SF 3096

1st Unofficial Engrossment - 85th Legislature (2007 - 2008)

Posted on 12/15/2009 12:00 a.m.

1.1A bill for an act 1.2relating to energy; creating program for government energy improvement 1.3investments; requiring a report; appropriating money;amending Minnesota 1.4Statutes 2006, section 216C.09; Minnesota Statutes 2007 Supplement, section 1.5216B.241, by adding a subdivision; proposing coding for new law in Minnesota 1.6Statutes, chapters 16B; 216C; repealing Laws 2007, chapter 57, article 2, section 1.730. 1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.9    Section 1. new text begin [16B.321] DEFINITIONS. new text end 1.10     new text begin Subdivision 1. new text end new text begin Scope. new text end new text begin For the purpose of this section and section 16B.322, the terms new text end 1.11 new text begin defined in this section have the meanings given them. new text end 1.12     new text begin Subd. 2. new text end new text begin Energy improvement project. new text end new text begin "Energy improvement project" means: new text end 1.13     new text begin (1) a project to improve energy efficiency in a building or facility, including the new text end 1.14 new text begin design, acquisition, installation, construction, and commissioning of equipment or new text end 1.15 new text begin improvements to a building or facility owned or operated by a state agency, and training new text end 1.16 new text begin of building or facility staff necessary to properly operate and maintain the equipment or new text end 1.17 new text begin improvements; or new text end 1.18     new text begin (2) a project to design, acquire, install, construct, and commission equipment or new text end 1.19 new text begin products to utilize solar, wind, geothermal, biomass, or other alternative energy sources in new text end 1.20 new text begin heating, cooling, or providing electricity for a building or facility owned or operated by a new text end 1.21 new text begin state agency and training of building or facility staff necessary to properly operate and new text end 1.22 new text begin maintain the equipment or improvements. new text end 1.23     new text begin Subd. 3. new text end new text begin Energy project study. new text end new text begin "Energy project study" means a technical and new text end 1.24 new text begin financial study of one or more energy improvement projects, including: new text end 1.25     new text begin (1) an analysis of historical energy consumption and cost data; new text end 2.1     new text begin (2) a description of existing equipment, structural elements, operating characteristics, new text end 2.2 new text begin and other conditions affecting energy use; new text end 2.3     new text begin (3) a description of the proposed energy improvement projects; new text end 2.4     new text begin (4) a detailed budget for the proposed project; and new text end 2.5     new text begin (5) calculations sufficient to demonstrate the expected energy and operational cost new text end 2.6 new text begin savings and reduction in fossil-fuel use. new text end 2.7     new text begin Subd. 4. new text end new text begin Financing agreement. new text end new text begin "Financing agreement" means a tax-exempt new text end 2.8 new text begin lease-purchase agreement entered into by the commissioner of administration and a new text end 2.9 new text begin financial institution under a standard project financing agreement offered under section new text end 2.10 new text begin 16B.322, subdivision 4. new text end 2.11     new text begin Subd. 5. new text end new text begin State agency. new text end new text begin "State agency" means any state officer, employee, board, new text end 2.12 new text begin commission, authority, department, or other agency of the executive branch of state new text end 2.13 new text begin government. new text end 2.14    Sec. 2. new text begin [16B.322] ENERGY IMPROVEMENT FINANCING PROGRAM FOR new text end 2.15 new text begin STATE GOVERNMENT. new text end 2.16     new text begin Subdivision 1. new text end new text begin Commissioner's authority and duties; state agency authority. new text end new text begin The new text end 2.17 new text begin commissioner shall administer this section. A state agency may enter into contracts for the new text end 2.18 new text begin purposes of this section with the commissioner and participating financial institutions. All new text end 2.19 new text begin technical services and construction contracts must be executed through the appropriate new text end 2.20 new text begin procurement procedure in chapters 16B, 16C, and other applicable law. new text end 2.21     new text begin Subd. 2. new text end new text begin Program eligibility; voluntary program participation; targeted new text end 2.22 new text begin technical services. new text end new text begin A state agency may elect to participate in the program. The new text end 2.23 new text begin commissioner may prioritize and target technical services offered under subdivision 3 to new text end 2.24 new text begin state agencies with state buildings or facilities that the commissioner determines offer the new text end 2.25 new text begin greatest potential to improve energy efficiency or reduce use of fossil-fuel energy. new text end 2.26     new text begin Subd. 3. new text end new text begin Target technical services. new text end new text begin The commissioner may require full or new text end 2.27 new text begin partial reimbursement of costs for technical services provided to a state agency, subject new text end 2.28 new text begin to terms and conditions specified and agreed to by