Program Emphasis
Types of Assistance
Eligibility
Prerequisites
Distribution Enhancement Process
Financial Responsibility of the Client
Confidentiality
Evaluation of Projects
Additional Information

AURI provides expertise and assistance to increase value, demand and market opportunities for agriculturally-based products.

The Distribution Enhancement Program (DEP) is intended to bring agriculturally-based value-added products or processes to market at an introductory level.  DEP is a grant program which focuses on enhancing an active AURI project that demonstrates a need for assistance in the distribution environment.  AURI personnel, labs and pilot plants are available to assist a client in Minnesota by:

DEP provides limited funding to an active AURI project which demonstrates a need for retail or promotional assistance in order to introduce the product/process into the marketplace.

DEP provides limited funding to an active AURI project.  Uses of DEP funds include, but are not limited to:

 

DEP financial assistance is available to an active AURI team project which demonstrates the need for market or promotional assistance in order to bring the project to the retail environment. 

The purpose of all of AURI’s programs is to provide technology development through its many resources, especially its professional staff, laboratories and pilot plant facilities.  The DEP program augments these AURI resources by providing grant funds for those services not available within AURI. The focus of DEP grant funding is the impact the funds will provide the project and the community in which the project is located.  The staff of AURI incorporates this focus when determining the amount of project funding to recommend.

CLIENT TIERS AND MAXIMUM FUNDING

The maximum level of funding available to a client is based upon the type of business organization the client has chosen, consideration of the impact of the project, and a demonstrated ability to bring a project to commercialization.  The tiers of maximum funding available are categorized as follows:

tier one

Tier One funding is available to a legally organized entity with less than $500,000 in yearly gross product sales, which is not organized as a Co-op or Producer LLC with three or more members/owners (not of the immediate family). Typically, a Tier One client will be a sole proprietorship, a partnership or a wholly owned corporation. Co-ops or Producer Limited Liability Corporations (LLC’s) with three or more member owners (not of the immediate family) are addressed in Tier Three.  Immediate family is defined as parent, child, brother, sister, spouse, stepparent, stepbrother, stepsister, grandparent and in-law relationships.

Maximum funding is $5,000 per project, based on the demonstrated effect the funding will have upon the commodity and/or the community.  A lifetime limit of distribution enhancement grant funding from the AURI of $5,000 per legal entity is also considered.  This limit applies to the legal entity involved in the project, as well as any general partnership, limited partnership, corporation, joint venture, trust, or joint operation, in which the funded legal entity is substantially involved in providing labor, capital, or management, or in which the funded legal entity has a greater than 30% ownership interest. Any funds distributed under the DEP will be taken into consideration when determining the client’s AURI lifetime funding limits of $100,000.

A recipient of Tier One funds is required to match each dollar of AURI assistance with a dollar of his/her/its own funds (1:1 cash match).  The appropriate client will receive an IRS 1099 statement at the end of the calendar year in which the funds are received.

tier two

DEP funds are not available to AURI Tier Two clients, as defined in the Product Development Services (PDS) program.

tier three

Tier Three funding is available to a legally organized Co-op or Producer LLC with three or more members/owners (not of the immediate family).  Typically, a Tier Three client will be an organized grower group attempting to add value to the crops it produces.  Immediate family is defined as parent, child, brother, sister, spouse, stepparent, stepbrother, stepsister, grandparent and in-law relationships.

Maximum funding is $5,000 per project, based on the demonstrated effect the funding will have upon the commodity and/or the community.  A lifetime limit of distribution enhancement  funding from AURI of $5,000 per legal entity is also considered.  This lifetime limit applies to the legal entity involved in the project, as well as any general partnership, limited partnership, corporation, joint venture, trust, or joint operation, in which the funded legal entity is substantially involved in providing labor, capital, or management, or in which the funded legal entity has a greater than 30% ownership interest.  Any funds distributed under the DEP will be taken into consideration when determining the client’s AURI lifetime funding limits of $200,000.

A recipient of Tier Three funds is required to match each dollar of AURI assistance with a dollar of his/her/its own funds (1:1 cash match). The appropriate client will receive an IRS 1099 statement at the end of the calendar year in which the funds are received.

The project for which DEP funding is sought must use a Minnesota grown commodity and must be deemed as having commercial viability by the staff of AURI.  Recipients of funding must actively work with AURI staff  to develop a product or process prior to funding approval.

