HF 2137

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to energy; promoting the use of hydrogen as
an energy resource; appropriating money; amending
Minnesota Statutes 2004, section 297A.67, by adding a
subdivision; proposing coding for new law in Minnesota
Statutes, chapter 216B.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [216B.811] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of sections 216B.811
to 216B.815, the terms defined in this section have the meanings
given them.
new text end

new text begin Subd. 2. new text end

new text begin Carbon-neutral. new text end

new text begin "Carbon-neutral" means no net
carbon dioxide emissions; or, if there are those emissions, that
they are captured and permanently stored underground, or by some
other scientifically proven method.
new text end

new text begin Subd. 3. new text end

new text begin Fuel cell. new text end

new text begin "Fuel cell" means an electrochemical
device that produces useful electricity, heat, and water vapor,
and operates as long as it is provided fuel.
new text end

new text begin Subd. 4. new text end

new text begin Hydrogen. new text end

new text begin "Hydrogen" means hydrogen produced
using native energy sources and methods that are renewable or
carbon-neutral, or that could be made so in the future.
new text end

new text begin Subd. 5. new text end

new text begin Related technologies. new text end

new text begin "Related technologies"
means balance of plant components necessary to make hydrogen and
fuel cell systems function; turbines, reciprocating, and other
combustion engines capable of operating on hydrogen; and
electrolyzers, reformers, and other equipment and processes
necessary to produce, purify, store, distribute, and use
hydrogen for energy.
new text end

Sec. 2.

new text begin [216B.812] FOSTERING THE TRANSITION TOWARD ENERGY
SECURITY.
new text end

new text begin Subdivision 1. new text end

new text begin Early purchase and deployment of hydrogen,
fuel cells, and related technologies by the state. new text end

new text begin The
Department of Administration shall identify opportunities for
demonstrating the use of hydrogen fuel cells within state-owned
facilities, vehicle fleets, and operations.
new text end

new text begin The department shall purchase and demonstrate hydrogen,
fuel cells, and related technologies in ways that strategically
contribute to realizing Minnesota's hydrogen economy goal as set
forth in section 216B.013, and which contribute to the following
nonexclusive list of objectives:
new text end

new text begin (1) provide needed performance data to the marketplace;
new text end

new text begin (2) identify code and regulatory issues to be resolved;
new text end

new text begin (3) advance or validate a critical area of research;
new text end

new text begin (4) foster economic development and job creation in the
state;
new text end

new text begin (5) raise public awareness of hydrogen, fuel cells, and
related technologies; or
new text end

new text begin (6) reduce emissions of carbon dioxide and other pollutants.
new text end

new text begin Subd. 2. new text end

new text begin Support for strategic demonstration projects
that accelerate the commercialization of hydrogen, fuel cells,
and related technologies. new text end

new text begin (a) In consultation with appropriate
representatives from state agencies, local governments,
universities, businesses, and other interested parties, the
Department of Commerce shall report back to the legislature by
November 1, 2005, and every two years thereafter, with a slate
of proposed pilot projects that contribute to realizing
Minnesota's hydrogen economy goal as set forth in section
216B.013. The Department of Commerce must consider the
following nonexclusive list of priorities in developing the
proposed slate of pilot projects:
new text end

new text begin (1) demonstrate "bridge" technologies such as
hybrid-electric, off-road, and fleet vehicles running on
hydrogen or fuels blended with hydrogen;
new text end

new text begin (2) develop cost-competitive, on-site hydrogen production
technologies;
new text end

new text begin (3) demonstrate nonvehicle applications for hydrogen;
new text end

new text begin (4) improve the cost and efficiency of hydrogen from
renewable energy sources; and
new text end

new text begin (5) improve the cost and efficiency of hydrogen production
using direct solar energy without electricity generation as an
intermediate step.
new text end

new text begin (b) For all demonstrations, individual system components of
the technology must meet commercial performance standards and
systems modeling must be completed to predict commercial
performance, risk, and synergies. In addition, the proposed
pilots should meet as many of the following criteria as possible:
new text end

