1.1A bill for an act1.2relating to energy; providing direction for use of federal stimulus funds for 1.3energy programs.1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:1.5ARTICLE 11.6DEFINITIONS; GOALS; LEGISLATIVE REVIEW1.7    Section 1. FEDERAL STIMULUS FUNDING; GOAL OF ENERGY 1.8PROGRAMS.1.9    Subdivision 1.Definitions.For the purposes of articles 1 to 5, the following terms 1.10have the meaning given them.1.11(a) "Act" means the American Recovery and Reinvestment Act of 2009.1.12(b) "Commissioner" means the commissioner of commerce.1.13(c) "Stimulus funding" or "funding" means funding provided to the state under 1.14the act for:1.15(1) energy efficiency and conservation block grants authorized under subtitle E of 1.16title V of the federal Energy Independence and Security Act of 2007, United States Code, 1.17title 42, section 17151 et seq.;1.18(2) the Weatherization Assistance Program authorized under part A of title IV of the 1.19federal Energy Conservation and Production Act, United States Code, title 42, section 1.206861, et seq.; and1.21(3) the State Energy Program authorized under part D of title III of the federal 1.22Energy Policy and Conservation Act, United States Code, title 42, section 6321, et seq.1.23    Subd. 2.Stimulus funding allocation and use goals.To the extent allowed by 1.24federal law and regulation and consistent with the purposes and principles of the act, 2.1stimulus funding must be allocated and expended under articles 2 to 4 for activities that 2.2best achieve the following goals:2.3(1) job retention and creation;2.4(2) improved energy efficiency and increased renewable energy production capacity;2.5(3) coordination with and leveraging of other resources to increase the total benefits 2.6derived from stimulus funding;2.7(4) timely implementation of funded activities;2.8(5) long-term sustainability of benefits derived from stimulus funds;2.9(6) geographic distribution across the state; and2.10(7) compliance with the disadvantaged business enterprise outreach requirements in 2.11Minnesota Statutes, section 16C.16, subdivision 4.2.12EFFECTIVE DATE.This section is effective the day following final enactment.2.13    Sec. 2. LEGISLATIVE REVIEW.2.14The Office of Energy Security shall, prior to expending any stimulus funds, submit 2.15to the chairs and ranking minority members of the senate and house of representatives 2.16committees with primary jurisdiction over energy policy and finance the criteria it 2.17proposes to use to rank the programs in articles 1 to 5 in order to allocate stimulus funding 2.18among the programs. Comments on the proposed criteria must be submitted to the Office 2.19of Energy Security within ten working days of receipt of the criteria. The Office of Energy 2.20Security shall consider the comments before establishing the final allocation criteria, and 2.21shall submit a report on the amount of stimulus funds allocated to each of the programs 2.22under articles 1 to 5 the chairs and ranking minority members of the senate and house of 2.23representatives committees with primary jurisdiction over energy policy and finance 2.24within ten working days of establishing the stimulus funding allocations.2.25EFFECTIVE DATE.This section is effective the day following final enactment.2.26ARTICLE 22.27ENERGY EFFICIENCY2.28    Section 1. WEATHERIZATION.2.29    Subdivision 1.Allocation of funds.All stimulus funds for weatherization must be 2.30allocated by the director of the Office of Energy Security, consistent with federal allocation 2.31requirements and state allocation formulas in the state weatherization plan. Existing 2.32providers of weatherization services must be fully utilized, consistent with effective 2.33program delivery, before additional providers of weatherization services are added.3.1    Subd. 2.Rental units. Programs that include rental units must be developed, 3.2including developing procedures to increase low-income rental unit participation in 3.3programs. Priority must be given to serving the largest number of new weatherization 3.4clients consistent with federal eligibility requirements.3.5EFFECTIVE DATE.This section is effective the day following final enactment.3.6    Sec. 2. LOCAL GOVERNMENT AND SCHOOL DISTRICT BUILDING 3.7RENOVATIONS.3.8The Office of Energy Security must coordinate the use of stimulus funds with the 3.9local public building enhanced energy-efficiency program under Minnesota Statutes, 3.10section 216C.43. The Office of Energy Security shall prioritize lighting upgrades, energy 3.11recommissioning, and other cost-effective energy projects that are ready for immediate 3.12implementation. Stimulus funds may be used for, but are not limited to, grants for a portion 3.13of costs incurred by local governments to implement energy efficiency improvements 3.14under the local public building enhanced energy-efficiency program.  