Minnesota Legislature
HF 3109
1st Engrossment - 86th Legislature (2009 - 2010) Posted on 03/08/2010 01:21pm
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A bill for an act
relating to local government; authorizing local governments to finance energy
improvements for property owners to install energy efficient or renewable energy
improvements; providing for repayment as a special assessment; authorizing
issuance of revenue bonds; 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.
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[216C.435] DEFINITIONS.
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new text begin Subdivision 1. new text end
new text begin Scope. new text end
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For the purposes of this section and section 216C.436, the
terms defined in this section have the meanings given them.
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new text begin Subd. 2. new text end
new text begin City. new text end
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"City" means a home rule charter or statutory city.
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new text begin Subd. 3. new text end
new text begin Local government. new text end
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"Local government" means a city, county, or town.
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new text begin Subd. 4. new text end
new text begin Energy audit. new text end
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"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.
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new text begin Subd. 5. new text end
new text begin Energy improvement. new text end
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"Energy improvement" means:
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(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;
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(2) installation of new or upgraded electrical circuits to enable electrical vehicle
charging; or
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(3) a renewable energy system attached to, installed within, or proximate to a
building that generates electrical or thermal energy from a renewable energy source.
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new text begin Subd. 6. new text end
new text begin Qualifying real property. new text end
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"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 Subd. 7. new text end
new text begin Renewable energy. new text end
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"Renewable energy" means energy produced by
means of solar thermal, solar photovoltaic, wind, or geothermal resources.
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new text begin Subd. 8. new text end
new text begin Renewable energy system feasibility study. new text end
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"Renewable energy system
feasibility study" means a written study, conducted by a contractor trained to perform that
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 Subd. 9. new text end
new text begin Solar thermal. new text end
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"Solar thermal" has the meaning given to "qualifying solar
thermal project" in section 216B.2411, subdivision 2, paragraph (e).
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new text begin Subd. 10. new text end
new text begin Solar photovoltaic. new text end
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"Solar photovoltaic" has the meaning given in
section 216C.06, subdivision 16, and must meet the requirements of section 216C.25.
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new text begin EFFECTIVE DATE. new text end
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This section is effective the day following final enactment.
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Sec. 2.
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[216C.436] VOLUNTARY ENERGY IMPROVEMENTS FINANCING
PROGRAM FOR LOCAL GOVERNMENTS.
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new text begin Subdivision 1. new text end
new text begin Program authority. new text end
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A local government may establish a program
to finance energy improvements to enable 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. 2. new text end
new text begin Program requirements. new text end
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A financing program must:
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(1) impose requirements and conditions on financing arrangements to ensure timely
repayment;
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(2) require an energy audit or renewable energy system feasibility study to be
conducted on the qualifying real property and reviewed by the local government prior to
approval of the financing;
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(3) inspect the installation and verify the performance of energy improvements
financed by the program;
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(4) require that all cost-effective energy efficiency improvements be made to a
qualifying real property prior to, or in conjunction with, an applicant receiving financing
for a renewable energy system for that property;
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(5) have work financed by the program done by licensed contractors as required by
chapter 326B or other law or ordinance;
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(6) require disclosures to borrowers by the local government of the risks involved in
borrowing, including the risk of foreclosure if a tax delinquency results from a default;
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(7) provide financing only to those who demonstrate an ability to repay;
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(8) not provide financing for a qualifying real property in which the owner has a
negative equity or is not current on mortgage or real property tax payments;
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(9) require a petition by all owners of the qualifying real property requesting
collections of repayments as a special assessment under section 429.101;
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(10) 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; and
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(11) that liability for special assessments related to the financing runs with the
qualifying real property.
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new text begin Subd. 3. new text end
new text begin Financing terms. new text end
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Financing provided under this section must have:
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(1) a term not to exceed the weighted average of the useful life of the energy
improvements installed, as determined by the local government, but in no event may
a term exceed 20 years;
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(2) a principal amount not to 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
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(3) an interest rate sufficient to pay the financing costs of the program, including the
issuance of bonds and any financing delinquencies.
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new text begin Subd. 4. new text end
new text begin Coordination with other programs. new text end
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A financing program must include
cooperation and coordination with the conservation improvement activities of the utility
serving the qualifying real property and other public and private energy improvement
programs.
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new text begin Subd. 5. new text end
new text begin Certificate of participation. new text end
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Upon completion of a project, a local
government shall provide a borrower with a certificate stating participation in the program
and what energy improvements have been made with financing program proceeds.
new text end
new text begin Subd. 6. new text end
new text begin Repayment. new text end
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A local government financing an energy improvement
under this section must:
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(1) secure payment with a lien against the benefited qualifying real property; and
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(2) collect repayments as a special assessment as provided for in section 429.101
or by charter.
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new text begin Subd. 7. new text end
new text begin Bond issuance; repayment. new text end
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(a) A local government may issue revenue
bonds as provided in chapter 475 for the purposes of this section.
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(b) The bonds must be payable as to both principal and interest solely from the
revenues from the assessments established in subdivision 4.
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(c) No holder of bonds issued under this subdivision may compel any exercise of the
taxing power of the local government 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 local
government 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.
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new text begin EFFECTIVE DATE. new text end
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This section is effective the day following final enactment.
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Sec. 3.
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); or
(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.
(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 removalnew 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
(c) A home rule charter city, statutory city, county, or town operating an energy
improvements financing program under section 216C.436 has the authority granted to a
municipality under paragraph (a) with respect to energy improvements financed under
that section.
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new text begin EFFECTIVE DATE. new text end
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This section is effective the day following final enactment.
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