new text begin (1) advance energy security;
new text end

new text begin (2) capitalize on the state's native resources;
new text end

new text begin (3) result in economically competitive infrastructure being
put in place;
new text end

new text begin (4) be located where it will link well with existing and
related projects and be accessible to the public, now or in the
future;
new text end

new text begin (5) demonstrate multiple, integrated aspects of hydrogen
infrastructure;
new text end

new text begin (6) include an explicit public education and awareness
component;
new text end

new text begin (7) be scalable to respond to changing circumstances and
market demands;
new text end

new text begin (8) draw on firms and expertise within the state where
possible;
new text end

new text begin (9) include an assessment of its economic, environmental,
and social impact; and
new text end

new text begin (10) serve other needs beyond hydrogen development.
new text end

new text begin Subd. 3. new text end

new text begin Establishing initial, multifuel transition
infrastructure for hydrogen vehicles. new text end

new text begin The commissioner of
commerce may accept federal funds, expend funds, and participate
in projects to design, site, and construct multifuel hydrogen
fueling stations that eventually link urban centers along key
trade corridors across the jurisdictions of Manitoba, the
Dakotas, Minnesota, Iowa, and Wisconsin.
new text end

new text begin These energy stations must serve the priorities listed in
subdivision 2 and, as transition infrastructure, should
accommodate a wide variety of vehicle technologies and fueling
platforms, including hybrid, flexible-fuel, and fuel cell
vehicles. They may offer, but not be limited to, gasoline,
diesel, ethanol (E-85), biodiesel, and hydrogen, and may
simultaneously test the integration of on-site combined heat and
power technologies with the existing energy infrastructure.
new text end

new text begin The hydrogen portion of the stations may initially serve
local, dedicated on or off-road vehicles, but should eventually
support long-haul transport.
new text end

Sec. 3.

new text begin [216B.813] HYDROGEN PRODUCTION INCENTIVE AND
APPROPRIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin The incentive provided by
this section applies to qualified hydrogen generation facilities
beginning operation after July 1, 2005. Payment may only be
made upon receipt by the commissioner of finance of an incentive
payment application that establishes that the applicant is
eligible to receive an incentive payment. The application must
be in a form and submitted at a time the commissioner
establishes.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin There is annually appropriated
from the general fund to the commissioner of commerce sums
sufficient to make the payments required under this section.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility window. new text end

new text begin Payments may be made under
this section only for hydrogen generated from a qualified
hydrogen generation facility that is operational and producing
hydrogen before December 31, 2010.
new text end

new text begin Subd. 4. new text end

new text begin Payment period. new text end

new text begin A facility may receive payments
under this section for a ten-year period. No payment under this
section may be made for hydrogen generated by a qualified
hydrogen generation facility after December 31, 2020. The
payment period begins and runs consecutively from the date the
facility begins generating hydrogen.
new text end

new text begin Subd. 5. new text end

new text begin Amount of payment; hydrogen facilities
limit. new text end

new text begin The production incentive is 48 cents per gallon of
gasoline equivalent used for transportation fuel, electricity,
heating, cooling, fertilizer production, or other new
commercially productive use.
new text end

new text begin Subd. 6. new text end

new text begin Eligibility process. new text end

new text begin A qualifying project is
eligible for the incentive on the date the commissioner of
commerce receives:
new text end

new text begin (1) an application for payment of the incentive;
new text end

new text begin (2) a copy of the purchase order for equipment to construct
the project with a delivery date and a copy of a signed receipt
for a nonrefundable deposit; and
new text end

new text begin (3) any other information the commissioner deems necessary
to determine whether the proposed project qualifies for the
incentive under this section.
new text end

new text begin The commissioner of commerce shall determine whether a
project qualifies for the incentive, and respond in writing to
the applicant approving or denying the application within 15
working days of receipt of the information required.
new text end

new text begin A project that is not operational within 18 months of
receipt of a letter of approval is no longer approved for the
incentive. The commissioner shall notify an applicant of
potential loss of approval not less than 60 days prior to the
end of the 18-month period.
new text end

new text begin Eligibility for a project that loses approval may be
reestablished as of the date the commissioner receives a new
completed application.
new text end

