1.1                          A bill for an act
  1.2             relating to renewable energy; permitting certain 
  1.3             municipalities in the upper Minnesota river valley 
  1.4             region to establish a rural development financing 
  1.5             authority and establishing the Minnesota alternative 
  1.6             energy development authority; proposing coding for new 
  1.7             law as Minnesota Statutes, chapter 41D. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  [FINDINGS AND PURPOSE.] 
  1.10     The state has a vital interest in providing for increased 
  1.11  efficiency in energy consumption, the development and use of 
  1.12  renewable energy resources for energy production whenever 
  1.13  possible including, but not limited to, electric energy 
  1.14  installed capacity generated by farm grown closed-loop biomass, 
  1.15  and the accompanying development of Minnesota's rural economy. 
  1.16     The legislature finds that the public would significantly 
  1.17  benefit from energy derived through construction of electrical 
  1.18  generation facilities powered by the state's renewable resources.
  1.19     The legislature further finds that it is in the best 
  1.20  interests of the state and its residents to foster cooperation 
  1.21  between the public and the private sectors, including 
  1.22  cooperatives, in order to effectively use the state's renewable 
  1.23  resources for energy production. 
  1.24     The legislature further finds that the production of farm 
  1.25  grown closed-loop biomass crops such as alfalfa will provide 
  1.26  benefits to its residents, including improved soil conservation, 
  2.1   reduced reliance on pesticides and chemicals, and reduced 
  2.2   surface water contamination. 
  2.3      The legislature further finds that the development of the 
  2.4   state's renewable resources will add value to agricultural 
  2.5   products and create jobs that will strengthen and diversify the 
  2.6   state's rural economy. 
  2.7      The legislature further finds that the exercise of the 
  2.8   powers granted in this act are a valid public purpose that will 
  2.9   benefit the residents of the state and improve and otherwise 
  2.10  promote their health, welfare, and prosperity and that the 
  2.11  objectives of this act can best be accomplished by forming a 
  2.12  municipal corporation to be known as the Minnesota alternative 
  2.13  energy development authority and a public body corporate and 
  2.14  politic to be known as the upper Minnesota valley rural 
  2.15  development financing authority and giving powers, rights, 
  2.16  privileges, and immunities provided in this act to those bodies 
  2.17  to the extent and for the valid public purposes provided for in 
  2.18  this act. 
  2.19     Sec. 2.  [41D.01] [MINNESOTA ALTERNATIVE ENERGY DEVELOPMENT 
  2.20  AUTHORITY.] 
  2.21     Subdivision 1.  [ESTABLISHMENT AND PURPOSE.] An 
  2.22  organization is established as a municipal corporation and an 
  2.23  agency of the state of Minnesota to conduct business under the 
  2.24  name "Minnesota alternative energy development authority."  The 
  2.25  purpose of the corporation is to undertake one or more projects. 
  2.26  For purposes of this section, "project" means an undertaking by 
  2.27  the corporation consisting of a plant, works, system, 
  2.28  facilities, equipment, and real and personal property used or 
  2.29  useful in the generation, production, transmission, purchase, 
  2.30  sale, exchange, or interchange of electric energy or any 
  2.31  interest in the energy or energy capacity, including conversion 
  2.32  of farm grown biomass to fuel for production of electrical 
  2.33  energy. 
  2.34     Subd. 2.  [BOARD OF DIRECTORS.] The corporation is governed 
  2.35  by a board of five, six, or seven directors.  As used in this 
  2.36  section, "board" means the board of directors of the 
  3.1   corporation.  Except as otherwise provided, the term of each 
  3.2   director is six years.  The commissioners of agriculture and 
  3.3   trade and economic development are directors.  The remaining 
  3.4   directors must be appointed by the governor from among persons 
  3.5   with knowledge and experience in agriculture, including 
  3.6   production, research, manufacturing, distribution, or sales, and 
  3.7   persons representing geographic areas desiring to develop 
  3.8   alternative energy resources.  Two of the members of the initial 
  3.9   board must be appointed for terms of four years and two for 
  3.10  terms of two years, after which all members shall serve terms of 
  3.11  six years.  
  3.12     Subd. 3.  [COMPENSATION AND REPLACEMENT.] The governor 
  3.13  shall appoint persons to fill vacancies on the board.  Board 
  3.14  members must not receive per diem compensation but may be 
  3.15  reimbursed for expenses as provided in section 15.0575, 
  3.16  subdivision 3. 
