Bill Text: MN HF2456 | 2013-2014 | 88th Legislature | Engrossed


Bill Title: Renewable chemical and advanced biofuel capital equipment loan program created, advanced biofuel and renewable chemical production incentive programs established, and money appropriated.

Spectrum: Slight Partisan Bill (Democrat 9-3)

Status: (Introduced - Dead) 2014-03-24 - Author added Persell [HF2456 Detail]

Download: Minnesota-2013-HF2456-Engrossed.html

1.1A bill for an act
1.2relating to agriculture; creating a renewable chemical and advanced biofuel
1.3capital equipment loan program; creating an advanced biofuel production
1.4incentive program; establishing a renewable chemical production incentive
1.5program; appropriating money;proposing coding for new law in Minnesota
1.6Statutes, chapter 41A.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8    Section 1. [41A.107] RENEWABLE CHEMICAL AND ADVANCED BIOFUEL
1.9CAPITAL EQUIPMENT LOANS.
1.10    Subdivision 1. Program. (a) The commissioner shall establish a renewable chemical
1.11and advanced biofuel loan program to make loans for capital equipment purchases by
1.12persons participating in advanced biofuel, renewable chemical, and anaerobic digestion
1.13production facilities. The commissioner, in consultation with the commissioners of natural
1.14resources and employment and economic development, shall establish guidelines for
1.15loans issued under this section.
1.16(b) The definitions in sections 41A.13, subdivision 2, and 41A.14, subdivision
1.172, apply to this section.
1.18    Subd. 2. Fund. A renewable chemical and advanced biofuel capital equipment
1.19revolving loan fund is established in the state treasury. All repayments of loans granted
1.20from the fund, including principal and interest, must be deposited into the fund. Interest
1.21earned on money in the fund accrues to the fund. Money in the fund is appropriated to
1.22the commissioner to make renewable chemical and advanced biofuel capital equipment
1.23loans under this section.

