HF 790

1st Committee Engrossment - 85th Legislature (2007 - 2008)

Posted on 12/22/2009 12:37 p.m.

1.1A bill for an act 1.2relating to public facilities; modifying provisions of the Minnesota Public 1.3Facilities Authority Act; making technical and housekeeping changes; modifying 1.4Pollution Control Agency project priority rule;amending Minnesota Statutes 1.52006, sections 116.182, subdivision 5; 446A.02; 446A.03; 446A.04; 446A.051; 1.6446A.07; 446A.072; 446A.073; 446A.074; 446A.075; 446A.081; 446A.085; 1.7446A.09; 446A.11, subdivision 13; 446A.17, subdivision 1; repealing Minnesota 1.8Statutes 2006, sections 446A.05; 446A.06; 446A.15, subdivision 6. 1.9BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.10ARTICLE 1 1.11PUBLIC FACILITIES AUTHORITY TECHNICAL AND 1.12HOUSEKEEPING CHANGES 1.13    Section 1. Minnesota Statutes 2006, section 446A.02, is amended to read: 1.14446A.02 DEFINITIONS. 1.15    Subdivision 1. Applicability. For the purposes of this chapter, the terms in this 1.16section have the meanings given them. 1.17    Subd. 1a. Agency. "Agency" means the Minnesota Pollution Control Agency. 1.18    Subd. 2. Authority. "Authority" means the Minnesota Public Facilities Authority. 1.19    Subd. 3. Commissioner. "Commissioner" means the commissioner of employment 1.20and economic development. 1.21    Subd. 4. Federal Water Pollution Control Act. "Federal Water Pollution Control 1.22Act" means the Federal Water Pollution Control Act, as amended, United States Code, 1.23title 33, sections 1251 et seq. 1.24     new text begin Subd. 4a. new text end new text begin Eligible recipient. new text end new text begin "Eligible recipient" means a governmental unit or new text end 1.25 new text begin other entity that may be defined as an eligible recipient for specific programs within this new text end 1.26 new text begin chapter, and which may be different from one program to another. new text end 2.1    Subd. 5. Governmental unit. "Governmental unit" means a state agency, home rule 2.2charter or statutory city, county, sanitary district, or other governmental subdivision. 2.3    Subd. 6. Project. "Project" means new text begin any eligible activity authorized in this chapter new text end 2.4 new text begin including new text end the acquisition, new text begin design, new text end construction, improvement, expansion, repair, or 2.5rehabilitation of all or part of any structure, facility, or equipment necessary for a 2.6wastewater treatment system or water supply system. 2.7    Sec. 2. Minnesota Statutes 2006, section 446A.03, is amended to read: 2.8446A.03 MINNESOTA PUBLIC FACILITIES AUTHORITY. 2.9    Subdivision 1. Membership. The Minnesota Public Facilities Authority consists 2.10of the commissioner of employment and economic development, the commissioner 2.11of finance, the commissioner of the Pollution Control Agency, the commissioner of 2.12agriculture, the commissioner of health, and the commissioner of transportation. 2.13    Subd. 2. Chair; other officers. The commissioner of employment and economic 2.14development shall serve as the chair and chief executive officer of the authority. The 2.15authority new text begin shall have the position of vice-chair rotate annually among its members. In the new text end 2.16 new text begin absence of the chair or vice-chair at meetings of the authority members may elect a chair new text end 2.17 new text begin for the meeting, and new text end may elect other officers as necessary from its members. 2.18    Subd. 3a. Delegation. In addition to any powers to delegate that members of the 2.19authority have as commissioners, they may delegate to the commissioner of employment 2.20and economic development new text begin chair, vice-chair, or executive director new text end their responsibilities as 2.21members of the authority for reviewing and approving financing of eligible projects that 2.22have been certified to the authority new text begin by another department or agency, projects that have new text end 2.23 new text begin been authorized by law, or programs specifically authorized by resolution of the authority new text end . 2.24    Subd. 4. Board actions. (a) A majority of the authority, excluding vacancies, 2.25constitutes a quorum to conduct its business, to exercise its powers, and for all other 2.26purposes. 2.27(b) The board may conduct its business by any technological means available, 2.28including teleconference calls or interactive video, that allows for an interaction between 2.29members. If a meeting is conducted under this paragraph, a specific location must be 2.30available for the public to attend the meeting and at least one member must be present at 2.31that location. 2.32    Subd. 5. Executive director new text begin ; staffing new text end . The commissioner new text begin authority new text end shall employ new text begin new text end 2.33 new text begin and the chair shall appoint new text end , with the concurrence of the authority, an executive director 2.34in the unclassified service. The new text begin executive new text end director shall new text begin be responsible for staff of the new text end 2.35 new text begin authority. The executive director shall new text end perform duties that the authority may require in 3.1carrying out its responsibilities new text begin to manage and implement the funds and programs in this new text end 3.2 new text begin chapter, implementation of debt issuance authorized by the authority, compliance with new text end 3.3 new text begin all state and federal program requirements, and state and federal securities and tax laws new text end 3.4 new text begin and regulations new text end . 3.5    Subd. 6. Administrative services. The commissioner shall provide administrative 3.6services to the authority new text begin shall enter into agreements for administrative and professional new text end 3.7 new text begin services, and technical support new text end . 3.8    Subd. 7. Personal liability. Members and officers of the authority are not liable 3.9personally for any debt or obligation of the authority. 3.10    Sec. 3. Minnesota Statutes 2006, section 446A.04, is amended to read: 3.11446A.04 POWERS; DUTIES new text begin ; PROGRAM ADMINISTRATION new text end . 3.12    Subdivision 1. Bylaws; rules. The authority shall adopt bylaws for its organization 3.13and internal management. The commissioner may adopt rules covering the authority's 3.14operations, properties, and facilities. 3.15    Subd. 2. Power to sue; enter contracts. The authority may sue and be sued. The 3.16authority may make and enter into contracts, leases, and agreements necessary to perform 3.17its duties and exercise its powers. 3.18    Subd. 3. Gifts; grants. The authority may apply for, accept, and disburse gifts, 3.19grants, loans, or other property from the United States, the state, private sources, or 3.20any other source for any of its purposes. Money received by the authority under this 3.21subdivision must be deposited in the state treasury and is appropriated to the authority to 3.22carry out its duties. 3.23    Subd. 4. Contract for services. The authority may retain or contract for the 3.24services of accountants, financial advisors, and other consultants or agents needed to 3.25perform its duties and exercise its powers. 3.26    Subd. 5. Fees. (a) The authority may set and collect fees for costs incurred by the 3.27authority for audits, arbitrage accounting, and payment of fees charged by the State Board 3.28of Investment. The authority may also set and collect fees for costs incurred by new text begin , new text end the 3.29commissioner new text begin Department of Employment and Economic Development new text end , the Department 3.30of Health, the Pollution Control Agency, and the Department of Transportation, including 3.31costs for personnel new text begin , professional, new text end and administrative services, for financings new text begin debt issuance new text end 3.32 new text begin related costs new text end and the establishment and maintenance of reserve funds. Fees charged 3.33directly to borrowers or grantees upon executing a loan or grant agreement must not 3.34exceed one-half of one percent of the loan or grant amount. Servicing fees assessed to loan 3.35repayments must not exceed two percent of the loan repayment. The disposition of fees 4.1collected for costs incurred by the authority is governed by section 446A.11, subdivision 4.213 . The authority shall enter into interagency agreements to transfer funds into appropriate 4.3administrative accounts established for fees collected under this subdivision for costs 4.4incurred by the commissioner new text begin Department of Employment and Economic Development new text end , 4.5the Department of Health, or the Pollution Control Agency. Fees collected under this 4.6subdivision for costs incurred by the commissioner new text begin Department new text end of Transportation must be 4.7credited to the fund or account which is the source of the loan to which the fees are related. 4.8(b) The authority shall annually report to the chairs of the finance and appropriations 4.9committees of the legislature on: 4.10(1) the amount of fees collected under this subdivision for costs incurred by the 4.11authority; 4.12(2) the purposes for which the fee proceeds have been spent; and 4.13(3) the amount of any remaining balance of fee proceeds. 4.14    Subd. 6. Property. The authority may acquire, encumber, hold, and convey through 4.15lease, purchase, gift, or otherwise, any real or personal property. 4.16     new text begin Subd. 6a. new text end new text begin Loans; grants. new text end new text begin The authority may make and contract to make loans and new text end 4.17 new text begin grants to eligible recipients to finance projects that the eligible recipient may construct or new text end 4.18 new text begin acquire or may acquire or contract to acquire notes and bonds issued by eligible recipients new text end 4.19 new text begin to finance those projects. new text end 4.20     new text begin Subd. 6b. new text end new text begin Debt. new text end new text begin The authority may borrow money to carry out and effectuate its new text end 4.21 new text begin programs and may issue bonds or notes as evidence of any such borrowing in accordance new text end 4.22 new text begin with sections 446A.12 to 446A.20. new text end 4.23    Subd. 7. In general. The authority has all the powers necessary and convenient 4.24to carry out its duties under this chapter. 