1.1                          A bill for an act 
  1.2             relating to energy; declaring the goal of moving 
  1.3             Minnesota to a hydrogen energy economy; providing 
  1.4             incentive payments for producing qualified hydrogen; 
  1.5             supporting research and development related to 
  1.6             hydrogen energy; providing for energy innovation 
  1.7             zones; amending Minnesota Statutes 2002, sections 
  1.8             116C.779; 216B.1691, subdivision 1; 216B.241, 
  1.9             subdivisions 1, 2; 216B.2422, subdivision 1; 216C.41, 
  1.10            subdivisions 1, 2, 3, 4, 5; proposing coding for new 
  1.11            law in Minnesota Statutes, chapter 216B. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 2002, section 116C.779, is 
  1.14  amended to read: 
  1.15     116C.779 [FUNDING FOR RENEWABLE DEVELOPMENT.] 
  1.16     Subdivision 1.  [RENEWABLE DEVELOPMENT ACCOUNT.] (a) The 
  1.17  public utility that operates the Prairie Island nuclear 
  1.18  generating plant must transfer to a renewable development 
  1.19  account $500,000 each year for each dry cask containing spent 
  1.20  fuel that is located at the independent spent fuel storage 
  1.21  installation at Prairie Island after January 1, 1999.  The fund 
  1.22  transfer must be made if waste is stored in a cask for any part 
  1.23  of a year.  Funds in the account may be expended only for 
  1.24  development of renewable energy sources.  Preference must be 
  1.25  given to development of renewable energy source projects located 
  1.26  within the state. 
  1.27     (b) Expenditures from the account may only be made after 
  1.28  approval by order of the public utilities commission upon a 
  2.1   petition by the public utility. 
  2.2      Subd. 2.  [HYDROGEN ECONOMY RESEARCH.] (a) $5,000,000 
  2.3   annually from the renewable development account must be 
  2.4   allocated to support basic and applied research at the Minnesota 
  2.5   hydrogen and renewables research center at the University of 
  2.6   Minnesota.  
  2.7      (b) Research funded under this subdivision must focus on: 
  2.8      (1) conversion of state wind resources to hydrogen for 
  2.9   energy storage and transportation to areas of energy demand; 
  2.10     (2) improvement of scalable hydrogen fuel cells for 
  2.11  stationary combined electricity generation and heating/cooling 
  2.12  function for residential and commercial use; and 
  2.13     (3) processing of agricultural and forestry plant products 
  2.14  for production of hydrogen and other fuels and sequestration of 
  2.15  carbon using a variety of means, including biocatalysis and 
  2.16  fermentation.  
  2.17     Sec. 2.  [216B.013] [HYDROGEN ENERGY ECONOMY GOAL.] 
  2.18     It is a goal of this state that Minnesota move to hydrogen 
  2.19  as an increasing source of energy for its electrical power, 
  2.20  heating, and transportation needs. 
  2.21     Sec. 3.  Minnesota Statutes 2002, section 216B.1691, 
  2.22  subdivision 1, is amended to read: 
  2.23     Subdivision 1.  [DEFINITIONS.] (a) "Eligible energy 
  2.24  technology" means an energy technology that: 
  2.25     (1) generates electricity from the following renewable 
  2.26  energy sources:  solar,; wind,; hydroelectric with a capacity of 
  2.27  less than 60 megawatts, or; biomass; or hydrogen, provided that 
  2.28  after January 1, 2010, the hydrogen must be generated from the 
  2.29  renewable energy resources otherwise identified in this clause; 
  2.30  and 
  2.31     (2) was not mandated by state law or commission order 
  2.32  enacted or issued prior to August 1, 2001. 
  2.33     (b) "Electric utility" means a public utility providing 
  2.34  electric service, a generation and transmission cooperative 
  2.35  electric association, or a municipal power agency. 
