1.1.................... moves to amend H.F. No. 4133, the second engrossment, as follows:
1.2Page 2, after line 10, insert:

1.3    "Sec. 2. Minnesota Statutes 2016, section 17.117, subdivision 1, is amended to read:
1.4    Subdivision 1. Purpose. The purpose of the agriculture best management practices loan
1.5program is to provide low or no interest financing to farmers, agriculture supply businesses,
1.6rural landowners, chapter 103E drainage authorities, and water-quality cooperatives for the
1.7implementation of agriculture and other best management practices that reduce environmental
1.8pollution.
1.9EFFECTIVE DATE.This section is effective the day following final enactment.

1.10    Sec. 3. Minnesota Statutes 2016, section 17.117, subdivision 4, is amended to read:
1.11    Subd. 4. Definitions. (a) For the purposes of this section, the terms defined in this
1.12subdivision have the meanings given them.
1.13    (b) "Agricultural and environmental revolving accounts" means accounts in the
1.14agricultural fund, controlled by the commissioner, which hold funds available to the program.
1.15    (c) "Agriculture supply business" means a person, partnership, joint venture, corporation,
1.16limited liability company, association, firm, public service company, or cooperative that
1.17provides materials, equipment, or services to farmers or agriculture-related enterprises.
1.18    (d) "Allocation" means the funds awarded to an applicant for implementation of best
1.19management practices through a competitive or noncompetitive application process.
1.20    (e) "Applicant" means a local unit of government eligible to participate in this program
1.21that requests an allocation of funds as provided in subdivision 6b.
1.22    (f) "Best management practices" has the meaning given in sections 103F.711, subdivision
1.233 , and 103H.151, subdivision 2. Best management practices also means other practices,
2.1techniques, and measures that have been demonstrated to the satisfaction of the
2.2commissioner: (1) to prevent or reduce adverse environmental impacts by using the most
2.3effective and practicable means of achieving environmental goals; or (2) to achieve drinking
2.4water quality standards under chapter 103H or under Code of Federal Regulations, title 40,
2.5parts 141 and 143, as amended.
2.6    (g) "Borrower" means a farmer, an agriculture supply business, or a rural landowner, or
2.7a chapter 103E drainage authority applying for a low-interest loan.
2.8    (h) "Commissioner" means the commissioner of agriculture, including when the
2.9commissioner is acting in the capacity of chair of the Rural Finance Authority, or the designee
2.10of the commissioner.
2.11    (i) "Committed project" means an eligible project scheduled to be implemented at a
2.12future date:
2.13    (1) that has been approved and certified by the local government unit; and
2.14    (2) for which a local lender has obligated itself to offer a loan.
2.15    (j) "Comprehensive water management plan" means a state-approved and locally adopted
2.16plan authorized under section 103B.231, 103B.255, 103B.311, 103C.331, 103D.401, or
2.17103D.405 .
2.18    (k) "Cost incurred" means expenses for implementation of a project accrued because
2.19the borrower has agreed to purchase equipment or is obligated to pay for services or materials
2.20already provided as a result of implementing an approved eligible project.
2.21    (l) "Farmer" means a person, partnership, joint venture, corporation, limited liability
2.22company, association, firm, public service company, or cooperative that regularly participates
2.23in physical labor or operations management of farming and files a Schedule F as part of
2.24filing United States Internal Revenue Service Form 1040 or indicates farming as the primary
2.25business activity under Schedule C, K, or S, or any other applicable report to the United
2.26States Internal Revenue Service.
2.27    (m) "Lender agreement" means an agreement entered into between the commissioner
2.28and a local lender which contains terms and conditions of participation in the program.
2.29    (n) "Local government unit" means a county, soil and water conservation district, or an
2.30organization formed for the joint exercise of powers under section 471.59 with the authority
2.31to participate in the program.
3.1    (o) "Local lender" means a local government unit as defined in paragraph (n), a state or
3.2federally chartered bank, a savings association, a state or federal credit union, Agribank
3.3and its affiliated organizations, or a nonprofit economic development organization or other
3.4financial lending institution approved by the commissioner.
3.5    (p) "Local revolving loan account" means the account held by a local government unit
3.6and a local lender into which principal repayments from borrowers are deposited and new
3.7loans are issued in accordance with the requirements of the program and lender agreements.
3.8    (q) "Nonpoint source" has the meaning given in section 103F.711, subdivision 6.
3.9    (r) "Program" means the agriculture best management practices loan program in this
3.10section.
3.11    (s) "Project" means one or more components or activities located within Minnesota that
3.12are required by the local government unit to be implemented for satisfactory completion of
3.13an eligible best management practice.
3.14    (t) "Rural landowner" means the owner of record of Minnesota real estate located in an
3.15area determined by the local government unit to be rural after consideration of local land
3.16use patterns, zoning regulations, jurisdictional boundaries, local community definitions,
3.17historical uses, and other pertinent local factors.
3.18    (u) "Water-quality cooperative" has the meaning given in section 115.58, paragraph (d),
3.19except as expressly limited in this section.
3.20EFFECTIVE DATE.This section is effective the day following final enactment.

