Section 2 [Energy Improvement Financing Program for State Government], subdivision 1 (Commissioner's Authority and Duties; State Agency Authority), provides that the Commissioner of Administration ("Commissioner") shall administer the section. Authorizes a state agency to enter into contracts with the Commissioner and participating financial institutions for the purpose of the section. Specifies that technical services and construction contracts are subject to procurement procedures set in statute.

Subdivision 2 (Program Eligibility; Voluntary Program Participation; Targeted Technical Services) provides that state agency participation in the program is voluntary. Authorizes the Commissioner to prioritize and target technical services to state agencies with buildings or facilities that offer the greatest potential to improve energy efficiency or reduce use of fossil-fuel energy.

Subdivision 3 (Targeted Technical Services) authorizes the Commissioner to require full or partial reimbursement of costs for technical services provided to a state agency.

Subdivision 4 (Financing Agreement) requires the Commissioner to solicit proposals from private financial institutions and permits the Commissioner to enter into a financing agreement. Specifies the terms of the financing agreement.

Subdivision 5 (Qualifying Energy Improvement Projects) specifies the conditions under which the Commissioner may approve an energy improvement project and enter into a financing agreement.

Subdivision 6 (Program Costs) provides that program costs that are not reimbursed or paid directly under a financing agreement may be paid with funds available to the Commissioner from the Petroleum Violation Escrow Fund.

Subdivision 7 (Conservation Investment Plan Savings Goals) authorizes a utility or association to count energy savings resulting from its investment in an energy improvement project toward its energy savings goals.

Section 3 [Commissioner Duties], paragraph (a), clause (13), eliminates the requirement that the Commissioner of Commerce adopt rules to dispense loans, grants, or other financial aid from money received from litigation or settlement of alleged violations of federal petroleum-pricing regulations.

Section 4 [Microenergy Loan Program], subdivision 1 (Definitions), defines "small-scale renewable energy," and "unit of local government" for purposes of the section.

Subdivision 2 (Program Established) directs the Commissioner of Commerce ("Commissioner") to develop, implement, and administer a microenergy loan program.

Subdivision 3 (Loan Purposes) authorizes the Commissioner to issue low-interest, long-term loans to units of local government to finance community-owned or publicly owned small scale renewable energy systems or to small businesses to install small-scale renewable energy systems. Authorizes the Commissioner to participate in loans made by the Housing Finance Agency for specified purposes.

Subdivision 4 (Technical Standards) requires the Commissioner to determine technical standards for small-scale renewable energy systems to qualify for loans.

Subdivision 5 (Loan Proposals) requires the Commissioner to publish a request for proposals from units of local government at least once a year in the State Register. Provides that the proposals will be selected based on specified criteria.

Subdivision 6 (Loan Terms) specifies that a loan must be issued at the lowest interest rate required to recover costs and must be a minimum of 15 years, unless a shorter term period of no less than 10 years is necessary and acceptable.

Subdivision 7 (Account) establishes a microenergy loan account in the state treasury.

Subdivision 8 (Appropriation) provides that money in the account is appropriated to the Commissioner of Commerce to make microenergy loans and to the Commissioner of Finance to pay debt service and other costs. Specifies that payment of debt service costs and funding reserves take priority over use of money in the account for any other purpose.

Section 5 [Microenergy Loan Revenue Bonds], subdivision 1 (Bonding Authority), authorizes the Commissioner of Finance ("Commissioner") to sell and issue state revenue bonds to make microenergy loans; to pay costs of issuance, debt service, and bond insurance or other credit enhancements, and to fund reserves; and to refund bonds issued. Provides that the aggregate principal amount of bonds that may be outstanding at any time may not exceed $20,000,000.

Subdivision 2 (Procedure) authorizes the Commissioner to sell and issue bonds on the terms and conditions determined to be in the best interest of the state. Specifies how the bonds may be sold. Requires proceeds of the bonds to be credited to the microenergy loan account.

Subdivision 3 (Revenue Sources) provides that the debt service on the bonds is only payable from revenue credited to the microenergy loan account from specified sources and from other revenues pledged to the payment of the bonds.

Subdivision 4 (Refunding Bonds) authorizes the Commissioner to issue bonds to refund outstanding bonds issued under subdivision 1 and specifies how the proceeds of the refunding bonds may be applied.

Subdivision 5 (Not a General or Moral Obligation) provides that bonds issued under this section are not public debt, and the full faith, credit, and taxing powers of the state are not pledged for their payment. Prohibits the payment of bonds through a statewide tax.