  2.36     Sec. 4.  Minnesota Statutes 2002, section 216B.241, 
  3.1   subdivision 1, is amended to read: 
  3.2      Subdivision 1.  [DEFINITIONS.] For purposes of this section 
  3.3   and section 216B.16, subdivision 6b, the terms defined in this 
  3.4   subdivision have the meanings given them.  
  3.5      (a) "Commission" means the public utilities commission. 
  3.6      (b) "Commissioner" means the commissioner of commerce. 
  3.7      (c) "Customer facility" means all buildings, structures, 
  3.8   equipment, and installations at a single site. 
  3.9      (d) "Department" means the department of commerce. 
  3.10     (e) "Energy conservation" means demand-side management of 
  3.11  energy supplies resulting in a net reduction in energy use.  
  3.12  Load management that reduces overall energy use is energy 
  3.13  conservation. 
  3.14     (f) "Energy conservation improvement" means a project that 
  3.15  results in energy conservation.  
  3.16     (g) "Investments and expenses of a public utility" includes 
  3.17  the investments and expenses incurred by a public utility in 
  3.18  connection with an energy conservation improvement, including 
  3.19  but not limited to:  
  3.20     (1) the differential in interest cost between the market 
  3.21  rate and the rate charged on a no-interest or below-market 
  3.22  interest loan made by a public utility to a customer for the 
  3.23  purchase or installation of an energy conservation improvement; 
  3.24     (2) the difference between the utility's cost of purchase 
  3.25  or installation of energy conservation improvements and any 
  3.26  price charged by a public utility to a customer for such 
  3.27  improvements.  
  3.28     (h) "Large electric customer facility" means a customer 
  3.29  facility that imposes a peak electrical demand on an electric 
  3.30  utility's system of not less than 20,000 kilowatts, measured in 
  3.31  the same way as the utility that serves the customer facility 
  3.32  measures electrical demand for billing purposes, and for which 
  3.33  electric services are provided at retail on a single bill by a 
  3.34  utility operating in the state. 
  3.35     (i) "Load management" means an activity, service, or 
  3.36  technology to change the timing or the efficiency of a 
  4.1   customer's use of energy that allows a utility or a customer to 
  4.2   respond to wholesale market fluctuations or to reduce the 
  4.3   overall demand for energy or capacity.  
  4.4      (j) "Renewable energy" has the meaning given in section 
  4.5   216B.2422, subdivision 1, paragraph (c).  
  4.6      Sec. 5.  Minnesota Statutes 2002, section 216B.241, 
  4.7   subdivision 2, is amended to read: 
  4.8      Subd. 2.  [PROGRAMS.] (a) The commissioner may require 
  4.9   public utilities to make investments and expenditures in energy 
  4.10  conservation improvements, explicitly setting forth the interest 
  4.11  rates, prices, and terms under which the improvements must be 
  4.12  offered to the customers.  The required programs must cover a 
  4.13  two-year period.  Public utilities shall file conservation 
  4.14  improvement plans by June 1, on a schedule determined by order 
  4.15  of the commissioner.  Plans received by a public utility by June 
  4.16  1 must be approved or approved as modified by the commissioner 
  4.17  by December 1 of that same year.  The commissioner shall give 
  4.18  special consideration and encouragement to programs that bring 
  4.19  about significant net savings through the use of 
  4.20  energy-efficient lighting.  The commissioner shall evaluate the 
  4.21  program on the basis of cost effectiveness and the reliability 
  4.22  of technologies employed.  The commissioner's order must provide 
  4.23  to the extent practicable for a free choice, by consumers 
  4.24  participating in the program, of the device, method, material, 
  4.25  or project constituting the energy conservation improvement and 
  4.26  for a free choice of the seller, installer, or contractor of the 
  4.27  energy conservation improvement, provided that the device, 
  4.28  method, material, or project seller, installer, or contractor is 
  4.29  duly licensed, certified, approved, or qualified, including 
  4.30  under the residential conservation services program, where 
  4.31  applicable.  