4.25    Sec. 4. Minnesota Statutes 2006, section 446A.051, is amended to read: 4.26446A.051 PROJECT FINANCIAL ASSISTANCE. 4.27     new text begin Subdivision 1. new text end new text begin Determination of financial assistance. new text end The authority shall assist 4.28eligible governmental units new text begin recipients new text end in determining what grants or loans under sections 4.29446A.06, 446A.07, 446A.072, 446A.073, 446A.074, 446A.075, and 446A.081 to apply 4.30for to finance projects and the manner in which the governmental unit new text begin eligible recipient new text end 4.31will pay for its portion of the project cost. 4.32     new text begin Subd. 2. new text end new text begin Grant limitations. new text end If a project is eligible for a grant under section 4.33446A.073 , 446A.074, or 446A.075, the total grant shall not exceed the greater of the 4.34maximum amount from a single program or the amount the project could receive under 4.35section 446A.072. 5.1     new text begin Subd. 3. new text end new text begin Financial feasibility review. new text end new text begin (a) new text end The authority shall review the proposed 5.2financing for each project certified by the agency to new text begin the authority to new text end ascertain whether or 5.3not: (1) total financing of a project is assured; and (2) the governmental unit's financial 5.4plan to pay for its portion of the project cost is feasible new text begin ; (3) the proposed project and new text end 5.5 new text begin financing plan is an eligible use of the money; and (4) the proposal is in compliance with new text end 5.6 new text begin applicable state and federal tax and securities laws and regulations new text end . 5.7 new text begin (b) Unless a project is specifically authorized by law, the authority may reject the new text end 5.8 new text begin proposed financing for a project meeting the requirements in paragraph (a) if a majority new text end 5.9 new text begin of members believe the financing of the project would not be in the best interests of the new text end 5.10 new text begin state or would be detrimental to the authority's funds or programs. A determination to new text end 5.11 new text begin reject a proposed project shall not be made in an arbitrary and capricious manner and must new text end 5.12 new text begin be supported by substantive evidence and documented by a resolution of the authority new text end 5.13 new text begin stating its findings. new text end 5.14    Sec. 5. Minnesota Statutes 2006, section 446A.07, is amended to read: 5.15446A.07 new text begin CLEAN new text end WATER POLLUTION CONTROL REVOLVING FUND. 5.16    Subdivision 1. Establishment of fund. The authority shall establish a new text begin clean new text end water 5.17pollution control revolving fund to provide loans for the purposes and eligible costs 5.18authorized under title VI of the Federal Water Pollution Control Act. The fund must be 5.19credited with repayments. 5.20     new text begin Subd. 1a. new text end new text begin Definitions. new text end new text begin (a) For the purposes of this section, the terms in this new text end 5.21 new text begin subdivision have the meanings given them. new text end 5.22 new text begin (b) "Eligible recipients" means governmental units or other entities eligible to receive new text end 5.23 new text begin loans or other assistance as provided in title VI of the Federal Water Pollution Control Act. new text end 5.24 new text begin (c) "Federal Water Pollution Control Act" means the Federal Water Pollution Control new text end 5.25 new text begin Act, as amended, United States Code, title 33, sections 1251 et seq. new text end 5.26    Subd. 2. State funds. A state matching fund is established to be used in compliance 5.27with federal matching requirements specified in the Federal Water Pollution Control Act. 5.28A state grant and loan fund is established to provide grants and loans to governmental 5.29units for the planning and construction of treatment works as specified in section 116.16, 5.30subdivision 2 , paragraphs (6) and (7). 5.31    Subd. 3. Capitalization grant agreement. The authority shall enter an agreement 5.32with the administrator of the United States Environmental Protection Agency to receive 5.33capitalization grants for the new text begin clean water new text end revolving fund. The authority may exercise 5.34powers necessary to comply with the requirements specified in the agreement, which must 5.35be in compliance with the Federal Water Pollution Control Act. 6.1    Subd. 4. Intended use plan. (a) The Public Facilities authority shall annually 6.2prepare and submit to the United States Environmental Protection Agency an intended use 6.3plan. The plan must identify the intended uses of the amounts available to the new text begin clean new text end water 6.4pollution control revolving fund, including a list of wastewater treatment and storm water 6.5projects and all other eligible activities to be funded during the fiscal year. 6.6(b) To be eligible for placement on the intended use plan: 6.7(1) a project must be listed on the Pollution Control Agency's project priority list; 6.8(2) the applicant must submit a written request to the Public Facilities authority, 6.9including a brief description of the project, a project cost estimate and the requested loan 6.10amount, and a proposed project schedule; and 6.11(3) for a construction loan, the project must have a facility plan approved by the 6.12Pollution Control Agency. 6.13(c) The Pollution Control Agency shall annually provide to the Public Facilities 6.14authority its project priority list of wastewater and storm water projects to be considered 6.15for funding. The Public Facilities authority may not submit the plan until it has received 6.16the review and comment of the Pollution Control Agency or until 30 days have elapsed 6.17since the plan was submitted to the Pollution Control Agency, whichever occurs first. In 6.18addition, the Public Facilities authority shall offer municipalities new text begin eligible recipients new text end seeking 6.19placement on the intended use plan an opportunity to review and comment on the plan 6.20before it is adopted. The plan may be amended to add additional projects for consideration 6.21for funding as it determines funds are available and additional projects are able to proceed. 6.22    Subd. 5. Applications. Applications by municipalities and other entities identified 6.23in the annual intended use plan new text begin eligible recipients new text end for loans from the new text begin clean new text end water pollution 6.24control revolving fund must be made to the authority on forms requiring information 6.25prescribed by the rules of the agency adopted under this section. The authority shall send 6.26the applications to the agency within ten days of receipt new text begin authority new text end . The director new text begin Pollution new text end 6.27 new text begin Control Agency new text end shall certify to the authority those applications new text begin projects new text end that appear to 6.28meet the criteria set forth in the Federal Water Pollution Control Act, this section, and 6.29rules of the new text begin Pollution Control new text end Agency. 6.30    Subd. 6. Award and terms of loans. The authority shall award loans to those 6.31municipalities and other entities new text begin for projects new text end certified by the Pollution Control Agency 6.32or shall provide funding for the appropriate state agency or department to make loans 6.33for eligible activities certified by the pollution control agency new text begin identified in the intended new text end 6.34 new text begin use plan, new text end provided the use of funds and the terms and conditions of the loans are in 6.35conformance with the federal Water Pollution Control Act, this section, and rules of the 6.36Pollution Control Agency and the authority adopted under this section. 7.1    Subd. 7. Loan conditions. When making loans from the revolving fund, the 7.2authority shall comply with the conditions of the Federal Water Pollution Control Act, 7.3including: 7.4(a) Loans must be made at or below market interest rates, including interest-free 7.5loans, at terms not to exceed 20 years. 7.6(b) The annual principal and interest payments must begin no later than one year 7.7after completion of a project. Loans must be fully amortized no later than 20 years after 7.8project completion. 7.9(c) A loan new text begin An eligible new text end recipient shall establish a dedicated source of revenue for 7.10repayment of the loan. 7.11(d) The fund must be credited with all payments of principal and interest on all loans. 