Agenda - Council Work Session - 04/11/2023

Home

promoting the development of solar energy on MN CLP sites and also consider the adoption of a variety of policy and financial incentives. Policy and financial incentives are described in more detail in Section 5. The US Department of Energy's National Renewable Energy Laboratory recently completed a technical and economic analysis of a potential solar energy development for the Becker landfill. At the time this report was completed this analysis had not yet been vetted; however, the process and information provided in the analysis could be very helpful in explaining the potential for development on CLP sites in Minnesota. We recommend the state consider doing this analysis on the top ten sites identified in this study. 4.2 Specific Barriers to the Top Five Bond Restricted Sites and Specific Actions to Address those Barriers The top five bond restricted and top five non -bond restricted sites share the common barriers described in Section 4.1. In Section 4.2 we will focus on the barrier exclusive to the bond restricted sites: prior use of state tax-exempt GOBS to finance improvements. There are 55 CLP sites where MPCA used state GOBs to clean up the sites. It should be noted these CLP sites often contain more than one parcel of land and, in some cases, some of the parcels carry the bond restrictions and some do not. According to the MMB, federal tax law imposes certain restrictions on the parcels where funds from a GOB were spent, and restrict private benefits deriving from use of the parcels. The restrictions attach to parcels identified in a real property declaration recorded with the associated county by the MPCA and remain in place for 37.5 years from the last date when GOB funds were used. MMB reports private use under federal tax law may include site leases to private solar developers, energy output contracts governing the sale of solar energy generated onsite, or other revenue generating activities. MMB has indicated if solar energy systems are to be developed on GOB -restricted parcels, and if those developments benefit private parties such as developers or lessees, the GOB restrictions will first have to be removed. There are two methods MMB described under existing law for removing the restrictions: 1) allow the declaration as restricted property to expire at the end of the 37.5-year period, or 2) sell the GOB -restricted land at fair market value. A third possibility requiring new legislation was also discussed: retiring the GOB debt early through legislative appropriation and action releasing State bonding restrictions. Appendix D shows GOB expenditures by site, the estimated GOB expiration date, the acres of restricted parcels and the acres of unrestricted parcels. The next paragraphs describe the bond challenges in more detail and identify questions to be answered if solar is to be developed on GOB -restricted land. Expiration of 37.5-year time period. Waiting for GOB debt to expire at the end of the 37.5-year period may be challenging. Based on the table of GOB expenditures (Appendix D), the soonest some of the restricted parcels would be available is 2034 and the last restrictions would expire in 2056. GOB funds were expended over multiple years and some sites have multiple restricted parcels, all improved at different times. This suggests some individual sites may have GOB's retiring over a series of years, further complicating a solar development plan. 20