1.1CONFERENCE COMMITTEE REPORT ON S.F. No. 30961.2A bill for an act1.3relating to energy; creating programs for government energy conservation 1.4investments; removing rulemaking requirement for certain loan and grant 1.5programs; establishing microenergy loan program; authorizing issuance of 1.6state revenue bonds; modifying provision allowing guaranteed energy savings 1.7contracts; requiring a report; appropriating money;amending Minnesota Statutes 1.82006, section 216C.09; Minnesota Statutes 2007 Supplement, section 471.345, 1.9subdivision 13; proposing coding for new law in Minnesota Statutes, chapters 1.1016B; 216C; repealing Laws 2007, chapter 57, article 2, section 30.1.11May 12, 20081.12The Honorable James P. Metzen1.13President of the Senate1.14The Honorable Margaret Anderson Kelliher1.15Speaker of the House of Representatives1.16We, the undersigned conferees for S.F. No. 3096 report that we have agreed upon 1.17the items in dispute and recommend as follows:1.18That the House recede from its amendments and that S.F. No. 3096 be further 1.19amended as follows:1.20Delete everything after the enacting clause and insert:1.21    "Section 1. [16B.321] DEFINITIONS.1.22    Subdivision 1.Scope.For the purpose of this section and section 16B.322, the terms 1.23defined in this section have the meanings given them.1.24    Subd. 2.Energy improvement project."Energy improvement project" means:1.25    (1) a project to improve energy efficiency in a building or facility, including the 1.26design, acquisition, installation, construction, and commissioning of equipment or 1.27improvements to a building or facility owned or operated by a state agency, and training 1.28of building or facility staff necessary to properly operate and maintain the equipment or 1.29improvements; or2.1    (2) a project to design, acquire, install, construct, and commission equipment or 2.2products to utilize solar, wind, geothermal, biomass, or other alternative energy sources in 2.3heating, cooling, or providing electricity for a building or facility owned or operated by a 2.4state agency and training of building or facility staff necessary to properly operate and 2.5maintain the equipment or improvements.2.6    Subd. 3.Energy project study."Energy project study" means a technical and 2.7financial study of one or more energy improvement projects, including:2.8    (1) an analysis of historical energy consumption and cost data;2.9    (2) a description of existing equipment, structural elements, operating characteristics, 2.10and other conditions affecting energy use;2.11    (3) a description of the proposed energy improvement projects;2.12    (4) a detailed budget for the proposed project; and2.13    (5) calculations sufficient to demonstrate the expected energy and operational cost 2.14savings and reduction in fossil-fuel use.2.15    Subd. 4.Financing agreement."Financing agreement" means a tax-exempt 2.16lease-purchase agreement entered into by the commissioner of administration and a 2.17financial institution under a standard project financing agreement offered under section 2.1816B.322, subdivision 4.2.19    Subd. 5.State agency."State agency" means any office, board, commission, 2.20authority, department, or other agency of the executive branch of state government.2.21    Sec. 2. [16B.322] ENERGY IMPROVEMENT FINANCING PROGRAM FOR 2.22STATE GOVERNMENT.2.23    Subdivision 1.Commissioner's authority and duties; state agency authority.2.24    The commissioner shall administer the energy improvement financing program created 2.25by this section. A state agency may enter into contracts for the purposes of this section 2.26with the commissioner and participating financial institutions. All technical services and 2.27construction contracts shall be executed through the appropriate procurement procedure in 2.28chapters 16B, 16C, and other applicable law.2.29    Subd. 2.Program eligibility; voluntary program participation; targeted 2.30technical services.A state agency may elect to participate in the program. The 2.31commissioner may prioritize and target technical services offered under subdivision 3 to 2.32state agencies with state buildings or facilities that the commissioner determines offer the 2.33greatest potential to improve energy efficiency or reduce use of fossil-fuel energy.3.1    Subd. 3.Targeted technical services.The commissioner may require full or partial 3.2reimbursement of costs for technical services provided to a state agency, subject to terms 3.3and conditions specified and agreed to by contract prior to the delivery of technical 3.4services.3.5    Subd. 4.Financing agreement.The commissioner shall solicit proposals from 3.6private financial institutions and may enter into a financing agreement with one or more 3.7financial institutions. The term of the financing agreement shall not exceed 15 years 3.8from the date of final completion of the energy improvement project. The financing 3.9agreement is assignable to the state agency operating or managing the state building or 3.10facility improved by the energy improvement project. The proceeds from the financing 3.11agreement are appropriated to the commissioner and may be used for the purposes of 3.12this section and are available until spent.3.13    Subd. 5.Qualifying energy improvement projects.The commissioner may 3.14approve an energy improvement project and enter into a financing agreement if the 3.15commissioner determines that:3.16    (1) the project and financing agreement have been approved by the governing body 3.17or head of the state agency that operates or manages the state building or facility to be 3.18improved;3.19    (2) the project is technically and economically feasible;3.20    (3) the state agency that operates or manages the state building or facility has made 3.21adequate provision for the operation and maintenance of the project;3.22    (4) if an energy efficiency improvement, the project is calculated to result in a 3.23positive cash flow in each year the financing agreement is in effect; 3.24    (5) the project proposer has fully explored the use of conservation investment plan 3.25opportunities under section 216B.241 with the utilities providing gas and electric service 3.26to the energy improvement project;3.27    (6) if a renewable energy improvement, the project is calculated to reduce use of 3.28fossil-fuel energy; and3.29    (7) if a geothermal energy improvement, the project is calculated to produce savings 3.30in terms of nongeothermal energy and costs.3.31    For the purpose of clause (6), "renewable energy" is energy produced by an eligible 3.32energy technology as defined in section 