the financial assistance is helping to convert land to 
 14.25  agroforestry, and other matters pertinent to the implementation 
 14.26  of the program. 
 14.27     Subd. 13.  [LIENS AGAINST PROPERTY.] (a) Unless an 
 14.28  agroforestry cooperative determines otherwise, at the time of 
 14.29  the disbursement of funds on a loan to a borrower under this 
 14.30  section, the principal balance due plus accrued interest on the 
 14.31  principal balance as provided by this section becomes a lien in 
 14.32  favor of the agroforestry cooperative making the loan upon the 
 14.33  real property on which the project is located.  This lien and 
 14.34  subordination agreement must be recorded against the real estate 
 14.35  in the county recorder's office or filed with the registrar of 
 14.36  titles for the county or counties in which the property is 
 15.1   located. 
 15.2      (b) An agroforestry cooperative may also secure amounts due 
 15.3   on a loan under this section by taking a purchase money security 
 15.4   interest in equipment in accordance with chapter 336, article 9, 
 15.5   and may enforce the purchase money security interest in 
 15.6   accordance with chapters 336, article 9; and 565. 
 15.7                              ARTICLE 4 
 15.8                            APPROPRIATIONS 
 15.9      Section 1.  [MINNESOTA STATE COLLEGES AND UNIVERSITIES 
 15.10  RURAL LIFE SUPPORT.] 
 15.11     $1,628,000 is appropriated from the general fund to the 
 15.12  board of trustees of the Minnesota state colleges and 
 15.13  universities for a rural life support program:  $400,000 is for 
 15.14  four farm support centers to provide counseling support to farm 
 15.15  families and business operators; $900,000 is for scholarships of 
 15.16  up to $450 per farmer for tuition at state colleges and 
 15.17  universities; $268,000 is for staff training, material, and 
 15.18  recruitment costs.  This appropriation is a one-time 
 15.19  appropriation and is available until June 30, 2001. 
 15.20     Sec. 2.  [FARM ADVOCATES.] 
 15.21     $200,000 is appropriated from the general fund to the 
 15.22  commissioner of agriculture for the farm advocates program.  
 15.23  This appropriation is a one-time appropriation and is available 
 15.24  until June 30, 2001. 
 15.25     Sec. 3.  [AGROFORESTRY.] 
 15.26     $5,000,000 is appropriated from the general fund to the 
 15.27  agroforestry revolving loan account created in article 3, 
 15.28  section 1, subdivision 10.