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HF 2603

3rd Engrossment - 88th Legislature (2013 - 2014) Posted on 04/03/2014 02:43pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 03/03/2014
1st Engrossment Posted on 03/26/2014
2nd Engrossment Posted on 03/28/2014
3rd Engrossment Posted on 04/03/2014

Current Version - 3rd Engrossment

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A bill for an act
relating to energy; modifying the community energy efficiency and renewable
energy loan program; modifying permissible administrative expenses for
disbursement of supplemental low-income home energy assistance; appropriating
money for the weatherization assistance program; amending Minnesota Statutes
2012, sections 216C.145; 216C.146; Laws 2014, chapter 145, section 1.

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

Section 1.

Minnesota Statutes 2012, section 216C.145, is amended to read:


216C.145 deleted text begin MICROENERGYdeleted text end new text begin COMMUNITY ENERGY EFFICIENCY AND
RENEWABLE ENERGY
new text end LOAN PROGRAM.

Subdivision 1.

Definitions.

(a) The definitions in this subdivision apply to this
section.

(b) "deleted text begin Small-scaledeleted text end new text begin Community energy efficiency and new text end renewable energy new text begin projectsnew text end "
deleted text begin projects includedeleted text end new text begin meansnew text end solar thermal water heating, solar electric or photovoltaic
equipment, small wind energy conversion systems of less than 250 kW, anaerobic digester
gas systems, microhydro systems up to 100 kW, deleted text begin anddeleted text end heating and cooling applications
using deleted text begin geothermal energydeleted text end new text begin solar thermal or ground source technology, and cost-effective
energy efficiency projects installed in industrial, commercial, or public buildings or health
care facilities
new text end .

new text begin (c) "Health care facilities" means a hospital licensed under sections 144.50 to
144.56, or a nursing home licensed under chapter 144A.
new text end

new text begin (d) "Industrial customer" means a business that is classified under the North
American Industrial Classification System under codes 21, 31 to 33, 48, 49, or 562.
new text end

new text begin (e) "Small business" means a business that employs 50 or fewer employees.
new text end

deleted text begin (c)deleted text end new text begin (f)new text end "Unit of local government" means any home rule charter or statutory city,
county, commission, district, authority, or other political subdivision or instrumentality
of this state, including a sanitary district, park district, the Metropolitan Council, a port
authority, an economic development authority, or a housing and redevelopment authority.

Subd. 2.

Program established.

The commissioner of commerce shall develop,
implement, and administer a deleted text begin microenergydeleted text end new text begin community energy efficiency and renewable
energy
new text end loan program under this section.

Subd. 3.

Loan purposes.

(a) The commissioner may issue low-interest, long-term
loans to units of local government tonew text begin :
new text end

new text begin (1) new text end finance community-owned or publicly owned deleted text begin small scaledeleted text end renewable energy
systems or deleted text begin todeleted text end new text begin cost-effective energy efficiency improvements to public buildings; or
new text end

deleted text begin provide loans or other aids to small businesses to install deleted text end deleted text begin small-scaledeleted text end deleted text begin renewable
deleted text end deleted text begin energy systems
deleted text end

new text begin (2) provide loans or other aids to industrial or commercial businesses or health care
facilities for cost-effective energy efficiency projects or to install renewable energy systems
new text end .

(b) The commissioner may participate in loans made by the Housing Finance
Agency to residential property owners, private developers, nonprofit organizations,
or units of local government under sections 462A.05, subdivisions 14 and 18; and
462A.33 for the construction, purchase, or rehabilitation of residential housing to facilitate
the installation of deleted text begin small-scaledeleted text end renewable energy systems in residential housing and
cost-effective energy conservation improvements identified in an energy efficiency audit.
The commissioner shall assist the Housing Finance Agency in assessing the technical
qualifications of loan applicants.

Subd. 4.

Technical standards.

The commissioner shall determine technical
standards for deleted text begin small-scale renewable energy systemsdeleted text end new text begin community energy efficiency and
renewable energy projects
new text end to qualify for loans under this section.

Subd. 5.

Loan proposals.

