ARTICLE 2

ENERGY AND CLIMATE CHANGE POLICY

new text begin [216B.2429] WATER UTILITY ENERGY RESILIENCE PROGRAM.
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new text begin [216C.391] MINNESOTA STATE COMPETITIVENESS FUND.
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new text begin [216C.441] MINNESOTA GREEN INNOVATION FINANCE FUND.
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new text begin [216C.45] DECARBONIZATION TECHNOLOGY INVESTMENT FUND.
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new text begin [216C.46] GRANTS FOR RENEWABLE INTEGRATION AND
DEMONSTRATION.
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HF 4654

ARTICLE 1

SUPPLEMENTAL APPROPRIATIONS

ARTICLE 2

ENERGY AND CLIMATE CHANGE POLICY

new text begin [216B.2429] WATER UTILITY ENERGY RESILIENCE PROGRAM. new text end

new text begin [216C.391] MINNESOTA STATE COMPETITIVENESS FUND. new text end

new text begin [216C.441] MINNESOTA GREEN INNOVATION FINANCE FUND. new text end

new text begin [216C.45] DECARBONIZATION TECHNOLOGY INVESTMENT FUND. new text end

new text begin [216B.2429] WATER UTILITY ENERGY RESILIENCE PROGRAM.
new text end

new text begin [216C.391] MINNESOTA STATE COMPETITIVENESS FUND.
new text end

new text begin [216C.441] MINNESOTA GREEN INNOVATION FINANCE FUND.
new text end

new text begin [216C.45] DECARBONIZATION TECHNOLOGY INVESTMENT FUND.
new text end

new text begin [216C.46] GRANTS FOR RENEWABLE INTEGRATION AND
DEMONSTRATION.
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Section 1.

Subdivision 1.

new text begin EFFECTIVE DATE. new text end

Sec. 2.

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Sec. 3.

Subdivision 1.

Sec. 4.

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Sec. 5.

new text begin Subdivision 1. new text end

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new text begin EFFECTIVE DATE. new text end

Sec. 6.

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Sec. 7.

new text begin Subdivision 1. new text end

new text begin Subd. 2. new text end

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new text begin Subd. 5. new text end

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new text begin EFFECTIVE DATE. new text end

Bill Text Versions

Current Version - as introduced

Section 1. new text begin APPROPRIATIONS.new text end

Sec. 2. new text begin DEPARTMENT OF COMMERCEnew text end

new text begin Subdivision 1. new text end

new text begin Subd. 2. new text end

Section 1.

Subdivision 1.

new text begin EFFECTIVE DATE. new text end

Sec. 2.

new text begin Subdivision 1. new text end

new text begin Subd. 2. new text end

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Sec. 3.

Subdivision 1.

Sec. 4.

new text begin Subdivision 1. new text end

new text begin Subd. 2. new text end

new text begin Subd. 3. new text end

Sec. 5.

new text begin Subdivision 1. new text end

new text begin Subd. 2. new text end

new text begin Subd. 3. new text end

new text begin Subd. 4. new text end

new text begin Subd. 5. new text end

new text begin Subd. 6. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 6.

new text begin Subdivision 1. new text end

new text begin Subd. 2. new text end

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new text begin Subd. 4. new text end

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Section 1. new text begin APPROPRIATIONS.
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Sec. 2. new text begin DEPARTMENT OF COMMERCE
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Renewable development account.

new text begin Definitions. new text end

new text begin Establishment; purpose. new text end

new text begin Establishment of account. new text end

new text begin Expenditures. new text end

new text begin Eligible system. new text end

new text begin Application process. new text end

new text begin Energy demonstration results. new text end

new text begin Technical assistance. new text end

new text begin Grant payments. new text end

new text begin Reporting. new text end

Definitions.

new text begin Establishment; purpose. new text end

new text begin Advisory task force; membership. new text end

new text begin Report; audit. new text end

new text begin Definitions. new text end

new text begin Establishment; purpose. new text end

new text begin Additional department responsibilities. new text end

new text begin Additional authorized activities. new text end

new text begin Advisory task force; membership. new text end

new text begin Report; audit. new text end

new text begin Definitions. new text end

new text begin Establishment; purpose. new text end

new text begin Eligible expenditures. new text end

new text begin Application process. new text end

new text begin Grant awards; limitations. new text end

new text begin Technical advisory committee; membership. new text end

new text begin Investment committee; duties; membership. new text end

new text begin Annual report; audit. new text end

new text begin Definitions. new text end

new text begin Establishment; purpose. new text end

new text begin Program account. new text end

new text begin Expenditures. new text end

new text begin Eligibility. new text end

new text begin Reporting. new text end

new text begin Gifts; grants; donations. new text end

new text begin Total Appropriation new text end

new text begin Energy Resources new text end

Renewable development account.

new text begin Definitions. new text end

new text begin Establishment; purpose. new text end

new text begin Establishment of account. new text end

new text begin Expenditures. new text end

new text begin Eligible system. new text end

new text begin Application process. new text end

new text begin Energy demonstration results. new text end

new text begin Technical assistance. new text end

new text begin Grant payments. new text end

new text begin Reporting. new text end

Definitions.

new text begin Establishment; purpose. new text end

new text begin Advisory task force; membership. new text end

new text begin Report; audit. new text end

new text begin Definitions. new text end

new text begin Establishment; purpose. new text end

new text begin Additional department responsibilities. new text end

new text begin Additional authorized activities. new text end

new text begin Advisory task force; membership. new text end

new text begin Report; audit. new text end

new text begin Definitions. new text end

new text begin Establishment; purpose. new text end

new text begin Eligible expenditures. new text end

new text begin Application process. new text end

new text begin Grant awards; limitations. new text end

new text begin Technical advisory committee; membership. new text end

new text begin Total Appropriation
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new text begin Energy Resources
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Engrossments
Introduction		Posted on 03/28/2022

Minnesota Statutes 2020, section 116C.779, subdivision 1, is amended to read:

(a) The renewable development
account is established as a separate account in the special revenue fund in the state treasury.
Appropriations and transfers to the account shall be credited to the account. Earnings, such
as interest, dividends, and any other earnings arising from assets of the account, shall be
credited to the account. Funds remaining in the account at the end of a fiscal year are not
canceled to the general fund but remain in the account until expended. The account shall
be administered by the commissioner of management and budget as provided under this
section.

