1.1 	A bill for an act
1.2 	relating to economic development; establishing flexible-fuel vehicle targets; 
1.3 	establishing a plug-in hybrid electric vehicle task force; requiring a public 
1.4 	utilities commission proceeding; requiring an independent study;proposing 
1.5 	coding for new law in Minnesota Statutes, chapter 80E.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. [80E.35] FLEXIBLE-FUEL VEHICLE TARGETS.
1.8 		Subdivision 1.Findings. The legislature finds that it is in the interest of all 
1.9 	Minnesotans to lessen dependence on oil as an energy source for economic, security, 
1.10 	and environmental reasons. Minnesota leads the nation in the production and use of 
1.11 	ethanol in motor vehicles, but this strategy can be made more effective by increasing the 
1.12 	proportion of vehicles that can use alternative fuels, such as E85. Further, manufacturers 
1.13 	can produce flexible-fuel vehicles at a minimal incremental cost above gasoline-only 
1.14 	vehicles. As a result, the legislature finds that Minnesota would benefit from more choices 
1.15 	of flexible-fuel vehicles.
1.16 		Subd. 2.Definitions. (a) As used in this section, "flexible-fuel vehicle" means a 
1.17 	motor vehicle that operates on gasoline and one or more alternative fuels.
1.18 	(b) As used in this section, "alternative fuel" has the meaning given in United States 
1.19 	Code, title 42, section 13211(3).
1.20 		Subd. 3.Target. (a) The targets in this subdivision apply to manufacturers who 
1.21 	grant a valid sales and service agreement, franchise, or contract to a dealer in this state.
1.22 	(b) The following targets refer to the percentage of a manufacturer's new motor 
1.23 	vehicles offered for sale in this state that are flexible-fuel vehicles:
1.24 	(1) 2008: ten percent;
1.25 	(2) 2009: 15 percent;
2.1 	(3) 2010: 20 percent;
2.2 	(4) 2011: 25 percent; and
2.3 	(5) 2012: 30 percent.

2.4 	Sec. 2. PLUG-IN HYBRID ELECTRIC VEHICLE TASK FORCE.
 2.5 		Subdivision 1.Establishment; membership. The plug-in hybrid electric vehicle 
2.6 	task force is established. The task force shall consist of 13 members as follows: 
2.7 	(1) one representative each from Xcel Energy and Great River Energy;
2.8 	(2) one representative each from the Minnesota Department of Commerce, the 
2.9 	Minnesota Department of Transportation, and the Minnesota Pollution Control Agency;
2.10 	(3) the director of the Travel Management Division of the Minnesota Department of 
2.11 	Administration, or the director's designee;
2.12 	(4) a representative from the University of Minnesota Department of Electrical 
2.13 	Engineering;
2.14 	(5) one representative each from Minnesota-based manufacturers of electric 
2.15 	batteries, automotive parts, and power electronics;
2.16 	(6) a representative from an environmental advocacy organization active in 
2.17 	electricity issues;
2.18 	(7) a representative of United Auto Workers Local 879; and
2.19 	(8) a representative of the Ford Motor Company.
2.20 		Subd. 2.Appointment. The chairs of the senate and house of representatives 
2.21 	committees with primary jurisdiction over energy policy shall jointly appoint the task 
2.22 	force members.
2.23 		Subd. 3.Cochairs. The task force shall have two cochairs, one appointed by each 
2.24 	of the appointing authorities established in subdivision 2.
2.25 		Subd. 4.Charge. (a) The plug-in hybrid electric vehicle task force shall identify 
2.26 	barriers to the adoption of plug-in hybrid electric vehicles by state agencies, small 
2.27 	and large private fleets, and Minnesota drivers at-large and develop strategies to be 
2.28 	implemented over one-, three-, and five-year time frames to overcome those barriers. 
2.29 	Included in the analysis should be possible financial incentives to encourage Ford Motor 
2.30 	Company to produce plug-in hybrid, flexible-fueled vehicles at its St. Paul plant.
2.31 	(b) The task force shall consider and evaluate the data and information presented to 
2.32 	it under subdivision 5 in presenting its findings and recommendations.
2.33 		Subd. 5.Data and analysis. (a) The commissioner of administration shall analyze 
2.34 	and report to the task force the economic impacts of purchasing a sufficient number of 
2.35 	plug-in hybrid electric vehicles to comprise ten percent, 25 percent, and 50 percent of the 
3.1 	state-owned vehicle fleet. The analysis must compare initial purchase and life-cycle costs 
3.2 	of plug-in hybrid electric vehicles and current fleet vehicles under several scenarios based 
3.3 	on alternative projections of future gasoline prices and prices at which utilities may charge 
3.4 	plug-in hybrid electric vehicles to recharge.
3.5 	(b) The commissioner of the pollution control agency shall analyze and report to 
3.6 	the task force the environmental impacts of purchasing plug-in hybrid electric vehicles 
3.7 	for the state-owned vehicle fleet and at penetration rates of ten percent, 25 percent, and 
3.8 	50 percent of all motor vehicles registered in this state. The analysis must compare, 
3.9 	for plug-in hybrid electric vehicles and current fleet vehicles, air emissions of sulfur 
3.10 	dioxide, nitrogen oxides, particulate matter less than 2.5 microns in width, volatile organic 
3.11 	compounds, and carbon dioxide.
3.12 		Subd. 6.Expenses. Members of the task force are entitled to reimbursement for 
3.13 	expenses under section 15.059, subdivision 6.
3.14 		Subd. 7.Staff. The state agencies represented on the commission shall provide 
3.15 	staff support.
3.16 		Subd. 8.Report. The task force shall present its findings and recommendations in a 
3.17 	report to the chairs of the senate and house of representatives committees with primary 
3.18 	jurisdiction over energy policy and state government operations by April 1, 2007.
3.19 		Subd. 9.Definitions. As used in this section, "plug-in hybrid electric vehicles" 
3.20 	means a vehicle containing an internal combustion engine that also allows power to 
3.21 	be delivered to the drive wheels by a battery-powered electric motor, and that meets 
3.22 	applicable federal motor vehicle safety standards. When connected to the electrical grid 
3.23 	via an electric outlet, the vehicle must be able to recharge its battery. The vehicle must 
3.24 	have the ability to travel at least 30 miles powered substantially by electricity.

