Minnesota Legislature
HF 3109
1st Committee Engrossment - 86th Legislature (2009 - 2010) Posted on 03/19/2013 07:29pm
KEY: stricken = removed, old language.
underscored = added, new language.
1.2relating to local government; authorizing local governments to finance energy
1.3improvements for property owners to install energy efficient or renewable energy
1.4improvements; providing for repayment as a special assessment; authorizing
1.5issuance of revenue bonds;amending Minnesota Statutes 2008, section 429.101,
1.6subdivision 1; proposing coding for new law in Minnesota Statutes, chapter
1.7216C.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 Section 1. [216C.435] DEFINITIONS.
1.10 Subdivision 1. Scope. For the purposes of this section and section 216C.436, the
1.11terms defined in this section have the meanings given them.
1.12 Subd. 2. City. "City" means a home rule charter or statutory city.
1.13 Subd. 3. Local government. "Local government" means a city, county, or town.
1.14 Subd. 4. Energy audit. "Energy audit" means a formal evaluation of the energy
1.15consumption of a building by a certified energy auditor, whose certification is approved by
1.16the commissioner, for the purpose of identifying appropriate energy improvements that
1.17could be made to the building and including an estimate of the length of time a specific
1.18energy improvement will take to repay its purchase and installation costs, based on the
1.19amount of energy saved and estimated future energy prices.
1.20 Subd. 5. Energy improvement. "Energy improvement" means:
1.21(1) any renovation or retrofitting of a building to improve energy efficiency that
1.22is permanently affixed to the property and that results in a net reduction in energy
1.23consumption without altering the principal source of energy;
1.24(2) installation of new or upgraded electrical circuits to enable electrical vehicle
1.25charging; or
2.1(3) a renewable energy system attached to, installed within, or proximate to a
2.2building that generates electrical or thermal energy from a renewable energy source.
2.3 Subd. 6. Qualifying real property. "Qualifying real property" means a
2.4single-family or multifamily residential dwelling, or a commercial or industrial building,
2.5that the city has determined, after review of an energy audit or renewable energy system
2.6feasibility study, can be benefited by installation of energy improvements.
2.7 Subd. 7. Renewable energy. "Renewable energy" means energy produced by
2.8means of solar thermal, solar photovoltaic, wind, or geothermal resources.
2.9 Subd. 8. Renewable energy system feasibility study. "Renewable energy system
2.10feasibility study" means a written study, conducted by a contractor trained to perform that
2.11analysis, for the purpose of determining the feasibility of installing a renewable energy
2.12system in a building, including an estimate of the length of time a specific renewable
2.13energy system will take to repay its purchase and installation costs, based on the amount of
2.14energy saved and estimated future energy prices. For a geothermal energy improvement,
2.15the feasibility study must calculate net savings in terms of nongeothermal energy and costs.
2.16 Subd. 9. Solar thermal. "Solar thermal" has the meaning given to "qualifying solar
2.17thermal project" in section 216B.2411, subdivision 2, paragraph (e).
2.18 Subd. 10. Solar photovoltaic. "Solar photovoltaic" has the meaning given in
2.19section 216C.06, subdivision 16, and must meet the requirements of section 216C.25.
2.20EFFECTIVE DATE.This section is effective the day following final enactment.
2.21 Sec. 2. [216C.436] VOLUNTARY ENERGY IMPROVEMENTS FINANCING
2.22PROGRAM FOR LOCAL GOVERNMENTS.
2.23 Subdivision 1. Program authority. A local government may establish a program
2.24to finance energy improvements to enable owners of qualifying real property to pay for
2.25cost-effective energy improvements to the qualifying real property with the net proceeds
2.26and interest earnings of revenue bonds authorized in this section.
2.27 Subd. 2. Program requirements. A financing program must:
2.28(1) impose requirements and conditions on financing arrangements to ensure timely
2.29repayment;
2.30(2) require an energy audit or renewable energy system feasibility study to be
2.31conducted on the qualifying real property and reviewed by the local government prior to
2.32approval of the financing;
2.33(3) inspect the installation and verify the performance of energy improvements
2.34financed by the program;
3.1(4) require that all cost-effective energy efficiency improvements be made to a
3.2qualifying real property prior to, or in conjunction with, an applicant receiving financing
3.3for a renewable energy system for that property;
3.4(5) have work financed by the program done by licensed contractors as required by
3.5chapter 326B or other law or ordinance;
3.6(6) require disclosures to borrowers by the local government of the risks involved in
3.7borrowing, including the risk of foreclosure if a tax delinquency results from a default;
3.8(7) provide financing only to those who demonstrate an ability to repay;
3.9(8) not provide financing for a qualifying real property in which the owner has a
3.10negative equity or is not current on mortgage or real property tax payments;
3.11(9) require a petition by all owners of the qualifying real property requesting
3.12collections of repayments as a special assessment under section 429.101;
3.13(10) provide that payments and assessments are not accelerated due to a default and
3.14that a tax delinquency exists only for assessments not paid when due; and
3.15(11) that liability for special assessments related to the financing runs with the
3.16qualifying real property.
