Eligibility modification for the agricultural growth, research, and innovation program

A bill for an act

relating to agriculture; modifying eligibility for the agricultural growth, research,

and innovation program; amending Laws 2025, chapter 34, article 1, section 2,

subdivision 3, as amended.

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

Section 1.

Laws 2025, chapter 34, article 1, section 2, subdivision 3, as amended by Laws

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

Subd. 3.

Agricultural Marketing and

Development

23,551,000

23,301,000

(a) $634,000 the first year and $634,000 the

second year are for the continuation of the

dairy development and profitability

enhancement program, including dairy

profitability teams and dairy business planning

grants under Minnesota Statutes, section

32D.30
.

(b) The commissioner may use funds

appropriated in this subdivision for annual

cost-share payments to resident farmers or

entities that sell, process, or package

agricultural products in this state for the costs

of organic certification. The commissioner

may allocate these funds for assistance to

persons transitioning from conventional to

organic agriculture.

(c) $100,000 the first year and $100,000 the

second year are for mental health outreach and

support to farmers, ranchers, farm workers

and employees, and others in the agricultural

community and profession and for farm and

farm worker safety grant and outreach

programs under Minnesota Statutes, section

17.1195
. Mental health outreach and support

may include a 24-hour hotline, stigma

reduction, and education. Notwithstanding

Minnesota Statutes, section
16A.28
, any

unencumbered balance does not cancel at the

end of the first year and is available in the

second year. The base for this appropriation

is $50,000 in fiscal year 2028 and each year

thereafter.

(d) $700,000 the first year and $700,000 the

second year are for the local food purchasing

assistance grant program under article 3,

section 35. Notwithstanding Minnesota

Statutes, section
16A.28
, any unencumbered

balance does not cancel at the end of the first

year and is available in the second year.

(e) $18,257,000 the first year and $18,007,000

the second year are for the agricultural growth,

research, and innovation program under

Minnesota Statutes, section
41A.12
. The base

for this appropriation is $17,449,000 in fiscal

year 2028 and each year thereafter.

(f) Except as provided in paragraph (g), the

commissioner may allocate the appropriation

in paragraph (e) each year among the

following areas: facilitating the startup,

modernization, improvement, or expansion of

livestock operations, including beginning and

transitioning livestock operations with

preference given to robotic dairy-milking

equipment; assisting value-added agricultural

businesses to begin or expand, to access new

markets, or to diversify, including aquaponics

systems, with preference given to hemp fiber

processing equipment; facilitating the startup,

modernization, or expansion of other

beginning and transitioning farms, including

by providing loans under Minnesota Statutes,

section
41B.056
; sustainable agriculture

on-farm research and demonstration; the

development or expansion of food hubs and

other alternative community-based food

distribution systems; enhancing renewable

energy infrastructure and use; crop research,

including basic and applied turf seed research;

Farm Business Management tuition assistance;

supporting the commercialization of an

innovative material additive utilizing

agricultural coproducts or waste streams to

produce fiber-based barrier packaging to

reduce perfluoroalkyl and polyfluoroalkyl

substances (PFAS) and plastics in packaging

products;
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assisting value-added businesses to

process agricultural commodities into

alternative protein food products;
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and good

agricultural practices and good handling

practices certification assistance.

Notwithstanding Minnesota Statutes, section

16B.98, subdivision 14
, the commissioner may

use up to 7.5 percent of the appropriation in

paragraph (e) for costs incurred to administer

the program.

(g) Of the amount appropriated for the

agricultural growth, research, and innovation

program under Minnesota Statutes, section

41A.12
:

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

the second year are for distribution in equal

amounts to each of the state's county fairs to

preserve and promote Minnesota agriculture;

(2) $3,000,000 the first year and $3,000,000

the second year are for incentive payments

under Minnesota Statutes, sections
41A.16
,

41A.17
,
41A.18
, and
41A.20
. If this

appropriation exceeds the total amount for

which all producers are eligible in a fiscal

year, the balance of the appropriation is

available for other purposes under this

paragraph;