3.25 	EFFECTIVE DATE. This section is effective the day following final enactment.

3.26 	Sec. 3. PUBLIC UTILITIES COMMISSION PROCEEDING.
 3.27 		Subdivision 1.Proceeding. The public utilities commission shall open a proceeding 
3.28 	to investigate how utilities can best develop the infrastructure to connect plug-in hybrid 
3.29 	electric vehicles to the electrical grid and to allow utilities to purchase electricity from 
3.30 	plug-in hybrid electric vehicles.
3.31 		Subd. 2.Definitions. As used in this section and section 4, "plug-in hybrid electric 
3.32 	vehicles" means a vehicle containing an internal combustion engine that also allows 
3.33 	power to be delivered to the drive wheels by a battery-powered electric motor, and that 
3.34 	meets applicable federal motor vehicle safety standards. When connected to the electrical 
3.35 	grid via a two-way electrical outlet, the vehicle must be able to recharge its battery and 
4.1 	to transfer electricity to a utility. The vehicle must have the ability to travel at least 30 
4.2 	miles powered substantially by electricity.

4.3 	Sec. 4. INDEPENDENT STUDY ON PLUG-IN HYBRID ELECTRIC VEHICLE 
4.4 	AND UTILITY ECONOMICS.
 4.5 	The Public Utilities Commission shall order the utility subject to Minnesota Statutes, 
4.6 	section 216B.1691, subdivision 6, to contract with a firm selected by the commissioner 
4.7 	of commerce for an independent study of:
4.8 	(1) the economics of using electricity purchased from plug-in hybrid electric 
4.9 	vehicles to provide to the utility peak power services and ancillary services, including 
4.10 	regulation and spinning reserves; and
4.11 	(2) how such purchases may impact the reserve needs for wind-generated electricity 
4.12 	purchased by the utility. The study must examine the economic impacts on plug-in hybrid 
4.13 	electric vehicle owners and utilities of different prices for electricity purchased from 
4.14 	plug-in hybrid electric vehicles and rates for recharging plug-in hybrid electric vehicles, 
4.15 	including time-of-day pricing and substantial discounts for off-peak charging. The study 
4.16 	must be completed by April 1, 2007, and submitted in a report to the chairs of the senate 
4.17 	and house of representatives committees with primary jurisdiction over energy policy. The 
4.18 	costs of the study are recoverable under Minnesota Statutes, section 216B.1645.