HF 3109

2nd Committee Engrossment - 86th Legislature (2009 - 2010) Posted on 03/19/2013 07:29pm

1.1A bill for an act

1.2relating to local government; authorizing local governments to finance energy
1.3improvements for property owners to install energy efficient or renewable energy
1.4improvements; providing for repayment as a special assessment; authorizing
1.5issuance of revenue bonds;amending Minnesota Statutes 2008, sections
1.6429.021, subdivision 1; 429.101, subdivision 1; proposing coding for new law
1.7in Minnesota Statutes, chapter 216C.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9    Section 1. [216C.435] DEFINITIONS.
1.10    Subdivision 1. Scope. For the purposes of this section and section 216C.436, the
1.11terms defined in this section have the meanings given them.
1.12    Subd. 2. City. "City" means a home rule charter or statutory city.
1.13    Subd. 3. Local government. "Local government" means a city, county, or town.
1.14    Subd. 4. Energy audit. "Energy audit" means a formal evaluation of the energy
1.15consumption of a building by a certified energy auditor, whose certification is approved by
1.16the commissioner, for the purpose of identifying appropriate energy improvements that
1.17could be made to the building and including an estimate of the length of time a specific
1.18energy improvement will take to repay its purchase and installation costs, based on the
1.19amount of energy saved and estimated future energy prices.
1.20    Subd. 5. Energy improvement. "Energy improvement" means:
1.21(1) any renovation or retrofitting of a building to improve energy efficiency that
1.22is permanently affixed to the property and that results in a net reduction in energy
1.23consumption without altering the principal source of energy;
1.24(2) permanent installation of new or upgraded electrical circuits to enable electrical
1.25vehicle charging; or
2.1(3) a renewable energy system attached to, installed within, or proximate to a
2.2building that generates electrical or thermal energy from a renewable energy source.
2.3    Subd. 6. Qualifying real property. "Qualifying real property" means a
2.4single-family or multifamily residential dwelling, or a commercial or industrial building,
2.5that the city has determined, after review of an energy audit or renewable energy system
2.6feasibility study, can be benefited by installation of energy improvements.
2.7    Subd. 7. Renewable energy. "Renewable energy" means energy produced by
2.8means of solar thermal, solar photovoltaic, wind, or geothermal resources.
2.9    Subd. 8. Renewable energy system feasibility study. "Renewable energy system
2.10feasibility study" means a written study, conducted by a contractor trained to perform that
2.11analysis, for the purpose of determining the feasibility of installing a renewable energy
2.12system in a building, including an estimate of the length of time a specific renewable
2.13energy system will take to repay its purchase and installation costs, based on the amount of
2.14energy saved and estimated future energy prices. For a geothermal energy improvement,
2.15the feasibility study must calculate net savings in terms of nongeothermal energy and costs.
2.16    Subd. 9. Solar thermal. "Solar thermal" has the meaning given to "qualifying solar
2.17thermal project" in section 216B.2411, subdivision 2, paragraph (e).
2.18    Subd. 10. Solar photovoltaic. "Solar photovoltaic" has the meaning given in
2.19section 216C.06, subdivision 16, and must meet the requirements of section 216C.25.
2.20EFFECTIVE DATE.This section is effective the day following final enactment.

