SF 2542

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 10/25/2023 09:27am

A bill for an act
relating to energy; modifying certain utility requirements; prohibiting certain
restrictions on the use of residential solar energy systems; modifying the property
assessed clean energy program; amending the definition of low-income household
for purposes of receiving energy conservation assistance; requiring submission of
a decommissioning and demolition plan for a scheduled retirement of an electric
generation facility; adding the definitions of gas and hazardous liquid; authorizing
natural gas utilities to sell extraordinary event bonds under certain circumstances;
modifying various other provisions governing utilities; and modifying various
other energy provisions; amending Minnesota Statutes 2022, sections 216B.164,
by adding a subdivision; 216B.2402, subdivision 16; 216B.2425, subdivision 3;
216B.243, subdivision 8, as amended; 216B.50, subdivision 1; 216C.435,
subdivision 8; 216C.436, subdivision 2, by adding a subdivision; 216G.02,
subdivision 1; 515B.2-103; 515B.3-102; Laws 2005, chapter 97, article 10, section
3, as amended; proposing coding for new law in Minnesota Statutes, chapters
216B; 500.

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

Section 1.

Minnesota Statutes 2022, section 216B.164, is amended by adding a subdivision
to read:

new text begin Subd. 12. new text end

new text begin Customer's access to electricity usage data. new text end

new text begin A utility must provide a
customer's electricity usage data to the customer within ten days of the date the utility
receives a request from the customer that is accompanied by evidence that the energy usage
data is relevant to the interconnection of a qualifying facility on behalf of the customer. For
the purposes of this subdivision, "electricity usage data" includes but is not limited to: (1)
the total amount of electricity used by a customer monthly; (2) usage by time period if the
customer operates under a tariff where costs vary by time-of-use; and (3) usage data that is
used to calculate a customer's demand charge.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2022, section 216B.2402, subdivision 16, is amended to read:

Subd. 16.

Low-income household.

"Low-income household" means a household whose
household income new text begin :
new text end

new text begin (1) new text end is deleted text begin 60 deleted text end new text begin 80 new text end percent or less of the deleted text begin state deleted text end new text begin area new text end median household income deleted text begin . deleted text end new text begin for the geographic
area in which the low-income household is located, as calculated by the federal Department
of Housing and Urban Development; or
new text end

new text begin (2) meets the income eligibility standards, as determined by the commissioner, required
for a household to receive financial assistance from a federal, state, municipal, or utility
program administered or approved by the department.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2022, section 216B.2425, subdivision 3, is amended to read:

Subd. 3.

Commission approval.

new text begin (a) new text end By June 1 of each even-numbered year, the
commission shall adopt a state transmission project list and shall certify, certify as modified,
or deny certification of the transmission and distribution projects proposed under subdivision
2. new text begin Except as provided in paragraph (b), new text end the commission may only certify a project that is a
high-voltage transmission line as defined in section 216B.2421, subdivision 2, that the
commission finds is:

(1) necessary to maintain or enhance the reliability of electric service to Minnesota
consumers;

(2) needed, applying the criteria in section 216B.243, subdivision 3; and

(3) in the public interest, taking into account electric energy system needs and economic,
environmental, and social interests affected by the project.

new text begin (b) The commission may certify a project proposed under subdivision 2, paragraph (e),
only if the commission finds the proposed project is in the public interest.
new text end

Sec. 4.

Minnesota Statutes 2022, section 216B.243, subdivision 8, as amended by Laws
2023, chapter 7, section 23, is amended to read:

Subd. 8.

Exemptions.

(a) This section does not apply to:

(1) cogeneration or small power production facilities as defined in the Federal Power
Act, United States Code, title 16, section 796, paragraph (17), subparagraph (A), and
paragraph (18), subparagraph (A), and having a combined capacity at a single site of less
than 80,000 kilowatts; plants or facilities for the production of ethanol or fuel alcohol; or
any case where the commission has determined after being advised by the attorney general
that its application has been preempted by federal law;

(2) a high-voltage transmission line proposed primarily to distribute electricity to serve
the demand of a single customer at a single location, unless the applicant opts to request
that the commission determine need under this section or section 216B.2425;

(3) the upgrade to a higher voltage of an existing transmission line that serves the demand
of a single customer that primarily uses existing rights-of-way, unless the applicant opts to
request that the commission determine need under this section or section 216B.2425;

(4) a high-voltage transmission line of one mile or less required to connect a new or
upgraded substation to an existing, new, or upgraded high-voltage transmission line;

(5) conversion of the fuel source of an existing electric generating plant to using natural
gas;

(6) the modification of an existing electric generating plant to increase efficiency, as
long as the capacity of the plant is not increased more than ten percent or more than 100
megawatts, whichever is greater;

(7) a large wind energy conversion system, as defined in section 216F.01, subdivision
2, or a solar energy generating system, as defined in section 216E.01, subdivision 9a, deleted text begin if the
system is owned and operated by an independent power producer and the electric output of
the system:
deleted text end

deleted text begin (i) is not sold to an entity that provides retail service in Minnesota or wholesale electric
service to another entity in Minnesota other than an entity that is a federally recognized
regional transmission organization or independent system operator; or
deleted text end

deleted text begin (ii) is sold to an entity that provides retail service in Minnesota or wholesale electric
service to another entity in Minnesota other than an entity that is a federally recognized
regional transmission organization or independent system operator, provided that the system
represents solar or wind capacity that the entity purchasing the system's electric output was
ordered by the commission to develop in the entity's most recent integrated resource plan
approved under section 216B.2422 deleted text end new text begin if a site permit application under chapter 216E or 216F
is initially submitted by an independent power producer new text end ; or

(8) a large wind energy conversion system, as defined in section 216F.01, subdivision
2, or a solar energy generating system that is a large energy facility, as defined in section
216B.2421, subdivision 2, engaging in a repowering project that:

(i) will not result in the system exceeding the nameplate capacity under its most recent
interconnection agreement; or

(ii) will result in the system exceeding the nameplate capacity under its most recent
interconnection agreement, provided that the Midcontinent Independent System Operator
has provided a signed generator interconnection agreement that reflects the expected net
power increase.

(b) For the purpose of this subdivision, "repowering project" means:

(1) modifying a large wind energy conversion system or a solar energy generating system
that is a large energy facility to increase its efficiency without increasing its nameplate
capacity;

(2) replacing turbines in a large wind energy conversion system without increasing the
nameplate capacity of the system; or

(3) increasing the nameplate capacity of a large wind energy conversion system.

Sec. 5.

