1.1 	A bill for an act
1.2 	relating to the environment; creating the Clean Water
1.3 	Legacy Act; providing authority, direction, and
1.4 	funding to achieve and maintain water quality
1.5 	standards for Minnesota's surface waters in accordance
1.6 	with section 303(d) of the federal Clean Water Act;
1.7 	appropriating money; amending Laws 2005, chapter 20,
1.8 	article 1, section 39; proposing coding for new law in
1.9 	Minnesota Statutes, chapter 446A; proposing coding for
1.10 	new law as Minnesota Statutes, chapter 114D.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	Section 1. [114D.05] CITATION.
1.13 	This chapter may be cited as the "Clean Water Legacy Act." 

1.14 	Sec. 2. [114D.10] LEGISLATIVE PURPOSE AND FINDINGS.
1.15 		Subdivision 1.Purpose. The purpose of the Clean Water
1.16 	Legacy Act is to protect, restore, and preserve the quality of
1.17 	Minnesota's surface waters by providing authority, direction,
1.18 	and resources to achieve and maintain water quality standards
1.19 	for surface waters as required by section 303(d) of the federal
1.20 	Clean Water Act, United States Code, title 33, section 1313(d),
1.21 	and applicable federal regulations.
1.22 		Subd. 2.Findings. The legislature finds that:
1.23 	(1) there is a close link between protecting, restoring,
1.24 	and preserving the quality of Minnesota's surface waters and the
1.25 	ability to develop the state's economy, enhance its quality of
1.26 	life, and protect its human and natural resources;
1.27 	(2) achieving the state's water quality goals will require
1.28 	long-term commitment and cooperation by all state and local
2.1 	agencies, and other public and private organizations and
2.2 	individuals, with responsibility and authority for water
2.3 	management, planning, and protection; and 
2.4 	(3) all persons and organizations whose activities affect
2.5 	the quality of waters, including point and nonpoint sources of
2.6 	pollution, have a responsibility to participate in and support
2.7 	efforts to achieve the state's water quality goals.

2.8 	Sec. 3. [114D.15] DEFINITIONS.
2.9 		Subdivision 1.Application. The definitions provided in
2.10 	this section apply to the terms used in this chapter.
2.11 		Subd. 2.Citizen monitoring. "Citizen monitoring" means
2.12 	monitoring of surface water quality by individuals and
2.13 	nongovernmental organizations that is consistent with Pollution
2.14 	Control Agency guidance on monitoring procedures, quality
2.15 	assurance protocols, and data management.
2.16 		Subd. 3.Clean water council. "Clean Water Council" or
2.17 	"council" means the Clean Water Council created pursuant to
2.18 	section 114D.30, subdivision 1.
2.19 		Subd. 4.Federal tmdl requirements. "Federal TMDL
2.20 	requirements" means the requirements of section 303(d) of the
2.21 	Clean Water Act, United States Code, title 33, section 1313(d),
2.22 	and associated regulations and guidance.
2.23 		Subd. 5.Impaired water. "Impaired water" means surface
2.24 	water that does not meet applicable water quality standards.
2.25 		Subd. 6.Public agencies. "Public agencies" means all
2.26 	state agencies, political subdivisions, joint powers
2.27 	organizations, and special purpose units of government with
2.28 	authority, responsibility, or expertise in protecting,
2.29 	restoring, or preserving the quality of surface waters, managing
2.30 	or planning for surface waters and related lands, or financing
2.31 	waters-related projects.  "Public agencies" also includes the
2.32 	University of Minnesota and other public education institutions.
2.33 		Subd. 7.Restoration. "Restoration" means actions,
2.34 	including effectiveness monitoring, that are taken to achieve
2.35 	and maintain water quality standards for impaired waters in
2.36 	accordance with a TMDL that has been approved by the United
3.1 	States Environmental Protection Agency under federal TMDL
3.2 	requirements.
3.3 		Subd. 8.Surface waters. "Surface waters" means waters
3.4 	of the state as defined in section 115.01, subdivision 22,
3.5 	excluding groundwater as defined in section 115.01, subdivision
3.6 	6.
3.7 		Subd. 9.Third-party tmdl. "Third-party TMDL" means a
3.8 	TMDL that is developed by a qualified public agency other than
3.9 	the Pollution Control Agency consistent with the goals,
3.10 	policies, and priorities in section 114D.20.
3.11 		Subd. 10.Total maximum daily load or tmdl. "Total
3.12 	maximum daily load" or "TMDL" means a calculation of the maximum
3.13 	amount of a pollutant that may be introduced into a surface
3.14 	water and still ensure that applicable water quality standards
3.15 	for that water are achieved and maintained.  A TMDL is the sum
3.16 	of the pollutant load allocations for all sources of the
3.17 	pollutant, including a load allocation for point sources, a load
3.18 	allocation for nonpoint sources and natural background, a load
3.19 	allocation for future growth of point and nonpoint sources, and
3.20 	a margin of safety to account for uncertainty about the
3.21 	relationship between pollutant loads and the quality of the
3.22 	receiving surface water.  "Natural background" means
3.23 	characteristics of the water body resulting from the
3.24 	multiplicity of factors in nature, including climate and
3.25 	ecosystem dynamics, that affect the physical, chemical, or
3.26 	biological conditions in a water body, but does not include
3.27 	measurable and distinguishable pollution that is attributable to
3.28 	human activity or influence.  A TMDL must take into account
3.29 	seasonal variations.
