as introduced - 87th Legislature (2011 - 2012) Posted on 02/17/2011 10:20am
A bill for an act
relating to public administration; modifying provisions governing energy forward
pricing mechanisms for government agencies; amending Minnesota Statutes
2010, section 16C.143; repealing Minnesota Statutes 2010, section 383B.1588.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Minnesota Statutes 2010, section 16C.143, is amended to read:
The following definitions apply in this section:
(1) "energy" means natural gas, heating oil, propane, diesel fuel,new text begin unleaded fuel,new text end and
any other energy source except electricity deleted text begin used in state operationsdeleted text end ; deleted text begin and
deleted text end
(2) "forward pricing mechanism" meansnew text begin either: (i)new text end a contract or financial instrument
that obligates a deleted text begin statedeleted text end new text begin governmentnew text end agency to buy or sell a specified quantity of energy
at a future date at a set pricedeleted text begin .deleted text end new text begin ; or (ii) an option to buy or sell the contract or financial
instrument; and
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(3) "government agency" means the state, the Minnesota state colleges and
universities, the University of Minnesota, a statutory or home rule charter city, a county, a
town, a school district, a regional agency, or another political subdivision.
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Notwithstanding any other law to the contrary, deleted text begin the
commissionerdeleted text end new text begin a government agencynew text end may use forward pricing mechanisms for budget
risk reduction.
Forward pricing mechanism transactions must be made only
under the following conditions:
(1) the quantity of energy affected by the forward pricing mechanism must not
exceed deleted text begin 90 percent ofdeleted text end the estimated energy use for the deleted text begin statedeleted text end new text begin governmentnew text end agency for the
same period, which shall not exceed 24 monthsnew text begin from the trade date of the transactionnew text end ; and
(2) a separate account must be established for deleted text begin eachdeleted text end new text begin operational energy for each
government agency and for each individual new text end state agency using a forward pricing
mechanism.
Before exercising the authority under
this section, the deleted text begin commissionerdeleted text end new text begin government agency new text end must develop written policies and
procedures governing the use of forward pricing mechanisms.
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Before exercising authority under subdivision 2, the
government agency must establish an oversight process that provides for review of the
government agency's use of forward pricing mechanisms. The oversight process must
include: internal or external audit reviews; annual reports to, and review by, an internal
investment committee; and internal management control.
new text end
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This section is effective July 1, 2011, and applies to forward
pricing transactions entered into on or after that date.
new text end
new text begin
Minnesota Statutes 2010, section 383B.1588,
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new text begin
is repealed.
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This section is effective July 1, 2011. The authority previously
granted by Minnesota Statutes, section 383B.1588, is granted under Minnesota Statutes,
section 16C.143, and the repeal of Minnesota Statutes, section 383B.1588, does not affect
any forward pricing transaction entered into before the effective date of this section.
new text end