new text begin [216B.491] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of sections 216B.491 to 216B.499, the terms
defined in this subdivision have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Ancillary agreement. new text end

new text begin "Ancillary agreement" means any bond, insurance policy,
letter of credit, reserve account, surety bond, interest rate lock or swap arrangement, liquidity
or credit support arrangement, or other financial arrangement entered into in connection
with extraordinary event bonds that is designed to promote the credit quality and
marketability of extraordinary event bonds or to mitigate the risk of an increase in interest
rates.
new text end

new text begin Subd. 3. new text end

new text begin Assignee. new text end

new text begin "Assignee" means any person to which an interest in extraordinary
event property is sold, assigned, transferred, or conveyed, other than as security, and any
successor to or subsequent assignee of the person.
new text end

new text begin Subd. 4. new text end

new text begin Bondholder. new text end

new text begin "Bondholder" means any holder or owner of extraordinary event
bonds.
new text end

new text begin Subd. 5. new text end

new text begin Customer. new text end

new text begin "Customer" means a person who purchases natural gas or natural
gas transportation services from a utility in Minnesota but does not include a person who:
new text end

new text begin (1) purchases natural gas transportation services from a utility in Minnesota that serves
fewer than 600,000 natural gas customers in Minnesota; and
new text end

new text begin (2) does not purchase natural gas from a utility in Minnesota.
new text end

new text begin Subd. 6. new text end

new text begin Extraordinary event. new text end

new text begin (a) "Extraordinary event" means an event arising from
unforeseen circumstances and of sufficient magnitude, as determined by the commission:
new text end

new text begin (1) to impose significant costs on customers; and
new text end

new text begin (2) for which the issuance of extraordinary event bonds in response to the event meets
the conditions of section 216B.492, subdivision 2, as determined by the commission.
new text end

new text begin (b) Extraordinary event includes but is not limited to a storm event or other natural
disaster, an act of God, war, terrorism, sabotage or vandalism, a cybersecurity attack, or a
temporary significant increase in the wholesale price of natural gas.
new text end

new text begin Subd. 7. new text end

new text begin Extraordinary event activity. new text end

new text begin "Extraordinary event activity" means an activity
undertaken by or on behalf of a utility to restore or maintain the utility's ability to provide
natural gas service following one or more extraordinary events, including but not limited
to activities related to mobilization, staging, construction, reconstruction, replacement, or
repair of natural gas transmission, distribution, storage, or general facilities.
new text end

new text begin Subd. 8. new text end

new text begin Extraordinary event bonds. new text end

new text begin "Extraordinary event bonds" means debt securities,
including but not limited to senior secured bonds, debentures, notes, certificates of
participation, certificates of beneficial interest, certificates of ownership, or other evidences
of indebtedness or ownership, that (1) have a scheduled maturity of no longer than 30 years
and a final legal maturity date that is not later than 32 years from the issue date, (2) are rated
AA or Aa2 or better by a major independent credit rating agency at the time of issuance,
and (3) are issued by a utility or an assignee under a financing order.
new text end

new text begin Subd. 9. new text end

new text begin Extraordinary event charge. new text end

new text begin "Extraordinary event charge" means a
nonbypassable charge that:
new text end

new text begin (1) a utility that is the subject of a financing order or the utility's successors or assignees
imposes on all of the utility's customers;
new text end

new text begin (2) is separate from the utility's base rates; and
new text end

new text begin (3) provides a source of revenue solely to repay, finance, or refinance extraordinary
event costs.
new text end

new text begin Subd. 10. new text end

new text begin Extraordinary event costs. new text end

new text begin "Extraordinary event costs":
new text end

new text begin (1) means all incremental costs of extraordinary event activities that are approved by
the commission in a financing order issued under section 216B.492 as being:
new text end

new text begin (i) necessary to enable the utility to restore or maintain natural gas service to customers
after the utility experiences an extraordinary event; and
new text end

new text begin (ii) prudent and reasonable;
new text end

new text begin (2) includes costs to repurchase equity or retire any indebtedness relating to extraordinary
event activities;
new text end

new text begin (3) are net of applicable insurance proceeds, tax benefits, and any other amounts intended
to reimburse the utility for extraordinary event activities, including government grants or
aid of any kind;
new text end

new text begin (4) do not include any monetary penalty, fine, or forfeiture assessed against a utility by
a government agency or court under a federal or state environmental statute, rule, or
regulation; and
new text end

new text begin (5) must be adjusted to reflect:
new text end

new text begin (i) the difference, as determined by the commission, between extraordinary event costs
that the utility expects to incur and actual, reasonable, and prudent costs incurred; or
new text end

new text begin (ii) a more fair or reasonable allocation of extraordinary event costs to customers over
time, as expressed in a commission order, provided that after the issuance of extraordinary
event bonds relating to the extraordinary event costs, the adjustment must not (A) impair
the value of the extraordinary event property relating to the extraordinary event bonds, or
(B) reduce, alter, or impair extraordinary event charges relating to the extraordinary event
bonds, until all principal and interest payable on the extraordinary event bonds, all financing
costs for the extraordinary event bonds, and all amounts to be paid to an assignee or financing
party under an ancillary agreement relating to the extraordinary event bonds are paid in full.
new text end

new text begin Subd. 11. new text end

new text begin Extraordinary event property. new text end

new text begin "Extraordinary event property" means:
new text end

new text begin (1) all rights and interests of a utility or the utility's successor or assignee under a
financing order for the right to impose, bill, collect, receive, and obtain periodic adjustments
to extraordinary event charges authorized under a financing order issued by the commission;
and
new text end

new text begin (2) all revenue, collections, claims, rights to payments, payments, money, or proceeds
arising from the rights and interests specified in clause (1), regardless of whether any are
commingled with other revenue, collections, rights to payment, payments, money, or
proceeds.
new text end

new text begin Subd. 12. new text end

new text begin Extraordinary event revenue. new text end

new text begin "Extraordinary event revenue" means revenue,
receipts, collections, payments, money, claims, or other proceeds arising from extraordinary
event property.
new text end

new text begin Subd. 13. new text end

new text begin Financing costs. new text end

new text begin "Financing costs" means:
new text end

new text begin (1) principal, interest, and redemption premiums that are payable on extraordinary event
bonds;
new text end

new text begin (2) payments required under an ancillary agreement and amounts required to fund or
replenish a reserve account or other accounts established under the terms of any indenture,
ancillary agreement, or other financing document pertaining to extraordinary event bonds;
new text end

new text begin (3) other demonstrable costs related to issuing, supporting, repaying, refunding, and
servicing extraordinary event bonds, including but not limited to servicing fees, accounting
and auditing fees, trustee fees, legal fees, consulting fees, financial adviser fees,
administrative fees, placement and underwriting fees, capitalized interest, rating agency
fees, stock exchange listing and compliance fees, security registration fees, filing fees,
information technology programming costs, and any other demonstrable costs necessary to
otherwise ensure and guarantee the timely payment of extraordinary event bonds or other
amounts or charges payable in connection with extraordinary event bonds;
new text end

new text begin (4) taxes and license fees imposed on the revenue generated from collecting an
extraordinary event charge;
new text end

new text begin (5) state and local taxes, including franchise, sales and use, and other taxes or similar
charges, including but not limited to regulatory assessment fees, whether paid, payable, or
accrued; and
new text end

new text begin (6) costs incurred by the commission to hire and compensate additional temporary staff
needed to perform the commission's responsibilities under this section and, in accordance
with section 216B.494, to engage specialized counsel and expert consultants experienced
in securitized utility ratepayer-backed bond financings similar to extraordinary event bond
financings.
new text end

new text begin Subd. 14. new text end

new text begin Financing order. new text end

new text begin "Financing order" means an order issued by the commission
under section 216B.492 that authorizes an applicant to:
new text end

new text begin (1) issue extraordinary event bonds in one or more series;
new text end

new text begin (2) impose, charge, and collect extraordinary event charges; and
new text end

new text begin (3) create extraordinary event property.
new text end

new text begin Subd. 15. new text end

new text begin Financing party. new text end

new text begin "Financing party" means a holder of extraordinary event
bonds and a trustee, a collateral agent, a party under an ancillary agreement, or any other
person acting for the benefit of extraordinary event bondholders.
new text end

new text begin Subd. 16. new text end

new text begin Natural gas facility. new text end

new text begin "Natural gas facility" means natural gas pipelines,
including distribution lines, underground storage areas, liquefied natural gas facilities,
propane storage tanks, and other facilities the commission determines are used and useful
to provide natural gas service to retail and transportation customers in Minnesota.
new text end

new text begin Subd. 17. new text end

new text begin Nonbypassable. new text end

new text begin "Nonbypassable" means an extraordinary event charge
required to pay (1) principal and interest on extraordinary event bonds, and (2) other financing
costs, that a retail customer located within a utility service area cannot avoid and must pay.
new text end

