HF 3858

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/14/2022 04:51pm

A bill for an act
relating to capital investment; making changes to the water infrastructure funding
program; making changes to the point source implementation grant program;
establishing an innovative wastewater technical planning program; appropriating
money for clean water; authorizing the sale and issuance of state bonds; amending
Minnesota Statutes 2020, sections 446A.072, subdivision 5a; 446A.073, subdivision
1; 446A.075, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2020, section 446A.072, subdivision 5a, is amended to read:

Subd. 5a.

Type and amount of assistance.

(a) For a governmental unit receiving grant
funding from the USDA/RECD, the authority may provide assistance in the form of a grant
of up to 65 percent of the eligible grant need determined by USDA/RECD. A governmental
unit may not receive a grant under this paragraph for more than deleted text begin $5,000,000 deleted text end new text begin $7,000,000 new text end per
project or deleted text begin $20,000 deleted text end new text begin $25,000 new text end per existing connection, whichever is less, unless specifically
approved by law.

(b) For a governmental unit receiving a loan from the clean water revolving fund under
section 446A.07, the authority may provide assistance under this section in the form of a
grant if the average annual residential wastewater system cost after completion of the project
would otherwise exceed 1.4 percent of the median household income of the project service
area. In determining whether the average annual residential wastewater system cost would
exceed 1.4 percent, the authority must consider the total costs associated with building,
operating, and maintaining the wastewater system, including existing wastewater debt
service, debt service on the eligible project cost, and operation and maintenance costs. Debt
service costs for the proposed project are calculated based on the maximum loan term
permitted for the clean water revolving fund loan under section 446A.07, subdivision 7.
The amount of the grant is equal to 80 percent of the amount needed to reduce the average
annual residential wastewater system cost to 1.4 percent of median household income in
the project service area, to a maximum of $5,000,000 per project or $20,000 per existing
connection, whichever is less, unless specifically approved by law. The eligible project cost
is determined by multiplying the total project costs minus any other grants by the essential
project component percentage calculated under subdivision 3, paragraph (c), clause (1). In
no case may the amount of the grant exceed 80 percent of the eligible project cost.

(c) For a governmental unit receiving a loan from the drinking water revolving fund
under section 446A.081, the authority may provide assistance under this section in the form
of a grant if the average annual residential drinking water system cost after completion of
the project would otherwise exceed 1.2 percent of the median household income of the
project service area. In determining whether the average annual residential drinking water
system cost would exceed 1.2 percent, the authority must consider the total costs associated
with building, operating, and maintaining the drinking water system, including existing
drinking water debt service, debt service on the eligible project cost, and operation and
maintenance costs. Debt service costs for the proposed project are calculated based on the
maximum loan term permitted for the drinking water revolving fund loan under section
446A.081, subdivision 8, paragraph (c). The amount of the grant is equal to 80 percent of
the amount needed to reduce the average annual residential drinking water system cost to
1.2 percent of median household income in the project service area, to a maximum of
$5,000,000 per project or $20,000 per existing connection, whichever is less, unless
specifically approved by law. The eligible project cost is determined by multiplying the
total project costs minus any other grants by the essential project component percentage
calculated under subdivision 3, paragraph (c), clause (1). In no case may the amount of the
grant exceed 80 percent of the eligible project cost.

(d) Notwithstanding the limits in paragraphs (a), (b), and (c), for a governmental unit
receiving supplemental assistance under this section after January 1, 2002, if the authority
determines that the governmental unit's construction and installation costs are significantly
increased due to geological conditions of crystalline bedrock or karst areas and discharge
limits that are more stringent than secondary treatment, the maximum award under this
section shall not be more than $25,000 per existing connection.

Sec. 2.

Minnesota Statutes 2020, section 446A.073, subdivision 1, is amended to read:

Subdivision 1.

Program established.

