MN HF38

Establishes a wood pellet production incentive program in Minnesota requiring facilities to be located in-state, process residual materials from Minnesota forests and sawmills, begin construction by June 30, 2022, and produce at least 50,000 metric tons annually to be eligible for payments.

Requires forest residue from parcels larger than 160 acres to be certified by the Forest Stewardship Council, Sustainable Forestry Initiative, or American Tree Farm System; smaller parcels must be harvested under a forest stewardship plan by a certified qualified logging professional.

Provides $25 per metric ton of wood pellets produced with annual payment caps of $2,500,000 per facility and a maximum eligibility period of 10 years, with all payments ending after June 30, 2032.

Requires eligible facilities to file quarterly claims by January 31, April 30, July 31, and October 31 with independent third-party verification of production amounts and sustainable harvesting compliance.

Appropriates $2,500,000 in fiscal year 2021 from the renewable development account to the commissioner of commerce, with $2,500,000 annual base funding for fiscal years 2022 through 2031 and $0 base for fiscal year 2032; unspent funds remain available for expenditure.