3.30 		Subd. 11.Water quality standards. "Water quality
3.31 	standards" for Minnesota surface waters are found in Minnesota
3.32 	Rules, chapters 7050 and 7052.

3.33 	Sec. 4. [114D.20] IMPLEMENTATION; COORDINATION; GOALS;
3.34 	POLICIES; AND PRIORITIES.
3.35 		Subdivision 1.Coordination and cooperation. In
3.36 	implementing this chapter, public agencies shall take into
4.1 	consideration the relevant provisions of local and other
4.2 	applicable water management, conservation, land use, land
4.3 	management, and development plans and programs.  Public agencies
4.4 	with authority for local water management, conservation, land
4.5 	use, land management, and development plans shall take into
4.6 	consideration the manner in which their plans affect the
4.7 	implementation of this chapter.  Public agencies shall identify
4.8 	opportunities to participate and assist in the successful
4.9 	implementation of this chapter, including the funding or
4.10 	technical assistance needs, if any, that may be necessary.  In
4.11 	implementing this chapter, public agencies shall endeavor to
4.12 	engage the cooperation of organizations and individuals whose
4.13 	activities affect the quality of surface waters, including point
4.14 	and nonpoint sources of pollution, and who have authority and
4.15 	responsibility for water management, planning, and protection.
4.16 	To the extent practicable, public agencies shall endeavor to
4.17 	enter into formal and informal agreements and arrangements with
4.18 	federal agencies and departments to jointly utilize staff and
4.19 	resources to deliver programs or conduct activities to achieve
4.20 	the intent of this chapter, including efforts under the federal
4.21 	Clean Water Act and other federal farm and soil and water
4.22 	conservation programs.
4.23 		Subd. 2.Goals for implementation. The following goals
4.24 	must guide the implementation of this chapter:
4.25 	(1) to identify impaired waters in accordance with federal
4.26 	TMDL requirements within ten years after the effective date of
4.27 	this section and thereafter to ensure continuing evaluation of
4.28 	surface waters for impairments;
4.29 	(2) to submit TMDL's to the United States Environmental
4.30 	Protection Agency for all impaired waters in a timely manner in
4.31 	accordance with federal TMDL requirements;
4.32 	(3) to set a reasonable time for implementing restoration
4.33 	of each identified impaired water;
4.34 	(4) to provide assistance and incentives to prevent waters
4.35 	from becoming impaired and to improve the quality of waters that
4.36 	are listed as impaired but do not have an approved TMDL
5.1 	addressing the impairment; and 
5.2 	(5) to promptly seek the delisting of waters from the
5.3 	impaired waters list when those waters are shown to achieve the
5.4 	designated uses applicable to the waters.
5.5 		Subd. 3.Implementation policies. The following policies
5.6 	must guide the implementation of this chapter:
5.7 	(1) develop regional and watershed TMDL's, and TMDL's for
5.8 	multiple pollutants, where reasonable and feasible;
5.9 	(2) maximize use of available organizational, technical,
5.10 	and financial resources to perform sampling, monitoring, and
5.11 	other activities to identify impaired waters, including use of
5.12 	citizen monitoring;
5.13 	(3) maximize opportunities for restoration of impaired
5.14 	waters, by prioritizing and targeting of available programmatic,
5.15 	financial, and technical resources and by providing additional
5.16 	state resources to complement and leverage available resources;
5.17 	(4) use existing regulatory authorities to achieve
5.18 	restoration for point and nonpoint sources of pollution where
5.19 	applicable, and promote the development and use of effective
5.20 	nonregulatory measures to address pollution sources for which
5.21 	regulations are not applicable;
5.22 	(5) use restoration methods that have a demonstrated
5.23 	effectiveness in reducing impairments and provide the greatest
5.24 	long-term positive impact on water quality protection and
5.25 	improvement and related conservation benefits while
5.26 	incorporating innovative approaches on a case-by-case basis;
5.27 	(6) identify for the legislature any innovative approaches
5.28 	that may strengthen or complement existing programs; and 
5.29 	(7) identify and encourage implementation of measures to
5.30 	prevent waters from becoming impaired and to improve the quality
5.31 	of waters that are listed as impaired but have no approved TMDL
5.32 	addressing the impairment using the best available data and
5.33 	technology, and establish and report outcome-based performance
5.34 	measures that monitor the progress and effectiveness of
5.35 	protection and restoration measures.
5.36 		Subd. 4.Priorities for identifying impaired waters. The
6.1 	Pollution Control Agency, in accordance with federal TMDL
6.2 	requirements, shall set priorities for identifying impaired
6.3 	waters, giving consideration to:
6.4 	(1) waters where impairments would pose the greatest
6.5 	potential risk to human or aquatic health; and 
6.6 	(2) waters where data developed through public agency or
6.7 	citizen monitoring or other means provides evidence that an
6.8 	impaired condition exists.