(a) At least once a year, the commissioner shall publish in
the State Register a request for proposals from units of local government for a loan under
this section. Within 45 days after the deadline for receipt of proposals, the commissioner
shall select proposals based on the following criteria:

(1) the reliability and cost-effectiveness of the renewable new text begin or energy efficiency
new text end technology to be installed under the proposal;

(2) the extent to which the proposal effectively integrates with the conservation and
energy efficiency programs new text begin or goals new text end of the energy utilities serving the proposer;

(3) the total life cycle energy use and greenhouse gas emissions reductions per
dollar of installed cost;

(4) the diversity of the renewable energy new text begin or energy efficiency new text end technology installed
under the proposal;

(5) the geographic distribution of projects throughout the state;

(6) the percentage of total project cost requested;

(7) the proposed security for payback of the loan; and

(8) other criteria the commissioner may determine to be necessary and appropriate.

new text begin (b) The commissioner may not consider as criteria for issuing a loan under this section
a requirement by a local unit of government for an industrial customer seeking a loan
funded under this section to release information regarding the amount of energy used by the
industrial customer to the local unit of government, to the commissioner, or to a third party.
new text end

Subd. 6.

Loan terms.

A loan under this section must be issued at the lowest interest
rate required to recover principal and interest plus the costs of issuing the loan, and must
be for a minimum of 15 years, unless the commissioner determines that a shorter loan
period of no less than deleted text begin tendeleted text end new text begin five new text end years is necessary and feasible.

new text begin Subd. 6a. new text end

new text begin Energy usage information. new text end

new text begin A local unit of government receiving a loan
under this section may not require an industrial customer applying for a loan or other aid
to release information regarding the amount of energy used by the industrial customer to
the local unit of government, to the commissioner, or to a third party.
new text end

Subd. 7.

Account.

A deleted text begin microenergydeleted text end new text begin community energy efficiency and renewable
energy
new text end loan account is established in the state treasury. Money in the account consists of
the proceeds of revenue bonds issued under section 216C.146, interest and other earnings
on money in the account, money received in repayment of loans from the account,
legislative appropriations, and money from any other source credited to the account.

Subd. 8.

Appropriation.

Money in the account is appropriated to the commissioner
of commerce to make deleted text begin microenergydeleted text end new text begin community energy efficiency and renewable energy
new text end loans under this section and to the commissioner of management and budget to pay debt
service and other costs under section 216C.146. Payment of debt service costs and funding
reserves take priority over use of money in the account for any other purpose.

Sec. 2.

Minnesota Statutes 2012, section 216C.146, is amended to read:


216C.146 deleted text begin MICROENERGYdeleted text end new text begin COMMUNITY ENERGY EFFICIENCY AND
RENEWABLE ENERGY
new text end LOAN REVENUE BONDS.

Subdivision 1.

Bonding authority; definition.

(a) The commissioner of
management and budget, if requested by the commissioner of commerce, shall sell and
issue state revenue bonds for the following purposes:

(1) to make deleted text begin microenergydeleted text end new text begin community energy efficiency and renewable energynew text end loans
under section 216C.145;

(2) to pay the costs of issuance, debt service, and bond insurance or other credit
enhancements, and to fund reserves; and

(3) to refund bonds issued under this section.

(b) The aggregate principal amount of bonds for the purposes of paragraph (a),
clause (1), that may be outstanding at any time may not exceednew text begin $100,000,000, of which
up to
new text end $20,000,000new text begin shall be reserved for community energy efficiency and renewable
energy projects taking place in small businesses and public buildings
new text end ; the principal
amount of bonds that may be issued for the purposes of paragraph (a), clauses (2) and
(3), is not limited.

(c) For the purpose of this section, "commissioner" means the commissioner of
management and budget.

Subd. 2.

Procedure.

The commissioner may sell and issue the bonds on the terms
and conditions the commissioner determines to be in the best interests of the state. The
bonds may be sold at public or private sale. The commissioner may enter into any
agreements or pledges the commissioner determines necessary or useful to sell the bonds
that are not inconsistent with section 216C.145. Sections 16A.672 to 16A.675 apply to
the bonds. The proceeds of the bonds issued under this section must be credited to the
deleted text begin microenergydeleted text end new text begin community energy efficiency and renewable energynew text end loan account created
under section 216C.145.

Subd. 3.

Revenue sources.