(b) On July 1, 2017, the public utility that owns the Prairie Island nuclear generating
plant must transfer all funds in the renewable development account previously established
under this subdivision and managed by the public utility to the renewable development
account established in paragraph (a). Funds awarded to grantees in previous grant cycles
that have not yet been expended and unencumbered funds required to be paid in calendar
year 2017 under paragraphs (f) and (g), and sections 116C.7792 and 216C.41, are not subject
to transfer under this paragraph.

(c) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing
each January 15 thereafter, the public utility that owns the Prairie Island nuclear generating
plant must transfer to the renewable development account $500,000 each year for each dry
cask containing spent fuel that is located at the Prairie Island power plant for each year the
plant is in operation, and $7,500,000 each year the plant is not in operation if ordered by
the commission pursuant to paragraph (i). The fund transfer must be made if nuclear waste
is stored in a dry cask at the independent spent-fuel storage facility at Prairie Island for any
part of a year.

(d) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing
each January 15 thereafter, the public utility that owns the Monticello nuclear generating
plant must transfer to the renewable development account $350,000 each year for each dry
cask containing spent fuel that is located at the Monticello nuclear power plant for each
year the plant is in operation, and $5,250,000 each year the plant is not in operation if ordered
by the commission pursuant to paragraph (i). The fund transfer must be made if nuclear
waste is stored in a dry cask at the independent spent-fuel storage facility at Monticello for
any part of a year.

(e) Each year, the public utility shall withhold from the funds transferred to the renewable
development account under paragraphs (c) and (d) the amount necessary to pay its obligations
under paragraphs (f) and (g), and sections 116C.7792 and 216C.41, for that calendar year.

(f) If the commission approves a new or amended power purchase agreement, the
termination of a power purchase agreement, or the purchase and closure of a facility under
section 216B.2424, subdivision 9, with an entity that uses poultry litter to generate electricity,
the public utility subject to this section shall enter into a contract with the city in which the
poultry litter plant is located to provide grants to the city for the purposes of economic
development on the following schedule: $4,000,000 in fiscal year 2018; $6,500,000 each
fiscal year in 2019 and 2020; and $3,000,000 in fiscal year 2021. The grants shall be paid
by the public utility from funds withheld from the transfer to the renewable development
account, as provided in paragraphs (b) and (e).

(g) If the commission approves a new or amended power purchase agreement, or the
termination of a power purchase agreement under section 216B.2424, subdivision 9, with
an entity owned or controlled, directly or indirectly, by two municipal utilities located north
of Constitutional Route No. 8, that was previously used to meet the biomass mandate in
section 216B.2424, the public utility that owns a nuclear generating plant shall enter into a
grant contract with such entity to provide $6,800,000 per year for five years, commencing
30 days after the commission approves the new or amended power purchase agreement, or
the termination of the power purchase agreement, and on each June 1 thereafter through
2021, to assist the transition required by the new, amended, or terminated power purchase
agreement. The grant shall be paid by the public utility from funds withheld from the transfer
to the renewable development account as provided in paragraphs (b) and (e).

(h) The collective amount paid under the grant contracts awarded under paragraphs (f)
and (g) is limited to the amount deposited into the renewable development account, and its
predecessor, the renewable development account, established under this section, that was
not required to be deposited into the account under Laws 1994, chapter 641, article 1, section
10.

(i) After discontinuation of operation of the Prairie Island nuclear plant or the Monticello
nuclear plant and each year spent nuclear fuel is stored in dry cask at the discontinued
facility, the commission shall require the public utility to pay $7,500,000 for the discontinued
Prairie Island facility and $5,250,000 for the discontinued Monticello facility for any year
in which the commission finds, by the preponderance of the evidence, that the public utility
did not make a good faith effort to remove the spent nuclear fuel stored at the facility to a
permanent or interim storage site out of the state. This determination shall be made at least
every two years.

(j) Funds in the account may be expended only for any of the following purposes:

(1) to stimulate research and development of renewable electric energy technologies;

(2) to encourage grid modernization, including, but not limited to, projects that implement
electricity storage, load control, and smart meter technology; and

(3) to stimulate other innovative energy projects that reduce demand and increase system
efficiency and flexibility.

Expenditures from the fund must benefit Minnesota ratepayers receiving electric service
from the utility that owns a nuclear-powered electric generating plant in this state or the
Prairie Island Indian community or its members.

The utility that owns a nuclear generating plant is eligible to apply for grants under this
subdivision.

(k) For the purposes of paragraph (j), the following terms have the meanings given:

(1) "renewable" has the meaning given in section 216B.2422, subdivision 1, paragraph
(c), clauses (1), (2), (4), and (5); and

(2) "grid modernization" means:

(i) enhancing the reliability of the electrical grid;

(ii) improving the security of the electrical grid against cyberthreats and physical threats;
and

(iii) increasing energy conservation opportunities by facilitating communication between
the utility and its customers through the use of two-way meters, control technologies, energy
storage and microgrids, technologies to enable demand response, and other innovative
technologies.