6.9 	Subd. 5.[PRIORITIES FOR PREPARATION OF TMDL'S.] The Clean
6.10 	Water Council shall recommend priorities for scheduling and
6.11 	preparing TMDL's taking into account the severity of the
6.12 	impairment, the designated uses of those waters, and other
6.13 	applicable federal TMDL requirements.  In recommending
6.14 	priorities, the council shall also give consideration to waters
6.15 	and watersheds:
6.16 	(1) with impairments that pose the greatest potential risk
6.17 	to human health;
6.18 	(2) with impairments that pose the greatest potential risk
6.19 	to threatened or endangered species;
6.20 	(3) with impairments that pose the greatest potential risk
6.21 	to aquatic health;
6.22 	(4) where other public agencies and participating
6.23 	organizations and individuals, especially local, basinwide, or
6.24 	regional agencies or organizations, have demonstrated readiness
6.25 	to assist in carrying out the responsibilities, including
6.26 	availability and organization of human, technical, and financial
6.27 	resources necessary to undertake the work; and 
6.28 	(5) where there is demonstrated coordination and
6.29 	cooperation among cities, counties, watershed districts, and
6.30 	soil and water conservation districts in planning and
6.31 	implementation of activities that will assist in carrying out
6.32 	the responsibilities.
6.33 		Subd. 6.Priorities for restoration of impaired
6.34 	waters. In implementing restoration of impaired waters, in
6.35 	addition to the priority considerations in subdivision 5 the
6.36 	Clean Water Council shall give priority in its recommendations
7.1 	for restoration funding from the clean water legacy account to
7.2 	restoration projects that:
7.3 	(1) coordinate with and utilize existing local authorities
7.4 	and infrastructure for implementation;
7.5 	(2) can be implemented in whole or in part by providing
7.6 	support for existing or ongoing restoration efforts;
7.7 	(3) most effectively leverage other sources of restoration
7.8 	funding, including federal, state, local, and private sources of
7.9 	funds;
7.10 	(4) show a high potential for early restoration and
7.11 	delisting based upon data developed through public agency or
7.12 	citizen monitoring or other means; and 
7.13 	(5) show a high potential for long-term water quality and
7.14 	related conservation benefits.
7.15 		Subd. 7.Priorities for funding prevention actions. The
7.16 	Clean Water Council shall apply the priorities applicable under
7.17 	subdivision 6, as far as practicable, when recommending
7.18 	priorities for funding actions to prevent waters from becoming
7.19 	impaired and to improve the quality of waters that are listed as
7.20 	impaired but do not have an approved TMDL.

7.21 	Sec. 5. [114D.25] ADMINISTRATION; POLLUTION CONTROL
7.22 	AGENCY.
7.23 		Subdivision 1.General duties and authorities. (a) The
7.24 	Pollution Control Agency, in accordance with federal TMDL
7.25 	requirements, shall:  identify impaired waters and propose a
7.26 	list of the waters for review and approval by the United States
7.27 	Environmental Protection Agency; develop and approve TMDL's for
7.28 	listed impaired waters and submit the approved TMDL's to the
7.29 	United States Environmental Protection Agency for final
7.30 	approval; and propose to delist waters from the United States
7.31 	Environmental Protection Agency impaired waters list.
7.32 	(b) A TMDL must include a statement of the facts and
7.33 	scientific data supporting the TMDL and a list of potential
7.34 	implementation options, including:
7.35 	(1) a range of estimates of the cost of implementation of
7.36 	the TMDL; and 
8.1 	(2) for point sources, the individual wasteload data and
8.2 	the estimated cost of compliance addressed by the TMDL.
8.3 	The implementation information does not need to be sent to the
8.4 	United States Environmental Protection Agency for review.
8.5 		Subd. 2.Administrative procedures for tmdl
8.6 	approval. Before approving a TMDL, the agency shall give
8.7 	written notice to the public of the proposed TMDL and provide a
8.8 	30-day opportunity for submission of written comments.  The
8.9 	agency shall distribute the notice in the same manner as a
8.10 	notice of a proposed permit is distributed under agency rules.
8.11 	The approval of a TMDL by the Pollution Control Agency is a
8.12 	final decision of the agency under section 115.05, subdivision
8.13 	11, clause (1), and is subject to the contested case procedures
8.14 	of sections 14.57 to 14.62 in accordance with agency procedural
8.15 	rules.  The agency shall not submit an approved TMDL to the
8.16 	United States Environmental Protection Agency until the time for
8.17 	commencing judicial review has run or the judicial review
8.18 	process has been completed.  A TMDL is not subject to the
8.19 	rulemaking requirements of chapter 14, including section 14.386.
8.20 		Subd. 3.Third-party tmdl development. The Pollution
8.21 	Control Agency may enter agreements with any qualified public
8.22 	agency setting forth the terms and conditions under which that
8.23 	entity is authorized to develop a third-party TMDL.  In
8.24 	determining whether the public agency is qualified to develop a
8.25 	third-party TMDL, the Pollution Control Agency shall consider
8.26 	the technical and administrative qualifications of the public
8.27 	agency and shall avoid any potential organizational conflict of
8.28 	interest, as defined in section 16C.02, subdivision 10a, of the
8.29 	public agency with respect to the development of the third-party
8.30 	TMDL.  A third-party TMDL is subject to modification and
8.31 	approval by the Pollution Control Agency, and must be approved
8.32 	by the Pollution Control Agency before it is submitted to the
8.33 	United States Environmental Protection Agency.  The Pollution
8.34 	Control Agency shall consider authorizing the development of
8.35 	third-party TMDL's consistent with the goals, policies, and
8.36 	priorities determined under section 116.384.

9.1 	Sec. 6. [114D.30] CLEAN WATER COUNCIL.
9.2 		Subdivision 1.Creation; duties. A Clean Water Council
9.3 	is created to advise on the administration and implementation of
9.4 	this chapter, and foster coordination and cooperation as
9.5 	described in section 114D.20, subdivision 1.  The council may
9.6 	also advise on the development of appropriate processes for
9.7 	expert scientific review as described in section 114D.35,
9.8 	subdivision 2.  The Pollution Control Agency shall provide
9.9 	administrative support for the council with the support of other
9.10 	member agencies.  The members of the council shall elect a chair
9.11 	from the nonagency members of the council.