216B.1691, subdivision 1, paragraph (a), clause 3.33(1).4.1    Subd. 6.Program costs.Program costs incurred by the commissioner or a state 4.2agency that are not reimbursed or paid directly under a financing agreement may be paid 4.3with money made available to the commissioner under section 216C.43, subdivision 10.4.4    Subd. 7.Conservation investment plan savings goals.A utility or association 4.5may count toward its energy savings goals under section 216B.241, subdivision 1c, the 4.6energy savings resulting from its investment in an energy improvement project.4.7    Subd. 8.Report.Beginning January 15, 2009, and each year thereafter, the 4.8commissioner of administration shall submit to the chairs and ranking minority members 4.9of the senate and house committees on energy finance a report containing, at a minimum, 4.10the following information regarding projects implemented under this section:4.11    (1) the total number of projects;4.12    (2) the amount of calculated and, if available, actual energy savings for each project;4.13    (3) the cost of each project; and4.14    (4) the total amount paid for technical services provided under subdivision 3 for 4.15each project.4.16    Sec. 3. [116J.437] COORDINATING ECONOMIC DEVELOPMENT AND 4.17ENVIRONMENTAL POLICY.4.18    Subdivision 1.Definitions.For the purpose of this section, "green economy" means 4.19products, processes, methods, technologies, or services intended to do one or more of 4.20the following:4.21    (1) increase the use of energy from renewable sources, including through achieving 4.22the renewable energy standard established in section 216B.1691;4.23    (2) achieve the statewide energy savings goal established in section 216B.2401, 4.24including energy savings achieved by the conservation investment program under section 4.25216B.241;4.26    (3) achieve the greenhouse gas emission reduction goals of section 216H.02, 4.27subdivision 1, including through reduction of greenhouse gas emissions, as defined in 4.28section 216H.01, subdivision 2, or mitigation of the greenhouse gas emissions through, 4.29but not limited to, carbon capture, storage, or sequestration;4.30    (4) monitor, protect, restore, and preserve the quality of surface waters, including 4.31actions to further the purposes of the Clean Water Legacy Act as provided in section 4.32114D.10, subdivision 1; or4.33    (5) expand the use of biofuels, including by expanding the feasibility or reducing the 4.34cost of producing biofuels or the types of equipment, machinery, and vehicles that can 5.1use biofuels, including activities to achieve the biofuels 25 by 2025 initiative in sections 5.241A.10, subdivision 2, and 41A.11.5.3For the purpose of clause (3), "green economy" includes strategies that reduce carbon 5.4emissions, such as utilizing existing buildings and other infrastructure, and utilizing mass 5.5transit or otherwise reducing commuting for employees.5.6    Subd. 2.Coordinating economic development and environmental policy.The 5.7commissioner and the Jobs Skills Partnership Board shall cooperate to promote job 5.8training that complements green economy business development.5.9EFFECTIVE DATE.This section is effective the day following final enactment.5.10    Sec. 4. Minnesota Statutes 2007 Supplement, section 116J.575, subdivision 1a, is 5.11amended to read:5.12    Subd. 1a. Priorities. (a) If applications for grants exceed the available 5.13appropriations, grants shall be made for sites that, in the commissioner's judgment, provide 5.14the highest return in public benefits for the public costs incurred. "Public benefits" include 5.15job creation, bioscience development, environmental benefits to the state and region, 5.16efficient use of public transportation, efficient use of existing infrastructure, provision of 5.17affordable housing, multiuse development that constitutes community rebuilding rather 5.18than single-use development, crime reduction, blight reduction, community stabilization, 5.19and property tax base maintenance or improvement. In making this judgment, the 5.20commissioner shall give priority to redevelopment projects with one or more of the 5.21following characteristics:5.22    (1) the need for redevelopment in conjunction with contamination remediation needs;5.23    (2) the redevelopment project meets current tax increment financing requirements 5.24for a redevelopment district and tax increments will contribute to the project;5.25    (3) the redevelopment potential within the municipality;5.26    (4) proximity to public transit if located in the metropolitan area; 5.27    (5) redevelopment costs related to expansion of a bioscience business in Minnesota; 5.28and5.29    (6) multijurisdictional projects that take into account the need for affordable housing, 5.30transportation, and environmental impact; or5.31    (7) the project advances or promotes the green economy as defined in section 5.32116J.437.5.33    (b) The factors in paragraph (a) are not listed in a rank order of priority; rather, the 5.34commissioner may weigh each factor, depending upon the facts and circumstances, as 5.35the commissioner considers appropriate. The commissioner may consider other factors 6.1that affect the net return of public benefits for completion of the redevelopment plan. The 6.2commissioner, notwithstanding the listing of priorities and the goal of maximizing the 6.3return of public benefits, shall make grants that distribute available money to sites both 6.4within and outside of the metropolitan area. Unless sufficient applications are not received 6.5for qualifying sites outside of the metropolitan area, at least 50 percent of the money 6.6provided as grants must be made for sites located outside of the metropolitan area.6.7    Sec. 5. Minnesota Statutes 2006, section 116J.8731, subdivision 4, is amended to read:6.8    Subd. 4. Eligible projects. Assistance must be evaluated on the existence of the 6.9following conditions:6.10    (1) creation of new jobs, retention of existing jobs, or improvements in the quality of 6.11existing jobs as measured by the wages, skills, or education associated with those jobs;6.12    (2) increase in the tax base;6.13    (3) the project can demonstrate that investment of public dollars induces private 6.14funds;6.15    (4) the project can demonstrate an excessive public infrastructure or improvement 6.16cost beyond the means of the affected community and private participants in the project;6.17    (5) the project provides higher wage levels to the community or will add value to 6.18current workforce skills;6.19    (6) whether assistance is necessary to retain existing business; and6.20    (7) whether assistance is necessary to attract out-of-state business; and6.21    (8) the project promotes or advances the green economy as defined in section 6.22116J.437.6.23    A grant or loan cannot be made based solely on a finding that the conditions in 6.24clause (6) or (7) exist. A finding must be made that a condition in clause (1), (2), (3), 6.25(4), or (5) also exists.6.26    Applications recommended for funding shall be submitted to the commissioner.6.27    Sec. 6. Minnesota Statutes 2006, section 216C.09, is amended to read:6.28216C.09 COMMISSIONER DUTIES.6.29    (a) The commissioner shall:6.30    (1) manage the department as the central repository within the state government for 6.31the collection of data on energy;6.32    (2) prepare and adopt an emergency allocation plan specifying actions to be taken 6.33in the event of an impending serious shortage of energy, or a threat to public health, 6.34safety, or welfare;7.1    (3) undertake a continuing assessment of trends in the consumption of all forms of 7.2energy and analyze the social, economic, and environmental consequences of these trends;7.3    (4) carry out energy conservation measures as specified by the legislature and 7.4recommend to the governor and the legislature additional energy policies and conservation 7.5measures as required to meet the objectives of sections 
         216C.05 to 
         216C.30;7.6    (5) collect and analyze data relating to present and future demands and resources 7.7for all sources of energy;7.8    (6) evaluate policies governing the establishment of rates and prices for energy 7.9as related to energy conservation, and other goals and policies of sections 
         216C.05 to 7.10216C.30
         , and make recommendations for changes in energy pricing policies and rate 7.11schedules;7.12    (7) study the impact and relationship of the state energy policies to international, 7.13national, and regional energy policies;7.14    (8) design and implement a state program for the conservation of energy; this 7.15program shall include but not be limited to, general commercial, industrial, and residential, 7.16and transportation areas; such program shall also provide for the evaluation of energy 7.17systems as they relate to lighting, heating, refrigeration, air conditioning, building design 7.18and operation, and appliance manufacturing and operation;7.19    (9) inform and educate the public about the sources and uses of energy and the 7.20ways in which persons can conserve energy;7.21    (10) dispense funds made available for the purpose of research studies and projects 7.22of professional and civic orientation, which are related to either energy conservation, 7.23resource recovery, or the development of alternative energy technologies which conserve 7.24nonrenewable energy resources while creating minimum environmental impact;7.25    (11) charge other governmental departments and agencies involved in energy-related 7.26activities with specific information gathering goals and require that those goals be met;7.27    (12) design a comprehensive program for the development of indigenous energy 7.28resources. The program shall include, but not be limited to, providing technical, 7.29informational, educational, and financial services and materials to persons, businesses, 7.30municipalities, and organizations involved in the development of solar, wind, hydropower, 7.31peat, fiber fuels, biomass, and other alternative energy resources. The program shall be 7.32evaluated by the alternative energy technical activity; and7.33    (13) dispense loans, grants, or other financial aid from money received from 7.34litigation or settlement of alleged violations of federal petroleum-pricing regulations 7.35made available to the department for that purpose. The commissioner shall adopt rules 7.36under chapter 14 for this purpose.8.1    (b) Further, the commissioner may participate fully in hearings before the 8.2Public Utilities Commission on matters pertaining to rate design, cost allocation, 8.3efficient resource utilization, utility conservation investments, small power production, 8.4cogeneration, and other rate issues. The commissioner shall support the policies stated in 8.5section 
         216C.05 and shall prepare and defend testimony proposed to encourage energy 8.6conservation improvements as defined in section 
         216B.241.8.7    Sec. 7. [216C.145] MICROENERGY LOAN PROGRAM.8.8    Subdivision 1.Definitions.(a) The definitions in this subdivision apply to this 8.9section.8.10    (b) "Small-scale renewable energy" projects include solar thermal water heating, 8.11solar electric or photovoltaic equipment, small wind energy conversion systems of less 8.12than 250 kW, anaerobic digester gas systems, microhydro systems up to 100 kW, and 8.13heating and cooling applications using geothermal energy. 8.14    (c) "Unit of local government" means any home rule charter or statutory city, county, 8.15commission, district, authority, or other political subdivision or instrumentality of this 8.16state, including a sanitary district, park district, the Metropolitan Council, a port authority, 8.17an economic development authority, or a housing and redevelopment authority.8.18    Subd. 2.Program established.The commissioner of commerce shall develop, 8.19implement, and administer a microenergy loan program under this section.8.20    Subd. 3.Loan purposes.(a) The commissioner may issue low-interest, long-term 8.21loans to units of local government to finance community-owned or publicly owned small 8.22scale renewable energy systems or to provide loans or other aids to small businesses to 8.23install small-scale renewable energy systems.8.24    (b) The commissioner may participate in loans made by the Housing Finance 8.25Agency to residential property owners, private developers, nonprofit organizations, or 8.26units of local government under sections 462A.05, subdivisions 14 and 18; and 462A.33 8.27for the construction, purchase, or rehabilitation of residential housing, to facilitate 8.28the installation of small-scale renewable energy systems in residential housing and 8.29cost-effective energy conservation improvements identified in an energy efficiency audit. 8.30The commissioner shall assist the Housing Finance Agency in assessing the technical 8.31qualifications of loan applicants.8.32    Subd. 4.Technical standards.The commissioner shall determine technical 8.33standards for small-scale renewable energy systems to qualify for loans under this section.8.34    Subd. 5.Loan proposals.