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Key: (1) language to be deleted (2) new language

                            CHAPTER 398-H.F.No. 2972 
                  An act relating to energy; decreasing regulatory 
                  requirements for small power lines; modifying 
                  provision for selecting reliability administrator; 
                  requiring department of administration to coordinate 
                  with department of commerce to develop comprehensive 
                  energy plan for public buildings by 2004; extending 
                  expiration by three years of certain procedural powers 
                  of public utilities commission; making technical 
                  corrections; amending Minnesota Statutes 2000, section 
                  116C.63, subdivision 4; Minnesota Statutes 2001 
                  Supplement, sections 216B.1646, as amended; 216B.1691, 
                  subdivision 1; 216B.243, subdivision 8; 216C.052, 
                  subdivision 2; 216C.41, subdivision 5; Laws 1999, 
                  chapter 125, section 4; Laws 2001, chapter 212, 
                  article 1, section 3. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2000, section 116C.63, 
        subdivision 4, is amended to read: 
           Subd. 4.  When private real property that is an 
        agricultural or nonagricultural homestead, nonhomestead 
        agricultural land, rental residential property, and both 
        commercial and noncommercial seasonal residential recreational 
        property, as those terms are defined in section 273.13 is 
        proposed to be acquired for the construction of a site or route 
        for a high-voltage transmission line with a capacity of 200 
        kilovolts or more by eminent domain proceedings, the fee owner, 
        or when applicable, the fee owner with the written consent of 
        the contract for deed vendee, or the contract for deed vendee 
        with the written consent of the fee owner, shall have the option 
        to require the utility to condemn a fee interest in any amount 
        of contiguous, commercially viable land which the owner or 
        vendee wholly owns or has contracted to own in undivided fee and 
        elects in writing to transfer to the utility within 60 days 
        after receipt of the notice of the objects of the petition filed 
        pursuant to section 117.055.  Commercial viability shall be 
        determined without regard to the presence of the utility route 
        or site.  The owner or, when applicable, the contract vendee 
        shall have only one such option and may not expand or otherwise 
        modify an election without the consent of the utility.  The 
        required acquisition of land pursuant to this subdivision shall 
        be considered an acquisition for a public purpose and for use in 
        the utility's business, for purposes of chapter 117 and section 
        500.24, respectively; provided that a utility shall divest 
        itself completely of all such lands used for farming or capable 
        of being used for farming not later than the time it can receive 
        the market value paid at the time of acquisition of lands less 
        any diminution in value by reason of the presence of the utility 
        route or site.  Upon the owner's election made under this 
        subdivision, the easement interest over and adjacent to the 
        lands designated by the owner to be acquired in fee, sought in 
        the condemnation petition for a high voltage right-of-way for a 
        high-voltage transmission line right-of-way with a capacity of 
        200 kilovolts or more shall automatically be converted into a 
        fee taking. 
           Sec. 2.  Minnesota Statutes 2001 Supplement, section 
        216B.1646, as amended by Laws 2002, chapter 377, article 4, 
        section 3, if enacted, is amended to read: 
           216B.1646 [RATE REDUCTION; PROPERTY TAX REDUCTION.] 
           (a) The commission shall, by any method the commission 
        finds appropriate, reduce the rates each electric utility 
        subject to rate regulation by the commission charges its 
        customers to reflect, on an ongoing basis, the amount by which 
        each utility's property tax on the personal property of its 
        electric system from taxes payable in 2001 to taxes payable in 
        2002 is reduced.  The commission must ensure that, to the extent 
        feasible, each dollar of personal property tax reduction 
        allocated to Minnesota consumers retroactive to January 1, 2002, 
        results in a dollar of savings to the utility's customers.  A 
        utility may voluntarily pass on any additional property tax 
        savings allocated in the same manner as approved by the 
        commission under this paragraph. 
           (b) By April 10, 2002, each utility shall submit a filing 
        to the commission containing: 
           (1) certified information regarding the utility's property 
        tax savings allocated to Minnesota retail customers; and 
           (2) a proposed method of passing these savings on to 
        Minnesota retail customers. 
        The utility shall provide the information in clause (1) to the 
        commissioner of revenue at the same time.  The commissioner 
        shall notify the commission within 30 days as to the accuracy of 
        the property tax data submitted by the utility. 
           (c)  For purposes of this section, "personal property" 
        means tools, implements, and machinery of the generating plant.  
        It does not apply to transformers, transmission lines, 
        distribution lines, or any other tools, implements, and 
        machinery that are part of an electric substation, wherever 
        located. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2001. 
           Sec. 3.  Minnesota Statutes 2001 Supplement, section 
        216B.1691, subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (a) "Eligible energy 
        technology" means: 
           (1) an energy technology that generates electricity from 
        the following renewable energy sources:  solar, wind, 
        hydroelectric with a capacity of less than 60 megawatts, or 
        biomass; and 
           (2) was not mandated by state law or commission 
        order enacted or issued prior to August 1, 2001. 
