Bill Summary – FastDemocracy

SECOND REGULAR SESSION
                        HOUSE BILL NO. 2661
                               103RD GENERAL ASSEMBLY


                              INTRODUCED BY REPRESENTATIVE COSTLOW.

     5548H.01I                                                                    JOSEPH ENGLER, Chief Clerk


                                                AN ACT
     To amend chapter 260, RSMo, by adding thereto fourteen new sections relating to energy
           infrastructure projects.


     Be it enacted by the General Assembly of the state of Missouri, as follows:

             Section A. Chapter 260, RSMo, is amended by adding thereto fourteen new sections,
 to be known as sections 260.130, 260.133, 260.136, 260.139, 260.142, 260.145, 260.148,
 260.151, 260.154, 260.157, 260.160, 260.163, 260.166, and 260.169, to read as follows:
             260.130. For the purposes of sections 260.130 to 260.169, the following terms
 shall mean:
         (1) "Authority", the environmental improvement and energy resources
 authority (EIERA) created under section 260.010;
         (2) "Bonds", bonds, notes, or other evidence of indebtedness except as otherwise
 provided in sections 260.130 to 260.169;
         (3) "Electric provider", includes "electrical corporation" as defined in section
 386.020, municipally owned utilities operating under chapter 91, and rural electric
 cooperatives operating under chapter 394;
         (4) "Eligible project", energy infrastructure projects that:
         (a) Provide or enhance infrastructure necessary for development of a site
 approved by the EIERA for grants under sections 260.130 to 260.169; or
         (b) Support the construction, enhancement, expansion, or upgrade of energy
 infrastructure projects in areas where the energy infrastructure is anticipated to
 facilitate future economic development as determined by the authority, with an
 emphasis on such development in rural areas.