(l) A renewable development account advisory group that includes, among others,
representatives of the public utility and its ratepayers, and includes at least one representative
of the Prairie Island Indian community appointed by that community's tribal council, shall
develop recommendations on account expenditures. The advisory group must design a
request for proposal and evaluate projects submitted in response to a request for proposals.
The advisory group must utilize an independent third-party expert to evaluate proposals
submitted in response to a request for proposal, including all proposals made by the public
utility. A request for proposal for research and development under paragraph (j), clause (1),
may be limited to or include a request to higher education institutions located in Minnesota
for multiple projects authorized under paragraph (j), clause (1). The request for multiple
projects may include a provision that exempts the projects from the third-party expert review
and instead provides for project evaluation and selection by a merit peer review grant system.
In the process of determining request for proposal scope and subject and in evaluating
responses to request for proposals, the advisory group must strongly consider, where
reasonable, potential benefit to Minnesota citizens and businesses and the utility's ratepayers.

(m) The advisory group shall submit funding recommendations to the public utility,
which has full and sole authority to determine which expenditures shall be submitted by
the advisory group to the legislature. The commission may approve proposed expenditures,
may disapprove proposed expenditures that it finds not to be in compliance with this
subdivision or otherwise not in the public interest, and may, if agreed to by the public utility,
modify proposed expenditures. The commission shall, by order, submit its funding
recommendations to the legislature as provided under paragraph (n).

(n) The commission shall present its recommended appropriations from the account to
the senate and house of representatives committees with jurisdiction over energy policy and
finance annually by February 15. Expenditures from the account must be appropriated by
law. In enacting appropriations from the account, the legislature:

(1) may approve or disapprove, but may not modify, the amount of an appropriation for
a project recommended by the commission; and

(2) may not appropriate money for a project the commission has not recommended
funding.

(o) A request for proposal for renewable energy generation projects must, when feasible
and reasonable, give preference to projects that are most cost-effective for a particular energy
source.

(p) The advisory group must annually, by February 15, report to the chairs and ranking
minority members of the legislative committees with jurisdiction over energy policy on
projects funded by the account for the prior year and all previous years. The report must,
to the extent possible and reasonable, itemize the actual and projected financial benefit to
the public utility's ratepayers of each project.

(q) By February 1, 2018, and each February 1 thereafter, the commissioner of
management and budget shall submit a written report regarding the availability of funds in
and obligations of the account to the chairs and ranking minority members of the senate
and house committees with jurisdiction over energy policy and finance, the public utility,
and the advisory group.

(r) A project receiving funds from the account must produce a written final report that
includes sufficient detail for technical readers and a clearly written summary for nontechnical
readers. The report must include an evaluation of the project's financial, environmental, and
other benefits to the state and the public utility's ratepayers.

(s) Final reports, any mid-project status reports, and renewable development account
financial reports must be posted online on a public website designated by the commissioner
of commerce.

(t) All final reports must acknowledge that the project was made possible in whole or
part by the Minnesota renewable development account, noting that the account is financed
by the public utility's ratepayers.

(u) Of the amount in the renewable development account, priority must be given to
making the payments required under section 216C.417.

new text begin (v) Of the money not otherwise appropriated or transferred under this subdivision in the
previous year, up to $10,000,000 is appropriated to the commissioner of commerce for the
grant program under section 216C.46.
new text end

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

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Combined heat and power" means cogeneration, as defined in section 216B.164,
subdivision 2a, paragraph (d).
new text end

new text begin (c) "Developer" means an entity that conducts a feasibility study or installs an eligible
technology on, in, or adjacent to a water utility that has been awarded a grant under this
section.
new text end

new text begin (d) "Drinking water" means potable water, as defined in section 115.01, subdivision 14.
new text end

new text begin (e) "Eligible energy technology" means renewable energy, combined heat and power,
energy efficiency, energy storage, or an enabling energy technology, as defined in paragraph
(f).
new text end

new text begin (f) "Enabling energy technology" means technologies that enable and track data for
renewable energy, combined heat and power, energy efficiency, and energy storage
technologies to function.
new text end

new text begin (g) "Energy efficiency" has the meaning given in section 216B.2402, subdivision 7.
new text end

new text begin (h) "Energy resilience" means the ability of an eligible energy technology to (1) provide
energy resources during an electrical outage, or (2) reduce the overall demand through
energy efficiency measures.
new text end

new text begin (i) "Energy storage" means an energy storage system, as defined in section 216B.2422,
subdivision 1, paragraph (f).
new text end

new text begin (j) "Jurisdiction" means a Minnesota local government, municipality, state agency,
school, Tribal government, Metropolitan Council, western Lake Superior sanitary district,
or other regional district.
new text end

new text begin (k) "Renewable energy" means an eligible energy technology, as defined in section
216B.1691, subdivision 1.
new text end

new text begin (l) "Wastewater" means sewage, as defined in section 115.01, subdivision 17.
new text end

new text begin (m) "Water utility" means a water treatment facility, as defined in section 115.01,
subdivision 21, or a similar system used to treat waste or potable water run by a Minnesota
jurisdiction.
new text end

new text begin A water utility energy resilience program is established
in the department. The purpose of the program is to stimulate the installation of eligible
energy technologies on, in, or adjacent to water utilities by providing grants in order to
reduce the cost of (1) feasibility studies of eligible energy technologies; and (2) eligible
energy technology projects that demonstrate energy resilience for water utilities at public
jurisdiction treatment plants.
new text end

new text begin A water utility energy resilience program account
is established in the special revenue fund in the state treasury.
new text end

new text begin Money in the account must be used only to pay for:
new text end

new text begin (1) energy feasibility studies;
new text end

new text begin (2) the installation of eligible energy technologies; or
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new text begin (3) the reasonable costs incurred by the department to administer this section.
new text end

new text begin A grant may be awarded to a water utility only if the eligible
energy technology that is the subject of the grant is:
new text end

new text begin (1) installed in, on, or adjacent to the water utility that consumes the electricity or thermal
energy generated, stored, or utilized more efficiently by the eligible energy technologies;
and
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new text begin (2) located on property within the service territory of the utility currently providing
electric service to the water utility.
new text end