9.12 		Subd. 2.Membership; appointment. The commissioners of
9.13 	natural resources, agriculture, and the Pollution Control
9.14 	Agency, and the executive director of the Board of Water and
9.15 	Soil Resources shall appoint one person from their respective
9.16 	agency to serve as a member of the council.  Nineteen additional
9.17 	nonagency members of the council shall be appointed as follows:
9.18 	(1) two members representing statewide farm organizations,
9.19 	appointed by the governor;
9.20 	(2) one member representing business organizations,
9.21 	appointed by the governor;
9.22 	(3) one member representing environmental organizations,
9.23 	appointed by the governor;
9.24 	(4) one member representing soil and water conservation
9.25 	districts, appointed by the governor;
9.26 	(5) one member representing watershed districts, appointed
9.27 	by the governor;
9.28 	(6) one member representing organizations focused on
9.29 	improvement of Minnesota lakes or streams, appointed by the
9.30 	governor;
9.31 	(7) two members representing an organization of county
9.32 	governments, appointed by the governor;
9.33 	(8) two members representing organizations of city
9.34 	governments, appointed by the governor;
9.35 	(9) one member representing the Metropolitan Council
9.36 	established under section 473.123, appointed by the governor;
10.1 	(10) one township officer, appointed by the governor;
10.2 	(11) one member of the house of representatives, appointed
10.3 	by the speaker;
10.4 	(12) one member of the senate, appointed by the majority
10.5 	leader;
10.6 	(13) one member representing the University of Minnesota or
10.7 	a Minnesota state university, appointed by the governor;
10.8 	(14) one member representing the interests of rural
10.9 	counties, appointed by the governor;
10.10 	(15) one member representing the interests of counties in
10.11 	the seven-county metropolitan area, appointed by the governor;
10.12 	and 
10.13 	(16) one member representing the interests of tribal
10.14 	governments, appointed by the governor.
10.15 	The members of the council appointed by the governor are
10.16 	subject to the advice and consent of the senate.  At least six
10.17 	of the members appointed by the governor must reside in the
10.18 	seven-county metropolitan area.
10.19 		Subd. 3.Terms; compensation; removal. The initial terms
10.20 	of members representing state agencies and the Metropolitan
10.21 	Council expire on the first Monday in January, 2007.
10.22 	Thereafter, the terms of members representing the state agencies
10.23 	and the Metropolitan Council are four years and are coterminous
10.24 	with the governor.  The terms of other members of the council
10.25 	shall be as provided in section 15.059, subdivision 2.  Members
10.26 	may serve until their successors are appointed and qualify.
10.27 	Compensation and removal of council members is as provided in
10.28 	section 15.059, subdivisions 3 and 4.  A vacancy on the council
10.29 	may be filled by the appointing authorities, as provided in
10.30 	subdivision 1, for the remainder of the unexpired term.
10.31 		Subd. 4.Implementation plan. The Clean Water Council
10.32 	shall recommend a plan for implementation of this chapter.  The
10.33 	recommended plan shall address general procedures and time
10.34 	frames for implementing this chapter, and shall include a more
10.35 	specific implementation work plan for the next fiscal biennium
10.36 	and a framework for setting priorities to address impaired
11.1 	waters consistent with section 114D.20, subdivisions 2 to 7.
11.2 	The council shall issue the first recommended plan under this
11.3 	subdivision by December 1, 2005, and shall issue a revised plan
11.4 	by December 1 of each even-numbered year thereafter.
11.5 		Subd. 5.Recommendations on appropriation of funds. The
11.6 	Clean Water Council shall recommend to the governor the manner
11.7 	in which money from the clean water legacy account should be
11.8 	appropriated for the purposes identified in section 114D.45,
11.9 	subdivision 3.  The council's recommendations must be consistent
11.10 	with the purposes, policies, goals, and priorities in sections
11.11 	114D.05 to 114D.35, and shall allocate adequate support and
11.12 	resources to identify impaired waters, develop TMDL's, implement
11.13 	restoration of impaired waters, and provide assistance and
11.14 	incentives to prevent waters from becoming impaired and improve
11.15 	the quality of waters which are listed as impaired but have no
11.16 	approved TMDL.
11.17 		Subd. 6.Biennial report to legislature. By December 1
11.18 	of each even-numbered year, the council shall submit a report to
11.19 	the legislature on the activities for which money from the clean
11.20 	water legacy account has been or will be spent for the current
11.21 	biennium, the activities for which money from the account is
11.22 	recommended to be spent in the next biennium, and the impact on
11.23 	economic development of the implementation of the impaired
11.24 	waters program.  The report due on December 1, 2014, must
11.25 	include an evaluation of the progress made through June 30,
11.26 	2014, in implementing this chapter, the need for funding of
11.27 	future implementation of those sections, and recommendations for
11.28 	the sources of funding.

