Commerce, energy agreement heads to House Floor; action anticipated Thursday

Increased protection for consumers and borrowers, and a boost for renewable energy are key elements of an agreement the House and Senate have reached in the areas of commerce and energy.

In addition to a “student loan borrowers’ bill of rights,” the bill would take measures to reduce catalytic converter thefts and toxic toys, and promote use of solar energy in schools.

Sponsored by Rep. Zack Stephenson (DFL-Coon Rapids), SSHF6 was the subject of informational hearings of both the House Commerce Finance and Policy Committee, and the House Climate and Energy Finance and Policy Committee Tuesday. Those meetings came one day after the bill was approved by the House Ways and Means Committee and sent to the House floor, where it is scheduled for action Thursday.

“It’s a good compromise bill,” Stephenson said. “Because we were committed to cooperative work, we have a bill that gets a lot done that both Democrats and Republicans can support.”

The chief objection from some Republicans of the ways and means committee is the sunset of the state’s health reinsurance program, something reiterated at Tuesday’s commerce committee hearing.

While Stephenson maintains that federal funds from the American Rescue Plan Act will serve the same purpose as the state’s reinsurance program, Rep. Tim O'Driscoll (R-Sartell) said state residents should expect insurance premiums to rise in July and October, and emphasized that “ARPA goes away after 2022.”

The bill would have a total impact on the General Fund for fiscal years ’21-’23 of $84.9 million, and would disburse $103 million over the same period from the Renewable Development Account, a state-administered fund designed expressly for the purpose of developing renewable energy sources in Minnesota. Xcel Energy pays into it with annual fees of between $350,000 and $500,000 for each cask of nuclear waste it stores at its Prairie Island and Monticello facilities.

[MORE: View the spreadsheet]

The companion, SSSF19, sponsored by Sen. Gary Dahms (R-Redwood Falls), awaits action by the Senate Finance Committee.

Policy

Among other commerce policy provisions, the bill would:

• establish a student loan borrowers’ bill of rights, including licensing of student loan servicers and state several required duties for them;
• create a catalytic converter theft prevention pilot project;
• create a toxic toy enforcement program;
• create an income tax subtraction for volunteer drivers; and
• increase licensing and regulation of pharmacy benefit managers and reinsurance intermediaries.

In energy policy, the bill would:

• extend the cold weather rule period from Oct. 1 to April 30 when utilities may not disconnect customers who have entered into a payment agreement;
• establish an advisory committee to develop a statewide energy transition plan;
• establish an energy transition office in the Department of Employment and Economic Development to assist communities and workers experiencing the retirement of an electric generating plant;
• authorize a natural gas utility to file a plan with the Public Utilities Commission to obtain innovative resources that displace conventional natural gas; and
• require wind energy generating systems to install light-mitigating technology.

Where the money goes

Of the General Fund money, $24.7 million would go to the Public Utilities Commission and $98.9 million to the Commerce Department, the latter distributed thus:

• administrative services, $28.4 million;
• energy resources, $22.9 million;
• insurance, $20.6 million;
• enforcement and market assurance, $17.6 million;
• telecommunications, $9.8 million;
• financial institutions, $4.3 million;
• Petroleum Tank Release Compensation Board, $3.2 million; and
• weights and measures, $3 million.

For the administrative services and enforcement and market assurance divisions, the allocations would go almost entirely to operations, the weights and measures money entirely to equipment replacement and planning.

Energy resources

General Fund money for energy resources would include $10.4 million toward operating expenses and $2.6 million for energy regulation and planning.

Allocations from the Renewable Development Account would include:

• the Prairie Island Indian Community’s net zero energy community project, $46.2 million;
• the University of Minnesota’s ammonia research project for developing battery storage, $10 million;
• expansion of a solar energy products plant in Mountain Iron, $5.5 million;
• a state building energy conservation revolving loan fund, $5 million;
• the University of St. Thomas Center for Microgrid Research, $3.6 million;
• a Granite Falls hydroelectric project, $2.7 million;
• the Minneapolis Clean Energy Training Center, $2.5 million; and
• community energy transition grants, $2 million.

Some projects would receive funding from both the General Fund and the Renewable Development Account, including programs for solar power on schools (a total of $16 million) and on community colleges ($2.4 million). 

The bill’s $103 million in Renewable Development Account allocations would leave an estimated $48.7 million in the fund at the end of 2023.

From a special revenue fund would come $6.9 million for the Minnesota Efficient Technology Accelerator and $1 million for a utility grid reliability assessment extension.

The Petroleum Tank Release Compensation Fund was scheduled to sunset but would be extended under the bill. It would distribute $91.9 million in fiscal years 2021-23, and have $450,000 remaining in the fund at the end of 2023.

Insurance

Of its $20.6 million in allocations, $12.7 million would go toward operating expenses. Of the remaining money, the largest sums would go toward:

• health insurance rate review, $2 million;
• rate regulation, $1.7 million from the Workers Compensation Fund;
• licensing and regulation of pharmacy benefit managers, $1.3 million; and
• actuarial reserve review, $1.3 million.

Telecommunications and financial institutions

Half of the telecommunications division’s $9.8 million would be the $4.9 million transferred from the Telecommunications Access Fund to the Department of Human Services for programs for the deaf, deaf/blind and hard of hearing. Its total would also include $3.3 million in operating expenses.

The financial institutions division’s $4.3 million allocation includes funding for a securities unit relocation ($2 million) and the Prepare & Prosper free tax preparation program ($1.2 million).

What’s not in the bill?

Among the items that passed either the House or Senate, but didn’t make the final agreement are:

• $150 million for a calendar year 2023 extension of the state’s health reinsurance program;
• $36 million for a biomass business compensation account;
• $21.2 million for retirement of Made in Minnesota obligations;
• $19.5 million for electric vehicle rebates;
• $10 million for an innovative finance authority;
• $7.5 million for a wood pellet production incentive;
• $5 million for electric Metro Transit buses;
• $4 million for solar on state-owned buildings;
• $3 million for Rebuild Right grants;
• $2.1 million for electric vehicle charging in state parks;
• $2 million for electric vehicle auto dealer certification;
• $2 million for an electric school bus program;
• $2 million for electric vehicle charging at county government buildings; and
• $2 million for solar in state parks.

The House had also proposed a projected $105.8 million in savings to the General Fund for a “premium security plan” for the 2024-25 biennium, but it wasn’t in the final agreement. Nor were plans for a prescription drug affordability board.