<a id="pl.1.3"></a><var>1.3</var>technical changes;amending Minnesota Statutes 2008, sections 446A.03, <br/>
<a id="pl.1.4"></a><var>1.4</var>subdivision 5; 446A.07, subdivision 8; 446A.072, subdivisions 1, 3, 5a, 9; <br/>
<a id="pl.1.5"></a><var>1.5</var>446A.081, subdivision 9; 446A.086, subdivisions 1, 2, 11; Minnesota Statutes <br/>
<a id="pl.1.6"></a><var>1.6</var>2009 Supplement, sections 446A.075, subdivisions 1a, 2, 4, 5; 446A.081, <br/>
<a id="pl.1.7"></a><var>1.7</var>subdivision 8.<br/>
<a id="pl.1.8"></a><var>1.8</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
<br/>
<a id="bill.0.1.0"></a><a id="pl.1.9"></a><var>1.9</var>    Section 1. Minnesota Statutes 2008, section 446A.03, subdivision 5, is amended to <br/>
<a id="pl.1.10"></a><var>1.10</var>read:<br/>
<a id="pl.1.11"></a><var>1.11</var>    Subd. 5. <b>Executive director; staffing.</b> (a) The authority shall employ and the <br/>
<a id="pl.1.12"></a><var>1.12</var>chair shall appoint, with the concurrence of the authority, an executive director in the <br/>
<a id="pl.1.13"></a><var>1.13</var>unclassified service. The executive director shall be responsible for staff of the authority.<br/>
<a id="pl.1.14"></a><var>1.14</var>(b) The executive director may employ a deputy director and chief financial officer.<br/>
<a id="pl.1.15"></a><var>1.15</var>(c) The executive director shall:<br/>
<a id="pl.1.16"></a><var>1.16</var>(1) perform duties that the authority may require in carrying out its responsibilities <br/>
<a id="pl.1.17"></a><var>1.17</var>to manage and implement the funds and programs in this chapter, implementation of <br/>
<a id="pl.1.18"></a><var>1.18</var>debt issuance authorized by the authority, compliance with all state and federal program <br/>
<a id="pl.1.19"></a><var>1.19</var>requirements, and state and federal securities and tax laws and regulations.;<br/>
<a id="pl.1.20"></a><var>1.20</var>(2) employ officers, employees, and agents that the executive director considers <br/>
<a id="pl.1.21"></a><var>1.21</var>necessary to discharge the functions of the executive director; and<br/>
<a id="pl.1.22"></a><var>1.22</var>(3) define the duties of officers, employees, and agents, and delegate to them any <br/>
<a id="pl.1.23"></a><var>1.23</var>of the powers, duties, and responsibilities, subject to the executive director's control and <br/>
<a id="pl.1.24"></a><var>1.24</var>under conditions prescribed by the executive director.<br/>
<br/>
<a id="bill.0.2.0"></a><a id="pl.2.1"></a><var>2.1</var>    Sec. 2. Minnesota Statutes 2008, section 446A.07, subdivision 8, is amended to read:<br/>
<a id="pl.2.2"></a><var>2.2</var>    Subd. 8. <b>Other uses of revolving fund.</b> (a) The clean water revolving fund may <br/>
<a id="pl.2.3"></a><var>2.3</var>be used as provided in title VI of the Federal Water Pollution Control Act, including <br/>
<a id="pl.2.4"></a><var>2.4</var>the following uses:<br/>
<a id="pl.2.5"></a><var>2.5</var>(1) to buy or refinance the debt obligation of governmental units for treatment <br/>
<a id="pl.2.6"></a><var>2.6</var>works where debt was incurred and construction begun after March 7, 1985, at or below <br/>
<a id="pl.2.7"></a><var>2.7</var>market rates;<br/>
<a id="pl.2.8"></a><var>2.8</var>(2) to guarantee or purchase insurance for local obligations to improve credit market <br/>
<a id="pl.2.9"></a><var>2.9</var>access or reduce interest rates;<br/>
<a id="pl.2.10"></a><var>2.10</var>(3) to provide a source of revenue or security for the payment of principal and <br/>
