Farm down payment assistance program modified.

A bill for an act

relating to agriculture; modifying the farm down payment assistance program;

amending Minnesota Statutes 2025 Supplement, section 17.133, subdivisions 1,

2; Laws 2025, chapter 34, article 1, section 2, subdivision 4, as amended.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2025 Supplement, section 17.133, subdivision 1, is amended

to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have

the meanings given.

(b) "Eligible farmer" means an individual who at the time that the grant is awarded:

(1) is a resident of Minnesota who intends to acquire farmland located within the state

and provide the majority of the day-to-day physical labor and management of the farm;

(2) grosses no more than $250,000 per year from the sale of farm products;

(3) has not, and whose spouse has not, at any time had a direct or indirect ownership

interest in farmland;
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and
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(4) is not, and whose spouse is not, a family member of the owner of the farmland that

the individual intends to acquire. "Family member" has the meaning given in section

267(c)(4) of the Internal Revenue Code
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.
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; and
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(5) has adequate farming experience or demonstrates knowledge in the type of farming

for which the farmer seeks assistance from the commissioner.

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(c) "Farm down payment" means an initial, partial payment required by a lender or seller

to purchase farmland.

(d) "Incubator farm" means a farm where:

(1) individuals are given temporary, exclusive, and affordable access to small parcels

of land, infrastructure, and often training, for the purpose of honing skills and launching a

farm business; and

(2) a majority of the individuals farming the small parcels of land grow industrial hemp,

cannabis, or one or more of the following specialty crops as defined by the United States

Department of Agriculture for purposes of the specialty crop block grant program: fruits

and vegetables, tree nuts, dried fruits, medicinal plants, culinary herbs and spices, horticulture

crops, floriculture crops, and nursery crops.

(e) "Limited land access" means farming without ownership of land and:

(1) the individual or the individual's child rents or leases the land, with the term of each

rental or lease agreement not exceeding three years in duration, from a person who is not

related to the individual or the individual's spouse by blood or marriage; or

(2) the individual rents the land from an incubator farm.

(f) "Limited market access" means the individual has gross sales of no more than

$100,000 per year from the sale of farm products.

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EFFECTIVE DATE.

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This section is effective July 1, 2026.

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Sec. 2.

Minnesota Statutes 2025 Supplement, section 17.133, subdivision 2, is amended

to read:

Subd. 2.

Grants.

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(a)
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The commissioner may award farm down payment assistance grants

of up to $20,000 per eligible farmer
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purchasing two to 75 acres of farmland, and up to

$40,000 per eligible farmer purchasing more than 75 acres of farmland
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. Each award must

be matched with at least $8,000 of other funding. Grants under this subdivision may be

awarded by a randomized selection process after applications are collected over a period

of no less than 30 calendar days. An eligible farmer must commit to own and farm the land

purchased with assistance provided under this section for at least five years. For each year

that a grant recipient does not own and farm the land during the five-year period, the grant

recipient must pay a penalty to the commissioner equal to 20 percent of the grant amount.

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(b) Farmland is not eligible for the farm down payment assistance grant program if the

farmland is in an area zoned for residential use. If the farmland is located in an area zoned

for commercial use, the eligible farmer must submit a business plan with the application.

If the farmland is located within the boundaries of a statutory or home rule charter city, the

eligible farmer must earn an annual revenue of at least $1,000.

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EFFECTIVE DATE.

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This section is effective July 1, 2026.

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Sec. 3.

Laws 2025, chapter 34, article 1, section 2, subdivision 4, as amended by Laws

2025, First Special Session chapter 11, section 12, is amended to read:

Subd. 4.

Administration and Financial

Assistance

14,179,000

11,145,000

(a) $474,000 the first year and $474,000 the

second year are for payments to county and

district agricultural societies and associations

under Minnesota Statutes, section
38.02,

subdivision 1
. Aid payments to county and

district agricultural societies and associations

must be disbursed no later than July 15 each

year. These payments are the amount of aid

from the state for an annual fair held in the

previous calendar year.

(b) $300,000 the first year and $300,000 the

second year are for grants to the Minnesota

Agricultural Education and Leadership

Council for programs of the council under

Minnesota Statutes, chapter 41D. The base for

this appropriation is $250,000 in fiscal year

2028 and each year thereafter.

