1.1    .................... moves to amend H. F. No. 3669 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. [16B.321] DEFINITIONS.
1.4    Subdivision 1. Scope. For the purpose of this section and section 16B.322, the terms
1.5defined in this section have the meanings given them.
1.6    Subd. 2. Energy improvement project. "Energy improvement project" means:
1.7    (1) a project to improve energy efficiency in a building or facility, including the
1.8design, acquisition, installation, construction, and commissioning of equipment or
1.9improvements to a building or facility, and training of building or facility staff necessary
1.10to properly operate and maintain the equipment or improvements; or
1.11    (2) a project to design, acquire, install, construct, and commission equipment or
1.12products to be used in gathering, processing, generating, transmitting, or distributing
1.13solar, wind, geothermal, biomass, or other alternative energy sources for use in heating,
1.14cooling, or providing electricity for a building or facility owned or operated by a state
1.15agency and training of building or facility staff necessary to properly operate and maintain
1.16the equipment or improvements.
1.17    Subd. 3. Energy project study. "Energy project study" means a technical and
1.18financial study of one or more energy improvement projects, including:
1.19    (1) an analysis of historical energy consumption and cost data;
1.20    (2) a description of existing equipment, structural elements, operating characteristics,
1.21and other conditions affecting energy use;
1.22    (3) a description of the proposed energy improvement projects;
1.23    (4) a detailed budget for the proposed project; and
1.24    (5) calculations sufficient to demonstrate the expected energy and operational cost
1.25savings and reduction in fossil-fuel use.
2.1    Subd. 4. Financing agreement. "Financing agreement" means a tax-exempt
2.2lease-purchase agreement entered into by the commissioner of administration and a
2.3financial institution under a standard project financing agreement offered under section
2.416B.322, subdivision 4.
2.5    Subd. 5. State agency. "State agency" means any state officer, employee, board,
2.6commission, authority, department, or other agency of the executive branch of state
2.7government.

2.8    Sec. 2. [16B.322] ENERGY IMPROVEMENT FINANCING PROGRAM FOR
2.9STATE GOVERNMENT.
2.10    Subdivision 1. Commissioner's authority and duties; state agency authority. The
2.11commissioner shall administer this section. A state agency may enter into contracts for the
2.12purposes of this section with the commissioner and participating financial institutions. All
2.13technical services and construction contracts shall be executed through the appropriate
2.14procurement procedure in chapters 16B, 16C, and other applicable law.
2.15    Subd. 2. Program eligibility; voluntary program participation; targeted
2.16technical services. A state agency may elect to participate in the program. The
2.17commissioner may prioritize and target technical services offered under subdivision 3 to
2.18state agencies with state buildings or facilities that the commissioner determines offer the
2.19greatest potential to improve energy efficiency or reduce use of fossil-fuel energy.
2.20    Subd. 3. Target technical services. The commissioner may require full or
2.21partial reimbursement of costs for technical services provided to a state agency, subject
2.22to terms and conditions specified and agreed to by contract prior to the delivery of
2.23technical services. The commissioner of commerce may transfer up to $1,000,000 of the
2.24appropriation in Laws 1988, chapter 686, article 1, section 38, to the commissioner of
2.25administration for the purposes of this section.
2.26    Subd. 4. Financing agreement. The commissioner shall solicit proposals from
2.27private financial institutions and may enter into a financing agreement with one or more
2.28financial institutions. The term of the financing agreement shall not exceed 15 years
2.29from the date of final completion of the energy improvement project. The financing
2.30agreement is assignable to the state agency operating or managing the state building or
2.31facility improved by the energy improvement project. The proceeds from the financing
2.32agreement are appropriated to the commissioner and may be used for the purposes of
2.33this section and are available until spent.
