1.1                          A bill for an act 
  1.2             relating to economic development; modifying the 
  1.3             wastewater infrastructure funding program; amending 
  1.4             Minnesota Statutes 2000, section 446A.072, 
  1.5             subdivisions 1, 3, 6, 7, 8, 9, 11, 12, by adding 
  1.6             subdivisions; repealing Minnesota Statutes 2000, 
  1.7             section 446A.072, subdivisions 2, 4, 5, 10, 13. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2000, section 446A.072, 
  1.10  subdivision 1, is amended to read: 
  1.11     Subdivision 1.  [ESTABLISHMENT OF PROGRAM.] The authority 
  1.12  will establish a wastewater infrastructure funding program to 
  1.13  provide supplemental assistance to municipalities applying 
  1.14  for receiving funding under through the water pollution control 
  1.15  revolving loan program or the United States Department of 
  1.16  Agriculture Rural Economic and Community Development's 
  1.17  (USDA/RECD) Water and Waste Disposal Loans and Grants program 
  1.18  for the design and planning, improvements to, and construction 
  1.19  of municipal wastewater treatment systems.  The purpose of the 
  1.20  program is to assist municipalities demonstrating financial need 
  1.21  in building cost-efficient projects to address existing 
  1.22  environmental or public health problems.  To implement the 
  1.23  program, the authority shall establish a wastewater 
  1.24  infrastructure fund to provide grants and loans for the purposes 
  1.25  authorized under title VI of the Federal Water Pollution Control 
  1.26  Act.  The fund shall be credited with all investment income from 
  2.1   the fund and all repayments of loans, grants, and penalties. 
  2.2      Sec. 2.  Minnesota Statutes 2000, section 446A.072, 
  2.3   subdivision 3, is amended to read: 
  2.4      Subd. 3.  [PROGRAM ADMINISTRATION.] (a) The authority shall 
  2.5   provide supplemental assistance, as provided in subdivision 2, 
  2.6   5a to municipalities demonstrating financial need, as provided 
  2.7   in subdivision 4, whose projects have been certified to the 
  2.8   authority by the commissioner of the agency.  The authority 
  2.9   shall reserve supplemental assistance for projects in order of 
  2.10  their priority ranking established by the agency.: 
  2.11     (1) whose projects are listed on the agency's project 
  2.12  priority list; 
  2.13     (2) that demonstrate their projects are a cost-effective 
  2.14  solution to an existing environmental or public health problem; 
  2.15  and 
  2.16     (3) whose projects are approved by the USDA/RECD or 
  2.17  certified by the commissioner of the agency. 
  2.18     (b) For a municipality receiving grant funding from the 
  2.19  USDA/RECD, applications must be made to the USDA/RECD with 
  2.20  additional information submitted to the authority as required by 
  2.21  the authority.  Eligible project costs and affordability 
  2.22  criteria shall be determined by the USDA/RECD. 
  2.23     (c) For a municipality not receiving grant funding from the 
  2.24  USDA/RECD, application must be made to the authority on forms 
  2.25  prescribed by the authority for the water pollution control 
  2.26  revolving fund program with additional information as required 
  2.27  by the authority.  In accordance with section 116.182, the 
  2.28  agency shall: 
  2.29     (1) calculate the essential project component percentage 
  2.30  which must be multiplied by the total project cost to determine 
  2.31  the eligible project cost; and 
  2.32     (2) review and certify approved projects to the authority. 
  2.33     (d) At the time funds are appropriated under this section, 
  2.34  the authority shall reserve supplemental assistance for projects 
  2.35  in order of their rankings on the agency's project priority list 
  2.36  and in an amount based on their most recent cost estimates 
  3.1   submitted to the authority or the as-bid costs, whichever is 
  3.2   less. 