contract prior to the delivery of new text end 2.29 new text begin technical services. The commissioner of commerce may transfer up to $1,000,000 of the new text end 2.30 new text begin appropriation in Laws 1988, chapter 686, article 1, section 38, to the commissioner of new text end 2.31 new text begin administration for the purposes of this section. new text end 2.32     new text begin Subd. 4. new text end new text begin Financing agreement. new text end new text begin The commissioner shall solicit proposals from new text end 2.33 new text begin private financial institutions and may enter into a financing agreement with one or more new text end 2.34 new text begin financial institutions. The term of the financing agreement must not exceed 15 years new text end 2.35 new text begin from the date of final completion of the energy improvement project. The financing new text end 3.1 new text begin agreement is assignable to the state agency operating or managing the state building or new text end 3.2 new text begin facility improved by the energy improvement project. The proceeds from the financing new text end 3.3 new text begin agreement are appropriated to the commissioner and may be used for the purposes of new text end 3.4 new text begin this section and are available until spent. new text end 3.5     new text begin Subd. 5. new text end new text begin Qualifying energy improvement projects. new text end new text begin The commissioner may new text end 3.6 new text begin approve an energy improvement project and enter into a financing agreement if the new text end 3.7 new text begin commissioner determines that: new text end 3.8     new text begin (1) the project and financing agreement have been approved by the governing body new text end 3.9 new text begin or head of the state agency that operates or manages the state building or facility to be new text end 3.10 new text begin improved; new text end 3.11     new text begin (2) the project is technically and economically feasible; new text end 3.12     new text begin (3) the state agency that operates or manages the state building or facility has made new text end 3.13 new text begin adequate provision for the operation and maintenance of the project; new text end 3.14     new text begin (4) if an energy efficiency improvement, the project has a substantial likelihood to new text end 3.15 new text begin result in a positive cash flow in each year the financing agreement is in effect; and new text end 3.16     new text begin (5) if a renewable energy improvement, the project has a substantial likelihood to new text end 3.17 new text begin reduce use of fossil-fuel energy. new text end 3.18     new text begin Subd. 6. new text end new text begin Program costs. new text end new text begin Program costs incurred by the commissioner or a state new text end 3.19 new text begin agency that are not reimbursed or paid directly under a financing agreement may be paid new text end 3.20 new text begin with funds made available to the commissioner under section 216C.43, subdivision 10. new text end 3.21    Sec. 3. Minnesota Statutes 2007 Supplement, section 216B.241, is amended by adding 3.22a subdivision to read: 3.23     new text begin Subd. 9. new text end new text begin Coordination with utility conservation improvement programs. new text end new text begin The new text end 3.24 new text begin contractor selected by the commissioner in subdivision 2 shall ensure that the local new text end 3.25 new text begin government makes use of all applicable conservation improvement programs provided new text end 3.26 new text begin by utilities providing electric or natural gas service. Consistent with direction from the new text end 3.27 new text begin commissioner, a utility may count the savings resulting from its energy improvement new text end 3.28 new text begin projects under sections 16B.322 and 216C.43 towards the utility's energy-saving goal new text end 3.29 new text begin under section 216B.241, subdivision 1c. new text end 3.30    Sec. 4. Minnesota Statutes 2006, section 216C.09, is amended to read: 3.31216C.09 COMMISSIONER DUTIES. 3.32    (a) The commissioner shall: 3.33    (1) manage the department as the central repository within the state government for 3.34the collection of data on energy; 4.1    (2) prepare and adopt an emergency allocation plan specifying actions to be taken 4.2in the event of an impending serious shortage of energy, or a threat to public health, 4.3safety, or welfare; 4.4    (3) undertake a continuing assessment of trends in the consumption of all forms of 4.5energy and analyze the social, economic, and environmental consequences of these trends; 4.6    (4) carry out energy conservation measures as specified by the legislature and 4.7recommend to the governor and the legislature additional energy policies and conservation 4.8measures as required to meet the objectives of sections 216C.05 to 216C.30; 4.9    (5) collect and analyze data relating to present and future demands and resources 4.10for all sources of energy; 4.11    (6) evaluate policies governing the establishment of rates and prices for energy 4.12as related to energy conservation, and other goals and policies of sections 216C.05 to 4.13216C.30 , and make recommendations for changes in energy pricing policies and rate 4.14schedules; 4.15    (7) study the impact and relationship of the state energy policies to international, 4.16national, and regional energy policies; 4.17    (8) design and implement a state program for the conservation of energy; this 4.18program shall include but not be limited to, general commercial, industrial, and residential, 4.19and transportation areas; such