HF 257

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 03/01/2021 04:28pm

A bill for an act
relating to energy; modifying certain utility requirements; prohibiting certain
restrictions on the use of residential solar energy systems; amending Minnesota
Statutes 2020, sections 216B.164, subdivision 3, by adding a subdivision; 515.07;
515B.2-103; 515B.3-102; proposing coding for new law in Minnesota Statutes,
chapter 500.

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

Section 1.

Minnesota Statutes 2020, section 216B.164, subdivision 3, is amended to read:

Subd. 3.

Purchases; small facilities.

(a) This paragraph applies to cooperative electric
associations and municipal utilities. For a qualifying facility having less than 40-kilowatt
capacity, the customer shall be billed for the net energy supplied by the utility according to
the applicable rate schedule for sales to that class of customer. A cooperative electric
association or municipal utility may charge an additional fee to recover the fixed costs not
already paid for by the customer through the customer's existing billing arrangement. Any
additional charge by the utility must be reasonable and appropriate for that class of customer
based on the most recent cost of service study. The cost of service study must be made
available for review by a customer of the utility upon request. In the case of net input into
the utility system by a qualifying facility having less than 40-kilowatt capacity, compensation
to the customer shall be at a per kilowatt-hour rate determined under paragraph (c), (d), or
(f).

(b) This paragraph applies to public utilities. For a qualifying facility having less than
1,000-kilowatt capacity, the customer shall be billed for the net energy supplied by the
utility according to the applicable rate schedule for sales to that class of customer. In the
case of net input into the utility system by a qualifying facility having: (1) more than
40-kilowatt but less than 1,000-kilowatt capacity, compensation to the customer shall be at
a per kilowatt-hour rate determined under paragraph (c); or (2) less than 40-kilowatt capacity,
compensation to the customer shall be at a per-kilowatt rate determined under paragraph
(c) or (d).

(c) In setting rates, the commission shall consider the fixed distribution costs to the
utility not otherwise accounted for in the basic monthly charge and shall ensure that the
costs charged to the qualifying facility are not discriminatory in relation to the costs charged
to other customers of the utility. The commission shall set the rates for net input into the
utility system based on avoided costs as defined in the Code of Federal Regulations, title
18, section 292.101, paragraph (b)(6), the factors listed in Code of Federal Regulations,
title 18, section 292.304, and all other relevant factors.

(d) Notwithstanding any provision in this chapter to the contrary, a qualifying facility
having less than 40-kilowatt capacity may elect that the compensation for net input by the
qualifying facility into the utility system shall be at the average retail utility energy rate.
"Average retail utility energy rate" is defined as the average of the retail energy rates,
exclusive of special rates based on income, age, or energy conservation, according to the
applicable rate schedule of the utility for sales to that class of customer.

(e) If the qualifying facility or net metered facility is interconnected with a nongenerating
utility deleted text begin which has a sole source contract with a municipal power agency or a generation and
transmission utility deleted text end , the nongenerating utility may elect to treat its purchase of any net input
under this subdivision as being made on behalf of its supplier new text begin or suppliers new text end and shall be
reimbursed new text begin proportionately new text end by its supplier new text begin or suppliers new text end for any additional costs incurred in
making the purchase. Qualifying facilities or net metered facilities having less than
1,000-kilowatt capacity if interconnected to a public utility, or less than 40-kilowatt capacity
if interconnected to a cooperative electric association or municipal utility may, at the
customer's option, elect to be governed by the provisions of subdivision 4.