3.21    Sec. 4. Minnesota Statutes 2016, section 17.117, subdivision 11, is amended to read:
3.22    Subd. 11. Loans issued to borrower. (a) Local lenders may issue loans only for projects
3.23that are approved and certified by the local government unit as meeting priority needs
3.24identified in a comprehensive water management plan or other local planning documents,
3.25are in compliance with accepted practices, standards, specifications, or criteria, and are
3.26eligible for financing under Environmental Protection Agency or other applicable guidelines.
3.27    (b) The local lender may use any additional criteria considered necessary to determine
3.28the eligibility of borrowers for loans.
3.29    (c) Local lenders shall set the terms and conditions of loans to borrowers, except that:
3.30    (1) no loan to a borrower may exceed $200,000;
3.31    (2) no loan for a project may exceed $200,000; and
4.1    (3) no borrower shall, at any time, have multiple loans from this program with a total
4.2outstanding loan balance of more than $200,000.
4.3Notwithstanding the limits in clauses (1) to (3), a chapter 103E drainage authority may
4.4request a loan to finance projects implemented on behalf of multiple landowners and the
4.5loan must not exceed an amount equal to the number of landowners represented in the
4.6drainage system multiplied by the limit in clause (1).
4.7    (d) The maximum term length for projects in this paragraph is ten years.
4.8    (e) Fees charged at the time of closing must:
4.9    (1) be in compliance with normal and customary practices of the local lender;
4.10    (2) be in accordance with published fee schedules issued by the local lender;
4.11    (3) not be based on participation program; and
4.12    (4) be consistent with fees charged other similar types of loans offered by the local
4.13lender.
4.14    (f) The interest rate assessed to an outstanding loan balance by the local lender must not
4.15exceed three percent per year.
4.16EFFECTIVE DATE.This section is effective the day following final enactment."
4.17Page 5, lines 24 to 26, reinstate the stricken language
4.18Page 13, delete section 20 and insert:

4.19    "Sec. 23. Minnesota Statutes 2016, section 41A.16, subdivision 1, is amended to read:
4.20    Subdivision 1. Eligibility. (a) A facility eligible for payment under this section must
4.21source from Minnesota at least 80 percent raw materials from Minnesota. of the biomass
4.22used to produce an advanced biofuel, except that, if a facility is sited 50 miles or less from
4.23the state border, raw materials biomass used to produce an advanced biofuel may be sourced
4.24from outside of Minnesota, but only if at least 80 percent of the biomass is sourced from
4.25within a 100-mile radius of the facility or from within Minnesota. Raw materials must be
4.26from agricultural or forestry sources or from solid waste. The facility must be located in
4.27Minnesota, must begin production at a specific location by June 30, 2025, and must not
4.28begin operating above 23,750 MMbtu of quarterly advanced biofuel production before July
4.291, 2015. Eligible facilities include existing companies and facilities that are adding advanced
4.30biofuel production capacity, or retrofitting existing capacity, as well as new companies and
4.31facilities. Production of conventional corn ethanol and conventional biodiesel is not eligible.
5.1Eligible advanced biofuel facilities must produce at least 23,750 1,500 MMbtu of advanced
5.2biofuel quarterly.
5.3(b) No payments shall be made for advanced biofuel production that occurs after June
5.430, 2035, for those eligible biofuel producers under paragraph (a).
5.5(c) An eligible producer of advanced biofuel shall not transfer the producer's eligibility
5.6for payments under this section to an advanced biofuel facility at a different location.
5.7(d) A producer that ceases production for any reason is ineligible to receive payments
5.8under this section until the producer resumes production.
5.9(e) Renewable chemical production for which payment has been received under section
5.1041A.17 , and biomass thermal production for which payment has been received under section
5.1141A.18 , are not eligible for payment under this section.
5.12(f) Biobutanol is eligible under this section."
5.13Page 14, delete section 22 and insert:

