HF 3018

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/20/2023 02:12pm

A bill for an act
relating to energy; modifying the property assessed clean energy program; adding
definitions; amending Minnesota Statutes 2022, sections 216C.435, subdivision
8; 216C.436, subdivision 2, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2022, section 216C.435, subdivision 8, is amended to read:

Subd. 8.

Qualifying commercial real property.

"Qualifying commercial real property"
means a multifamily residential dwelling, deleted text begin or deleted text end a commercial or industrial building, new text begin or farmland,
as defined in section 216C.436, subdivision 1b, new text end that the implementing entity has determined,
after review of an energy audit deleted text begin or deleted text end new text begin , new text end renewable energy system feasibility study, new text begin or agronomic
assessment, as defined in section 216C.436, subdivision 1b, new text end can deleted text begin be benefited by deleted text end new text begin benefit
from the new text end installation of cost-effective energy improvements new text begin or land and water improvements,
as defined in section 216C.436, subdivision 1b new text end . Qualifying commercial real property includes
new construction.

Sec. 2.

Minnesota Statutes 2022, section 216C.436, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have the
meanings given.
new text end

new text begin (b) "Agronomic assessment" means a study by an independent third party that assesses
the environmental impacts of proposed land and water improvements on farmland.
new text end

new text begin (c) "Farmland" means land classified as 2a, 2b, or 2c for property tax purposes under
section 273.13, subdivision 23.
new text end

new text begin (d) "Land and water improvement" means:
new text end

new text begin (1) an improvement to farmland that:
new text end

new text begin (i) is permanent;
new text end

new text begin (ii) results in improved agricultural profitability or resiliency;
new text end

new text begin (iii) reduces the environmental impact of agricultural production; and
new text end

new text begin (iv) if the improvement affects drainage, complies with the most recent versions of the
applicable following conservation practice standards issued by the United States Department
of Agriculture's Natural Resources Conservation Service: Drainage Water Management
(Code 554), Saturated Buffer (Code 604), Denitrifying Bioreactor (Code 605), and
Constructed Wetland (Code 656); or
new text end

new text begin (2) water conservation and quality measures, which include permanently affixed
equipment, appliances, or improvements that reduce a property's water consumption or that
enable water to be managed more efficiently.
new text end

new text begin (e) "Resiliency" means the ability of farmland to maintain and enhance profitability,
soil health, and water quality.
new text end

Sec. 3.

Minnesota Statutes 2022, section 216C.436, subdivision 2, is amended to read:

Subd. 2.

Program requirements.

A commercial PACE loan program must:

(1) impose requirements and conditions on financing arrangements to ensure timely
repayment;

(2) require an energy audit deleted text begin or deleted text end new text begin , new text end renewable energy system feasibility study new text begin , or agronomic
or soil health assessment new text end to be conducted on the qualifying commercial real property and
reviewed by the implementing entity prior to approval of the financing;

(3) require the inspection of all installations and a performance verification of at least
ten percent of the cost-effective energy improvements new text begin or land and water improvements new text end
financed by the program;

(4) not prohibit the financing of all cost-effective energy improvements new text begin or land and
water improvements new text end not otherwise prohibited by this section;

(5) require that all cost-effective energy improvements new text begin or land and water improvements new text end
be made to a qualifying commercial real property prior to, or in conjunction with, an
applicant's repayment of financing for cost-effective energy improvements new text begin or land and water
improvements new text end for that property;

(6) have cost-effective energy improvements new text begin or land and water improvements new text end financed
by the program performed by a licensed contractor as required by chapter 326B or other
law or ordinance;

(7) require disclosures new text begin in the loan document new text end to borrowers by the implementing entity
of new text begin : (i) new text end the risks involved in borrowing, including the risk of foreclosure if a tax delinquency
results from a default new text begin ; and (ii) all the terms and conditions of the commercial PACE loan
and the installation of cost-effective energy improvements or land and water improvements,
including the interest rate being charged on the loan new text end ;

(8) provide financing only to those who demonstrate an ability to repay;

(9) not provide financing for a qualifying commercial real property in which the owner
is not current on mortgage or real property tax payments;

(10) require a petition to the implementing entity by all owners of the qualifying
commercial real property requesting collections of repayments as a special assessment under
section 429.101;

(11) provide that payments and assessments are not accelerated due to a default and that
a tax delinquency exists only for assessments not paid when due; deleted text begin and
deleted text end

(12) require that liability for special assessments related to the financing runs with the
qualifying commercial real property deleted text begin . deleted text end new text begin ; and
new text end

new text begin (13) prior to financing any improvements to or imposing any assessment upon qualifying
commercial real property, require notice to and written consent from the mortgage lender
of any mortgage encumbering or otherwise secured by the qualifying commercial real
property.
new text end