program shall also provide for the evaluation of energy 4.20systems as they relate to lighting, heating, refrigeration, air conditioning, building design 4.21and operation, and appliance manufacturing and operation; 4.22    (9) inform and educate the public about the sources and uses of energy and the 4.23ways in which persons can conserve energy; 4.24    (10) dispense funds made available for the purpose of research studies and projects 4.25of professional and civic orientation, which are related to either energy conservation, 4.26resource recovery, or the development of alternative energy technologies which conserve 4.27nonrenewable energy resources while creating minimum environmental impact; 4.28    (11) charge other governmental departments and agencies involved in energy-related 4.29activities with specific information gathering goals and require that those goals be met; 4.30    (12) design a comprehensive program for the development of indigenous energy 4.31resources. The program shall include, but not be limited to, providing technical, 4.32informational, educational, and financial services and materials to persons, businesses, 4.33municipalities, and organizations involved in the development of solar, wind, hydropower, 4.34peat, fiber fuels, biomass, and other alternative energy resources. The program shall be 4.35evaluated by the alternative energy technical activity; and 5.1    (13) dispense loans, grants, or other financial aid from money received from 5.2litigation or settlement of alleged violations of federal petroleum-pricing regulations 5.3made available to the department for that purpose. The commissioner shall adopt rules 5.4under chapter 14 for this purpose. 5.5    (b) Further, the commissioner may participate fully in hearings before the 5.6Public Utilities Commission on matters pertaining to rate design, cost allocation, 5.7efficient resource utilization, utility conservation investments, small power production, 5.8cogeneration, and other rate issues. The commissioner shall support the policies stated in 5.9section 216C.05 and shall prepare and defend testimony proposed to encourage energy 5.10conservation improvements as defined in section 216B.241. 5.11    Sec. 5. new text begin [216C.42] DEFINITIONS. new text end 5.12     new text begin Subdivision 1. new text end new text begin Scope. new text end new text begin For the purpose of this section and section 216C.43, the terms new text end 5.13 new text begin defined in this section have the meanings given them. new text end 5.14     new text begin Subd. 2. new text end new text begin Energy improvement project. new text end new text begin "Energy improvement project" means new text end 5.15 new text begin a project to improve energy efficiency in a building or facility, including the design, new text end 5.16 new text begin acquisition, installation, and commissioning of equipment or improvements to a building new text end 5.17 new text begin or facility, and training of building or facility staff necessary to properly operate and new text end 5.18 new text begin maintain the equipment or improvements. new text end 5.19     new text begin Subd. 3. new text end new text begin Energy project study. new text end new text begin "Energy project study" means a technical and new text end 5.20 new text begin financial study of one or more energy improvement projects, including: new text end 5.21     new text begin (1) an analysis of historical energy consumption and cost data; new text end 5.22     new text begin (2) a description of existing equipment, structural elements, operating characteristics, new text end 5.23 new text begin and other conditions affecting energy use; new text end 5.24     new text begin (3) a description of the proposed energy improvement projects; new text end 5.25     new text begin (4) a detailed budget for the proposed project; and new text end 5.26     new text begin (5) calculations sufficient to demonstrate the expected energy savings. new text end 5.27     new text begin Subd. 4. new text end new text begin Financing agreement. new text end new text begin "Financing agreement" means a tax-exempt new text end 5.28 new text begin lease-purchase agreement entered into by a local government and a financial institution new text end 5.29 new text begin under a standard project financing agreement offered under section 216C.43, subdivision 6. new text end 5.30     new text begin Subd. 5. new text end new text begin Local government. new text end new text begin "Local government" means a Minnesota county, new text end 5.31 new text begin statutory or home rule charter city, town, school district, or any combination of those units new text end 5.32 new text begin operating under an agreement to exercise powers jointly. new text end 5.33     new text begin Subd. 6. new text end new text begin Program. new text end new text begin "Program" means the energy improvement financing program new text end 5.34 new text begin for local governments authorized by section 216C.43. new text end 6.1     new text begin Subd. 7. new text end new text begin Supplemental cash flow agreement. new text end new text begin "Supplemental cash flow agreement" new text end 6.2 new text begin means an agreement by the commissioner to lend funds to a local government up to an new text end 6.3 new text begin amount necessary to ensure that the cumulative payments made by the local government new text end 6.4 new text begin under a financing agreement minus the amount loaned by the commissioner do not exceed new text end 6.5 new text begin the actual energy and operating cost savings attributable to the energy improvement new text end 6.6 new text begin