SF 3060

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 07/27/2022 01:32pm

A bill for an act
relating to energy; modifying the property assessed clean energy program; amending
Minnesota Statutes 2020, sections 216C.435, subdivision 8; 216C.436, subdivision
2, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2020, section 216C.435, subdivision 8, is amended to read:

Subd. 8.

Qualifying commercial real property.

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

Sec. 2.

Minnesota Statutes 2020, section 216C.436, is amended by adding a subdivision
to read:

Subd. 1b.

Definition.

For the purposes of this section, "land and water improvements"
means:

(1) any improvement to qualifying farmland, as defined in section 273.13, subdivision
23, that is permanent in nature, results in improved agricultural productivity or resiliency,
and reduces environmental impact; or

(2) water conservation measures, which includes permanently affixed equipment,
appliances, or improvements that reduce a property's water consumption or that enable the
property to manage water more efficiently.

Sec. 3.

Minnesota Statutes 2020, 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 or renewable energy system feasibility study 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 or land and water improvements
financed by the program;

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

(5) require that all cost-effective energy improvements or land and water improvements
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 for that property;

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

(7) require disclosures to borrowers by the implementing entity of the risks involved in
borrowing, including the risk of foreclosure if a tax delinquency results from a default;

(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; and

(12) require that liability for special assessments related to the financing runs with the
qualifying commercial real property; and

(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.