HF 4118

as introduced - 90th Legislature (2017 - 2018) Posted on 03/21/2018 12:01pm

A bill for an act
relating to energy; establishing a process to compensate businesses for loss of
business opportunity resulting from sale and closure of a biomass energy plant;
proposing coding for new law in Minnesota Statutes, chapter 116C.

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

Section 1.

new text begin [116C.7793] BIOMASS BUSINESS COMPENSATION.
new text end

new text begin Subdivision 1. new text end

new text begin Findings. new text end

new text begin The legislature finds that the authorization of the sale and
closure of the biomass energy plant under section 216B.2424, subdivision 9, will produce
significant savings for utility ratepayers in the state of Minnesota. A consequence of the
sale and closure of the plant is that several businesses established to serve the biomass plant
have lost business opportunity and face catastrophic financial losses as a result of the sale
and closure of the plant. The cost of compensating businesses for losses is significantly less
than the savings accrued to ratepayers as a result of the sale and closure of the plant. A
compensation process to assist businesses losing business opportunity as a result of the sale
and closure of the biomass plant serves the public interest by (1) providing a remedy for
businesses adversely affected by state action, and (2) preserving business capital and job
opportunities in the affected communities.
new text end

new text begin Subd. 2. new text end

new text begin Office of Administrative Hearings; claims process. new text end

new text begin 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
sale and closure of the biomass plant under section 216B.2424. The administrative law
judge may create a process, including creation of forms, to consider claims for affected
businesses and issue awards to eligible businesses. A form developed for the process must,
at a minimum, require the name of the business, the business address and telephone number,
and the name of a contact person.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility. new text end

new text begin 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
either the biomass plant identified under section 116C.779, subdivision 1, paragraph (f), or
a fertilizer plant integrated with the biomass plant identified under section 116C.779,
subdivision 1, paragraph (f).
new text end

new text begin Subd. 4. new text end

new text begin Calculation of award. new text end

new text begin (a) An eligible business must demonstrate the extent
of its lost business opportunity by providing copies of any contracts or other documentation
under subdivision 3, including financial statements showing company financial performance
over the past five years for supplying or managing material for, or receiving material from,
the biomass plant identified under section 116C.779, subdivision 1, paragraph (f), or a
fertilizer plant integrated with the biomass plant identified under section 116C.779,
subdivision 1, paragraph (f).
new text end

new text begin (b) A business seeking compensation must report any payment received from business
interruption insurance policies, if any, the payment of which would offset compensation
provided under this section. A business seeking compensation must also provide a valuation
of the sales, salvage, or scrap value of real or personal property associated with the business
if there is no alternative use available for the company's real and personal property.
new text end

new text begin (c) A business seeking compensation may also provide information documenting its
stranded investment in personal property essential to the business operation but for which
there is no valuable alternative use in the market place. Such stranded investment may be
included in the calculation of compensable loss for purposes of seeking compensation under
this section.
new text end

new text begin (d) A business seeking compensation must provide any other documentation it deems
appropriate, or as required by the administrative law judge, to support its claim for
compensation, including a narrative regarding the facts of the business claim which gives
rise to the request for compensation.
new text end

new text begin Subd. 5. new text end

new text begin Priority. new text end

new text begin The administrative law judge must give priority to claims by eligible
businesses that demonstrate a significant effort to mitigate losses resulting from the closure
of the biomass plant under section 216B.2424, subdivision 9. The administrative law judge
must consider whether, as listed in order of importance, the business:
new text end

new text begin (1) has demonstrated effort to pivot the business through retasking and retooling;
new text end

new text begin (2) was formed as a result of the biomass plant identified under section 116C.779,
subdivision 1, paragraph (f), commencing operations;
new text end

new text begin (3) was in business prior to the date the biomass plant identified under section 116C.779,
subdivision 1, paragraph (f), commenced operations; or
new text end

new text begin (4) is requesting compensation for a total business loss without mitigation efforts.
new text end

new text begin Subd. 6. new text end

new text begin Amount of claim. new text end

new text begin Any claim is limited by and proportional to the amount
provided for compensation in the biomass business compensation fund established under
section 116C.7794, and the number of claimants. A request for compensation must not
exceed the average of the annual net revenue generated from a contract or business
relationship with the biomass plant identified under section 116C.779, subdivision 1,
paragraph (f), or a fertilizer plant integrated with the biomass plant identified under section
116C.779, subdivision 1, paragraph (f), for the past five years times ten or times the number
of years remaining on the biomass plant's original power purchase agreement, whichever
is less.
new text end

new text begin Subd. 7. new text end

new text begin Deadlines. new text end

new text begin A business seeking to submit a request for compensation and receive
an offer of settlement or enter into a settlement agreement under this section must file claims
with the administrative law judge within 60 days of the date the biomass plant was closed
under section 216B.2424, subdivision 9. Any offer of settlement must be made by .................,
2019. The business must accept the offer of settlement within 40 of the date it received the
offer.
new text end

new text begin Subd. 8. new text end

new text begin Appeals. new text end

new text begin A decision to deny compensation claimed under this section is subject
to the contested case review procedures under chapter 14.
new text end

Sec. 2.

new text begin [116C.7794] BIOMASS BUSINESS COMPENSATION ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Account established. new text end

new text begin 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. Earnings, such
as interest, and any other earnings arising from the assets of the account are credited to the
account. Funds remaining in the account as of December 31, 2020, must be transferred to
the renewable development account established under section 116C.779.
new text end

new text begin Subd. 2. new text end

new text begin Funding for the special account. new text end

new text begin On July 1, 2018, $40,000,000 must be
transferred from the renewable development account under section 116C.779 to the biomass
business compensation account established under subdivision 1. The transferred funds must
be used to pay eligible obligations under the biomass business compensation program
established in section 116C.7793.
new text end

new text begin Subd. 3. new text end

new text begin Payment of expenses. new text end

new text begin 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 renewable development account under section
116C.779 for the expenses submitted under this subdivision.
new text end