HF 2977

as introduced - 86th Legislature (2009 - 2010) Posted on 02/15/2010 10:01am

A bill for an act
relating to energy finance; authorizing home rule charter and statutory cities to
make loans to property owners who install energy efficient or renewable energy
improvements, to be repaid through a special assessment collected through the
property tax, and to sell revenue bonds to fund the program; amending Minnesota
Statutes 2008, section 429.101, subdivision 1; proposing coding for new law
in Minnesota Statutes, chapter 216C.

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

Section 1.

new text begin [216C.435] ENERGY IMPROVEMENTS FINANCING PROGRAM
FOR RESIDENTIAL AND BUSINESS PROPERTY.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section:
new text end

new text begin (a) "Biomass" has the meaning given in section 216B.1691, subdivision 1, paragraph
(a), clause (5), but does not include an energy recovery facility used to capture the heat
value of mixed municipal solid waste or refuse-derived fuel from mixed municipal solid
waste as a primary fuel.
new text end

new text begin (b) "City" means a home rule charter or statutory city.
new text end

new text begin (c) "Energy audit" means a formal evaluation of the energy consumption of a
building by a certified energy auditor, whose certification is approved by the commissioner,
for the purpose of identifying appropriate energy improvements that could be made to the
building and including an estimate of the length of time a specific energy improvement
will take to repay its purchase and installation costs, based on the amount of energy saved
and estimated future energy prices.
new text end

new text begin (d) "Energy improvement" means:
new text end

new text begin (1) any renovation or retrofitting of a building to improve energy efficiency that
is permanently affixed to the property and that results in a net reduction in energy
consumption without altering the principal source of energy; or
new text end

new text begin (2) a renewable energy system attached to or installed within or proximate to a
building that generates electrical or thermal energy from a renewable energy source.
new text end

new text begin (e) "Qualifying real property" means a single-family or multifamily residential
dwelling, or a commercial or industrial building, that the city has determined, after review
of an energy audit or renewable energy system feasibility study, can be benefited by
installation of energy improvements.
new text end

new text begin (f) "Renewable energy" means energy produced by means of solar thermal, solar
photovoltaic, wind, geothermal, or biomass resources.
new text end

new text begin (g) "Renewable energy system feasibility study" means a written study, conducted
by a contractor to perform such analysis, for the purpose of determining the feasibility of
installing a renewable energy system in a building, including an estimate of the length of
time a specific renewable energy system will take to repay its purchase and installation
costs, based on the amount of energy saved and estimated future energy prices. For a
geothermal energy improvement, the feasibility study must calculate net savings in terms
of nongeothermal energy and costs.
new text end

new text begin (h) "Solar thermal" has the meaning given to "qualifying solar thermal project" in
section 216B.2411, subdivision 2, paragraph (e).
new text end

new text begin (i) "Solar photovoltaic" has the meaning given in section 216C.06, subdivision 16,
and must meet the requirements of section 216C.25.
new text end

new text begin Subd. 2. new text end

new text begin Program authority. new text end

new text begin A city may establish by ordinance a program to make
loans to owners of qualifying real property to pay for cost-effective energy improvements
to the qualifying real property with the net proceeds and interest earnings of revenue
bonds authorized in this section.
new text end

new text begin Subd. 3. new text end

new text begin Program requirements. new text end

new text begin A city that establishes a loan program under this
section must:
new text end

new text begin (1) impose requirements to ensure that the loan is consistent with the purpose of the
program;
new text end

new text begin (2) impose requirements and conditions on loans to ensure their timely repayment;
new text end

new text begin (3) require an energy audit or renewable energy system feasibility study to be
conducted on the qualifying real property and reviewed by the city prior to approval of
the loan;
new text end

new text begin (4) verify the installation and performance of energy improvements financed by the
loan program; and
new text end

new text begin (5) determine criteria for the making of loans under this section, subject to the
following:
new text end

new text begin (i) the term over which a loan is repaid may not exceed the weighted average of the
useful life of the energy improvements installed, as determined by the city; and
new text end

new text begin (ii) the principal amount of a loan may not exceed the lesser of ten percent of the
appraised value of the real property on which the improvements are to be installed or
the actual cost of installing the energy improvements, including the costs of necessary
equipment, materials, and labor, the costs of each related energy audit or renewable energy
system feasibility study, and the cost of verification of installation; and
new text end

new text begin (iii) the interest rate charged to the borrower must be sufficient to pay the financing
costs of the program, including the issuance of bonds and loan delinquencies.
new text end

new text begin Subd. 4. new text end

new text begin Loan repayment. new text end

new text begin In addition to any other method established in the
program ordinance for loan repayment, a city making a loan under this section may:
new text end

new text begin (1) secure the loan with a lien against the benefited qualifying real property; and
new text end

new text begin (2) collect loan repayments as a special assessment as provided for in section
429.101 or by charter.
new text end

new text begin Subd. 5. new text end

new text begin Bond issuance; repayment. new text end

new text begin (a) A city may issue revenue bonds as
provided in chapter 475 for the purposes of this section.
new text end

new text begin (b) The bonds must be payable as to both principal and interest solely from the
revenues from the assessments established in subdivision 4.
new text end

new text begin (c) No holder of bonds issued under this subdivision may compel any exercise
of the taxing power of the city that issued the bonds to pay principal or interest on the
bonds. Bonds issued under this subdivision are not a debt or obligation of the city that
issued them, nor is the payment of the bonds enforceable out of any money other than the
revenue pledged to the payment of the bonds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2008, section 429.101, subdivision 1, is amended to read:

Subdivision 1.

Ordinances.

(a) In addition to any other method authorized by
law or charter, the governing body of any municipality may provide for the collection
of unpaid special charges as a special assessment against the property benefited for all
or any part of the cost of:

(1) snow, ice, or rubbish removal from sidewalks;

(2) weed elimination from streets or private property;

(3) removal or elimination of public health or safety hazards from private property,
excluding any structure included under the provisions of sections 463.15 to 463.26;

(4) installation or repair of water service lines, street sprinkling or other dust
treatment of streets;

(5) the trimming and care of trees and the removal of unsound trees from any street;

(6) the treatment and removal of insect infested or diseased trees on private property,
the repair of sidewalks and alleys;

(7) the operation of a street lighting system;

(8) the operation and maintenance of a fire protection or a pedestrian skyway system;

(9) inspections relating to a municipal housing maintenance code violation;

(10) the recovery of any disbursements under section 504B.445, subdivision 4,
clause (5), including disbursements for payment of utility bills and other services, even if
provided by a third party, necessary to remedy violations as described in section 504B.445,
subdivision 4, clause (2); deleted text begin or deleted text end

(11) [Repealed, 2004 c 275 s 5]

(12) the recovery of delinquent vacant building registration fees under a municipal
program designed to identify and register vacant buildings deleted text begin . deleted text end new text begin ; or
new text end

new text begin (13) energy improvements to residential or business property, as authorized under
section 216C.435.
new text end

(b) The council may by ordinance adopt regulations consistent with this section to
make this authority effective, including, at the option of the council, provisions for placing
primary responsibility upon the property owner or occupant to do the work personally
(except in the case of street sprinkling or other dust treatment, alley repair, tree trimming,
care, and removal new text begin , new text end or the operation of a street lighting system) upon notice before the work
is undertaken, and for collection from the property owner or other person served of the
charges when due before unpaid charges are made a special assessment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end