5.14    "Sec. 25. Minnesota Statutes 2016, section 41A.17, subdivision 1, is amended to read:
5.15    Subdivision 1. Eligibility. (a) A facility eligible for payment under this program section
5.16must source from Minnesota at least 80 percent biobased content from Minnesota. of the
5.17biomass used to produce a renewable chemical, except that, if a facility is sited 50 miles or
5.18less from the state border, biobased content must biomass used to produce a renewable
5.19chemical may be sourced from outside of Minnesota, but only if at least 80 percent of the
5.20biomass is sourced from within a 100-mile radius of the facility or from within Minnesota.
5.21Biobased content must be from agricultural or forestry sources or from solid waste. The
5.22facility must be located in Minnesota, must begin production at a specific location by June
5.2330, 2025, and must not begin production of 750,000 250,000 pounds of chemicals quarterly
5.24before January 1, 2015. Eligible facilities include existing companies and facilities that are
5.25adding production capacity, or retrofitting existing capacity, as well as new companies and
5.26facilities. Eligible renewable chemical facilities must produce at least 750,000 250,000
5.27pounds of renewable chemicals quarterly. Renewable chemicals produced through processes
5.28that are fully commercial before January 1, 2000, are not eligible.
5.29(b) No payments shall be made for renewable chemical production that occurs after June
5.3030, 2035, for those eligible renewable chemical producers under paragraph (a).
5.31(c) An eligible producer of renewable chemicals shall not transfer the producer's eligibility
5.32for payments under this section to a renewable chemical facility at a different location.
6.1(d) A producer that ceases production for any reason is ineligible to receive payments
6.2under this section until the producer resumes production.
6.3(e) Advanced biofuel production for which payment has been received under section
6.441A.16 , and biomass thermal production for which payment has been received under section
6.541A.18 , are not eligible for payment under this section."
6.6Page 16, delete section 25 and insert:

6.7    "Sec. 25. Minnesota Statutes 2016, section 41A.18, subdivision 1, is amended to read:
6.8    Subdivision 1. Eligibility. (a) A facility eligible for payment under this section must
6.9source from Minnesota at least 80 percent raw materials from Minnesota. of the biomass
6.10used for biomass thermal production, except that, if a facility is sited 50 miles or less from
6.11the state border, raw materials should biomass used for biomass thermal production may
6.12be sourced from outside of Minnesota, but only if at least 80 percent of the biomass is
6.13sourced from within a 100-mile radius of the facility, or from within Minnesota. Raw
6.14materials Biomass must be from agricultural or forestry sources. The facility must be located
6.15in Minnesota, must have begun production at a specific location by June 30, 2025, and must
6.16not begin before July 1, 2015. Eligible facilities include existing companies and facilities
6.17that are adding production capacity, or retrofitting existing capacity, as well as new
6.18companies and facilities. Eligible biomass thermal production facilities must produce at
6.19least 250 MMbtu of biomass thermal quarterly.
6.20(b) No payments shall be made for biomass thermal production that occurs after June
6.2130, 2035, for those eligible biomass thermal producers under paragraph (a).
6.22(c) An eligible producer of biomass thermal production shall not transfer the producer's
6.23eligibility for payments under this section to a biomass thermal production facility at a
6.24different location.
6.25(d) A producer that ceases production for any reason is ineligible to receive payments
6.26under this section until the producer resumes production.
6.27(e) Biofuel production for which payment has been received under section 41A.16, and
6.28renewable chemical production for which payment has been received under section 41A.17,
6.29are not eligible for payment under this section."
6.30Page 19, delete section 33
6.31Renumber the sections in sequence and correct the internal references
6.32Amend the title accordingly