Deadline week brings activity at MN Legislature
An update from Minnesota Corn Growers Association Senior Public Policy Director Amanda Bilek
This week is the first major deadline week for the Minnesota Legislature. Refer to my update from last week about committee deadlines at the Legislature and what they mean.
There are currently several proposals moving that have an impact on corn farmers. We will see more proposals move this week, but we still have a couple of months to determine what will make it into final policy and spending agreements.
Last week the Senate Energy, Utilities, Environment and Climate Committee heard SF 4787, which would streamline environmental permitting for transmission, solar, and wind projects. The bill aims to help the state meet its target of 100% clean energy by 2040, as mandated by the State Legislature last year. Its companion, HF 4700, is scheduled for a hearing Wednesday in the House Climate and Energy Finance and Policy Committee.
Fortunately, the bill does not currently include a proposal to repeal the state’s prime farmland exclusion rule or amend the rule so it doesn’t apply to large energy projects (those 50 megawatts and above). Those ideas were proposed in summer 2023 during a series of stakeholder discussions held by the Public Utilities Commission on permitting reform for clean energy projects. The Minnesota Corn Growers Association (MCGA) and several other agriculture groups opposed the changes when they were proposed this past summer. That’s because the current rule doesn’t prevent the construction of utility-scale solar projects and is a reasonable check to ensure solar projects are in the best interests of the public.
Clean energy is not the only sector burdened by a slow and inefficient environmental permitting system. Permitting challenges for projects, including those in agriculture, exist across a wide spectrum of Minnesota’s industrial and commercial sectors. Just last month, the Minnesota Chamber of Commerce released a comprehensive report on Streamlining Minnesota’s environmental permitting process: essential for economic growth. Minnesota Corn has previously conducted research on environmental permitting obstacles for livestock and the agriculture commodity processing, including biofuels. These reports clearly document that there is a need and a viable path to improve Minnesota’s environmental permitting system that will maintain strong environmental protections but provide increased predictability for projects navigating the permitting process. The discussion at the Legislature should be much broader than just clean energy projects.
This week, MCGA is busy testifying on bills during the policy deadline week. Yesterday, the House Environment and Natural Resources Committee heard HF 4135, which proposes to increase taxes on fertilizer products containing nitrogen and deposit revenue collected into a special account to address nitrate issues in southeast Minnesota. This bill has not been heard in the Senate. Governor Walz is proposing a different approach. Continuing reading to learn more.
Also yesterday, the House Agriculture Finance and Policy Committee heard a newly introduced proposal from Rep. Pursell (DFL-Mankato) and Rep. Bjorn Olson (R-Fairmont) to address soil health, clean water, and climate smart agriculture practice adoption. HF 4989 would establish aggressive goals for clean water, soil health, and climate smart practice adoption and stand up a pilot program in southeast Minnesota to provide financial incentives for specific practice adoption. MCGA has concerns about the bill and will be testifying as well as working with the authors as the bill moves through the process.
Supplemental budget proposal
On Monday, Governor Walz unveiled the administration’s supplemental budget proposal for FY 2024-2025 and adjustments for the upcoming biennium (FY 2026-2027). The supplemental budget proposal marks the beginning of fiscal discussions among the administration, the House, and the Senate.
The governor’s supplemental budget proposal is relatively modest at $198 million compared to the full budget enacted last session, and it proposes to leave about $2 billion on the bottom of the project surplus. A few items to note of interest to corn farmers:
- Agriculture – Agricultural Growth, Research, and Innovation (AGRI)
- $4 million in one-time general funds to the AGRI program. The fund at MDA provides grants for several farmer and agricultural development programs, including the biofuels infrastructure grant program.
- Agriculture – Agricultural Best Management Practices Loan Program
- $3.4 million in Clean Water Funds to meet backlog of requests for low-interest loans for water quality-related purposes.
- Agriculture – Extend the Agricultural Fertilizer Research and Education Council (AFREC)
- Extend the sunset date for AFREC through end of fiscal year 2030 and extend the authority to collect the $0.40 per ton fee through fiscal year 2029.
- Agriculture – Increase maximum loan amount for Rural Finance Authority (RFA)
- This is a budget-neutral proposal but would increase by $100,000 the maximum low-interest loan amount for RFA loans, including those administered through the Beginning Farmer, Seller Assisted, Agricultural Improvement, Livestock Expansion, and Restructure II loan programs.
The supplemental budget proposal also includes targeted funds to address nitrate issues in southeast Minnesota in response to the environmental group petition to the Environmental Protection Agency.
- Agriculture – Nitrate treatment
- $3 million one-time general funds for in-home water treatment systems to remove nitrate from drinking water.
- $1 million in Clean Water Funds to accelerate the Nitrogen Fertilizer Management Plan in southeast Minnesota.
- Health – Addressing nitrate contamination in private wells in southeast Minnesota
- $4 million in one-time general funds for mitigation in wells that exceed the drinking water standard for nitrate. Mitigation options include repair or replacement of wells or installation of home water treatment.
- $2.79 million in one-time Clean Water Funds for a well inventory and well testing for residents.
- Pollution Control – Continuous nitrate sensor network
- $2 million in one-time Clean Water Funds to develop a continuous nitrate monitoring network and effectively target best management practices where nitrate reduction is most needed.
As with any supplemental budget, the Governor is required to put forward a proposal, but legislators will ultimately decide and vote on what will be included and sent to the Governor. The administration will be a part of the negotiation, but we are at an inflection point in session when more of the focus will be on spending items either in the supplemental budget or a capital investment proposal.