(f) A customer with a qualifying facility or net metered facility having a capacity below
40 kilowatts that is interconnected to a cooperative electric association or a municipal utility
may elect to be compensated for the customer's net input into the utility system in the form
of a kilowatt-hour credit on the customer's energy bill carried forward and applied to
subsequent energy bills. Any kilowatt-hour credits carried forward by the customer cancel
at the end of the calendar year with no additional compensation.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2020, section 216B.164, is amended by adding a subdivision
to read:

new text begin Subd. 12. new text end

new text begin Customer's access to electricity usage data. new text end

new text begin A utility shall provide a
customer's electricity usage data to the customer within ten days of receipt of a request from
the customer that is accompanied by evidence that the energy usage data is relevant to the
interconnection of a qualifying facility on behalf of the customer. For the purposes of this
subdivision, "electricity usage data" includes but is not limited to the total amount of
electricity used by a customer monthly, usage by time period if the customer operates under
a tariff where costs vary by time-of-use, and usage data that is used to calculate a customer's
demand charge.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

new text begin [500.216] LIMITS ON CERTAIN RESIDENTIAL SOLAR ENERGY
SYSTEMS PROHIBITED.
new text end

new text begin Subdivision 1. new text end

new text begin General rule. new text end

new text begin A private entity may not prohibit or refuse to permit
installation, maintenance, or use of a roof-mounted solar energy system by the owner of a
single-family dwelling notwithstanding any covenant, restriction, or condition contained in
a deed, security instrument, homeowners association document, or any other instrument
affecting the transfer, sale of, or an interest in real property, except as provided in this
section.
new text end

new text begin Subd. 2. new text end

new text begin Applicability. new text end

new text begin This section applies to single-family dwellings, whether attached
or detached, where the dwelling owner is responsible for maintenance, repair, replacement,
and insurance of the roof of the dwelling.
new text end

new text begin Subd. 3. new text end

new text begin Definitions. new text end

new text begin (a) The definitions in this subdivision apply to this section.
new text end

new text begin (b) "Private entity" means a homeowners association, community association, or other
association that is subject to a homeowners association document.
new text end

new text begin (c) "Homeowners association document" means a document containing the declaration,
articles of incorporation, bylaws, or rules and regulations of:
new text end

new text begin (1) a common interest community, as defined in section 515B.1-103, regardless of
whether the common interest community is subject to chapter 515B; and
new text end

new text begin (2) a residential community that is not a common interest community.
new text end

new text begin (d) "Solar energy system" has the meaning given in section 216C.06, subdivision 17.
new text end

new text begin Subd. 4. new text end

new text begin Allowable conditions. new text end

new text begin (a) This section does not prohibit a private entity from
requiring that:
new text end

new text begin (1) a licensed contractor install a solar energy system;
new text end

new text begin (2) a roof-mounted solar energy system not extend above the peak of a pitched roof or
beyond the edge of the roof;
new text end

new text begin (3) the owner or installer of a solar energy system indemnify or reimburse the private
entity or its members for loss or damage caused by the installation, maintenance, use, repair,
or removal of a solar energy system;
new text end

new text begin (4) the owner and each successive owner of a solar energy system list the private entity
as a certificate holder on the homeowner's insurance policy; or
new text end

new text begin (5) the owner and each successive owner of a solar energy system be responsible for
removing the system if reasonably necessary for the repair, maintenance, or replacement
of common elements or limited common elements, as defined in section 515B.1-103.
new text end

new text begin (b) A private entity may impose other reasonable restrictions on the installation,
maintenance, or use of solar energy systems, provided that those restrictions do not decrease
the projected generation of energy by a solar energy system by more than 20 percent or
increase its cost by more than (1) 20 percent, for a solar water heater, or (2) $2,000, for a
solar photovoltaic system, compared with the generation of energy and the cost of labor
and materials certified by the designer or installer of the solar energy system as originally
proposed without the restrictions. A private entity may obtain an alternative bid and design
from a solar energy system designer or installer for the purposes of this paragraph.
new text end

new text begin (c) A solar energy system must meet applicable standards and requirements imposed by
the state and by governmental units, as defined in section 462.384.
new text end