3.17 Subd. 3. Financing terms. Financing provided under this section must have:
3.18(1) a term not to exceed the weighted average of the useful life of the energy
3.19improvements installed, as determined by the local government, but in no event may
3.20a term exceed 20 years;
3.21(2) a principal amount not to exceed the lesser of ten percent of the appraised value
3.22of the real property on which the improvements are to be installed or the actual cost of
3.23installing the energy improvements, including the costs of necessary equipment, materials,
3.24and labor, the costs of each related energy audit or renewable energy system feasibility
3.25study, and the cost of verification of installation; and
3.26(3) an interest rate sufficient to pay the financing costs of the program, including the
3.27issuance of bonds and any financing delinquencies.
3.28 Subd. 4. Coordination with other programs. A financing program must include
3.29cooperation and coordination with the conservation improvement activities of the utility
3.30serving the qualifying real property and other public and private energy improvement
3.31programs.
3.32 Subd. 5. Certificate of participation. Upon completion of a project, a local
3.33government shall provide a borrower with a certificate stating participation in the program
3.34and what energy improvements have been made with financing program proceeds.
3.35 Subd. 6. Repayment. A local government financing an energy improvement
3.36under this section must:
4.1(1) secure payment with a lien against the benefited qualifying real property; and
4.2(2) collect repayments as a special assessment as provided for in section 429.101
4.3or by charter.
4.4 Subd. 7. Bond issuance; repayment. (a) A local government may issue revenue
4.5bonds as provided in chapter 475 for the purposes of this section.
4.6(b) The bonds must be payable as to both principal and interest solely from the
4.7revenues from the assessments established in subdivision 4.
4.8(c) No holder of bonds issued under this subdivision may compel any exercise of the
4.9taxing power of the local government that issued the bonds to pay principal or interest on
4.10the bonds. Bonds issued under this subdivision are not a debt or obligation of the local
4.11government that issued them, nor is the payment of the bonds enforceable out of any
4.12money other than the revenue pledged to the payment of the bonds.
4.13EFFECTIVE DATE.This section is effective the day following final enactment.
4.14 Sec. 3. Minnesota Statutes 2008, section 429.101, subdivision 1, is amended to read:
4.15 Subdivision 1. Ordinances. (a) In addition to any other method authorized by
4.16law or charter, the governing body of any municipality may provide for the collection
4.17of unpaid special charges as a special assessment against the property benefited for all
4.18or any part of the cost of:
4.19 (1) snow, ice, or rubbish removal from sidewalks;
4.20 (2) weed elimination from streets or private property;
4.21 (3) removal or elimination of public health or safety hazards from private property,
4.22excluding any structure included under the provisions of sections463.15 to
463.26 ;
4.23 (4) installation or repair of water service lines, street sprinkling or other dust
4.24treatment of streets;
4.25 (5) the trimming and care of trees and the removal of unsound trees from any street;
4.26 (6) the treatment and removal of insect infested or diseased trees on private property,
4.27the repair of sidewalks and alleys;
4.28 (7) the operation of a street lighting system;
4.29 (8) the operation and maintenance of a fire protection or a pedestrian skyway system;
4.30 (9) inspections relating to a municipal housing maintenance code violation;
4.31 (10) the recovery of any disbursements under section504B.445, subdivision 4 ,
4.32clause (5), including disbursements for payment of utility bills and other services, even if
4.33provided by a third party, necessary to remedy violations as described in section504B.445,
4.34subdivision 4 , clause (2); or
4.35 (11) [Repealed, 2004 c 275 s 5]
5.1 (12) the recovery of delinquent vacant building registration fees under a municipal
5.2program designed to identify and register vacant buildings.
5.3 (b) The council may by ordinance adopt regulations consistent with this section to
5.4make this authority effective, including, at the option of the council, provisions for placing
5.5primary responsibility upon the property owner or occupant to do the work personally
5.6(except in the case of street sprinkling or other dust treatment, alley repair, tree trimming,
5.7care, and removal, or the operation of a street lighting system) upon notice before the work
5.8is undertaken, and for collection from the property owner or other person served of the
5.9charges when due before unpaid charges are made a special assessment.
