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HF 2044

as introduced - 92nd Legislature (2021 - 2022) Posted on 04/13/2021 10:53am

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

Bill Text Versions

Engrossments
Introduction Posted on 03/09/2021

Current Version - as introduced

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A bill for an act
relating to energy; establishing a nonprofit corporation to provide financing and
leverage private investment for clean energy and other projects; requiring a report;
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.441] MINNESOTA INNOVATION FINANCE AUTHORITY.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given them.
new text end

new text begin (b) "Advisory task force" means the advisory task force of the Minnesota Innovation
Finance Authority.
new text end

new text begin (c) "Authority" means the Minnesota Innovation Finance Authority.
new text end

new text begin (d) "Clean energy project" has the meaning given to "qualified project" in paragraph
(k), clauses (1) to (4).
new text end

new text begin (e) "Credit enhancement" means a pool of capital set aside to cover potential losses on
loans made by private lenders, including but not limited to loan loss reserves and loan
guarantees.
new text end

new text begin (f) "Energy storage system" has the meaning given in section 216B.2422, subdivision
1, paragraph (f).
new text end

new text begin (g) "Fuel cell" means a cell that converts the chemical energy of hydrogen directly into
electricity through electrochemical reactions.
new text end

new text begin (h) "Greenhouse gas emissions" has the meaning given to "statewide greenhouse gas
emissions" in section 216H.01, subdivision 2.
new text end

new text begin (i) "Loan loss reserve" means a pool of capital set aside to reimburse a private lender if
a customer defaults on a loan, up to an agreed upon percentage of loans originated by the
private lender.
new text end

new text begin (j) "Microgrid system" means an electrical grid serving a discrete geographical area
from distributed energy resources that can operate independently from the central electric
grid on a temporary basis.
new text end

new text begin (k) "Qualified project" means:
new text end

new text begin (1) a project, technology, product, service, or measure that:
new text end

new text begin (i) reduces energy use while providing the same level and quality of service or output
obtained before the application of the project;
new text end

new text begin (ii) shifts the use of electricity by retail customers in response to changes in the price of
electricity that vary over time, or other incentives designed to shift electricity demand from
times when market prices are high or when system reliability is jeopardized; or
new text end

new text begin (iii) significantly reduces greenhouse gas emissions relative to greenhouse gas emissions
produced before application of the project, excluding projects that generate power from the
combustion of fossil fuels;
new text end

new text begin (2) the development, construction, deployment, alteration, or repair of any:
new text end

new text begin (i) project, technology, product, service, or measure that generates electric power from
renewable energy; or
new text end

new text begin (ii) distributed generation system, energy storage system, smart grid technology, microgrid
system, fuel cell system, or combined heat and power system;
new text end

new text begin (3) the installation, construction, or use of end-use electric technology that replaces
existing fossil fuel-based technology;
new text end

new text begin (4) a project, technology, product, service, or measure that supports the development
and deployment of electric vehicle charging stations and associated infrastructure;
new text end

new text begin (5) agriculture projects that reduce net greenhouse gas emissions or improve climate
resiliency, including but not limited to reforestation, afforestation, forestry management,
and regenerative agriculture;
new text end

new text begin (6) the construction or enhancement of infrastructure that is planned, designed, and
operated in a manner that anticipates, prepares for, and adapts to current and projected
changing climate conditions so that the infrastructure withstands, responds to, and more
readily recovers from disruptions caused by the current and projected changing climate
conditions; and
new text end

new text begin (7) the development, construction, deployment, alteration, or repair of any project,
technology, product, service, or measure that:
new text end

new text begin (i) reduces water use while providing the same or better level and quality of service or
output that was obtained before implementing the water-saving approach; or
new text end

new text begin (ii) protects, restores, or preserves the quality of groundwater and surface waters,
including but not limited to actions that further the purposes of the Clean Water Legacy
Act, as provided in section 114D.10, subdivision 1.
new text end