The Office of Energy 3.15Security may require a local government, as a condition of receiving a grant, to commit to 3.16implement future activities, including, but not limited to, staff training, that are designed 3.17to create additional energy or operating savings to the local government.  The Office of 3.18Energy Security shall coordinate with the Department of Education to prioritize school 3.19district projects for funding under this section, consistent with the principles of statewide 3.20geographic distribution of projects, optimized energy savings, and an improved learning 3.21environment for schoolchildren.3.22EFFECTIVE DATE.This section is effective the day following final enactment.3.23    Sec. 3. STATE GOVERNMENT BUILDINGS.3.24The Department of Administration shall develop a plan and procedures to select, 3.25fund, and implement projects using stimulus funds. The plan and procedures shall 3.26prioritize lighting upgrades, energy recommissioning, and other cost-effective energy 3.27projects that are ready for immediate implementation. Funds may be used for, but are not 3.28limited to, grants for a portion of costs incurred by state agencies in implementing energy 3.29efficiency improvements.  The Department of Administration may require a state agency, 3.30as a condition of receiving stimulus funds, to commit to implement future activities, 3.31including, but not limited to, staff training, that are designed to create additional energy 3.32or operating savings to the state agency.3.33EFFECTIVE DATE.This section is effective the day following final enactment.4.1    Sec. 4. RESIDENTIAL ENERGY EFFICIENCY PROGRAMS.4.2The Office of Energy Security shall coordinate with the Minnesota Housing Finance 4.3Agency to use stimulus funds in conjunction with the Minnesota Housing Finance 4.4Agency's existing financing programs to improve energy efficiency in dwellings.4.5EFFECTIVE DATE.This section is effective the day following final enactment.4.6    Sec. 5. TRAINING AND WORKFORCE DEVELOPMENT.4.7(a) The Department of Employment and Economic Development, in consultation 4.8with the Office of Energy Security and the Office of Higher Education, shall develop a 4.9plan and procedures to:4.10(1) allocate stimulus funds to training programs to train energy professionals needed 4.11to implement the energy programs described in sections 2 to 4, including but not limited to 4.12energy auditors, energy managers, and building operators;4.13(2) coordinate, oversee, and monitor the training and certification of energy 4.14professionals; and4.15(3) allocate stimulus funding for the purposes of clauses (1) and (2) and to training 4.16providers.4.17(b) Training strategies must be designed to meet the wide range of facilities 4.18managers and building sizes and types, and must protect the occupational health and safety 4.19of workers employed on these energy projects. Technical skills training must include 4.20insulation, air sealing, and mechanical work.4.21(c) The plan must include procedures to:4.22(1) train individuals already employed in implementing energy programs;4.23(2) recruit individuals to be trained to perform work in energy projects using 4.24stimulus funding who are unemployed, especially targeting communities experiencing 4.25disproportionately high rates of unemployment, including, but not limited to, low-income, 4.26rural, or tribal communities and individuals in construction trades and crafts; and4.27(3) ensure that the full capacity of current training providers is utilized, including, 4.28but not limited to, opportunities industrialization centers, skilled trades labor unions, tribal 4.29colleges or nonprofits working in tribal communities, community action partnerships, 4.30utility companies, higher education institutions, and nonprofit organizations with 4.31demonstrated expertise in energy efficiency.4.32EFFECTIVE DATE.This section is effective the day following final enactment.4.33    Sec. 6. ACCOUNTABILITY AND TRANSPARENCY REPORTING.5.1The director of the Office of Energy Security, after compiling information supplied 