new text begin Subd. 18. new text end

new text begin Pretax costs. new text end

new text begin "Pretax costs" means costs incurred by a utility and approved
by the commission, including but not limited to:
new text end

new text begin (1) unrecovered capitalized costs of replaced natural gas facilities damaged or destroyed
by an extraordinary event;
new text end

new text begin (2) costs to decommission and restore the site of a natural gas facility damaged or
destroyed by an extraordinary event;
new text end

new text begin (3) other applicable capital and operating costs, accrued carrying charges, deferred
expenses, reductions for applicable insurance, and salvage proceeds; and
new text end

new text begin (4) costs to retire any existing indebtedness, fees, costs, and expenses to modify existing
debt agreements, or for waivers or consents related to existing debt agreements.
new text end

new text begin Subd. 19. new text end

new text begin Storm event. new text end

new text begin "Storm event" means a tornado, derecho, ice or snow storm,
wildfire, flood, earthquake, or other significant weather or natural disaster that causes
substantial damage to a utility's infrastructure.
new text end

new text begin Subd. 20. new text end

new text begin Successor. new text end

new text begin "Successor" means a legal entity that succeeds by operation of law
to the rights and obligations of another legal entity as a result of bankruptcy, reorganization,
restructuring, other insolvency proceeding, merger, acquisition, consolidation, or sale or
transfer of assets.
new text end

new text begin Subd. 21. new text end

new text begin Utility. new text end

new text begin "Utility" means a public utility, as defined in section 216B.02,
subdivision 4, that provides natural gas service to Minnesota customers. Utility includes
the utility's successors or assignees.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

new text begin [216B.492] FINANCING ORDER.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin (a) A utility may file an application with the commission
for the issuance of a financing order to enable the utility to recover extraordinary event costs
through the issuance of extraordinary event bonds under this section.
new text end

new text begin (b) The application must include the following information, as applicable:
new text end

new text begin (1) a description of each natural gas facility to be repaired or replaced;
new text end

new text begin (2) the undepreciated value remaining in the natural gas facility whose repair or
replacement is proposed to be financed through the issuance of extraordinary event bonds
under sections 216B.491 to 216B.499, and the method used to calculate the amount;
new text end

new text begin (3) the estimated costs imposed on customers resulting from an extraordinary event that
involves no physical damage to natural gas facilities;
new text end

new text begin (4) the estimated savings or estimated mitigation of rate impacts to utility customers if
the financing order is issued as requested in the application, calculated by comparing the
costs to customers that are expected to result from implementing the financing order and
the estimated costs associated with implementing traditional utility financing mechanisms
with respect to the same undepreciated balance, expressed in net present value terms;
new text end

new text begin (5) a description of (i) the nonbypassable extraordinary event charge utility customers
would be required to pay in order to fully recover financing costs, and (ii) the method and
assumptions used to calculate the amount;
new text end

new text begin (6) a proposed methodology to allocate the revenue requirement for the extraordinary
event charge among the utility's customer classes;
new text end

new text begin (7) a description of a proposed adjustment mechanism that is implemented when necessary
to correct any overcollection or undercollection of extraordinary event charges, in order to
complete payment of scheduled principal and interest on extraordinary event bonds and
other financing costs in a timely fashion;
new text end

new text begin (8) a memorandum with supporting exhibits, from a securities firm that is experienced
in the marketing of securitized utility ratepayer-backed bonds and that is approved by the
commissioner of management and budget, indicating the proposed issuance satisfies the
current published AA or Aa2 or higher rating or equivalent rating criteria of at least one
nationally recognized securities rating organization for issuances similar to the proposed
extraordinary event bonds;
new text end

new text begin (9) an estimate of the timing of the issuance and the term of the extraordinary event
bonds, or series of bonds, provided that the scheduled final maturity for each bond issuance
does not exceed 30 years;
new text end

new text begin (10) identification of plans to sell, assign, transfer, or convey, other than as a security,
interest in extraordinary event property, including identification of an assignee, and
demonstration that the assignee is a financing entity that is wholly owned, directly or
indirectly, by the utility;
new text end

new text begin (11) identification of ancillary agreements that may be necessary or appropriate;
new text end

new text begin (12) one or more alternative financing scenarios in addition to the preferred scenario
contained in the application;
new text end

new text begin (13) the extent of damage to the utility's natural gas facility caused by an extraordinary
event and the estimated costs to repair or replace the damaged natural gas facility;
new text end

new text begin (14) a schedule of the proposed repairs to and replacement of the damaged natural gas
facility;
new text end

new text begin (15) a description of the steps taken to provide customers interim natural gas service
while the damaged natural gas facility is being repaired or replaced; and
new text end

new text begin (16) a description of the impacts on the utility's current workforce resulting from
implementing a repair or replacement plan following an extraordinary event.
new text end

new text begin Subd. 2. new text end

new text begin Findings. new text end

new text begin After providing notice and holding a public hearing on an application
filed under subdivision 1, the commission may issue a financing order if the commission
finds that:
new text end

new text begin (1) the extraordinary event costs described in the application are reasonable;
new text end

new text begin (2) the proposed issuance of extraordinary event bonds and the imposition and collection
of extraordinary event charges:
new text end

new text begin (i) are just and reasonable;
new text end

new text begin (ii) are consistent with the public interest;
new text end

new text begin (iii) constitute a prudent and reasonable mechanism to finance the extraordinary event
costs; and
new text end

new text begin (iv) provide tangible and quantifiable benefits to customers, either by providing lower
overall costs or mitigating rate impacts relative to traditional methods of financing, that
exceed the benefits that would have been achieved absent the issuance of extraordinary
event bonds; and
new text end

new text begin (3) the proposed structuring, marketing, and pricing of the extraordinary event bonds:
new text end

new text begin (i) lower overall costs to customers or mitigate rate impacts to customers relative to
traditional methods of financing; and
new text end

new text begin (ii) achieve customer savings or mitigation of rate impacts to customers, as determined
by the commission in a financing order, consistent with market conditions at the time of
sale and the terms of the financing order.
new text end

new text begin Subd. 3. new text end

new text begin Contents. new text end

new text begin (a) A financing order issued under this section must:
new text end

new text begin (1) determine the maximum amount of extraordinary event costs that may be financed
from proceeds of extraordinary event bonds issued pursuant to the financing order;
new text end

new text begin (2) describe the proposed customer billing mechanism for extraordinary event charges
and include a finding that the mechanism is just and reasonable;
new text end

new text begin (3) describe the financing costs that may be recovered through extraordinary event
charges and the period over which the costs may be recovered, which must end no earlier
than the date of final legal maturity of the extraordinary event bonds;
new text end

new text begin (4) describe the extraordinary event property that is created and that may be used to pay,
and secure the payment of, principal and interest on the extraordinary event bonds and other
financing costs authorized in the financing order;
new text end

new text begin (5) authorize the utility to finance extraordinary event costs through the issuance of one
or more series of extraordinary event bonds. A utility is not required to secure a separate
financing order for each issuance of extraordinary event bonds or for each scheduled phase
of the replacement of natural gas facilities approved in the financing order;
new text end

new text begin (6) include a formula-based mechanism that must be used to make expeditious periodic
adjustments to the extraordinary event charges authorized by the financing order that are
necessary to correct for any overcollection or undercollection, or to otherwise provide for
the timely payment of extraordinary event bonds, other financing costs, and other required
amounts and charges payable in connection with extraordinary event bonds;
new text end

