HF 1656

3rd Engrossment - 93rd Legislature (2023 - 2024) Posted on 05/01/2023 12:42pm

A bill for an act
relating to energy; establishing grant programs to enhance the competitiveness of
Minnesota entities in obtaining federal money for energy projects; creating an
account; 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.390] LEGISLATIVE FINDINGS.
new text end

new text begin The legislature finds that increasing the competitiveness of Minnesota is critically
important to ensuring the state's economy is strong and growing. Increasing competitiveness
can be accomplished by improving productivity, improving competition, and improving
investments.
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.391] MINNESOTA STATE COMPETITIVENESS FUND.
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.
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new text begin (b) "Competitive funds" means federal funds awarded to selected applicants based on
the grantor's evaluation of the strength of an application measured against all other
applications.
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new text begin (c) "Disadvantaged community" has the meaning given by the federal agency disbursing
federal funds.
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new text begin (d) "Eligible entity" means an entity located in Minnesota that is eligible to receive
federal funds, or an entity that has at least one Minnesota-based partner, as determined by
the grantor of the federal funds.
new text end

new text begin (e) "Federal funds" means federal formula or competitive funds available for award to
applicants for energy projects under the Infrastructure Investment and Jobs Act, Public Law
117-58, or the Inflation Reduction Act of 2022, Public Law 117-169.
new text end

new text begin (f) "Formula funds" means federal funds awarded to all eligible applicants on a
noncompetitive basis.
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new text begin (g) "Match" means the amount of state money a successful grantee in Minnesota is
required to contribute to a project as a condition of receiving federal funds.
new text end

new text begin (h) "Political subdivision" has the meaning given in section 331A.01, subdivision 3.
new text end

new text begin (i) "Project" means the activities proposed to be undertaken by an eligible entity awarded
federal funds and are located in Minnesota or will directly benefit Minnesotans.
new text end

new text begin (j) "Tribal government" has the meaning given in section 116J.64, subdivision 4.
new text end

new text begin Subd. 2. new text end

new text begin Establishment of account; eligible expenditures. new text end

new text begin (a) A state competitiveness
fund account is created in the special revenue fund of the state treasury. The commissioner
must credit to the account appropriations and transfers to the account. Earnings, such as
interest, dividends, and any other earnings arising from assets of the account, must be
credited to the account. Money remaining in the account at the end of a fiscal year does not
cancel to the general fund but remains available until June 30, 2034. The commissioner is
the fiscal agent and must manage the account.
new text end

new text begin (b) Money in the account is appropriated to the commissioner and must be used to:
new text end

new text begin (1) pay all or any portion of the state match required as a condition of receiving federal
funds, or to otherwise reduce the cost for projects that are awarded federal funds;
new text end

new text begin (2) award grants under subdivision 4 to obtain grant development assistance for eligible
entities; and
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new text begin (3) pay the reasonable costs incurred by the department to assist eligible entities to
successfully compete for available federal funds.
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new text begin Subd. 3. new text end

new text begin Grant awards; eligible entities; priorities. new text end

new text begin (a) Grants may be awarded under
this section to eligible entities in accordance with the following order of priorities:
new text end

new text begin (1) federal formula funds directed to the state that require a match;
new text end

new text begin (2) federal funds directed to a political subdivision or a Tribal government that require
a match;
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new text begin (3) federal funds directed to an institution of higher education, a consumer-owned utility,
a business, or a nonprofit organization that require a match;
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new text begin (4) federal funds directed to investor-owned utilities that require a match;
new text end

new text begin (5) federal funds directed to an eligible entity not included in clauses (1) to (4) that
require a match; and
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new text begin (6) all other grant opportunities directed to eligible entities that do not require a match
but for which the commissioner determines that a grant made under this section is likely to
enhance the likelihood of an applicant receiving federal funds, or to increase the potential
amount of federal funds received.
new text end

new text begin (b) By November 15, 2023, the commissioner must develop and publicly post, and report
to the chairs and ranking minority members of the legislative committees with jurisdiction
over energy finance, the federal energy grant funds that are eligible for state matching funds
under this section.
new text end

new text begin Subd. 4. new text end

new text begin Grant awards; grant development assistance. new text end

new text begin Grants may be awarded under
this section to entities with expertise and experience in grant development to assist eligible
entities to prepare grant applications for federal funds. Eligible grantees under this subdivision
include regional development commissions established in section 462.387, the West Central
Initiative Foundation, Minnesota Municipal Utilities Association, Minnesota Rural Electric
Association, consumer-owned utilities, Tribal governments, and any entity the commissioner
determines will enhance the competitiveness of grant applications by disadvantaged
communities and from eligible entities located in areas not served by a regional development
commission.
new text end

new text begin Subd. 5. new text end

new text begin Grant amounts. new text end

new text begin (a) For grants that meet the criteria in subdivision 3, paragraph
(a), clauses (1) to (3), the maximum grant award for each entity is 100 percent of the required
match.
new text end

new text begin (b) For grants that meet the criteria in subdivision 3, paragraph (a), clauses (4) and (5),
the maximum grant award is 50 percent of the required match, except that if the commissioner
determines that at least 40 percent of the direct benefits resulting from a project awarded
federal funds would be realized by residents of a disadvantaged community, the commissioner
may award up to 100 percent of the required match.
new text end

new text begin (c) For projects that meet the criteria in subdivision 3, paragraph (a), clause (6), the
commissioner may award a grant up to ten percent of the amount of federal funds requested
by the applicant, except that if the commissioner determines that at least 40 percent of the
direct benefits resulting from a project awarded federal funds would be realized by residents
of a disadvantaged community, the commissioner may award up to 20 percent of the amount
of federal funds requested.
new text end

