Minnesota Legislature
SF 3318
as introduced - 86th Legislature (2009 - 2010) Posted on 03/24/2010 07:37am
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A bill for an act
relating to state government; changing provisions in the energy improvement
financing program; amending Minnesota Statutes 2008, section 16B.322,
subdivisions 4, 5; Minnesota Statutes 2009 Supplement, section 16B.322,
subdivisions 4a, 4b, 4c.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2008, section 16B.322, subdivision 4, is amended to read:
Subd. 4.
Financing agreement.
The commissioner shall solicit proposals from
private financial institutionsnew text begin on an individual project or line of credit basisnew text end and may enter
into a financing agreement with one or more financial institutions. new text begin If a financing agreement
is for an individual project, new text end the term of the financing agreement shall not exceed 15 years
from the date of final completion of the energy improvement projectdeleted text begin . Thedeleted text end new text begin and anew text end financing
agreement is assignable to the state agency operating or managing the state building or
facility improved by the energy improvement project.new text begin The term of a financing agreement
on an individual project basis must be less than the average expected useful life of the
energy saving measures implemented under the project.new text end The proceeds from the financing
agreement are appropriated to the commissioner and may be used for the purposes of
this section and are available until spent.
Sec. 2.
Minnesota Statutes 2009 Supplement, section 16B.322, subdivision 4a, is
amended to read:
Subd. 4a.
Financing agreement.
The commissioner of administration may, in
connection with a financing agreement, covenant deleted text begin in a master lease-purchase agreementdeleted text end
that the state will abide by the terms and provisions that are customary in net lease or
lease-purchase transactions including, but not limited to, covenants providing that the state:
(1) will maintain insurance as required under the terms of the lease agreement;
(2) is responsible to the lessor for any public liability or property damage claims or
costs related to the selection, use, or maintenance of the leased equipment, to the extent of
insurance or self-insurance maintained by the lessee, and for costs and expenses incurred
by the lessor as a result of any default by the lessee;
(3) authorizes the lessor to exercise the rights of a secured party with respect to the
equipment subject to the lease in the event of default by the lessee and, in addition, for
the present recovery of lease rentals due during the current term of the lease as liquidated
damages.
Sec. 3.
Minnesota Statutes 2009 Supplement, section 16B.322, subdivision 4b, is
amended to read:
Subd. 4b.
Master lease-purchase agreements not debt.
A deleted text begin tax-exempt
lease-purchase agreement related to adeleted text end financing agreementnew text begin under this sectionnew text end does not
constitute or create a general or moral obligation or indebtedness of the state in excess
of the money from time to time appropriated or otherwise available for the payment of
rent coming due under the lease, and the state has no continuing obligation to appropriate
money for the payment of rent or other obligations under the deleted text begin leasedeleted text end new text begin agreementnew text end . Rent due
under a deleted text begin master lease-purchasedeleted text end new text begin financingnew text end agreementnew text begin under this sectionnew text end during a current
deleted text begin leasedeleted text end term for which money has been appropriated is a current expense of the state.
Sec. 4.
Minnesota Statutes 2009 Supplement, section 16B.322, subdivision 4c, is
amended to read:
Subd. 4c.
Budget offset.
new text begin The commissioner shall require a state agency that uses
the state energy improvement program to certify that the agency will budget, allocate, and
commit agency funds sufficient to make rent payments under a financing agreement until
all rent obligations are paid in full. In the event a participating agency fails to make a
rent payment, new text end the commissioner of management and budget shall reduce the operating
deleted text begin budgetsdeleted text end new text begin budgetnew text end ofnew text begin thenew text end state deleted text begin agencies that use the master lease-purchase program under a
financial agreementdeleted text end new text begin agencynew text end . The amount of the reduction is the amount sufficient to
make the actual deleted text begin master leasedeleted text end payments.
Sec. 5.
Minnesota Statutes 2008, section 16B.322, subdivision 5, is amended to read:
Subd. 5.
Qualifying energy improvement projects.
The commissioner may
approve an energy improvement project deleted text begin and enter intodeleted text end new text begin fornew text end a financing agreement if the
commissioner determines that:
(1) the project andnew text begin projectnew text end financing agreement have been approved by the governing
body or head of the state agency that operates or manages the state building or facility to
be improved;
(2) the project is technically and economically feasible;
(3) the state agency that operates or manages the state building or facility has made
adequate provision for the operation and maintenance of the project;
(4) if an energy efficiency improvement, the project is calculated to result in a
positive cash flow in each year the financing agreement is in effect;
(5) the project proposer has fully explored the use of conservation investment plan
opportunities under section 216B.241 with the utilities providing gas and electric service
to the energy improvement project;
(6) if a renewable energy improvement, the project is calculated to reduce use of
fossil-fuel energy; and
(7) if a geothermal energy improvement, the project is calculated to produce savings
in terms of nongeothermal energy and costs.
For the purpose of clause (6), "renewable energy" is energy produced by an eligible energy
technology as defined in section 216B.1691, subdivision 1, paragraph (a), clause (1).