<a id="pl.2.11"></a><var>2.11</var>interest on revenue or general obligation bonds issued by the authority if the bond <br/>
<a id="pl.2.12"></a><var>2.12</var>proceeds are deposited in the fund;<br/>
<a id="pl.2.13"></a><var>2.13</var>(4) to provide loan guarantees, loans, or set-aside for similar revolving funds <br/>
<a id="pl.2.14"></a><var>2.14</var>established by a governmental unit other than state agencies, or state agencies under <br/>
<a id="pl.2.15"></a><var>2.15</var>sections 
         <statute_ref>17.117</statute_ref>, 
         <statute_ref>103F.725, subdivision 1a</statute_ref>, and 
         <statute_ref>116J.617</statute_ref>; <br/>
<a id="pl.2.16"></a><var>2.16</var>(5) to earn interest on fund accounts; and<br/>
<a id="pl.2.17"></a><var>2.17</var>(6) to pay the reasonable costs incurred by the authority and the Pollution Control <br/>
<a id="pl.2.18"></a><var>2.18</var>Agency of administering the fund and conducting activities required under the Federal <br/>
<a id="pl.2.19"></a><var>2.19</var>Water Pollution Control Act, including water quality management planning under section <br/>
<a id="pl.2.20"></a><var>2.20</var>205(j) of the act and water quality standards continuing planning under section 303(e) <br/>
<a id="pl.2.21"></a><var>2.21</var>of the act.;<br/>
<a id="pl.2.22"></a><var>2.22</var>(7) to provide principal forgiveness or grants to the extent permitted under the <br/>
<a id="pl.2.23"></a><var>2.23</var>Federal Water Pollution Control Act and other federal law, based on the criteria and <br/>
<a id="pl.2.24"></a><var>2.24</var>requirements established for the wastewater infrastructure funding program under section <br/>
<a id="pl.2.25"></a><var>2.25</var>446A.072; and<br/>
<a id="pl.2.26"></a><var>2.26</var>(8) to provide loans, principal forgiveness, or grants to the extent permitted under the <br/>
<a id="pl.2.27"></a><var>2.27</var>Federal Water Pollution Control Act and other federal law to address green infrastructure, <br/>
<a id="pl.2.28"></a><var>2.28</var>water or energy efficiency improvements, or other environmentally innovative activities.<br/>
<a id="pl.2.29"></a><var>2.29</var>(b) Amounts spent under paragraph (a), clause (6), may not exceed the amount <br/>
<a id="pl.2.30"></a><var>2.30</var>allowed under the Federal Water Pollution Control Act.<br/>
<a id="pl.2.31"></a><var>2.31</var>(c) Principal forgiveness or grants provided under paragraph (a), clause (8), may <br/>
<a id="pl.2.32"></a><var>2.32</var>not exceed 25 percent of the eligible project costs as determined by the Pollution Control <br/>
<a id="pl.2.33"></a><var>2.33</var>Agency for project components directly related to green infrastructure, water or energy <br/>
<a id="pl.2.34"></a><var>2.34</var>efficiency improvements, or other environmentally innovative activities, up to a maximum <br/>
<a id="pl.2.35"></a><var>2.35</var>of $1,000,000.<br/>
<br/>
<a id="bill.0.3.0"></a><a id="pl.3.1"></a><var>3.1</var>    Sec. 3. Minnesota Statutes 2008, section 446A.072, subdivision 1, is amended to read:<br/>
<a id="pl.3.2"></a><var>3.2</var>    Subdivision 1. <b>Establishment of program.</b> The authority will establish a <br/>
<a id="pl.3.3"></a><var>3.3</var>wastewater infrastructure funding program to provide supplemental assistance to <br/>
<a id="pl.3.4"></a><var>3.4</var>governmental units receiving funding through the clean water revolving fund program <br/>
<a id="pl.3.5"></a><var>3.5</var>or the United States Department of Agriculture Rural Economic and Community <br/>