7.12 new text begin (e) A loan may not be used to pay operating expenses or current obligations, unless new text end 7.13 new text begin specifically allowed by the Federal Water Pollution Control Act. new text end 7.14 new text begin (f) A loan made by the authority must be secured by notes or bonds of the eligible new text end 7.15 new text begin recipient of the loan. new text end 7.16    Subd. 8. Other uses of revolving fund. The new text begin clean new text end water pollution control revolving 7.17fund may be used as provided in title VI of the Federal Water Pollution Control Act, 7.18including the following uses: 7.19(1) to buy or refinance the debt obligation of governmental units for treatment 7.20works where debt was incurred and construction begun after March 7, 1985, at or below 7.21market rates; 7.22(2) to guarantee or purchase insurance for local obligations to improve credit market 7.23access or reduce interest rates; 7.24(3) to provide a source of revenue or security for the payment of principal and 7.25interest on revenue or general obligation bonds issued by the authority if the bond 7.26proceeds are deposited in the fund; 7.27(4) to provide loan guarantees, loans, or set-aside for similar revolving funds 7.28established by a governmental unit other than state agencies, or state agencies under 7.29sections 17.117, 103F.725, subdivision 1a, 116J.403, and 116J.617; provided that no more 7.30than $4,000,000 of the balance in the fund may be used for the small cities block grant 7.31program under section and the tourism loan program under section , 7.32taken together; 7.33(5) to earn interest on fund accounts; and 7.34(6) to pay the reasonable costs incurred by the authority and the new text begin Pollution Control new text end 7.35Agency of administering the fund and conducting activities required under the Federal 7.36Water Pollution Control Act, including water quality management planning under section 8.1205(j) of the act and water quality standards continuing planning under section 303(e) 8.2of the act. 8.3Amounts spent under clause (6) may not exceed the amount allowed under the 8.4Federal Water Pollution Control Act. 8.5    Subd. 9. Payments. Payments from the fund must be made in accordance with the 8.6applicable state and federal law governing the payments, except that for projects other 8.7than those funded under section 17.117, 103F.725, subdivision 1a, , 116J.617, 8.8or 462A.05, no payment for a project may be made to a governmental unit new text begin an eligible new text end 8.9 new text begin recipient new text end until and unless the authority has determined the total estimated cost of the 8.10project and ascertained that financing of the project is assured by: 8.11(1) a loan authorized by state law or the appropriation of proceeds of bonds or other 8.12money of the governmental unit to a fund for the construction of the project; and 8.13(2) an irrevocable undertaking, by resolution of the governing body new text begin eligible recipient new text end 8.14of the governmental unit, to use all money made available for the project exclusively for 8.15the project, and to pay any additional amount by which the cost of the project exceeds the 8.16estimate by the appropriation to the construction fund of additional money or the proceeds 8.17of additional bonds to be issued by the governmental unit new text begin eligible recipient new text end . 8.18    Subd. 10. Rules of authority. The commissioner shall adopt rules containing 8.19procedures for the administration of the authority's duties as provided in this section, 8.20including loan interest rates, the amounts of loans, and municipal financial need. 8.21    Subd. 11. Rules of new text begin Pollution Control new text end Agency. The new text begin Pollution Control new text end Agency 8.22shall adopt rules relating to the procedure for preparation of the annual intended use plan 8.23 new text begin certification of projects to the authority for funding, new text end and other matters that the new text begin Pollution new text end 8.24 new text begin Control new text end Agency considers necessary for proper loan administration new text begin of its duties under this new text end 8.25 new text begin section new text end . Eligible activities are those required under the Federal Water Pollution Control 8.26Act of 1987, as amended. 8.27    Sec. 6. Minnesota Statutes 2006, section 446A.072, is amended to read: 8.28446A.072 WASTEWATER INFRASTRUCTURE FUNDING PROGRAM. 8.29    Subdivision 1. Establishment of program. The authority will establish a 8.30wastewater infrastructure funding program to provide supplemental assistance to 8.31municipalities new text begin governmental units new text end receiving funding through the new text begin clean new text end water pollution 8.32control revolving loan new text begin fund new text end program or the United States Department of Agriculture 8.33Rural Economic and Community Development's (USDA/RECD) Water and Waste 8.34Disposal Loans and Grants program for the design and planning, improvements to, and 8.35construction of municipal wastewater treatment systems. The purpose of the program 9.1is to assist municipalities new text begin governmental units new text end demonstrating financial need in building 9.2cost-efficient projects to address existing environmental or public health problems. To 9.3implement the program, the authority shall establish a wastewater infrastructure fund to 9.4provide grants and loans for the purposes authorized under title VI of the Federal Water 9.5Pollution Control Act. The fund shall be credited with all investment income from the 9.6fund and all repayments of loans, grants, and penalties. 9.7    Subd. 3. Program administration. (a) The authority shall provide supplemental 9.8assistance, as provided in subdivision 5a to municipalities new text begin governmental units new text end : 9.9(1) whose projects are listed on the new text begin Pollution Control new text end Agency's project priority list; 9.10(2) that demonstrate their projects are a cost-effective solution to an existing 9.11environmental or public health problem; and 9.12(3) whose projects are approved by the USDA/RECD or certified by the 9.13commissioner of the new text begin Pollution Control new text end Agency. 9.14(b) For a municipality new text begin governmental unit new text end receiving grant funding from the 9.15USDA/RECD, applications must be made to the USDA/RECD with additional 9.16information submitted to the authority as required by the authority. Eligible project costs 9.17and affordability criteria shall be determined by the USDA/RECD. 9.18(c) For a municipality new text begin governmental unit new text end not receiving grant funding from the 9.19USDA/RECD, application must be made to the authority on forms prescribed by the 9.20authority for the new text begin clean new text end water pollution control revolving fund program with additional 9.21information as required by the authority. In accordance with section 116.182, the new text begin Pollution new text end 9.22 new text begin Control new text end Agency shall: 9.23(1) calculate the essential project component percentage which must be multiplied 9.24by the total project cost to determine the eligible project cost; and 9.25(2) review and certify approved projects to the authority. 9.26(d) At the time funds are appropriated under this section, the authority shall reserve 9.27supplemental assistance for projects in order of their rankings on the new text begin Pollution Control new text end 9.28Agency's project priority list and in an amount based on their most recent cost estimates 9.29submitted to the authority or the as-bid costs, whichever is less. 9.30    Subd. 5a. Type and amount of assistance. (a) For a municipality new text begin governmental new text end 9.31 new text begin unit new text end receiving grant funding from the USDA/RECD, the authority shall provide assistance 9.32in the form of a grant of up to one-half of the eligible grant amount determined by 9.33USDA/RECD. A municipality new text begin governmental unit new text end may not receive a grant under this 9.34paragraph for more than $4,000,000 or $15,000 per existing connection, whichever 9.35is less, unless specifically approved by law. In the case of a sanitary district or other 9.36multijurisdictional project for which the USDA/RECD is unable to fully fund up to 10.1one-half of the eligible grant amount, the authority may provide up to an additional 10.2$1,000,000 for each additional municipality new text begin governmental unit new text end participating up to a 10.3maximum of $8,000,000 or $15,000 per existing connection, whichever is less, but not to 10.4exceed the maximum grant level determined by the USDA/RECD as needed to keep the 10.5project affordable. 10.6(b) For a municipality new text begin governmental unit new text end not receiving grant funding from the 10.7USDA/RECD, the authority shall provide assistance in the form of a loan for the eligible 10.8project costs that exceed five percent of the market value of properties in the project 10.9service area new text begin , less the amount of any other grant funding received by the governmental new text end 10.10 new text begin unit for the project new text end . A municipality new text begin governmental unit new text end may not receive a loan under 10.11this paragraph for more than $4,000,000 or $15,000 per existing connection, whichever 10.12is less, unless specifically approved by law. In the case of a sanitary district or other 10.13multijurisdictional project, the authority may provide a loan under this paragraph for up to 10.14an additional $1,000,000 for each additional municipality participating up to a maximum 10.15of $8,000,000 or $15,000 per existing connection, whichever is less, unless specifically 10.16approved by law. A loan under this paragraph must bear no interest, must be repaid as 10.17provided in subdivision 7, and must only be provided in conjunction with a loan from the 10.18 new text begin clean new text end water pollution control revolving fund under section 446A.07. 10.19(c) Notwithstanding the limits in paragraphs (a) and (b), for a municipality new text begin new text end 10.20 new text begin governmental unit new text end receiving supplemental assistance under this section after January 1, 10.212002, if the authority determines that the municipality's new text begin governmental unit's new text end construction 10.22and installation costs are significantly increased due to geological conditions of crystalline 10.23bedrock or karst areas and discharge limits that are more stringent than secondary 10.24treatment, the authority shall provide assistance in the form of half grant and half loan. 10.25Assistance from the authority may not be more than $25,000 per existing connection. Any 10.26additional grant amount received for the same project must be used to reduce the amount 10.27of the municipality's new text begin governmental unit's new text end loan from the water pollution control revolving 10.28fund that exceeds five percent of the market value of properties in the project service area. 10.29    Subd. 5b. Special assessment deferral. A municipality new text begin governmental unit new text end 10.30receiving a loan under subdivision 5a that levies special assessments to repay the loan 10.31under subdivision 5a or section 446A.07 may defer payment of such assessments under 10.32the provisions of sections 435.193 to 435.195. 