1.1A bill for an act1.2relating to energy; authorizing sale and issuance of state bonds; authorizing 1.3program to provide grants to municipalities for designing and constructing 1.4energy-efficient buildings and landscaping; authorizing grants for energy-related 1.5projects; modifying provisions for sustainable building guidelines; appropriating 1.6money;amending Minnesota Statutes 2006, section 16B.325.1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8Section 1. CAPITAL IMPROVEMENT APPROPRIATIONS.

1.9    The sums shown in the column under "Appropriations" are appropriated from the 1.10bond proceeds fund, or another named fund, to the state agencies or officials indicated, 1.11to be spent for public purposes. Appropriations of bond proceeds must be spent as 1.12authorized by the Minnesota Constitution, article XI, section 5, paragraph (a), to acquire 1.13and better public land and buildings and other public improvements of a capital nature, or 1.14as authorized by the Minnesota Constitution, article XI, section 5, paragraphs (b) to (j), or 1.15article XIV. Unless otherwise specified, the appropriations in this act are available until 1.16the project is completed or abandoned subject to Minnesota Statutes, section 16A.642.1.17    Sec. 2. PRIORITIES.1.18    Subdivision 1.General.The Energy Finance and Policy Division of the House 1.19Finance Committee prioritizes the appropriations in this act as provided in this section.1.20    Subd. 2.High priorities.The Green Bonds: Grants to Municipalities program in 1.21section 3.1.22    Subd. 3.Medium.The Waste to Energy Demonstration Project in section 4, 1.23subdivision 2.1.24    Subd. 4.Low.The Steam Line Extension project in section 4, subdivision 3.1.25    Subd. 5.Do not fund.

2.1Sec. 3. COMMERCE

2.2Subdivision 1.Total Appropriation$10,000,000

2.3To the commissioner of commerce for the 2.4purposes specified in this section.

2.52.6Subd. 2.Green Bonds: Grants to Municipalities

2.7(a) For grants to municipalities that meet 2.8or exceed the sustainability guidelines 2.9of Minnesota Statutes, section 16B.325. 2.10"Municipality" means a county, statutory or 2.11home rule charter city, town, school district, 2.12or any combination of those units operating 2.13under an agreement to undertake projects 2.14jointly. The grants are:2.15(1) to pay a portion of the incremental cost 2.16of predesign and design work that will 2.17identify the design elements and costs for 2.18construction or renovation of the proposed 2.19building and adjacent landscaping using 2.20standard construction methods, and the 2.21design elements and costs for construction or 2.22renovation using energy-efficient elements; 2.23(2) to pay a portion of the incremental cost 2.24of construction or renovation and adjacent 2.25landscaping work related to implementation 2.26of the energy-efficient design, as identified 2.27in the design; and2.28(3) not to be used to pay any costs of a 2.29project that a local gas or electric utility can 2.30fund as part of its conservation improvement 2.31spending requirement under Minnesota 2.32Statutes, section 216B.241.2.33(b) The commissioner shall prescribe 2.34the application form. For all grants, 3.1the application must include at least the 3.2following information:3.3(1) the resolution adopted by the municipality 3.4in support of the project and specifically in 3.5support of implementing an energy-efficient 3.6design in the construction of the new 3.7municipal building;3.8(2) a detailed estimate, along with necessary 3.9supporting evidence, of the total costs for 3.10the phase of the project for which a grant is 3.11sought;3.12(3) evidence that the municipality has funds 3.13committed to pay for the balance of this 3.14phase of the project; 3.15(4) a letter from the utility providing electric 3.16and gas service to the project stating that (i) 3.17it cannot fund the project, or any portion of 3.18it, as part of its conservation improvement 3.19spending requirement under Minnesota 3.20Statutes, section 216B.241, or (ii) the utility 3.21is not required to invest in conservation 3.22improvements under Minnesota Statutes, 3.23section 216B.241; and3.24(5) any additional information or material the 3.25commissioner requires.3.26(c) For a predesign or design grant, the 3.27application must include at least the 3.28following information:3.29(1) a general description of the project, 3.30including the ultimate use of the building, 3.31an estimate of the size, possible locations 3.32for the building, ownership, and timeline for 3.33implementation;4.1(2) the method for soliciting proposals from 4.2design professionals and the qualifications 4.3required by the municipality in selecting the 4.4design professional for the project; and4.5(3) an estimate of the incremental cost of 4.6the predesign or design work proposed that 4.7will be due to providing the energy-efficient 4.8alternative.4.9(d) For a construction grant, the application 4.10must include at least the predesign and 4.11design work that provides sufficient detail for 4.12the commissioner to identify the difference 4.13in construction costs and estimated operating 4.14costs, including energy consumption, 4.15between construction of the project with 4.16standard elements and construction using 4.17the proposed energy-efficient elements. 4.18Grants may only be provided for additional 4.19construction or renovation costs that would 4.20not be recovered from energy savings within 4.21five years.4.22(e) The commissioner shall require each 4.23grant recipient to document and report 4.24details of the project funded to allow the 4.25commissioner to analyze costs, energy 4.26savings, and building operational savings.

