Minnesota Session Laws - 2023, Regular Session

CHAPTER 24--H.F.No. 1656

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. new text end

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. new text end

new text begin (c) "Disadvantaged community" has the meaning given by the federal agency disbursing federal funds. new text end

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. new text end

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 new text end

new text begin (3) pay the reasonable costs incurred by the department to assist eligible entities to successfully compete for available federal funds. new text end

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; new text end

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; new text end

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 new text end

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. new text end

new text begin (c) Within ten business days of determining a grant award amount to an applicant, the commissioner must: new text end

new text begin (1) reserve that amount for that specific grant in the state competitiveness fund account; and new text end

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. new text end

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; new text end

new text begin (2) each grant awarded; new text end

new text begin (3) the number of additional personnel hired for the purposes of this section; new text end

new text begin (4) expenditures on activities conducted under this section, reported separately for these areas: new text end

new text begin (i) the provision of technical assistance; new text end

new text begin (ii) grants made under subdivision 4 to entities to assist applicants with grant development; new text end

new text begin (iii) application review and evaluation, including applicants that were denied federal or state grant awards and the reason for the denial; new text end

new text begin (iv) information technology activities; and new text end

new text begin (v) other expenditures; new text end

new text begin (5) the unreserved balance remaining in the state competitiveness fund account; new text end

new text begin (6) a copy of a financial audit of the department's expenditures under this section conducted by an independent auditor; new text end

new text begin (7) recommendations for legislation to enhance the ability of eligible entities to successfully compete for federal funds; new text end

new text begin (8) additional available funding opportunities to obtain energy-related funding from federal agencies; and new text end

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. 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.

new text begin APPROPRIATION. new text end

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; new text end

new text begin (2) $6,000,000 is for grant awards made under Minnesota Statutes, section 216C.391, subdivision 4; new text end

new text begin (3) $750,000 is for the reports and audits under Minnesota Statutes, section 216C.391, subdivision 7; new text end

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 new text end

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

Presented to the governor April 17, 2023

Signed by the governor April 18, 2023, 10:52 a.m.