1.1                          A bill for an act
  1.2             relating to energy; providing incentives for use of 
  1.3             renewable biodiesel fuel; amending Minnesota Statutes 
  1.4             2001 Supplement, section 216C.41, subdivisions 1, 2, 
  1.5             3, 4, 5. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2001 Supplement, section 
  1.8   216C.41, subdivision 1, is amended to read: 
  1.9      Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
  1.10  subdivision apply to this section. 
  1.11     (b) "Qualified hydroelectric facility" means a 
  1.12  hydroelectric generating facility in this state that: 
  1.13     (1) is located at the site of a dam, if the dam was in 
  1.14  existence as of March 31, 1994; and 
  1.15     (2) begins generating electricity after July 1, 1994, or 
  1.16  generates electricity after substantial refurbishing of a 
  1.17  facility that begins after July 1, 2001. 
  1.18     (c) "Qualified wind energy conversion facility" means a 
  1.19  wind energy conversion system that: 
  1.20     (1) produces two megawatts or less of electricity as 
  1.21  measured by nameplate rating and begins generating electricity 
  1.22  after December 31, 1996, and before July 1, 1999; 
  1.23     (2) begins generating electricity after June 30, 1999, 
  1.24  produces two megawatts or less of electricity as measured by 
  1.25  nameplate rating, and is: 
  2.1      (i) located within one county and owned by a natural person 
  2.2   who owns the land where the facility is sited; 
  2.3      (ii) owned by a Minnesota small business as defined in 
  2.4   section 645.445; 
  2.5      (iii) owned by a nonprofit organization; or 
  2.6      (iv) owned by a tribal council if the facility is located 
  2.7   within the boundaries of the reservation; or 
  2.8      (3) begins generating electricity after June 30, 1999, 
  2.9   produces seven megawatts or less of electricity as measured by 
  2.10  nameplate rating, and: 
  2.11     (i) is owned by a cooperative organized under chapter 308A; 
  2.12  and 
  2.13     (ii) all shares and membership in the cooperative are held 
  2.14  by natural persons or estates, at least 51 percent of whom 
  2.15  reside in a county or contiguous to a county where the wind 
  2.16  energy production facilities of the cooperative are located. 
  2.17     (d) "Qualified on-farm biogas recovery facility" means an 
  2.18  anaerobic digester system that: 
  2.19     (1) is located at the site of an agricultural operation; 
  2.20     (2) is owned by a natural person who owns or rents the land 
  2.21  where the facility is located; and 
  2.22     (3) begins generating electricity after July 1, 2001.  
  2.23     (e) "Anaerobic digester system" means a system of 
  2.24  components that processes animal waste based on the absence of 
  2.25  oxygen and produces gas used to generate electricity. 
  2.26     (f) "Qualified biodiesel generation facility" means an 
  2.27  electric power generation facility located in this state that 
  2.28  uses a fuel blend of at least 85 percent biodiesel fuel. 
  2.29     (g) "Biodiesel fuel" means a renewable, biodegradable, mono 
  2.30  alkyl ester combustible liquid fuel derived from agricultural 
  2.31  plant oils or animal fats and that meets American Society for 
  2.32  Testing and Materials Specification ASTM D 6751-02 for Biodiesel 
  2.33  Fuel (B100) Blend Stock for Distillate Fuels.  
  2.34     Sec. 2.  Minnesota Statutes 2001 Supplement, section 
  2.35  216C.41, subdivision 2, is amended to read: 
  2.36     Subd. 2.  [INCENTIVE PAYMENT; APPROPRIATION.] (a) Incentive 
  3.1   payments must be made according to this section to:  
  3.2      (1) a qualified on-farm biogas recovery facility,; 
  3.3      (2) the owner or operator of a qualified hydropower 
  3.4   facility or qualified wind energy conversion facility for 
  3.5   electric energy generated and sold by the facility,; 
  3.6      (3) a publicly owned hydropower facility for electric 
  3.7   energy that is generated by the facility and used by the owner 
  3.8   of the facility outside the facility, or; 
  3.9      (4) the owner of a publicly owned dam that is in need of 
  3.10  substantial repair, for electric energy that is generated by a 
  3.11  hydropower facility at the dam and, provided the annual 
  3.12  incentive payments will be are used either (i) to fund the 
  3.13  structural repairs and replacement of structural components of 
  3.14  the dam, or (ii) to retire debt incurred to fund those repairs; 
  3.15  or 
  3.16     (5) the owner or operator of a qualified biodiesel 
  3.17  generation facility.  
  3.18     (b) Payment may only be made upon receipt by the 
  3.19  commissioner of finance of an incentive payment application that 
  3.20  establishes that the applicant is eligible to receive an 
  3.21  incentive payment and that satisfies other requirements the 
  3.22  commissioner deems necessary.  The application must be in a form 
  3.23  and submitted at a time the commissioner establishes.  
