SF 904

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to energy; creating a revolving loan fund for geothermal heating and
cooling applications in public buildings; appropriating money; proposing coding
for new law in Minnesota Statutes, chapter 216C.

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

Section 1.

new text begin [216C.371] GEOTHERMAL INVESTMENT LOANS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purpose of this section:
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new text begin (a) "Commissioner" means the commissioner of commerce.
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new text begin (b) "Geothermal energy investments" means all capital expenditures that are
associated with a building heating or cooling application using geothermal energy, and
that have a 20-year or less payback period.
new text end

new text begin (c) "Municipality" means any county, statutory or home rule charter city, town,
school district, or any combination of those units operating under an agreement to jointly
undertake projects authorized in this section.
new text end

new text begin (d) "Geothermal application study" means a study of one or more geothermal-related
capital improvement projects analyzed in sufficient detail to support a financing
application. At a minimum, it must include one year of energy consumption and cost
data, a description of existing conditions, a description of proposed conditions, a detailed
description of the costs of the project, and calculations sufficient to document the proposed
energy savings in terms of nongeothermal energy and costs saved.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility. new text end

new text begin The commissioner must approve loans to municipalities
for geothermal energy investments. A loan may be made to a municipality that has
demonstrated that it has complied with this section and has made adequate provisions to
assure proper and efficient operation of the municipal facilities after improvements and
modifications are completed.
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin Application for a loan to be made pursuant to this section
must be made by a municipality to the commissioner. The commissioner shall review each
application to determine:
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new text begin (1) whether or not the municipality's proposal is complete;
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new text begin (2) whether the calculations and estimates contained in the geothermal application
project study are appropriate, accurate, and reasonable;
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new text begin (3) whether the project is eligible for a loan;
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new text begin (4) the amount of the loan for which the project is eligible; and
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new text begin (5) the means by which the municipality proposes to finance the project.
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new text begin During application review, the commissioner may request additional information about a
proposed geothermal energy investment, including information on project cost.
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new text begin Subd. 4. new text end

new text begin Conditions for loan approval; repayment. new text end

new text begin The commissioner shall
approve loans to municipalities on the following conditions:
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new text begin (a) A municipality must demonstrate that the project is economically feasible, and
that it has made adequate provisions to assure proper and efficient operation of the facility
once the project is completed.
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new text begin (b) A loan made pursuant to this section is repayable over a period of not more than
ten years from the date the loan is made. Interest must accrue from the date the loan is
made, but the first payment of interest or principal is not due until one year after the
loan was made. The principal must be amortized in equal periodic payments over the
remainder of the term of the loan. The accrued interest on the balance of the loan principal
is due with each payment. Interest attributable to the first year of deferred payment must
be paid in the same manner as principal.
new text end

new text begin Subd. 5. new text end

new text begin Payment; obligation. new text end

new text begin The commissioner shall not approve payment to a
municipality pursuant to an approved loan until the commissioner has determined that
financing of the project is assured by an irrevocable undertaking, by resolution of the
governing body of the municipality, to annually levy or otherwise collect an amount of
money sufficient to pay the principal and interest due on the loan as well as any of the
commissioner of finance's administrative expenses according to the terms of the loan.
new text end

new text begin Subd. 6. new text end

new text begin Geothermal revolving loan account; receipts; appropriation. new text end

new text begin The
geothermal revolving loan account is established in the special revenue fund in the state
treasury. Earnings and interest on funds in the account must be credited to the account.
Repayments of loans made under this section must be deposited into the geothermal
revolving loan account. Money in the geothermal revolving loan account is appropriated
to the commissioner of commerce for the purposes of making loans under this section.
new text end

Sec. 2. new text begin APPROPRIATION.
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new text begin $....... is appropriated from the general fund to the commissioner of commerce for
deposit into the geothermal revolving loan account in the special revenue fund in the state
treasury. The appropriation does not lapse.
new text end