5.2by the Departments of Administration, Education, and Employment and Economic 5.3Development, and the Office of Higher Education, shall report on the progress of the 5.4programs funded under articles 1 to 5 to the house of representatives and senate committees 5.5with jurisdiction over energy finance and workforce development policy by September 1, 5.62009, January 15, 2010, April 1, 2010, and September 1, 2010. The report must include a 5.7complete accounting of all stimulus funds spent on the programs funded under articles 1 to 5.85, to the extent allowable by state and federal law, including, but not limited to:5.9(1) the specific projects funded, including the location, building owner, and project 5.10manager;5.11(2) the number of jobs retained or created by each project;5.12(3) the total calculated and actual energy savings for each project;5.13(4) the remaining balances in each stimulus fund;5.14(5) the nonstimulus funding leveraged by stimulus funds for each project;5.15(6) the training courses provided, including the location and provider of courses 5.16offered, the funding source for each training course, and the total number of trainees; and5.17(7) compliance with prevailing wage, veterans, and disadvantaged business 5.18enterprise requirements.5.19EFFECTIVE DATE.This section is effective the day following final enactment.5.20ARTICLE 35.21RENEWABLE ENERGY5.22    Section 1. RENEWABLE ENERGY GRANT PROGRAM.5.23(a) The commissioner of commerce shall establish a program to award grants to 5.24energy projects that meet the following conditions:5.25(1) the project qualifies as a community-based energy development (C-BED) project, 5.26as defined in Minnesota Statutes, section 216B.1612, subdivision 2, paragraph (g);5.27(2) for wind projects, the project is located in an area where the measured wind 5.28resource is Class 4 or above;5.29(3) the project begins commercial operation after July 1, 2009;5.30(4) the project does not receive renewable energy payment incentives under 5.31Minnesota Statutes, section 216C.41; and5.32(5) the project meets any other conditions established under the American Recovery 5.33and Reinvestment Act of 2009, Public Law 111-5, for use of these funds.6.1(b) The department shall develop an application form, application review procedures, 6.2criteria that projects must meet in order to be considered for a grant award, procedures 6.3and guidelines for project monitoring and evaluation, and other administrative procedures 6.4necessary to fully implement a grant program.6.5(c) The maximum grant to a project is $500,000.6.6(d) No more than two projects in a single county may receive a grant under this 6.7section.6.8(e) No C-BED qualifying owner may financially participate in more than one project 6.9that receives a grant under this section.6.10(f) Grant awards must be geographically dispersed throughout the state.6.11EFFECTIVE DATE.This section is effective the day following final enactment.6.12    Sec. 2. RENEWABLE ELECTRIC GENERATION FACILITY REBATES.6.13(a) The commissioner shall establish a program to award rebates to qualifying 6.14facilities that generate electricity from a renewable source and that:6.15(1) begin operation after July 1, 2009; 6.16(2) meet all other conditions established under the act; and6.17(3) provide electricity to:6.18(i) a homeowner's primary residence; or6.19(ii) a business, with 20 or fewer full-time employees.6.20(b) The commissioner shall develop an application form, application review 6.21procedures, criteria that projects must meet in order to be considered for a rebate, 6.22procedures and guidelines for project monitoring and evaluation, and other administrative 6.23procedures necessary to fully implement a rebate program.6.24(c) The owner of a qualifying facility may apply to the commissioner for a rebate of 6.25the lesser of $2,500 or 35 percent of the cost of the electric generation facility, including 6.26installation costs.6.27(d) The commissioner shall award rebates only from funds appropriated for that 6.28purpose and to the extent of those appropriations. Grants must be made to applicants in 6.29the order of the time of receipt of a complete application.6.30(e) For purposes of this section:6.31(1) "Qualifying facility" means an electric generation facility with a capacity of less 6.32than 40 kilowatts that generates electricity from a renewable energy source.6.33(2) "Renewable energy source" means:6.34(i) solar;6.35(ii) wind;7.1(iii) hydroelectric;7.2(iv) hydrogen, provided