2.21    Sec. 2. [216C.436] VOLUNTARY ENERGY IMPROVEMENTS FINANCING
2.22PROGRAM FOR LOCAL GOVERNMENTS.
2.23    Subdivision 1. Program authority. A local government may establish a program
2.24to finance energy improvements to enable owners of qualifying real property to pay for
2.25cost-effective energy improvements to the qualifying real property with the net proceeds
2.26and interest earnings of revenue bonds authorized in this section. A local government may
2.27limit the number of qualifying real properties for which a property owner may receive
2.28program financing.
2.29    Subd. 2. Program requirements. A financing program must:
2.30(1) impose requirements and conditions on financing arrangements to ensure timely
2.31repayment;
2.32(2) require an energy audit or renewable energy system feasibility study to be
2.33conducted on the qualifying real property and reviewed by the local government prior to
2.34approval of the financing;
3.1(3) require the inspection of all installations and performance verification of at least
3.2ten percent of the energy improvements financed by the program;
3.3(4) require that all cost-effective energy improvements be made to a qualifying
3.4real property prior to, or in conjunction with, an applicant's repayment of financing for
3.5energy improvements for that property;
3.6(5) have energy improvements financed by the program performed by licensed
3.7contractors as required by chapter 326B or other law or ordinance;
3.8(6) require disclosures to borrowers by the local government of the risks involved in
3.9borrowing, including the risk of foreclosure if a tax delinquency results from a default;
3.10(7) provide financing only to those who demonstrate an ability to repay;
3.11(8) not provide financing for a qualifying real property in which the owner is not
3.12current on mortgage or real property tax payments;
3.13(9) require a petition by all owners of the qualifying real property requesting
3.14collections of repayments as a special assessment under section 429.101;
3.15(10) provide that payments and assessments are not accelerated due to a default and
3.16that a tax delinquency exists only for assessments not paid when due; and
3.17(11) require that liability for special assessments related to the financing runs with
3.18the qualifying real property.
3.19    Subd. 3. Retail and end use prohibited. Energy generated by an energy
3.20improvement may not be sold, transmitted, or distributed at retail and may not provide for
3.21end use of the electrical energy for an off-site facility. On-site generation is allowed to the
3.22extent provided for in section 216B.1611.
3.23This section does not modify the exclusive service territories or exclusive right to
3.24serve as provided in sections 216B.37 to 216B.43.
3.25    Subd. 4. Financing terms. Financing provided under this section must have:
3.26(1) a term not to exceed the weighted average of the useful life of the energy
3.27improvements installed, as determined by the local government, but in no event may
3.28a term exceed 20 years;
3.29(2) a principal amount not to exceed the lesser of ten percent of the assessed value
3.30of the real property on which the improvements are to be installed or the actual cost of
3.31installing the energy improvements, including the costs of necessary equipment, materials,
3.32and labor, the costs of each related energy audit or renewable energy system feasibility
3.33study, and the cost of verification of installation; and
3.34(3) an interest rate sufficient to pay the financing costs of the program, including the
3.35issuance of bonds and any financing delinquencies.
4.1    Subd. 5. Coordination with other programs. A financing program must include
4.2cooperation and coordination with the conservation improvement activities of the utility
4.3serving the qualifying real property and other public and private energy improvement
4.4programs.
4.5    Subd. 6. Certificate of participation. Upon completion of a project, a local
4.6government shall provide a borrower with a certificate stating participation in the program
4.7and what energy improvements have been made with financing program proceeds.
4.8    Subd. 7. Repayment. A local government financing an energy improvement
4.9under this section must:
4.10(1) secure payment with a lien against the benefited qualifying real property; and
4.11(2) collect repayments as a special assessment as provided for in section 429.101
4.12or by charter.
4.13    Subd. 8. Bond issuance; repayment. (a) A local government may issue revenue
4.14bonds as provided in chapter 475 for the purposes of this section.
4.15(b) The bonds must be payable as to both principal and interest solely from the
4.16revenues from the assessments established in subdivision 7.
4.17(c) No holder of bonds issued under this subdivision may compel any exercise of the
4.18taxing power of the local government that issued the bonds to pay principal or interest on
4.19the bonds. Bonds issued under this subdivision are not a debt or obligation of the local
4.20government that issued them, nor is the payment of the bonds enforceable out of any
4.21money other than the revenue pledged to the payment of the bonds.
4.22EFFECTIVE DATE.This section is effective the day following final enactment.

