1.2relating to energy; modifying the community energy efficiency and renewable
1.3energy loan program; modifying permissible administrative expenses for
1.4disbursement of supplemental low-income home energy assistance; appropriating
1.5money for the weatherization assistance program;amending Minnesota Statutes
1.62012, sections 216C.145; 216C.146; Laws 2014, chapter 145, section 1.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8    Section 1. Minnesota Statutes 2012, section 216C.145, is amended to read:
1.9216C.145 MICROENERGY COMMUNITY ENERGY EFFICIENCY AND
1.10RENEWABLE ENERGY LOAN PROGRAM.
1.11    Subdivision 1. Definitions. (a) The definitions in this subdivision apply to this
1.12section.
1.13    (b) "Small-scale Community energy efficiency and renewable energy projects"
1.14projects include means solar thermal water heating, solar electric or photovoltaic
1.15equipment, small wind energy conversion systems of less than 250 kW, anaerobic digester
1.16gas systems, microhydro systems up to 100 kW, and heating and cooling applications
1.17using geothermal energy solar thermal or ground source technology, and cost-effective
1.18energy efficiency projects installed in industrial, commercial, or public buildings or health
1.19care facilities.
1.20(c) "Health care facilities" means a hospital licensed under sections 144.50 to
1.21144.56, or a nursing home licensed under chapter 144A.
1.22(d) "Industrial customer" means a business that is classified under the North
1.23American Industrial Classification System under codes 21, 31 to 33, 48, 49, or 562.
1.24(e) "Small business" means a business that employs 50 or fewer employees.
2.1    (c) (f) "Unit of local government" means any home rule charter or statutory city,
2.2county, commission, district, authority, or other political subdivision or instrumentality
2.3of this state, including a sanitary district, park district, the Metropolitan Council, a port
2.4authority, an economic development authority, or a housing and redevelopment authority.
2.5    Subd. 2. Program established. The commissioner of commerce shall develop,
2.6implement, and administer a microenergy community energy efficiency and renewable
2.7energy loan program under this section.
2.8    Subd. 3. Loan purposes. (a) The commissioner may issue low-interest, long-term
2.9loans to units of local government to:
2.10    (1) finance community-owned or publicly owned small scale renewable energy
2.11systems or to cost-effective energy efficiency improvements to public buildings; or
2.12     provide loans or other aids to small businesses to install small-scale renewable
2.13energy systems
2.14    (2) provide loans or other aids to industrial or commercial businesses or health care
2.15facilities for cost-effective energy efficiency projects or to install renewable energy systems.
2.16    (b) The commissioner may participate in loans made by the Housing Finance
2.17Agency to residential property owners, private developers, nonprofit organizations,
2.18or units of local government under sections 462A.05, subdivisions 14 and 18; and
2.19462A.33 for the construction, purchase, or rehabilitation of residential housing to facilitate
2.20the installation of small-scale renewable energy systems in residential housing and
2.21cost-effective energy conservation improvements identified in an energy efficiency audit.
2.22The commissioner shall assist the Housing Finance Agency in assessing the technical
2.23qualifications of loan applicants.
2.24    Subd. 4. Technical standards. The commissioner shall determine technical
2.25standards for small-scale renewable energy systems community energy efficiency and
2.26renewable energy projects to qualify for loans under this section.
2.27    Subd. 5. Loan proposals. (a) At least once a year, the commissioner shall publish in
2.28the State Register a request for proposals from units of local government for a loan under
2.29this section. Within 45 days after the deadline for receipt of proposals, the commissioner
2.30shall select proposals based on the following criteria:
2.31    (1) the reliability and cost-effectiveness of the renewable or energy efficiency
2.32technology to be installed under the proposal;
2.33    (2) the extent to which the proposal effectively integrates with the conservation and
2.34energy efficiency programs or goals of the energy utilities serving the proposer;
2.35    (3) the total life cycle energy use and greenhouse gas emissions reductions per
2.36dollar of installed cost;
3.1    (4) the diversity of the renewable energy or energy efficiency technology installed
3.2under the proposal;
3.3    (5) the geographic distribution of projects throughout the state;
3.4    (6) the percentage of total project cost requested;
3.5    (7) the proposed security for payback of the loan; and
3.6    (8) other criteria the commissioner may determine to be necessary and appropriate.