new text begin (7) specify the degree of flexibility afforded to the utility in establishing the terms and
conditions of the extraordinary event bonds, including but not limited to repayment schedules,
expected interest rates, and other financing costs;
new text end

new text begin (8) specify that the extraordinary event bonds must be issued, subject to market conditions
and the terms of the financing order, as soon as feasible following issuance of the financing
order;
new text end

new text begin (9) require the utility, at the same time as extraordinary event charges are initially
collected and independent of the schedule to close and decommission any natural gas facility
replaced as the result of an extraordinary event, if any, to remove the natural gas facility
from the utility's rate base and commensurately reduce the utility's base rates;
new text end

new text begin (10) specify a future ratemaking process to reconcile any difference between the projected
pretax costs included in the amount financed by extraordinary event bonds and the final
actual pretax costs incurred by the utility to retire or replace the natural gas facility, if any;
new text end

new text begin (11) specify information regarding extraordinary event bond issuance and repayments,
financing costs, energy transaction charges, extraordinary event property, and related matters
that the natural gas utility is required to provide to the commission on a schedule determined
by the commission;
new text end

new text begin (12) allow or require the creation of a utility's extraordinary event property to be
conditioned on, and occur simultaneously with, the sale or other transfer of the extraordinary
event property to an assignee and the pledge of the extraordinary event property to secure
the extraordinary event bonds;
new text end

new text begin (13) ensure that the structuring, marketing, and pricing of extraordinary event bonds
result in reasonable securitization bond charges and customer savings or rate impact
mitigation, consistent with market conditions and the terms of the financing order; and
new text end

new text begin (14) specify that a utility financing the replacement of one or more natural gas facilities
after the natural gas facilities subject to the finance order are removed from the utility's rate
base is prohibited from:
new text end

new text begin (i) operating the natural gas facilities; or
new text end

new text begin (ii) selling the natural gas facilities to another entity to operate as natural gas facilities.
new text end

new text begin (b) A financing order issued under this section may:
new text end

new text begin (1) include conditions different from those requested in the application that the
commission determines are necessary to:
new text end

new text begin (i) promote the public interest; and
new text end

new text begin (ii) maximize the financial benefits or minimize the financial risks of the transaction to
customers and to directly impacted Minnesota workers and communities; and
new text end

new text begin (2) specify the selection of one or more underwriters of the extraordinary event bonds.
new text end

new text begin Subd. 4. new text end

new text begin Duration; irrevocability; subsequent order. new text end

new text begin (a) A financing order remains
in effect until the extraordinary event bonds issued under the financing order and all financing
costs related to the extraordinary event bonds have been paid in full.
new text end

new text begin (b) A financing order remains in effect and unabated notwithstanding the bankruptcy,
reorganization, or insolvency of the utility to which the financing order applies or any
affiliate, successor, or assignee of the utility to which the financing order applies.
new text end

new text begin (c) Subject to judicial review under section 216B.52, a financing order is irrevocable
and is not reviewable by a future commission. The commission must not: (1) reduce, impair,
postpone, or terminate extraordinary event charges approved in a financing order; or (2)
impair extraordinary event property or the collection or recovery of extraordinary event
charges and extraordinary event revenue.
new text end

new text begin (d) Notwithstanding paragraph (c), the commission may, on the commission's own
motion or at the request of a utility or any other person, commence a proceeding and issue
a subsequent financing order that provides for refinancing, retiring, or refunding extraordinary
event bonds issued under the original financing order if:
new text end

new text begin (1) the commission makes all of the findings specified in subdivision 2 with respect to
the subsequent financing order; and
new text end

new text begin (2) the modification contained in the subsequent financing order does not in any way
impair the covenants and terms of the extraordinary event bonds being refinanced, retired,
or refunded.
new text end

new text begin Subd. 5. new text end

new text begin Effect on commission jurisdiction. new text end

new text begin (a) Except as provided in paragraph (b),
the commission, in exercising the powers and carrying out the duties under this section, is
prohibited from:
new text end

new text begin (1) considering extraordinary event bonds issued under this section to be debt of the
utility other than for income tax purposes, unless it is necessary to consider the extraordinary
event bonds to be debt in order to achieve consistency with prevailing utility debt rating
methodologies;
new text end

new text begin (2) considering the extraordinary event charges paid under the financing order to be
revenue of the utility;
new text end

new text begin (3) considering the extraordinary event costs or financing costs specified in the financing
order to be the regulated costs or assets of the utility; or
new text end

new text begin (4) determining that any prudent action taken by a utility that is consistent with the
financing order is unjust or unreasonable.
new text end

new text begin (b) Nothing in this subdivision:
new text end

new text begin (1) affects the authority of the commission to apply or modify any billing mechanism
designed to recover extraordinary event charges;
new text end

new text begin (2) prevents or precludes the commission from (i) investigating a utility's compliance
with the terms and conditions of a financing order, and (ii) requiring compliance with the
financing order; or
new text end

new text begin (3) prevents or precludes the commission from imposing regulatory sanctions against a
utility for failure to comply with the terms and conditions of a financing order or the
requirements of this section.
new text end

new text begin (c) The commission is prohibited from refusing to allow a utility to recover any costs
associated with the replacement of natural gas facilities solely because the utility has elected
to finance the natural gas facility replacement through a financing mechanism other than
extraordinary event bonds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

new text begin [216B.493] POSTORDER COMMISSION DUTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Financing cost review. new text end

new text begin Within 120 days after the date extraordinary
event bonds are issued, a utility subject to a financing order must file with the commission
the actual initial and ongoing financing costs, the final structure and pricing of the
extraordinary event bonds, and the actual extraordinary event charge. The commission must
review the prudence of the natural gas utility's actions to determine whether the actual
financing costs were the lowest that could reasonably be achieved given the terms of the
financing order and market conditions prevailing at the time of the extraordinary event
bond's issuance.
new text end

new text begin Subd. 2. new text end

new text begin Enforcement. new text end

new text begin If the commission determines that a utility's actions under this
section are not prudent or are inconsistent with the financing order, the commission may
apply remedies deemed appropriate for utility actions, provided that any remedy applied
must not directly or indirectly (1) impair the value of the extraordinary event property, or
(2) reduce, alter, or impair extraordinary event charges, until all principal and interest payable
on the extraordinary event bonds, all financing costs, and all amounts to be paid to an
assignee or financing party under an ancillary agreement are paid in full.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

new text begin [216B.494] USE OF OUTSIDE EXPERTS.
new text end

new text begin (a) In carrying out the duties under this section, the commission may:
new text end

new text begin (1) contract with outside consultants and counsel experienced in securitized utility
customer-backed bond financing similar to extraordinary event bonds; and
new text end

new text begin (2) hire and compensate additional temporary staff as needed.
new text end

new text begin Expenses incurred by the commission under this paragraph must be treated as financing
costs to be paid by the extraordinary event revenue. The costs incurred under clause (1) are
not an obligation of the state and are assigned solely to the transaction.
new text end

new text begin (b) A utility presented with a written request from the commission for reimbursement
of the commission's expenses incurred under paragraph (a), accompanied by a detailed
account of those expenses, must remit full payment of the expenses to the commission
within 30 days of receiving the request.
new text end

new text begin (c) If a utility's application for a financing order is denied or withdrawn for any reason
and extraordinary event bonds are not issued, the commission's costs to retain expert
consultants under this section must be paid by the applicant utility and are deemed a prudent
deferred expense eligible for recovery in the utility's future rates.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9.