  4.32     (b) The commissioner may require a utility to make an 
  4.33  energy conservation improvement investment or expenditure 
  4.34  whenever the commissioner finds that the improvement will result 
  4.35  in energy savings at a total cost to the utility less than the 
  4.36  cost to the utility to produce or purchase an equivalent amount 
  5.1   of new supply of energy.  The commissioner shall nevertheless 
  5.2   ensure that every public utility operate one or more programs 
  5.3   under periodic review by the department.  
  5.4      (c) Each public utility subject to subdivision 1a may spend 
  5.5   and invest annually up to ten percent of the total amount 
  5.6   required to be spent and invested on energy conservation 
  5.7   improvements under this section by the utility on research and 
  5.8   development projects that meet the definition of energy 
  5.9   conservation improvement in subdivision 1 and that are funded 
  5.10  directly by the public utility.  
  5.11     (d) A public utility may not spend for or invest in energy 
  5.12  conservation improvements that directly benefit a large electric 
  5.13  customer facility for which the commissioner has issued an 
  5.14  exemption pursuant to subdivision 1a, paragraph (b).  The 
  5.15  commissioner shall consider and may require a utility to 
  5.16  undertake a program suggested by an outside source, including a 
  5.17  political subdivision or a nonprofit or community organization. 
  5.18     (e) The commissioner may, by order, establish a list of 
  5.19  programs that may be offered as energy conservation improvements 
  5.20  by a public utility, municipal utility, cooperative electric 
  5.21  association, or other entity providing conservation services 
  5.22  pursuant to this section.  The list of programs may include 
  5.23  rebates for high-efficiency appliances, rebates or subsidies for 
  5.24  high-efficiency lamps, small business energy audits, and 
  5.25  building recommissioning.  The commissioner may, by order, 
  5.26  change this list to add or subtract programs as the commissioner 
  5.27  determines is necessary to promote efficient and effective 
  5.28  conservation programs. 
  5.29     (f) The commissioner shall ensure that a portion of the 
  5.30  money spent on residential conservation improvement programs is 
  5.31  devoted to programs that directly address the needs of renters 
  5.32  and low-income persons, in proportion to the amount the utility 
  5.33  has historically spent on such programs based on the most recent 
  5.34  three-year average relative to the utility's total conservation 
  5.35  spending under this section, unless an insufficient number of 
  5.36  appropriate programs are available. 
  6.1      (g) A utility, a political subdivision, or a nonprofit or 
  6.2   community organization that has suggested a program, the 
  6.3   attorney general acting on behalf of consumers and small 
  6.4   business interests, or a utility customer that has suggested a 
  6.5   program and is not represented by the attorney general under 
  6.6   section 8.33 may petition the commission to modify or revoke a 
  6.7   department decision under this section, and the commission may 
  6.8   do so if it determines that the program is not cost effective, 
  6.9   does not adequately address the residential conservation 
  6.10  improvement needs of low-income persons, has a long-range 
  6.11  negative effect on one or more classes of customers, or is 
  6.12  otherwise not in the public interest.  The commission shall 
  6.13  reject a petition that, on its face, fails to make a reasonable 
  6.14  argument that a program is not in the public interest. 
  6.15     (h) The commissioner may order a public utility to include, 
  6.16  with the filing of the utility's proposed conservation 
  6.17  improvement plan under paragraph (a), the results of an 
  6.18  independent audit of the utility's conservation improvement 
  6.19  programs and expenditures performed by the department or an 
  6.20  auditor with experience in the provision of energy conservation 
  6.21  and energy efficiency services approved by the commissioner and 
  6.22  chosen by the utility.  The audit must specify the energy 
  6.23  savings or increased efficiency in the use of energy within the 
  6.24  service territory of the utility that is the result of the 
  6.25  spending and investments.  The audit must evaluate the cost 
  6.26  effectiveness of the utility's conservation programs. 