     EXPLANATION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is
     intended to be omitted from the law. Matter in bold-face type in the above bill is proposed language.
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 "Eligible project" shall not include funding for activities associated with the general
 maintenance, repair, or upkeep of energy infrastructure;
         (5) "Energy bank", the Missouri energy infrastructure bank created under
 section 260.133;
         (6) "Energy fund", the Missouri energy infrastructure fund created under
 section 260.133;
         (7) "Energy infrastructure projects", generation infrastructure, transmission
 infrastructure, and projects addressing long-lead items;
         (8) "Financial assistance", includes, but is not limited to, contractual guarantees
 supporting eligible projects, credit enhancement, capital or debt reserves for bonds or
 debt instrument financing, interest rate subsidies, provision of letters of credit and
 credit instruments, provision of bond or other debt financing instrument security,
 reimbursable or other contractual arrangements, and other lawful forms of financing
 and methods of leveraging funds that are approved by the authority and, in the case of
 federal funds, as allowed by federal law;
         (9) "Financing agreement", any agreement entered into between the authority
 and an electric provider pertaining to a loan or other financial assistance and other
 provisions as the authority may determine. The term includes a loan agreement, trust
 indenture, security agreement, reimbursement agreements, guarantee agreement, bond
 or note, ordinance or resolution, or similar instrument;
         (10) "Loan", an obligation subject to repayment that is provided by the
 authority to an electric provider for all or a part of the costs of an eligible project. A
 loan may be disbursed in anticipation of reimbursement for or direct payment of costs
 of an eligible project or to refinance temporary financing used to pay costs of an eligible
 project;
         (11) "Loan obligation", a bond, note, or other evidence of an obligation issued by
 an electric provider;
         (12) "Long-lead items", equipment, components, or materials necessary for
 infrastructure projects that require extended manufacturing, procurement, or delivery
 times of at least twenty-four months and with a total cost that exceeds two hundred fifty
 thousand dollars, as may be approved by the authority;
         (13) "Permitted investments", include any of the following:
         (a) Certificates of deposit, savings accounts, deposit accounts, or money market
 deposits that are any of the following:
         a. Secured by an interest in tangible property;
         b. Fully insured by the FDIC; and
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         c. Made with a bank whose unsecured, long-term obligations are rated by at
 least one nationally recognized securities rating agency in one of the three highest rating
 categories assigned by that rating agency;
         (b) Direct obligations of, or obligations the full and timely payment of which is
 guaranteed by, the United States of America, including unit investment trusts and
 mutual funds that invest solely in such obligations;
         (c) Bonds, debentures, notes, pass-through securities, or other obligations issued
 or guaranteed by any federal agency or corporation that has been or is hereafter created
 by or under an act of the Congress of the United States of America as an agency or
 instrumentality thereof if such obligations are either of the following:
         a. Backed by the full faith and credit of the United States of America; or
         b. Rated by at least one nationally recognized securities rating agency in one of
 the three highest rating categories assigned by the rating agency;
         (d) Commercial paper that is rated not less than "P-1" by Moody's Investor
 Service or "A-1+" by Standard and Poor's at the time of purchase;
         (e) Money market funds rated by at least one nationally recognized securities
 rating agency in one of the three highest rating categories assigned by that rating
 agency;
         (f) Bonds, warrants, notes, or other obligations issued by any state, county, or
 municipality that are rated by at least one nationally recognized securities rating agency
 in one of the three highest rating categories assigned by that rating agency;
         (g) Investment agreements including, but not limited to, guaranteed investment
 contracts, repurchase agreements, and forward purchase agreements, provided that all
 of the following requirements are satisfied:
         a. Any securities purchased or held under such agreement are otherwise
 permitted investments;
         b. The counterparty's long-term debt obligations are rated by at least one
 nationally recognized securities rating agency in one of the three highest rating
 categories assigned by that rating agency; and
         c. The securities, if purchased, are owned by the bank or a trustee for any of the
 bank's obligations and are held by the bank, the trustee, or a third-party custodian
 acceptable to the bank or, if held as collateral, are held by the bank, the trustee, or a
 third-party custodian acceptable to the bank with a perfected first security interest in
 such collateral;
         (h) Investment or cash management agreements with a commercial bank whose
 senior long-term debt obligations are, at the time of the acquisition of any such
 investment or cash management agreement for the account of the bank, rated by at least
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 one nationally recognized securities rating agency in one of the three highest rating
 categories assigned by that rating agency, or with a commercial bank that is owned or
 controlled by a bank holding company whose senior long-term debt obligations, at the
 time of the acquisition of any such investment or cash management agreement for the
 account of the bank, are rated by at least one nationally recognized securities rating
 agency in one of the three highest rating categories assigned by that rating agency;
         (14) "Revenues", when used with respect to the authority, any receipts, fees,
 income, or other payments received or to be received by the authority as a result of the
 authority's activities under sections 260.130 to 260.169 including, but not limited to,
 receipts and other payments deposited with the authority and investment earnings on its
 funds and accounts;
         (15) "Rural area", any county within the state with fewer than one hundred fifty
 thousand residents, as recorded at the most recent federal decennial census;
         (16) "Strategic development fund", the strategic energy infrastructure
 development fund established under section 260.169;
         (17) "Transmission infrastructure", facilities and systems responsible for
 transporting electricity from generation sources and for also processing, converting, and
 delivering such electricity into voltages required for the eligible project including, but
 not limited to, high-voltage transmission lines, transformers, breakers, relays,
 substations, interconnection facilities, and associated equipment.
              260.133. 1. There is hereby created within the authority a division to be known
 as the "Missouri Energy Infrastructure Bank".
         2. Through the bank, the authority may act as a state energy financing
 institution, as defined in 42 U.S.C. Section 16511(7)(A), as amended, for purposes of
 obtaining federal support for energy infrastructure projects.
         3. (1) There is hereby created in the state treasury the "Missouri Energy
 Infrastructure Fund", which shall consist of moneys collected under sections 260.130 to
 260.169. The state treasurer shall be custodian of the fund. In accordance with sections
 30.170 and 30.180, the state treasurer may approve disbursements. The fund shall be a
 dedicated fund and, upon appropriation, moneys in this fund shall be used solely as
 provided in sections 260.130 to 260.169.
         (2) Notwithstanding the provisions of section 33.080 to the contrary, any moneys
 remaining in the fund at the end of the biennium shall not revert to the credit of the
 general revenue fund.
         (3) The state treasurer shall invest moneys in the fund in the same manner as
 other funds are invested. Any interest and moneys earned on such investments shall be