(a) At least once a year, the commissioner shall publish in 8.35the State Register a request for proposals from units of local government for a loan under 9.1this section. Within 45 days after the deadline for receipt of proposals, the commissioner 9.2shall select proposals based on the following criteria:9.3    (1) the reliability and cost-effectiveness of the renewable technology to be installed 9.4under the proposal;9.5    (2) the extent to which the proposal effectively integrates with the conservation and 9.6energy efficiency programs of the energy utilities serving the proposer;9.7    (3) the total life cycle energy use and greenhouse gas emissions reductions per 9.8dollar of installed cost;9.9    (4) the diversity of the renewable energy technology installed under the proposal;9.10    (5) the geographic distribution of projects throughout the state;9.11    (6) the percentage of total project cost requested;9.12    (7) the proposed security for payback of the loan; and9.13    (8) other criteria the commissioner may determine to be necessary and appropriate.9.14    Subd. 6.Loan terms.A loan under this section must be issued at the lowest interest 9.15rate required to recover principal and interest plus the costs of issuing the loan, and must 9.16be for a minimum of 15 years, unless the commissioner determines that a shorter loan 9.17period of no less than ten years is necessary and feasible.9.18    Subd. 7.Account.A microenergy loan account is established in the state treasury. 9.19Money in the account consists of the proceeds of revenue bonds issued under section 9.20216C.146, interest and other earnings on money in the account, money received in 9.21repayment of loans from the account, legislative appropriations, and money from any 9.22other source credited to the account. 9.23    Subd. 8.Appropriation.Money in the account is appropriated to the commissioner 9.24of commerce to make microenergy loans under this section and to the commissioner of 9.25finance to pay debt service and other costs under section 216C.146. Payment of debt 9.26service costs and funding reserves take priority over use of money in the account for 9.27any other purpose.9.28EFFECTIVE DATE.This section is effective the day following final enactment.9.29    Sec. 8. [216C.146] MICROENERGY LOAN REVENUE BONDS.9.30    Subdivision 1.Bonding authority; definition.(a) The commissioner of finance, if 9.31requested by the commissioner of commerce, shall sell and issue state revenue bonds for 9.32the following purposes:9.33    (1) to make microenergy loans under section 216C.145;9.34    (2) to pay the costs of issuance, debt service, and bond insurance or other credit 9.35enhancements, and to fund reserves; and10.1    (3) to refund bonds issued under this section.10.2    (b) The aggregate principal amount of bonds for the purposes of paragraph (a), 10.3clause (1), that may be outstanding at any time may not exceed $20,000,000; the principal 10.4amount of bonds that may be issued for the purposes of paragraph (a), clauses (2) and 10.5(3), is not limited.10.6    (c) For the purpose of this section, "commissioner" means the commissioner of 10.7finance.10.8    Subd. 2.Procedure.The commissioner may sell and issue the bonds on the terms 10.9and conditions the commissioner determines to be in the best interests of the state. The 10.10bonds may be sold at public or private sale. The commissioner may enter into any 10.11agreements or pledges the commissioner determines necessary or useful to sell the bonds 10.12that are not inconsistent with section 216C.145. Sections 16A.672 to 16A.675 apply to 10.13the bonds. The proceeds of the bonds issued under this section must be credited to the 10.14microenergy loan account created under section 216C.145.10.15    Subd. 3.Revenue sources.The debt service on the bonds is payable only from the 10.16following sources:10.17    (1) revenue credited to the microenergy loan account from the sources identified in 10.18section 216C.145 or from any other source; and10.19    (2) other revenues pledged to the payment of the bonds.10.20    Subd. 4.Refunding bonds.The commissioner may issue bonds to refund 10.21outstanding bonds issued under subdivision 1, including the payment of any redemption 10.22premiums on the bonds and any interest accrued or to accrue to the first redemption date 10.23after delivery of the refunding bonds. The proceeds of the refunding bonds may, at the 10.24discretion of the commissioner, be applied to the purchases or payment at maturity of the 10.25bonds to be refunded, or the redemption of the outstanding bonds on the first redemption 10.26date after delivery of the refunding bonds and may, until so used, be placed in escrow to 10.27be applied to the purchase, retirement, or redemption. Refunding bonds issued under this 10.28subdivision must be issued and secured in the manner provided by the commissioner.10.29    Subd. 5.Not a general or moral obligation.Bonds issued under this section are 10.30not public debt, and the full faith, credit, and taxing powers of the state are not pledged 10.31for their payment. The bonds may not be paid, directly in whole or in part from a tax of 10.32statewide application on any class of property, income, transaction, or privilege. Payment 10.33of the bonds is limited to the revenues explicitly authorized to be pledged under this 10.34section. The state neither makes nor has a moral obligation to pay the bonds if the pledged 10.35revenues and other legal security for them is insufficient.11.1    Subd. 6.Trustee.The commissioner may contract with and appoint a trustee for 11.2bond holders. The trustee has the powers and authority vested in it by the commissioner 11.3under the bond and trust indentures.11.4    Subd. 7.Pledges.A pledge made by the commissioner is valid and binding from 11.5the time the pledge is made. The money or property pledged and later received by the 11.6commissioner is immediately subject to the lien of the pledge without any physical 11.7delivery of the property or money or further act, and the lien of the pledge is valid and 11.8binding as against all parties having claims of any kind in tort, contract, or otherwise 11.9against the commissioner, whether or not those parties have notice of the lien or pledge. 