  6.27     (i) Up to three percent of a utility's conservation 
  6.28  spending obligation under this section may be used for program 
  6.29  pre-evaluation, testing, and monitoring and program audit and 
  6.30  evaluation.  
  6.31     (j) Each public utility subject to subdivision 1a may spend 
  6.32  and invest annually up to five percent of the total amount 
  6.33  required to be spent and invested on energy conservation 
  6.34  improvements under this section on renewable energy research or 
  6.35  renewable energy production at a public school or public 
  6.36  institution of higher education.  
  7.1      Sec. 6.  Minnesota Statutes 2002, section 216B.2422, 
  7.2   subdivision 1, is amended to read: 
  7.3      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  7.4   section, the terms defined in this subdivision have the meanings 
  7.5   given them. 
  7.6      (b) "Utility" means an entity with the capability of 
  7.7   generating 100,000 kilowatts or more of electric power and 
  7.8   serving, either directly or indirectly, the needs of 10,000 
  7.9   retail customers in Minnesota.  Utility does not include federal 
  7.10  power agencies. 
  7.11     (c) "Renewable energy" means electricity generated through 
  7.12  use of any of the following resources: 
  7.13     (1) wind; 
  7.14     (2) solar; 
  7.15     (3) geothermal; 
  7.16     (4) hydro; 
  7.17     (5) trees or other vegetation; or 
  7.18     (6) landfill gas; or 
  7.19     (7) hydrogen, provided that after January 1, 2010, the 
  7.20  hydrogen must be generated from the resources identified in 
  7.21  clauses (1) through (6). 
  7.22     (d) "Resource plan" means a set of resource options that a 
  7.23  utility could use to meet the service needs of its customers 
  7.24  over a forecast period, including an explanation of the supply 
  7.25  and demand circumstances under which, and the extent to which, 
  7.26  each resource option would be used to meet those service needs.  
  7.27  These resource options include using, refurbishing, and 
  7.28  constructing utility plant and equipment, buying power generated 
  7.29  by other entities, controlling customer loads, and implementing 
  7.30  customer energy conservation. 
  7.31     (e) "Refurbish" means to rebuild or substantially modify an 
  7.32  existing electricity generating resource of 30 megawatts or 
  7.33  greater. 
  7.34     Sec. 7.  Minnesota Statutes 2002, section 216C.41, 
  7.35  subdivision 1, is amended to read: 
  7.36     Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
  8.1   subdivision apply to this section. 
  8.2      (b) "Qualified hydroelectric facility" means a 
  8.3   hydroelectric generating facility in this state that: 
  8.4      (1) is located at the site of a dam, if the dam was in 
  8.5   existence as of March 31, 1994; and 
  8.6      (2) begins generating electricity after July 1, 1994, or 
  8.7   generates electricity after substantial refurbishing of a 
  8.8   facility that begins after July 1, 2001. 
  8.9      (c) "Qualified wind energy conversion facility" means a 
  8.10  wind energy conversion system that: 
  8.11     (1) produces two megawatts or less of electricity as 
  8.12  measured by nameplate rating and begins generating electricity 
  8.13  after December 31, 1996, and before July 1, 1999; 
  8.14     (2) begins generating electricity after June 30, 1999, 
  8.15  produces two megawatts or less of electricity as measured by 
  8.16  nameplate rating, and is: 
  8.17     (i) located within one county and owned by a natural person 
  8.18  who owns the land where the facility is sited; 
  8.19     (ii) owned by a Minnesota small business as defined in 
  8.20  section 645.445; 
  8.21     (iii) owned by a nonprofit organization; or 
  8.22     (iv) owned by a tribal council if the facility is located 
  8.23  within the boundaries of the reservation; or 
  8.24     (3) begins generating electricity after June 30, 1999, 
  8.25  produces seven megawatts or less of electricity as measured by 
  8.26  nameplate rating, and: 
  8.27     (i) is owned by a cooperative organized under chapter 308A; 
  8.28  and 
  8.29     (ii) all shares and membership in the cooperative are held 
  8.30  by natural persons or estates, at least 51 percent of whom 
  8.31  reside in a county or contiguous to a county where the wind 
  8.32  energy production facilities of the cooperative are located. 