4.274.28Sec. 4. EMPLOYMENT AND ECONOMIC DEVELOPMENT

4.29Subdivision 1.Total Appropriation$8,500,000

4.30To the commissioner of employment and 4.31economic development for the purposes 4.32specified in this section.

4.334.34Subd. 2.Waste to Energy Demonstration Project2,500,000

5.1For a grant to be used to design, construct, 5.2furnish, and equip a waste to energy 5.3demonstration facility that:5.4(1) uses plasma arc technology to generate 5.5energy;5.6(2) uses a variety of Minnesota feedstocks, 5.7including corn stover, corn cobs, wood chips, 5.8and scrap materials, as fuel; and5.9(3) is to be manufactured by a company 5.10incorporated in Minnesota and is to 5.11be installed by Hutchinson Utilities 5.12Commission on a site in Hutchinson to 5.13be selected by the commission. This 5.14appropriation is not available until the 5.15commissioner of finance determines that at 5.16least $1,500,000 has been committed to the 5.17project from other sources.

5.18Subd. 3.Steam Line Extension6,000,000

5.19For a grant to Olmsted County to design 5.20and construct approximately 1.25 miles of 5.21a new steam pipeline from the Olmsted 5.22Waste-to-Energy Facility to the Rochester 5.23Community and Technical College Campus, 5.24supplying steam heat and cooling from a 5.25renewable energy source. This appropriation 5.26is not available until the commissioner has 5.27determined that at least an equal amount has 5.28been committed from Olmsted County.5.29    Sec. 5. BOND SALE AUTHORIZATION.5.30    To provide the money appropriated in this act from the bond proceeds fund, the 5.31commissioner of finance shall sell and issue bonds of the state in an amount up to 5.32$18,500,000 in the manner, upon the terms, and with the effect prescribed by Minnesota 5.33Statutes, sections 16A.631 to 16A.675, and by the Minnesota Constitution, article XI, 5.34sections 4 to 7.6.1    Sec. 6. Minnesota Statutes 2006, section 16B.325, is amended to read:6.216B.325 SUSTAINABLE BUILDING GUIDELINES.6.3    Subdivision 1.Development of sustainable building guidelines. The Department 6.4of Administration and the Department of Commerce, with the assistance of other agencies, 6.5shall develop sustainable building design guidelines for all new state buildings by January 6.615, 2003, and for all major renovations of state buildings by February 1, 2009. The 6.7primary objectives of these guidelines are to ensure that all new state buildings, and 6.8major renovations of state buildings, initially exceed existing the state energy code, as 6.9established in Minnesota Rules, chapter 7676, by at least 30 percent. 6.10    Subd. 2.Lowest possible cost; energy conservation. The guidelines must focus 6.11on achieving the lowest possible lifetime cost for new buildings and major renovations, 6.12and allow for changes in the guidelines that encourage continual energy conservation 6.13improvements in new buildings. and major renovations. The guidelines must define 6.14"major renovations" for purposes of this section. The definition may not allow "major 6.15renovations" to encompass less than 10,000 square feet or to encompass less than the 6.16complete replacement of the mechanical, ventilation, or cooling system of the building or 6.17a section of the building. The design guidelines must establish sustainability guidelines 6.18that include air quality and lighting standards and that create and maintain a healthy 6.19environment and facilitate productivity improvements; specify ways to reduce material 6.20costs; and must consider the long-term operating costs of the building, including the use of 6.21renewable energy sources and distributed electric energy generation that uses a renewable 6.22source or natural gas or a fuel that is as clean or cleaner than natural gas. 6.23    Subd. 3.Development of guidelines; applicability. In developing the guidelines, 6.24the departments shall use an open process, including providing the opportunity for public 6.25comment. The guidelines established under this section are mandatory for all new 6.26buildings receiving funding from the bond proceeds fund after January 1, 2004, and for all 6.27major renovations receiving funding from the bond proceeds fund after February 1, 2009.6.28    Sec. 7. EFFECTIVE DATE.6.29    Except as otherwise provided, this act is effective the day following final enactment.