new text begin (a) The commissioner must develop administrative
procedures governing the application and grant award process. The commissioner must
begin accepting applications no later than January 1, 2023, and must award grants based
on completed applications from eligible water utilities that were submitted on a form
prescribed by the commissioner.
new text end

new text begin (b) The commissioner must issue a request for proposals to utilities, water utilities, and
developers who wish to apply for a grant under this section on behalf of a water utility for
demonstration projects. The commissioner must issue a request for proposals under this
paragraph no less than annually until December 31, 2027. An eligible water utility must
submit an application to the commissioner on a form prescribed by the commissioner. The
application must include, at a minimum:
new text end

new text begin (1) the capacity of the proposed eligible energy technology; the amount of electricity
and thermal energy, as applicable, that is expected to be generated and stored; and the
duration the electricity or thermal energy may be stored;
new text end

new text begin (2) the water utility's current energy demand and consumption where the eligible energy
technology is to be installed and information regarding any existing eligible energy
technology and distributed energy resource, including a subscription to a community solar
garden, that currently provides electricity or thermal energy to the water utility;
new text end

new text begin (3) the total cost to purchase and install the eligible energy technology and the eligible
energy technology's life cycle cost, including removal and disposal at the end of the eligible
energy technology's life, as determined by the department;
new text end

new text begin (4) a copy of the proposed contract agreement between the water utility and the utility
or developer, including provisions addressing responsibility for maintenance of the eligible
energy technology;
new text end

new text begin (5) the water utility's willingness to share with the commissioner information regarding
the impacts on the resilience of the water utility that result from installing an eligible energy
technology, as prescribed by the commissioner;
new text end

new text begin (6) information that demonstrates the water utility's level of need for assistance available
under this section;
new text end

new text begin (7) information that demonstrates the water utility's readiness to implement the project,
including but not limited to the age of the water utility, the availability of the site on which
the eligible energy system is to be installed, and the level of engagement with the utility
providing electric service to the building on which the eligible energy system is to be
installed;
new text end

new text begin (8) any issues relevant to the implementation of the project, including metering and other
issues;
new text end

new text begin (9) how the developer or public utility plans to reduce the water utility's initial capital
expense to purchase and install the eligible energy technology by providing financial
assistance to the water utility; and
new text end

new text begin (10) any other information deemed relevant by the commissioner.
new text end

new text begin (c) The commissioner must develop administrative procedures governing the application
and grant award process.
new text end

new text begin At the commissioner's request, a water utility
awarded a demonstration grant under this section must provide the commissioner data and
information regarding the eligible energy measures implemented at the water utility, including
energy-related data prior to and after installation of the eligible energy measures, in order
to use the demonstration project as a learning tool for other water utilities.
new text end

new text begin The commissioner may provide technical assistance to
water utilities to develop and execute feasibility studies and install demonstration projects
under this section.
new text end

new text begin The commissioner must award a grant from the account
established under subdivision 3 to a water utility for the necessary costs associated with
purchasing, installing, and operating eligible energy technologies. The amount of a
demonstration grant award must be based on an energy feasibility study and the
commissioner's assessment of the need for assistance.
new text end

new text begin Beginning February 15, 2024, and each year thereafter until all
money is expended, the commissioner must report to the chairs and ranking minority
members of the legislative committees with jurisdiction over energy regarding: (1) grants
and amounts awarded to water utilities under this section during the previous year; and (2)
any remaining balances available under this section.
new text end

Minnesota Statutes 2021 Supplement, section 216C.375, subdivision 1, is amended
to read:

(a) For the purposes of this section and section 216C.376,
the following terms have the meanings given them.

(b) "Developer" means an entity that installs a solar energy system on a school building
that has been awarded a grant under this section.

(d) "School" means: (1) a school that operates as part of an independent or special school
district;new text begin (2) a Tribal contract school;new text end or deleted text begin (2)deleted text end new text begin (3)new text end a state college or university that is under the
jurisdiction of the Board of Trustees of the Minnesota State Colleges and Universities.

(e) "School district" means an independent or special school district.

(f) "Solar energy system" means photovoltaic or solar thermal devices.

(g) "Solar thermal" has the meaning given to "qualifying solar thermal project" in section
216B.2411, subdivision 2, paragraph (d).

(h) "State colleges and universities" has the meaning given in section 136F.01, subdivision
4.

new text begin (a) A state competitiveness fund account is
created in the special revenue fund of the state treasury. The money in the account must be
used to: (1) meet match requirements for federal funds provided to the state by the United
States Department of Energy or another federal entity; (2) increase competitiveness to
capture federally designated, energy-related formula or competitive funds; (3) assist eligible
entities to access competitive federal dollars; or (4) pay the reasonable costs incurred by
the department to: (i) pursue and administer energy-related federal funds; and (ii) assist
eligible grantees in the pursuit and management of energy-related federal funds.
new text end

new text begin (b) State matching grants may be awarded to eligible entities, as defined by the federal
fund source, with priority given in the following order: (1) federal formula funds directed
to the state that require a match; (2) federal formula or competitive funds in which a state
match allows disadvantaged communities, utilities, or businesses to be competitive in the
pursuit of funding; and (3) all other competitive or formula grant opportunities in which
matching state funds enhance or enable federal dollars to be leveraged.
new text end

new text begin (c) By August 1, 2022, the department must establish and convene a Minnesota State
Competitiveness Fund Advisory Task Force.
new text end

new text begin (d) By October 1, 2022, the advisory task force must develop administrative procedures
governing the determination of state grants so that the grant money is prioritized, to the
extent practicable, in an equitable manner.
new text end

new text begin (a) The Minnesota State Competitiveness
Fund Advisory Task Force is established and consists of 12 members as follows:
new text end

new text begin (1) the commissioner of commerce or the commissioner's designee, who serves as a
nonvoting chair of the advisory task force;
new text end