project for the term of the supplemental cash flow agreement. new text end 6.7    Sec. 6. new text begin [216C.43] ENERGY IMPROVEMENT FINANCING PROGRAM FOR new text end 6.8 new text begin LOCAL GOVERNMENT. new text end 6.9     new text begin Subdivision 1. new text end new text begin Commissioner's authority and duties; local government new text end 6.10 new text begin authority. new text end new text begin The commissioner shall administer this section. A local government may new text end 6.11 new text begin enter into contracts for the purposes of this section with the commissioner, the primary new text end 6.12 new text begin contractor, other contracted technical service providers, and participating financial new text end 6.13 new text begin institutions. new text end 6.14     new text begin Subd. 2. new text end new text begin Program eligibility; voluntary program participation; targeted new text end 6.15 new text begin technical services. new text end new text begin A local government may elect to participate in the program. The new text end 6.16 new text begin commissioner may prioritize and target technical services offered under subdivision new text end 6.17 new text begin 5 to public entities that the commissioner determines offer the greatest potential for new text end 6.18 new text begin cost-effective energy improvement projects. new text end 6.19     new text begin Subd. 3. new text end new text begin Primary contractor for technical, financial, and program management new text end 6.20 new text begin services. new text end new text begin The commissioner may enter into a contract for the delivery of technical new text end 6.21 new text begin services, financial management, marketing, and administrative services necessary for new text end 6.22 new text begin implementation of the program. new text end 6.23     new text begin Subd. 4. new text end new text begin Targeted technical services. new text end new text begin The commissioner shall offer technical new text end 6.24 new text begin services to targeted public entities to conduct energy project studies. The commissioner new text end 6.25 new text begin may contract with one or more qualified technical service providers to conduct energy new text end 6.26 new text begin project studies for targeted public entities. The commissioner may require full or partial new text end 6.27 new text begin reimbursement of costs for technical services provided to a local government, subject to new text end 6.28 new text begin terms and conditions specified and agreed to by contract prior to the delivery of technical new text end 6.29 new text begin services. A local government may independently procure technical services to conduct an new text end 6.30 new text begin energy project study, but the energy project study must be reviewed and approved by the new text end 6.31 new text begin commissioner to qualify an energy improvement project for a financing agreement under new text end 6.32 new text begin subdivision 6 or a supplemental cash flow agreement under subdivision 7. new text end 6.33     new text begin Subd. 5. new text end new text begin Participation of technical service providers statewide. new text end new text begin Program new text end 6.34 new text begin activities must be implemented to encourage statewide participation of engineers, new text end 6.35 new text begin architects, energy auditors, contractors, and other technical service providers. The new text end 7.1 new text begin commissioner may provide training on energy project study requirements and procedures new text end 7.2 new text begin to technical service providers. new text end 7.3     new text begin Subd. 6. new text end new text begin Standard project financing agreement. new text end new text begin The commissioner shall solicit new text end 7.4 new text begin proposals from private financial institutions and may enter into a standard project new text end 7.5 new text begin financing agreement with one or more financial institutions. A standard project financing new text end 7.6 new text begin agreement must specify terms and conditions uniformly available to all participating new text end 7.7 new text begin public entities for financing to implement energy improvement projects under this section. new text end 7.8 new text begin A local government may choose to finance an energy improvement project by means other new text end 7.9 new text begin than a standard project financing agreement, but a supplemental cash flow agreement new text end 7.10 new text begin under subdivision 7 must not be offered unless the commissioner determines that the other new text end 7.11 new text begin financing means creates no greater potential obligation under a supplemental cash flow new text end 7.12 new text begin agreement than would be created through a standard project financing agreement. new text end 7.13     new text begin Subd. 7. new text end new text begin Supplemental cash flow agreement. new text end new text begin (a) The commissioner may offer new text end 7.14 new text begin a supplemental cash flow agreement to a participating local government for qualifying new text end 7.15 new text begin energy improvement projects. The term of a supplemental cash flow agreement may not new text end 7.16 new text begin exceed 15 years. Terms and conditions of a supplemental cash flow agreement must be new text end 7.17 new text begin agreed to by contract prior to a local government entering into a financing agreement. new text end 7.18     new text begin (b) A supplemental cash flow agreement contract must include, but is not limited to: new text end 7.19     new text begin (1) specification of