5.10(c) A home rule charter city, statutory city, county, or town operating an energy
5.11improvements financing program under section 216C.436 has the authority granted to a
5.12municipality under paragraph (a) with respect to energy improvements financed under
5.13that section.
5.14EFFECTIVE DATE.This section is effective the day following final enactment.
1.3improvements for property owners to install energy efficient or renewable energy
1.4improvements; providing for repayment as a special assessment; authorizing
1.5issuance of revenue bonds;amending Minnesota Statutes 2008, section 429.101,
1.6subdivision 1; proposing coding for new law in Minnesota Statutes, chapter
1.7216C.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 Section 1. [216C.435] DEFINITIONS.
1.10 Subdivision 1. Scope. For the purposes of this section and section 216C.436, the
1.11terms defined in this section have the meanings given them.
1.12 Subd. 2. City. "City" means a home rule charter or statutory city.
1.13 Subd. 3. Local government. "Local government" means a city, county, or town.
1.14 Subd. 4. Energy audit. "Energy audit" means a formal evaluation of the energy
1.15consumption of a building by a certified energy auditor, whose certification is approved by
1.16the commissioner, for the purpose of identifying appropriate energy improvements that
1.17could be made to the building and including an estimate of the length of time a specific
1.18energy improvement will take to repay its purchase and installation costs, based on the
1.19amount of energy saved and estimated future energy prices.
1.20 Subd. 5. Energy improvement. "Energy improvement" means:
1.21(1) any renovation or retrofitting of a building to improve energy efficiency that
1.22is permanently affixed to the property and that results in a net reduction in energy
1.23consumption without altering the principal source of energy;
1.24(2) installation of new or upgraded electrical circuits to enable electrical vehicle
1.25charging; or
2.1(3) a renewable energy system attached to, installed within, or proximate to a
2.2building that generates electrical or thermal energy from a renewable energy source.
2.3 Subd. 6. Qualifying real property. "Qualifying real property" means a
2.4single-family or multifamily residential dwelling, or a commercial or industrial building,
2.5that the city has determined, after review of an energy audit or renewable energy system
2.6feasibility study, can be benefited by installation of energy improvements.
2.7 Subd. 7. Renewable energy. "Renewable energy" means energy produced by
2.8means of solar thermal, solar photovoltaic, wind, or geothermal resources.
2.9 Subd. 8. Renewable energy system feasibility study. "Renewable energy system
2.10feasibility study" means a written study, conducted by a contractor trained to perform that
2.11analysis, for the purpose of determining the feasibility of installing a renewable energy
2.12system in a building, including an estimate of the length of time a specific renewable
2.13energy system will take to repay its purchase and installation costs, based on the amount of
2.14energy saved and estimated future energy prices. For a geothermal energy improvement,
2.15the feasibility study must calculate net savings in terms of nongeothermal energy and costs.
2.16 Subd. 9. Solar thermal. "Solar thermal" has the meaning given to "qualifying solar
2.17thermal project" in section 216B.2411, subdivision 2, paragraph (e).
2.18 Subd. 10. Solar photovoltaic. "Solar photovoltaic" has the meaning given in
2.19section 216C.06, subdivision 16, and must meet the requirements of section 216C.25.
2.20EFFECTIVE DATE.This section is effective the day following final enactment.
2.21 Sec. 2. [216C.436] VOLUNTARY ENERGY IMPROVEMENTS FINANCING
2.22PROGRAM FOR LOCAL GOVERNMENTS.
2.23 Subdivision 1. Program authority. A local government may establish a program
2.24to finance energy improvements to enable owners of qualifying real property to pay for
2.25cost-effective energy improvements to the qualifying real property with the net proceeds
2.26and interest earnings of revenue bonds authorized in this section.
2.27 Subd. 2. Program requirements. A financing program must:
2.28(1) impose requirements and conditions on financing arrangements to ensure timely
2.29repayment;
2.30(2) require an energy audit or renewable energy system feasibility study to be
2.31conducted on the qualifying real property and reviewed by the local government prior to
2.32approval of the financing;
2.33(3) inspect the installation and verify the performance of energy improvements
2.34financed by the program;
3.1(4) require that all cost-effective energy efficiency improvements be made to a
3.2qualifying real property prior to, or in conjunction with, an applicant receiving financing
3.3for a renewable energy system for that property;
3.4(5) have work financed by the program done by licensed contractors as required by
3.5chapter 326B or other law or ordinance;
3.6(6) require disclosures to borrowers by the local government of the risks involved in
3.7borrowing, including the risk of foreclosure if a tax delinquency results from a default;
3.8(7) provide financing only to those who demonstrate an ability to repay;
3.9(8) not provide financing for a qualifying real property in which the owner has a
3.10negative equity or is not current on mortgage or real property tax payments;
3.11(9) require a petition by all owners of the qualifying real property requesting
3.12collections of repayments as a special assessment under section 429.101;
3.13(10) provide that payments and assessments are not accelerated due to a default and
3.14that a tax delinquency exists only for assessments not paid when due; and
3.15(11) that liability for special assessments related to the financing runs with the
3.16qualifying real property.
