Minnesota Legislature
SF 2720
1st Engrossment - 86th Legislature (2009 - 2010) Posted on 03/04/2010 11:42am
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A bill for an act
relating to energy; authorizing green energy revenue bonds; permitting local
assessments for energy improvements by cities; creating a voluntary energy
efficiency financing program for cities; amending Minnesota Statutes 2008,
section 429.101, subdivision 1; proposing coding for new law in Minnesota
Statutes, chapter 216C.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[216C.435] DEFINITIONS; ENERGY IMPROVEMENTS
FINANCING PROGRAM FOR RESIDENTIAL AND BUSINESS PROPERTY.
new text end
new text begin Subdivision 1. new text end
new text begin Scope. new text end
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For the purposes of this section and section 216C.436, the
terms defined in this section have the meanings given them.
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new text begin Subd. 2. new text end
new text begin City. new text end
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"City" means a home rule charter or statutory city.
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new text begin Subd. 3. new text end
new text begin Energy audit. new text end
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"Energy audit" means a formal evaluation of the energy
consumption of a building by a certified energy auditor, whose certification is approved by
the commissioner, for the purpose of identifying appropriate energy improvements that
could be made to the building and including an estimate of the length of time a specific
energy improvement will take to repay its purchase and installation costs, based on the
amount of energy saved and estimated future energy prices.
new text end
new text begin Subd. 4. new text end
new text begin Energy improvement. new text end
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"Energy improvement" means:
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(1) any renovation or retrofitting of a building to improve energy efficiency that
is permanently affixed to the property and that results in a net reduction in energy
consumption without altering the principal source of energy; or
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(2) a renewable energy system attached to or installed within or proximate to a
building that generates electrical or thermal energy from a renewable energy source.
new text end
new text begin Subd. 5. new text end
new text begin Qualifying real property. new text end
new text begin
"Qualifying real property" means a
single-family or multifamily residential dwelling, or a commercial or industrial building,
that the city has determined, after review of an energy audit or renewable energy system
feasibility study, can be benefited by installation of energy improvements.
new text end
new text begin Subd. 6. new text end
new text begin Renewable energy. new text end
new text begin
"Renewable energy" means energy produced by
means of solar thermal, solar photovoltaic, wind, or geothermal resources.
new text end
new text begin Subd. 7. new text end
new text begin Renewable energy system feasibility study. new text end
new text begin
"Renewable energy system
feasibility study" means a written study, conducted by a contractor trained to perform that
analysis, for the purpose of determining the feasibility of installing a renewable energy
system in a building, including an estimate of the length of time a specific renewable
energy system will take to repay its purchase and installation costs, based on the amount of
energy saved and estimated future energy prices. For a geothermal energy improvement,
the feasibility study must calculate net savings in terms of nongeothermal energy and costs.
new text end
new text begin Subd. 8. new text end
new text begin Solar thermal. new text end
new text begin
"Solar thermal" has the meaning given to "qualifying solar
thermal project" in section 216B.2411, subdivision 2, paragraph (e).
new text end
new text begin Subd. 9. new text end
new text begin Solar photovoltaic. new text end
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"Solar photovoltaic" has the meaning given in section
216C.06, subdivision 16, and must meet the requirements of section 216C.25.
new text end
new text begin Subd. 10. new text end
new text begin Cost-effective energy efficiency improvements. new text end
new text begin
"Cost-effective energy
efficiency improvements" mean projects that have a simple payback of ten years or less.
new text end
new text begin EFFECTIVE DATE. new text end
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This section is effective the day following final enactment.
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Sec. 2.
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[216C.436] VOLUNTARY ENERGY EFFICIENCY FINANCING
PROGRAM FOR CITIES.
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new text begin Subdivision 1. new text end
new text begin Program authority. new text end
new text begin
A city may establish a program to make loans
to owners of qualifying real property to pay for cost-effective energy improvements to
the qualifying real property with the net proceeds and interest earnings of revenue bonds
authorized in this section.
new text end
new text begin Subd. 2. new text end
new text begin Program requirements. new text end
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A loan program must:
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(1) impose requirements and conditions on loans to ensure their timely repayment;
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(2) require an energy audit or renewable energy system feasibility study to be
conducted on the qualifying real property and reviewed by the city prior to approval of
the loan;
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(3) inspect the installation and verify the performance of energy improvements
financed by the loan program;
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(4) require that all cost-effective energy efficiency improvements be made to a
qualifying real property prior to, or in conjunction with, an applicant receiving a loan for a
renewable energy system for that property;
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(5) have work funded by a loan be done by licensed contractors as required by
chapter 326B or other law or ordinance;
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(6) require disclosures to borrowers by the city of the risks involved in borrowing,
including the risk of foreclosure if a tax delinquency results from a default;
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(7) provide loans only to those who demonstrate an ability to repay the loan;
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(8) not make loans for a qualifying real property in which the owner has a negative
equity or is not current on mortgage or real property tax payments;
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(9) 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; and
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(10) that liability for special assessments related to the loan runs with the qualifying
real property.