11.29 	Sec. 7. [114D.35] PUBLIC AND STAKEHOLDER PARTICIPATION;
11.30 	SCIENTIFIC REVIEW; EDUCATION.
11.31 		Subdivision 1.Public and stakeholder participation.
 11.32 	Public agencies involved in the implementation of this chapter
11.33 	shall encourage participation by the public and stakeholders,
11.34 	including local citizens, landowners and managers, and public
11.35 	and private organizations, in the identification of impaired
11.36 	waters, in developing TMDL's, and in planning and implementing
12.1 	restoration of impaired waters.  In particular, the Pollution
12.2 	Control Agency shall make reasonable efforts to provide timely
12.3 	information to the public and to stakeholders about impaired
12.4 	waters that have been identified by the agency.  The agency
12.5 	shall seek broad and early public and stakeholder participation
12.6 	in scoping the activities necessary to develop a TMDL, including
12.7 	the scientific models, methods, and approaches to be used in
12.8 	TMDL development, and to implement restoration pursuant to
12.9 	section 114D.15, subdivision 7.
12.10 		Subd. 2.Expert scientific advice. The Clean Water
12.11 	Council and public agencies shall make use of available
12.12 	expertise from educational, research, and technical
12.13 	organizations, including the University of Minnesota and other
12.14 	higher education institutions, to provide appropriate
12.15 	independent expert advice on models, methods, and approaches
12.16 	used in identifying impaired waters, developing TMDL's, and
12.17 	implementing prevention and restoration.
12.18 		Subd. 3.Education. The Clean Water Council shall
12.19 	develop strategies for informing, educating, and encouraging the
12.20 	participation of citizens, stakeholders, and others regarding
12.21 	the identification of impaired waters, development of TMDL's,
12.22 	and development and implementation of restoration for impaired
12.23 	waters.  Public agencies shall be responsible for implementing
12.24 	the strategies.

12.25 	Sec. 8. [114D.45] CLEAN WATER LEGACY ACCOUNT.
12.26 		Subdivision 1.Creation. The clean water legacy account
12.27 	is created as an account in the environmental fund.  Money in
12.28 	the account must be made available for the implementation of
12.29 	this chapter and sections 446A.073, 446A.074, and 446A.075,
12.30 	without supplanting or taking the place of any other funds which
12.31 	are currently available or may become available from any other
12.32 	source, whether federal, state, local, or private, for
12.33 	implementation of those sections.
12.34 		Subd. 2.Sources of revenue. The following revenues must
12.35 	be deposited in the clean water legacy account:
12.36 	(1) money transferred to the account; and 
13.1 	(2) interest accrued on the account.
13.2 		Subd. 3.Purposes. Subject to appropriation by the
13.3 	legislature, the clean water legacy account may be spent for the
13.4 	following purposes:
13.5 	(1) to provide grants, loans, and technical assistance to
13.6 	public agencies and others who are participating in the process
13.7 	of identifying impaired waters, developing TMDL's, implementing
13.8 	restoration plans for impaired waters, and monitoring the
13.9 	effectiveness of restoration;
13.10 	(2) to support measures to prevent waters from becoming
13.11 	impaired and to improve the quality of waters that are listed as
13.12 	impaired but have no approved TMDL addressing the impairment;
13.13 	(3) to provide grants and loans for wastewater and storm
13.14 	water treatment projects through the Public Facilities
13.15 	Authority;
13.16 	(4) to support the efforts of public agencies associated
13.17 	with individual sewage treatment systems and financial
13.18 	assistance for upgrading and replacing the systems; and 
13.19 	(5) to provide funds to state agencies to carry out their
13.20 	responsibilities under this chapter.

13.21 	Sec. 9. [446A.073] CLEAN WATER LEGACY PHOSPHORUS
13.22 	REDUCTION GRANTS.
13.23 		Subdivision 1.Creation of fund; appropriation. The
13.24 	authority shall establish a clean water legacy capital
13.25 	improvement fund and shall make grants from the fund as provided
13.26 	in this section.  Money in the clean water legacy capital
13.27 	improvement fund, including interest earned, is appropriated to
13.28 	the authority for the purposes of this section.
13.29 		Subd. 2.Grants. The authority shall award grants from
13.30 	the clean water legacy capital improvement fund to governmental
13.31 	units for the capital costs of wastewater treatment facility
13.32 	projects or a portion thereof that will reduce the discharge of
13.33 	total phosphorus from the facility to one milligram per liter or
13.34 	less.  A project is eligible for a grant if it meets the
13.35 	following requirements:
13.36 	(1) the applicable phosphorus discharge limit is
14.1 	incorporated in a permit issued by the agency for the wastewater
14.2 	treatment facility on or after March 28, 2000, the grantee
14.3 	agrees to comply with the applicable limit as a condition of
14.4 	receiving the grant, or the grantee made improvements to a
14.5 	wastewater treatment facility on or after March 28, 2000, that
14.6 	include infrastructure to reduce the discharge of total
14.7 	phosphorus to one milligram per liter or less;
14.8 	(2) the governmental unit has submitted a facilities plan
14.9 	for the project to the agency and a grant application to the
14.10 	authority on a form prescribed by the authority; and 
14.11 	(3) the agency has approved the application and facilities
14.12 	plan, and certified the eligible costs for the project to the
14.13 	authority.
14.14 		Subd. 3.Eligible capital costs. Eligible capital costs
14.15 	for phosphorus reduction grants under subdivision 4, paragraph
14.16 	(a), include the as-bid construction costs and engineering
14.17 	planning and design costs.  Eligible capital costs for
14.18 	phosphorus reduction grants under subdivision 4, paragraph (b),
14.19 	include the final, incurred construction, engineering, planning,
14.20 	and design costs.
