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SF 2720

3rd Engrossment - 86th Legislature (2009 - 2010) Posted on 03/24/2010 05:48pm

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to local government; authorizing local governments to finance energy
improvements for property owners to install energy efficient or renewable energy
improvements; providing for repayment as a special assessment; authorizing
issuance of revenue bonds; amending Minnesota Statutes 2008, sections
429.021, subdivision 1; 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.

new text begin [216C.435] 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 this section and section 216C.436, the
terms defined in this section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin City. new text end

new text begin "City" means a home rule charter or statutory city.
new text end

new text begin Subd. 3. new text end

new text begin Local government. new text end

new text begin "Local government" means a city, county, or town.
new text end

new text begin Subd. 4. new text end

new text begin Energy audit. new text end

new text begin "Energy audit" means a formal evaluation of the energy
consumption of a building by a state certified energy auditor, 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. 5. new text end

new text begin Energy improvement. new text end

new text begin "Energy improvement" means:
new text end

new text begin (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;
new text end

new text begin (2) permanent installation of new or upgraded electrical circuits and related
equipment to enable electrical vehicle charging; or
new text end

new text begin (3) a renewable energy system attached to, 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. 6. 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. 7. 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. 8. 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. 9. 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. 10. new text end

new text begin Solar photovoltaic. new text end

new text begin "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 EFFECTIVE DATE. new text end

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

Sec. 2.

new text begin [216C.436] VOLUNTARY ENERGY IMPROVEMENTS FINANCING
PROGRAM FOR LOCAL GOVERNMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Program authority. new text end

new text begin A local government may establish a program
to finance energy improvements to enable 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. A local government may
limit the number of qualifying real properties for which a property owner may receive
program financing.
new text end

new text begin Subd. 2. new text end

new text begin Program requirements. new text end

new text begin A financing program must:
new text end

new text begin (1) impose requirements and conditions on financing arrangements to ensure timely
repayment;
new text end

new text begin (2) require an energy audit or renewable energy system feasibility study to be
conducted on the qualifying real property and reviewed by the local government prior to
approval of the financing;
new text end

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

new text begin (4) require that all cost-effective energy improvements be made to a qualifying
real property prior to, or in conjunction with, an applicant's repayment of financing for
energy improvements for that property;
new text end

new text begin (5) have energy improvements financed by the program performed by licensed
contractors as required by chapter 326B or other law or ordinance;
new text end

new text begin (6) require disclosures to borrowers by the local government of the risks involved in
borrowing, including the risk of foreclosure if a tax delinquency results from a default;
new text end

new text begin (7) provide financing only to those who demonstrate an ability to repay;
new text end

new text begin (8) not provide financing for a qualifying real property in which the owner is not
current on mortgage or real property tax payments;
new text end

new text begin (9) require a petition by each owner of the qualifying real property requesting
collections of repayments as a special assessment under section 429.101;
new text end

new text begin (10) 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
new text end

new text begin (11) provide that liability for special assessments related to the financing runs with
the qualifying real property.
new text end

new text begin Subd. 3. new text end

new text begin Retail and end use prohibited. new text end

new text begin Energy generated by an energy
improvement may not be sold, transmitted, or distributed at retail and may not be provided
for end use from an off-site facility of the electrical energy. On-site generation is allowed
to the extent provided for in section 216B.1611.
new text end

new text begin This section does not modify the exclusive service territories or exclusive right to
serve as provided in sections 216B.37 to 216B.43.
new text end

new text begin Subd. 4. new text end

new text begin Financing terms. new text end

new text begin Financing provided under this section must have:
new text end

new text begin (1) a term not to exceed the weighted average of the useful life of the energy
improvements installed, as determined by the local government, but in no event may
a term exceed 20 years;
new text end

new text begin (2) a principal amount not to exceed the lesser of ten percent of the assessed 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
new text end

new text begin (3) an interest rate sufficient to pay the financing costs of the program, including the
issuance of bonds and any financing delinquencies.
new text end

new text begin Subd. 5. new text end

new text begin Coordination with other programs. new text end

new text begin A financing 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. 6. new text end

new text begin Certificate of participation. new text end

new text begin Upon completion of a project, a local
government shall provide a borrower with a certificate stating participation in the program
and what energy improvements have been made with financing program proceeds.
new text end

