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Minnesota Legislature

Office of the Revisor of Statutes

SF 2949

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to energy; enacting local renewable energy initiative to finance
small-scale renewable energy projects; authorizing sale and issuance of revenue
bonds; appropriating money; 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.145] LOCAL RENEWABLE ENERGY INITIATIVE;
ACCOUNT; MICROENERGY LOAN PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Program. new text end

new text begin (a) The Office of Energy Security shall implement and
administer the microenergy loan program as part of the local renewable energy initiative.
From money appropriated for this program, the office shall issue low-interest, long-term
loans to units of local government. The loan funds must be used to finance small-scale
community renewable energy projects or to provide money to individuals or small
businesses for assistance with costs of small-scale renewable energy installations.
new text end

new text begin (b) For the purposes of this program, "small-scale renewable energy" projects
include solar thermal water heating, solar electric or photovoltaic equipment, small wind
energy conversion systems of less than 250 kW, geothermal heat pumps, anaerobic
digester gas systems, and microhydro systems up to 100 kW.
new text end

new text begin (c) For the purposes of this section, "units of local government" means a county, a
statutory or home rule charter city, a town, a sanitary district, or the Metropolitan Council.
new text end

new text begin Subd. 2. new text end

new text begin Account; appropriation. new text end

new text begin A special local renewable energy initiative
account is established in the state treasury. Money in the account consists of the proceeds
of revenue bonds issued for the purposes of the microenergy loan program, interest earned
on money in the account, the repayment of loans of money from the account, legislative
appropriations, and any other source. Money in the account is annually appropriated to the
director of the Office of Energy Security for purposes of the program.
new text end

new text begin Subd. 3. new text end

new text begin Microenergy loans. new text end

new text begin (a) At least once a year, the director of the Office of
Energy Security shall publish in the State Register a request for proposals from units of
local governments for a loan under this section. Within 45 days of the deadline for receipt
of proposals, the director shall select proposals based on the following criteria:
new text end

new text begin (1) dispersed geographic distribution throughout the state;
new text end

new text begin (2) diversity of the renewable energy technology installed under the proposal;
new text end

new text begin (3) integration of the proposal with the conservation and energy efficiency programs
of the electric and natural gas utilities serving that local governmental unit;
new text end

new text begin (4) analysis of the quality and cost-effectiveness of the local renewable resources to
be developed and of the technology installed under the proposal; and
new text end

new text begin (5) the proposed security for payback of the loan.
new text end

new text begin (b) A loan under this program must be issued at the lowest interest required to recover
the costs of issuing the loan, and must be for a minimum of 15 years, unless the director
determines that a shorter loan period of no less than ten years is necessary and feasible.
new text end

Sec. 2.

new text begin [216C.146] LOCAL RENEWABLE ENERGY INITIATIVE REVENUE
BONDS.
new text end

new text begin Subdivision 1. new text end

new text begin Bonding authority. new text end

new text begin (a) The commissioner of finance, if requested by
the director of the Office of Energy Security, shall sell and issue state revenue bonds for
the following purposes:
new text end

new text begin (1) to pay the costs of the local renewable energy initiative established in section
216C.145;
new text end

new text begin (2) to pay the costs of issuance, debt service, and bond insurance or other credit
enhancements, and to fund reserves; and
new text end

new text begin (3) to refund bonds issued under this section.
new text end

new text begin (b) The amount of bonds that may be issued for the purposes of paragraph (a), clause
(1), will be set from time to time by law; the amount of bonds that may be issued for the
purposes of paragraph (a), clauses (2) and (3), is not limited.
new text end

new text begin Subd. 2. new text end

new text begin Procedure. new text end

new text begin (a) The commissioner may sell and issue the bonds on the
terms and conditions the commissioner determines to be in the best interests of the
state. The bonds may be sold at public or private sale. The commissioner may enter any
agreements or pledges the commissioner determines necessary or useful to sell the bonds
that are not inconsistent with section 216C.145. Sections 16A.672 to 16A.675 apply to the
bonds. The proceeds of the bonds issued under this section must be credited to a special
local renewable energy initiative revenue bond proceeds account in the state treasury.
new text end

new text begin (b) Before the proceeds are received in the local renewable energy initiative revenue
bond proceeds account, the commissioner of finance may transfer to the account from the
special local renewable energy initiative account amounts not exceeding the expected
proceeds from the next bond sale. The commissioner of finance shall return these amounts
to the special local renewable energy initiative account by transferring proceeds when
received. The amounts of these transfers are appropriated from the special local renewable
energy initiative account and from the local renewable energy initiative revenue bond
proceeds account.
new text end

new text begin Subd. 3. new text end

new text begin Revenue sources. new text end

new text begin The debt service on the bonds is payable only from the
following sources:
new text end