that after January 1, 2010, the hydrogen must be generated 7.3from the resources listed in this clause; or7.4(v) biomass, which includes, without limitation, landfill gas; an anaerobic digester 7.5system; and the predominantly organic components of wastewater effluent, sludge, or 7.6related by-products from publicly owned treatment works, but not including incineration 7.7of wastewater sludge to produce electricity.7.8EFFECTIVE DATE.This section is effective the day following final enactment.7.9    Sec. 3. SOLAR ENERGY PROJECTS IN PUBLIC BUILDINGS AND 7.10SCHOOLS.7.11(a) The commissioner shall establish a program to award grants to:7.12(1) local units of government to pay the costs of installing solar energy projects to 7.13generate energy used in public buildings; or7.14(2) to school districts to pay the costs of installing solar energy projects to generate 7.15energy used in K-12 schools.7.16(b) To be eligible to receive a grant, a project must:7.17(1) begin operation after July 1, 2009; and7.18(2) meet all other conditions established under the act.7.19(c) The commissioner shall develop an application form, application review 7.20procedures, criteria that a project must meet in order to be considered for a grant award, 7.21procedures and guidelines for project monitoring and evaluation, and other administrative 7.22procedures necessary to fully implement a grant program.7.23(d) In awarding grants, the commissioner must determine, at a minimum, the 7.24following:7.25(1) that the physical condition of the building is sufficient to support the efficient 7.26operation of the solar energy project;7.27(2) that there is no significant possibility that the building may close within ten 7.28years, which determination, for a school, must be based on enrollment projections; and7.29(3) that the projected cumulative energy savings exceed the grant amount within 15 7.30years for a qualifying solar thermal project, and within 20 years for a photovoltaic device.7.31(e) In awarding grants, the commissioner must also consider:7.32(1) the reliability and cost-effectiveness of the solar technology to be installed;7.33(2) the extent to which the proposal effectively coordinates with the conservation 7.34and energy efficiency programs offered by the energy utilities serving the building in 8.1which the project is located, and with the public building enhanced energy efficiency 8.2program under section 216C.43, if applicable;8.3(3) life cycle energy use reductions and greenhouse gas emissions reductions 8.4projected per dollar of installed cost of the project; and8.5(4) the geographic distribution of grant recipients throughout the state.8.6(f) For the purposes of this section:8.7(1) "public building" means any publicly owned building, sports arena, or other 8.8facility of a county, city, or other local unit of government; and8.9(2)  "solar energy" means:8.10(i) a photovoltaic device, as defined in Minnesota Statutes, section 216C.06, 8.11subdivision 16; or8.12(ii) a qualifying thermal project, as defined in Minnesota Statutes, section 8.13216B.2411, subdivision 2, that includes modifications made to a distribution system to 8.14distribute heating or cooling throughout a building.8.15EFFECTIVE DATE.This section is effective the day following final enactment.8.16ARTICLE 48.17MISCELLANEOUS PROGRAMS 8.18    Section 1. ENERGY PROGRAMS IN COMMERCIAL AND INDUSTRIAL 8.19BUILDINGS.8.20(a) The commissioner shall establish a program to award grants to commercial 8.21and industrial facilities for the purpose of installing energy-efficiency improvements or 8.22devices that use renewable energy sources to generate electricity or to heat or cool a 8.23building. To be eligible to receive a grant, a project must:8.24(1) begin commercial operation after July 1, 2009; and8.25(2) meet all other conditions established under the act.8.26(b) The commissioner shall develop an application form, application review 8.27procedures, criteria that a project must meet in order to be considered for a grant award, 8.28procedures and guidelines for project monitoring and evaluation, and other administrative 8.29procedures necessary to fully implement a grant program.8.30(c) For the purposes of this section, "renewable energy source" means:8.31(i) solar;8.32(ii) wind;8.33(iii) hydroelectric;9.1(iv) hydrogen, provided that after January 1, 2010, the hydrogen must be generated 9.2from the resources listed in this clause; or9.3(v) biomass, which