1.1 A bill for an act
1.2 relating to energy; establishing a process to compensate businesses for loss of
1.3 business opportunity resulting from sale and closure of a biomass energy plant.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. BIOMASS BUSINESS COMPENSATION.
1.6 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
1.7the meanings given.
1.8 (b) "Biomass plant" means the biomass plant identified under Minnesota Statutes, section
1.9116C.779, subdivision 1, paragraph (f).
1.10 (c) "Early termination" means the early termination of the power purchase agreement
1.11authorized under Minnesota Statutes, section 216B.2424, subdivision 9, with the biomass
1.12plant.
1.13 (d) "Operating income" means a business's revenue minus its operating expenses.
1.14 Subd. 2.Office of Administrative Hearings; claims process.(a) The chief
1.15administrative law judge of the Office of Administrative Hearings must assign an
1.16administrative law judge to administer a claims award process to compensate businesses
1.17negatively affected by the early termination. The chief administrative law judge may develop
1.18a process, prescribe forms, identify documentation affected businesses must submit with
1.19claims, and issue awards to eligible businesses consistent with this section. The process
1.20must allow, but not require, an authorized representative from each business that applies
1.21for compensation to appear in person before the assigned administrative law judge to provide
1.22evidence in support of the business's claim.
1Section 1.
REVISOR RSI/EN 25-0124501/13/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 1772
NINETY-FOURTH SESSION
Authored by Van Binsbergen03/03/2025
The bill was read for the first time and referred to the Committee on State Government Finance and Policy 2.1 (b) The chief administrative law judge may contract with and use the services of financial
2.2or other consultants to examine financial documentation presented by claimants or otherwise
2.3assist in the evaluation and award of claims.
2.4 (c) Records submitted to the Office of Administrative Hearings as part of the claims
2.5process constitute business data under Minnesota Statutes, section 13.591.
2.6 (d) An award made under this section is final and is not subject to judicial review.
2.7 (e) An award made under this section does not constitute an admission of liability by
2.8the state for any damages or other losses suffered by a business affected by the early
2.9termination.
2.10 Subd. 3.Eligibility.To be eligible for an award of compensation, an affected business
2.11must meet the following criteria:
2.12 (1) as of May 1, 2017, the affected business was operating under the terms of a valid
2.13written contract, or an oral contract that is sufficiently supported by business records, with
2.14the company operating the biomass plant or the fertilizer plant integrated with the biomass
2.15plant to supply or manage material for, or receive material from, the biomass plant or the
2.16fertilizer plant integrated with the biomass plant;
2.17 (2) the affected business is located in Minnesota; and
2.18 (3) as the result of the early termination, the affected business suffered:
2.19 (i) decreased operating income; or
2.20 (ii) the loss of value of investments in real or personal property essential to business
2.21operations with the biomass plant.
2.22 Subd. 4.Types of claims.(a) An eligible business may make claims for a compensation
2.23award based on either or both:
2.24 (1) decreased operating income; or
2.25 (2) the loss of value of investments in real or personal property essential to business
2.26operations with the biomass plant.
2.27 (b) To establish and quantify a claim for decreased operating income, an eligible business
2.28must:
2.29 (1) demonstrate the eligible business's operating income over the past five years derived
2.30from supplying or managing material for, or receiving material from, the biomass plant;
2Section 1.
REVISOR RSI/EN 25-0124501/13/25 3.1 (2) present evidence of any alternative business opportunities the eligible business has
3.2pursued or could pursue to mitigate the loss of revenue from the termination of its contract
3.3with the biomass plant; and
3.4 (3) demonstrate the amount that the business's annual operating income, including
3.5operating income from any alternative business opportunities, after the termination of the
3.6business's contract with the biomass plant is less than the five-year average of the business's
3.7annual operating income before the early termination.
3.8 (c) To establish and quantify a loss of value of investments in real or personal property
3.9claim, an eligible business must provide sufficient evidence of:
3.10 (1) the essential nature of the investment made in the property to fulfill the contract with
3.11the biomass plant;
3.12 (2) the extent to which the eligible business is able to repurpose the property for another
3.13productive use after the early termination, including but not limited to the use, sales, salvage,
3.14or scrap value of the property for which the loss is claimed; and
3.15 (3) the value of the eligible business's nondepreciated investment in the property.