3.1    Subd. 5. Qualifying energy improvement projects. The commissioner may
3.2approve an energy improvement project and enter into a financing agreement if the
3.3commissioner determines that:
3.4    (1) the project and financing agreement have been approved by the governing body
3.5or head of the state agency that operates or manages the state building or facility to be
3.6improved;
3.7    (2) the project is technically and economically feasible;
3.8    (3) the state agency that operates or manages the state building or facility has made
3.9adequate provision for the operation and maintenance of the project;
3.10    (4) if an energy efficiency improvement, the project has a substantial likelihood to
3.11result in a positive cash flow in each year the financing agreement is in effect; and
3.12    (5) if a renewable energy improvement, the project has a substantial likelihood to
3.13reduce use of fossil-fuel energy.
3.14    Subd. 6. Program costs. Program costs incurred by the commissioner or a state
3.15agency that are not reimbursed or paid directly under a financing agreement may be paid
3.16with funds made available to the commissioner under section 216C.43, subdivision 10.

3.17    Sec. 3. Minnesota Statutes 2007 Supplement, section 216B.241, is amended by adding
3.18a subdivision to read:
3.19    Subd. 9. Coordination with utility conservation improvement programs.
3.20    The contractor selected by the commissioner in subdivision 2 shall insure that the local
3.21government makes use of all applicable conservation improvement programs provided
3.22by utilities providing electric or natural gas service. Consistent with direction from the
3.23commissioner, a utility may count the savings resulting from its energy improvement
3.24projects under sections 16B.322 and 216C.43 towards the utility's energy-saving goal
3.25under section 216B.241, subdivision 1c.

3.26    Sec. 4. Minnesota Statutes 2006, section 216C.09, is amended to read:
3.27216C.09 COMMISSIONER DUTIES.
3.28    (a) The commissioner shall:
3.29    (1) manage the department as the central repository within the state government for
3.30the collection of data on energy;
3.31    (2) prepare and adopt an emergency allocation plan specifying actions to be taken
3.32in the event of an impending serious shortage of energy, or a threat to public health,
3.33safety, or welfare;
4.1    (3) undertake a continuing assessment of trends in the consumption of all forms of
4.2energy and analyze the social, economic, and environmental consequences of these trends;
4.3    (4) carry out energy conservation measures as specified by the legislature and
4.4recommend to the governor and the legislature additional energy policies and conservation
4.5measures as required to meet the objectives of sections 216C.05 to 216C.30;
4.6    (5) collect and analyze data relating to present and future demands and resources
4.7for all sources of energy;
4.8    (6) evaluate policies governing the establishment of rates and prices for energy
4.9as related to energy conservation, and other goals and policies of sections 216C.05 to
4.10216C.30 , and make recommendations for changes in energy pricing policies and rate
4.11schedules;
4.12    (7) study the impact and relationship of the state energy policies to international,
4.13national, and regional energy policies;
4.14    (8) design and implement a state program for the conservation of energy; this
4.15program shall include but not be limited to, general commercial, industrial, and residential,
4.16and transportation areas; such program shall also provide for the evaluation of energy
4.17systems as they relate to lighting, heating, refrigeration, air conditioning, building design
4.18and operation, and appliance manufacturing and operation;
4.19    (9) inform and educate the public about the sources and uses of energy and the
4.20ways in which persons can conserve energy;
4.21    (10) dispense funds made available for the purpose of research studies and projects
4.22of professional and civic orientation, which are related to either energy conservation,
4.23resource recovery, or the development of alternative energy technologies which conserve
4.24nonrenewable energy resources while creating minimum environmental impact;
4.25    (11) charge other governmental departments and agencies involved in energy-related
4.26activities with specific information gathering goals and require that those goals be met;
4.27    (12) design a comprehensive program for the development of indigenous energy
4.28resources. The program shall include, but not be limited to, providing technical,
4.29informational, educational, and financial services and materials to persons, businesses,
4.30municipalities, and organizations involved in the development of solar, wind, hydropower,
4.31peat, fiber fuels, biomass, and other alternative energy resources. The program shall be
4.32evaluated by the alternative energy technical activity; and
4.33    (13) dispense loans, grants, or other financial aid from money received from
4.34litigation or settlement of alleged violations of federal petroleum-pricing regulations
4.35made available to the department for that purpose. The commissioner shall adopt rules
4.36under chapter 14 for this purpose.