includes, without limitation, landfill gas; an anaerobic digester 9.4system; and the predominantly organic components of wastewater effluent, sludge, or 9.5related by-products from publicly owned treatment works, but not including incineration 9.6of wastewater sludge to produce electricity.9.7EFFECTIVE DATE.This section is effective the day following final enactment.9.8    Sec. 2. ENERGY EDUCATION, TRAINING, AND DATA SYSTEMS.9.9The Office of Energy Security shall establish programs to work with teachers and 9.10other energy experts to include energy issues in K-12 curricula; develop training and 9.11certification programs for technicians to install and service wind and solar energy systems; 9.12and upgrade data systems to enable accurate tracking of energy savings resulting from the 9.13conservation improvement program and other state energy programs.9.14EFFECTIVE DATE.This section is effective the day following final enactment.9.15    Sec. 3. ENERGY EFFICIENCY GRANTS TO LOCAL GOVERNMENTS.9.16The Office of Energy Security shall establish a grant program to award grants to 9.17local units of government to enhance energy efficiency and reduce energy use. Energy 9.18efficiency and conservation block grant funds may be used for grants for planning, 9.19consultant services, energy audits, implementing energy-efficient building codes and 9.20inspection services, energy efficiency renovations, street lighting, and the installation of 9.21renewable energy devices deployed on public buildings.9.22ARTICLE 59.23APPROPRIATIONS9.24    Section 1. WEATHERIZATION ASSISTANCE PROGRAM APPROPRIATION.9.25Of the funds available to the state of Minnesota from the federal stimulus funding for 9.26the weatherization assistance program under the American Recovery and Reinvestment 9.27Act of 2009, Public Law 111-5, $131,937,411 is appropriated to the commissioner of 9.28commerce. The funds must be administered consistent with the requirements in article 2, 9.29section 1.9.30    Sec. 2. ENERGY EFFICIENCY AND CONSERVATION BLOCK PROGRAM 9.31APPROPRIATION.10.1(b) The funds available to the state of Minnesota from the federal stimulus funding 10.2for the Energy Efficiency and Conservation Block Grant Program under the American 10.3Recovery and Reinvestment Act of 2009, Public Law 111-5, estimated to be $13,900,000, 10.4are appropriated to the commissioner of commerce. The appropriation must be distributed 10.5as follows:10.6(1) 61.5 percent, estimated to be $8,550,000, is for energy efficiency grants to local 10.7government in article 4, section 3; and10.8(2) 38.5 percent, estimated to be $5,350,000, is for local government and school 10.9district buildings consistent with the requirements in article 2, section 2.10.10EFFECTIVE DATE.This section is effective the day following final enactment.10.11    Sec. 3. STATE ENERGY PROGRAM APPROPRIATION.10.12Of the funds available to the state of Minnesota from the federal stimulus funding 10.13for the State Energy Program under the American Recovery and Reinvestment Act of 10.142009, Public Law 111-5, $54,172,000 is appropriated to the commissioner of commerce. 10.15Of this amount:10.16(1) $14,650,000 is for local government and school district buildings consistent 10.17with the requirements in article 2, section 2;10.18(2) $4,000,000 is for state government buildings consistent with the requirements in 10.19article 2, section 3;10.20(3) $12,000,000 is for the residential energy financing program in article 2, section 5;10.21(4) $12,000,000 is for renewable energy programs, including, but not limited to, the 10.22programs specified in article 3;10.23(6) $5,000,000 is for grants to commercial and industrial facilities for energy 10.24efficiency and renewable energy projects in article 4, section 1;10.25(7) $5,022,000 is for energy education, training, and information and data systems in 10.26article 4, section 2; and10.27(8) $1,500,000 is for a grant to the Board of Trustees of the Minnesota State Colleges 10.28and Universities for the International Renewable Energy Technology Institute (IRETI) to 10.29be located at Minnesota State University, Mankato, as a public and private partnership to 10.30support applied research in renewable energy and energy efficiency to aid in the transfer of 10.31technology from Sweden to Minnesota and to support technology commercialization from 10.32companies located in Minnesota and throughout the world.10.33EFFECTIVE DATE.This section is effective the day following final enactment.