new text begin (2) the chair of the house of representatives committee having jurisdiction over energy
finance and policy or the chair's designee;
new text end

new text begin (3) the chair of the senate committee having jurisdiction over energy finance and policy
or the chair's designee; and
new text end

new text begin (4) nine entities determined by the commissioner and chairs that represent the following
interests:
new text end

new text begin (i) two entities representing Minnesota utilities;
new text end

new text begin (ii) one entity representing labor;
new text end

new text begin (iii) two entities representing energy justice, rural, low-income, or historically
disadvantaged communities;
new text end

new text begin (iv) one entity representing clean energy businesses;
new text end

new text begin (v) one entity representing manufacturing;
new text end

new text begin (vi) one entity representing higher education; and
new text end

new text begin (vii) one person or entity with policy or implementation expertise on workforce
development for displaced energy workers or persons from low-income or environmental
justice communities.
new text end

new text begin (b) A voting member serving on the Minnesota State Competitiveness Fund Advisory
Task Force, and the voting member's respective organization, is ineligible from receiving
state matching funds authorized under this section. A nominal stipend may be provided
from grant funds to participating members who would otherwise be unable to attend.
new text end

new text begin Beginning February 15, 2024, and each year thereafter until
February 15, 2035, the commissioner must report to the chairs and ranking minority members
of the legislative committees with jurisdiction over energy finance and policy regarding:
(1) grants and amounts awarded under this section during the previous year; (2) the remaining
balance available under this section and any additional funding opportunities that require
additional funding beyond the remaining balance.
new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given them.
new text end

new text begin (b) "Advisory task force" means the Minnesota green innovation finance fund advisory
task force.
new text end

new text begin (c) "Fund" means the Minnesota green innovation finance fund.
new text end

new text begin (d) "Clean energy project" has the meaning given to "qualified project" in paragraph (l),
clauses (1) to (4).
new text end

new text begin (e) "Credit enhancement" means a pool of capital set aside to cover potential losses on
loans made by private lenders, including but not limited to loan loss reserves and loan
guarantees.
new text end

new text begin (f) "Energy storage system" has the meaning given in section 216B.2422, subdivision
1, paragraph (f).
new text end

new text begin (g) "Fuel cell" means a cell that converts the chemical energy of hydrogen directly into
electricity through electrochemical reactions.
new text end

new text begin (h) "Greenhouse gas emissions" has the meaning given to "statewide greenhouse gas
emissions" in section 216H.01, subdivision 2.
new text end

new text begin (i) "Loan loss reserve" means a pool of capital set aside to reimburse a private lender if
a customer defaults on a loan, up to an agreed-upon percentage of loans originated by the
private lender.
new text end

new text begin (j) "Microgrid system" means an electrical grid that serves a discrete geographical area
from distributed energy resources and that can operate independently from the central electric
grid on a temporary basis.
new text end

new text begin (k) "Qualified project" means a project, technology, product, service, or measure
predominantly focused on clean energy, electrification, or energy or climate resilience as
follows:
new text end

new text begin (1) a project, technology, product, service, or measure that:
new text end

new text begin (i) results in the reduction of energy use required to achieve the same level of service
or output obtained before the application of the project, technology, product, service, function,
or measure or aggregation of the project, technology, product, service, function, and measure;
new text end

new text begin (ii) shifts the use of electricity by retail customers in response to changes in the price of
electricity that vary over time or provides other incentives designed to shift electricity
demand from times when market prices are high or when system reliability is jeopardized;
or
new text end

new text begin (iii) significantly reduces greenhouse gas emissions relative to greenhouse gas emissions
produced before the project is implemented, excluding projects that generate power from
the combustion of fossil fuels, including, without limitation, petroleum and petroleum
products;
new text end

new text begin (2) the development, construction, deployment, alteration, or repair of any:
new text end

new text begin (i) project, technology, product, service, or measure that generates electric power from
renewable energy; or
new text end

new text begin (ii) distributed generation system, energy storage system, smart grid technology, microgrid
system, fuel cell system, or combined heat and power system;
new text end

new text begin (3) the installation, construction, or use of end-use electric technology that replaces
existing fossil-fuel-based technology;
new text end

new text begin (4) a project, technology, product, service, or measure that supports the development
and deployment of electric vehicle charging stations and associated infrastructure;
new text end

new text begin (5) projects that reduce net greenhouse gas emissions or improve climate resiliency,
including but not limited to reforestation, afforestation, forestry management, and
regenerative agriculture; and
new text end

new text begin (6) the construction or enhancement of infrastructure that is planned, designed, and
operated in a manner that anticipates, prepares for, and adapts to current and projected
changing climate conditions so that the infrastructure withstands, responds to, and more
readily recovers from disruptions caused by the current and projected changing climate
conditions.
new text end

new text begin Qualified projects include the development, construction, deployment, alteration, or repair
of any eligible project, technology, product, service, or measure, as defined in this paragraph,
that also: reduces water use while providing the same or better level and quality of service
or output that was obtained before implementing the water-saving approach; or protects,
restores, or preserves the quality of groundwater and surface waters, including but not
limited to actions that further the purposes of the Clean Water Legacy Act, as provided in
section 114D.10, subdivision 1.
new text end

new text begin (l) "Regenerative agriculture" means the deployment of farming methods that reduce
agriculture's contribution to climate change by increasing the soil's ability to absorb
atmospheric carbon and convert the atmospheric carbon to soil carbon.
new text end

new text begin (m) "Renewable energy" has the meaning given in section 216B.2422.
new text end

new text begin (n) "Smart grid" means a digital technology that (1) allows for two-way communication
between a utility and the utility's customers, and (2) enables the utility to control power
flow and load in real time.
new text end

new text begin (a) By September 1, 2022, the department must
establish and convene a Minnesota Green Innovation Finance Fund Advisory Task Force.
new text end

