SF 3290

4th Engrossment - 90th Legislature (2017 - 2018) Posted on 05/18/2018 03:29pm

A bill for an act
relating to energy; establishing a process to compensate businesses for loss of
business opportunity resulting from sale and closure of a biomass energy plant;
proposing coding for new law in Minnesota Statutes, chapter 116C.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [116C.7793] BIOMASS BUSINESS COMPENSATION.
new text end

new text begin Subdivision 1. new text end

new text begin Office of Administrative Hearings; claims process. new text end

new text begin The chief
administrative law judge of the Office of Administrative Hearings must name an
administrative law judge to administer a claims award process to compensate businesses
negatively affected by the sale and closure of the biomass plant identified under section
116C.779, subdivision 1, paragraph (f). The administrative law judge may create a process,
including creation of forms, to consider claims for affected businesses and issue awards to
eligible businesses. A form developed for the process must, at a minimum, require the name
of the business, the business address and telephone number, and the name of a contact
person.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility. new text end

new text begin To be eligible for compensation, an affected business must verify
that as of May 1, 2017, it was operating under the terms of a valid contract or provide other
documentation demonstrating an ongoing business relationship of preparing, supplying, or
transporting products, fuel, or by-products to or from either the company operating the
biomass plant identified under section 116C.779, subdivision 1, paragraph (f), or a fertilizer
plant integrated with the biomass plant identified under section 116C.779, subdivision 1,
paragraph (f).
new text end

new text begin Subd. 3. new text end

new text begin Calculation of award. new text end

new text begin (a) An eligible business shall make any claim for
compensation with the administrative law judge in accordance with this section.
new text end

new text begin (b) A claim for compensation by an eligible business shall:
new text end

new text begin (1) demonstrate the extent of its lost business opportunity by providing copies of any
contracts or other documentation under subdivision 2, including financial statements showing
company financial performance over the past five years for supplying or managing material
for, or receiving material from, the biomass plant identified under section 116C.779,
subdivision 1, paragraph (f);
new text end

new text begin (2) report any payment received from business interruption insurance policies or other
payments, settlements, or awards received as a result of termination of an agreement resulting
from the closure of the biomass plant identified under section 116C.779, subdivision 1,
paragraph (f), the payment of which would offset compensation provided under this section.
A business seeking compensation must also provide a valuation of the sales, salvage, or
scrap value of real or personal property associated with the business if there is no alternative
use available for the company's real and personal property;
new text end

new text begin (3) provide information documenting its stranded investment in personal property
essential to the business operation but for which there is no valuable alternative use in the
marketplace. Such stranded investment may be included in the calculation of compensable
loss for purposes of seeking compensation under this section; and
new text end

new text begin (4) provide any other documentation it deems appropriate, or as required by the
administrative law judge, to support its claim for compensation, including a narrative
regarding the facts of the business claim which gives rise to the request for compensation.
new text end

new text begin (c) Section 13.591 applies to data submitted by a business requesting compensation
under this section.
new text end

new text begin Subd. 4. new text end

new text begin Priority. new text end

new text begin The administrative law judge may give priority to claims by eligible
businesses that demonstrate a significant effort to:
new text end

new text begin (1) mitigate losses resulting from the closure of the biomass plant identified under section
116C.779, subdivision 1, paragraph (f); or
new text end

new text begin (2) repurpose the business for another use through retasking and retooling.
new text end

new text begin Whether the business is requesting compensation for a total business loss without mitigation
efforts shall also be a factor in determining awards.
new text end

new text begin Subd. 5. new text end

new text begin Amount of claim. new text end

new text begin Any claim is limited by and proportional to the amount
provided for compensation in the biomass business compensation fund established under
section 116C.7794, and the number of claimants. A request for compensation must not
exceed the average of the annual net revenue generated from a contract or business
relationship with the biomass plant identified under section 116C.779, subdivision 1,
paragraph (f), or a fertilizer plant integrated with the biomass plant identified under section
116C.779, subdivision 1, paragraph (f), for the past five years times ten or times the number
of years remaining on the biomass plant's original power purchase agreement, whichever
is less.
new text end

new text begin Subd. 6. new text end

new text begin Deadlines. new text end

new text begin The administrative law judge shall make an application process for
compensation available by August 1, 2018. A business seeking to submit a request for
compensation under this section must file claims with the administrative law judge within
60 days following closure of the biomass plant. The administrative law judge shall issue
orders on award determinations within 180 days after the deadline for filing claims.
new text end

new text begin Subd. 7. new text end

new text begin Appeals. new text end

new text begin Orders issued by the administrative law judge under this section are
final. An order denying compensation claimed under this section is subject to the contested
case review procedures under chapter 14.
new text end

Sec. 2.

new text begin [116C.7794] BIOMASS BUSINESS COMPENSATION ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Account established. new text end

new text begin A biomass business compensation account is
established as a separate account in the special revenue fund in the state treasury.
Appropriations and transfers to the account must be credited to the account. Earnings, such
as interest, and any other earnings arising from the assets of the account are credited to the
account. Funds remaining in the account as of December 31, 2020, must be transferred to
the renewable development account established under section 116C.779.
new text end

new text begin Subd. 2. new text end

new text begin Funding for the special account. new text end

new text begin On July 1, 2018, $40,000,000 must be
transferred from the renewable development account under section 116C.779 to the biomass
business compensation account established under subdivision 1. The transferred funds are
appropriated for payment of eligible obligations under the biomass business compensation
program established in section 116C.7793.
new text end

new text begin Subd. 3. new text end

new text begin Repayment of funds transferred from the renewable development account.
new text end

new text begin The public utility subject to section 116C.779 shall petition the commission to approve a
rate schedule that provides for the automatic adjustment of charges to recover payments
awarded under a process provided for in section 116C.7793. The commission shall approve
the rate schedule upon a showing that the recovery of investments, expenses and costs, and
earnings on the investments continues to be less than the costs that would have been
recovered from customers had the utility continued to purchase energy under the power
purchase agreement under section 116C.2424, in effect before May 1, 2017. Beginning July
1, 2019, and continuing annually thereafter, the public utility subject to section 116C.779
shall deposit an amount, not to exceed $10,000,000 annually, into the renewable development
account under section 116C.779, until total contributions equal the total compensation
amount identified in subdivision 2.
new text end

new text begin Subd. 4. new text end

new text begin Payment of expenses. new text end

new text begin The chief administrative law judge shall certify to the
commissioner of management and budget the total costs incurred for administering the
biomass business compensation claims process during each fiscal year, in an amount less
than or equal to $200,000. The commissioner of management and budget shall transfer the
amount of certified costs incurred for these activities from the renewable development
account under section 116C.779 and deposit it to the administrative hearings account under
section 14.54. Transfers may occur quarterly, based on quarterly cost and revenue reports,
throughout the fiscal year, with final certification and reconciliation after each fiscal year.
new text end

new text begin Subd. 5. new text end

new text begin Expiration. new text end

new text begin This section expires the day following the final deposit to the
renewable development account under section 116C.779, as required in subdivision 3.
new text end