Minnesota Legislature
HF 4114
as introduced - 90th Legislature (2017 - 2018) Posted on 03/28/2018 02:00pm
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A bill for an act
relating to economic development; providing for compensation to businesses for
loss of business opportunity from sale and closure of biomass energy plant; creating
an account; transferring money.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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BIOMASS BUSINESS COMPENSATION.
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new text begin Subdivision 1. new text end
new text begin Office of Administrative Hearings; claims process. new text end
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The chief
administrative law judge of the Office of Administrative Hearings must name an
administrative law judge to administer a claims award process to compensate businesses
negatively affected by the termination of the contract of the biomass plant identified under
Minnesota Statutes, section 116C.779, subdivision 1, paragraph (f). The administrative law
judge may develop a process and prescribe forms to consider claims by affected businesses
and issue awards to eligible businesses.
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new text begin Subd. 2. new text end
new text begin Eligibility. new text end
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To be eligible for compensation, an affected business must verify
that as of May 1, 2017, it was operating under the terms of a valid contract or provide other
documentation demonstrating an ongoing business relationship with the company operating
the biomass plant identified under Minnesota Statutes, section 116C.779, subdivision 1,
paragraph (f).
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new text begin Subd. 3. new text end
new text begin Calculating award. new text end
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(a) An eligible business may make a claim for compensation
based on decreased net revenue and the loss of value of investments in real or personal
property essential to business operations with the biomass plant identified under Minnesota
Statutes, section 116C.779, subdivision 1, paragraph (f). All such losses must be attributable
to the termination of the contract under Minnesota Statutes, section 216B.2424, subdivision
9.
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(b) In filing a claim of decreased net revenue, an eligible business must demonstrate the
extent of its decreased business by providing copies of any contracts or other documentation
under subdivision 2, including financial statements showing the eligible business's financial
performance over the past five years for supplying or managing material for, or receiving
material from, the biomass plant identified under Minnesota Statutes, section 116C.779,
subdivision 1, paragraph (f). The business must also present evidence of any alternative
business opportunities it has pursued or could pursue to mitigate the loss of revenue from
the termination of the contract, as the value of these alternative opportunities offsets
compensation provided under this section.
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(c) In filing a claim of loss of value of investments in real or personal property, an eligible
business must provide:
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(1) evidence that the property was essential to fulfilling the contract with the biomass
plant identified under Minnesota Statutes, section 116C.779, subdivision 1, paragraph (f);
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(2) evidence that the eligible business is unable to fully repurpose the property to another
productive use after the termination of the contract under Minnesota Statutes, section
216B.2424, subdivision 9; and
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(3) documentation of the eligible business's investment in the property, minus any
economic depreciation.
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An eligible business must also provide a valuation of the use, sales, salvage, or scrap value
of the property for which the loss is claimed, as this value offsets compensation provided
under this section.
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(d) A business seeking compensation under this section must report any payment received
from business interruption insurance policies, settlements, or other forms of compensation
related to the termination of the contract of the biomass plant identified under Minnesota
Statutes, section 116C.779, subdivision 1, paragraph (f). All such payments offset
compensation provided under this section.
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(e) A business seeking compensation under this section must provide any other
documentation it deems appropriate, or as required by the administrative law judge, to
support its claim, including a narrative of the facts of the business claim that gives rise to
the request for compensation.
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(f) Regardless of actual losses, an award of compensation must not exceed the average
of the eligible business's annual net revenue generated from a contract or business relationship
with the biomass plant identified under Minnesota Statutes, section 116C.779, subdivision
1, paragraph (f), for the past five years, multiplied by two.
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new text begin Subd. 4. new text end
new text begin Paying claims; priority. new text end
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(a) The administrative law judge must give priority
to claims by eligible businesses that:
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(1) demonstrate a significant effort to mitigate losses resulting from the termination of
the contract under Minnesota Statutes, section 216B.2424, subdivision 9;
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(2) suffered a large loss as a percentage of its total business due to the termination of
the contract under Minnesota Statutes, section 216B.2424, subdivision 9; and
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(3) can clearly show its losses were caused by reliance on the continued operation of
the biomass plant identified under Minnesota Statutes, section 116C.779, subdivision 1,
paragraph (f).
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(b) If the amount provided for compensation in the biomass business compensation
account established under section 2 is insufficient to fully compensate all claims determined
to have priority, all awards for priority claims must be adjusted proportionally.
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(c) After the payment of all priority claims, if the remaining amount provided for
compensation in the biomass business compensation account established under section 2 is
insufficient to fully compensate all claims determined not to have priority, all awards for
claims without priority must be adjusted proportionally.
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new text begin Subd. 5. new text end
new text begin Deadlines. new text end
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The administrative law judge must make an application process
for compensation available by August 1, 2018. A business seeking compensation under this
section must file all claims with the administrative law judge by October 1, 2018. Any offer
of settlement must be made by October 1, 2019. A business must accept the offer of
settlement within 40 days of the date it receives the offer.
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new text begin Subd. 6. new text end
new text begin Appeals. new text end
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A decision to deny compensation claimed under this section is subject
to the contested case review procedures under Minnesota Statutes, chapter 14.
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new text begin Subd. 7. new text end
new text begin Expiration. new text end
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This section expires June 30, 2021.
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Sec. 2.
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BIOMASS BUSINESS COMPENSATION ACCOUNT.
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new text begin Subdivision 1. new text end
new text begin Account established. new text end
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A biomass business compensation account is
established as a separate account in the special revenue fund in the state treasury.
Appropriations and transfers to the account must be credited to the account. Interest and
any other earnings arising from the assets of the account are credited to the account. Funds
in the account may be used to pay compensation under the biomass business compensation
program established in section 1 or administrative expenses under subdivision 3. Funds
remaining in the account on December 31, 2020, must be transferred to the renewable
development account established under Minnesota Statutes, section 116C.779.
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new text begin Subd. 2. new text end
new text begin Transfer to special account. new text end
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On July 1, 2018, and July 1, 2019, $20,000,000
must be transferred from the renewable development account under Minnesota Statutes,
section 116C.779, to the biomass business compensation account established under
subdivision 1.
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new text begin Subd. 3. new text end
new text begin Paying expenses. new text end
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The chief administrative law judge must submit to the
commissioner of management and budget documentation regarding salaries, expenses, and
administrative costs incurred for staff or consultants to administer the biomass business
compensation program. The commissioner of management and budget must reimburse the
chief administrative law judge from the biomass business compensation account established
under subdivision 1.
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new text begin Subd. 4. new text end
new text begin Expiration. new text end
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This section expires June 30, 2021.
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Sec. 3. new text begin EFFECTIVE DATE.
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Sections 1 and 2 are effective the day following final enactment.
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