new text begin (b) By February 1, 2023, the Minnesota Green Innovation Finance Fund Advisory Task
Force convened by the department must establish the Minnesota green innovation finance
fund as a nonprofit corporation, including the development of the nonprofit board under
chapter 317A, and must seek designation as a charitable tax-exempt organization under
section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The advisory task
force must engage independent legal counsel with relevant experience in nonprofit corporate
law to help establish the nonprofit corporation. The nonprofit corporation must be governed
by a board of directors.
new text end

new text begin (c) The fund must establish bylaws, subject to the prior approval by the commissioner.
new text end

new text begin (d) The initial board of directors must include at least a majority of the members of the
advisory task force established under subdivision 5.
new text end

new text begin (e) When incorporated, the fund must serve as an independent, nonprofit corporation
for public benefit whose purpose is to (1) promote investments in qualified clean energy,
efficiency, electrification, and other climate-mitigation-related projects, and (2) accelerate
the deployment of qualified projects by reducing the up-front and total cost of adoption.
The fund may achieve the purposes under this paragraph by leveraging public sources and
additional private sources of capital through the strategic deployment of public funds in the
form of loans, credit enhancements, and other financing mechanisms, along with strategies
that stimulate demand.
new text end

new text begin (f) The Minnesota green innovation finance fund must:
new text end

new text begin (1) identify underserved markets for qualified projects in Minnesota, develop programs
to overcome market impediments, and provide access to financing to serve the projects and
underserved markets;
new text end

new text begin (2) except in cases of projects within identified disadvantaged communities, as determined
by the commissioner, that may limit such an investment, strategically prioritize funds to
leverage private investment in qualified projects, achieving a high ratio of private to public
funds invested through funding mechanisms that support, enhance, and complement private
investment;
new text end

new text begin (3) coordinate with existing government- and utility-based programs to ensure (i) the
most effective use of the fund's resources, (ii) that financing terms and conditions offered
are well-suited to qualified projects, (iii) coordination of communication with respect to all
financing options under this section and other state and utility programs, and (iv) the fund's
activities add to and complement the efforts of state and utility partners;
new text end

new text begin (4) serve as an informational resource for contractors interested in installing qualified
projects by forming partnerships with and educating contractors regarding the fund's financing
programs and coordinating multiple contractors on projects that install multiple qualifying
technologies;
new text end

new text begin (5) develop innovative and inclusive marketing strategies to stimulate project owner
interest in targeted underserved markets;
new text end

new text begin (6) serve as a financial resource to reduce the up-front and total costs to borrowers;
new text end

new text begin (7) prioritize projects that maximize greenhouse gas emission reductions or address
disparities in access to clean energy projects for underserved communities;
new text end

new text begin (8) ensure that workers employed by contractors and subcontractors in construction
work on projects over $100,000 in total cost, financed all or in part by the fund, are paid
wages not less than those prevailing on similar construction projects in the locality;
new text end

new text begin (9) develop rules, policies, and procedures specifying borrower eligibility and other
terms and conditions for financial support offered by the fund that must be met before
financing support is provided for any qualified clean energy project;
new text end

new text begin (10) develop and administer policies to collect reasonable fees for fund services and risk
management activities that are sufficient to support ongoing fund activities;
new text end

new text begin (11) subject to review by the department, develop and adopt a work plan to accomplish
all of the activities required of the fund and update the work plan on an annual basis;
new text end

new text begin (12) develop consumer protection standards governing the fund's investments to ensure
the fund and partners provide financial support in a responsible and transparent manner that
is in the financial interest of participating project owners and serves the defined underserved
markets and disadvantaged communities; or
new text end

new text begin (13) establish and maintain an online and mobile-access portal that provides access to
all fund programs and financial products, including rates, terms, and conditions of all
financing support programs, unless disclosure of the information constitutes a trade secret
or confidential commercial or financial information.
new text end

new text begin In addition to the responsibilities
listed in this chapter, the department must:
new text end

new text begin (1) review consumer protection standards established by the fund; and
new text end

new text begin (2) provide standard state oversight to money appropriated under this section.
new text end

new text begin The fund is authorized to:
new text end

new text begin (1) engage in any activities of a Minnesota nonprofit corporation operating under chapter
317A;
new text end

new text begin (2) develop and employ financing methods to support qualified projects, including:
new text end

new text begin (i) credit enhancement mechanisms that reduce financial risk for private lenders by
providing assurance that a limited portion of a loan is assumed by the fund via a loan loss
reserve, loan guarantee, or other mechanism;
new text end

new text begin (ii) co-investment, where the fund invests directly in a clean energy project by providing
senior or subordinated debt, equity, or other mechanisms in conjunction with a private
financier's investment; and
new text end

new text begin (iii) serving as an aggregator of many small and geographically dispersed qualified
projects, where the fund may provide direct lending, investment, or other financial support
in order to diversify risk; and
new text end

new text begin (3) seek to qualify as a community development financial institution under United States
Code, title 12, section 4702, in which case the fund must be treated as a qualified community
development entity for the purposes of sections 45D and 1400(m) of the Internal Revenue
Code.
new text end

new text begin (a) The Minnesota Green Innovation
Finance Fund Advisory Task Force is established and consists of ... members as follows:
new text end

new text begin (1) the commissioner of commerce or the commissioner's designee, who serves as chair
of the advisory task force;
new text end

new text begin (2) the commissioner of employment and economic development or the commissioner's
designee;
new text end

new text begin (3) the commissioner of the Pollution Control Agency or the commissioner's designee;
new text end

new text begin (4) the commissioner of agriculture or the commissioner's designee;
new text end

new text begin (5) ... additional members appointed by the governor;
new text end

new text begin (6) ... additional members appointed by the speaker of the house;
new text end

new text begin (7) ... additional members appointed by the president of the senate; and
new text end

new text begin (8) five members that have extensive life or work experience within vulnerable
communities that the fund aims to serve, appointed by the governor and the commissioners
identified in clauses (1) to (4).
new text end

