Bill Text: MN HF3278 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Energy forward pricing mechanism for government agencies provisions modified.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-03-24 - Introduction and first reading, referred to Energy Policy [HF3278 Detail]
Download: Minnesota-2013-HF3278-Introduced.html
1.2relating to local government; modifying provisions governing energy forward
1.3pricing mechanisms for government agencies;amending Minnesota Statutes
1.42012, section 16C.143; repealing Minnesota Statutes 2012, sections 383B.1588;
1.5473.1293.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 16C.143, is amended to read:
1.816C.143 ENERGY FORWARD PRICING MECHANISMS.
1.9 Subdivision 1. Definitions. The following definitions apply in this section:
1.10(1) "energy" means natural gas, heating oil, propane, diesel fuel, unleaded fuel, and
1.11any other energy sourceexcept electricity used in state operations; and
1.12(2) "forward pricing mechanism" means either: (i) a contract or financial instrument
1.13that obligates astate government agency to buy or sell a specified quantity of energy
1.14at a future date at a set price.; or (ii) an option to buy or sell the contract or financial
1.15instrument; and
1.16(3) "government agency" means the state, the Minnesota state colleges and
1.17universities, the University of Minnesota, a statutory or home rule charter city, a county, a
1.18town, a school district, a regional agency, or another political subdivision.
1.19 Subd. 2. Authority. Notwithstanding any other law to the contrary,the commissioner
1.20 a government agency may use forward pricing mechanisms for budget risk reduction.
1.21 Subd. 3. Conditions.Forward pricing mechanism transactions must be made only
1.22under the following conditions:
2.1(1) The quantity of energy affected by the forward pricing mechanism must not
2.2exceed90 percent of the estimated energy use for the state government agency for the same
2.3period, which shall not exceed24 48 months from the trade date of the transaction; and.
2.4(2) a separate account must be established for each state agency using a forward
2.5pricing mechanism.
2.6 Subd. 4. Written policies and procedures. Before exercising the authority under
2.7this section, thecommissioner government agency must develop written policies and
2.8procedures governing the use of forward pricing mechanisms.
2.9 Subd. 5. Oversight process. Before exercising authority under subdivision 2,
2.10the government agency must establish an oversight process that provides for review of
2.11the government agency's use of forward pricing mechanisms. The oversight process
2.12must include: internal or external audit reviews in a manner prescribed by the state
2.13auditor; annual reports to, and review by, an internal investment committee; and internal
2.14management control.
2.15EFFECTIVE DATE.This section is effective July 1, 2014, and applies to forward
2.16pricing transactions entered into on or after that date.
2.17 Sec. 2. REPEALER.
2.18Minnesota Statutes 2012, sections 383B.1588; and 473.1293, are repealed.
2.19EFFECTIVE DATE.This section is effective July 1, 2014. The authority
2.20previously granted by Minnesota Statutes, sections 383B.1588 and 473.1293, is granted
2.21under Minnesota Statutes, section 16C.143, and the repeal of Minnesota Statutes, sections
2.22383B.1588 and 473.1293, does not affect any forward pricing transaction entered into
2.23before the effective date of this section.
1.3pricing mechanisms for government agencies;amending Minnesota Statutes
1.42012, section 16C.143; repealing Minnesota Statutes 2012, sections 383B.1588;
1.5473.1293.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 16C.143, is amended to read:
1.816C.143 ENERGY FORWARD PRICING MECHANISMS.
1.9 Subdivision 1. Definitions. The following definitions apply in this section:
1.10(1) "energy" means natural gas, heating oil, propane, diesel fuel, unleaded fuel, and
1.11any other energy source
1.12(2) "forward pricing mechanism" means either: (i) a contract or financial instrument
1.13that obligates a
1.14at a future date at a set price
1.15instrument; and
1.16(3) "government agency" means the state, the Minnesota state colleges and
1.17universities, the University of Minnesota, a statutory or home rule charter city, a county, a
1.18town, a school district, a regional agency, or another political subdivision.
1.19 Subd. 2. Authority. Notwithstanding any other law to the contrary,
1.20 a government agency may use forward pricing mechanisms for budget risk reduction.
1.21 Subd. 3. Conditions.
1.22
2.1
2.2exceed
2.3period, which shall not exceed
2.4
2.5
2.6 Subd. 4. Written policies and procedures. Before exercising the authority under
2.7this section, the
2.8procedures governing the use of forward pricing mechanisms.
2.9 Subd. 5. Oversight process. Before exercising authority under subdivision 2,
2.10the government agency must establish an oversight process that provides for review of
2.11the government agency's use of forward pricing mechanisms. The oversight process
2.12must include: internal or external audit reviews in a manner prescribed by the state
2.13auditor; annual reports to, and review by, an internal investment committee; and internal
2.14management control.
2.15EFFECTIVE DATE.This section is effective July 1, 2014, and applies to forward
2.16pricing transactions entered into on or after that date.
2.17 Sec. 2. REPEALER.
2.18Minnesota Statutes 2012, sections 383B.1588; and 473.1293, are repealed.
2.19EFFECTIVE DATE.This section is effective July 1, 2014. The authority
2.20previously granted by Minnesota Statutes, sections 383B.1588 and 473.1293, is granted
2.21under Minnesota Statutes, section 16C.143, and the repeal of Minnesota Statutes, sections
2.22383B.1588 and 473.1293, does not affect any forward pricing transaction entered into
2.23before the effective date of this section.