The debt service on the bonds is payable only from the
following sources:

(1) revenue credited to the deleted text begin microenergydeleted text end new text begin community energy efficiency and renewable
energy
new text end loan account from the sources identified in section 216C.145 or from any other
source; and

(2) other revenues pledged to the payment of the bondsnew text begin , including reserves
established by a local government unit
new text end .

Subd. 4.

Refunding bonds.

The commissioner may issue bonds to refund
outstanding bonds issued under subdivision 1, including the payment of any redemption
premiums on the bonds and any interest accrued or to accrue to the first redemption date
after delivery of the refunding bonds. The proceeds of the refunding bonds may, at the
discretion of the commissioner, be applied to the purchases or payment at maturity of the
bonds to be refunded, or the redemption of the outstanding bonds on the first redemption
date after delivery of the refunding bonds and may, until so used, be placed in escrow to
be applied to the purchase, retirement, or redemption. Refunding bonds issued under this
subdivision must be issued and secured in the manner provided by the commissioner.

Subd. 5.

Not a general or moral obligation.

Bonds issued under this section are
not public debt, and the full faith, credit, and taxing powers of the state are not pledged
for their payment. The bonds may not be paid, directly in whole or in part from a tax of
statewide application on any class of property, income, transaction, or privilege. Payment
of the bonds is limited to the revenues explicitly authorized to be pledged under this
section. The state neither makes nor has a moral obligation to pay the bonds if the pledged
revenues and other legal security for them is insufficient.

Subd. 6.

Trustee.

The commissioner may contract with and appoint a trustee for
bondholders. The trustee has the powers and authority vested in it by the commissioner
under the bond and trust indentures.

Subd. 7.

Pledges.

A pledge made by the commissioner is valid and binding from
the time the pledge is made. The money or property pledged and later received by the
commissioner is immediately subject to the lien of the pledge without any physical
delivery of the property or money or further act, and the lien of the pledge is valid and
binding as against all parties having claims of any kind in tort, contract, or otherwise
against the commissioner, whether or not those parties have notice of the lien or pledge.
Neither the order nor any other instrument by which a pledge is created need be recorded.

Subd. 8.

Bonds; purchase and cancellation.

The commissioner, subject to
agreements with bondholders that may then exist, may, out of any money available for the
purpose, purchase bonds of the commissioner at a price not exceeding (1) if the bonds are
then redeemable, the redemption price then applicable plus accrued interest to the next
interest payment date thereon, or (2) if the bonds are not redeemable, the redemption price
applicable on the first date after the purchase upon which the bonds become subject to
redemption plus accrued interest to that date.

Subd. 9.

State pledge against impairment of contracts.

The state pledges and
agrees with the holders of any bonds that the state will not limit or alter the rights vested in
the commissioner to fulfill the terms of any agreements made with the bondholders, or
in any way impair the rights and remedies of the holders until the bonds, together with
interest on them, with interest on any unpaid installments of interest, and all costs and
expenses in connection with any action or proceeding by or on behalf of the bondholders,
are fully met and discharged. The commissioner may include this pledge and agreement
of the state in any agreement with the holders of bonds issued under this section.

Sec. 3.

Laws 2014, chapter 145, section 1, is amended to read:


Section 1. LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM;
SUPPLEMENTAL APPROPRIATION.

(a) $20,000,000 is appropriated in fiscal year 2014 from the general fund to the
commissioner of commerce for the purpose of providing additional heating assistance
through the low-income home energy assistance program under United States Code, title
42, sections 8621 to 8630, and Minnesota Statutes, section 216C.02, subdivision 1. No
more than deleted text begin fivedeleted text end new text begin eightnew text end percent of this appropriation may be used for expenses to administer
the program. deleted text begin Any unspent balance available on June 30, 2014, cancels to the general fund.
deleted text end

(b) The funding provided in this section shall supplement, and not replace, any
federal or other funding existing or otherwise available for heating assistance in Minnesota.

(c) The commissioner shall disburse the funds provided in this section in a manner
consistent with the requirements of the federal low-income home energy assistance
program under United States Code, title 42, sections 8621 to 8630.

new text begin EFFECTIVE DATE. new text end

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

Sec. 4. new text begin APPROPRIATION.
new text end

new text begin Any unspent balance available on June 30, 2014, from the appropriation made to the
commissioner of commerce in Laws 2014, chapter 145, section 1, may be used by the
commissioner of commerce for the purposes of the weatherization assistance program.
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