1.1                          A bill for an act 
  1.2             relating to energy; establishing a pilot program 
  1.3             allowing increased state participation in loans for 
  1.4             farm wind energy conversion facilities; providing an 
  1.5             incentive for certain wind energy facilities; 
  1.6             regulating contracts used to satisfy a wind power 
  1.7             mandate; amending Minnesota Statutes 1996, sections 
  1.8             216B.2423, by adding a subdivision; and 216C.41, 
  1.9             subdivision 1. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1996, section 216B.2423, is 
  1.12  amended by adding a subdivision to read: 
  1.13     Subd. 3.  [STANDARD CONTRACTS FOR WIND ENERGY CONVERSION 
  1.14  SYSTEMS.] The public utilities commission shall require a public 
  1.15  utility subject to subdivision 1 to develop and file in a form 
  1.16  acceptable to the commission by October 1, 1997, a standard form 
  1.17  contract for the purchase of electricity from wind conversion 
  1.18  systems with installed capacity of one megawatt and less.  For 
  1.19  purposes of applying the one megawatt limit, the installed 
  1.20  capacity sold to the public utility from a single seller or 
  1.21  affiliated group of sellers shall be cumulated.  The standard 
  1.22  contract shall include all the terms and conditions for 
  1.23  purchasing wind-generated power by the utility, except for price 
  1.24  and any other specific terms necessary to ensure system 
  1.25  reliability and safety, which shall be separately negotiable. 
  1.26     Sec. 2.  Minnesota Statutes 1996, section 216C.41, 
  1.27  subdivision 1, is amended to read: 
  2.1      Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
  2.2   subdivision apply to this section: 
  2.3      (b) "Qualified hydroelectric facility" means a 
  2.4   hydroelectric generating facility in this state that: 
  2.5      (1) is located at the site of a dam, if the dam was in 
  2.6   existence as of March 31, 1994; and 
  2.7      (2) begins generating electricity after July 1, 1994. 
  2.8      (c) "Qualified wind energy conversion facility" means a 
  2.9   wind energy conversion system that: 
  2.10     (1) is located within one county and owned by a natural 
  2.11  person who owns the land where the facility is sited, or is a 
  2.12  farm-generated wind energy production facility qualifying under 
  2.13  section 41B.046, subdivision 1; 
  2.14     (2) for the period between July 1, 1997, and June 30, 1999, 
  2.15  produces two megawatts or less of electricity as measured by 
  2.16  nameplate rating; and 
  2.17     (3) that begins generating electricity after June 30, 1997. 
  2.18  ; and 
  2.19     (2) for the period after June 30, 1999, produces two 
  2.20  megawatts or less of electricity as measured by nameplate rating 
  2.21  and is: 
  2.22     (i) located within one county and owned by a natural person 
  2.23  who owns the land where the facility is sited; 
  2.24     (ii) owned by a Minnesota small business as defined by 
  2.25  regulations promulgated by the federal Small Business 
  2.26  Administration, or a special purpose corporation; 
  2.27     (iii) owned by a nonprofit organization; or 
  2.28     (iv) owned by a tribal council if the facility is located 
  2.29  within the boundaries of the reservation. 
  2.30     Sec. 3.  [AGRICULTURAL IMPROVEMENTS; WIND ENERGY CONVERSION 
  2.31  FACILITY PILOT PROGRAM.] 
  2.32     Subdivision 1.  [LOANS AUTHORIZED.] The Minnesota rural 
  2.33  finance authority may establish a pilot program to participate 
  2.34  in loans to an eligible borrower through the agricultural 
  2.35  improvement loan program under Minnesota Statutes, section 
  2.36  41B.043, for wind energy conversion facilities.  Except as 
  3.1   specifically provided in subdivision 2, all loans made under 
  3.2   this section must comply with Minnesota Statutes, chapter 41B. 
  3.3      Subd. 2.  [LOAN PARTICIPATION; REPAYMENT; LIFETIME LIMIT 
  3.4   EXCLUSION.] Participation by the authority under this section is 
  3.5   limited to a total of $3,000,000.  The authority is limited on a 
  3.6   particular loan to 85 percent of the principal amount or 
  3.7   $500,000, whichever is less.  A loan must have a term of no more 
  3.8   than 15 years.  Loans under this section must not be included in 
  3.9   the lifetime limitation calculated under Minnesota Statutes, 
  3.10  section 41B.03, subdivision 1. 
  3.11     Subd. 3.  [REPORT.] By January 15, 1999, the rural finance 
  3.12  authority must report to the senate committee on agriculture and 
  3.13  rural development, the senate environment and agriculture budget 
  3.14  division, the house committee on agriculture, and the house 
  3.15  committee on environmental finance on the status of loans made 
  3.16  under this pilot program.  The report must include 
  3.17  recommendations on whether to make permanent changes to the 
  3.18  agricultural improvement loan program that allow for increased 
  3.19  participation by the state in wind energy conversion facility 
  3.20  loans.