  3.17     Subd. 4.  [DUTIES OF THE BOARD.] (a) The board of directors 
  3.18  shall adopt bylaws necessary for the conduct of the business of 
  3.19  the corporation consistent with this chapter.  The corporation 
  3.20  must publish the bylaws and amendments to the bylaws in the 
  3.21  State Register. 
  3.22     (b) The board shall locate and maintain the corporation's 
  3.23  place of business within the state. 
  3.24     (c) The board shall annually elect from among its members a 
  3.25  chair and other officers necessary for the performance of its 
  3.26  duties. 
  3.27     (d) The board shall meet at least annually and may hold 
  3.28  additional meetings on giving notice in accordance with the 
  3.29  bylaws of the corporation.  Board meetings are subject to 
  3.30  section 471.705. 
  3.31     Subd. 5.  [CONFLICT OF INTEREST.] A director of the 
  3.32  corporation may not vote on a decision of the board relating to 
  3.33  an organization in which the director has either a direct or 
  3.34  indirect financial interest. 
  3.35     Subd. 6.  [ECONOMIC INTEREST STATEMENTS.] Directors and 
  3.36  officers of the corporation are public officials for the purpose 
  4.1   of section 10A.09 and must file statements of economic interest 
  4.2   with the ethical practices board. 
  4.3      Subd. 7.  [NO BENEFIT TO PRIVATE INDIVIDUALS OR 
  4.4   CORPORATIONS.] The corporation may not provide any pecuniary 
  4.5   gain to a private individual, firm, or corporation, except the 
  4.6   payment of reasonable fees for goods and services rendered and 
  4.7   approved in accordance with the bylaws of the corporation, and 
  4.8   no part of the net income or net earnings of the corporation may 
  4.9   directly or indirectly be distributable to or otherwise inure to 
  4.10  the benefit of an individual. 
  4.11     Subd. 8.  [POWERS.] The corporation has the powers listed 
  4.12  in this subdivision and the powers necessary and convenient to 
  4.13  exercise the listed powers.  In exercising those powers, the 
  4.14  corporation is performing an essential governmental function and 
  4.15  exercising sovereign powers of the state. 
  4.16     (a) It may sue and be sued, complain and defend, and 
  4.17  participate as a party or otherwise in a legal, administrative, 
  4.18  or arbitration proceeding in its corporate name. 
  4.19     (b) It may purchase, lease, or otherwise acquire, own, 
  4.20  hold, improve, use, and otherwise deal in and with real or 
  4.21  personal property or any interest in that property wherever 
  4.22  situated. 
  4.23     (c) It may sell, convey, mortgage, create a security 
  4.24  interest in, lease, exchange, transfer, or otherwise dispose of 
  4.25  all or any part of its real and personal property or any 
  4.26  interest in it wherever situated.  A sale of property subject to 
  4.27  section 16A.695 may be made without the finding required under 
  4.28  subdivision 3 of that section that the property is no longer 
  4.29  usable or needed by the corporation to carry out the 
  4.30  governmental program for which it was acquired or constructed.  
  4.31  All other applicable provisions of section 16A.695 apply. 
  4.32     (d) It may take and hold real and personal property whether 
  4.33  or not of a kind sold or otherwise dealt in by the corporation 
  4.34  as security for the payment of money loaned, advanced, or 
  4.35  invested. 
  4.36     (e) It may elect or appoint officers, employees, and agents 
  5.1   of the corporation and define their duties and fix their 
  5.2   compensation. 
  5.3      (f) It may plan, acquire, construct, reconstruct, operate, 
  5.4   maintain, repair, extend, or improve one or more authorized 
  5.5   projects authorized within the state or acquire an interest in 
  5.6   or a right to capacity of a project and may act as agent, or 
  5.7   designate one or more of the other persons participating in a 
  5.8   project to act as its agent, in connection with the planning, 
  5.9   acquisition, construction, reconstruction, operation, 
  5.10  maintenance, repair, extensions, or improvement of the project. 
  5.11     (g) It may investigate the desirability or necessity for 
  5.12  additional sources and supplies of electric energy and 
  5.13  alternative renewable energy resources for energy production and 
  5.14  make studies, surveys, and estimates necessary to determine the 
  5.15  feasibility and cost. 
  5.16     (h) It may cooperate with another person in the development 
  5.17  of sources and supplies of electric energy and alternative 
  5.18  renewable energy resources for energy production. 
  5.19     (i) It may apply to a public agency for consents, 
  5.20  authorizations, or approvals required for an authorized project 
  5.21  and take all actions necessary to comply with any conditions 
  5.22  imposed. 