Sec. 4.

new text begin [216B.814] ENERGY INFRASTRUCTURE TRANSITION
ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Account created. new text end

new text begin There is established in
the state treasury an energy infrastructure transition account
in the special revenue fund. All repayments of financial
assistance granted under subdivision 2, including principal and
interest, must be deposited into the energy infrastructure
transition account.
new text end

new text begin Subd. 2. new text end

new text begin Energy infrastructure transition loan
program. new text end

new text begin The Department of Commerce may establish, adopt rules
for, and implement a loan program to provide capital for the
construction of vehicle refueling facilities that deploy any
combination of renewable and carbon-neutral technologies that
provide transportation fuel, electricity, heating, or cooling.
The program may provide for secured or unsecured loans, loan
participations, and loan guarantees with respect to real or
personal property comprising all or part of the facilities and
the payment of costs incurred by the commissioner to establish
and administer the loan program. Fees collected for
administration of the program must be deposited in the energy
infrastructure transition account.
new text end

Sec. 5.

new text begin [216B.815] AUTHORIZE AND ENCOURAGE THE STATE'S
PUBLIC RESEARCH INSTITUTIONS TO COORDINATE AND LEVERAGE THEIR
STRENGTHS THROUGH A REGIONAL ENERGY RESEARCH AND EDUCATION
PARTNERSHIP.
new text end

new text begin The state's public research and higher education
institutions must work with one another and with similar
institutions in the region to establish Minnesota and the Upper
Midwest as a center of research, education, outreach, and
technology transfer for the production of renewable and
carbon-neutral energy and products, including hydrogen, fuel
cells, and related technologies. The partnership must be
designed to create a critical mass of research and education
capability that can compete effectively for federal and private
investment in these areas.
new text end

new text begin The partnership must include an advisory committee
comprised of government, industry, academic, and nonprofit
representatives to help focus its research and education efforts
on the most critical issues. Initiatives undertaken by the
partnership may include:
new text end

new text begin (1) collaborative and interdisciplinary research,
demonstration projects, and commercialization of market-ready
technologies;
new text end

new text begin (2) creation of undergraduate and graduate course offerings
and eventually degreed and vocational programs with reciprocity;
new text end

new text begin (3) establishment of fellows programs at the region's
institutes of higher learning that provide financial incentives
for relevant study, research, and exchange; and
new text end

new text begin (4) development and field-testing of relevant curricula,
teacher kits for all educational levels, and widespread teacher
training, in collaboration with state energy offices, teachers,
nonprofits, businesses, the United States Department of Energy,
and other interested parties.
new text end

Sec. 6.

Minnesota Statutes 2004, section 297A.67, is
amended by adding a subdivision to read:

new text begin Subd. 32. new text end

new text begin Hydrogen. new text end

new text begin Hydrogen, as defined in section
216B.811, subdivision 4, is exempt if the hydrogen is used for
transportation fuel, electricity generation, heating, cooling,
fertilizer production, or other new commercially productive use.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales after
June 30, 2005, and before January 1, 2015.
new text end

Sec. 7. new text begin APPROPRIATIONS.
new text end

new text begin $300,000 is appropriated in fiscal year 2006 and $300,000
is appropriated in fiscal year 2007 from the general fund to the
commissioner of commerce for the purpose of matching federal and
private investments in three multifuel hydrogen refueling
stations in Moorhead, Alexandria, and the Twin Cities
respectively. The unencumbered balance in the first year does
not cancel but is available for the second year. Availability
of the appropriation is contingent upon securing the balance of
the total project costs from nonstate sources.
new text end