  8.33     (d) "Qualified on-farm biogas recovery facility" means an 
  8.34  anaerobic digester system that: 
  8.35     (1) is located at the site of an agricultural operation; 
  8.36     (2) is owned by a natural person who owns or rents the land 
  9.1   where the facility is located; and 
  9.2      (3) begins generating electricity after July 1, 2001.  
  9.3      (e) "Anaerobic digester system" means a system of 
  9.4   components that processes animal waste based on the absence of 
  9.5   oxygen and produces gas used to generate electricity. 
  9.6      (f) "Qualified hydrogen generation facility" means a 
  9.7   facility that generates hydrogen from renewable resources for 
  9.8   use in generating electricity after July 1, 2003.  
  9.9      Sec. 8.  Minnesota Statutes 2002, section 216C.41, 
  9.10  subdivision 2, is amended to read: 
  9.11     Subd. 2.  [INCENTIVE PAYMENT; APPROPRIATION.] (a) Incentive 
  9.12  payments must be made according to this section to (1) a 
  9.13  qualified on-farm biogas recovery facility, (2) the owner or 
  9.14  operator of a qualified hydropower facility or qualified wind 
  9.15  energy conversion facility for electric energy generated and 
  9.16  sold by the facility, (3) a publicly owned hydropower facility 
  9.17  for electric energy that is generated by the facility and used 
  9.18  by the owner of the facility outside the facility, or (4) the 
  9.19  owner of a publicly owned dam that is in need of substantial 
  9.20  repair, for electric energy that is generated by a hydropower 
  9.21  facility at the dam and the annual incentive payments will be 
  9.22  used to fund the structural repairs and replacement of 
  9.23  structural components of the dam, or to retire debt incurred to 
  9.24  fund those repairs, or (5) a qualified hydrogen generation 
  9.25  facility. 
  9.26     (b) Payment may only be made upon receipt by the 
  9.27  commissioner of finance of an incentive payment application that 
  9.28  establishes that the applicant is eligible to receive an 
  9.29  incentive payment and that satisfies other requirements the 
  9.30  commissioner deems necessary.  The application must be in a form 
  9.31  and submitted at a time the commissioner establishes.  
  9.32     (c) There is annually appropriated from the general fund 
  9.33  sums sufficient to make the payments required under this section.
  9.34     Sec. 9.  Minnesota Statutes 2002, section 216C.41, 
  9.35  subdivision 3, is amended to read: 
  9.36     Subd. 3.  [ELIGIBILITY WINDOW.] (a) Payments may be made 
 10.1   under this section only for electricity generated: 
 10.2      (1) from a qualified hydroelectric facility that is 
 10.3   operational and generating electricity before December 31, 2005; 
 10.4      (2) from a qualified wind energy conversion facility that 
 10.5   is operational and generating electricity before January 1, 
 10.6   2005; or 
 10.7      (3) from a qualified on-farm biogas recovery facility from 
 10.8   July 1, 2001, through December 31, 2015. 
 10.9      (b) Payments may be made under this section only for 
 10.10  hydrogen produced before December 31, 2020.  