new text begin [216B.495] EXTRAORDINARY EVENT CHARGE; BILLING TREATMENT.
new text end

new text begin (a) A utility that obtains a financing order and issues extraordinary event bonds must:
new text end

new text begin (1) include on each customer's monthly natural gas bill:
new text end

new text begin (i) a statement that a portion of the charges represents extraordinary event charges
approved in a financing order;
new text end

new text begin (ii) the amount and rate of the extraordinary event charge as a separate line item titled
"extraordinary event charge"; and
new text end

new text begin (iii) if extraordinary event property has been transferred to an assignee, a statement that
the assignee is the owner of the rights to extraordinary event charges and that the utility or
other entity, if applicable, is acting as a collection agent or servicer for the assignee; and
new text end

new text begin (2) file annually with the commission:
new text end

new text begin (i) a calculation that identifies the impact financing the retirement or replacement of
natural gas facilities has on customer rates, itemized by customer class; and
new text end

new text begin (ii) evidence demonstrating that extraordinary event revenues are applied solely to pay
(A) principal and interest on extraordinary event bonds, and (B) other financing costs.
new text end

new text begin (b) Extraordinary event charges are nonbypassable and must be paid by all existing and
future customers receiving service from the utility or the utility's successors or assignees
under commission-approved rate schedules or special contracts.
new text end

new text begin (c) A utility's failure to comply with this section does not invalidate, impair, or affect
any financing order, extraordinary event property, extraordinary event charge, or
extraordinary event bonds, but does subject the utility to penalties under applicable
commission rules provided that any penalty applied must not directly or indirectly (1) impair
the value of the extraordinary event property, or (2) reduce, alter, or impair extraordinary
event charges, until all principal and interest payable on the extraordinary event bonds, all
financing costs, and all amounts to be paid to an assignee or financing party under an
ancillary agreement are paid in full.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 10.

new text begin [216B.496] EXTRAORDINARY EVENT PROPERTY.
new text end

new text begin Subdivision 1. new text end

new text begin General. new text end

new text begin (a) Extraordinary event property is an existing present property
right or interest in a property right, even though the imposition and collection of extraordinary
event charges depend on the utility collecting extraordinary event charges and on future
natural gas consumption. The property right or interest exists regardless of whether the
revenues or proceeds arising from the extraordinary event property have been billed, have
accrued, or have been collected.
new text end

new text begin (b) Extraordinary event property exists until all extraordinary event bonds issued under
a financing order are paid in full and all financing costs and other costs of the extraordinary
event bonds have been recovered in full.
new text end

new text begin (c) All or any portion of extraordinary event property described in a financing order
issued to a utility may be transferred, sold, conveyed, or assigned to a successor or assignee
that is wholly owned, directly or indirectly, by the utility and is created for the limited
purpose of acquiring, owning, or administering extraordinary event property or issuing
extraordinary event bonds authorized by the financing order. All or any portion of
extraordinary event property may be pledged to secure extraordinary event bonds issued
under a financing order, amounts payable to financing parties and to counterparties under
any ancillary agreements, and other financing costs. Each transfer, sale, conveyance,
assignment, or pledge by a utility or an affiliate of extraordinary event property is a
transaction in the ordinary course of business.
new text end

new text begin (d) If a utility defaults on any required payment of charges arising from extraordinary
event property described in a financing order, a court, upon petition by an interested party
and without limiting any other remedies available to the petitioner, must order the
sequestration and payment of the revenues arising from the extraordinary event property to
the financing parties.
new text end

new text begin (e) The interest of a transferee, purchaser, acquirer, assignee, or pledgee in extraordinary
event property specified in a financing order issued to a utility, and in the revenue and
collections arising from the property, is not subject to setoff, counterclaim, surcharge, or
defense by the utility or any other person, or in connection with the reorganization,
bankruptcy, or other insolvency of the utility or any other entity.
new text end

new text begin (f) A successor to a utility, whether resulting from a reorganization, bankruptcy, or other
insolvency proceeding, merger or acquisition, sale, other business combination, transfer by
operation of law, utility restructuring, or otherwise, must: (1) perform and satisfy all
obligations of, and has the same duties and rights under, a financing order as the utility to
which the financing order applies; and (2) perform the duties and exercise the rights in the
same manner and to the same extent as the utility, including collecting and paying to any
person entitled to receive revenues, collections, payments, or proceeds of extraordinary
event property.
new text end

new text begin Subd. 2. new text end

new text begin Security interests in extraordinary event property. new text end

new text begin (a) The creation,
perfection, and enforcement of any security interest in extraordinary event property to secure
the repayment of the principal and interest on extraordinary event bonds, amounts payable
under any ancillary agreement, and other financing costs are governed solely by this section.
new text end

new text begin (b) A security interest in extraordinary event property is created, valid, and binding
when:
new text end

new text begin (1) the financing order that describes the extraordinary event property is issued;
new text end

new text begin (2) a security agreement is executed and delivered; and
new text end

new text begin (3) value is received for the extraordinary event bonds.
new text end

new text begin (c) Once a security interest in extraordinary event property is created, the security interest
attaches without any physical delivery of collateral or any other act. The lien of the security
interest is valid, binding, and perfected against all parties having claims of any kind in tort,
contract, or otherwise against the person granting the security interest, regardless of whether
the parties have notice of the lien, upon the filing of a financing statement with the secretary
of state.
new text end

new text begin (d) The description or indication of extraordinary event property in a transfer or security
agreement and a financing statement is sufficient only if the description or indication refers
to this section and the financing order creating the extraordinary event property.
new text end

new text begin (e) A security interest in extraordinary event property is a continuously perfected security
interest and has priority over any other lien, created by operation of law or otherwise, which
may subsequently attach to the extraordinary event property unless the holder of the security
interest has agreed otherwise in writing.
new text end

new text begin (f) The priority of a security interest in extraordinary event property is not affected by
the commingling of extraordinary event property or extraordinary event revenue with other
money. An assignee, bondholder, or financing party has a perfected security interest in the
amount of all extraordinary event property or extraordinary event revenue that is pledged
to pay extraordinary event bonds, even if the extraordinary event property or extraordinary
event revenue is deposited in a cash or deposit account of the utility in which the
extraordinary event revenue is commingled with other money. Any other security interest
that applies to the other money does not apply to the extraordinary event revenue.
new text end

new text begin (g) Neither a subsequent commission order amending a financing order under section
216B.492, subdivision 4, nor application of an adjustment mechanism authorized by a
financing order under section 216B.492, subdivision 3, affects the validity, perfection, or
priority of a security interest in or transfer of extraordinary event property.
new text end

new text begin Subd. 3. new text end

new text begin Sales of extraordinary event property. new text end

new text begin (a) A sale, assignment, or transfer of
extraordinary event property is an absolute transfer and true sale of, and not a pledge of or
secured transaction relating to, the seller's right, title, and interest in, to, and under the
extraordinary event property if the documents governing the transaction expressly state that
the transaction is a sale or other absolute transfer. A transfer of an interest in extraordinary
event property may be created when:
new text end

new text begin (1) the financing order creating and describing the extraordinary event property is
effective;
new text end

new text begin (2) the documents evidencing the transfer of the extraordinary event property are executed
and delivered to the assignee; and
new text end

new text begin (3) value is received.
new text end

new text begin (b) The characterization of a sale, assignment, or transfer as an absolute transfer and
true sale, and the corresponding characterization of the property interest of the assignee, is
not affected or impaired by:
new text end

new text begin (1) commingling of extraordinary event revenue with other money;
new text end

new text begin (2) the seller retaining:
new text end

new text begin (i) a partial or residual interest, including an equity interest, in the extraordinary event
property, whether (A) direct or indirect, or (B) subordinate or otherwise; or
new text end

new text begin (ii) the right to recover costs associated with taxes, franchise fees, or license fees imposed
on the collection of extraordinary event revenue;
new text end

new text begin (3) any recourse that the extraordinary event property purchaser may have against the
seller;
new text end

new text begin (4) any indemnification rights, obligations, or repurchase rights made or provided by
the extraordinary event property seller;
new text end

new text begin (5) the extraordinary event property seller's to collect extraordinary event revenues on
behalf of an assignee;
new text end

new text begin (6) the treatment of the sale, assignment, or transfer for tax, financial reporting, or other
purposes;
new text end

new text begin (7) any subsequent financing order amending a financing order under section 216B.492,
subdivision 4, paragraph (d); or
new text end

new text begin (8) any application of an adjustment mechanism under section 216B.492, subdivision
3, paragraph (a), clause (6).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 11.