11.10Neither the order nor any other instrument by which a pledge is created need be recorded.11.11    Subd. 8.Bonds; purchase and cancellation.The commissioner, subject to 11.12agreements with bondholders that may then exist, may, out of any money available for the 11.13purpose, purchase bonds of the commissioner at a price not exceeding (1) if the bonds are 11.14then redeemable, the redemption price then applicable plus accrued interest to the next 11.15interest payment date thereon, or (2) if the bonds are not redeemable, the redemption price 11.16applicable on the first date after the purchase upon which the bonds become subject to 11.17redemption plus accrued interest to that date.11.18    Subd. 9.State pledge against impairment of contracts.The state pledges and 11.19agrees with the holders of any bonds that the state will not limit or alter the rights vested in 11.20the commissioner to fulfill the terms of any agreements made with the bondholders, or 11.21in any way impair the rights and remedies of the holders until the bonds, together with 11.22interest on them, with interest on any unpaid installments of interest, and all costs and 11.23expenses in connection with any action or proceeding by or on behalf of the bondholders, 11.24are fully met and discharged. The commissioner may include this pledge and agreement 11.25of the state in any agreement with the holders of bonds issued under this section.11.26EFFECTIVE DATE.This section is effective the day following final enactment.11.27    Sec. 9. [216C.42] DEFINITIONS.11.28    Subdivision 1.Scope.For the purpose of this section and section 216C.43, the terms 11.29defined in this section have the meanings given them.11.30    Subd. 2.Energy improvement project."Energy improvement project" means 11.31a project to improve energy efficiency in a building or facility, including the design, 11.32acquisition, installation, construction, and commissioning of equipment or improvements 11.33to a building or facility, and training of building or facility staff necessary to properly 11.34operate and maintain the equipment or improvements.12.1    Subd. 3.Energy project study."Energy project study" means a technical and 12.2financial study of one or more energy improvement projects, including:12.3    (1) an analysis of historical energy consumption and cost data;12.4    (2) a description of existing equipment, structural elements, operating characteristics, 12.5and other conditions affecting energy use;12.6    (3) a description of the proposed energy improvement projects;12.7    (4) a detailed budget for the proposed project; 12.8    (5) calculations sufficient to demonstrate the expected energy savings; and12.9    (6) if a geothermal energy improvement, whether the project is calculated to produce 12.10savings in terms of nongeothermal energy and costs.12.11    Subd. 4.Financing agreement."Financing agreement" means a tax-exempt 12.12lease-purchase agreement entered into by a local government and a financial institution 12.13under a standard project financing agreement offered under section 216C.43, subdivision 6.12.14    Subd. 5.Local government."Local government" means a Minnesota county, 12.15statutory or home rule charter city, town, school district, park district, or any combination 12.16of those units operating under an agreement to exercise powers jointly.12.17    Subd. 6.Program."Program" means the energy improvement financing program 12.18for local governments authorized by section 216C.43.12.19    Subd. 7.Supplemental cash flow agreement."Supplemental cash flow agreement" 12.20means an agreement by the commissioner to lend funds to a local government up to an 12.21amount necessary to ensure that the cumulative payments made by the local government 12.22under a financing agreement minus the amount loaned by the commissioner do not exceed 12.23the actual energy and operating cost savings attributable to the energy improvement 12.24project for the term of the supplemental cash flow agreement.12.25    Sec. 10. [216C.43] ENERGY IMPROVEMENT FINANCING PROGRAM FOR 12.26LOCAL GOVERNMENT.12.27    Subdivision 1.Commissioner's authority and duties; local government 12.28authority.The commissioner shall administer this section. A local government may 12.29enter into contracts for the purposes of this section with the commissioner, the primary 12.30contractor, other contracted technical service providers, and participating financial 12.31institutions.12.32    Subd. 2.Program eligibility; voluntary program participation; targeted 12.33technical services.A local government may elect to participate in the program. The 12.34commissioner may prioritize and target technical services offered under subdivision 4 13.1to local governments that the commissioner determines offer the greatest potential for 13.2cost-effective energy improvement projects.13.3    Subd. 3.Primary contractor for technical, financial, and program management 13.4services.The commissioner may enter into a contract for the delivery of technical 13.5services, financial management, marketing, and administrative services necessary for 13.6implementation of the program.13.7    Subd. 4.Targeted technical services.The commissioner shall offer technical 13.8services to targeted local governments to conduct energy project studies. The 13.9commissioner may contract with one or more qualified technical service providers to 13.10conduct energy project studies for targeted local governments. The commissioner may 13.11require full or partial reimbursement of costs for technical services provided to a local 13.12government, subject to terms and conditions specified and agreed to by contract before 13.13the delivery of technical services. A local government may independently procure 13.14technical services to conduct an energy project study, but the energy project study must be 13.15reviewed and approved by the commissioner to qualify an energy improvement project 13.16for a financing agreement under subdivision 6 or a supplemental cash flow agreement 13.17under subdivision 7.13.18    Subd. 5.Participation of technical service providers statewide.Program 13.19activities must be implemented to encourage statewide participation of engineers, 13.20architects, energy auditors, contractors, and other technical service providers. The 13.21commissioner may provide training on energy project study requirements and procedures 13.22to technical service providers.13.23    Subd. 6.Standard project financing agreement.The commissioner shall solicit 13.24proposals from private financial institutions and may enter into a standard project 13.25financing agreement with one or more financial institutions. A standard project financing 13.26agreement must specify terms and conditions uniformly available to all participating 13.27public entities for financing to implement energy improvement projects under this section. 