  3.3      Sec. 3.  Minnesota Statutes 2000, section 446A.072, is 
  3.4   amended by adding a subdivision to read: 
  3.5      Subd. 5a.  [TYPE AND AMOUNT OF ASSISTANCE.] (a) For a 
  3.6   municipality receiving grant funding from the USDA/RECD, the 
  3.7   authority shall provide assistance in the form of a grant of up 
  3.8   to one-half of the eligible grant amount determined by 
  3.9   USDA/RECD.  A municipality may not receive a grant under this 
  3.10  paragraph for more than $4,000,000 or $15,000 per existing 
  3.11  connection, whichever is less, unless specifically approved by 
  3.12  law.  In the case of a sanitary district or other 
  3.13  multijurisdictional project for which the USDA/RECD is unable to 
  3.14  fully fund up to one-half of the eligible grant amount, the 
  3.15  authority may provide up to an additional $1,000,000 for each 
  3.16  additional municipality participating up to a maximum of 
  3.17  $8,000,000 or $15,000 per existing connection, whichever is 
  3.18  less, but not to exceed the maximum grant level determined by 
  3.19  the USDA/RECD as needed to keep the project affordable. 
  3.20     (b) For a municipality not receiving grant funding from the 
  3.21  USDA/RECD, the authority shall provide assistance in the form of 
  3.22  a loan for the eligible project costs that exceed five percent 
  3.23  of the market value of properties in the project service area.  
  3.24  A municipality may not receive a loan under this paragraph for 
  3.25  more than $4,000,000 or $15,000 per existing connection, 
  3.26  whichever is less, unless specifically approved by law.  In the 
  3.27  case of a sanitary district or other multijurisdictional 
  3.28  project, the authority may provide a loan under this paragraph 
  3.29  for up to an additional $1,000,000 for each additional 
  3.30  municipality participating up to a maximum of $8,000,000 or 
  3.31  $15,000 per existing connection, whichever is less, unless 
  3.32  specifically approved by law.  A loan under this paragraph must 
  3.33  bear no interest, must be repaid as provided in subdivision 7, 
  3.34  and must only be provided in conjunction with a loan from the 
  3.35  water pollution control revolving fund under section 446A.07. 
  3.36     (c) Notwithstanding the limits in paragraphs (a) and (b), 
  4.1   for a municipality receiving supplemental assistance under this 
  4.2   section after January 1, 2002, the authority shall provide 
  4.3   assistance up to $25,000 per existing connection if the 
  4.4   authority determines that the municipality's construction and 
  4.5   installation costs are significantly increased due to geological 
  4.6   conditions and more stringent discharge limits. 
  4.7      Sec. 4.  Minnesota Statutes 2000, section 446A.072, is 
  4.8   amended by adding a subdivision to read: 
  4.9      Subd. 5b.  [SPECIAL ASSESSMENT DEFERRAL.] A municipality 
  4.10  receiving a loan under subdivision 5a that levies special 
  4.11  assessments to repay the loan under subdivision 5a or section 
  4.12  446A.07 may defer payment of such assessments under the 
  4.13  provisions of sections 435.193 to 435.195. 
  4.14     Sec. 5.  Minnesota Statutes 2000, section 446A.072, 
  4.15  subdivision 6, is amended to read: 
  4.16     Subd. 6.  [DISBURSEMENTS.] Disbursements made of grants or 
  4.17  loans awarded under this section by the authority to recipients 
  4.18  must be made for eligible project costs as incurred by the 
  4.19  recipients, and must be made by the authority in accordance with 
  4.20  the project financing agreement and applicable state and federal 
  4.21  laws and rules governing the payments. 
  4.22     Sec. 6.  Minnesota Statutes 2000, section 446A.072, 
  4.23  subdivision 7, is amended to read: 
  4.24     Subd. 7.  [LOAN REPAYMENTS.] All loan repayments received 
  4.25  by the authority under subdivision 2 must be used to provide 
  4.26  additional assistance under this section.  A municipality 
  4.27  receiving a loan under this section shall repay the loan in 
  4.28  semiannual payment amounts determined by the authority.  The 
  4.29  payment amount must be based on the average payments on the 
  4.30  municipality's water pollution control revolving fund loan or, 
  4.31  if greater, the minimum amount required to fully repay the loan 
  4.32  by the maturity date.  Payments must begin within one year of 
  4.33  the date of the municipality's final payment on the water 
  4.34  pollution control revolving fund loan.  The maturity date of the 
  4.35  loan must be no later than 20 years from the date of the first 
  4.36  payment. 