3.7(b) The commissioner may not consider as criteria for issuing a loan under this section
3.8a requirement by a local unit of government for an industrial customer seeking a loan
3.9funded under this section to release information regarding the amount of energy used by the
3.10industrial customer to the local unit of government, to the commissioner, or to a third party.
3.11    Subd. 6. Loan terms. A loan under this section must be issued at the lowest interest
3.12rate required to recover principal and interest plus the costs of issuing the loan, and must
3.13be for a minimum of 15 years, unless the commissioner determines that a shorter loan
3.14period of no less than ten five years is necessary and feasible.
3.15    Subd. 6a. Energy usage information. A local unit of government receiving a loan
3.16under this section may not require an industrial customer applying for a loan or other aid
3.17to release information regarding the amount of energy used by the industrial customer to
3.18the local unit of government, to the commissioner, or to a third party.
3.19    Subd. 7. Account. A microenergy community energy efficiency and renewable
3.20energy loan account is established in the state treasury. Money in the account consists of
3.21the proceeds of revenue bonds issued under section 216C.146, interest and other earnings
3.22on money in the account, money received in repayment of loans from the account,
3.23legislative appropriations, and money from any other source credited to the account.
3.24    Subd. 8. Appropriation. Money in the account is appropriated to the commissioner
3.25of commerce to make microenergy community energy efficiency and renewable energy
3.26 loans under this section and to the commissioner of management and budget to pay debt
3.27service and other costs under section 216C.146. Payment of debt service costs and funding
3.28reserves take priority over use of money in the account for any other purpose.

3.29    Sec. 2. Minnesota Statutes 2012, section 216C.146, is amended to read:
3.30216C.146 MICROENERGY COMMUNITY ENERGY EFFICIENCY AND
3.31RENEWABLE ENERGY LOAN REVENUE BONDS.
3.32    Subdivision 1. Bonding authority; definition. (a) The commissioner of
3.33management and budget, if requested by the commissioner of commerce, shall sell and
3.34issue state revenue bonds for the following purposes:
4.1    (1) to make microenergy community energy efficiency and renewable energy loans
4.2under section 216C.145;
4.3    (2) to pay the costs of issuance, debt service, and bond insurance or other credit
4.4enhancements, and to fund reserves; and
4.5    (3) to refund bonds issued under this section.
4.6    (b) The aggregate principal amount of bonds for the purposes of paragraph (a),
4.7clause (1), that may be outstanding at any time may not exceed $100,000,000, of which
4.8up to $20,000,000 shall be reserved for community energy efficiency and renewable
4.9energy projects taking place in small businesses and public buildings; the principal
4.10amount of bonds that may be issued for the purposes of paragraph (a), clauses (2) and
4.11(3), is not limited.
4.12    (c) For the purpose of this section, "commissioner" means the commissioner of
4.13management and budget.
4.14    Subd. 2. Procedure. The commissioner may sell and issue the bonds on the terms
4.15and conditions the commissioner determines to be in the best interests of the state. The
4.16bonds may be sold at public or private sale. The commissioner may enter into any
4.17agreements or pledges the commissioner determines necessary or useful to sell the bonds
4.18that are not inconsistent with section 216C.145. Sections 16A.672 to 16A.675 apply to
4.19the bonds. The proceeds of the bonds issued under this section must be credited to the
4.20microenergy community energy efficiency and renewable energy loan account created
4.21under section 216C.145.
4.22    Subd. 3. Revenue sources. The debt service on the bonds is payable only from the
4.23following sources:
4.24    (1) revenue credited to the microenergy community energy efficiency and renewable
4.25energy loan account from the sources identified in section 216C.145 or from any other
4.26source; and
4.27    (2) other revenues pledged to the payment of the bonds, including reserves
4.28established by a local government unit.