10.33    Subd. 6. Disbursements. Disbursements of grants or loans awarded under this 10.34section by the authority to recipients must be made for eligible project costs as incurred by 10.35the recipients, and must be made by the authority in accordance with the project financing 10.36agreement and applicable state and federal laws and rules governing the payments. 11.1    Subd. 7. Loan repayments. Notwithstanding the limitations set forth in section 11.2475.54 , subdivision 1, this subdivision shall govern the maturities and mandatory sinking 11.3fund redemptions of the loans under this section. A municipality new text begin governmental unit new text end 11.4receiving a loan under this section shall repay the loan in semiannual payment amounts 11.5determined by the authority. The payment amount must be based on the average payments 11.6on the municipality's new text begin governmental unit's clean new text end water pollution control revolving fund 11.7loan or, if greater, the minimum amount required to fully repay the loan by the maturity 11.8date. Payments must begin within one year of the date of the municipality's new text begin governmental new text end 11.9 new text begin unit's new text end final payment on the new text begin clean new text end water pollution control revolving fund loan. The final 11.10maturity date of the loan under this section must be no later than 20 years from the date of 11.11the first payment on the loan under this section and no later than 40 years from the date of 11.12the first payment on the new text begin clean new text end water pollution control revolving fund loan. 11.13    Subd. 8. Eligibility. A municipality new text begin governmental unit new text end is eligible for assistance 11.14under this section only after new text begin applying for new text end grant funding from other sources new text begin and funding new text end 11.15has been applied for, obtained, rejected, or the authority has determined that the potential 11.16funding is unlikely. 11.17    Subd. 9. Loan limitation. Supplemental assistance may not be used to reduce 11.18the sewer service charges of a significant wastewater contributor, or a single user that 11.19has caused the need for the project or whose current or projected flow and load exceed 11.20one-half of the current wastewater treatment plant's capacity. 11.21    Subd. 11. Report on needs. By February 1 of each even-numbered year, the 11.22authority, in conjunction with the Pollution Control Agency, shall prepare a report to the 11.23Finance Division of the senate Environment and Natural Resources Committee and the 11.24house Environment and Natural Resources Finance Committee on wastewater funding 11.25assistance needs of municipalities new text begin governmental units new text end under this section. 11.26    Subd. 12. System replacement fund. Each municipality new text begin governmental unit new text end 11.27receiving a loan new text begin or grant new text end under this section shall establish a system replacement fund 11.28and shall annually deposit a minimum of $.50 per 1,000 gallons of flow for major 11.29rehabilitation, new text begin or new text end expansion new text begin of the treatment system new text end , or replacement of the treatment 11.30system at the end of its useful life. Money must remain in the account, for the life of the 11.31loan new text begin from the authority or USDA/RECD, new text end unless use of the fund is approved in writing by 11.32the authority for major rehabilitation, expansion, or replacement of the treatment system. 11.33By March 1 each year during the life of the loan, each municipality new text begin recipient new text end shall submit 11.34a report to the authority regarding the amount deposited and the fund balance for the 11.35prior calendar year. Failure to comply with the requirements of this subdivision shall 11.36result in the authority assessing a penalty fee to the municipality new text begin recipient new text end equal to one 12.1percent of the outstanding loan balance new text begin supplemental assistance amount new text end for each year of 12.2noncompliance. Failure to make the required deposit or pay the penalty fee as required 12.3constitutes a default on the loan. 12.4    Subd. 14. Consistency with land use plans. A municipality new text begin governmental unit new text end 12.5applying for a project in an unsewered area shall include in its application to the authority 12.6a certification from the county in which the project is located that: 12.7(1) the project is consistent with the county comprehensive land use plan, if the 12.8county has adopted one; 12.9(2) the project is consistent with the county water plan, if the county has adopted 12.10one; and 12.11(3) the county has adopted specific land use ordinances or controls so as to meet or 12.12exceed the requirements of Minnesota Rules, part 7080.0305. 12.13    Sec. 7. Minnesota Statutes 2006, section 446A.073, is amended to read: 12.14446A.073 TOTAL MAXIMUM DAILY LOAD GRANTS. 12.15    Subdivision 1. Program established. When money is appropriated for grants 12.16under this program, the authority must make grants new text begin up to a maximum of $3,000,000 new text end to 12.17municipalities new text begin governmental units new text end to cover up to one-half the cost of wastewater treatment 12.18or stormwater projects made necessary by wasteload reductions under total maximum 12.19daily load plans required by section 303(d) of the federal Clean Water Act, United States 12.20Code, title 33, section 1313(d). 12.21    Subd. 2. Grant application. Application for a grant must be made to the authority 12.22on forms prescribed by the authority for the total maximum daily load grant program, with 12.23additional information as required by the authority, including a project schedule and cost 12.24estimate for the work necessary to comply with the point source wasteload allocation. The 12.25Pollution Control Agency shall: 12.26(1) in accordance with section 116.182, calculate the essential project component 12.27percentage, which must be multiplied by the total project cost to determine the eligible 12.28project cost; and 12.29(2) review and certify to the authority those projects that have plans and 12.30specifications approved under section 115.03, subdivision 1, paragraph (f). 12.31    Subd. 3. Project priorities. When money is appropriated for grants under this 12.32program, the authority shall new text begin accept applications during the month of July and new text end reserve 12.33money for projects new text begin expected to proceed with construction by the end of the fiscal year new text end in 12.34the order that their new text begin listed on the Pollution Control Agency's project priority list, provided new text end 12.35 new text begin the project is included in a new text end total maximum daily load plan was new text begin that has been new text end approved by 13.1the United States Environmental Protection Agency new text begin at the time the appropriation became new text end 13.2 new text begin law new text end and in an amount based on their most recent new text begin the new text end cost estimates new text begin estimate new text end submitted to 13.3the authority new text begin in the grant application new text end or the as-bid costs, whichever is less. 13.4    Subd. 4. Grant approval. The authority must make a grant to a municipality new text begin new text end 13.5 new text begin governmental unit new text end , as defined in section 116.182, subdivision 1, only after: 13.6(1) the commissioner of the Minnesota Pollution Control Agency has certified to 13.7the United States Environmental Protection Agency a total maximum daily load plan for 13.8identified waters of this state that includes a point source wasteload allocation; 13.9(2) the Environmental Protection Agency has approved the plan; 13.10(3) a municipality new text begin governmental unit new text end affected by the plan has estimated the cost to it 13.11of new text begin submitted the as-bid cost for the new text end wastewater treatment new text begin or storm water new text end projects necessary 13.12to comply with the point source wasteload allocation; 13.13(4) the Pollution Control Agency has approved the cost estimate new text begin as-bid costs and new text end 13.14 new text begin certified the grant eligible portion of the project new text end ; and 13.15(5) the authority has determined that the additional financing necessary to complete 13.16the project has been committed from other sources. 13.17    Subd. 5. Grant disbursement. Disbursement of a grant must be made for eligible 13.18project costs as incurred by the municipality new text begin governmental unit new text end and in accordance with 13.19a project financing agreement and applicable state and federal laws and rules governing 13.20the payments. 13.21    Sec. 8. Minnesota Statutes 2006, section 446A.074, is amended to read: 13.22446A.074 CLEAN WATER LEGACY PHOSPHORUS REDUCTION 13.23GRANTS. 13.24    Subdivision 1. Creation of account. A clean water legacy capital improvement 13.25account is created in the bond proceeds fund new text begin state treasury new text end . Money in the account may 13.26only be used for grants for eligible capital costs as provided in this section. Money in 13.27the clean water legacy capital improvement fund new text begin account new text end , including interest earned, is 13.28appropriated to the authority for the purposes of this section. 