  5.23     (j) It may perform an authorized act through or by means of 
  5.24  its officers, agents, or employees or by contract with any 
  5.25  person. 
  5.26     (k) It may acquire, hold, use, and dispose of income, 
  5.27  revenues, funds, and money. 
  5.28     (l) It may invest in various technologies to minimize 
  5.29  long-term costs of providing electrical services to consumers.  
  5.30  These investments include energy conservation measures and 
  5.31  renewable resources. 
  5.32     (m) It may grant the use by franchise, lease, or otherwise 
  5.33  and make charges for the use of any property or facility owned 
  5.34  or controlled by it. 
  5.35     (n) It may borrow money and issue negotiable revenue bonds 
  5.36  or notes secured or unsecured in accordance with it. 
  6.1      (o) Subject to any agreement with bond holders or note 
  6.2   holders, it may invest money of the corporation not required for 
  6.3   immediate use, including proceeds from the sale of any bonds or 
  6.4   notes in obligations, securities, and other investments the 
  6.5   corporation considers prudent, notwithstanding the provisions of 
  6.6   any other law relating to the investment of public funds. 
  6.7      (p) It may determine the location and character of and all 
  6.8   other matters in connection with projects it is authorized to 
  6.9   acquire, hold, establish, effectuate, operate, or control. 
  6.10     (q) With or without advertising for bids, it may contract 
  6.11  with any person for the construction of a project or for the 
  6.12  sale or transmission of electric energy generated by a project 
  6.13  or for any interest in the energy or any right to energy 
  6.14  capacity on the terms and for the period its board of directors 
  6.15  determines. 
  6.16     (r) It may purchase, sell, exchange, or transmit electric 
  6.17  energy or alternative energy resources within and outside the 
  6.18  state in amounts it determines necessary and appropriate to make 
  6.19  the most effective use of its powers and to meet its 
  6.20  responsibilities, and may enter into agreements, with or without 
  6.21  advertising for bids, with any person with respect to that 
  6.22  purchase, sale, exchange, or transmission on the terms and for 
  6.23  the period its board of directors determines. 
  6.24     (s) It may procure insurance against losses in connection 
  6.25  with its property, operations, or assets in amounts and from 
  6.26  insurers it deems desirable. 
  6.27     (t) It may contract for and accept gifts, grants, or loans 
  6.28  of funds for property or financial or other aid in any form from 
  6.29  a public agency or another person and may comply, subject to 
  6.30  this section, with the terms and conditions of the gift, grant, 
  6.31  or loan. 
  6.32     (u) It may mortgage, pledge, and grant a security interest 
  6.33  in any of its real and personal properties, including contract 
  6.34  rights, to secure the payment of its bonds and notes or other 
  6.35  obligations or contracts. 
  6.36     (v) It may enter into management contracts or lease 
  7.1   agreements or both, with or without advertising for bids, to 
  7.2   design, develop, and operate electrical energy and alternative 
  7.3   energy facilities and other facilities to further the purposes 
  7.4   of this chapter.  Notwithstanding the provisions of subdivision 
  7.5   5 relating to the conflict of interest, a director or officer of 
  7.6   the corporation who is also a director, officer, or member of a 
  7.7   rural development financing authority and the corporation may 
  7.8   participate in and vote on the decision of the board as to the 
  7.9   terms and conditions of management contracts or lease agreements 
  7.10  between the rural development financing authority and the 
  7.11  corporation. 
  7.12     (w) The board may provide for promotional and advertising 
  7.13  programs to be developed and implemented either by its personnel 
  7.14  or by contract with outside personnel and paid for out of funds 
  7.15  other than bond revenues. 
  7.16     (x) It may exercise all other powers not inconsistent with 
  7.17  the constitution of the state or the United States Constitution 
  7.18  which powers may be reasonably necessary or appropriate for or 
  7.19  incidental to the effectuation of its authorized purposes or to 
  7.20  the exercise of any powers enumerated in this section and 
  7.21  generally may exercise in connection with its property and 
  7.22  affairs and in connection with the property within its control, 
  7.23  any and all powers which might be exercised by a natural person 
  7.24  or a private corporation in connection with similar property and 
  7.25  affairs. 
