Cleaning up power sources, drinking water key to energy and agriculture law

The energy and agriculture policy and supplemental budget law includes $17 million in fiscal year 2025 energy appropriations designed to get the state closer to its goal of 100% clean energy by 2040, and $4.5 million for such agriculture-related programs as assisting communities in southeastern Minnesota affected by nitrate contamination in their drinking water.

Sponsored by Rep. Patty Acomb (DFL-Minnetonka) and Sen. Nick Frentz (DFL-North Mankato), the law’s climate and energy provisions took effect May 25, 2024, except where indicated. The same is true of the law’s supplemental budget and policy provisions impacting agriculture and broadband, which were included in bills sponsored by Rep. Samantha Vang (DFL-Brooklyn Center) and Sen. Aric Putnam (DFL-St. Cloud).

HF4975/SF4942*/CH126

Agriculture appropriations

Among the outlays for agriculture that take effect July 1, 2024, is $2.8 million to provide nitrate home water treatment, including reverse osmosis systems, for households in Dodge, Fillmore, Goodhue, Houston, Mower, Olmsted, Wabasha and Winona counties with wells that have been contaminated. Priority is given to households at or below 300% of the federal poverty guidelines and those with infants or pregnant people. (Art. 1, Sec. 2)

Elk damage

The law modifies the process to compensate farmers when crops or fences are damaged by elk. Farmers must promptly report the damage but can submit a claim for crop damage upon discovery or at harvest. There is an upper limit of $1,800 per year for fence damage. (Art. 2, Secs. 1-5)

Beginning farmers

The law adjusts some grant programs aimed at helping farmers who have historically faced barriers entering the field. It gives preference to farmers with limited access to land (renters with leases shorter than three years) and markets (less than $100,000 in gross sales).

Producers of industrial hemp or cannabis — or one who grows specialty crops such as fruits, vegetables, nuts, herbs or flowers — are often entry-level farmers, and they may receive preference for some grant programs. (Art. 1, Sec. 2; Art. 2, Secs. 6-9)

Pesticides

The law places in statute many of the Department of Agriculture’s practices surrounding commercial pesticide licensing, certification and record keeping. It also bars those younger than age 18 from being licensed.

Additionally, the Department of Agriculture must consult with outside experts, including the Department of Health, Department of Natural Resources, Pollution Control Agency and University of Minnesota, before approving an experimental pesticide. And commercial applicator license exams are required to be available in Spanish by Jan. 1, 2025. (Art. 2, Secs. 13-30, 71)

Agricultural Fertilizer Research and Education Council

The law extends a 40-cent-per-ton fee on fertilizer purchases until June 30, 2029. The fee will continue to be used to fund the Agricultural Fertilizer Research and Education Council, which is extended to June 30, 2030.

The council will grow from 12 to 15 members, with one member from the Minnesota Crop Production Retailers, rather than two. Of the new members, one will come from the Minnesota Institute for Sustainable Agriculture, one from the Minnesota Soil Health Coalition, one will be an expert in public health, and one an expert in water quality.

The council’s priorities must now include research and guidance on best practices in areas with karst geology, where groundwater is susceptible to nitrate contamination.

The law also adds regenerative agriculture and protection of clean water to the list of research projects that can be funded. (Art. 2, Secs. 36-43)

Other farm and rural development provisions

Recipients of soil health equipment grants must certify they won’t sell the equipment for at least 10 years. The sunset of the Food Safety and Defense Task Force is extended by 10 years to June 30, 2037, while the sunset of the Minnesota Organic Advisory Task Force is extended by 10 years to June 30, 2034. Consistent with federal labeling laws, honey that is mixed with another sweetener must be labeled as such. And the law modifies the Dairy Development and Profitability Enhancement program for better flexibility. (Art. 2, Secs. 11, 51, 53-55)

Additionally, the law:

• increases by $100,000 the maximum state participation in some Rural Finance Authority loans;

• states that disaster recovery loans can be used to buy animal feed if drought is the reason for the purchase;

• establishes that known owners of stray animals shall be notified within seven days, with the owner paying any transportation costs to recover the stray;