13.29    Subd. 2. Grants. The authority shall award grants from the clean water legacy 13.30capital improvement account to governmental units for the capital costs of wastewater 13.31treatment facility projects or a portion thereof that will reduce the discharge of total 13.32phosphorus from the facility to one milligram per liter or less. A project is eligible for a 13.33grant if it meets the following requirements: 13.34    (1) the applicable phosphorus discharge limit is incorporated in a permit issued by 13.35the new text begin Pollution Control new text end Agency for the wastewater treatment facility on or after March 28, 14.12000, the grantee agrees to comply with the applicable limit as a condition of receiving the 14.2grant, or the grantee made improvements to a wastewater treatment facility on or after 14.3March 28, 2000, that include infrastructure to reduce the discharge of total phosphorus to 14.4one milligram per liter or less; 14.5    (2) the governmental unit has submitted a facilities plan new text begin plans and specifications new text end 14.6for the project to the new text begin Pollution Control new text end Agency and a grant application to the authority 14.7on a form prescribed by the authority; and 14.8    (3) the new text begin Pollution Control new text end Agency has approved the facilities plan new text begin plans and new text end 14.9 new text begin specifications new text end , and certified the new text begin project and the as-bid or final new text end eligible costs for the project 14.10to the authority. 14.11    Subd. 3. Eligible capital costs. Eligible capital costs for phosphorus reduction 14.12grants under subdivision 4, paragraph (a), include engineering and inspection costs 14.13and the as-bid construction costs for phosphorus treatment. Eligible capital costs for 14.14phosphorus reduction grants under subdivision 4, paragraph (b), include the final, incurred 14.15construction, engineering, and inspection costs for phosphorus treatment. 14.16    Subd. 4. Grant amounts and priorities. (a) Priority must be given to projects that 14.17start construction on or after July 1, 2006 new text begin , and rank on the Pollution Control Agency's new text end 14.18 new text begin project priority list new text end . If a facility's plan for a project is approved new text begin and certified new text end by the 14.19 new text begin Pollution Control new text end Agency before July 1, 2010, the amount of the grant is 75 percent of 14.20the eligible capital cost of the project new text begin up to a maximum of $500,000 new text end . If a facility's plan 14.21for a project is approved new text begin and certified new text end by the new text begin Pollution Control new text end Agency on or after July 14.221, 2010, the amount of the grant is 50 percent of the eligible capital cost of the project 14.23 new text begin up to a maximum of $500,000 new text end . Priority in awarding grants under this paragraph must be 14.24based on the date of approval of the facility's plan for the project. 14.25    (b) Projects that meet the eligibility requirements in subdivision 2 and have started 14.26construction before July 1, 2006, may be eligible for grants to reimburse up to 75 percent 14.27of the eligible capital cost of the project, less any amounts previously received in grants 14.28from other sources, provided that reimbursement is an eligible use of funds. Application 14.29for a grant under this paragraph must be submitted to the authority no later than June 30, 14.302008. Priority for award of grants under this paragraph must be based on the date of 14.31 new text begin Pollution Control new text end Agency approval of the facility plan new text begin project plans and specifications new text end . 14.32    (c) In each fiscal year that money is available for grants, the authority shall new text begin accept new text end 14.33 new text begin applications during the month of July. Money shall new text end first award grants new text begin be reserved until new text end 14.34 new text begin May 1 of that fiscal year for projects new text end under paragraph (a) to projects that met the eligibility 14.35requirements of subdivision 2 new text begin in the order listed on the Pollution Control Agency's new text end 14.36 new text begin project priority list and in an amount based on the cost estimate submitted to the authority new text end 15.1 new text begin in the grant application or the as-bid costs, whichever is less. Any money reserved for new text end 15.2 new text begin projects that are not approved and certified by the Pollution Control Agency new text end by May 1 of 15.3that year. The authority shall use any remaining money new text begin be new text end available that year to award 15.4grants under paragraph (b). Grants that have been approved but not awarded in a previous 15.5fiscal year carry over and must be awarded in subsequent fiscal years in accordance with 15.6the priorities in this paragraph. 15.7    (d) Disbursements of grants under this section by the authority to recipients must 15.8be made for eligible project costs as incurred by the recipients, and must be made by the 15.9authority in accordance with the project financing agreement and applicable state law. 15.10    Subd. 5. Fees. The authority may charge the grant recipient a fee for its 15.11administrative costs not to exceed one-half of one percent of the grant amount, to be 15.12paid upon execution of the grant agreement. 15.13    Sec. 9. Minnesota Statutes 2006, section 446A.075, is amended to read: 15.14446A.075 SMALL COMMUNITY WASTEWATER TREATMENT 15.15PROGRAM. 15.16    Subdivision 1. Creation of account. A small community wastewater treatment 15.17account is created in the special revenue fund. The authority shall make loans and grants 15.18from the account as provided in this section. Money in the fund is annually appropriated 15.19to the authority and does not lapse. The account shall be credited with all loan repayments 15.20and investment income from the account and servicing fees assessed under section 15.21446A.04 , subdivision 5. The authority shall manage and administer the small community 15.22wastewater treatment account and for these purposes, may exercise all powers provided 15.23in this chapter. 15.24     new text begin Subd. 1a. new text end new text begin Technical assistance grants. new text end new text begin If requested, and if it is an eligible use of new text end 15.25 new text begin funds, the authority shall provide technical assistance grants to governmental units as new text end 15.26 new text begin provided in this section to analyze possible solutions to problems from noncomplying new text end 15.27 new text begin individual sewage treatment systems. A grant under this subdivision shall equal $10,000 new text end 15.28 new text begin plus $500 per household, not to exceed a total of $40,000. Technical assistance grant new text end 15.29 new text begin funds may be used to: new text end 15.30 new text begin (1) contract with a licensed individual sewage treatment system professional for a new text end 15.31 new text begin preliminary analysis of the feasibility of installing new systems meeting the requirements new text end 15.32 new text begin of section 115.55; and new text end 15.33 new text begin (2) to contract for services from the University of Minnesota Extension Service new text end 15.34 new text begin to advise the governmental unit on the feasibility of possible wastewater treatment new text end 15.35 new text begin alternatives and help the governmental unit develop the technical, managerial, and new text end 16.1 new text begin financial capacity necessary to build, operate, and maintain individual wastewater new text end 16.2 new text begin treatment systems. new text end 16.3    Subd. 2. new text begin Construction new text end loans and grants. (a) The authority shall award loans as 16.4provided in paragraph (b) and grants as provided in paragraphs (c) and (d) new text begin this subdivision new text end 16.5 to governmental units from the small community wastewater treatment account for 16.6projects to replace noncomplying individual sewage treatment systems with a community 16.7wastewater treatment new text begin an individual sewage treatment new text end system or systems meeting the 16.8requirements of section 115.55. A governmental unit receiving a loan or loan and grant 16.9from the account shall own the individual wastewater treatment systems or community 16.10wastewater treatment systems built under the program and shall be responsible, either 16.11directly or through a contract with a private vendor, for all inspections, maintenance, and 16.12repairs necessary to ensure proper operation of the systems. 16.13    (b) Loans may be awarded for up to 100 percent of eligible project costs as described 16.14in this section. 16.15    (c) When the area to be served by a project has a median household income below 16.16the state average median household income, the governmental unit may receive 50 percent 16.17of the funding provided under this section new text begin subdivision new text end in the form of a grant. An applicant 16.18may submit income survey data collected by an independent party if it believes the most 16.19recent United States census does not accurately reflect the median household income 16.20of the area to be served. 16.21(d) If requested, and if it is an eligible use of funds, a governmental unit receiving 16.22funding under this section may receive a grant equal to ten percent of its first year's 16.23award, up to a maximum of $30,000, to contract for technical assistance services from 16.24the University of Minnesota Extension Service to develop the technical, managerial, and 16.25financial capacity necessary to build, operate, and maintain the systems. 16.26    Subd. 3. Project priority list. Governmental units seeking loans or loans and grants 16.27from the small community wastewater treatment program shall first submit a project 16.28proposal to the new text begin Pollution Control new text end Agency on a form prescribed by the new text begin Pollution Control new text end 16.29Agency. A project proposal shall include the compliance status for all individual sewage 16.30treatment systems in the project area. The new text begin Pollution Control new text end agency shall rank project 16.31proposals on its project priority list used for the new text begin clean new text end water pollution control revolving 16.32fund under section 446A.07. 