new text begin [216B.497] EXTRAORDINARY EVENT BONDS.
new text end

new text begin (a) Banks, trust companies, savings and loan associations, insurance companies, executors,
administrators, guardians, trustees, and other fiduciaries may legally invest any money
within the individual's or entity's control in extraordinary event bonds.
new text end

new text begin (b) Extraordinary event bonds issued under a financing order are not debt of or a pledge
of the faith and credit or taxing power of the state, any agency of the state, or any political
subdivision. Holders of extraordinary event bonds may not have taxes levied by the state
or a political subdivision in order to pay the principal or interest on extraordinary event
bonds. The issuance of extraordinary event bonds does not directly, indirectly, or contingently
obligate the state or a political subdivision to levy any tax or make any appropriation to pay
principal or interest on the extraordinary event bonds.
new text end

new text begin (c) The state pledges to and agrees with holders of extraordinary event bonds, any
assignee, and any financing parties that the state and state agencies, including the commission,
are prohibited from:
new text end

new text begin (1) taking or permitting any action that impairs the value of extraordinary event property;
or
new text end

new text begin (2) reducing, altering, or impairing extraordinary event charges that are imposed,
collected, and remitted for the benefit of holders of extraordinary event bonds, any assignee,
and any financing parties until any principal, interest, and redemption premium payable on
extraordinary event bonds, all financing costs, and all amounts to be paid to an assignee or
financing party under an ancillary agreement are paid in full.
new text end

new text begin (d) The commission may include a pledge in the financing order similar to the state
pledge included in paragraph (c).
new text end

new text begin (e) A person who issues extraordinary event bonds may include the pledge specified in
paragraphs (c) and (d) in the extraordinary event bonds, ancillary agreements, and
documentation related to the issuance and marketing of the extraordinary event bonds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 12.

new text begin [216B.498] ASSIGNEE OF FINANCING PARTY NOT SUBJECT TO
COMMISSION REGULATION.
new text end

new text begin An assignee or financing party that is not already regulated by the commission does not
become subject to commission regulation solely as a result of engaging in any transaction
authorized by or described in sections 216B.491 to 216B.499.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 13.

new text begin [216B.499] EFFECT ON OTHER LAWS.
new text end

new text begin (a) If any provision of sections 216B.491 to 216B.499 conflicts with any other law
regarding the attachment, assignment, perfection, effect of perfection, or priority of any
security interest in or transfer of extraordinary event property, sections 216B.491 to 216B.499
govern.
new text end

new text begin (b) Nothing in this section precludes a utility for which the commission has initially
issued a financing order from applying to the commission for:
new text end

new text begin (1) a subsequent financing order amending the financing order under section 216B.492,
subdivision 4, paragraph (d); or
new text end

new text begin (2) approval to issue extraordinary event bonds to refund all or a portion of an outstanding
series of extraordinary event bonds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 14.

Minnesota Statutes 2022, section 216B.50, subdivision 1, is amended to read:

Subdivision 1.

Commission approval required.

No public utility shall sell, acquire,
lease, or rent any plant as an operating unit or system in this state for a total consideration
in excess of deleted text begin $100,000 deleted text end new text begin $1,000,000 new text end , or merge or consolidate with another public utility or
transmission company operating in this state, without first being authorized so to do by the
commission. Upon the filing of an application for the approval and consent of the
commission, the commission shall investigate, with or without public hearing. The
commission shall hold a public hearing, upon such notice as the commission may require.
If the commission finds that the proposed action is consistent with the public interest, it
shall give its consent and approval by order in writing. In reaching its determination, the
commission shall take into consideration the reasonable value of the property, plant, or
securities to be acquired or disposed of, or merged and consolidated.

This section does not apply to the purchase of property to replace or add to the plant of
the public utility by construction.

Sec. 15.

Minnesota Statutes 2022, section 216C.435, subdivision 8, is amended to read:

Subd. 8.

Qualifying commercial real property.

"Qualifying commercial real property"
means a multifamily residential dwelling, deleted text begin or deleted text end a commercial or industrial building, new text begin or farmland,
as defined in section 216C.436, subdivision 1b, new text end that the implementing entity has determined,
after review of an energy audit deleted text begin or deleted text end new text begin , new text end renewable energy system feasibility study, new text begin or agronomic
assessment, as defined in section 216C.436, subdivision 1b, new text end can deleted text begin be benefited by deleted text end new text begin benefit
from the new text end installation of cost-effective energy improvements new text begin or land and water improvements,
as defined in section 216C.436, subdivision 1b new text end . Qualifying commercial real property includes
new construction.

Sec. 16.

Minnesota Statutes 2022, section 216C.436, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have the
meanings given.
new text end

new text begin (b) "Agronomic assessment" means a study by an independent third party that assesses
the environmental impacts of proposed land and water improvements on farmland.
new text end

new text begin (c) "Farmland" means land classified as 2a, 2b, or 2c for property tax purposes under
section 273.13, subdivision 23.
new text end

new text begin (d) "Land and water improvement" means:
new text end

new text begin (1) an improvement to farmland that:
new text end

new text begin (i) is permanent;
new text end

new text begin (ii) results in improved agricultural profitability or resiliency;
new text end

new text begin (iii) reduces the environmental impact of agricultural production; and
new text end

new text begin (iv) if the improvement affects drainage, complies with the most recent versions of the
applicable following conservation practice standards issued by the United States Department
of Agriculture's Natural Resources Conservation Service: Drainage Water Management
(Code 554), Saturated Buffer (Code 604), Denitrifying Bioreactor (Code 605), and
Constructed Wetland (Code 656); or
new text end

new text begin (2) water conservation and quality measures, which include permanently affixed
equipment, appliances, or improvements that reduce a property's water consumption or that
enable water to be managed more efficiently.
new text end

new text begin (e) "Resiliency" means the ability of farmland to maintain and enhance profitability,
soil health, and water quality.
new text end

Sec. 17.

Minnesota Statutes 2022, section 216C.436, subdivision 2, is amended to read:

Subd. 2.

Program requirements.