13.28A local government may choose to finance an energy improvement project by means other 13.29than a standard project financing agreement, but a supplemental cash flow agreement 13.30under subdivision 7 must not be offered unless the commissioner determines that the other 13.31financing means creates no greater potential obligation under a supplemental cash flow 13.32agreement than would be created through a standard project financing agreement.13.33    Subd. 7.Supplemental cash flow agreement.(a) The commissioner may offer 13.34a supplemental cash flow agreement to a participating local government for qualifying 13.35energy improvement projects. The term of a supplemental cash flow agreement may not 14.1exceed 15 years. Terms and conditions of a supplemental cash flow agreement must be 14.2agreed to by contract prior to a local government entering into a financing agreement.14.3    (b) A supplemental cash flow agreement must include, but is not limited to:14.4    (1) specification of methods and procedures to measure and verify energy cost 14.5savings;14.6    (2) obligations of the local government to operate and maintain the energy 14.7improvements;14.8    (3) procedures to modify the supplemental cash flow agreement if the local 14.9government modifies operating characteristics of its building or facility in a manner that 14.10adversely affects energy cost savings;14.11    (4) interest charged on the loan, which may not exceed the interest on the related 14.12financial agreement; and14.13    (5) procedures for resolution of disputes.14.14    (c) The commissioner must limit aggregate exposure to liability for payments under 14.15existing supplemental cash flow agreements to an amount no more than the appropriation 14.16available to make those payments.14.17    Subd. 8.Qualifying energy improvement projects.A local government may 14.18submit to the commissioner, on a form prescribed by the commissioner, an application for 14.19a financing agreement authorization and supplemental cash flow agreement for energy 14.20improvement projects. The commissioner shall approve an energy improvement project 14.21for a supplemental cash flow agreement and authorize eligibility for a financing agreement 14.22if the commissioner determines that:14.23    (1) the application has been approved by the governing body or agency head of the 14.24local government;14.25    (2) the project is technically and economically feasible;14.26    (3) the local government has made adequate provision for the operation and 14.27maintenance of the project;14.28    (4) the project proposer has fully explored the use of conservation investment plan 14.29opportunities under section 216B.241 with the utilities providing gas and electric service 14.30to the project;14.31    (5) the project is calculated to result in a positive cash flow in each year the financing 14.32agreement is in effect; and14.33    (6) adequate money will be available to the commissioner to fulfill the supplemental 14.34cash flow agreement.14.35Energy improvement projects under this section are not subject to section 123B.71.15.1    Subd. 9.Program costs.Program costs incurred by the commissioner or a public 15.2entity that are not direct costs to implement energy improvement projects may be paid 15.3with program money appropriated under subdivision 10.15.4    Subd. 10.Funding; appropriation; receipts.Petroleum violation escrow funds 15.5appropriated to the commissioner by Laws 1988, chapter 686, article 1, section 38, for 15.6state energy loan programs for schools, hospitals, and public buildings, and reappropriated 15.7by Laws 2007, chapter 57, article 2, section 30, are appropriated to the commissioner 15.8for the purposes of this section and are available until spent. The commissioner may 15.9transfer up to $1,000,000 of this appropriation to the commissioner of administration for 15.10the purposes of section 16B.322.15.11    Subd. 11.CIP energy savings goals.A utility or association may count toward its 15.12energy savings goals under section 216B.241, subdivision 1c, the energy savings resulting 15.13from its investment in an energy improvement project.15.14    Subd. 12.Report.Beginning January 15, 2009, and each year thereafter, the 15.15commissioner shall submit to the chairs and ranking minority members of the senate and 15.16house committees on energy finance a report containing, at a minimum, the following 15.17information regarding projects implemented under this section:15.18    (1) the total number of projects;15.19    (2) the amount of calculated and, if available, actual energy savings for each project;15.20    (3) the cost of each project; and15.21    (4) the total amount paid for technical services provided under subdivision 4 for 15.22each project.15.23    Sec. 11. Minnesota Statutes 2007 Supplement, section 471.345, subdivision 13, 15.24is amended to read:15.25    Subd. 13. Energy efficiency projects. The following definitions apply to this 15.26subdivision.15.27    (a) "Energy conservation measure" means a training program or facility alteration 15.28designed to reduce energy consumption or operating costs and includes:15.29    (1) insulation of the building structure and systems within the building;15.30    (2) storm windows and doors, caulking or weatherstripping, multiglazed windows 15.31and doors, heat absorbing or heat reflective glazed and coated window and door 15.32systems, additional glazing, reductions in glass area, and other window and door system 15.33modifications that reduce energy consumption;15.34    (3) automatic energy control systems;15.35    (4) heating, ventilating, or air conditioning system modifications or replacements;16.1    (5) replacement or modifications of lighting fixtures to increase the energy efficiency 16.2of the lighting system without increasing the overall illumination of a facility, unless an 16.3increase in illumination is necessary to conform to the applicable state or local building 16.4code for the lighting system after the proposed modifications are made;16.5    (6) energy recovery systems;16.6    (7) cogeneration systems that produce steam or forms of energy such as heat, as well 16.7as electricity, for use primarily within a building or complex of buildings;16.8    (8) energy conservation measures that provide long-term operating cost reductions.16.9    (b) "Guaranteed energy savings contract" means a contract for the evaluation 16.10and recommendations of energy conservation measures, and for one or more energy 16.11conservation measures. The contract must provide that all payments, except obligations 16.12on termination of the contract before its expiration, are to be made over time, but not to 16.13exceed 1520 years from the date of final installation, and the savings are guaranteed to 16.14the extent necessary to make payments for the systems.16.15    (c) "Qualified