  5.1      Sec. 7.  Minnesota Statutes 2000, section 446A.072, 
  5.2   subdivision 8, is amended to read: 
  5.3      Subd. 8.  [ELIGIBILITY.] A municipality is eligible for 
  5.4   assistance under this section only after grant funding from 
  5.5   other sources has been applied for, obtained, rejected, or the 
  5.6   authority has determined that the potential funding is unlikely. 
  5.7      Sec. 8.  Minnesota Statutes 2000, section 446A.072, 
  5.8   subdivision 9, is amended to read: 
  5.9      Subd. 9.  [LOAN LIMITATION.] Supplemental assistance may 
  5.10  not be used to reduce the sewer service charges of a significant 
  5.11  wastewater contributor, or a single user that has caused the 
  5.12  need for the project or whose current or projected flow and load 
  5.13  exceed one-half of the current wastewater treatment plant's 
  5.14  capacity, unless the applicant can demonstrate to the authority 
  5.15  that the significant wastewater contributor cannot pay its fair 
  5.16  share.  Funding will not be provided for projects that are not 
  5.17  qualified for assistance or that would violate the state's 
  5.18  constitution or laws regarding the use of funds appropriated for 
  5.19  the program. 
  5.20     Sec. 9.  Minnesota Statutes 2000, section 446A.072, 
  5.21  subdivision 11, is amended to read: 
  5.22     Subd. 11.  [REPORT ON NEEDS.] By October 15 February 1 of 
  5.23  each odd-numbered even-numbered year, the authority, in 
  5.24  conjunction with the pollution control agency, shall prepare a 
  5.25  report to the finance division of the senate environment and 
  5.26  natural resources committee and the house environment and 
  5.27  natural resources finance committee on wastewater funding 
  5.28  assistance needs of municipalities under this section. 
  5.29     Sec. 10.  Minnesota Statutes 2000, section 446A.072, 
  5.30  subdivision 12, is amended to read: 
  5.31     Subd. 12.  [SYSTEM REPLACEMENT FUND.] Each recipient of 
  5.32  assistance municipality receiving a loan under this section 
  5.33  shall establish a system replacement fund setting aside and 
  5.34  shall annually deposit a minimum of $.10 $.50 per 1,000 gallons 
  5.35  of flow for major rehabilitation, expansion, or replacement of 
  5.36  the treatment plant system at the end of its useful life.  Money 
  6.1   must remain in the account, for the life of the loan associated 
  6.2   with the supplemental assistance under this section, unless use 
  6.3   of the fund is approved in writing by the authority for major 
  6.4   rehabilitation, expansion, or replacement of the treatment 
  6.5   plant.  Failure to maintain the fund will cancel the loan 
  6.6   forgiveness provided under subdivision 2 system.  By March 1 
  6.7   each year during the life of the loan, each municipality shall 
  6.8   submit a report to the authority regarding the amount deposited 
  6.9   and the fund balance for the prior calendar year.  Failure to 
  6.10  comply with the requirements of this subdivision shall result in 
  6.11  the authority assessing a penalty fee to the municipality equal 
  6.12  to one percent of the outstanding loan balance for each year of 
  6.13  noncompliance.  Failure to make the required deposit or pay the 
  6.14  penalty fee as required constitutes a default on the loan. 
  6.15     Sec. 11.  Minnesota Statutes 2000, section 466A.072, is 
  6.16  amended by adding a subdivision to read: 
  6.17     Subd. 14.  [CONSISTENCY WITH LAND USE PLANS.] A 
  6.18  municipality applying for a project in an unsewered area shall 
  6.19  include in its application to the authority a certification from 
  6.20  the county in which the project is located that: 
  6.21     (1) the project is consistent with an adopted county 
  6.22  comprehensive land use plan and local water plan; and 
  6.23     (2) the county has adopted specific land use ordinances and 
  6.24  controls to prevent future development from occurring in a 
  6.25  manner that could create unsewered area problems in the future. 
  6.26     Sec. 12.  [REPEALER.] 
  6.27     Minnesota Statutes 2000, section 446A.072, subdivisions 2, 
  6.28  4, 5, 10, and 13, are repealed. 
  6.29     Sec. 13.  [EFFECTIVE DATE.] 
  6.30     This act is effective for funds appropriated after January 
  6.31  1, 2002.