(3) $2,750,000 the first year and $2,750,000

the second year are for grants that enable retail

petroleum dispensers, fuel storage tanks, and

other equipment to dispense biofuels to the

public in accordance with the biofuel

replacement goals established under

Minnesota Statutes, section
239.7911
. A retail

petroleum dispenser selling petroleum for use

in spark ignition engines for vehicle model

years after 2000 is eligible for grant money

under this clause if the retail petroleum

dispenser has no more than 20 retail petroleum

dispensing sites and each site is located in

Minnesota. The grant money must be used to

replace or upgrade equipment that does not

have the ability to be certified for E25. A grant

award must not exceed 65 percent of the cost

of the appropriate technology. A grant award

must not exceed $200,000 per station. The

commissioner must cooperate with biofuel

stakeholders in the implementation of the grant

program. The commissioner, in cooperation

with any economic or community development

financial institution and any other entity with

which the commissioner contracts, must

submit a report on the biofuels infrastructure

financial assistance program by January 15

each year to the chairs and ranking minority

members of the legislative committees and

divisions with jurisdiction over agriculture

policy and finance. The annual report must

include but not be limited to a summary of the

following metrics: (i) the number and types

of projects financed; (ii) the amount of dollars

leveraged or matched per project; (iii) the

geographic distribution of financed projects;

(iv) any market expansion associated with

upgraded infrastructure; (v) the demographics

of the areas served; (vi) the costs of the

program; and (vii) the number of grants to

minority-owned or female-owned businesses;

(4) $350,000 the first year and $250,000 the

second year are for grants to facilitate the

startup, modernization, or expansion of meat,

poultry, egg, and milk processing facilities. A

grant award under this clause must not exceed

$200,000;

(5) $1,594,000 the first year and $1,544,000

the second year are for providing more fruits,

vegetables, meat, poultry, grain, and dairy for

children in school and early childhood

education settings, including, at the

commissioner's discretion, providing grants

to reimburse schools and early childhood

education and child care providers for

purchasing equipment and agricultural

products. Of the amount appropriated,

$150,000 each year is for a statewide

coordinator of farm-to-institution strategy and

programming. The coordinator must consult

with relevant stakeholders and provide

technical assistance and training for

participating farmers and eligible grant

recipients. The base for this appropriation is

$1,636,000 in fiscal year 2028 and each year

thereafter. At the commissioner's discretion,

for state administration of federal cooperative

agreements for purchasing Minnesota grown

and raised foods for schools, child care

providers, food banks, and other institutions,

the commissioner may use an amount of state

funds equal to no more than 7.5 percent of the

total federal funds awarded to the state. The

commissioner shall expend any available

federal administrative funds awarded for this

purpose before using state funds;

(6) up to $1,750,000 the first year and up to

$1,750,000 the second year are for grants to

facilitate the development of urban agriculture,

including projects related to youth education,

community and economic development,

value-added processing, and vocational

training;

(7) $1,000,000 the first year and $1,000,000

the second year are for the food retail

improvement and development program under

Minnesota Statutes, section
17.1017
;

(8) up to $200,000 the first year and up to

$200,000 the second year are for cooperative

development grants under Minnesota Statutes,

section
17.1016
;

(9) $250,000 the first year and $150,000 the

second year are for the protecting livestock

grant program for producers to support the

installation of measures to prevent the

transmission of avian influenza. For the

appropriation in this clause, a grant applicant

must document a cost-share of 20 percent. An

applicant's cost-share amount may be reduced

up to $2,000 to cover time and labor costs.

This is a onetime appropriation; and

(10) up to $525,000 the first year and up to

$525,000 the second year are to award AGRI

Works grants to institutions and organizations

to provide regional and statewide services.

Preference shall be given to legislatively

created entities and organizations that enhance

agricultural, horticultural, or rural community

and economic development, marketing, and

promotion, and research and education. A

grant award under this clause must not exceed

$200,000. Grants made under this paragraph

are subject to the requirements in Minnesota

Statutes, sections
16B.98
and
16B.981
. This

is a onetime appropriation.

(h) Notwithstanding Minnesota Statutes,

section
16A.28
, the appropriation in paragraph

(e) does not cancel at the end of the second

year and is available until June 30, 2029.

Appropriations encumbered under contract on

or before June 30, 2029, for agricultural

growth, research, and innovation grants are

available until June 30, 2032. At the end of

fiscal year 2027, the commissioner must

prioritize any money resulting from canceled

contracts to be used for AGRI Works grants

under paragraph (g), clause (10).

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EFFECTIVE DATE.

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This section is effective July 1, 2026.

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