methods and procedures to measure and verify energy cost new text end 7.20 new text begin savings; new text end 7.21     new text begin (2) obligations of the local government to operate and maintain the energy new text end 7.22 new text begin improvements; new text end 7.23     new text begin (3) procedures to modify the supplemental cash flow agreement if the local new text end 7.24 new text begin government modifies operating characteristics of its building or facility in a manner that new text end 7.25 new text begin adversely affects energy cost savings; new text end 7.26     new text begin (4) interest charged on the loan, which may not exceed the interest on the related new text end 7.27 new text begin financial agreement; and new text end 7.28     new text begin (5) procedures for resolution of disputes. new text end 7.29     new text begin Subd. 8. new text end new text begin Qualifying energy improvement projects. new text end new text begin A local government may new text end 7.30 new text begin submit to the commissioner, on a form prescribed by the commissioner, an application for new text end 7.31 new text begin a financing agreement authorization and supplemental cash flow agreement for energy new text end 7.32 new text begin improvement projects. The commissioner shall approve an energy improvement project new text end 7.33 new text begin for a supplemental cash flow agreement and authorize eligibility for a financing agreement new text end 7.34 new text begin if the commissioner determines that: new text end 7.35     new text begin (1) the application has been approved by the governing body or agency head of the new text end 7.36 new text begin local government; new text end 8.1     new text begin (2) the project is technically and economically feasible; new text end 8.2     new text begin (3) the local government has made adequate provision for the operation and new text end 8.3 new text begin maintenance of the project; new text end 8.4     new text begin (4) the project has a substantial likelihood to result in a positive cash flow in each new text end 8.5 new text begin year the financing agreement is in effect; and new text end 8.6     new text begin (5) adequate funds will be available to the commissioner to fulfill the supplemental new text end 8.7 new text begin cash flow agreement. new text end 8.8     new text begin Subd. 9. new text end new text begin Program costs. new text end new text begin Program costs incurred by the commissioner or a public new text end 8.9 new text begin entity that are not direct costs to implement energy improvement projects may be paid new text end 8.10 new text begin with program funds appropriated under subdivision 10. new text end 8.11     new text begin Subd. 10. new text end new text begin Funding; appropriation; receipts. new text end new text begin Petroleum violation escrow funds new text end 8.12 new text begin appropriated to the commissioner by Laws 1988, chapter 686, article 1, section 38, for new text end 8.13 new text begin state energy loan programs for schools, hospitals, and public buildings, and reappropriated new text end 8.14 new text begin by Laws 2007, chapter 57, article 2, section 30, are appropriated to the commissioner new text end 8.15 new text begin for the purposes of this section and are available until spent. The commissioner may new text end 8.16 new text begin transfer up to $1,000,000 of this appropriation to the commissioner of administration for new text end 8.17 new text begin the purposes of section 16B.322. new text end 8.18    Sec. 7. new text begin REPORT; GREEN STAR AWARD EXPANSION. new text end 8.19     new text begin The Pollution Control Agency and the Office of Energy Security in the Department new text end 8.20 new text begin of Commerce shall, in collaboration with the clean energy resource teams (CERT's), new text end 8.21 new text begin submit a report by February 2, 2009, to the chairs and ranking minority members of the new text end 8.22 new text begin senate and house of representatives committees with primary jurisdiction over energy new text end 8.23 new text begin policy that makes recommendations regarding how to expand eligibility to receive the new text end 8.24 new text begin Green Star award, described in Minnesota Statutes, section 114C.25, to include cities and new text end 8.25 new text begin communities that take action to help meet the state's greenhouse gas emissions reduction new text end 8.26 new text begin goals established in Minnesota Statutes, section 216H.02, subdivision 1. The report must new text end 8.27 new text begin address, at a minimum, the following issues: new text end 8.28     new text begin (1) the criteria for actions cities and communities must take in order to receive a new text end 8.29 new text begin Green Star award; new text end 8.30     new text begin (2) what entity or entities would issue the award; new text end 8.31     new text begin (3) the length of time during which the award may be displayed; new text end 8.32     new text begin (4) existing state financial and technical assistance available to communities and new text end 8.33 new text begin cities to assist them to reduce greenhouse gas emissions; new text end 8.34     new text begin (5) sources of additional funding needed to implement the program; and new text end 8.35     new text begin (6) any other issues that need to be resolved in order to implement the program. new text end 9.1    Sec. 8. new text begin REPEALER. new text end 9.2 new text begin Laws 2007, chapter 57, article 2, section 30, new text end new text begin is repealed. new text end 9.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end