1.1                          A bill for an act 
  1.2             relating to municipalities; extending the maximum 
  1.3             length of guaranteed energy savings contracts from ten 
  1.4             to 15 years; amending Minnesota Statutes 2002, section 
  1.5             471.345, subdivision 13. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2002, section 471.345, 
  1.8   subdivision 13, is amended to read: 
  1.9      Subd. 13.  [ENERGY EFFICIENCY PROJECTS.] The following 
  1.10  definitions apply to this subdivision. 
  1.11     (a) "Energy conservation measure" means a training program 
  1.12  or facility alteration designed to reduce energy consumption or 
  1.13  operating costs and includes: 
  1.14     (1) insulation of the building structure and systems within 
  1.15  the building; 
  1.16     (2) storm windows and doors, caulking or weatherstripping, 
  1.17  multiglazed windows and doors, heat absorbing or heat reflective 
  1.18  glazed and coated window and door systems, additional glazing, 
  1.19  reductions in glass area, and other window and door system 
  1.20  modifications that reduce energy consumption; 
  1.21     (3) automatic energy control systems; 
  1.22     (4) heating, ventilating, or air conditioning system 
  1.23  modifications or replacements; 
  1.24     (5) replacement or modifications of lighting fixtures to 
  1.25  increase the energy efficiency of the lighting system without 
  2.1   increasing the overall illumination of a facility, unless an 
  2.2   increase in illumination is necessary to conform to the 
  2.3   applicable state or local building code for the lighting system 
  2.4   after the proposed modifications are made; 
  2.5      (6) energy recovery systems; 
  2.6      (7) cogeneration systems that produce steam or forms of 
  2.7   energy such as heat, as well as electricity, for use primarily 
  2.8   within a building or complex of buildings; 
  2.9      (8) energy conservation measures that provide long-term 
  2.10  operating cost reductions.  
  2.11     (b) "Guaranteed energy savings contract" means a contract 
  2.12  for the evaluation and recommendations of energy conservation 
  2.13  measures, and for one or more energy conservation measures.  The 
  2.14  contract must provide that all payments, except obligations on 
  2.15  termination of the contract before its expiration, are to be 
  2.16  made over time, but not to exceed ten 15 years from the date of 
  2.17  final installation, and the savings are guaranteed to the extent 
  2.18  necessary to make payments for the systems. 
  2.19     (c) "Qualified provider" means a person or business 
  2.20  experienced in the design, implementation, and installation of 
  2.21  energy conservation measures.  A qualified provider to whom the 
  2.22  contract is awarded shall give a sufficient bond to the 
  2.23  municipality for its faithful performance. 
  2.24     Notwithstanding any law to the contrary, a municipality may 
  2.25  enter into a guaranteed energy savings contract with a qualified 
  2.26  provider to significantly reduce energy or operating costs. 
  2.27     Before entering into a contract under this subdivision, the 
  2.28  municipality shall provide published notice of the meeting in 
  2.29  which it proposes to award the contract, the names of the 
  2.30  parties to the proposed contract, and the contract's purpose. 
  2.31     Before installation of equipment, modification, or 
  2.32  remodeling, the qualified provider shall first issue a report, 
  2.33  summarizing estimates of all costs of installations, 
  2.34  modifications, or remodeling, including costs of design, 
  2.35  engineering, installation, maintenance, repairs, or debt 
  2.36  service, and estimates of the amounts by which energy or 
  3.1   operating costs will be reduced. 
  3.2      A guaranteed energy savings contract that includes a 
  3.3   written guarantee that savings will meet or exceed the cost of 
  3.4   energy conservation measures is not subject to competitive 
  3.5   bidding requirements of section 471.345 or other law or city 
  3.6   charter.  The contract is not subject to section 123B.52. 
  3.7      A municipality may enter into a guaranteed energy savings 
  3.8   contract with a qualified provider if, after review of the 
  3.9   report, it finds that the amount it would spend on the energy 
  3.10  conservation measures recommended in the report is not likely to 
  3.11  exceed the amount to be saved in energy and operation costs over 
  3.12  ten 15 years from the date of installation if the 
  3.13  recommendations in the report were followed, and the qualified 
  3.14  provider provides a written guarantee that the energy or 
  3.15  operating cost savings will meet or exceed the costs of the 
  3.16  system.  The guaranteed energy savings contract may provide for 
  3.17  payments over a period of time, not to exceed ten 15 years. 
  3.18     A municipality may enter into an installment payment 
  3.19  contract for the purchase and installation of energy 
  3.20  conservation measures.  The contract must provide for payments 
  3.21  of not less than one-tenth 1/15 of the price to be paid within 
  3.22  two years from the date of the first operation, and the 
  3.23  remaining costs to be paid monthly, not to exceed a ten-year 
  3.24  15-year term from the date of the first operation. 
  3.25     Guaranteed energy savings contracts may extend beyond the 
  3.26  fiscal year in which they become effective.  The municipality 
  3.27  shall include in its annual appropriations measure for each 
  3.28  later fiscal year any amounts payable under guaranteed energy 
  3.29  savings contracts during the year.  Failure of a municipality to 
  3.30  make such an appropriation does not affect the validity of the 
  3.31  guaranteed energy savings contract or the municipality's 
  3.32  obligations under the contracts. 
  3.33     Sec. 2.  [EFFECTIVE DATE.] 
  3.34     This act is effective the day following final enactment.