16.33    Subd. 4. Applications. Governmental units with projects on the project priority list 16.34shall submit applications new text begin for loans or grants under this program new text end to the authority on forms 16.35prescribed by the authority. new text begin An application for technical assistance funds shall include the new text end 17.1 new text begin number of households served by individual sewage treatment systems in the community new text end 17.2 new text begin and the proposed use of funds. new text end The new text begin An new text end application new text begin for construction funds new text end shall include: 17.3    (1) a list of the individual sewage treatment systems proposed to be replaced over a 17.4period of up to three years; 17.5    (2) a project schedule and cost estimate for each year of the project; 17.6    (3) a financing plan for repayment of the loan; and 17.7    (4) a management plan providing for the inspection, maintenance, and repairs 17.8necessary to ensure proper operation of the systems. 17.9    Subd. 5. Awards. The authority shall award loans or loans and grants as provided 17.10in subdivision 2 new text begin this section new text end to governmental units with approved applications based on 17.11their ranking on the new text begin Pollution Control new text end Agency's project priority list. new text begin Prior to the award new text end 17.12 new text begin of construction loans or grants under subdivision 2, paragraph (b), the Pollution Control new text end 17.13 new text begin Agency shall certify that the individual sewage treatment systems to be built appear to new text end 17.14 new text begin meet the criteria set forth in section 115.55 and rules of the Pollution Control Agency. new text end The 17.15total amount awarded new text begin for construction loans and grants under subdivision 2, paragraph new text end 17.16 new text begin (b), new text end shall be based on the estimated project costs for the portion of the project expected 17.17to be completed within one year, up to an annual maximum of $500,000. For projects 17.18expected to take more than one year to complete, the authority may make a multiyear 17.19commitment for a period not to exceed three years, contingent on the future availability of 17.20funds. Each year of a multiyear commitment must be funded by a separate loan or loan 17.21and grant agreement meeting the terms and conditions in subdivision 6. A governmental 17.22unit receiving a loan or loan and grant under a multiyear commitment shall have priority 17.23for additional loan and grant funds in subsequent years. 17.24    Subd. 6. Loan terms and conditions. Loans from the small community wastewater 17.25treatment account shall comply with the following terms and conditions: 17.26    (1) principal and interest payments must begin no later than two years after the 17.27loan is awarded; 17.28    (2) loans shall carry an interest rate of one percent; 17.29    (3) loans shall be fully amortized within ten years of the first scheduled payment 17.30or, if the loan amount exceeds $10,000 per household, shall be fully amortized within 20 17.31years but not to exceed the expected design life of the system; 17.32    (4) a governmental unit receiving a loan must establish a dedicated source or sources 17.33of revenues for repayment of the loan and must issue a general obligation note to the 17.34authority for the full amount of the loan; and 18.1    (5) each property owner voluntarily seeking assistance for repair or replacement of 18.2an individual treatment system under this program must provide an new text begin a utility new text end easement to 18.3the governmental unit to allow access to the system for management and repairs. 18.4    Subd. 7. Special assessment deferral. (a) A governmental unit receiving a loan 18.5under this section that levies special assessments to repay the loan may defer payment of 18.6the assessments under the provisions of sections 435.193 to 435.195. 18.7    (b) A governmental unit that defers payment of special assessments for one or more 18.8properties under paragraph (a) may request deferral of that portion of the debt service on 18.9its loan, and the authority shall accept appropriate amendments to the general obligation 18.10note of the governmental unit. If special assessment payments are later received from 18.11properties that received a deferral, the funds received shall be paid to the authority with 18.12the next scheduled loan payment. 18.13    Subd. 8. Eligible costs. new text begin (a) Eligible costs for technical assistance grants as provided new text end 18.14 new text begin in subdivision 1a shall include the cost of soil borings. new text end 18.15 new text begin (b) new text end Eligible costs for small community wastewater treatment new text begin construction new text end loans 18.16and grants shall include the costs of technical assistance as provided in subdivision 2, 18.17paragraph (d), new text begin for new text end design, construction, related legal fees, and land acquisition. 18.18    Subd. 9. Disbursements. Loan and grant disbursements by the authority under this 18.19section must be made for eligible project costs as incurred by the recipients, and must be 18.20made in accordance with the project loan or grant and loan agreement and applicable 18.21state law. 18.22    Subd. 10. Audits. A governmental unit receiving a loan under this section must 18.23annually provide to the authority for the term of the loan a copy of its annual independent 18.24audit or, if the governmental unit is not required to prepare an independent audit, a copy of 18.25the annual financial reporting form it provides to the state auditor. 18.26    Sec. 10. Minnesota Statutes 2006, section 446A.081, is amended to read: 18.27446A.081 DRINKING WATER REVOLVING FUND. 18.28    Subdivision 1. Definitions. (a) For the purposes of this section, the terms in this 18.29subdivision have the meanings given them. 18.30(b) "Act" means the Safe Drinking Water Act Amendments of 1996, Public Law 18.31104-182. 18.32(c) "Department" means the Department of Health. 18.33 new text begin (b) "Eligible recipient" means governmental units or other entities eligible to receive new text end 18.34 new text begin loans or other assistance as provided in the federal Safe Drinking Water Act. new text end 19.1 new text begin (c) "Federal Safe Drinking Water Act" means the federal Safe Drinking Water Act, new text end 19.2 new text begin as amended, United States Code, title 42, sections 300f et seq. new text end 19.3    Subd. 2. Establishment of fund. The authority shall establish a drinking water 19.4revolving fund to provide loans and other forms of financial assistance authorized by the 19.5 new text begin federal Safe Drinking Water new text end Act, as determined by the authority under the rules adopted 19.6under this section for the purposes and eligible costs authorized under the new text begin federal Safe new text end 19.7 new text begin Drinking Water new text end Act. The fund must be credited with repayments. The new text begin federal Safe new text end 19.8 new text begin Drinking Water new text end Act requires that the fund corpus must be managed so as to be available 19.9in perpetuity for the financing of drinking water systems in the state. At a minimum, 15 19.10percent of the funds received each federal fiscal year shall be available solely for providing 19.11loans to public water systems which regularly serve fewer than 10,000 individuals. 19.12    Subd. 3. State funds. A state matching fund is established to be used in compliance 19.13with federal matching requirements specified in the new text begin federal Safe Drinking Water new text end Act. 19.14    Subd. 4. Capitalization grant agreement. The authority shall enter into an 19.15agreement with the administrator of the United States Environmental Protection Agency 19.16to receive capitalization grants for the fund. The authority and the Department new text begin of Health new text end 19.17shall enter into an operating agreement with the administrator of the United States 19.18Environmental Protection Agency to satisfy the criteria in the act to operate the fund. The 19.19authority and the Department new text begin of Health new text end may exercise the powers necessary to comply with 19.20the requirements specified in the agreements and to ensure that loan recipients comply 19.21with all applicable federal and state requirements. 19.22    Subd. 5. Intended use plan. The authority shall annually prepare and submit 19.23to the United States Environmental Protection Agency an intended use plan. The plan 19.24must identify the intended uses of the amounts available to the drinking water revolving 19.25loan fund. The Department new text begin of Health new text end shall provide a prioritized list of drinking water 19.26projects and other eligible activities to be considered for funding by the authority. The 19.27plan may be amended by the authority and include additional eligible projects proposed by 19.28the Department new text begin of Health new text end . 19.29    Subd. 6. Applications. Applications by municipalities, privately owned public 19.30water systems, and eligible entities identified in the annual intended use plan for loans 19.31from the fund must be made to the authority on the forms prescribed by the rules of the 19.32authority and the rules of the Department new text begin of Health new text end adopted under this section. The 19.33authority shall forward the application to the Department new text begin of Health new text end within ten days 19.34of receipt. The Department new text begin of Health new text end shall approve those applications that appear to 19.35meet the criteria in the new text begin federal Safe Drinking Water new text end Act, this section, and the rules of 19.36the Department new text begin of Health new text end or the authority. 20.1    Subd. 7. Award and terms of loans. The authority shall award loans to those 20.2municipalities, privately owned public water systems, and other eligible entities approved 20.3by the Department new text begin of Health new text end , provided that the applicant is able to comply with the terms 20.4and conditions of the authority loan, which must be in conformance with the new text begin federal Safe new text end 20.5 new text begin Drinking Water Act new text end , this section, and the rules of the authority adopted under this section. 20.6    Subd. 8. Loan conditions. (a) When making loans from the drinking water 20.7revolving fund, the authority shall comply with the conditions of the new text begin federal Safe Drinking new text end 20.8 new text begin Water new text end Act, including the criteria in paragraphs (b) to (e). 