new text begin Subd. 7. new text end

new text begin Repayment. new text end

new text begin A local government financing an energy improvement
under this section must:
new text end

new text begin (1) secure payment with a lien against the benefited qualifying real property; and
new text end

new text begin (2) collect repayments as a special assessment as provided for in section 429.101
or by charter.
new text end

new text begin Subd. 8. new text end

new text begin Bond issuance; repayment. new text end

new text begin (a) A local government may issue revenue
bonds as provided in chapter 475 for the purposes of this section.
new text end

new text begin (b) The bonds must be payable as to both principal and interest solely from the
revenues from the assessments established in subdivision 7.
new text end

new text begin (c) No holder of bonds issued under this subdivision may compel any exercise of the
taxing power of the local government 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 local
government 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.
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 2008, section 429.021, subdivision 1, is amended to read:


Subdivision 1.

Improvements authorized.

The council of a municipality shall have
power to make the following improvements:

(1) To acquire, open, and widen any street, and to improve the same by constructing,
reconstructing, and maintaining sidewalks, pavement, gutters, curbs, and vehicle parking
strips of any material, or by grading, graveling, oiling, or otherwise improving the same,
including the beautification thereof and including storm sewers or other street drainage
and connections from sewer, water, or similar mains to curb lines.

(2) To acquire, develop, construct, reconstruct, extend, and maintain storm and
sanitary sewers and systems, including outlets, holding areas and ponds, treatment plants,
pumps, lift stations, service connections, and other appurtenances of a sewer system,
within and without the corporate limits.

(3) To construct, reconstruct, extend, and maintain steam heating mains.

(4) To install, replace, extend, and maintain street lights and street lighting systems
and special lighting systems.

(5) To acquire, improve, construct, reconstruct, extend, and maintain water works
systems, including mains, valves, hydrants, service connections, wells, pumps, reservoirs,
tanks, treatment plants, and other appurtenances of a water works system, within and
without the corporate limits.

(6) To acquire, improve and equip parks, open space areas, playgrounds, and
recreational facilities within or without the corporate limits.

(7) To plant trees on streets and provide for their trimming, care, and removal.

(8) To abate nuisances and to drain swamps, marshes, and ponds on public or private
property and to fill the same.

(9) To construct, reconstruct, extend, and maintain dikes and other flood control
works.

(10) To construct, reconstruct, extend, and maintain retaining walls and area walls.

(11) To acquire, construct, reconstruct, improve, alter, extend, operate, maintain, and
promote a pedestrian skyway system. Such improvement may be made upon a petition
pursuant to section 429.031, subdivision 3.

(12) To acquire, construct, reconstruct, extend, operate, maintain, and promote
underground pedestrian concourses.

(13) To acquire, construct, improve, alter, extend, operate, maintain, and promote
public malls, plazas or courtyards.

(14) To construct, reconstruct, extend, and maintain district heating systems.

(15) To construct, reconstruct, alter, extend, operate, maintain, and promote fire
protection systems in existing buildings, but only upon a petition pursuant to section
429.031, subdivision 3.

(16) To acquire, construct, reconstruct, improve, alter, extend, and maintain highway
sound barriers.

(17) To improve, construct, reconstruct, extend, and maintain gas and electric
distribution facilities owned by a municipal gas or electric utility.

(18) To purchase, install, and maintain signs, posts, and other markers for addressing
related to the operation of enhanced 911 telephone service.

(19) To improve, construct, extend, and maintain facilities for Internet access and
other communications purposes, if the council finds that:

(i) the facilities are necessary to make available Internet access or other
communications services that are not and will not be available through other providers or
the private market in the reasonably foreseeable future; and

(ii) the service to be provided by the facilities will not compete with service provided
by private entities.

(20) To assess affected property owners for all or a portion of the costs agreed to
with an electric utility, telecommunications carrier, or cable system operator to bury or
alter a new or existing distribution system within the public right-of-way that exceeds the
utility's design and construction standards, or those set by law, tariff, or franchise, but only
upon petition under section 429.031, subdivision 3.

new text begin (21) To assess affected property owners for repayment of voluntary energy
improvement financing under section 216C.436, subdivision 7.
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. 4.

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); or

(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 buildings.

(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 (c) A home rule charter city, statutory city, county, or town operating an energy
improvements financing program under section 216C.436 has the authority granted to a
municipality under paragraph (a) with respect to energy improvements financed under
that section.
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