1.24    Sec. 2. [41A.13] ADVANCED BIOFUEL PRODUCTION INCENTIVE.
2.1    Subdivision 1. Appropriation. A sum sufficient to make the payments required by
2.2this section is annually appropriated from the general fund to the commissioner, and all
2.3money so appropriated is available until expended.
2.4    Subd. 2. Definitions. (a) For the purposes of this section and sections 41A.107 and
2.541A.14, the terms defined in this subdivision have the meanings given.
2.6(b) "Advanced biofuels" has the meaning given in section 239.051, subdivision 1a.
2.7(c) "Anaerobic digestion" means a series of biological processes in which
2.8microorganisms break down biodegradable material in the absence of oxygen to produce a
2.9mixture of methane, carbon dioxide, and other trace gases.
2.10(d) "Commissioner" means the commissioner of agriculture.
2.11(e) "MMBtu" means one million British thermal units.
2.12(f) "Qualifying facility" or "facility" means a facility that satisfies the eligibility
2.13criteria in subdivision 3.
2.14    Subd. 3. Eligibility. An eligible facility must source at least 80 percent of its raw
2.15materials from Minnesota. Raw materials must be from an agricultural or forestry source
2.16or from the organic content of municipal solid waste. The facility must be located in
2.17Minnesota, must begin production at a specific location by June 30, 2020, and must not
2.18begin operation above 950,000 MMBtu of annual biofuel production before January 1,
2.192015. Eligible facilities include existing facilities that are adding additional production
2.20capacity, as well as new facilities. Production of conventional corn ethanol, conventional
2.21biodiesel, and other fully commercial technologies is not eligible. An advanced biofuel
2.22facility must produce at least 950,000 MMBtu per year.
2.23    Subd. 4. Advanced biofuel producer payments. (a) The commissioner shall make
2.24cash payments to eligible producers of advanced biofuel at a qualifying facility. For
2.25the purpose of this subdivision, an entity that holds a controlling interest in more than
2.26one advanced biofuel facility is considered a single eligible producer. The amount of
2.27the payment for each eligible producer's annual production is $2.1053 per MMBtu for
2.28advanced biofuel production from cellulosic biomass and $1.053 per MMBtu for advanced
2.29biofuel production from sugar or starch at a specific location for ten years after the start of
2.30production. All forestry-derived biomass must be produced using Minnesota state biomass
2.31harvesting guidelines. All biomass from brushlands must be produced using Minnesota
2.32Brushland Harvesting Biomass Harvest Guidelines. Land that is larger than 160 acres and
2.33used to produce forestry-derived biomass must be certified by the Forest Stewardship
2.34Council, Sustainable Forestry Initiative, or American Tree Farm System. Uncertified land
2.35that is 160 acres or less and used to produce forestry-derived biomass must be harvested
2.36by a Minnesota Certified Master Logger and must have a forest stewardship plan.
3.1(b) No payment shall be made for advanced biofuel production that occurs after
3.2June 30, 2030. An eligible producer of advanced biofuel shall not transfer the producer's
3.3eligibility for payments under this section to an advanced biofuel facility at a different
3.4location.
3.5(c) Total payments under this section to all eligible biofuel producers may not
3.6exceed $15,000,000 in a fiscal year. Total payments under this section to an eligible
3.7biofuel producer in a fiscal year may not exceed the amount necessary for 2,850,000
3.8MMBtu of biofuel production.
3.9(d) By the last day of October, January, April, and July, each eligible biofuel producer
3.10shall file with the commissioner a claim for payment for advanced biofuel production
3.11during the preceding three calendar months. An eligible biofuel producer that files a claim
3.12under this subdivision shall include a statement of the eligible biofuel producer's total
3.13advanced biofuel production in Minnesota during the quarter covered by the claim. For
3.14each claim and statement of total advanced biofuel production filed under this subdivision,
3.15the volume of advanced biofuel production must be examined by an independent
3.16certified public accountant in accordance with Statements on Standards for Attestation
3.17Engagements established by the American Institute of Certified Public Accountants.
3.18(e) The commissioner must make payments by November 15, February 15, May 15,
3.19and August 15. The commissioner must issue a separate payment for each claim filed.
3.20The total quarterly payment to an eligible producer under this paragraph may not exceed
3.21the amount necessary for 712,500 MMBtu of biofuel production.
3.22(f) Any producer that ceases production for any reason is ineligible to receive
3.23payments under this section until they begin producing again.
3.24(g) Annually, within 90 days of its fiscal year end, an advanced biofuel producer
3.25receiving payments under this section must file a disclosure statement on a form provided
3.26by the commissioner. The initial disclosure statement must include a summary description
3.27of the business structure of the producer and a listing of the percentages of ownership
3.28and governance by any person or other entity with an ownership interest or governance
3.29rights of five percent or greater. Annual disclosures must include a copy of the producer's
3.30annual audited financial statements, including the auditor's report and footnotes. No later
3.31than February 15 each year, the commissioner shall deliver to the chairs of the standing
3.32committees of the senate and the house of representatives with jurisdiction over agricultural
3.33policy and agricultural finance an annual report summarizing aggregated and facility-level
3.34production and financial performance data for all facilities that received payment under
3.35this section during the preceding calendar year. Audited financial statements and notes
3.36and disclosure statements submitted to the commissioner are nonpublic data under section
4.113.02, subdivision 9. Notwithstanding the provisions of chapter 13 relating to nonpublic
4.2data, a summary of the submitted audited financial reports and notes and disclosure
4.3statements must be contained in the report to the committee chairs and are public data.
4.4(h) Renewable chemical production for which payment has been received under
4.5section 41A.14 is not eligible for payment under this section.