5.1    (b) Further, the commissioner may participate fully in hearings before the
5.2Public Utilities Commission on matters pertaining to rate design, cost allocation,
5.3efficient resource utilization, utility conservation investments, small power production,
5.4cogeneration, and other rate issues. The commissioner shall support the policies stated in
5.5section 216C.05 and shall prepare and defend testimony proposed to encourage energy
5.6conservation improvements as defined in section 216B.241.

5.7    Sec. 5. [216C.42] DEFINITIONS.
5.8    Subdivision 1. Scope. For the purpose of this section and section 216C.43, the terms
5.9defined in this section have the meanings given them.
5.10    Subd. 2. Energy improvement project. "Energy improvement project" means
5.11a project to improve energy efficiency in a building or facility, including the design,
5.12acquisition, installation, and commissioning of equipment or improvements to a building
5.13or facility, and training of building or facility staff necessary to properly operate and
5.14maintain the equipment or improvements.
5.15    Subd. 3. Energy project study. "Energy project study" means a technical and
5.16financial study of one or more energy improvement projects, including:
5.17    (1) an analysis of historical energy consumption and cost data;
5.18    (2) a description of existing equipment, structural elements, operating characteristics,
5.19and other conditions affecting energy use;
5.20    (3) a description of the proposed energy improvement projects;
5.21    (4) a detailed budget for the proposed project; and
5.22    (5) calculations sufficient to demonstrate the expected energy savings.
5.23    Subd. 4. Financing agreement. "Financing agreement" means a tax-exempt
5.24lease-purchase agreement entered into by a local government and a financial institution
5.25under a standard project financing agreement offered under section 216C.43, subdivision 6.
5.26    Subd. 5. Guarantee. "Guarantee" means a positive budget impact guarantee under
5.27section 216C.43, subdivision 7.
5.28    Subd. 6. Local government. "Local government" means a Minnesota county,
5.29statutory or home rule charter city, town, school district, or any combination of those units
5.30operating under an agreement to exercise powers jointly.
5.31    Subd. 7. Program. "Program" means the energy improvement financing program
5.32for local governments authorized by section 216C.43.

5.33    Sec. 6. [216C.43] ENERGY IMPROVEMENT FINANCING PROGRAM FOR
5.34LOCAL GOVERNMENT.
6.1    Subdivision 1. Commissioner's authority and duties; local government
6.2authority. The commissioner shall administer this section. A local government may
6.3enter into contracts for the purposes of this section with the commissioner, the primary
6.4contractor, other contracted technical service providers, and participating financial
6.5institutions.
6.6    Subd. 2. Program eligibility; voluntary program participation; targeted
6.7technical services. A local government may elect to participate in the program. The
6.8commissioner may prioritize and target technical services offered under subdivision
6.95 to public entities that the commissioner determines offer the greatest potential for
6.10cost-effective energy improvement projects.
6.11    Subd. 3. Primary contractor for technical, financial, and program management
6.12services. The commissioner may enter into a contract for the delivery of technical
6.13services, financial management, marketing, and administrative services necessary for
6.14implementation of the program.
6.15    Subd. 4. Targeted technical services. The commissioner shall offer technical
6.16services to targeted public entities to conduct energy project studies. The commissioner
6.17may contract with one or more qualified technical service providers to conduct energy
6.18project studies for targeted public entities. The commissioner may require full or partial
6.19reimbursement of costs for technical services provided to a local government, subject to
6.20terms and conditions specified and agreed to by contract prior to the delivery of technical
6.21services. A local government may independently procure technical services to conduct
6.22an energy project study, but the energy project study must be reviewed and approved by
6.23the commissioner to qualify an energy improvement project for a financing agreement
6.24under subdivision 6 or a guarantee under subdivision 7.