new text end
new text begin Subd. 3. new text end
new text begin Loan terms. new text end
new text begin
Loans made under this section must have:
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(1) a term not to exceed the weighted average of the useful life of the energy
improvements installed, as determined by the city, but in no event may a term exceed
20 years;
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(2) a principal amount not to exceed the lesser of ten percent of the appraised value
of the real property on which the improvements are to be installed or the actual cost of
installing the energy improvements, including the costs of necessary equipment, materials,
and labor, the costs of each related energy audit or renewable energy system feasibility
study, and the cost of verification of installation; and
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new text begin
(3) an interest rate sufficient to pay the financing costs of the program, including the
issuance of bonds and loan delinquencies.
new text end
new text begin Subd. 4. new text end
new text begin Coordination with other programs. new text end
new text begin
A loan program must include
cooperation and coordination with the conservation improvement activities of the utility
serving the qualifying real property and other public and private energy improvement
programs.
new text end
new text begin Subd. 5. new text end
new text begin Certificate of participation. new text end
new text begin
Upon completion of a project, a city shall
provide a borrower with a certificate stating participation in the program and what energy
improvements have been made with loan proceeds.
new text end
new text begin Subd. 6. new text end
new text begin Loan repayment. new text end
new text begin
In addition to any other method established in the
program for loan repayment, a city making a loan under this section may:
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(1) secure the loan with a lien against the benefited qualifying real property; and
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(2) collect loan repayments as a special assessment as provided for in section
429.101 or by charter.
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new text begin Subd. 7. new text end
new text begin Bond issuance; repayment. new text end
new text begin
(a) A city may issue revenue bonds as
provided in chapter 475 for the purposes of this section.
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(b) The bonds must be payable as to both principal and interest solely from the
revenues from the assessments established in subdivision 6.
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(c) No holder of bonds issued under this subdivision may compel any exercise
of the taxing power of the city that issued the bonds to pay principal or interest on the
bonds. Bonds issued under this subdivision are not a debt or obligation of the city that
issued them, nor is the payment of the bonds enforceable out of any money other than the
revenue pledged to the payment of the bonds.
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new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
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Sec. 3.
Minnesota Statutes 2008, section 429.101, subdivision 1, is amended to read:
Subdivision 1.
Ordinances.
(a) In addition to any other method authorized by
law or charter, the governing body of any municipality may provide for the collection
of unpaid special charges as a special assessment against the property benefited for all
or any part of the cost of:
(1) snow, ice, or rubbish removal from sidewalks;
(2) weed elimination from streets or private property;
(3) removal or elimination of public health or safety hazards from private property,
excluding any structure included under the provisions of sections 463.15 to 463.26;
(4) installation or repair of water service lines, street sprinkling or other dust
treatment of streets;
(5) the trimming and care of trees and the removal of unsound trees from any street;
(6) the treatment and removal of insect infested or diseased trees on private property,
the repair of sidewalks and alleys;
(7) the operation of a street lighting system;
(8) the operation and maintenance of a fire protection or a pedestrian skyway system;
(9) inspections relating to a municipal housing maintenance code violation;
(10) the recovery of any disbursements under section 504B.445, subdivision 4,
clause (5), including disbursements for payment of utility bills and other services, even if
provided by a third party, necessary to remedy violations as described in section 504B.445,
subdivision 4, clause (2); deleted text begin ordeleted text end
(11) [Repealed, 2004 c 275 s 5]
(12) the recovery of delinquent vacant building registration fees under a municipal
program designed to identify and register vacant buildingsdeleted text begin .deleted text end new text begin ; or
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(13) energy improvements to residential or business property, as authorized under
section 216C.435.
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(b) The council may by ordinance adopt regulations consistent with this section to
make this authority effective, including, at the option of the council, provisions for placing
primary responsibility upon the property owner or occupant to do the work personally
(except in the case of street sprinkling or other dust treatment, alley repair, tree trimming,
care, and removalnew text begin ,new text end or the operation of a street lighting system) upon notice before the work
is undertaken, and for collection from the property owner or other person served of the
charges when due before unpaid charges are made a special assessment.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end