 credited to the fund.
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             260.136. 1. In addition to the powers granted under this chapter, the authority
 shall have additional powers to:
         (1) Make loans or provide other financial assistance to electric providers to
 finance or reduce the costs of eligible projects, to collect fees and charges related to such
 loans or other financial assistance, and to acquire, hold, pledge, and sell loan obligations
 at prices and in a manner the authority deems advisable;
         (2) Enter into contracts, arrangements, and agreements with electric providers
 and other persons and execute and deliver all financing agreements and other
 instruments necessary or convenient to the exercise of the powers granted in sections
 260.130 to 260.169;
         (3) Enter into agreements with a department, agency, or instrumentality of the
 United States of America or of this state or another state for the purpose of planning,
 securing, and providing for the financing of eligible projects;
         (4) Enter into contracts, arrangements, or agreements with external experts for
 the purpose of providing advice regarding the operations of the bank and viability of the
 fund, as well as the necessity of project applications from the bank and strategic
 development fund;
         (5) Procure insurance, guarantees, letters of credit, and other forms of collateral
 or security or credit support from any public entity, including any department, agency,
 or instrumentality of the United States of America or this state, for the payment of any
 bonds issued by it, including the power to pay premiums or fees on any issuance,
 guarantees, letters of credit, or other forms of collateral or security or credit support;
         (6) Collect or authorize the trustee under any trust indenture securing any
 bonds to collect amounts due under any loan obligations owned by it, including taking
 the action required to obtain payment of any sums in default;
         (7) Unless restricted under any agreement with holders of bonds, consent to any
 modification with respect to the rate of interest, time, and payment of any installment of
 principal or interest, or premium, if any, or any other term of any loan obligations
 owned by it or held by the applicable indenture trustee;
         (8) Borrow money through the issuance of bonds and other forms of
 indebtedness and to secure the repayment of the same as provided in section 260.130
 to 260.169, including by pledging or granting of a security interest in the loan obligation;
         (9) Expend funds credited to the authority resulting from its operations of the
 energy bank as the authority may determine as being necessary or desirable for the
 costs of administering the operations of the energy bank;
         (10) Procure insurance against losses in connection with its property, assets, or
 activities including insurance against liability for its act or the acts of its employees or
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 agents or to establish cash reserves to enable it to act as a self-insurer against any and all
 such losses;
         (11) Apply for, receive, and accept from any source aid, grants, and
 contributions of money, property, labor, or other things of value to be used to carry
 out the purposes of sections 260.130 to 260.169, subject to the conditions upon which the
 aid, grants, or contributions are made; and
         (12) Do all other things necessary or convenient to carry out the purposes and
 powers conferred in sections 260.130 to 260.169.
             260.139. 1. In considering applications for eligible projects, the authority may
 request additional input from external experts as to the urgency of the energy
 infrastructure project, the ability of the applicant to execute the project within the
 stated time frame, and other assistance as determined by the authority.
         2. The total aggregate amount of loans or other financial assistance provided by
 the bank in any year shall be limited to an amount that would not jeopardize the validity
 of the fund, as determined by the authority with the advice of external experts.
         3. In selecting eligible projects, the authority shall consider, with assistance from
 external experts, project feasibility and the degree of financial risk to be assumed by the
 authority.
         4. The authority shall ensure that no electric provider receives more than forty
 percent of the loan or financial assistance funds provided by the bank in each calendar
 year unless a joint application is made; however, in no event shall more than fifty
 percent of the loan or financial assistance funds provided by the bank in each calendar
 year be received by any single electric provider.
         5. The authority shall reserve at least forty percent of the aggregate amount
 available in each calendar year for loans and other financial assistance from the energy
 bank for energy infrastructure projects in rural areas. In the event that applications are
 not received for energy infrastructure projects in rural areas by the close of the second
 quarter of the applicable calendar year, such reservation shall no longer apply and
 reserved funds may be used for other energy infrastructure projects, provided that, in
 failing to apply for an energy infrastructure project by the end of the second quarter of
 a calendar year, an electric provider is not prohibited from subsequently applying and
 receiving an allocation of funds for energy infrastructure projects in rural areas later in
 the calendar year.
         6. Any nonpublic or proprietary information included in an application by an
 economic development prospect or electric provider shall be confidential.
             260.142. 1. (1) An electric provider, or more than one electric provider in a joint
 application, may apply to the authority for the purpose of obtaining financial assistance
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 to support an eligible project. An application under this subsection shall include the
 following:
         (a) A detailed summary of the proposed energy infrastructure project, including
 location, scope, timeline, and total estimated cost;
         (b) Identification of the energy infrastructure project to be funded;
         (c) Anticipated job creation, business attraction, or commercial or industrial
 expansion to be facilitated by the energy infrastructure project as applicable; and
         (d) Projected load demand and anticipated capacity increases;
         (2) An application under this subsection for more than one electric provider
 shall also include:
         (a) Identification of all participating electric providers and designation of a lead
 applicant responsible for administration of funds; and
         (b) Explanation of how participating electric providers will collaborate on
 energy infrastructure project implementation.
         (3) During the term that the financial assistance is provided under this
 subsection, the electric provider shall submit an annual report to the authority detailing
 the progress of the approved eligible project and the use of the financial assistance
 provided to the electric provider.
         2. (1) An electric provider and an economic development prospect may submit a
 joint application for a long-lead item or energy infrastructure project if the provision of
 financial assistance from the energy bank will facilitate an eligible project for a new or
 expanding industrial or commercial facility within the state.
         (2) A joint application under this subsection shall include:
         (a) A statement from the electric provider detailing the infrastructure
 improvements necessary to meet the eligible prospect's energy requirements; and
         (b) An assessment of economic impact, including projected job creation, capital
 investment, and state and local sales and property tax revenues generated from the
 eligible project, determined after taking into account any abatements granted.
         (3) During the term that the financial assistance is provided under this
 subsection, the economic development prospect and the electric provider shall submit an
 annual report to the authority detailing the progress of the approved eligible project and
 the use of the financial assistance provided.
         (4) The authority may condition th