6.25    Subd. 5. Participation of technical service providers statewide. Program
6.26activities must be implemented to encourage statewide participation of engineers,
6.27architects, energy auditors, contractors, and other technical service providers. The
6.28commissioner may provide training on energy project study requirements and procedures
6.29to technical service providers.
6.30    Subd. 6. Standard project financing agreement. The commissioner shall solicit
6.31proposals from private financial institutions and may enter into a standard project
6.32financing agreement with one or more financial institutions. A standard project financing
6.33agreement must specify terms and conditions uniformly available to all participating
6.34public entities for financing to implement energy improvement projects under this section.
6.35A local government may choose to finance an energy improvement project by means
7.1other than a standard project financing agreement, but a guarantee under subdivision 7
7.2must not be offered unless the commissioner determines that the other financing means
7.3creates no greater potential obligation under a guarantee than would be created through a
7.4standard project financing agreement.
7.5    Subd. 7. Positive budget impact guarantee. (a) The commissioner shall offer
7.6a guarantee of positive budget impact for the term of the financing agreement to a
7.7participating local government for qualifying energy improvement projects. A positive
7.8budget impact guarantee is an agreement by the commissioner to lend funds to a local
7.9government in an amount necessary so that the cumulative payments made by the local
7.10government under a financing agreement minus the amount loaned by the commissioner
7.11do not exceed the actual energy and operating cost savings attributable to the energy
7.12improvement project for the term of the guarantee.
7.13Funds loaned to a local government by the commissioner in fulfillment of a guarantee are
7.14repayable only to the extent that a positive budget impact is maintained during the term of
7.15the guarantee. Terms and conditions of a guarantee must be agreed to by contract prior to
7.16a local government entering into a financing agreement.
7.17    (b) A guarantee contract must include, but is not limited to:
7.18    (1) specification of methods and procedures to measure and verify energy cost
7.19savings;
7.20    (2) obligations of the local government to operate and maintain the energy
7.21improvements;
7.22    (3) procedures to modify the guarantee if the local government modifies operating
7.23characteristics of its building or facility in a manner that adversely affects energy cost
7.24savings;
7.25    (4) interest charged on the loan, which may not exceed the interest on the related
7.26financial agreement; and
7.27    (5) procedures for resolution of disputes.
7.28    Subd. 8. Qualifying energy improvement projects. A local government may
7.29submit to the commissioner, on a form prescribed by the commissioner, an application for
7.30a financing agreement authorization and guarantee for energy improvement projects. The
7.31commissioner shall approve an energy improvement project for a guarantee and authorize
7.32eligibility for a financing agreement if the commissioner determines that:
7.33    (1) the application has been approved by the governing body or agency head of the
7.34local government;
7.35    (2) the project is technically and economically feasible;
8.1    (3) the local government has made adequate provision for the operation and
8.2maintenance of the project;
8.3    (4) the project has a substantial likelihood to result in a positive cash flow in each
8.4year the financing agreement is in effect; and
8.5    (5) adequate funds will be available to the commissioner to fulfill the guarantee.
8.6    Subd. 9. Program costs. Program costs incurred by the commissioner or a public
8.7entity that are not direct costs to implement energy improvement projects may be paid
8.8with program funds appropriated under subdivision 10.
8.9    Subd. 10. Funding; appropriation; receipts. Petroleum violation escrow funds
8.10appropriated to the commissioner by Laws 1988, chapter 686, article 1, section 38, for
8.11state energy loan programs for schools, hospitals, and public buildings, and reappropriated
8.12by Laws 2007, chapter 57, article 2, section 30, are appropriated to the commissioner
8.13for the purposes of this section and are available until spent. The commissioner may
8.14transfer up to $1,000,000 of this appropriation to the commissioner of administration for
8.15the purposes of section 16B.322.

8.16    Sec. 7. REPEALER.
8.17Laws 2007, chapter 57, article 2, section 30, is repealed.
8.18EFFECTIVE DATE.This section is effective the day following final enactment."
8.19Amend the title accordingly