 10.11     Sec. 10.  Minnesota Statutes 2002, section 216C.41, 
 10.12  subdivision 4, is amended to read: 
 10.13     Subd. 4.  [PAYMENT PERIOD.] (a) A facility other than a 
 10.14  qualified hydrogen generation facility may receive payments 
 10.15  under this section for a ten-year period.  No payment under this 
 10.16  section may be made for electricity generated: 
 10.17     (1) by a qualified hydroelectric facility after December 
 10.18  31, 2015; 
 10.19     (2) by a qualified wind energy conversion facility after 
 10.20  December 31, 2015; or 
 10.21     (3) by a qualified on-farm biogas recovery facility after 
 10.22  December 31, 2015.  
 10.23     (b) The payment period begins and runs consecutively from 
 10.24  the first year in which electricity generated from the facility 
 10.25  is eligible for incentive payment or after substantial repairs 
 10.26  to the hydropower facility dam funded by the incentive payments 
 10.27  are initiated. 
 10.28     Sec. 11.  Minnesota Statutes 2002, section 216C.41, 
 10.29  subdivision 5, is amended to read: 
 10.30     Subd. 5.  [AMOUNT OF PAYMENT.] (a) An incentive payment for 
 10.31  other than a qualified hydrogen generation facility is based on 
 10.32  the number of kilowatt hours of electricity generated. The 
 10.33  amount of the payment is: 
 10.34     (1) for a facility described under subdivision 2, paragraph 
 10.35  (a), clause (4), 1.0 cent per kilowatt hour; and 
 10.36     (2) for all other facilities, 1.5 cents per kilowatt hour.  
 11.1   For electricity generated by qualified wind energy conversion 
 11.2   facilities, the incentive payment under this section is limited 
 11.3   to no more than 100 megawatts of nameplate capacity.  During any 
 11.4   period in which qualifying claims for incentive payments exceed 
 11.5   100 megawatts of nameplate capacity, the payments must be made 
 11.6   to producers in the order in which the production capacity was 
 11.7   brought into production.  
 11.8      (b) For wind energy conversion systems installed and 
 11.9   contracted for after January 1, 2002, the total size of a wind 
 11.10  energy conversion system under this section must be determined 
 11.11  according to this paragraph.  Unless the systems are 
 11.12  interconnected with different distribution systems, the 
 11.13  nameplate capacity of one wind energy conversion system must be 
 11.14  combined with the nameplate capacity of any other wind energy 
 11.15  conversion system that is: 
 11.16     (1) located within five miles of the wind energy conversion 
 11.17  system; 
 11.18     (2) constructed within the same calendar year as the wind 
 11.19  energy conversion system; and 
 11.20     (3) under common ownership. 
 11.21  In the case of a dispute, the commissioner of commerce shall 
 11.22  determine the total size of the system, and shall draw all 
 11.23  reasonable inferences in favor of combining the systems. 
 11.24     (c) In making a determination under paragraph (b), the 
 11.25  commissioner of commerce may determine that two wind energy 
 11.26  conversion systems are under common ownership when the 
 11.27  underlying ownership structure contains similar persons or 
 11.28  entities, even if the ownership shares differ between the two 
 11.29  systems.  Wind energy conversion systems are not under common 
 11.30  ownership solely because the same person or entity provided 
 11.31  equity financing for the systems. 
 11.32     (d) The amount of payment for a qualified hydrogen 
 11.33  generation facility is $....... per standard cubic foot of 
 11.34  hydrogen produced.  
 11.35     Sec. 12.  [DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT; 
 11.36  PROGRAM DEVELOPMENT.] 
 12.1      Subdivision 1.  [DEVELOPMENT OF BUSINESSES ENGAGED IN 
 12.2   HYDROGEN PRODUCTION.] The department of trade and economic 
 12.3   development must develop a targeted program to promote and 
 12.4   encourage the development and attraction of businesses engaged 
 12.5   in the biocatalysis of agricultural and forestry plant products 
 12.6   for the production of hydrogen, the manufacture of hydrogen fuel 
 12.7   cells, and hydrogen electrolysis from renewable energy sources.  