new text begin (b) The members appointed to the advisory task force under paragraph (a), clauses (6)
and (7), must have expertise in matters relating to energy conservation, clean energy,
economic development, banking, law, finance, or other matters relevant to the work of the
advisory task force.
new text end

new text begin (c) When appointing a member to the advisory task force, consideration must be given
to whether the advisory task force members collectively reflect the geographical and ethnic
diversity of Minnesota.
new text end

new text begin (d) Members of the advisory task force must abide by the conflict of interest provisions
in section 43A.38.
new text end

new text begin (e) In order to ensure participation, the commissioner may provide a nominal grant to
any advisory task force member that can demonstrate financial need in order to participate.
new text end

new text begin Beginning February 1, 2024, the fund must annually submit a
comprehensive report on the fund's activities for the previous fiscal year to the governor
and the chairs and ranking minority members of the legislative committees with primary
jurisdiction over energy policy. The report must contain, at a minimum, information on:
new text end

new text begin (1) the amount of fund capital invested, by project type;
new text end

new text begin (2) the amount of private capital leveraged as a result of fund investments, by project
type;
new text end

new text begin (3) the number of qualified projects supported, by project type and location within
Minnesota;
new text end

new text begin (4) the estimated number of jobs created and tax revenue generated as a result of the
fund's activities;
new text end

new text begin (5) the number of clean energy projects financed in low- and moderate-income
households; and
new text end

new text begin (6) the fund's financial statements.
new text end

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

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Contracts" means a grant or a loan.
new text end

new text begin (c) "Emerging energy technology" means carbon-reducing energy technologies, systems,
or practices that require capital investment in order to achieve sufficient market share.
new text end

new text begin (d) "Qualified business" means a business that is:
new text end

new text begin (1) seeking funding for an eligible use; and
new text end

new text begin (2) a Minnesota-focused business, as defined by the commissioner.
new text end

new text begin (e) "Qualified equity business" means a minority-, women-, or veteran-owned business,
as the terms are defined under section 116J.8737.
new text end

new text begin (f) "Qualified greater Minnesota business" means a qualified small business that is also
certified by the commissioner as a qualified greater Minnesota business under section
116J.8737, subdivision 2.
new text end

new text begin (a) A decarbonization technology investment fund
is established within the Department of Commerce to provide loans and grants to qualified
businesses to: (1) promote the start-up, expansion, and attraction of emerging energy
technologies and businesses within Minnesota; and (2) stimulate other innovative carbon
reduction projects that provide a reasonable expectation to reduce carbon emissions in a
measurable way as a proof of concept prior to large-scale deployment within Minnesota.
new text end

new text begin (b) A decarbonization technology innovation investment account is created in the special
revenue fund in the state treasury. Earnings, including interest, dividends, and any other
earnings arising from assets of the account, must be credited to the account.
new text end

new text begin (c) The commissioner must manage the account but may select and use a third-party
administrator to administer and manage the account, including projects funded under the
account. Money in the account is appropriated to the commissioner for contracts under this
section and must be expended only as provided in this section.
new text end

new text begin (d) The commissioner may seek and accept funding from nonstate sources to support
eligible expenditures under subdivision 4. Any money received under this paragraph must
be deposited in the state treasury, credited to the decarbonization technology investment
account in the special revenue fund, and is appropriated to the commissioner for the purposes
of this section. The commissioner must ensure that the funding source has no influence on
(1) the process to select projects eligible for funding under this section, or (2) any of the
activities to administer the fund.
new text end

new text begin (e) The account under this subdivision expires ten years after the effective date of this
section or June 30, 2035, whichever is later. Any money remaining in the account on the
date the account expires cancels to the general fund.
new text end

new text begin (f) The commissioner may retain no more than three percent annually of funds credited
to the account for the department's administrative expenses, including but not limited to
duties required under subdivision 9, program management, contract management, software
applications, program outreach, application and project technical review, and staffing.
new text end

new text begin (a) The commissioner may, by order, approve and make
contracts under the account established in subdivision 2. Money in the account established
in subdivision 2 must be used only to provide awards to eligible entities. No less than 50
percent of funds must be allocated to qualified greater Minnesota businesses or qualified
equity businesses. Any amount that is reserved for qualified investments in greater Minnesota
businesses or qualified equity businesses under this paragraph that is not allocated by March
31, 2024, is available for allocation to other qualified businesses.
new text end

new text begin (b) The commissioner must develop administrative procedures to implement this section.
new text end

new text begin (c) The commissioner must award all loans by June 30, 2025.
new text end

new text begin (d) Money in the account must be allocated to projects as follows:
new text end

new text begin (1) up to 65 percent of available funds must be allocated to establish a low-interest loan
fund and loan loss reserve. Loan recipients must repay loan amounts awarded under this
section by the end of the loan term. Loan repayment amounts must be credited to the account
established under subdivision 2. The department may use up to ten percent of the money
or 6.5 percent of total funds, whichever is greater, under this section to establish a loan loss
reserve in order to leverage additional investments; ensure funding for emerging, innovative
energy products; and ensure accessibility by small businesses; or
new text end

new text begin (2) no less than 35 percent of available money must be allocated to provide grants to
eligible projects.
new text end

new text begin (a) An application for a grant or loan contract under this
section must be made to the commissioner on a form developed by the commissioner.
new text end

new text begin (b) An application made under this section must be evaluated by the investment committee
under subdivision 7.
new text end

new text begin (a) The commissioner must award grants under
this section to eligible applicants through a competitive grant process.
new text end

new text begin (b) An eligible entity must be (1) located in Minnesota, or (2) able to demonstrate how
the grant directly and significantly benefits Minnesotans in a manner that meets criteria
established by the commissioner.
new text end