new text begin (l) "Regenerative agriculture" means the deployment of farming methods that reduce
agriculture's contribution to climate change by increasing the soil's ability to absorb
atmospheric carbon and convert the atmospheric carbon to soil carbon.
new text end

new text begin (m) "Renewable energy" means energy generated from the following sources:
new text end

new text begin (1) solar;
new text end

new text begin (2) wind;
new text end

new text begin (3) geothermal;
new text end

new text begin (4) hydro;
new text end

new text begin (5) trees or other vegetation;
new text end

new text begin (6) anaerobic digestion of organic waste streams; and
new text end

new text begin (7) fuel cells using energy sources listed in this paragraph.
new text end

new text begin (n) "Smart grid" means a digital technology that allows for two-way communication
between a utility and the utility's customers that enables the utility to control power flow
and load in real time.
new text end

new text begin Subd. 2. new text end

new text begin Establishment; purpose. new text end

new text begin (a) By October 15, 2021, the Minnesota Innovation
Finance Authority Task Force established in this section must establish the Minnesota
Innovation Finance Authority as a nonprofit corporation under chapter 317A and must seek
designation as a charitable tax-exempt organization under section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
new text end

new text begin (b) When incorporated, the authority's purpose is to accelerate the deployment of clean
energy and other qualified projects by reducing the upfront and total cost of adoption, which
the authority achieves by leveraging existing public sources and additional private sources
of capital through the strategic deployment of public funds in the form of loans, credit
enhancements, and other financing mechanisms. The initial directors of the nonprofit
corporation must include at least a majority of the members of the task force and must
include the commissioner of commerce or the commissioner's designee and the commissioner
of employment and economic development or the commissioner's designee. The task force
must engage independent legal counsel with relevant experience in nonprofit corporation
law and clean energy financing.
new text end

new text begin (c) The Minnesota Innovation Finance Authority must:
new text end

new text begin (1) identify underserved markets for qualified projects in Minnesota, develop programs
to overcome market impediments, and provide access to financing to serve the projects and
underserved markets;
new text end

new text begin (2) strategically use authority funds to leverage private investment in qualified projects,
achieving a high ratio of private to public funds invested through funding mechanisms that
support, enhance, and complement private investment;
new text end

new text begin (3) coordinate with existing government- and utility-based programs to make the most
efficient use of the authority's funds, ensure that financing terms and conditions offered are
well-suited to qualified projects, and ensure the authority's activities add to and complement
the efforts of these partners;
new text end

new text begin (4) stimulate demand for qualified projects by serving as a single point of access for a
customer to obtain technical information on energy conservation and renewable energy
measures, for contractors who install energy conservation and renewable energy measures,
and for financing to reduce the upfront and total costs to borrowers, including through:
new text end

new text begin (i) serving as a clearinghouse for information about federal, state, and utility financial
assistance for qualifying projects in targeted underserved markets, including coordinating
efforts with the energy conservation programs administered by the customer's utility under
section 216B.241 and other programs offered to low-income households;
new text end

new text begin (ii) forming partnerships with contractors and educating contractors regarding the
authority's financing programs;
new text end

new text begin (iii) coordinating multiple contractors on projects that install multiple qualifying
technologies; and
new text end

new text begin (iv) developing innovative marketing strategies to stimulate project owner interest in
targeted underserved markets;
new text end

new text begin (5) develop rules, policies, and procedures specifying borrower eligibility and other
terms and conditions of financial support offered by the authority;
new text end

new text begin (6) develop consumer protection standards governing the authority's investments to
ensure the authority and partners provide financial support in a responsible and transparent
manner that is in the financial interest of participating project owners;
new text end

new text begin (7) develop and administer policies to collect reasonable fees for authority services that
are sufficient to support ongoing authority activities;
new text end

new text begin (8) develop and adopt a workplan to accomplish all of the activities required of the
authority, and update the workplan on an annual basis; and
new text end