14.21 		Subd. 4.Grant amounts and priorities. (a) Priority must
14.22 	be given to projects that start construction on or after July 1,
14.23 	2005.  If a facility's plan for a project is approved by the
14.24 	agency before July 1, 2009, the amount of the grant is 75
14.25 	percent of the eligible capital cost of the project.  If a
14.26 	facility's plan for a project is approved by the agency on or
14.27 	after July 1, 2009, the amount of the grant is 50 percent of the
14.28 	eligible capital cost of the project.  Priority in awarding
14.29 	grants under this paragraph must be based on the date of
14.30 	approval of the facility's plan for the project.
14.31 	(b) Projects that meet the eligibility requirements in
14.32 	subdivision 2 and have started construction before July 1, 2005,
14.33 	are eligible for grants to reimburse 75 percent of the eligible
14.34 	capital cost of the project, less any amounts previously
14.35 	received in grants from other sources.  Application for a grant
14.36 	under this paragraph must be submitted to the agency no later
15.1 	than June 30, 2007.  Priority for award of grants under this
15.2 	paragraph must be based on the date of agency approval of the
15.3 	application for the grant.
15.4 	(c) In each fiscal year that money is available for grants,
15.5 	the authority shall first award grants under paragraph (a) to
15.6 	projects that met the eligibility requirements of subdivision 2
15.7 	by May 1 of that year.  The authority shall use any remaining
15.8 	money available that year to award grants under paragraph (b).
15.9 	Grants that have been approved but not awarded in a previous
15.10 	fiscal year carry over and must be awarded in subsequent fiscal
15.11 	years in accordance with the priorities in this paragraph.
15.12 	(d) Disbursements of grants under this section by the
15.13 	authority to recipients must be made for eligible project costs
15.14 	as incurred by the recipients, and must be made by the authority
15.15 	in accordance with the project financing agreement and
15.16 	applicable state law.
15.17 		Subd. 5.Fees. The authority may charge the grant
15.18 	recipient a fee for its administrative costs not to exceed
15.19 	one-half of one percent of the grant amount, to be paid upon
15.20 	execution of the grant agreement.

15.21 	Sec. 10. [446A.074] SMALL COMMUNITY WASTEWATER TREATMENT
15.22 	LOAN PROGRAM.
15.23 		Subdivision 1.Creation of fund. The authority shall
15.24 	establish a small community wastewater treatment fund and shall
15.25 	make loans from the fund as provided in this section.  Money in
15.26 	the fund is annually appropriated to the authority and does not
15.27 	lapse.  The fund shall be credited with all loan repayments and
15.28 	investment income from the fund, and servicing fees assessed
15.29 	under section 446A.04, subdivision 5.  The authority shall
15.30 	manage and administer the small community wastewater treatment
15.31 	fund, and for these purposes, may exercise all powers provided
15.32 	in this chapter.
15.33 		Subd. 2.Loans. The authority shall award loans to
15.34 	governmental units from the small community wastewater treatment
15.35 	fund for projects to replace noncomplying individual sewage
15.36 	treatment systems with a community wastewater treatment system
16.1 	or systems meeting the requirements of section 115.55.  A
16.2 	governmental unit receiving a loan from the fund shall own the
16.3 	community wastewater treatment systems built under the program
16.4 	and shall be responsible, either directly or through a contract
16.5 	with a private vendor, for all inspections, maintenance, and
16.6 	repairs necessary to assure proper operation of the systems.
16.7 		Subd. 3.Project priority list. Governmental units
16.8 	seeking loans from the small community wastewater treatment loan
16.9 	program shall first submit a project proposal to the agency.  A
16.10 	project proposal shall include a compliance determination for
16.11 	all individual sewage treatment systems in the project area.
16.12 	The agency shall rank project proposals on its project priority
16.13 	list used for the water pollution control revolving fund under
16.14 	section 446A.07.
16.15 		Subd. 4.Loan applications. Governmental units with
16.16 	projects on the project priority list shall submit applications
16.17 	to the authority on forms prescribed by the authority.  The
16.18 	application shall include:
16.19 	(1) a list of the individual sewage treatment systems
16.20 	proposed to be replaced over a period of up to three years;
16.21 	(2) a project schedule and cost estimate for each year of
16.22 	the project;
16.23 	(3) a financing plan for repayment of the loan; and 
16.24 	(4) a management plan providing for the inspection,
16.25 	maintenance, and repairs necessary to assure proper operation of
16.26 	the systems.
16.27 		Subd. 5.Loan awards. The authority shall award loans to
16.28 	governmental units with approved loan applications based on
16.29 	their ranking on the agency's project priority list.  The loan
16.30 	amount shall be based on the estimated project costs for the
16.31 	portion of the project expected to be completed within one year,
16.32 	up to an annual maximum of $500,000.  For projects expected to
16.33 	take more than one year to complete, the authority may make a
16.34 	multiyear commitment for a period not to exceed three years,
16.35 	contingent on the future availability of funds.  Each year of a
16.36 	multiyear commitment must be funded by a separate loan agreement
17.1 	meeting the terms and conditions in subdivision 6.  A
17.2 	governmental unit receiving a loan under a multiyear commitment
17.3 	shall have priority for additional loan funds in subsequent
17.4 	years.