Subdivision 6 (Trustee) authorizes the Commissioner to contract with and appoint a trustee for bond holders. Provides that the trustee has the powers and authority vested in it by the Commissioner under the bond and trust indentures.

Subdivision 7 (Pledges) provides that any pledge made by the Commissioner is valid and binding from the time the pledge is made. Specifies when the pledged money or property is subject to the lien of the pledge and when the lien is valid. Provides that the order or any instrument by which a pledge is created does not need to be recorded.

Subdivision 8 (Bonds; Purchase and Cancellation) specifies the purchase and cancellation of bonds.

Subdivision 9 (State Pledge Against Impairment of Contracts) provides a state pledge and agreement with bond holders that the state will not limit or alter rights vested in the Commissioner to fulfill the terms of agreements made with the bondholders, or in any way impair the rights and remedies of the holders until the bonds, interest, and related costs are fully met.

Section 6 [Definitions] defines "energy improvement project," "energy project study," "financing agreement," "local government," "program," and "supplemental cash flow agreement" for the purpose of this section and section 7 (Energy Improvement Financing Program for Local Government).

Section 7 [Energy Improvement Financing Program for Local Government], subdivision 1 (Commissioner's Authority and Duties; Local Government Authority), provides that the Commissioner of Commerce (Commissioner) shall administer the section. Authorizes a local government to enter into contracts for the purposes of this section with the Commissioner, the primary contractor, other contracted technical service providers, and participating financial institutions.

Subdivision 2 (Program Eligibility; Voluntary Program Participation; Targeted Technical Services), provides that local government participation in the program is voluntary. Authorizes the Commissioner to prioritize and target technical services to public entities that offer the greatest potential for cost-effective energy improvement projects.

Subdivision 3 (Primary Contractor for Technical, Financial, and Program Management Services), authorizes the Commissioner to enter into a contract for technical services, financial management, marketing, and administrative services necessary to implement the program.

Subdivision 4 (Targeted Technical Services) requires the Commissioner to offer technical services, with the assistance of qualified technical service providers (if necessary), to targeted public entities to conduct energy project studies. The Commissioner may require full or partial reimbursement for the services. Authorizes a local government to independently procure technical services, but requires that the project study be reviewed and approved by the Commissioner to qualify for a financing agreement or a supplemental cash flow agreement.

Subdivision 5 (Participation of Technical Service Providers Statewide), requires program activities to encourage statewide participation of engineers, architects, energy auditors, contractors, and other technical service providers. Authorizes the Commissioner to provide training to technical service providers.

Subdivision 6 (Standard Project Financing Agreement) requires the Commissioner to solicit proposals from private financial institutions and permits the Commissioner to enter into a standard project financing agreement. Provides that a local government is not required to use a standard project financing agreement, but a supplemental cash flow agreement will only be offered if the alternate financing does not create a greater potential obligation.

Subdivision 7 (Supplemental Cash Flow Agreement) requires the Commissioner to offer a supplemental cash flow agreement for the term of the financing agreement to a participating local government for a qualifying project. Defines a supplemental cash flow agreement and specifies related terms and conditions.

Subdivision 8 (Qualifying Energy Improvement Projects) specifies the requirements for Commissioner approval of a local government application for a financing agreement and supplemental cash flow agreement for energy improvement projects.

Subdivision 9 (Program Costs) provides that program costs incurred by the Commissioner or a public entity that are not direct costs to implement energy improvement projects may be repaid with the appropriation from the Petroleum Violation Escrow Fund.

Subdivision 10 (Funding; Appropriation; Receipts) transfers money appropriated to the Petroleum Violation Escrow Fund for state energy loan programs for schools, hospitals, and public buildings to the Commissioner of Commerce for purposes of this section. The Commissioner may transfer up to $1,000,000 of the appropriation to the Commissioner of Administration for the purposes of section 2 (Energy Improvement Financing Program for State Government).

Subdivision 11 (CIP Energy Savings Goals), authorizes a utility or association to count energy savings resulting from its investment in an energy improvement project toward its energy savings goals.

Section 8, subdivision 13 (Energy Efficiency Projects), extends the contract payment period of a guaranteed energy savings contract from 15 to 20 years.

Section 9 [Report to Commissioner of Education] requires the Commissioner of Commerce to report to the Commissioner of Education by January 15, 2009 and 2010, on the school districts that have applied for specified loans.

Section 10 [Repealer] repeals Laws 2007, chapter 57, article 2, section 30 (Petroleum Violation Escrow Funds).

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