           (b) "Electric utility" means a public utility providing 
        electric service, a generation and transmission cooperative 
        electric association, or a municipal power agency. 
           Sec. 4.  Minnesota Statutes 2001 Supplement, section 
        216B.243, subdivision 8, is amended to read: 
           Subd. 8.  [EXEMPTIONS.] This section does not apply to: 
           (1) cogeneration or small power production facilities as 
        defined in the Federal Power Act, United States Code, title 16, 
        section 796, paragraph (17), subparagraph (A), and paragraph 
        (18), subparagraph (A), and having a combined capacity at a 
        single site of less than 80,000 kilowatts or to plants or 
        facilities for the production of ethanol or fuel alcohol nor in 
        any case where the commission shall determine after being 
        advised by the attorney general that its application has been 
        preempted by federal law; 
           (2) a high-voltage transmission line proposed primarily to 
        distribute electricity to serve the demand of a single customer 
        at a single location, unless the applicant opts to request that 
        the commission determine need under this section or section 
        216B.2425; 
           (3) the upgrade to a higher voltage of an existing 
        transmission line that serves the demand of a single customer 
        that primarily uses existing rights-of-way, unless the applicant 
        opts to request that the commission determine need under this 
        section or section 216B.2425; 
           (4) a high-voltage transmission line of one mile or less 
        required to connect a new or upgraded substation to an existing, 
        new, or upgraded high-voltage transmission line; 
           (5) conversion of the fuel source of an existing electric 
        generating plant to using natural gas; or 
           (5) (6) modification of an existing electric generating 
        plant to increase efficiency, as long as the capacity of the 
        plant is not increased more than ten percent or more than 100 
        megawatts, whichever is greater.  
           Sec. 5.  Minnesota Statutes 2001 Supplement, section 
        216C.052, subdivision 2, is amended to read: 
           Subd. 2.  [ADMINISTRATIVE ISSUES.] (a) The commissioner may 
        select the administrator who shall serve for a four-year 
        term.  The administrator may not have been a party or a 
        participant in a commission energy proceeding for at least one 
        year prior to selection by the commissioner.  The commissioner 
        shall oversee and direct the work of the administrator, annually 
        review the expenses of the administrator, and annually approve 
        the budget of the administrator.  The administrator may hire 
        staff and may contract for technical expertise in performing 
        duties when existing state resources are required for other 
        state responsibilities or when special expertise is required.  
        The salary of the administrator is governed by section 15A.0815, 
        subdivision 2. 
           (b) Costs relating to a specific proceeding, analysis, or 
        project are not general administrative costs.  For purposes of 
        this section, "energy utility" means public utilities, 
        generation and transmission cooperative electric associations, 
        and municipal power agencies providing natural gas or electric 
        service in the state.  
           (c) The department of commerce shall pay: 
           (1) the general administrative costs of the administrator, 
        not to exceed $1,500,000 in a fiscal year, and shall assess 
        energy utilities for reimbursement for those administrative 
        costs.  These costs must be consistent with the budget approved 
        by the commissioner under paragraph (a).  The department shall 
        apportion the costs among all energy utilities in proportion to 
        their respective gross operating revenues from sales of gas or 
        electric service within the state during the last calendar year, 
        and shall then render a bill to each utility on a regular basis; 
        and 
           (2) costs relating to a specific proceeding analysis or 
        project and shall render a bill for reimbursement to the 
        specific energy utility or utilities participating in the 
        proceeding, analysis, or project directly, either at the 
        conclusion of a particular proceeding, analysis, or project, or 
        from time to time during the course of the proceeding, analysis, 
        or project. 
           (d) For purposes of administrative efficiency, the 
        department shall assess energy utilities and issue bills in 
        accordance with the billing and assessment procedures provided 
        in section 216B.62, to the extent that these procedures do not 
        conflict with this subdivision.  The amount of the bills 
        rendered by the department under paragraph (c) must be paid by 
        the energy utility into an account in the special revenue fund 
        in the state treasury within 30 days from the date of billing 
        and is appropriated to the commissioner for the purposes 
        provided in this section.  The commission shall approve or 
        approve as modified a rate schedule providing for the automatic 
        adjustment of charges to recover amounts paid by utilities under 
        this section.  All amounts assessed under this section are in 
        addition to amounts appropriated to the commission and the 
        department by other law.  
           Sec. 6.  Minnesota Statutes 2001 Supplement, section 
        216C.41, subdivision 5, is amended to read: 
           Subd. 5.  [AMOUNT OF PAYMENT.] (a) An incentive payment is 
        based on the number of kilowatt hours of electricity generated. 
        The amount of the payment is: 
           (1) for a facility described under subdivision 2, paragraph 
        (a), clause (4), 1.0 cents per kilowatt hour; and 
           (2) for all other facilities, 1.5 cents per kilowatt hour.  