A commercial PACE loan program must:

(1) impose requirements and conditions on financing arrangements to ensure timely
repayment;

(2) require an energy audit deleted text begin or deleted text end new text begin , new text end renewable energy system feasibility study new text begin , or agronomic
or soil health assessment new text end to be conducted on the qualifying commercial real property and
reviewed by the implementing entity prior to approval of the financing;

(3) require the inspection of all installations and a performance verification of at least
ten percent of the cost-effective energy improvements new text begin or land and water improvements new text end
financed by the program;

(4) not prohibit the financing of all cost-effective energy improvements new text begin or land and
water improvements new text end not otherwise prohibited by this section;

(5) require that all cost-effective energy improvements new text begin or land and water improvements new text end
be made to a qualifying commercial real property prior to, or in conjunction with, an
applicant's repayment of financing for cost-effective energy improvements new text begin or land and water
improvements new text end for that property;

(6) have cost-effective energy improvements new text begin or land and water improvements new text end financed
by the program performed by a licensed contractor as required by chapter 326B or other
law or ordinance;

(7) require disclosures new text begin in the loan document new text end to borrowers by the implementing entity
of new text begin : (i) new text end the risks involved in borrowing, including the risk of foreclosure if a tax delinquency
results from a default new text begin ; and (ii) all the terms and conditions of the commercial PACE loan
and the installation of cost-effective energy improvements or land and water improvements,
including the interest rate being charged on the loan new text end ;

(8) provide financing only to those who demonstrate an ability to repay;

(9) not provide financing for a qualifying commercial real property in which the owner
is not current on mortgage or real property tax payments;

(10) require a petition to the implementing entity by all owners of the qualifying
commercial real property requesting collections of repayments as a special assessment under
section 429.101;

(11) 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; deleted text begin and
deleted text end

(12) require that liability for special assessments related to the financing runs with the
qualifying commercial real property deleted text begin . deleted text end new text begin ; and
new text end

new text begin (13) prior to financing any improvements to or imposing any assessment upon qualifying
commercial real property, require notice to and written consent from the mortgage lender
of any mortgage encumbering or otherwise secured by the qualifying commercial real
property.
new text end

Sec. 18.

Minnesota Statutes 2022, section 216G.02, subdivision 1, is amended to read:

Subdivision 1.

Definition.

new text begin (a) new text end For purposes of this section deleted text begin and deleted text end new text begin , the following terms
defined in this subdivision have the meanings given.
new text end

new text begin (b) "Gas" means natural gas, flammable gas, carbon dioxide, gas that is toxic, or gas
that is corrosive, regardless of whether the material has been compressed or cooled to a
liquid or supercritical state.
new text end

new text begin (c) "Hazardous liquid" means petroleum, petroleum products, anhydrous ammonia, or
a substance included in the definition of hazardous liquid under Code of Federal Regulations,
title 49, section 195.2, as amended.
new text end

new text begin (d) new text end Notwithstanding section 216G.01, subdivision 3, "pipeline" means:

(1) pipe with a nominal diameter of six inches or more that is designed to transport
hazardous liquids, but does not include pipe designed to transport a hazardous liquid by
gravity, and pipe designed to transport or store a hazardous liquid within a refining, storage,
or manufacturing facility; or

(2) pipe designed to be operated at a pressure of more than 275 pounds per square inch
and to carry gas.

Sec. 19.

new text begin [500.216] LIMITS ON CERTAIN RESIDENTIAL SOLAR ENERGY
SYSTEMS PROHIBITED.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the terms defined in this
subdivision have the meanings given.
new text end

new text begin (b) "Private entity" means a homeowners association, community association, or other
association that is subject to a homeowners association document.
new text end

new text begin (c) "Homeowners association document" means a document containing the declaration,
articles of incorporation, bylaws, or rules and regulations of:
new text end

new text begin (1) a common interest community, as defined in section 515B.1-103, regardless of
whether the common interest community is subject to chapter 515B; and
new text end

new text begin (2) a residential community that is not a common interest community.
new text end

new text begin (d) "Solar energy system" has the meaning given in section 216C.06, subdivision 17.
new text end

new text begin Subd. 2. new text end

new text begin Applicability. new text end

new text begin This section applies to:
new text end

new text begin (1) single family detached dwellings for which the dwelling owner or owners each wholly
owns the entire building in which the dwelling is located and is wholly responsible for the
maintenance, repair, replacement, and insurance of the entire building; and
new text end

new text begin (2) multifamily attached dwellings for which the dwelling owner or owners each wholly
owns the entire building in which the dwelling is located and is wholly responsible for the
maintenance, repair, replacement, and insurance of the entire building.
new text end

new text begin Subd. 3. new text end

new text begin General rule. new text end

new text begin Except as otherwise provided in this section and notwithstanding
any covenant, restriction, or condition contained in a deed, security instrument, homeowners
association document, or any other instrument affecting the transfer, sale of, or an interest
in real property, a private entity must not prohibit or refuse to permit the owner of a
single-family dwelling to install, maintain, or use a roof-mounted solar energy system.
new text end

new text begin Subd. 4. new text end

new text begin Allowable conditions. new text end

new text begin (a) A private entity may require that:
new text end

new text begin (1) a licensed contractor install a solar energy system;
new text end

new text begin (2) a roof-mounted solar energy system not extend above the peak of a pitched roof or
beyond the edge of the roof;
new text end

new text begin (3) the owner or installer of a solar energy system indemnify or reimburse the private
entity or the private entity's members for loss or damage caused by the installation,
maintenance, use, repair, or removal of a solar energy system;
new text end

new text begin (4) the owner and each successive owner of a solar energy system list the private entity
as a certificate holder on the homeowner's insurance policy; or
new text end

new text begin (5) the owner and each successive owner of a solar energy system be responsible for
removing the system if reasonably necessary to repair, perform maintenance, or replace
common elements or limited common elements, as defined in section 515B.1-103.
new text end

new text begin (b) A private entity may impose other reasonable restrictions on installing, maintaining,
or using solar energy systems, provided that the restrictions do not (1) decrease the solar
energy system's projected energy generation by more than ten percent; or (2) increase the
solar energy system's cost by more than (i) 20 percent for a solar water heater, or (ii) $1,000
for a solar photovoltaic system, when compared with the solar energy system's energy
generation and the cost of labor and materials as originally proposed without the restrictions,
as certified by the solar energy system's designer or installer. A private entity may obtain
an alternative bid and design from a solar energy system designer or installer for the purposes
of this paragraph.
new text end

new text begin (c) A solar energy system must meet applicable standards and requirements imposed by
the state and by governmental units, as defined in section 462.384.
new text end

new text begin (d) A solar energy system for heating water must be certified by the Solar Rating
Certification Corporation or an equivalent certification agency. A solar energy system for
producing electricity must meet (1) all applicable safety and performance standards
established by the National Electrical Code, the Institute of Electrical and Electronics
Engineers, and accredited testing laboratories, including but not limited to Underwriters
Laboratories; and (2) where applicable, rules of the Public Utilities Commission regarding
safety and reliability.
new text end

new text begin (e) If approval by a private entity is required prior to installing or using a solar energy
system, the application for approval (1) must be processed and approved in the same manner
as an application for approval of an architectural modification to the property, and (2) must
not be willfully avoided or delayed. In no event will a private entity have less than 60 days
to approve or disapprove an application for a solar energy system.
new text end

new text begin (f) An application for approval must be made in writing and must contain certification
that the applicant must meet any conditions required by a private entity under subdivision
4. An application must include a copy of the interconnection application submitted to the
applicable electric utility.
new text end

new text begin (g) A private entity must approve or deny an application in writing. If an application is
not denied in writing within 60 days of the date the application was received, the application
is deemed approved unless the delay is the result of a reasonable request for additional
information. If a private entity determines that it needs additional information from the
applicant in order to approve or disapprove the application, the private entity must request
the additional information in writing within 60 days from the date of receipt of the
application. If the private entity makes a request for additional information within 15 days
from the date the private entity initially received the application, the private entity shall
have 60 days from the date of receipt of the additional information in which to approve or
deny the application. If the private entity makes a written request to the applicant for
additional information more than 15 days after the private entity initially received the
application, the private entity shall have 15 days after the private entity receives the additional
information it requested from the applicant in which to approve or disapprove the application,
but in no event shall the private entity have less than 60 days from the date the private entity
initially received the application in which to approve or disapprove the application.
new text end

Sec. 20.