4.6    Sec. 3. [41A.14] RENEWABLE CHEMICAL PRODUCTION INCENTIVE.
4.7    Subdivision 1. Appropriation. A sum sufficient to make the payments required by
4.8this section is annually appropriated from the general fund to the commissioner, and all
4.9money so appropriated is available until expended.
4.10    Subd. 2. Definitions. (a) The definitions in this subdivision and section 41A.13,
4.11subdivision 2, apply to this section.
4.12(b) "Cellulosic sugar" means sugar derived from lignocellulosic materials from
4.13agricultural or forestry resources.
4.14(c) "Qualifying facility" or "facility" means a facility that satisfies the eligibility
4.15criteria in subdivision 3.
4.16(d) "Renewable chemical" means a chemical with biobased content as defined in
4.17section 41A.105, subdivision 1a.
4.18    Subd. 3. Eligibility. An eligible facility must source at least 90 percent of its
4.19raw materials from Minnesota. Raw materials must be from an agricultural or forestry
4.20source or from the organic content of municipal solid waste. The facility must be located
4.21in Minnesota, must begin production at a specific location by June 30, 2020, and must
4.22not begin production of 30,000,000 pounds of chemicals annually before January 1,
4.232015. Eligible facilities include existing facilities that are adding additional production
4.24capacity, as well as new facilities. Renewable chemical facilities must produce at least
4.2530,000,000 pounds per year. Renewable chemicals produced through processes that are
4.26fully commercial before January 1, 2000, are not eligible.
4.27    Subd. 4. Renewable chemical producer payments. (a) The commissioner shall
4.28make cash payments to eligible producers of renewable chemicals at a qualifying facility.
4.29For the purposes of this subdivision, an entity that holds a controlling interest in more
4.30than one renewable chemical production facility is considered a single eligible producer.
4.31The amount of the payment for each producer's annual production is $0.03 per pound
4.32of sugar-derived renewable chemical, $0.03 per pound of cellulosic sugar, and $0.06
4.33per pound of cellulosic-derived renewable chemical produced at a specific location for
4.34ten years after the start of production. All forestry-derived cellulosic biomass must
4.35be produced using Minnesota state biomass harvesting guidelines. All biomass from
5.1brushlands must be produced using Minnesota Brushland Harvesting Biomass Harvest
5.2Guidelines. Land that is larger than 160 acres and used to produce forestry-derived
5.3biomass must be certified by the Forest Stewardship Council, Sustainable Forestry
5.4Initiative, or American Tree Farm System. Uncertified land that is 160 acres or less and
5.5used to produce forestry-derived biomass must be harvested by a Minnesota Certified
5.6Master Logger and must have a forest stewardship plan.
5.7(b) No payments shall be made for renewable chemical production that occurs
5.8after June 30, 2030. An eligible producer of renewable chemicals shall not transfer the
5.9producer's eligibility for payments under this section to a renewable chemical facility at a
5.10different location.
5.11(c) Total payments under this section to all eligible renewable chemical producers
5.12may not exceed $15,000,000 in a fiscal year. Total payments under this section to
5.13an eligible renewable chemical producer in a fiscal year may not exceed the amount
5.14necessary for 99,999,999 pounds of renewable chemicals.
5.15(d) By the last day of October, January, April, and July, each eligible renewable
5.16chemical producer shall file a claim with the commissioner for payment for renewable
5.17chemical production during the preceding three calendar months. An eligible renewable
5.18chemical producer that files a claim under this subdivision shall include a statement of
5.19the eligible producer's total renewable chemical production in Minnesota during the
5.20quarter covered by the claim. For each claim and statement of total renewable chemical
5.21production filed under this subdivision, the volume of renewable chemical production
5.22must be examined by an independent certified public accountant in accordance with
5.23Statements on Standards for Attestation Engagements established by the American
5.24Institute of Certified Public Accountants.
5.25(e) The commissioner must make payments by November 15, February 15, May 15,
5.26and August 15. The commissioner must issue a separate payment for each claim filed.
5.27The total quarterly payment to an eligible producer under this paragraph may not exceed
5.28the amount necessary for 25,000,000 pounds of production.
5.29(f) Any producer that ceases production for any reason is ineligible to receive
5.30payments under the program until they begin producing again.
5.31(g) Annually, within 90 days of its fiscal year end, a renewable chemical producer
5.32receiving payments under this section must file a disclosure statement on a form provided
5.33by the commissioner. The initial disclosure statement must include a summary description
5.34of the business structure of the producer and a listing of the percentages of ownership
5.35and governance by any person or other entity with an ownership interest or governance
5.36rights of five percent or greater. Annual disclosures must include a copy of the producer's
6.1annual audited financial statements, including the auditor's report and footnotes. No later
6.2than February 15 each year, the commissioner shall deliver to the chairs of the standing
6.3committees of the senate and the house of representatives with jurisdiction over agricultural
6.4policy and agricultural finance an annual report summarizing aggregated and facility-level
6.5production and financial performance data for all facilities that received payment under
6.6this section during the preceding calendar year. Audited financial statements and notes
6.7and disclosure statements submitted to the commissioner are nonpublic data under section
6.813.02, subdivision 9. Notwithstanding the provisions of chapter 13 relating to nonpublic
6.9data, a summary of the submitted audited financial reports and notes and disclosure
6.10statements must be contained in the report to the committee chairs and are public data.
6.11(h) Advanced biofuel production for which payment has been received under section
6.1241A.13 is not eligible for payment under this section.
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