4.23    Sec. 3. Minnesota Statutes 2008, section 429.021, subdivision 1, is amended to read:
4.24    Subdivision 1. Improvements authorized. The council of a municipality shall have
4.25power to make the following improvements:
4.26(1) To acquire, open, and widen any street, and to improve the same by constructing,
4.27reconstructing, and maintaining sidewalks, pavement, gutters, curbs, and vehicle parking
4.28strips of any material, or by grading, graveling, oiling, or otherwise improving the same,
4.29including the beautification thereof and including storm sewers or other street drainage
4.30and connections from sewer, water, or similar mains to curb lines.
4.31(2) To acquire, develop, construct, reconstruct, extend, and maintain storm and
4.32sanitary sewers and systems, including outlets, holding areas and ponds, treatment plants,
4.33pumps, lift stations, service connections, and other appurtenances of a sewer system,
4.34within and without the corporate limits.
4.35(3) To construct, reconstruct, extend, and maintain steam heating mains.
5.1(4) To install, replace, extend, and maintain street lights and street lighting systems
5.2and special lighting systems.
5.3(5) To acquire, improve, construct, reconstruct, extend, and maintain water works
5.4systems, including mains, valves, hydrants, service connections, wells, pumps, reservoirs,
5.5tanks, treatment plants, and other appurtenances of a water works system, within and
5.6without the corporate limits.
5.7(6) To acquire, improve and equip parks, open space areas, playgrounds, and
5.8recreational facilities within or without the corporate limits.
5.9(7) To plant trees on streets and provide for their trimming, care, and removal.
5.10(8) To abate nuisances and to drain swamps, marshes, and ponds on public or private
5.11property and to fill the same.
5.12(9) To construct, reconstruct, extend, and maintain dikes and other flood control
5.13works.
5.14(10) To construct, reconstruct, extend, and maintain retaining walls and area walls.
5.15(11) To acquire, construct, reconstruct, improve, alter, extend, operate, maintain, and
5.16promote a pedestrian skyway system. Such improvement may be made upon a petition
5.17pursuant to section 429.031, subdivision 3.
5.18(12) To acquire, construct, reconstruct, extend, operate, maintain, and promote
5.19underground pedestrian concourses.
5.20(13) To acquire, construct, improve, alter, extend, operate, maintain, and promote
5.21public malls, plazas or courtyards.
5.22(14) To construct, reconstruct, extend, and maintain district heating systems.
5.23(15) To construct, reconstruct, alter, extend, operate, maintain, and promote fire
5.24protection systems in existing buildings, but only upon a petition pursuant to section
5.25429.031, subdivision 3 .
5.26(16) To acquire, construct, reconstruct, improve, alter, extend, and maintain highway
5.27sound barriers.
5.28(17) To improve, construct, reconstruct, extend, and maintain gas and electric
5.29distribution facilities owned by a municipal gas or electric utility.
5.30(18) To purchase, install, and maintain signs, posts, and other markers for addressing
5.31related to the operation of enhanced 911 telephone service.
5.32(19) To improve, construct, extend, and maintain facilities for Internet access and
5.33other communications purposes, if the council finds that:
5.34(i) the facilities are necessary to make available Internet access or other
5.35communications services that are not and will not be available through other providers or
5.36the private market in the reasonably foreseeable future; and
6.1(ii) the service to be provided by the facilities will not compete with service provided
6.2by private entities.
6.3(20) To assess affected property owners for all or a portion of the costs agreed to
6.4with an electric utility, telecommunications carrier, or cable system operator to bury or
6.5alter a new or existing distribution system within the public right-of-way that exceeds the
6.6utility's design and construction standards, or those set by law, tariff, or franchise, but only
6.7upon petition under section 429.031, subdivision 3.
6.8(21) To assess affected property owners for repayment of voluntary energy
6.9improvement financing under section 216C.436, subdivision 7.
6.10EFFECTIVE DATE.This section is effective the day following final enactment.

6.11    Sec. 4. Minnesota Statutes 2008, section 429.101, subdivision 1, is amended to read:
6.12    Subdivision 1. Ordinances. (a) In addition to any other method authorized by
6.13law or charter, the governing body of any municipality may provide for the collection
6.14of unpaid special charges as a special assessment against the property benefited for all
6.15or any part of the cost of:
6.16    (1) snow, ice, or rubbish removal from sidewalks;
6.17    (2) weed elimination from streets or private property;
6.18    (3) removal or elimination of public health or safety hazards from private property,
6.19excluding any structure included under the provisions of sections 463.15 to 463.26;
6.20    (4) installation or repair of water service lines, street sprinkling or other dust
6.21treatment of streets;
6.22    (5) the trimming and care of trees and the removal of unsound trees from any street;
6.23    (6) the treatment and removal of insect infested or diseased trees on private property,
6.24the repair of sidewalks and alleys;
6.25    (7) the operation of a street lighting system;
6.26    (8) the operation and maintenance of a fire protection or a pedestrian skyway system;
6.27    (9) inspections relating to a municipal housing maintenance code violation;
6.28    (10) the recovery of any disbursements under section 504B.445, subdivision 4,
6.29clause (5), including disbursements for payment of utility bills and other services, even if
6.30provided by a third party, necessary to remedy violations as described in section 504B.445,
6.31subdivision 4 , clause (2); or
6.32    (11) [Repealed, 2004 c 275 s 5]
6.33    (12) the recovery of delinquent vacant building registration fees under a municipal
6.34program designed to identify and register vacant buildings.
7.1    (b) The council may by ordinance adopt regulations consistent with this section to
7.2make this authority effective, including, at the option of the council, provisions for placing
7.3primary responsibility upon the property owner or occupant to do the work personally
7.4(except in the case of street sprinkling or other dust treatment, alley repair, tree trimming,
7.5care, and removal, or the operation of a street lighting system) upon notice before the work
7.6is undertaken, and for collection from the property owner or other person served of the
7.7charges when due before unpaid charges are made a special assessment.
7.8(c) A home rule charter city, statutory city, county, or town operating an energy
7.9improvements financing program under section 216C.436 has the authority granted to a
7.10municipality under paragraph (a) with respect to energy improvements financed under
7.11that section.
7.12EFFECTIVE DATE.This section is effective the day following final enactment.