  3.24     (c) There is annually appropriated from the general fund 
  3.25  sums sufficient to make the payments required under this section.
  3.26     Sec. 3.  Minnesota Statutes 2001 Supplement, section 
  3.27  216C.41, subdivision 3, is amended to read: 
  3.28     Subd. 3.  [ELIGIBILITY WINDOW.] Payments may be made under 
  3.29  this section only for electricity generated: 
  3.30     (1) from a qualified hydroelectric facility that is 
  3.31  operational and generating electricity before December 31, 2005; 
  3.32     (2) from a qualified wind energy conversion facility that 
  3.33  is operational and generating electricity before January 1, 
  3.34  2005; or 
  3.35     (3) from a qualified on-farm biogas recovery facility from 
  3.36  July 1, 2001, through December 31, 2015; or 
  4.1      (4) from a qualified biodiesel generation facility that is 
  4.2   operational and generating electricity after June 1, 2003. 
  4.3      Sec. 4.  Minnesota Statutes 2001 Supplement, section 
  4.4   216C.41, subdivision 4, is amended to read: 
  4.5      Subd. 4.  [PAYMENT PERIOD.] (a) A facility may receive 
  4.6   payments under this section for a ten-year period.  No payment 
  4.7   under this section may be made for electricity generated: 
  4.8      (1) by a qualified hydroelectric facility after December 
  4.9   31, 2015; 
  4.10     (2) by a qualified wind energy conversion facility after 
  4.11  December 31, 2015; or 
  4.12     (3) by a qualified on-farm biogas recovery facility after 
  4.13  December 31, 2015; or 
  4.14     (4) by a qualified biodiesel generation facility after 
  4.15  December 31, 2015.  
  4.16     (b) The payment period begins and runs consecutively from 
  4.17  the first year in which electricity generated from the facility 
  4.18  is eligible for incentive payment or after substantial repairs 
  4.19  to the hydropower facility dam funded by the incentive payments 
  4.20  are initiated. 
  4.21     Sec. 5.  Minnesota Statutes 2001 Supplement, section 
  4.22  216C.41, subdivision 5, is amended to read: 
  4.23     Subd. 5.  [AMOUNT OF PAYMENT.] (a) An incentive payment is 
  4.24  based on the number of kilowatt hours of electricity generated. 
  4.25  The amount of the payment is: 
  4.26     (1) for a facility described under subdivision 2, paragraph 
  4.27  (a), clause (4), 1.0 cents per kilowatt hour; and 
  4.28     (2) for all other facilities, 1.5 cents per kilowatt hour.  
  4.29  For electricity generated by qualified wind energy conversion 
  4.30  facilities, the incentive payment under this section is limited 
  4.31  to no more than 100 megawatts of nameplate capacity.  During any 
  4.32  period in which qualifying claims for incentive payments exceed 
  4.33  100 megawatts of nameplate capacity, the payments must be made 
  4.34  to producers in the order in which the production capacity was 
  4.35  brought into production.  
  4.36  For electricity generated by qualified biodiesel generation 
  5.1   facilities, the incentive payment under this section is limited 
  5.2   to no more than 50 megawatts of nameplate capacity.  During any 
  5.3   period in which qualifying claims for incentive payments exceed 
  5.4   that 50 megawatts, the payments must be made to producers in the 
  5.5   order in which the production capacity was brought into 
  5.6   production.  
  5.7      (b) Beginning January 1, 2002, the total size of a wind 
  5.8   energy conversion system under this section must be determined 
  5.9   according to this paragraph.  Unless the systems are 
  5.10  interconnected with different distribution systems, the 
  5.11  nameplate capacity of one wind energy conversion system must be 
  5.12  combined with the nameplate capacity of any other wind energy 
  5.13  conversion system that is: 
  5.14     (1) located within five miles of the wind energy conversion 
  5.15  system; 
  5.16     (2) constructed within the same calendar year as the wind 
  5.17  energy conversion system; and 
  5.18     (3) under common ownership. 
  5.19  In the case of a dispute, the commissioner of commerce shall 
  5.20  determine the total size of the system, and shall draw all 
  5.21  reasonable inferences in favor of combining the systems. 
  5.22     (c) In making a determination under paragraph (b), the 
  5.23  commissioner of commerce may determine that two wind energy 
  5.24  conversion systems are under common ownership when the 
  5.25  underlying ownership structure contains similar persons or 
  5.26  entities, even if the ownership shares differ between the two 
  5.27  systems.  Wind energy conversion systems are not under common 
  5.28  ownership solely because the same person or entity provided 
  5.29  equity financing for the systems.