new text begin (c) The commissioner must consult with the advisory committee under subdivision 6
and the investment committee under subdivision 7 to issue additional grant award criteria
under subdivision 3 or under section 216C.02, subdivision 3.
new text end

new text begin (a) The commissioner must
establish a technical advisory committee to assist in the development of eligible uses of the
money under subdivision 3. The technical advisory committee must have expertise in energy
research and development, energy conservation, clean energy technology development,
economic development, or energy project financing.
new text end

new text begin (b) When establishing the technical advisory committee, the commissioner must consider
whether the members collectively reflect the geographic and ethnic diversity of Minnesota.
new text end

new text begin (c) Members of the technical advisory committee must comply with the conflicts of
interest provisions under section 43A.38.
new text end

new text begin (a) The commissioner, in
consultation with the commissioner of employment and economic development, must
establish an investment committee to recommend eligible applicants for grant awards under
subdivision 5.
new text end

new text begin (b) The investment committee consists of seven members. Members of the investment
committee must have expertise and experience in investments and finance. The commissioner
or the commissioner's designee, and the commissioner of employment and economic
development or the commissioner of employment and economic development's designee,
serve as members of the investment committee. The commissioner or the commissioner's
designee serves as chair of the investment committee.
new text end

new text begin (c) When establishing the investment committee, the commissioner must consider whether
the members collectively reflect the geographic and ethnic diversity of Minnesota. In order
to ensure participation, the commissioner may provide a nominal grant to any investment
committee member that demonstrates financial need in order to participate.
new text end

new text begin (d) Members of the investment committee must comply with the conflicts of interest
provisions under section 43A.38. Entities represented by members of the investment
committee are ineligible to receive grants under subdivision 5.
new text end

new text begin On or before February 15, 2024, and by February 15
each year thereafter, the commissioner must report on the activities of the fund for the
preceding calendar year to the chairs and ranking minority members of the committees of
the senate and house of representatives with jurisdiction over energy finance and policy and
economic development finance. The report must include but is not limited to information
specifying:
new text end

new text begin (1) the number of applications for funding received;
new text end

new text begin (2) the number of applications selected for grants;
new text end

new text begin (3) the total amount of grants issued in the previous year and to date, itemized by project
type and grant type; and
new text end

new text begin (4) a complete operating and financial statement covering the fund's operations for that
year.
new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Grid modernization" means:
new text end

new text begin (1) enhancing electric grid service quality and reliability;
new text end

new text begin (2) improving the security of the electric grid and critical infrastructure against
cyberthreats and physical threats; and
new text end

new text begin (3) increasing energy conservation opportunities by facilitating communication between
the utility and the utility's customers through the use of two-way meters, control technologies,
energy storage and microgrids, technologies that enable demand flexibility, and other
innovative technologies.
new text end

new text begin (c) "Renewable energy" has the meaning given in section 216B.2422, subdivision 1,
paragraph (c).
new text end

new text begin A grants for renewable integration and demonstration
program is established in the department. The purpose of the program is to provide grants
for projects to:
new text end

new text begin (1) stimulate research, deployment, and grid integration of renewable electric energy
technologies;
new text end

new text begin (2) encourage grid modernization, including but not limited to projects that implement
electricity storage, generation control, load control, and smart meter technology; and
new text end

new text begin (3) stimulate other innovative energy projects that reduce demand and increase system
efficiency and flexibility to benefit customers of the utility that owns nuclear generating
units in Minnesota.
new text end

new text begin A grants for renewable integration and demonstration
program account is established as a separate account in the special revenue fund in the state
treasury.
new text end

new text begin Money in the account may be used only:
new text end

new text begin (1) for grant awards made under this section;
new text end

new text begin (2) for costs to procure technical evaluation services; and
new text end

new text begin (3) to pay reasonable costs incurred by the department to administer this section.
new text end

new text begin The commissioner must determine whether a project is eligible for
a grant under this section. When evaluating a project for approval, the commissioner must
consider:
new text end

new text begin (1) diversity, equity, and inclusion;
new text end

new text begin (2) greenhouse gas emissions;
new text end

new text begin (3) resiliency value;
new text end

new text begin (4) grid security;
new text end

new text begin (5) jobs and economic development; and
new text end

new text begin (6) other potential benefits to Minnesota citizens and businesses, ratepayers receiving
electric service from the utility that owns a nuclear-powered electric generating plant in
Minnesota, the Prairie Island Indian community, or Prairie Island Indian community
members.
new text end

new text begin (a) A project that receives money from a grant approved under this
section must produce a written final report that includes sufficient detail for technical readers
and a clearly written summary for nontechnical readers. The report must include an evaluation
of the project's financial, environmental, and other benefits to Minnesota and the public
utility's ratepayers.
new text end

new text begin (b) Final reports, any project status reports, and grants for renewable integration and
demonstration program balances must be posted on a public website designated by the
commissioner.
new text end

new text begin (c) All final reports must acknowledge that the project was made possible in whole or
part by the Minnesota renewable development account, noting that the account is financed
by the public utility's ratepayers.
new text end

new text begin (d) By February 15 each year, the commissioner must report to the chairs and ranking
minority members of the legislative committees with primary jurisdiction over energy
regarding: (1) grants issued under this section during the previous calendar year; and (2)
any remaining balances available under this section.
new text end

new text begin The program may accept gifts and grants on behalf
of the state that constitute donations to the state. Money received under this subdivision is
appropriated to the commissioner of commerce to support the program under this section.
new text end

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

new text begin Appropriations by Fund new text end
	new text begin 2022 new text end	new text begin 2023 new text end
new text begin General new text end	new text begin -0- new text end	new text begin 144,500,000 new text end
new text begin Renewable Development Account new text end	new text begin -0- new text end	new text begin 5,000,000 new text end

new text begin APPROPRIATIONS
new text end

new text begin Available for the Year
new text end

new text begin Ending June 30
new text end

new text begin 2022
new text end

new text begin 2023
new text end