new text begin (d) Except for the commissioner, when matching federal funds are directed to the state,
no single entity may receive, as an award or subaward, grants under this subdivision totaling
more than $15,000,000.
new text end

new text begin (e) The maximum grant award for each entity under subdivision 4 is $300,000.
new text end

new text begin Subd. 6. new text end

new text begin Grant awards; administration. new text end

new text begin (a) An eligible entity seeking a grant award
under subdivision 3 or an entity seeking a grant award under subdivision 4 must submit an
application to the commissioner on a form prescribed by the commissioner. The
commissioner is responsible for receiving and reviewing grant applications and awarding
grants under this section, and shall develop administrative procedures governing the
application, evaluation, and award process. The commissioner may not make a grant award
under this section unless the commissioner has determined, and has notified the applicant
in writing, that the application is complete. In awarding grants under this section, the
commissioner shall endeavor to make awards to applicants from all regions of the state.
new text end

new text begin (b) The department must provide technical assistance to applicants. Applicants may also
receive grant development assistance at no cost from entities awarded grants for that purpose
under subdivision 4.
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new text begin (c) Within ten business days of determining a grant award amount to an applicant, the
commissioner must:
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new text begin (1) reserve that amount for that specific grant in the state competitiveness fund account;
and
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new text begin (2) notify the Legislative Advisory Commission in writing of the reserved amount, the
name of the applicant, the purpose of the project, and the unreserved balance of funds
remaining in the account.
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new text begin (d) Reserved funds are committed to the grant and use specified in the notice provided
under paragraph (c) and are unavailable for reservation or appropriation for other applications
unless and until the commissioner receives written notice from the applicant that the
application for federal funds has been withdrawn or from the federal grantor that the
application for which funds from the account were reserved has been denied federal funds.
new text end

new text begin (e) Reserved funds may only be expended upon presentation of written notice from the
federal grantor to the commissioner stating that the applicant will receive federal funds for
the project described in the application. If the amount of federal funds awarded to an applicant
differs from the amount requested in the application, the commissioner may adjust the award
made under this section accordingly.
new text end

new text begin (f) Reserved funds must be made for projects that demonstrate they will help meet the
state's clean energy and energy-related climate goals through renewable energy development,
energy conservation, efficiency, or energy-related greenhouse gas reduction benefits.
new text end

new text begin (g) The commissioner must notify the chairs and ranking minority members of the
legislative committees with jurisdiction over energy finance when the unreserved balance
of the competitiveness fund account reaches the following amounts: 50 percent, unreserved;
25 percent, unreserved; 15 percent, unreserved; and five percent. The notification must be
within ten days after each level of unreserved balance is reached.
new text end

new text begin Subd. 7. new text end

new text begin Report; audit. new text end

new text begin Beginning February 15, 2024, and each February 15 thereafter
until February 15, 2035, the commissioner must submit a written report to the chairs and
ranking minority members of the legislative committees with jurisdiction over energy finance
on the activities taken and expenditures made under this section. The report must, at a
minimum, include the following information for the most recent calendar year:
new text end

new text begin (1) the number of applications for grants filed with the commissioner and the total amount
of grant funds requested;
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new text begin (2) each grant awarded;
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new text begin (3) the number of additional personnel hired for the purposes of this section;
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new text begin (4) expenditures on activities conducted under this section, reported separately for these
areas:
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new text begin (i) the provision of technical assistance;
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new text begin (ii) grants made under subdivision 4 to entities to assist applicants with grant
development;
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new text begin (iii) application review and evaluation, including applicants that were denied federal or
state grant awards and the reason for the denial;
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new text begin (iv) information technology activities; and
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new text begin (v) other expenditures;
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new text begin (5) the unreserved balance remaining in the state competitiveness fund account;
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new text begin (6) a copy of a financial audit of the department's expenditures under this section
conducted by an independent auditor;
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new text begin (7) recommendations for legislation to enhance the ability of eligible entities to
successfully compete for federal funds;
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new text begin (8) additional available funding opportunities to obtain energy-related funding from
federal agencies; and
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new text begin (9) federal grant program changes that would affect the federal funds available to the
state and eligible applicants, including changes that would affect the required match for
receiving federal funds.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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Sec. 3. new text begin APPROPRIATION.
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new text begin (a) $115,000,000 in fiscal year 2023 is appropriated from the general fund to the
commissioner of commerce for the purposes of Minnesota Statutes, section 216C.391. This
is a onetime appropriation. Of this amount:
new text end

new text begin (1) $100,000,000 is for grant awards made under Minnesota Statutes, section 216C.391,
subdivision 3, of which at least $75,000,000 is for grant awards of less than $1,000,000;
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new text begin (2) $6,000,000 is for grant awards made under Minnesota Statutes, section 216C.391,
subdivision 4;
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new text begin (3) $750,000 is for the reports and audits under Minnesota Statutes, section 216C.391,
subdivision 7;
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new text begin (4) $1,500,000 is for information system development improvements necessary to carry
out Minnesota Statutes, section 216C.391, and to improve digital access and reporting;
new text end

new text begin (5) $6,750,000 is for technical assistance to applicants and administration of Minnesota
Statutes, section 216C.391, by the Department of Commerce; and
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new text begin (6) the commissioner may transfer money from clause (2) to clause (1) if less than 75
percent of the money in clause (2) has been awarded by June 30, 2028.
new text end

new text begin (b) To the extent that federal funds for energy projects under the Infrastructure Investment
and Jobs Act, Public Law 117-58, or the Inflation Reduction Act of 2022, Public Law
117-169, become permanently unavailable to be matched with funds appropriated under
this section, the commissioner of management and budget must certify the proportional
amount of unencumbered funds remaining in the account established under Minnesota
Statutes, section 216C.391, and those unencumbered funds cancel to the general fund.
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