new text begin (d) A solar energy system for heating water must be certified by the Solar Rating
Certification Corporation (SRCC) or an equivalent certification agency. A solar energy
system for producing electricity must meet all applicable safety and performance standards
established by the National Electrical Code, the Institute of Electrical and Electronics
Engineers, and accredited testing laboratories, including, but not limited to, Underwriters
Laboratories and, where applicable, rules of the Public Utilities Commission regarding
safety and reliability.
new text end

new text begin (e) If approval by a private entity is required for the installation or use of a solar energy
system, the application for approval must be processed and approved in the same manner
as an application for approval of an architectural modification to the property, and must not
be willfully avoided or delayed. A private entity shall approve or deny an application in
writing. If an application is not denied in writing within 60 days from the date of receipt of
the application, the application is deemed approved unless the delay is the result of a
reasonable request for additional information.
new text end

Sec. 4.

Minnesota Statutes 2020, section 515.07, is amended to read:

515.07 COMPLIANCE WITH COVENANTS, BYLAWS, AND RULES.

Each apartment owner shall comply strictly with the bylaws and with the administrative
rules adopted pursuant thereto, as either of the same may be lawfully amended from time
to time, and with the covenants, conditions, and restrictions set forth in the declaration or
in the owner's deed to the apartment. Failure to comply with any of the same shall be ground
for an action to recover sums due, for damages or injunctive relief or both maintainable by
the manager or board of directors on behalf of the association of apartment owners or, in a
proper case, by an aggrieved apartment owner. This chapter is subject to deleted text begin section deleted text end new text begin sections new text end
500.215 new text begin and 500.216 new text end .

Sec. 5.

Minnesota Statutes 2020, section 515B.2-103, is amended to read:

515B.2-103 CONSTRUCTION AND VALIDITY OF DECLARATION AND
BYLAWS.

(a) All provisions of the declaration and bylaws are severable.

(b) The rule against perpetuities may not be applied to defeat any provision of the
declaration or this chapter, or any instrument executed pursuant to the declaration or this
chapter.

(c) In the event of a conflict between the provisions of the declaration and the bylaws,
the declaration prevails except to the extent that the declaration is inconsistent with this
chapter.

(d) The declaration and bylaws must comply with deleted text begin section deleted text end new text begin sections new text end 500.215 new text begin and 500.216 new text end .

Sec. 6.

Minnesota Statutes 2020, section 515B.3-102, is amended to read:

515B.3-102 POWERS OF UNIT OWNERS' ASSOCIATION.

(a) Except as provided in subsections (b), (c), (d), and (e), and subject to the provisions
of the declaration or bylaws, the association shall have the power to:

(1) adopt, amend and revoke rules and regulations not inconsistent with the articles of
incorporation, bylaws and declaration, as follows: (i) regulating the use of the common
elements; (ii) regulating the use of the units, and conduct of unit occupants, which may
jeopardize the health, safety or welfare of other occupants, which involves noise or other
disturbing activity, or which may damage the common elements or other units; (iii) regulating
or prohibiting animals; (iv) regulating changes in the appearance of the common elements
and conduct which may damage the common interest community; (v) regulating the exterior
appearance of the common interest community, including, for example, balconies and patios,
window treatments, and signs and other displays, regardless of whether inside a unit; (vi)
implementing the articles of incorporation, declaration and bylaws, and exercising the
powers granted by this section; and (vii) otherwise facilitating the operation of the common
interest community;

(2) adopt and amend budgets for revenues, expenditures and reserves, and levy and
collect assessments for common expenses from unit owners;

(3) hire and discharge managing agents and other employees, agents, and independent
contractors;

(4) institute, defend, or intervene in litigation or administrative proceedings (i) in its
own name on behalf of itself or two or more unit owners on matters affecting the common
elements or other matters affecting the common interest community or, (ii) with the consent
of the owners of the affected units on matters affecting only those units;

(5) make contracts and incur liabilities;

(6) regulate the use, maintenance, repair, replacement, and modification of the common
elements and the units;

(7) cause improvements to be made as a part of the common elements, and, in the case
of a cooperative, the units;