 12.8   The program may make use of existing departmental programs, 
 12.9   either alone or in combination.  The department shall report to 
 12.10  the legislature by January 15, 2004, on legislative changes or 
 12.11  additional funding needed, if any, to accomplish the purposes of 
 12.12  this section.  
 12.13     Subd. 2.  [ENERGY INNOVATION ZONES.] (a) The commissioner 
 12.14  of trade and economic development, in consultation with the 
 12.15  commissioners of commerce and revenue, shall develop a plan to 
 12.16  designate not more than three energy innovation zones to spur 
 12.17  the development of fuel cells, fuel cell components, hydrogen 
 12.18  infrastructure, and other energy efficiency and renewable energy 
 12.19  technologies in the state.  In developing the criteria for the 
 12.20  designations, the commissioner shall consider: 
 12.21     (1) the availability of business, academic, and government 
 12.22  partners; 
 12.23     (2) the likelihood of establishing a distributed, renewable 
 12.24  energy microgrid to power the zone, providing below-market 
 12.25  electricity and heat to businesses, or greater reliability than 
 12.26  is available from the grid, from within the zone; 
 12.27     (3) the prospect of tenants for the zone that will 
 12.28  represent net new jobs to the state; and 
 12.29     (4) the likelihood of the production, storage, 
 12.30  distribution, and use of hydrogen, including its use in fuel 
 12.31  cells, for electricity and heat. 
 12.32     (b) Energy under paragraph (a), clause (2), must come from 
 12.33  one or more of the following renewable sources:  wind, water, 
 12.34  sun, biomass, not including municipal solid waste, or hydrogen 
 12.35  reformed from natural gas up to 2010. 
 12.36     (c) The plan must allow for interested parties to form 
 13.1   energy innovation cooperatives.  In addition, the commissioner 
 13.2   shall consider the feasibility of the sale of energy innovation 
 13.3   bonds for the construction of qualifying facilities. 
 13.4      (d) In drafting the plan, the commissioner shall consider 
 13.5   incentives for investment in the zone, including: 
 13.6      (1) subsidization of construction of qualifying facilities; 
 13.7      (2) long-term contracts for market-rate heat and power; 
 13.8      (3) exemption from laws giving exclusive service territory; 
 13.9      (4) streamlined interconnection to the existing power grid; 
 13.10     (5) exemptions from property tax; 
 13.11     (6) expedited permitting; 
 13.12     (7) methods for providing technical assistance; and 
 13.13     (8) other methods of encouraging the development and use 
 13.14  and development of fuel cell and hydrogen-generation 
 13.15  technologies. 
 13.16     (e) The commissioner shall report to the legislature by 
 13.17  January 15, 2004, on legislative changes and necessary funding 
 13.18  to accomplish the purposes of this subdivision. 
 13.19     Sec. 13.  [DEMONSTRATION PROJECT.] 
 13.20     (a) The department of commerce, in cooperation with the 
 13.21  department of trade and economic development, must develop and 
 13.22  issue a request for proposal for the construction of a 
 13.23  hydrogen-to-electricity demonstration project with the following 
 13.24  components:  
 13.25     (1) commercial-scale windmill-powered electrolysis of water 
 13.26  to hydrogen; 
 13.27     (2) on-site storage of hydrogen and fuel cells for 
 13.28  hydrogen-to-electricity conversion to maintain the supply of 
 13.29  electricity in the absence of wind; 
 13.30     (3) a hydrogen pipeline of less than ten miles to a public 
 13.31  facility demonstration site; and 
 13.32     (4) a public facility with on-site hydrogen fuel cells 
 13.33  providing hydrogen-to-electricity and heating/cooling function.  
 13.34     (b) For purposes of this section, a "public facility" is a 
 13.35  municipal building, public school, state college or university, 
 13.36  or other public building. 
 14.1      Sec. 14.  [EFFECTIVE DATE.] 
 14.2      Sections 1 to 11, 12, and 13 are effective the day 
 14.3   following final enactment.