17.5 		Subd. 6.Loan terms and conditions. Loans from the small
17.6 	community wastewater treatment fund shall comply with the
17.7 	following terms and conditions:
17.8 	(1) principal and interest payments must begin no later
17.9 	than two years after the loan is awarded;
17.10 	(2) loans shall carry an interest rate of one percent;
17.11 	(3) loans shall be fully amortized within ten years of the
17.12 	first scheduled payment or, if the loan amount exceeds $10,000
17.13 	per household, shall be fully amortized within 20 years but not
17.14 	to exceed the expected design life of the system;
17.15 	(4) a governmental unit receiving a loan must establish a
17.16 	dedicated source or sources of revenues for repayment of the
17.17 	loan and must issue a general obligation note to the authority
17.18 	for the full amount of the loan; and 
17.19 	(5) each property owner to be served by a community
17.20 	wastewater treatment system under this program must provide an
17.21 	easement to the governmental unit to allow access to the system
17.22 	for management and repairs.
17.23 		Subd. 7.Special assessment deferral. (a) A governmental
17.24 	unit receiving a loan under this section that levies special
17.25 	assessments to repay the loan may defer payment of the
17.26 	assessments under the provisions of sections 435.193 to 435.195.
17.27 	(b) A governmental unit that defers payment of special
17.28 	assessments for one or more properties under paragraph (a) may
17.29 	request deferral of that portion of the debt service on its
17.30 	loan, and the authority shall accept appropriate amendments to
17.31 	the general obligation note of the governmental unit.  If
17.32 	special assessment payments are later received from properties
17.33 	that received a deferral, the funds received shall be paid to
17.34 	the authority with the next scheduled loan payment.
17.35 		Subd. 8.Eligible costs. Eligible costs for small
17.36 	community wastewater treatment loans shall include the costs of
18.1 	planning, design, construction, legal fees, administration, and
18.2 	land acquisition.
18.3 		Subd. 9.Disbursements. Loan disbursements by the
18.4 	authority under this section must be made for eligible project
18.5 	costs as incurred by the recipients, and must be made in
18.6 	accordance with the project loan agreement and applicable state
18.7 	law.
18.8 		Subd. 10.Audits. A governmental unit receiving a loan
18.9 	under this section must annually provide to the authority for
18.10 	the term of the loan a copy of its annual independent audit or,
18.11 	if the governmental unit is not required to prepare an
18.12 	independent audit, a copy of the annual financial reporting form
18.13 	it provides to the state auditor.

18.14 	Sec. 11. Laws 2005, chapter 20, article 1, section 39, is
18.15 	amended to read:

18.16 	Sec. 39. [446A.073] TOTAL MAXIMUM DAILY LOAD GRANTS.
18.17 		Subdivision 1.Program established. The authority must
18.18 	make grants to municipalities to cover up to one-half the cost
18.19 	of wastewater treatment or stormwater projects made necessary by
18.20 	wasteload reductions under total maximum daily load plans
18.21 	required by section 303(d) of the federal Clean Water Act,
18.22 	United States Code, title 33, section 1313(d).
18.23 		Subd. 2.Grant application. Application for a grant must
18.24 	be made to the authority on forms prescribed by the authority
18.25 	for the total maximum daily load grant program, with additional
18.26 	information as required by the authority.  In accordance with
18.27 	section 116.182, the Pollution Control Agency shall:
18.28 	(1) calculate the essential project component percentage,
18.29 	which must be multiplied by the total project cost to determine
18.30 	the eligible project cost; and
18.31 	(2) review and certify approved projects to the authority.
18.32 		Subd. 3.Project priorities. When money is appropriated
18.33 	for grants under this program, the authority shall reserve money
18.34 	for projects in the order that their total maximum daily load
18.35 	plan was approved by the United States Environmental Protection
18.36 	Agency and in an amount based on their most recent cost
19.1 	estimates submitted to the authority or the as-bid costs,
19.2 	whichever is less.
19.3 		Subd. 4.Grant approval. The authority must make a grant
19.4 	to a municipality, as defined in section 116.182, subdivision 1,
19.5 	only after:
19.6 	(1) the commissioner of the Minnesota Pollution Control
19.7 	Agency has certified to the United States Environmental
19.8 	Protection Agency a total maximum daily load plan for identified
19.9 	waters of this state that includes a point source wasteload
19.10 	allocation;
19.11 	(2) the Environmental Protection Agency has approved the
19.12 	plan;
19.13 	(3) a municipality affected by the plan has estimated the
19.14 	cost to it of wastewater treatment projects necessary to comply
19.15 	with the point source wasteload allocation;
19.16 	(4) the Pollution Control Agency has approved the cost
19.17 	estimate; and
19.18 	(5) the authority has determined that the additional
19.19 	financing necessary to complete the project has been committed
19.20 	from other sources.
19.21 		Subd. 5.Grant disbursement. Disbursement of a grant
19.22 	must be made for eligible project costs as incurred by the
19.23 	municipality and in accordance with a project financing
19.24 	agreement and applicable state and federal laws and rules
19.25 	governing the payments.

19.26 	Sec. 12. APPROPRIATIONS.
 19.27 		Subdivision 1.General provisions. The appropriations in
19.28 	this section are from the environmental fund and are available
19.29 	for the fiscal years ending June 30, 2006, and June 30, 2007.
19.30 	Any money remaining after the first year of the biennium is
19.31 	available for the second year.  Appropriations in this section
19.32 	that are encumbered under contract, including grant contract, on
19.33 	or before June 30, 2007, are available until June 30, 2009.