        For electricity generated by qualified wind energy conversion 
        facilities, the incentive payment under this section is limited 
        to no more than 100 megawatts of nameplate capacity.  During any 
        period in which qualifying claims for incentive payments exceed 
        100 megawatts of nameplate capacity, the payments must be made 
        to producers in the order in which the production capacity was 
        brought into production.  
           (b) Beginning For wind energy conversion systems installed 
        and contracted for after January 1, 2002, the total size of a 
        wind energy conversion system under this section must be 
        determined according to this paragraph.  Unless the systems are 
        interconnected with different distribution systems, the 
        nameplate capacity of one wind energy conversion system must be 
        combined with the nameplate capacity of any other wind energy 
        conversion system that is: 
           (1) located within five miles of the wind energy conversion 
        system; 
           (2) constructed within the same calendar year as the wind 
        energy conversion system; and 
           (3) under common ownership. 
        In the case of a dispute, the commissioner of commerce shall 
        determine the total size of the system, and shall draw all 
        reasonable inferences in favor of combining the systems. 
           (c) In making a determination under paragraph (b), the 
        commissioner of commerce may determine that two wind energy 
        conversion systems are under common ownership when the 
        underlying ownership structure contains similar persons or 
        entities, even if the ownership shares differ between the two 
        systems.  Wind energy conversion systems are not under common 
        ownership solely because the same person or entity provided 
        equity financing for the systems. 
           Sec. 7.  Laws 1999, chapter 125, section 4, is amended to 
        read: 
           Sec. 4.  [SUNSETS.] 
           Sections 1 to 3 expire as of June 30, 2002 2005. 
           Sec. 8.  Laws 2001, chapter 212, article 1, section 3, is 
        amended to read:  
           Sec. 3.  [BENCHMARKS FOR EXISTING PUBLIC BUILDINGS.] 
           The department of administration shall maintain information 
        on energy usage in all public buildings for the purpose of 
        establishing energy efficiency benchmarks and energy 
        conservation goals.  The department shall report preliminary 
        energy conservation goals to the chairs of the senate 
        telecommunications, energy and utilities committee and the house 
        regulated industries committee by January 15, 2002.  The 
        department shall develop, in coordination with the department of 
        commerce, a comprehensive plan by January 15, 2003 2004, to 
        maximize electrical and thermal energy efficiency in existing 
        public buildings through conservation measures having a simple 
        payback within ten to 15 years.  The plan must detail the steps 
        necessary to implement the conservation measures and include the 
        projected costs of these measures.  The owner or operator of a 
        public building subject to this section shall provide 
        information to the department of administration necessary to 
        accomplish the purposes of this section.  
           Sec. 9.  [IDENTIFICATION AND EVALUATION; COMPETITIVE 
        BIDDING CRITERIA.] 
           The commissioner of commerce shall identify and evaluate 
        various criteria that could be used by a utility in evaluating 
        and selecting bids submitted in a competitive bidding process 
        established under Minnesota Statutes, section 216B.2422, 
        subdivision 5. 
           To assist in the evaluation, the commissioner shall convene 
        a series of forums at which input from citizens and stakeholders 
        can be solicited.  The commissioner shall present this 
        evaluation in a report to the house and senate policy and 
        finance committees with jurisdiction over energy regulatory 
        issues and agencies by January 15, 2003. 
           Sec. 10.  [EXCESS DULUTH ENERGY LOAN FUNDS; USE IN OTHER 
        ENERGY CONSERVATION PROGRAMS.] 
           Notwithstanding Laws 1981, chapter 223, as amended by Laws 
        1984, chapter 581, or any other law to the contrary, the city of 
        Duluth may use excess funds in accounts in its home energy loan 
        program authorized by those laws for other energy conservation 
        programs, including, but not limited to, a commercial enterprise 
        energy loan program or a city climate protection program to 
        reduce city energy consumption, provided that: 
           (1) all bonds issued under the home energy loan program 
        have been retired; 
           (2) no more energy loan bonds are issued; and 
           (3) any sums used for other energy saving programs are in 
        excess of market demands for home energy loans. 
           [EFFECTIVE DATE.] This section is effective the day after 
        the approval by the governing body of the city of Duluth is 
        filed according to Minnesota Statutes, section 645.021, 
        subdivision 3. 
           Sec. 11.  [INSTRUCTION TO REVISOR.] 
           The revisor of statutes shall remove codification of Laws 
        2001, chapter 212, article 8, section 14.  Laws 2001, chapter 
        212, article 8, section 14, shall remain part of Laws 2001 as 
        uncodified law. 
           Sec. 12.  [EFFECTIVE DATE.] 
           Sections 1, 3 to 9, and 11 are effective the day following 
        final enactment. 
           Presented to the governor May 20, 2002 
           Signed by the governor May 22, 2002, 1:29 p.m.

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