new text begin (1) revenue credited to the special local renewable energy initiative account from the
sources identified in section 216C.145 or from any other source; and
new text end

new text begin (2) other revenues pledged to the payment of the bonds.
new text end

new text begin Subd. 4. new text end

new text begin Refunding bonds. new text end

new text begin The commissioner may issue bonds to refund
outstanding bonds issued under subdivision 1, including the payment of any redemption
premiums on the bonds and any interest accrued or to accrue to the first redemption date
after delivery of the refunding bonds. The proceeds of the refunding bonds may, in the
discretion of the commissioner, be applied to the purchases or payment at maturity of the
bonds to be refunded, or the redemption of the outstanding bonds on the first redemption
date after delivery of the refunding bonds and may, until so used, be placed in escrow to
be applied to the purchase, retirement, or redemption. Refunding bonds issued under this
subdivision must be issued and secured in the manner provided by the commissioner.
new text end

new text begin Subd. 5. new text end

new text begin Not a general or moral obligation. new text end

new text begin Bonds issued under this section are
not public debt, and the full faith, credit, and taxing powers of the state are not pledged
for their payment. The bonds may not be paid, directly in whole or in part from a tax of
statewide application on any class of property, income, transaction, or privilege. Payment
of the bonds is limited to the revenues explicitly authorized to be pledged under this
section. The state neither makes nor has a moral obligation to pay the bonds if the pledged
revenues and other legal security for them is insufficient.
new text end

new text begin Subd. 6. new text end

new text begin Trustee. new text end

new text begin The commissioner may contract with and appoint a trustee for
bond holders. The trustee has the powers and authority vested in it by the commissioner
under the bond and trust indentures.
new text end

new text begin Subd. 7. new text end

new text begin Pledges. new text end

new text begin Any pledge made by the commissioner is valid and binding
from the time the pledge is made. The money or property pledged and later received by
the commissioner is immediately subject to the lien of the pledge without any physical
delivery of the property or money or further act, and the lien of any pledge is valid and
binding as against all parties having claims of any kind in tort, contract, or otherwise
against the commissioner, whether or not those parties have notice of the lien or pledge.
Neither the order nor any other instrument by which a pledge is created need be recorded.
new text end

new text begin Subd. 8. new text end

new text begin Bonds; purchase and cancellation. new text end

new text begin The commissioner, subject to
agreements with bondholders that may then exist, may, out of any money available for the
purpose, purchase bonds of the commissioner at a price not exceeding (1) if the bonds are
then redeemable, the redemption price then applicable plus accrued interest to the next
interest payment date thereon, or (2) if the bonds are not redeemable, the redemption price
applicable on the first date after the purchase upon which the bonds become subject to
redemption plus accrued interest to that date.
new text end

new text begin Subd. 9. new text end

new text begin State pledge against impairment of contracts. new text end

new text begin The state pledges and
agrees with the holders of any bonds that the state will not limit or alter the rights vested in
the commissioner to fulfill the terms of any agreements made with the bondholders, or
in any way impair the rights and remedies of the holders until the bonds, together with
interest on them, with interest on any unpaid installments of interest, and all costs and
expenses in connection with any action or proceeding by or on behalf of the bondholders,
are fully met and discharged. The commissioner may include this pledge and agreement
of the state in any agreement with the holders of bonds issued under this section.
new text end

Sec. 3.

new text begin [216C.147] STANDING APPROPRIATION; COSTS COVERED.
new text end

new text begin The amount necessary to pay debt service costs and reserves for bonds issued by
the commissioner of finance under section 216C.146 is appropriated from the special
local renewable energy initiative account established under section 216C.145 to the
commissioner of finance. The commissioner of finance shall transmit the necessary
amounts to the Office of Energy Security as requested by the director of the office.
new text end

new text begin This appropriation must be used to pay annual debt service costs and reserves for
bonds issued pursuant to section 216C.146 prior to the expenditure of any other money to
pay other costs or to support other appropriations.
new text end

Sec. 4. new text beginAPPROPRIATION.
new text end

new text begin Up to $20,000,000 is appropriated from the special local renewable energy initiative
account in the state treasury to the director of the Office of Energy Security for the
purposes of this act. This appropriation does not lapse.
new text end

Sec. 5. new text beginBOND SALE.
new text end

new text begin To provide the money appropriated in section 4 from the special local renewable
energy initiative account, the commissioner of finance shall sell and issue revenue bonds
of the state in an amount up to $20,000,000 in the manner, upon the terms, and with the
effect prescribed by Minnesota Statutes, sections 216C.145 to 216C.147. The proceeds of
the bonds, except accrued interest and any premium received on the sales of the bonds,
must be credited to the special local renewable energy initiative revenue bond proceeds
account in the state treasury.
new text end

Sec. 6. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 1 to 5 are effective the day following final enactment.
new text end