An eligible client that has an active AURI project may work with the AURI team leader to present an application for DEP funds.  DEP funding consideration involves the following:

STEP 1:     Client and a designated team member define the impact the DEP funding will have on the project.  If appropriate, the team member will submit an application for DEP funds.  The client may be asked to identify:

A.  Activities to be performed

B.  Expected outcomes

C.  Project objective(s)

D.  Estimated amount of funds to be provided by AURI and matched by the client.

STEP 2:    Upon completion of the application documents, the information is submitted to the AURI management team. The AURI management team reviews the application, considers the direct and indirect impact of the dollars requested on Minnesota, and makes a decision on the amount of funding.  Any funding request which would cause the active project disbursements to exceed $25,000 must be reviewed and acted upon by the AURI Board of Directors.

STEP 3:    Upon approval of the funding request, the AURI project team and client will be notified, a grant agreement prepared, and the client will receive the following:

1.  Grant Agreement

2.  Client Reference packet, including forms and information with respect to:

a.  Request for Disbursement

b.  Progress Report

c.  Final Project Report

3.  If the AURI project team has agreed upon specific funding items, a contract addendum will be issued noting:

a. The specific item funded and amount of funding

b. The expiration of the Addendum (the activity must occur before this date)

c. NOTE:  Although a Grant Agreement may be issued, a specific project activity is NOT authorized until a contract addendum has been issued.
 

To guarantee funding availability, the client must sign and return the Grant Agreement within 60 days of AURI approval.

STEP 4:    As a project task is finished, the Request for Disbursement form is completed by the client and mailed to the AURI State Office in Crookston.  Additionally, a project progress report is due every ninety days from the approved start date of the project.  Additional information on disbursements and progress reports is found in the AURI Client Reference packet.  A client is encouraged to remain in frequent communication with the AURI project team during the duration of the project.

STEP 5:    Upon completion of the project, a final report, including a financial summary, must be submitted to the AURI State Office in Crookston.  After the completion of the project, the client may receive periodic requests to complete project progress and impact update reports in order to allow AURI to track the actual impact of the project on a commodity or community.

At a minimum, a funded entity must match in accordance with his/her/its appropriate funding tier.  Matching funds may not come from an AURI affiliated program. AURI funds must be used to obtain technical research and business assistance not available within AURI.  AURI funds may not be used for legal fees, salaries of existing employees or officers, travel, websites, vehicles, equipment, buildings, real estate, slotting fees, printing or items relating directly to the client’s costs of full-scale production (Cost of Goods Sold).  AURI staff approves funding and the subsequent use of funds; however, projects requesting an aggregate of $25,000 or greater must be reviewed and acted upon by the AURI Board of Directors. 

Agreement to fund a project under the DEP requires AURI and the client enter into a written agreement which establishes the terms and conditions of AURI funding.  AURI may request a security interest or other legal interest in intellectual property developed/enhanced with the assistance of AURI.  In the event the client breaches the written agreement, AURI funds are subject to immediate repayment in full, plus interest at the rate of interest prescribed by Minnesota Statutes with respect to judgments.

Upon presentation of invoice(s) and completion of an updated progress report, funds will be disbursed in accordance with AURI draft policy:  if paid invoice(s) are presented, a single-party draft payable to client will be issued; if unpaid invoice(s) are presented, a two-party draft payable to client and vendor will be issued.  Required client match must be documented on the amount requested prior to fund disbursement.

The client/recipient is required to submit to the AURI State Office the following reports:

1.  Progress reports, submitted when requesting disbursement of funds, describing activity to date and documenting match.

2.  A final narrative report, including any appendices or materials developed and supporting documentation, describing the work performed and the results obtained.

3.  A final financial report of expenses incurred within the scope of the project.

AURI will treat all mutually agreed upon information provided by an applicant as confidential. Information provided to or gathered by AURI related to funding programs shall be treated as private data.  Such data includes:
 

Proprietary information provided to AURI, should be limited, set apart from the text of the application, and clearly marked as CONFIDENTIAL.  AURI will limit the dissemination of such proprietary information to staff and project reviewers on a confidential basis; but in any event, AURI does not assume any liability for inadvertent disclosures.

AURI will not, consistent with relevant law, make public any information disclosing product, process, commodity, invention, technology, innovation, or service funded pursuant to the DEP until a patent, copyright or trademark is applied for, or for two years after completion of the project, whichever occurs first.  AURI does not assume liability for any inadvertent disclosure.
 

AURI assistance is intended to occur early in the existence of a product or process, during which feasibility is determined.  A request for AURI assistance is analyzed with respect to a project’s positive impact on Minnesota and its agriculture.  A project is reviewed and evaluated based upon the following criteria:
 

The answers to each of these questions will determine the extent to which AURI may assist a client. A project, which demonstrates significant positive impact, is likely to receive more assistance than one showing minimal impact.  Some projects may be eligible for technical assistance only, while others may be eligible for financial and technical assistance.

Additional information regarding AURI’s programs and services, as well as necessary forms and guidelines, may be obtained by contacting one of the field offices listed above.