• establishes that, for strays with unknown owners, notice must be given to the town or city clerk within 10 days or the animal must be given to animal control or a kennel within seven days;

• requires a report by Feb. 1, 2025, that examines whether the state should set up a carbon credit market; and

• allows the Office of Broadband to move up to $5 million among its border-to-border broadband, low-density population and broadband line extension programs. (Art. 2, Secs. 56-61, 67, 72; Art. 3, Sec. 1)

Climate and energy appropriations

The law allocates $1.1 million from the General Fund to the Department of Commerce and $267,000 to the Public Utilities Commission in fiscal year 2025.

The Department of Commerce appropriations include $500,000 each for a thermal energy network site suitability study and to award incentives to local units of government to adopt the Solar Automated Permit Processing+ software program designed to help municipalities transition to solar energy. (Art. 4, Sec. 2)

Renewable Development Account appropriations

This account is designed to fund projects that employ renewable energy sources, its monies coming from fees paid by Xcel Energy in order to store nuclear waste at its Monticello and Prairie Island nuclear plants.

The law distributes $15.4 million from the account in fiscal year 2025. Of that funding, the largest total is $6 million toward a geothermal energy system for Minneapolis’ Sabathani Community Center. The law also appropriates $5 million for an anaerobic digester energy system for Ramsey and Washington counties that will be located in Louisville Township.

Allocations from the Renewable Development Account for fiscal year 2025 also include:

• $1.5 million to promote the Solar APP+ software program;

• $1.2 million for geothermal energy system planning grants;

• $1 million for a suitability review of carbon pipelines;

• $500,000 to Dakota County for energy efficiency projects; and

• $250,000 for ultra-efficient vehicle development grants. (Art. 5, Secs. 2-3)

Energy policy

The law extends the state’s solar energy production incentive program (Solar Rewards) through 2035, and allocates $5 million per year toward the program from 2026 through 2035. The law also:

• requires that utilities must allow new customers to use individual taxpayer identification numbers in lieu of Social Security numbers;

• adds efficient fuel-switching improvements to incentive plans for energy conservation and programs for electric and natural gas utilities;

• adds energy savings goals for consumer-owned natural gas facilities;

• sets requirements for utilities’ innovation plans to include thermal energy networks;

• creates a geothermal planning grant account for grants of up to $150,000;

• establishes a program to provide technical assistance and financial assistance to local units of government to streamline the review and permitting process for residential solar and energy storage system projects;

• establishes a grant program to provide financial assistance to developers and producers of ultra-efficient vehicles;

• creates a thermal energy network deployment work group;

• requires the Public Utilities Commission to conduct studies regarding carbon dioxide pipelines and thermal energy network site suitability;

• orders the Public Utilities Commission to assemble a report on grid-enhancing technologies and initiate a proceeding to establish cost-sharing standards necessary to upgrade a utility’s distribution system; and

• establishes an interconnection ombudsperson position in the Public Utilities Commission’s consumer affairs office. (Art. 6, Secs. 4-6, 11-12, 14-18, 23, 45-46, 48-54)

Minnesota Energy Infrastructure Permitting Act

This section of the law was the product of a work group of 31 stakeholders assembled by the Public Utilities Commission, and includes that group’s top 12 recommendations for streamlining the permitting process for electricity-generating projects to be hooked up to the transmission grid.

It shortens the deadlines for transmission line owners and streamlines the process for designating sites and routes, lays out procedures for determining what review processes are applicable for a project, and contains measures designed to streamline the processes for environmental assessment and amending permits with minor alterations. It also provides permitting exemptions for projects below a certain size involving solar, wind or battery storage.

The provisions in this article are effective July 1, 2025. (Art. 7, Secs. 5-6, 9-10).

Certificates of need

The law exempts certain projects from the requirement to obtain a certificate of need from the Public Utilities Commission including certain high-voltage transmission lines, based on their capacity and length, and wind and solar energy projects contributing to the state’s renewable or carbon-fee energy standards. (Art. 8, Secs. 1, 6)

SF4942* / HF4975 / CH126