  7.26     Subd. 9.  [BONDS.] (a) The corporation may issue its bonds 
  7.27  or notes in principal amounts it considers necessary to provide 
  7.28  sufficient funds to carry out any of its corporate purposes and 
  7.29  powers, including but not limited to:  the acquisition or 
  7.30  construction of any project to be owned or leased, as lessor or 
  7.31  lessee, by the corporation or the acquisition of any interest 
  7.32  therein, or any right to capacity thereof; the funding or 
  7.33  refunding of the principal of or interest or redemption premiums 
  7.34  on any bonds or notes issued by it, whether or not the bonds or 
  7.35  notes or interest to be funded or refunded have or have not 
  7.36  become due; the establishment or increase of reserves to secure 
  8.1   or pay bonds or notes or interest on them; and the payment of 
  8.2   all other costs or expenses of the corporation incident to and 
  8.3   necessary or convenient to carry out its corporate purposes and 
  8.4   powers. 
  8.5      (b) Except as may be otherwise expressly provided by this 
  8.6   section, every issue of bonds or notes of the corporation is 
  8.7   payable out of any revenues or funds of the corporation, subject 
  8.8   only to any agreements with the holders of particular bonds or 
  8.9   notes pledging any particular revenues or funds.  The 
  8.10  corporation may issue bonds or notes including bonds or notes 
  8.11  the principal of and interest on which are payable exclusively 
  8.12  from the revenues of one or more projects or from an interest 
  8.13  therein or a right to capacity thereof, or from one or more 
  8.14  revenue-producing contracts made by the corporation with any 
  8.15  person or from its revenues generally.  Any such bonds or notes 
  8.16  may be additionally secured by a pledge of any grant, subsidy, 
  8.17  or contribution from any public agency or other person, or a 
  8.18  pledge of any income or revenues, funds, or money of the 
  8.19  corporation from any source. 
  8.20     (c) The bonds or notes of the corporation may be issued and 
  8.21  rents, rates, and charges may be established and pledged for 
  8.22  security of bonds or notes and interest and redemption premiums 
  8.23  without obtaining the consent of any department, division, 
  8.24  commission, board, bureau, or agency of the state, and without 
  8.25  any other proceeding or happening of any other condition or 
  8.26  occurrence except as specifically required by this section. 
  8.27     (d) The principal of and interest on any bonds or notes 
  8.28  issued by the corporation shall be payable solely from the 
  8.29  revenues or funds pledged or available for their payment, as 
  8.30  authorized in this section.  Each bond and note shall contain a 
  8.31  statement that the principal and interest is payable solely from 
  8.32  revenues or funds of the corporation, and that neither the state 
  8.33  nor any political subdivision other than the corporation is 
  8.34  obligated to pay the principal or interest on the bonds or 
  8.35  notes, and that neither the full faith and credit nor the taxing 
  8.36  power of the state or any political subdivision thereof or of 
  9.1   any city is pledged to the payment of the principal of or 
  9.2   interest on the bonds or notes. 
  9.3      (e) Section 453.55, subdivisions 3, 4, 5, 6, 7, 9, 10, 11, 
  9.4   and 12, apply to the bonds or notes of the corporation.  For 
  9.5   purposes of construing those subdivisions, the term "municipal 
  9.6   power agency" shall be deemed to refer to the corporation. 
  9.7      Subd. 10.  [EMPLOYEES.] Persons employed by the 
  9.8   corporation's contractors or lessees are not state employees and 
  9.9   may not participate in state retirement, deferred compensation 
  9.10  insurance, or other plans that apply to state employees 
  9.11  generally, and are not subject to regulation by the state 
  9.12  ethical practices board. 
  9.13     Subd. 11.  [ACCOUNTS; AUDITS.] The corporation may 
  9.14  establish funds and accounts that it finds convenient.  The 
  9.15  board shall provide for and pay the cost of an independent 
  9.16  annual audit of its official books and records by the 
  9.17  legislative auditor subject to sections 3.971 and 3.972.  A copy 
  9.18  of this audit must be filed with the secretary of state. 
  9.19     Subd. 12.  [ANNUAL REPORT.] The board shall submit a report 
  9.20  to the chairs of the senate economic development and housing 
  9.21  committee, and the house economic development committee of the 
  9.22  legislature and the governor on the activities of the 
  9.23  corporation and its contractors and lessees by February 1 of 
  9.24  each year.  The report must include at least the following: 
  9.25     (1) a description of each of the programs that the 
  9.26  corporation has provided or undertaken at some time during the 
  9.27  previous year; 
  9.28     (2) an identification of the sources of funding in the 
  9.29  previous year for the corporation and its program, including 
  9.30  federal, state, and local governments, foundations, gifts, 
  9.31  donations, fees, and all other sources; 
  9.32     (3) a description of the administrative expenses of the 
  9.33  corporation during the previous year; 
  9.34     (4) a listing of the assets and liabilities of the 
  9.35  corporation at the end of the previous fiscal year; 
  9.36     (5) a description of any changes made to the operational 
 10.1   plan during the previous year; and 
 10.2      (6) a description of any newly adopted or significant 
 10.3   changes to the bylaws, policies, rules, or programs created or 
 10.4   administered by the corporation during the previous year. 