19.34 		Subd. 2.Pollution control agency. The following amounts
19.35 	are appropriated to the Pollution Control Agency for the
19.36 	purposes stated:
20.1 	(1) $4,125,000 in fiscal year 2006 and $1,669,000 in fiscal
20.2 	year 2007 are for statewide assessment of surface water quality
20.3 	and trends; of these amounts, up to $1,960,000 in fiscal year
20.4 	2006 and $793,000 in fiscal year 2007 are available for grants
20.5 	or contracts to support citizen monitoring of surface waters;
20.6 	and 
20.7 	(2) $3,290,000 in fiscal year 2006 and $1,331,000 in fiscal
20.8 	year 2007 are to develop TMDL's for waters listed on the United
20.9 	States Environmental Protection Agency approved 2004 impaired
20.10 	waters list; of this appropriation, up to $1,119,000 in fiscal
20.11 	year 2006 and $453,000 in fiscal year 2007 are available for
20.12 	grants or contracts to develop TMDL's.
20.13 		Subd. 3.Agriculture department. The following amounts
20.14 	are appropriated to the Department of Agriculture for the
20.15 	purposes stated:
20.16 	(1) $2,300,000 in fiscal year 2006 is for the agricultural
20.17 	best management practices loan program under Minnesota Statutes,
20.18 	section 17.117; of this amount, $2,100,000 in fiscal year 2006
20.19 	is available for pass-through to local governments and lenders
20.20 	for low-interest loans;
20.21 	(2) $800,000 in fiscal year 2006 is to expand technical
20.22 	assistance to producers and conservation professionals on
20.23 	nutrient and pasture management; target practices to sources of
20.24 	water impairments; coordinate federal and state farm
20.25 	conservation programs to fully utilize federal conservation
20.26 	funds; and expand conservation planning assistance for
20.27 	producers; of this amount, $210,000 in fiscal year 2006 is
20.28 	available for grants or contracts to develop nutrient and
20.29 	conservation planning assistance information materials; and 
20.30 	(3) $800,000 in fiscal year 2006 is for research,
20.31 	evaluation, and effectiveness monitoring of agricultural
20.32 	practices in restoring impaired waters; of this amount, $600,000
20.33 	in fiscal year 2006 is available for grants or contracts for
20.34 	research, evaluations, and effectiveness monitoring of
20.35 	agricultural practices in restoring impaired waters, including
20.36 	on-farm demonstrations.
21.1 		Subd. 4.Board of water and soil resources. The
21.2 	following amounts are appropriated to the Board of Water and
21.3 	Soil Resources for restoration and prevention actions as
21.4 	described in Minnesota Statutes, section 114D.20, subdivisions 6
21.5 	and 7:
21.6 	(1) $1,807,000 in fiscal year 2006 is for targeted nonpoint
21.7 	restoration cost-share and incentive payments; of this amount,
21.8 	up to $1,713,000 in fiscal year 2006 is available for grants to
21.9 	soil and water conservation districts through the state
21.10 	cost-share program authorized under Minnesota Statutes, section
21.11 	103C.501;
21.12 	(2) $1,085,000 in fiscal year 2006 is for targeted nonpoint
21.13 	technical and engineering assistance for restoration activities;
21.14 	of this amount, up to $1,022,000 in fiscal year 2006 is
21.15 	available for grants to soil and water conservation districts,
21.16 	watershed management organizations, or counties to support
21.17 	implementation of nonpoint restoration activities;
21.18 	(3) $63,000 in fiscal year 2006 is for reporting and
21.19 	evaluation of applied soil and water conservation practices;
21.20 	(4) $755,000 in fiscal year 2006 is for grants to counties
21.21 	for implementation of county individual sewage treatment systems
21.22 	programs through the local water resources protection and
21.23 	management program under Minnesota Statutes, section 103B.3369;
21.24 	(5) $471,000 in fiscal year 2006 is for base and challenge
21.25 	grants to support nonpoint source protection activities related
21.26 	to lake and river protection and management through the local
21.27 	water resources protection and management program under
21.28 	Minnesota Statutes, section 103B.3369; and 
21.29 	(6) $755,000 in fiscal year 2006 is for grants to soil and
21.30 	water conservation districts for streambank, stream channel,
21.31 	lakeshore, and roadside protection and restoration projects
21.32 	through the state-cost share program under Minnesota Statutes,
21.33 	section 103C.501.
21.34 		Subd. 5.Public facilities authority. $15,249,000 in
21.35 	fiscal year 2006 is appropriated to the Public Facilities
21.36 	Authority; of this amount, $6,131,000 in fiscal year 2006 is for
22.1 	deposit in the clean water legacy capital improvements fund for
22.2 	grants under Minnesota Statutes, section 446A.073; $1,441,000 in
22.3 	fiscal year 2006 is for deposit in the small community
22.4 	wastewater treatment fund for loans under Minnesota Statutes,
22.5 	section 446A.074; and $7,677,000 in fiscal year 2006 is for
22.6 	deposit in the water pollution control revolving fund under
22.7 	Minnesota Statutes, section 446A.07, for wastewater treatment
22.8 	and storm water projects.  Money appropriated under this
22.9 	subdivision does not cancel and is available until expended.

22.10 	Sec. 13. REVISOR'S INSTRUCTION.
 22.11 	The revisor of statutes shall renumber the section coded as
22.12 	Minnesota Statutes, section 446A.073, as Minnesota Statutes,
22.13 	section 446A.075.