new text begin (9) establish and maintain a comprehensive website providing access to all authority
programs and financial products, including rates, terms, and conditions of all financing
support programs, unless disclosure of the information constitutes a trade secret or
confidential commercial or financial information.
new text end

new text begin Subd. 3. new text end

new text begin Additional authorized activities. new text end

new text begin The authority is authorized to:
new text end

new text begin (1) engage in any activities of a Minnesota nonprofit corporation operating under chapter
317A;
new text end

new text begin (2) develop and employ the following financing methods to support qualified projects:
new text end

new text begin (i) credit enhancement mechanisms that reduce financial risk for private lenders by
providing assurance that a limited portion of a loan is assumed by the authority by means
of a loan loss reserve, loan guarantee, or other mechanism;
new text end

new text begin (ii) co-investment, in which the authority invests directly in a clean energy project
through the provision of senior or subordinated debt, equity, or other mechanisms in
conjunction with a private financier's investment; and
new text end

new text begin (iii) serve as an aggregator of many small and geographically dispersed qualified projects,
in which the authority may provide direct lending, investment, or other financial support in
order to diversify risk;
new text end

new text begin (3) serve as the designated state entity to apply for and accept federal funds authorized
by Congress under a federal climate bank, federal green bank, or other similar entity, provided
that the commissioner of commerce authorizes the application; and
new text end

new text begin (4) seek to qualify as a Community Development Financial Institution under United
States Code, title 12, section 4702, in which case the authority must be treated as a qualified
community development entity for the purposes of sections 45D and 1400(m) of the Internal
Revenue Code.
new text end

new text begin Subd. 4. new text end

new text begin Advisory task force; membership. new text end

new text begin (a) The advisory task force of the Minnesota
Innovation Finance Authority is established and consists of ..... members as follows:
new text end

new text begin (1) the commissioner of commerce or the commissioner's designee;
new text end

new text begin (2) the commissioner of employment and economic development or the commissioner's
designee;
new text end

new text begin (3) ..... additional members appointed by the governor;
new text end

new text begin (4) ..... additional members appointed by the speaker of the house of representatives;
and
new text end

new text begin (5) ..... additional members appointed by the president of the senate.
new text end

new text begin (b) The members appointed to the advisory task force under paragraph (a), clauses (3)
to (5), must have expertise in matters relating to energy conservation, clean energy, economic
development, banking, law, finance, or other matters relevant to the work of the advisory
task force. When appointing a member to the advisory task force, consideration must be
given to whether the advisory task force members collectively reflect the geographical and
ethnic diversity of Minnesota.
new text end

new text begin Subd. 5. new text end

new text begin Report; audit. new text end

new text begin By June 30, 2022, and by June 30 each year thereafter, the
authority must submit a comprehensive annual report on the authority's activities to the
governor and to the chairs and ranking minority members of the legislative committees with
primary jurisdiction over energy policy. The report must contain, at a minimum, information
on:
new text end

new text begin (1) the amount of authority capital invested, by project type;
new text end

new text begin (2) the amount of private capital leveraged as a result of authority investments, by project
type;
new text end

new text begin (3) the number of qualified projects supported, by project type, and location within
Minnesota;
new text end

new text begin (4) the estimated number of jobs created and tax revenue generated as a result of the
authority's activities;
new text end

new text begin (5) the number of clean energy projects financed in low- and moderate-income
households; and
new text end

new text begin (6) the authority's financial statements.
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 beginAPPROPRIATION.
new text end

new text begin Notwithstanding Minnesota Statutes, section 116C.779, subdivision 1, paragraph (j),
$....... in fiscal year 2022 is appropriated from the renewable development account established
under Minnesota Statutes, section 116C.779, subdivision 1, to the commissioner of ..... to
transfer to the advisory task force of the Minnesota Innovation Finance Authority established
under Minnesota Statutes, section 216C.441. This is a onetime appropriation. Of this amount,
up to $50,000 must be made available to the advisory task force of the Minnesota Innovation
Finance Authority for start-up expenses, including but not limited to expenses incurred prior
to incorporation.
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