 10.5      Reports must be made to the legislature as required by 
 10.6   section 3.195. 
 10.7      Subd. 13.  [PROPERTY TAX STATUS.] Property of the 
 10.8   corporation is exempt from taxation on its value in the same 
 10.9   manner as property listed in section 272.02, subdivision 1.  The 
 10.10  corporation shall negotiate a payment in lieu of taxes with the 
 10.11  local government units within which its facilities are located. 
 10.12     Subd. 14.  [DISSOLUTION.] Upon dissolution of the 
 10.13  corporation for any reason, its wholly owned assets become state 
 10.14  property.  Partially owned assets become state property to the 
 10.15  extent that state money was used to acquire them. 
 10.16     Sec. 3.  [UPPER MINNESOTA VALLEY RURAL DEVELOPMENT 
 10.17  FINANCING AUTHORITY.] 
 10.18     Subdivision 1.  [ESTABLISHMENT.] A public body corporate 
 10.19  and politic to be known as the upper Minnesota valley rural 
 10.20  development financing authority is created in order to promote, 
 10.21  advertise, improve, and develop the economic and agricultural 
 10.22  resources in its area of operation, including but not limited to 
 10.23  development or ownership or both of alfalfa processing 
 10.24  facilities and biomass electric generation facilities.  The 
 10.25  authority has all the powers of a rural development financing 
 10.26  authority under Minnesota Statutes, sections 469.142 to 469.151; 
 10.27  all the powers of a port authority under Minnesota Statutes, 
 10.28  sections 469.048 to 469.068; all the powers of an economic 
 10.29  development authority under Minnesota Statutes, sections 469.090 
 10.30  to 469.1081; all the powers of a county or multicounty housing 
 10.31  and redevelopment authority under Minnesota Statutes, sections 
 10.32  469.001 to 469.047; and all the powers of a city under Minnesota 
 10.33  Statutes, chapter 453, except as otherwise provided in this 
 10.34  section.  For the purposes of this section, "authority" means 
 10.35  the upper Minnesota valley rural development financing authority.
 10.36     Subd. 2.  [ELIGIBLE MEMBERS.] Eligible members of the 
 11.1   authority are those cities, counties, and towns located within a 
 11.2   50-mile radius of the city of Granite Falls, the governing 
 11.3   bodies of which have adopted a resolution meeting the 
 11.4   requirements of Minnesota Statutes, sections 469.093, 
 11.5   subdivision 1, and 469.144, subdivision 1, provided that a 
 11.6   public hearing is not required.  The territory of the members 
 11.7   need not be contiguous.  Municipalities seeking membership after 
 11.8   the initial organizational meeting of the commissioners 
 11.9   described in subdivision 4 must be approved by a majority vote 
 11.10  of the commissioners then holding office. 
 11.11     Subd. 3.  [AREA OF OPERATION.] The area of operation of the 
 11.12  authority includes the entire territory of all its member 
 11.13  cities, counties, and towns.  Any project undertaken by the 
 11.14  authority, which by statute is required to be approved by the 
 11.15  municipality in which the project is located, must be approved 
 11.16  by the governing body of the municipality within which the 
 11.17  project is located. 
 11.18     Subd. 4.  [COMMISSIONERS.] The authority consists of 
 11.19  commissioners appointed by the governing bodies of the member 
 11.20  municipalities.  Each member municipality may appoint one 
 11.21  commissioner.  The commissioners initially appointed by the 
 11.22  governing bodies of the municipalities shall serve staggered 
 11.23  terms of one, two, three, four, five, and six years as evenly 
 11.24  distributed among the commissioners as is reasonably possible.  
 11.25  Thereafter, commissioners must be appointed for six-year terms, 
 11.26  except that vacancies during a term must be filled for the 
 11.27  unexpired portion of the term in the manner in which the 
 11.28  original appointment was made.  Commissioners must be 
 11.29  compensated, reimbursed, and removed for cause by the governing 
 11.30  bodies which appointed them in the manner provided in Minnesota 
 11.31  Statutes, section 469.095. 
 11.32     Subd. 5.  [UNORGANIZED TERRITORY.] The county board shall 
 11.33  act as a town board with respect to an unorganized territory 
 11.34  within its jurisdictional limits.