When money is appropriated for grants under this
program, the authority shall award grants deleted text begin up to a maximum of $7,000,000 deleted text end to governmental
units to cover 80 percent of the cost of water infrastructure projects made necessary by:

(1) a wasteload reduction prescribed under a total maximum daily load plan required by
section 303(d) of the federal Clean Water Act, United States Code, title 33, section 1313(d);

(2) a phosphorus concentration or mass limit which requires discharging one milligram
per liter or less at permitted design flow which is incorporated into a permit issued by the
Pollution Control Agency;

(3) any other water quality-based effluent limit established under section 115.03,
subdivision 1, paragraph (e), clause (8), and incorporated into a permit issued by the Pollution
Control Agency that exceeds secondary treatment limits; or

(4) a total nitrogen concentration or mass limit that requires discharging ten milligrams
per liter or less at permitted design flow.

Sec. 3.

Minnesota Statutes 2020, section 446A.075, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Technical planning grants. new text end

new text begin (a) The authority may provide technical planning
grants to local governments to develop long-term plans for their wastewater facilities and
related sewer systems and for their drinking water treatment systems that will allow local
governments to: (1) address current needs and future challenges; (2) to think creatively
about cost-effective solutions such as regionalization or optimization; and (3) to access the
state and federal funds needed to implement those plans.
new text end

new text begin (b) A grant under this subdivision must not exceed $100,000. Local government units
with populations over 10,000 will be required to pay a cost share of 50 percent or more.
Technical planning grants may be used by recipients to contract with an engineer who
specializes in wastewater or drinking water, the University of Minnesota, a regional
development commission, or a qualified nonprofit organization to develop long-term
integrated plans for wastewater systems and to facilitate grant and proposal writing for
accessing federal and state funds to implement such plans or other innovative wastewater
and water treatment solutions.
new text end

new text begin (c) The authority will confer with the Pollution Control Agency and the Department of
Health regarding the design of the grant program and evaluation of the grant proposals.
new text end

Sec. 4. new text begin CLEAN WATER APPROPRIATIONS; GENERAL OBLIGATION BONDS.
new text end

new text begin Subdivision 1. new text end

new text begin Total appropriation. new text end

new text begin $299,000,000 is appropriated from the bond
proceeds fund to the Public Facilities Authority for the purposes of this section.
new text end

new text begin Subd. 2. new text end

new text begin State match for revolving loan funds. new text end

new text begin $49,000,000 of this appropriation is to
match federal capitalization grants for the clean water revolving fund under Minnesota
Statutes, section 446A.07, and the drinking water revolving fund under Minnesota Statutes,
section 446A.081. This appropriation must be used for qualified capital projects.
new text end

new text begin Subd. 3. new text end

new text begin Water infrastructure funding program. new text end

new text begin $100,000,000 of this appropriation
is for grants to eligible municipalities under the water infrastructure funding program under
Minnesota Statutes, section 446A.072.
new text end

new text begin Subd. 4. new text end

new text begin Point source implementation grants program. new text end

new text begin $150,000,000 of this
appropriation is for grants to eligible municipalities under the point source implementation
grants program under Minnesota Statutes, section 446A.073. This appropriation must be
used for qualified capital projects.
new text end

new text begin Subd. 5. new text end

new text begin Bond sale. new text end

new text begin To provide the money appropriated in this section from the bond
proceeds fund, the commissioner of management and budget shall sell and issue bonds of
the state in an amount up to $299,000,000 in the manner, upon the terms, and with the effect
prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota
Constitution, article XI, sections 4 to 7.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5. new text begin CLEAN WATER APPROPRIATIONS; GENERAL FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Point Source implementation grants program. new text end

new text begin $999,000 in fiscal year
2023 is appropriated from the general fund to the Public Facilities Authority for the point
source implementation grants program, under Minnesota Statutes, section 446A.073. The
base for this appropriation is $37,500,000 in fiscal year 2024 and beyond.
new text end

new text begin Subd. 2. new text end

new text begin Innovative Technical Planning Grants. new text end

new text begin $5,000,000 in fiscal year 2023 is
appropriated from the general fund to the Public Facilities Authority for innovative
wastewater technical planning grants, under Minnesota Statutes, section 446A.073. The
base for this appropriation is $2,500,000 in fiscal year 2024 and beyond.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end