3.16 Subd. 5.Limitations on awards.(a) A compensation award for a decreased operating
3.17income claim must not exceed the amount calculated under subdivision 4, paragraph (b),
3.18clause (3), multiplied by two.
3.19 (b) The use, sales, salvage, or scrap value of the property for which a loss is claimed
3.20must be deducted from a compensation award for a loss of value of investments in real or
3.21personal property claim.
3.22 (c) A payment received from business interruption insurance policies, settlements, or
3.23other forms of compensation related to the termination of the business's contract with the
3.24biomass plant must be deducted from any compensation award provided under this section.
3.25 Subd. 6.Priority.The chief administrative law judge may give priority to claims by
3.26eligible businesses that demonstrate a significant effort to pursue alternative business
3.27opportunities or to conduct other loss mitigation efforts to reduce the eligible business's
3.28claimed losses related to the termination of the eligible business's contract with the company
3.29operating the biomass plant.
3.30 Subd. 7.Awarding claims.If the amount provided for compensation in the biomass
3.31business compensation account established under section 2 is insufficient to fully award all
3.32claims eligible for an award, all awards must be adjusted proportionally based on the value
3.33of the claim.
3Section 1.
REVISOR RSI/EN 25-0124501/13/25 4.1 Subd. 8.Deadlines.The chief administrative law judge must make the application
4.2process for eligible claims available by August 1, 2025. A business seeking an award under
4.3this section must file all claims with the chief administrative law judge within 60 days of
4.4the date the chief administrative law judge makes the application process for eligible claims
4.5available. All preliminary awards on eligible claims must be made within 120 days of the
4.6deadline date to file claims. Any requests to reconsider an award denial must be filed with
4.7the chief administrative law judge within 60 days of the notice date for preliminary awards.
4.8All final awards for eligible claims must be made within 60 days of the deadline date to file
4.9reconsideration requests. The commissioner of management and budget must pay all awarded
4.10claims within 45 days of the date the commissioner of management and budget receives
4.11notice of the final awards from the chief administrative law judge.
4.12 Subd. 9.Expiration.This section expires June 30, 2027.
4.13 EFFECTIVE DATE.This section is effective the day following final enactment.
4.14 Sec. 2. BIOMASS BUSINESS COMPENSATION ACCOUNT.
4.15 Subdivision 1.Account established.A biomass business compensation account is
4.16established as a separate account in the special revenue fund in the state treasury.
4.17Appropriations and transfers to the account must be credited to the account. Earnings,
4.18including interest and any other earnings arising from the assets of the account, are credited
4.19to the account. Money remaining in the account on December 31, 2027, must be transferred
4.20to the renewable development account established under Minnesota Statutes, section
4.21116C.779.
4.22 Subd. 2.Funding for the special account.Notwithstanding Minnesota Statutes, section
4.23116C.779, subdivision 1, paragraph (j), on July 1, 2025, $20,000,000, and on July 1, 2026,
4.24$20,000,000 must be transferred from the renewable development account under Minnesota
4.25Statutes, section 116C.779, to the biomass business compensation account established under
4.26subdivision 1. The transferred money is appropriated to pay eligible obligations under the
4.27biomass business compensation program established under section 1.
4.28 Subd. 3.Payment of expenses.The chief administrative law judge must certify to the
4.29commissioner of management and budget the total costs incurred to administer the biomass
4.30business compensation claims process. The commissioner of management and budget must
4.31transfer an amount equal to the certified costs incurred for biomass business compensation
4.32claim activities from the renewable development account under Minnesota Statutes, section
4.33116C.779, and deposit it in the administrative hearings account under Minnesota Statutes,
4.34section 14.54. Transfers may occur quarterly throughout the fiscal year and must be based
4Sec. 2.
REVISOR RSI/EN 25-0124501/13/25 5.1on quarterly cost and revenue reports, with final certification and reconciliation after each
5.2fiscal year. The total amount transferred under this subdivision must not exceed $200,000.
5.3 Subd. 4.Expiration.This section expires June 30, 2027.
5.4 EFFECTIVE DATE.This section is effective the day following final enactment.
5Sec. 2.
REVISOR RSI/EN 25-0124501/13/25