20.9(b) Loans must be made at or below market interest rates, including zero interest 20.10loans, for terms not to exceed 20 years. 20.11(c) The annual principal and interest payments must begin no later than one year 20.12after completion of the project. Loans must be amortized no later than 20 years after 20.13project completion. 20.14(d) A loan recipient must identify and establish a dedicated source of revenue for 20.15repayment of the loan, and provide for a source of revenue to properly operate, maintain, 20.16and repair the water system. 20.17(e) The fund must be credited with all payments of principal and interest on all loans, 20.18except the costs as permitted under section 446A.04, subdivision 5, paragraph (a). 20.19 new text begin (f) A loan may not be used to pay operating expenses or current obligations, unless new text end 20.20 new text begin specifically allowed by the federal Safe Drinking Water Act. new text end 20.21 new text begin (g) A loan made by the authority must be secured by notes or bonds of the new text end 20.22 new text begin governmental unit and collateral to be determined by the authority for private borrowers. new text end 20.23    Subd. 9. Other uses of fund. The drinking water revolving loan fund may be used 20.24as provided in the act, including the following uses: 20.25(1) to buy or refinance the debt obligations, at or below market rates, of public water 20.26systems for drinking water systems, where such new text begin the new text end debt was incurred after the date of 20.27enactment of the act, for the purposes of construction of the necessary improvements 20.28to comply with the national primary drinking water regulations under the federal Safe 20.29Drinking Water Act; 20.30(2) to purchase or guarantee insurance for local obligations to improve credit market 20.31access or reduce interest rates; 20.32(3) to provide a source of revenue or security for the payment of principal and 20.33interest on revenue or general obligation bonds issued by the authority if the bond 20.34proceeds are deposited in the fund; 20.35(4) to provide loans or loan guarantees for similar revolving funds established by a 20.36governmental unit or state agency; 21.1(5) to earn interest on fund accounts; 21.2(6) to pay the reasonable costs incurred by the authority, the Department of 21.3Employment and Economic Development, and the Department new text begin of Health new text end for conducting 21.4activities as authorized and required under the act up to the limits authorized under the 21.5act; and 21.6(7) to develop and administer programs for water system supervision, source water 21.7protection, and related programs required under the act. 21.8    Subd. 10. Payments. Payments from the fund to borrowers must be in accordance 21.9with the applicable state and federal laws governing such new text begin the new text end payments, except no payment 21.10for a project may be made to a borrower until and unless the authority has determined that 21.11the total estimated cost of the project and the financing of the project are assured by: 21.12(1) a loan authorized by state law or appropriation of proceeds of bonds or other 21.13money of the borrower to a fund for the construction of the project; and 21.14(2) an irrevocable undertaking, by resolution of the governing body of the borrower, 21.15to use all money made available for the project exclusively for the project, and to pay 21.16any additional amount by which the cost of the project exceeds the estimate by the 21.17appropriation to the construction fund of additional money or proceeds of additional 21.18bonds to be issued by the borrower. 21.19    Subd. 11. Rules of the authority. The commissioner of employment and economic 21.20development shall adopt rules containing the procedures for the administration of the 21.21authority's duties as provided by this section that include: setting of interest rates, which 21.22shall take into account the financial need of the applicant; the amount of project financing 21.23to be provided; the collateral required for public drinking water systems and for privately 21.24owned public water systems; dedicated sources of revenue or income streams to ensure 21.25repayment of loans; and the requirements to ensure proper operation, maintenance, and 21.26repair of the water systems financed by the authority. 21.27    Subd. 12. Rules of the department. The Department new text begin of Health new text end shall adopt rules 21.28relating to the procedures for administration of the department's new text begin Department of Health's new text end 21.29duties under the act and this section. The department and the commissioner of the 21.30Department of Employment and Economic Development may adopt a single set of rules 21.31for the program. 21.32    Sec. 11. Minnesota Statutes 2006, section 446A.085, is amended to read: 21.33446A.085 TRANSPORTATION REVOLVING LOAN FUND. 21.34    Subdivision 1. Definitions. (a) For the purposes of this section, the terms defined in 21.35this subdivision have the meanings given them. 22.1(b) "Act" means the National Highway System Designation Act of 1995, Public 22.2Law 104-59, as amended. 22.3(c) "Borrower" means the state, counties, cities, and other governmental entities 22.4eligible under the act and state law to apply for and receive loans from the transportation 22.5revolving loan fund. 22.6(d) "Loan" means financial assistance provided for all or part of the cost of a 22.7project including money disbursed in anticipation of reimbursement or repayment, loan 22.8guarantees, lines of credit, credit enhancements, equipment financing leases, bond 22.9insurance, or other forms of financial assistance. 22.10(e) "Transportation Committee" means a committee of the Minnesota Public 22.11Facilities Authority, acting on behalf of the Minnesota Public Facilities Authority, 22.12consisting of the commissioner of the Department of Employment and Economic 22.13Development, the commissioner of finance, and the commissioner of transportation. 22.14    Subd. 2. Purpose. The purpose of the transportation revolving loan fund is 22.15to provide loans for public transportation projects eligible for financing or aid under 22.16any federal act or program or state law, including, without limitation, the study of 22.17the feasibility of construction, reconstruction, resurfacing, restoring, rehabilitation, or 22.18replacement of transportation facilities; acquisition of right-of-way; and maintenance, 22.19repair, improvement, or construction of city, town, county, or state highways, roads, 22.20streets, rights-of-way, bridges, tunnels, railroad-highway crossings, drainage structures, 22.21signs, maintenance and operation facilities, guardrails, and protective structures used in 22.22connection with highways or transit projects. Enhancement items, including without 22.23limitation bicycle paths, ornamental lighting, and landscaping, are eligible for financing 22.24provided they are an integral part of overall project design and construction of a 22.25federal-aid highway. Money in the fund may not be used for any toll facilities project or 22.26congestion-pricing project. 22.27    Subd. 3. Establishment of fund. A transportation revolving loan fund is established 22.28to make loans for the purposes described in subdivision 2. A highway account is 22.29established in the fund for highway projects eligible under United States Code, title 23. A 22.30transit account is established in the fund for transit capital projects eligible under United 22.31States Code, title 49. A state funds general loan account is established in the fund for 22.32transportation projects eligible under state law. Other accounts may be established in the 22.33fund as necessary for its management and administration. The transportation revolving 22.34loan fund receives federal money under the act and money from any source. Money 22.35received under this section must be paid to the commissioner of finance and credited to 22.36the transportation revolving loan fund. Money in the fund is annually appropriated to the 23.1authority and does not lapse. The fund must be credited with investment income, and with 23.2repayments of principal and interest, except for servicing fees assessed under sections 23.3446A.04, subdivision 5 , and 446A.11, subdivision 8. 23.4    Subd. 4. Management of fund and accounts. The authority shall manage and 23.5administer the transportation revolving loan fund and individual accounts in the fund. For 23.6those purposes, the authority may exercise all powers provided in this chapter. 23.7    Subd. 6. Transportation Committee. The Transportation Committee may 23.8authorize the making of loans to borrowers by the authority for transportation purposes 23.9authorized by the act or this section, without further action by the authority. The authority 23.10may not make loans for transportation purposes without the approval of the Transportation 23.11Committee. Each project must be certified by the commissioner of transportation before 23.12its consideration by the Transportation Committee. 23.13    Subd. 7. Applications. new text begin (a) new text end Applicants for loans must submit an application to the 23.14Transportation Committee new text begin authority new text end on forms prescribed by the Transportation Committee 23.15 new text begin authority new text end . The applicant must provide the following information: 23.16(1) the estimated cost of the project and the amount of the loan sought; 23.17(2) other possible sources of funding in addition to loans sought from the 23.18transportation revolving loan fund; 23.19(3) the proposed methods and sources of funds to be used for repayment of loans 23.20received; and 23.21(4) information showing the financial status and ability of the borrower to repay 23.22loans. 