Senate hears proposal to fund Green Bank revolving loans for geothermal and HVAC upgrades in schools

Senate File 1787, presented March 5 to the Senate Energy Committee, would provide funding for the state green bank (MNCIFA) to create a revolving loan fund to help Minnesota school districts install modern HVAC systems and geothermal heating and cooling. The sponsor and testifiers said the program would use limited public dollars to crowd in private capital, support direct‑pay tax credit monetization and recycle funds as loans are repaid.

Sponsor and amendments: Vice‑Chair / Senator Jeong offered an A1 amendment (adopted), and an oral amendment was adopted to insert $10,000,000 on two lines of the bill; counsel read the oral amendment into the record. Testifiers said the inserted $10 million figures would be applied to the RDA and general‑fund portions as drafted by the sponsor and counsel.

Testimony in support: Education Minnesota, represented by Dr. Justin Killian, described classroom heat, indoor air quality and teacher retention concerns and said the bill prioritizes Title I and Greater Minnesota schools. Lucas Franco of the local trades (representing unionized construction workers) said geothermal installations can reduce energy costs and highlighted a local apprenticeship training center that achieved an 85% reduction in cooling costs after installing geothermal. Willie Miley of Darcey Solutions and Sean Jarvey of Flow Environmental Systems described geothermal and CO2‑based heat pump technologies and provided projected payback and energy savings. Kari Groth Swan, executive director of MNCIFA, outlined how the green bank would offer bridge loans monetized by direct‑pay tax credits and could work with the federal Loan Programs Office to scale projects.

Finance and mechanics: Testimony detailed that projects can access direct‑pay tax credits, which MNCIFA can monetize to repay loans; MNCIFA said those credits typically return funds 12–24 months after project completion and can replenish the revolving fund. MNCIFA stated it had previously attracted and managed significant public and federal funding and that demand from schools could exceed the bill’s initial $20,000,000 total allocation.

Questions and committee concerns: Senators questioned why the Green Bank required additional funding given earlier appropriations and whether the loans’ terms would be meaningfully cheaper than existing school financing. MNCIFA staff said their loans offer "patient capital" with flexible terms tied to 10‑year T‑bill indices and that direct‑pay tax credits and longer, lower‑cost financing would reduce net costs for school districts. Senators asked for follow‑up comparisons between the green bank approach and conventional district financing.

Disposition: Senate File 1787 was laid over for possible inclusion. The committee adopted the A1 and the oral $10,000,000 amendment during the hearing; no final appropriation was enacted at this session.