Minnesota Statutes 2022, section 515B.2-103, is amended to read:

515B.2-103 CONSTRUCTION AND VALIDITY OF DECLARATION AND
BYLAWS.

(a) All provisions of the declaration and bylaws are severable.

(b) The rule against perpetuities may not be applied to defeat any provision of the
declaration or this chapter, or any instrument executed pursuant to the declaration or this
chapter.

(c) In the event of a conflict between the provisions of the declaration and the bylaws,
the declaration prevails except to the extent that the declaration is inconsistent with this
chapter.

(d) The declaration and bylaws must comply with deleted text begin section deleted text end new text begin sections new text end 500.215 new text begin and 500.216 new text end .

Sec. 21.

Minnesota Statutes 2022, section 515B.3-102, is amended to read:

515B.3-102 POWERS OF UNIT OWNERS' ASSOCIATION.

(a) Except as provided in subsections (b), (c), (d), and (e), and subject to the provisions
of the declaration or bylaws, the association shall have the power to:

(1) adopt, amend and revoke rules and regulations not inconsistent with the articles of
incorporation, bylaws and declaration, as follows: (i) regulating the use of the common
elements; (ii) regulating the use of the units, and conduct of unit occupants, which may
jeopardize the health, safety or welfare of other occupants, which involves noise or other
disturbing activity, or which may damage the common elements or other units; (iii) regulating
or prohibiting animals; (iv) regulating changes in the appearance of the common elements
and conduct which may damage the common interest community; (v) regulating the exterior
appearance of the common interest community, including, for example, balconies and patios,
window treatments, and signs and other displays, regardless of whether inside a unit; (vi)
implementing the articles of incorporation, declaration and bylaws, and exercising the
powers granted by this section; and (vii) otherwise facilitating the operation of the common
interest community;

(2) adopt and amend budgets for revenues, expenditures and reserves, and levy and
collect assessments for common expenses from unit owners;

(3) hire and discharge managing agents and other employees, agents, and independent
contractors;

(4) institute, defend, or intervene in litigation or administrative proceedings (i) in its
own name on behalf of itself or two or more unit owners on matters affecting the common
elements or other matters affecting the common interest community or, (ii) with the consent
of the owners of the affected units on matters affecting only those units;

(5) make contracts and incur liabilities;

(6) regulate the use, maintenance, repair, replacement, and modification of the common
elements and the units;

(7) cause improvements to be made as a part of the common elements, and, in the case
of a cooperative, the units;

(8) acquire, hold, encumber, and convey in its own name any right, title, or interest to
real estate or personal property, but (i) common elements in a condominium or planned
community may be conveyed or subjected to a security interest only pursuant to section
515B.3-112, or (ii) part of a cooperative may be conveyed, or all or part of a cooperative
may be subjected to a security interest, only pursuant to section 515B.3-112;

(9) grant or amend easements for public utilities, public rights-of-way or other public
purposes, and cable television or other communications, through, over or under the common
elements; grant or amend easements, leases, or licenses to unit owners for purposes authorized
by the declaration; and, subject to approval by a vote of unit owners other than declarant
or its affiliates, grant or amend other easements, leases, and licenses through, over or under
the common elements;

(10) impose and receive any payments, fees, or charges for the use, rental, or operation
of the common elements, other than limited common elements, and for services provided
to unit owners;

(11) impose interest and late charges for late payment of assessments and, after notice
and an opportunity to be heard before the board or a committee appointed by it, levy
reasonable fines for violations of the declaration, bylaws, and rules and regulations of the
association;

(12) impose reasonable charges for the review, preparation and recordation of
amendments to the declaration, resale certificates required by section 515B.4-107, statements
of unpaid assessments, or furnishing copies of association records;

(13) provide for the indemnification of its officers and directors, and maintain directors'
and officers' liability insurance;

(14) provide for reasonable procedures governing the conduct of meetings and election
of directors;

(15) exercise any other powers conferred by law, or by the declaration, articles of
incorporation or bylaws; and

(16) exercise any other powers necessary and proper for the governance and operation
of the association.

(b) Notwithstanding subsection (a) the declaration or bylaws may not impose limitations
on the power of the association to deal with the declarant which are more restrictive than
the limitations imposed on the power of the association to deal with other persons.

(c) Notwithstanding subsection (a), powers exercised under this section must comply
with deleted text begin section deleted text end new text begin sections new text end 500.215 new text begin and 500.216 new text end .

(d) Notwithstanding subsection (a)(4) or any other provision of this chapter, the
association, before instituting litigation or arbitration involving construction defect claims
against a development party, shall:

(1) mail or deliver written notice of the anticipated commencement of the action to each
unit owner at the addresses, if any, established for notices to owners in the declaration and,
if the declaration does not state how notices are to be given to owners, to the owner's last
known address. The notice shall specify the nature of the construction defect claims to be
alleged, the relief sought, and the manner in which the association proposes to fund the cost
of pursuing the construction defect claims; and

(2) obtain the approval of owners of units to which a majority of the total votes in the
association are allocated. Votes allocated to units owned by the declarant, an affiliate of the
declarant, or a mortgagee who obtained ownership of the unit through a foreclosure sale
are excluded. The association may obtain the required approval by a vote at an annual or
special meeting of the members or, if authorized by the statute under which the association
is created and taken in compliance with that statute, by a vote of the members taken by
electronic means or mailed ballots. If the association holds a meeting and voting by electronic
means or mailed ballots is authorized by that statute, the association shall also provide for
voting by those methods. Section 515B.3-110(c) applies to votes taken by electronic means
or mailed ballots, except that the votes must be used in combination with the vote taken at
a meeting and are not in lieu of holding a meeting, if a meeting is held, and are considered
for purposes of determining whether a quorum was present. Proxies may not be used for a
vote taken under this paragraph unless the unit owner executes the proxy after receipt of
the notice required under subsection (d)(1) and the proxy expressly references this notice.

(e) The association may intervene in a litigation or arbitration involving a construction
defect claim or assert a construction defect claim as a counterclaim, crossclaim, or third-party
claim before complying with subsections (d)(1) and (d)(2) but the association's complaint
in an intervention, counterclaim, crossclaim, or third-party claim shall be dismissed without
prejudice unless the association has complied with the requirements of subsection (d) within
90 days of the association's commencement of the complaint in an intervention or the
assertion of the counterclaim, crossclaim, or third-party claim.

Sec. 22.

Laws 2005, chapter 97, article 10, section 3, as amended by Laws 2013, chapter
85, article 7, section 9, is amended to read:

Sec. 3. SUNSET.

Sections 1 and 2 deleted text begin shall deleted text end expire deleted text begin on deleted text end June 30, deleted text begin 2023 deleted text end new text begin 2028 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 23. new text begin DECOMMISSIONING AND DEMOLITION PLAN FOR COAL-FIRED
PLANT.
new text end

new text begin (a) As a part of the next resource plan filing under Minnesota Statutes, section 216B.2422,
subdivision 2, but no later than December 31, 2025, the public utility that owns an electric
generation facility that is powered by coal, scheduled for retirement in 2028, and located
within the St. Croix National Scenic Riverway must provide, to the extent known, the public
utility's plan and a detailed timeline to decommission and demolish the electric generation
facility and remediate pollution at the electric generation facility site.
new text end

new text begin (b) The public utility must also provide a copy of the plan and timeline to the governing
body of the municipality where the electric generation facility is located on the same date
the plan and timeline are submitted to the Public Utilities Commission.
new text end

new text begin (c) If a resource plan is not filed or required before December 31, 2025, the plan and
timeline must be submitted to the Public Utilities Commission and the municipality as a
separate filing by December 31, 2025.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end