(c) $1,250,000 the first year and $1,250,000

the second year are to award and administer

farm down payment assistance grants under

Minnesota Statutes, section
17.133
, with

priority given to eligible applicants with no

more than $100,000 in annual gross farm

product sales and eligible applicants who are

producers of industrial hemp, cannabis, or one

or more of the following specialty crops as

defined by the United States Department of

Agriculture for purposes of the specialty crop

block grant program: fruits and vegetables,

tree nuts, dried fruits, medicinal plants,

culinary herbs and spices, horticulture crops,

floriculture crops, and nursery crops.
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In the

second year, the commissioner must reserve

half the appropriation for applicants who

submit a purchase agreement with their

applications. After half the appropriation is

awarded to applicants with purchase

agreements or all the applicants with purchase

agreements have been awarded a grant,

whichever occurs first, the commissioner may

award grants to any eligible applicant.
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Notwithstanding Minnesota Statutes, section

16A.28
, any unencumbered balance at the end

of the first year does not cancel and is

available in the second year and appropriations

encumbered under contract by June 30, 2027,

are available until June 30, 2029. The base for

this appropriation is $1,000,000 in fiscal year

2028 and each year thereafter.

(d) $1,000,000 the first year and $1,000,000

the second year are for the purchase of milk

for distribution to Minnesota's food shelves

and other charitable organizations that are

eligible to receive food from the food banks.

Milk purchased with grant money must be

acquired from Minnesota milk processors and

based on low-cost bids. The milk must be

allocated to each Feeding America food bank

serving Minnesota according to the formula

used in the distribution of United States

Department of Agriculture commodities under

The Emergency Food Assistance Program.

The commissioner may enter into contracts or

agreements with food banks for shared funding

or reimbursement of the direct purchase of

milk. Each food bank that receives funding

under this paragraph may use up to two

percent for administrative expenses.

Notwithstanding Minnesota Statutes, section

16A.28
, any unencumbered balance the first

year does not cancel and is available the

second year.

(e) $260,000 the first year and $260,000 the

second year are for a pass-through grant to

Region Five Development Commission to

provide, in collaboration with Farm Business

Management, statewide mental health

counseling support to Minnesota farm

operators, families, and employees, and

individuals who work with Minnesota farmers

in a professional capacity. Region Five

Development Commission may use up to 7.5

percent of the grant awarded under this

paragraph for administration.

(f) $1,000,000 the first year and $1,000,000

the second year are to expand the Emerging

Farmers Office and provide services to

beginning and emerging farmers to increase

connections between farmers and market

opportunities throughout the state. This

appropriation may be used for grants,

translation services, training programs, or

other purposes in line with the

recommendations of the emerging farmer

working group established under Minnesota

Statutes, section
17.055, subdivision 1
.

(g) $137,000 the first year and $203,000 the

second year are to support current services.

(h) $337,000 the first year and $337,000 the

second year are for farm advocate services.

Of these amounts, $50,000 the first year and

$50,000 the second year are for the

continuation of the farmland transition

programs and may be used for grants to

farmland access teams to provide technical

assistance to potential beginning farmers.

Farmland access teams must assist existing

farmers and beginning farmers with

transitioning farm ownership and farm

operation. Services provided by teams may

include but are not limited to mediation

assistance, designing contracts, financial

planning, tax preparation, estate planning, and

housing assistance.

(i) $3,000,000 the first year is for transfer to

the Public Facilities Authority for a grant to

First District Association to acquire land for

and to design, engineer, construct, equip, and

furnish a wastewater treatment project. This

appropriation is in addition to the

appropriation in Laws 2023, chapter 71, article

1, section 15, subdivision 7. This appropriation

is available until the project is completed or

abandoned, subject to Minnesota Statutes,

section
16A.642
.

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(k)
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(j)
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$50,000 the first year is to be awarded

as a grant in a competitive bid process to an

entity that is not a for-profit entity to conduct

a study of market and workforce factors that

may contribute to the incorrect marking for

the installation of underground

telecommunications infrastructure that is

located within ten feet of existing underground

utilities or that crosses the existing

underground utilities. The study must include

recommendations to the legislature and be

submitted to the chairs and ranking minority

members of the legislative committees and

divisions with jurisdiction over agriculture

policy and finance by June 1, 2027.

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(r)
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(k)
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$50,000 the first year is to conduct a

study and develop recommendations for

establishing an incentive-based program to

support and encourage agricultural retailers

in promoting 4R nutrient management

practices. The 4R nutrient management

practices include: the right source of nutrients,

at the right rate and right time, in the right

place.

(1) As part of the study, the department must

evaluate strategies for leveraging cost-share

programs, including the feasibility of

coordinating with the Agricultural Water

Quality Certification Program and other efforts

related to the state's Nutrient Reduction

Strategy.

(2) The commissioner must submit a report

detailing its findings, including potential

funding sources and proposal outlines for

funding requests where appropriate. The

commissioner must submit the report to the

chairs and ranking minority members of the

legislative committees with jurisdiction over

agriculture and environment by March 15,

2026.

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(s)
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(l)
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The commissioner shall continue to

increase connections with ethnic minority and

immigrant farmers to farming opportunities

and farming programs throughout the state.

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EFFECTIVE DATE.

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This section is effective July 1, 2026.

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