4.29    Subd. 4. Refunding bonds. The commissioner may issue bonds to refund
4.30outstanding bonds issued under subdivision 1, including the payment of any redemption
4.31premiums on the bonds and any interest accrued or to accrue to the first redemption date
4.32after delivery of the refunding bonds. The proceeds of the refunding bonds may, at the
4.33discretion of the commissioner, be applied to the purchases or payment at maturity of the
4.34bonds to be refunded, or the redemption of the outstanding bonds on the first redemption
4.35date after delivery of the refunding bonds and may, until so used, be placed in escrow to
5.1be applied to the purchase, retirement, or redemption. Refunding bonds issued under this
5.2subdivision must be issued and secured in the manner provided by the commissioner.
5.3    Subd. 5. Not a general or moral obligation. Bonds issued under this section are
5.4not public debt, and the full faith, credit, and taxing powers of the state are not pledged
5.5for their payment. The bonds may not be paid, directly in whole or in part from a tax of
5.6statewide application on any class of property, income, transaction, or privilege. Payment
5.7of the bonds is limited to the revenues explicitly authorized to be pledged under this
5.8section. The state neither makes nor has a moral obligation to pay the bonds if the pledged
5.9revenues and other legal security for them is insufficient.
5.10    Subd. 6. Trustee. The commissioner may contract with and appoint a trustee for
5.11bondholders. The trustee has the powers and authority vested in it by the commissioner
5.12under the bond and trust indentures.
5.13    Subd. 7. Pledges. A pledge made by the commissioner is valid and binding from
5.14the time the pledge is made. The money or property pledged and later received by the
5.15commissioner is immediately subject to the lien of the pledge without any physical
5.16delivery of the property or money or further act, and the lien of the pledge is valid and
5.17binding as against all parties having claims of any kind in tort, contract, or otherwise
5.18against the commissioner, whether or not those parties have notice of the lien or pledge.
5.19Neither the order nor any other instrument by which a pledge is created need be recorded.
5.20    Subd. 8. Bonds; purchase and cancellation. The commissioner, subject to
5.21agreements with bondholders that may then exist, may, out of any money available for the
5.22purpose, purchase bonds of the commissioner at a price not exceeding (1) if the bonds are
5.23then redeemable, the redemption price then applicable plus accrued interest to the next
5.24interest payment date thereon, or (2) if the bonds are not redeemable, the redemption price
5.25applicable on the first date after the purchase upon which the bonds become subject to
5.26redemption plus accrued interest to that date.
5.27    Subd. 9. State pledge against impairment of contracts. The state pledges and
5.28agrees with the holders of any bonds that the state will not limit or alter the rights vested in
5.29the commissioner to fulfill the terms of any agreements made with the bondholders, or
5.30in any way impair the rights and remedies of the holders until the bonds, together with
5.31interest on them, with interest on any unpaid installments of interest, and all costs and
5.32expenses in connection with any action or proceeding by or on behalf of the bondholders,
5.33are fully met and discharged. The commissioner may include this pledge and agreement
5.34of the state in any agreement with the holders of bonds issued under this section.

5.35    Sec. 3. Laws 2014, chapter 145, section 1, is amended to read:
6.1    Section 1. LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM;
6.2SUPPLEMENTAL APPROPRIATION.
6.3(a) $20,000,000 is appropriated in fiscal year 2014 from the general fund to the
6.4commissioner of commerce for the purpose of providing additional heating assistance
6.5through the low-income home energy assistance program under United States Code, title
6.642, sections 8621 to 8630, and Minnesota Statutes, section 216C.02, subdivision 1. No
6.7more than five eight percent of this appropriation may be used for expenses to administer
6.8the program. Any unspent balance available on June 30, 2014, cancels to the general fund.
6.9(b) The funding provided in this section shall supplement, and not replace, any
6.10federal or other funding existing or otherwise available for heating assistance in Minnesota.
6.11(c) The commissioner shall disburse the funds provided in this section in a manner
6.12consistent with the requirements of the federal low-income home energy assistance
6.13program under United States Code, title 42, sections 8621 to 8630.
6.14EFFECTIVE DATE.This section is effective the day following final enactment.

6.15    Sec. 4. APPROPRIATION.
6.16Any unspent balance available on June 30, 2014, from the appropriation made to the
6.17commissioner of commerce in Laws 2014, chapter 145, section 1, may be used by the
6.18commissioner of commerce for the purposes of the weatherization assistance program.
6.19EFFECTIVE DATE.This section is effective the day following final enactment.