Department of Agriculture package prompts questions over grain license fee increases and multiple program changes

Chair Anderson presented House File 2446, the Minnesota Department of Agriculture’s omnibus package, which contains a wide array of statutory updates ranging from AGRI grant administration changes to food‑licensing modernization and proposed fee increases for grain licensees.

Andrea Vawbel, Deputy Commissioner of the Minnesota Department of Agriculture, summarized key provisions and fiscal drivers. The presentation included requests to increase the AGRI administrative allowance, expand eligibility for the biofuels infrastructure grant, broaden the urban agriculture grant scope, make programmatic changes to Good Food Access grants, update the Ag BMP loan program and expand livestock investment grant eligibility to include tribal governments and additional species. Vawbel also outlined requested technical changes for seed potato certification statutes, food licensing modernization with associated fee changes, milk marketing modernization to address unpaid milk incidents, and various Rural Finance Authority program updates.

Vawbel told the committee the department faces increased fixed costs, including an unexpectedly higher laboratory rent. "We estimate that to be about $1,000,000 per year," she said, and added that maintaining current service levels requires adjustments.

The portion of the hearing that drew the most direct opposition focused on proposed grain licensing and inspection fee increases. Laura Lemke, executive director of the Minnesota Grain and Feed Association, testified in opposition and said the proposed fee increases are severe for many license holders: "This license and inspection fee increase will cost many state grain buyers in storage facilities between 40–250% more for their licenses. This is not a small bump to license fees," Lemke said, adding that small independent elevators could see license fees jump by $2,000 or more and larger cooperatives could see fees rise from about $18,000 to more than $40,000. Lemke asked the committee to consider alternatives such as reduced fee increases or longer inspection cycles.

Vawbel and plant‑program staff explained that the grain program has faced revenue shortfalls for several years, the program now has more annual inspections and more financial-report review work, and that fees have not been meaningfully adjusted in roughly 20 years. Departments staff acknowledged that entities with multiple locations will be charged per location under the proposed structure and that a $350 minimum per location reflects program time to review financial records even if a facility does not physically store grain.

Other items discussed included canceling $3 million of a prior green fertilizer appropriation to reduce unspent balances; suggested updates to the Good Food Access program language to reduce stigma and simplify RFP eligibility; clarifying seed potato program funding restrictions; and the Department’s food licensing modernization proposal to adjust license categories and raise fees to sustain inspection capacity. The RFA adjustments include raising minimum bond/loan sizes and adding a net‑worth limit for disaster loans.

Industry representatives urged more gradual change on grain fees or alternative approaches, and the committee laid the omnibus bill over to allow further review and stakeholder negotiation.

Action: Chair Anderson moved House File 2446 and the committee laid it over; an A1 amendment (administrative allowance for AGRI to use some funds for administration) was moved and adopted for that section; the larger fee schedule and program changes were retained for additional committee work.