(8) acquire, hold, encumber, and convey in its own name any right, title, or interest to
real estate or personal property, but (i) common elements in a condominium or planned
community may be conveyed or subjected to a security interest only pursuant to section
515B.3-112, or (ii) part of a cooperative may be conveyed, or all or part of a cooperative
may be subjected to a security interest, only pursuant to section 515B.3-112;

(9) grant or amend easements for public utilities, public rights-of-way or other public
purposes, and cable television or other communications, through, over or under the common
elements; grant or amend easements, leases, or licenses to unit owners for purposes authorized
by the declaration; and, subject to approval by a vote of unit owners other than declarant
or its affiliates, grant or amend other easements, leases, and licenses through, over or under
the common elements;

(10) impose and receive any payments, fees, or charges for the use, rental, or operation
of the common elements, other than limited common elements, and for services provided
to unit owners;

(11) impose interest and late charges for late payment of assessments and, after notice
and an opportunity to be heard before the board or a committee appointed by it, levy
reasonable fines for violations of the declaration, bylaws, and rules and regulations of the
association;

(12) impose reasonable charges for the review, preparation and recordation of
amendments to the declaration, resale certificates required by section 515B.4-107, statements
of unpaid assessments, or furnishing copies of association records;

(13) provide for the indemnification of its officers and directors, and maintain directors'
and officers' liability insurance;

(14) provide for reasonable procedures governing the conduct of meetings and election
of directors;

(15) exercise any other powers conferred by law, or by the declaration, articles of
incorporation or bylaws; and

(16) exercise any other powers necessary and proper for the governance and operation
of the association.

(b) Notwithstanding subsection (a) the declaration or bylaws may not impose limitations
on the power of the association to deal with the declarant which are more restrictive than
the limitations imposed on the power of the association to deal with other persons.

(c) Notwithstanding subsection (a), powers exercised under this section must comply
with deleted text begin section deleted text end new text begin sections new text end 500.215 new text begin and 500.216 new text end .

(d) Notwithstanding subsection (a)(4) or any other provision of this chapter, the
association, before instituting litigation or arbitration involving construction defect claims
against a development party, shall:

(1) mail or deliver written notice of the anticipated commencement of the action to each
unit owner at the addresses, if any, established for notices to owners in the declaration and,
if the declaration does not state how notices are to be given to owners, to the owner's last
known address. The notice shall specify the nature of the construction defect claims to be
alleged, the relief sought, and the manner in which the association proposes to fund the cost
of pursuing the construction defect claims; and

(2) obtain the approval of owners of units to which a majority of the total votes in the
association are allocated. Votes allocated to units owned by the declarant, an affiliate of the
declarant, or a mortgagee who obtained ownership of the unit through a foreclosure sale
are excluded. The association may obtain the required approval by a vote at an annual or
special meeting of the members or, if authorized by the statute under which the association
is created and taken in compliance with that statute, by a vote of the members taken by
electronic means or mailed ballots. If the association holds a meeting and voting by electronic
means or mailed ballots is authorized by that statute, the association shall also provide for
voting by those methods. Section 515B.3-110(c) applies to votes taken by electronic means
or mailed ballots, except that the votes must be used in combination with the vote taken at
a meeting and are not in lieu of holding a meeting, if a meeting is held, and are considered
for purposes of determining whether a quorum was present. Proxies may not be used for a
vote taken under this paragraph unless the unit owner executes the proxy after receipt of
the notice required under subsection (d)(1) and the proxy expressly references this notice.

(e) The association may intervene in a litigation or arbitration involving a construction
defect claim or assert a construction defect claim as a counterclaim, crossclaim, or third-party
claim before complying with subsections (d)(1) and (d)(2) but the association's complaint
in an intervention, counterclaim, crossclaim, or third-party claim shall be dismissed without
prejudice unless the association has complied with the requirements of subsection (d) within
90 days of the association's commencement of the complaint in an intervention or the
assertion of the counterclaim, crossclaim, or third-party claim.