provider" means a person or business experienced in the design, 16.16implementation, and installation of energy conservation measures. A qualified provider 16.17to whom the contract is awarded shall give a sufficient bond to the municipality for its 16.18faithful performance.16.19    Notwithstanding any law to the contrary, a municipality may enter into a guaranteed 16.20energy savings contract with a qualified provider to significantly reduce energy or 16.21operating costs.16.22    Before entering into a contract under this subdivision, the municipality shall provide 16.23published notice of the meeting in which it proposes to award the contract, the names of 16.24the parties to the proposed contract, and the contract's purpose.16.25    Before installation of equipment, modification, or remodeling, the qualified provider 16.26shall first issue a report, summarizing estimates of all costs of installations, modifications, 16.27or remodeling, including costs of design, engineering, installation, maintenance, repairs, 16.28or debt service, and estimates of the amounts by which energy or operating costs will be 16.29reduced.16.30    A guaranteed energy savings contract that includes a written guarantee that savings 16.31will meet or exceed the cost of energy conservation measures is not subject to competitive 16.32bidding requirements of section 
         471.345 or other law or city charter. The contract is 16.33not subject to section 
         123B.52. 16.34    A municipality may enter into a guaranteed energy savings contract with a qualified 16.35provider if, after review of the report, it finds that the amount it would spend on the energy 16.36conservation measures recommended in the report is not likely to exceed the amount to be 17.1saved in energy and operation costs over 1520 years from the date of final installation if 17.2the recommendations in the report were followed, and the qualified provider provides a 17.3written guarantee that the energy or operating cost savings will meet or exceed the costs 17.4of the system. The guaranteed energy savings contract may provide for payments over a 17.5period of time, not to exceed 1520 years.17.6    A municipality may enter into an installment payment contract for the purchase and 17.7installation of energy conservation measures. The contract must provide for payments of 17.8not less than 1/151/20 of the price to be paid within two years from the date of the first 17.9operation, and the remaining costs to be paid monthly, not to exceed a 15-year20-year 17.10term from the date of the first operation final acceptance.17.11    A municipality entering into a guaranteed energy savings contract shall provide a 17.12copy of the contract and the report from the qualified provider to the commissioner of 17.13commerce within 30 days of the effective date of the contract.17.14    Guaranteed energy savings contracts may extend beyond the fiscal year in which 17.15they become effective. The municipality shall include in its annual appropriations measure 17.16for each later fiscal year any amounts payable under guaranteed energy savings contracts 17.17during the year. Failure of a municipality to make such an appropriation does not affect 17.18the validity of the guaranteed energy savings contract or the municipality's obligations 17.19under the contracts.17.20    Sec. 12. REPORT TO COMMISSIONER OF EDUCATION.17.21    The commissioner of commerce must report to the commissioner of education by 17.22January 15, 2009, and January 15, 2010, the school districts that have applied for financing 17.23under Minnesota Statutes, section 216C.43. The report must indicate the type of project 17.24for which each district requested approval, the amount of the loan requested, and whether 17.25the project was approved. If the district's project was not approved, the commissioner 17.26must report the reason for the lack of approval. This section expires January 16, 2010.17.27    Sec. 13. REPORT; GREEN STAR AWARD EXPANSION.17.28    The Pollution Control Agency and the Office of Energy Security in the Department 17.29of Commerce shall, in collaboration with the clean energy resource teams (CERT's), 17.30submit a report by February 2, 2009, to the chairs and ranking minority members of the 17.31senate and house of representatives committees with primary jurisdiction over energy 17.32policy that makes recommendations regarding how to expand eligibility to receive the 17.33Green Star award, described in Minnesota Statutes, section 114C.25, to include cities and 17.34communities that take action to help meet the state's greenhouse gas emissions reduction 17.35goals established in Minnesota Statutes, section 216H.02, subdivision 1. The report must 17.36address, at a minimum, the following issues:18.1    (1) the criteria for actions cities and communities must take in order to receive a 18.2Green Star award;18.3    (2) what entity or entities would issue the award;18.4    (3) the length of time during which the award may be displayed;18.5    (4) existing state financial and technical assistance available to communities and 18.6cities to assist them to reduce greenhouse gas emissions;18.7    (5) sources of additional funding needed to implement the program; and18.8    (6) any other issues that need to be resolved in order to implement the program.18.9    Sec. 14. GREEN ECONOMY REPORT.18.10    (a) Each state agency, other than the Iron Range Resources and Rehabilitation 18.11Board or the Office of the Commissioner of Iron Range Resources and Rehabilitation, 18.12that administers a loan or grant program must assess those programs to determine 18.13their potential to advance or promote the growth of the green economy, as defined in 18.14Minnesota Statutes, section 116J.437. An agency must report on its determination to the 18.15commissioner of commerce by September 15, 2008.18.16    (b) If a program is determined to have significant potential, the agency must develop 18.17a plan to integrate program elements appropriate to that program to advance or promote 18.18the growth of the green economy in this state. An agency must report on its plan to the 18.19commissioner of commerce by November 15, 2008.18.20    (c) The commissioner of commerce, in consultation with the commissioner of 18.21employment and economic development, must develop guidelines to be followed by state 18.22agencies in complying with this section.18.23    (d) By January 15, 2009, the commissioner of commerce, in consultation with the 18.24commissioner of employment and economic development, must submit a report containing 18.25the plans developed under paragraph (b), and any recommended implementing legislation, 18.26to the chairs and ranking minority members of the senate and house committees with 18.27primary jurisdiction over energy, environmental and economic development policy, and 18.28finance.18.29    (e) The commissioner of commerce may contract for services to fulfill the 18.30commissioner's duties under this section.18.31EFFECTIVE DATE.This section is effective the day following final enactment.18.32    Sec. 15. GREEN JOBS TASK FORCE.18.33    Subdivision 1.Task force.