23.23     new text begin (b) Each project must be certified by the commissioner of transportation under new text end 23.24 new text begin subdivision 8 before its consideration by the authority. new text end 23.25    Subd. 8. Certification of projects. The commissioner of transportation shall 23.26consider the following information when evaluating projects to certify for funding to 23.27the Transportation Committee new text begin authority new text end : 23.28(1) a description of the nature and purpose of the proposed transportation project 23.29including an explanation of the need for the project and the reasons why it is in the 23.30public interest; 23.31(2) the relationship of the project to the area transportation improvement program, 23.32the approved statewide transportation improvement program, and to any transportation 23.33plans required under state or federal law; 23.34(3) the estimated cost of the project and the amount of loans sought; 23.35(4) proposed sources of funding in addition to loans sought from the transportation 23.36revolving loan fund; 24.1(5) the need for the project as part of the overall transportation system; 24.2(6) the overall economic impact of the project; and 24.3(7) the extent to which completion of the project will improve the movement of 24.4people and freight. 24.5    Subd. 9. Loan conditions. When making loans from the transportation revolving 24.6loan fund, the Transportation Committee shall comply with the applicable provisions of 24.7the act and state law. In addition, A loan made under this section must: 24.8(1) bear interest at or below market rates or as otherwise specified in federal law; 24.9(2) have a repayment term not longer than 30 years; 24.10(3) be fully amortized no later than 30 years after project completion; 24.11(4) be subject to repayment of principal and interest beginning not later than five 24.12years after the facility financed with a loan has been completed, or in the case of a highway 24.13project, five years after the facility has opened to traffic; and 24.14(5) be disbursed for specific project elements only after all applicable environmental 24.15requirements have been met. 24.16    Subd. 10. Loans in anticipation of future apportionments. A loan may be made 24.17to a county, or to a statutory or home rule charter city having a population of 5,000 or 24.18more, in anticipation of repayment of the loan from sums that will be apportioned to a 24.19county from the county state-aid highway fund under section 162.07 or to a city from the 24.20municipal state-aid street fund under section 162.14. 24.21    Subd. 11. Payment by county or city. Notwithstanding the allocation provisions of 24.22section 162.08 for counties, and the apportionment provisions of section 162.14 for cities, 24.23sums apportioned under section 162.13 to a statutory or home rule charter city, or under 24.24section 162.07 to a county, that has loan repayments due to the transportation revolving 24.25loan fund, shall be paid by the commissioner of transportation to the appropriate loan fund 24.26to offset the loan repayments that are due. 24.27    Subd. 12. Rules of Transportation Committee and authority. The commissioner 24.28of the Department of Employment and Economic Development shall adopt administrative 24.29rules specifying the procedures that will be used for the administration of the duties of the 24.30Transportation Committee and authority. The rules must include criteria, standards, and 24.31procedures that will be used for making loans, determining interest rates to be charged on 24.32loans, the amount of project financing to be provided, the collateral that will be required, 24.33the requirements for dedicated sources of revenue or income streams to ensure repayment 24.34of loans, and the length of repayment terms. 24.35    Subd. 13. Authority new text begin Duties new text end and Rules of Department new text begin of Transportation new text end . 24.36The commissioner of transportation shall establish, adopt rules for, and new text begin adopt rules to new text end 25.1implement a program to identify, assist with the development of, and certify projects 25.2eligible for loans under the act new text begin this section new text end to the Transportation Committee. Until rules 25.3are adopted by the commissioner of transportation, the commissioner of transportation 25.4may certify to the Transportation Committee any project that has been reviewed through 25.5an approved planning process that qualifies the project to be included in the statewide 25.6transportation program or amended into the statewide transportation improvement 25.7program new text begin authority new text end . 25.8    Subd. 14. Joint rules. The commissioner of the Department of Employment and 25.9Economic Development and the commissioner of transportation may adopt a single set 25.10of rules. 25.11    Sec. 12. Minnesota Statutes 2006, section 446A.09, is amended to read: 25.12446A.09 REPORT; AUDIT. 25.13The authority shall report to the legislature and the governor by January 1 new text begin 15 new text end of each 25.14year. The report must include a complete operating and financial statement covering the 25.15authority's operations during the year, including amounts of income from all sources. new text begin The new text end 25.16 new text begin report must also include the authority's analysis of the interest rate subsidy provided to new text end 25.17 new text begin borrowers on loans made during the year. new text end Books and records of the authority are subject 25.18to audit by the legislative auditor in the manner prescribed for state agencies. 25.19    Sec. 13. Minnesota Statutes 2006, section 446A.11, subdivision 13, is amended to read: 25.20    Subd. 13. Proceeds appropriated to authority. Proceeds of the authority's bonds, 25.21notes, and other obligations; amounts granted or appropriated to the authority for the 25.22making or purchase or the insurance or guaranty of loans or for bond reserves; income 25.23from investment; money in the funds; and all revenues from loans, fees, and charges 25.24of the authority including rentals, royalties, dividends, or other proceeds in connection 25.25with technology-related products, energy conservation products, or other equipment 25.26are annually appropriated to the authority for the accomplishment of its corporate 25.27purposes and must be spent, administered, and accounted for in accordance with the 25.28applicable provisions of all bond and note resolutions, indentures, and other instruments, 25.29contracts, and agreements of the agency new text begin authority new text end . Notwithstanding section 16A.28, these 25.30appropriations are available until expended. 25.31    Sec. 14. Minnesota Statutes 2006, section 446A.17, subdivision 1, is amended to read: 25.32    Subdivision 1. Nonliability of individuals. No member of the authority new text begin , staff of new text end 25.33 new text begin the authority, new text end or other person executing the bonds, loans, interest rate swaps, or other 26.1agreements or contracts of the authority is liable personally on the bonds, loans, interest 26.2rate swaps, or other agreements or contracts of the authority or is subject to any personal 26.3liability or accountability by reason of their issuance, execution, delivery, or performance. 26.4    Sec. 15. new text begin REVISOR'S INSTRUCTION. new text end 26.5 new text begin (a) The revisor of statutes shall renumber Minnesota Statutes, section 373.45, new text end 26.6 new text begin as Minnesota Statutes, section 446A.086. The revisor shall also make necessary new text end 26.7 new text begin cross-reference changes in Minnesota Statutes and Minnesota Rules consistent with the new text end 26.8 new text begin renumbering. new text end 26.9 new text begin (b) The revisor of statutes shall renumber Minnesota Statutes, section 446A.11, new text end 26.10 new text begin subdivisions 1 to 14, as Minnesota Statutes, section 446A.04, subdivisions 8 to 21. The new text end 26.11 new text begin revisor shall also make necessary cross-reference changes in Minnesota Statutes and new text end 26.12 new text begin Minnesota Rules consistent with the renumbering. new text end 26.13    Sec. 16. new text begin REPEALER. new text end 26.14 new text begin Minnesota Statutes 2006, sections 446A.05; 446A.06; and 446A.15, subdivision new text end 26.15 new text begin 6, new text end new text begin are repealed. new text end 26.16ARTICLE 2 26.17POLLUTION CONTROL AGENCY PROJECT PRIORITY 26.18RULE MODIFICATION 26.19    Section 1. Minnesota Statutes 2006, section 116.182, subdivision 5, is amended to read: 26.20    Subd. 5. Rules. new text begin (a) new text end The agency shall adopt rules for the administration of the 26.21financial assistance program. For wastewater treatment projects, the rules must include: 26.22(1) application requirements; 26.23(2) criteria for the ranking of projects in order of priority based on factors including 26.24the type of project and the degree of environmental impact, and scenic and wild river 26.25standards; and 26.26(3) criteria for determining essential project components. 26.27 new text begin (b) Notwithstanding Minnesota Rules, chapter 7077, the agency shall apply the new text end 26.28 new text begin following criteria to Minnesota Rules, part 7077.0119: new text end 26.29 new text begin (1) ten points shall be assigned if the municipality proposing the project holds a new text end 26.30 new text begin NPDES permit for a municipal separate storm sewer system and is implementing a storm new text end 26.31 new text begin water pollution prevention plan pursuant to Code of Federal Regulations, title 40, section new text end 26.32 new text begin 122.34, that addresses requirements resulting from an USEPA-approved TMDL for an new text end 27.1 new text begin impaired water listed under United States Code, title 33, section 303(d), of the Clean new text end 27.2 new text begin Water Act; and new text end 27.3 new text begin (2) up to ten points shall be assigned to a municipal storm water project by new text end 27.4 new text begin multiplying 20 times the ratio of the project area's impervious surface area to the total new text end 27.5 new text begin project area to be served by the proposed best management practices. A maximum of ten new text end 27.6 new text begin points shall be awarded and any fraction of a point shall be rounded up to the nearest new text end 27.7 new text begin whole number. new text end 27.8 new text begin (c) Paragraph (b) expires on June 30, 2012. new text end