3.17 Subd. 3. Financing terms. Financing provided under this section must have:
3.18(1) a term not to exceed the weighted average of the useful life of the energy
3.19improvements installed, as determined by the local government, but in no event may
3.20a term exceed 20 years;
3.21(2) a principal amount not to exceed the lesser of ten percent of the appraised value
3.22of the real property on which the improvements are to be installed or the actual cost of
3.23installing the energy improvements, including the costs of necessary equipment, materials,
3.24and labor, the costs of each related energy audit or renewable energy system feasibility
3.25study, and the cost of verification of installation; and
3.26(3) an interest rate sufficient to pay the financing costs of the program, including the
3.27issuance of bonds and any financing delinquencies.
3.28 Subd. 4. Coordination with other programs. A financing program must include
3.29cooperation and coordination with the conservation improvement activities of the utility
3.30serving the qualifying real property and other public and private energy improvement
3.31programs.
3.32 Subd. 5. Certificate of participation. Upon completion of a project, a local
3.33government shall provide a borrower with a certificate stating participation in the program
3.34and what energy improvements have been made with financing program proceeds.
3.35 Subd. 6. Repayment. A local government financing an energy improvement
3.36under this section must:
4.1(1) secure payment with a lien against the benefited qualifying real property; and
4.2(2) collect repayments as a special assessment as provided for in section 429.101
4.3or by charter.
4.4 Subd. 7. Bond issuance; repayment. (a) A local government may issue revenue
4.5bonds as provided in chapter 475 for the purposes of this section.
4.6(b) The bonds must be payable as to both principal and interest solely from the
4.7revenues from the assessments established in subdivision 4.
4.8(c) No holder of bonds issued under this subdivision may compel any exercise of the
4.9taxing power of the local government that issued the bonds to pay principal or interest on
4.10the bonds. Bonds issued under this subdivision are not a debt or obligation of the local
4.11government that issued them, nor is the payment of the bonds enforceable out of any
4.12money other than the revenue pledged to the payment of the bonds.
4.13EFFECTIVE DATE.This section is effective the day following final enactment.
4.14 Sec. 3. Minnesota Statutes 2008, section 429.101, subdivision 1, is amended to read:
4.15 Subdivision 1. Ordinances. (a) In addition to any other method authorized by
4.16law or charter, the governing body of any municipality may provide for the collection
4.17of unpaid special charges as a special assessment against the property benefited for all
4.18or any part of the cost of:
4.19 (1) snow, ice, or rubbish removal from sidewalks;
4.20 (2) weed elimination from streets or private property;
4.21 (3) removal or elimination of public health or safety hazards from private property,
4.22excluding any structure included under the provisions of sections
4.23 (4) installation or repair of water service lines, street sprinkling or other dust
4.24treatment of streets;
4.25 (5) the trimming and care of trees and the removal of unsound trees from any street;
4.26 (6) the treatment and removal of insect infested or diseased trees on private property,
4.27the repair of sidewalks and alleys;
4.28 (7) the operation of a street lighting system;
4.29 (8) the operation and maintenance of a fire protection or a pedestrian skyway system;
4.30 (9) inspections relating to a municipal housing maintenance code violation;
4.31 (10) the recovery of any disbursements under section
4.32clause (5), including disbursements for payment of utility bills and other services, even if
4.33provided by a third party, necessary to remedy violations as described in section
4.34subdivision 4
4.35 (11) [Repealed, 2004 c 275 s 5]
5.1 (12) the recovery of delinquent vacant building registration fees under a municipal
5.2program designed to identify and register vacant buildings.
5.3 (b) The council may by ordinance adopt regulations consistent with this section to
5.4make this authority effective, including, at the option of the council, provisions for placing
5.5primary responsibility upon the property owner or occupant to do the work personally
5.6(except in the case of street sprinkling or other dust treatment, alley repair, tree trimming,
5.7care, and removal, or the operation of a street lighting system) upon notice before the work
5.8is undertaken, and for collection from the property owner or other person served of the
5.9charges when due before unpaid charges are made a special assessment.
5.10(c) A home rule charter city, statutory city, county, or town operating an energy
5.11improvements financing program under section 216C.436 has the authority granted to a
5.12municipality under paragraph (a) with respect to energy improvements financed under
5.13that section.
5.14EFFECTIVE DATE.This section is effective the day following final enactment.