(a) A Green Jobs Task Force is created to advise and 18.34assist the governor and legislature regarding activities to advance the state's economy, and 19.1to develop a statewide action plan as provided under subdivision 2. The task force shall 19.2be appointed no later than June 30, 2008, and consist of:19.3    (1) three members of the house of representatives, including one member of the 19.4minority party appointed by the speaker;19.5    (2) three members of the senate appointed by the Subcommittee on Committees of 19.6the Committee on Rules and Administration, including one member of the minority;19.7    (3) seven representatives from state agencies and institutions appointed by the 19.8governor, including one member from the Office of Energy Security, one member from 19.9the Department of Employment and Economic Development, one member from the Job 19.10Skills Partnership Board, one member from the University of Minnesota, one member 19.11from Minnesota State Colleges and Universities, one member from the Pollution Control 19.12Agency, and one member from the Department of Natural Resources;19.13    (4) three public members appointed by the governor, including one member 19.14representing the manufacturing industry, one member representing a statewide 19.15organization dedicated to commerce, and one member representing the Agricultural 19.16Utilization Research Institute; 19.17    (5) four public members appointed by the speaker of the house of representatives, 19.18including one member representing labor, one member representing a statewide 19.19environmental organization, one member representing financial institutions or venture 19.20capital, and one member from a local economic development authority from greater 19.21Minnesota; and19.22    (6) four public members appointed by the senate Subcommittee on Committees 19.23of the Committee on Rules and Administration, including one member from a local 19.24economic development authority from the metropolitan area, one member from a 19.25statewide organization dedicated to furthering the green economy, one member from a 19.26firm currently engaged in green manufacturing, and one local workforce development 19.27representative from an area that has experienced significant manufacturing job loss.19.28    (b) The commissioner of commerce, in cooperation with the commissioner of 19.29employment and economic development, shall provide staff support to the task force. The 19.30task force may accept outside resources to help support its efforts.19.31    (c) Each of the legislative appointing authorities must name a cochair of the task 19.32force from the legislative members appointed by that authority.19.33    (d) Public members of the task force must be compensated as provided in Minnesota 19.34Statutes, section 15.059, subdivision 3.19.35    Subd. 2.Duties.(a) By January 15, 2009, the task force shall develop and present to 19.36the legislature under Minnesota Statutes, section 3.195, and to the governor a statewide 20.1action plan to optimize the growth of the green economy. For the purpose of this section, 20.2"green economy" has the meaning given it by Minnesota Statutes, section 116J.437.20.3    (b) The plan must include necessary draft legislation and budget requests and may 20.4include administrative actions of governmental entities, collaborative actions, and actions 20.5of individuals and individual organizations. The plan must be developed following the 20.6analysis described in this paragraph and must be based on the analysis. The analysis 20.7must include:20.8    (1) a market analysis of the business opportunities and needs created by the laws 20.9enumerated in paragraph (a), including local, state, national, and international markets;20.10    (2) an analysis of the labor force needs related to the market analysis opportunities 20.11identified in clause (1), including educational, training, and retraining needs; and20.12    (3) an inventory of the current labor and business assets available to respond to the 20.13opportunities identified in clause (1) and the labor needs identified in clause (2).20.14The task force shall contract for the analysis required by this paragraph.20.15    Subd. 3.Expiration.The task force expires June 30, 2009.20.16EFFECTIVE DATE.This section is effective the day following final enactment.20.17    Sec. 16.  REPEALER.20.18Laws 2007, chapter 57, article 2, section 30, is repealed.20.19EFFECTIVE DATE.This section is effective the day following final enactment."20.20Delete the title and insert:20.21"A bill for an act20.22relating to energy; creating programs for government energy conservation 20.23investments; removing rulemaking requirement for certain loan and grant 20.24programs; establishing microenergy loan program; authorizing issuance of 20.25state revenue bonds; modifying provision allowing guaranteed energy savings 20.26contracts; modifying or adding provisions relating to green economy activities; 20.27creating Green Jobs Task Force; requiring reports; appropriating money;20.28amending Minnesota Statutes 2006, sections 116J.8731, subdivision 4; 216C.09; 20.29Minnesota Statutes 2007 Supplement, sections 116J.575, subdivision 1a; 20.30471.345, subdivision 13; proposing coding for new law in Minnesota Statutes, 20.31chapters 16B; 116J; 216C; repealing Laws 2007, chapter 57, article 2, section 30."
         		We request the adoption of this report and repassage of the bill.Senate Conferees: (Signed) D. Scott Dibble, Julie A. Rosen, Ellen R. AndersonHouse Conferees: (Signed) Jeremy Kalin, Andy Welti, Doug Magnus

21.1We request the adoption of this report and repassage of the bill.21.2Senate Conferees:(Signed)21.3
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                     						21.4D. Scott DibbleJulie A. Rosen21.5
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                     						21.6Ellen R. Anderson21.7House Conferees:(Signed)21.8
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                     						21.9Jeremy KalinAndy Welti21.10
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                     						21.11Doug Magnus