<a id="pl.3.6"></a><var>3.6</var>Development's (USDA/RECD) Water and Waste Disposal Loans and Grants program for <br/>
<a id="pl.3.7"></a><var>3.7</var>the predesign, design and planning, improvements to, and construction of municipal <br/>
<a id="pl.3.8"></a><var>3.8</var>wastewater treatment systems, including purchase of land and easements. The purpose <br/>
<a id="pl.3.9"></a><var>3.9</var>of the program is to assist governmental units demonstrating financial need in building <br/>
<a id="pl.3.10"></a><var>3.10</var>cost-efficient to build cost-effective projects to address existing environmental or public <br/>
<a id="pl.3.11"></a><var>3.11</var>health problems. To implement the program, the authority shall establish a wastewater <br/>
<a id="pl.3.12"></a><var>3.12</var>infrastructure fund to provide grants and loans for the purposes authorized under title VI <br/>
<a id="pl.3.13"></a><var>3.13</var>of the Federal Water Pollution Control Act. The fund shall be credited with all investment <br/>
<a id="pl.3.14"></a><var>3.14</var>income from the fund and all repayments of loans, grants, and penalties.<br/>
<br/>
<a id="bill.0.4.0"></a><a id="pl.3.15"></a><var>3.15</var>    Sec. 4. Minnesota Statutes 2008, section 446A.072, subdivision 3, is amended to read:<br/>
<a id="pl.3.16"></a><var>3.16</var>    Subd. 3. <b>Program administration.</b> (a) The authority shall provide supplemental <br/>
<a id="pl.3.17"></a><var>3.17</var>assistance, as provided in subdivision 5a to governmental units:<br/>
<a id="pl.3.18"></a><var>3.18</var>    (1) whose projects are listed on the Pollution Control Agency's project priority list;<br/>
<a id="pl.3.19"></a><var>3.19</var>    (2) that demonstrate their projects are a cost-effective solution to an existing <br/>
<a id="pl.3.20"></a><var>3.20</var>environmental or public health problem; and<br/>
<a id="pl.3.21"></a><var>3.21</var>    (3) whose projects are approved by the USDA/RECD or certified by the <br/>
<a id="pl.3.22"></a><var>3.22</var>commissioner of the Pollution Control Agency.<br/>
<a id="pl.3.23"></a><var>3.23</var>    (b) For a governmental unit receiving grant funding from the USDA/RECD, <br/>
<a id="pl.3.24"></a><var>3.24</var>applications must be made to the USDA/RECD with additional information submitted to <br/>
<a id="pl.3.25"></a><var>3.25</var>the authority as required by the authority. Eligible project costs and affordability criteria <br/>
<a id="pl.3.26"></a><var>3.26</var>shall be determined by the USDA/RECD.<br/>
<a id="pl.3.27"></a><var>3.27</var>    (c) For a governmental unit not receiving grant funding from the USDA/RECD, <br/>
<a id="pl.3.28"></a><var>3.28</var>application must be made to the authority on forms prescribed by the authority for the <br/>
<a id="pl.3.29"></a><var>3.29</var>clean water revolving fund program with additional information as required by the <br/>
<a id="pl.3.30"></a><var>3.30</var>authority. In accordance with section 
         <statute_ref>116.182</statute_ref>, the Pollution Control Agency shall:<br/>
<a id="pl.3.31"></a><var>3.31</var>    (1) calculate the essential project component percentage which must be multiplied <br/>
<a id="pl.3.32"></a><var>3.32</var>by the total project cost to determine the eligible project cost; and<br/>
<a id="pl.3.33"></a><var>3.33</var>    (2) review and certify approved projects to the authority.<br/>
<a id="pl.3.34"></a><var>3.34</var>    (d) Each fiscal year the authority shall make funds available for projects based on <br/>
<a id="pl.3.35"></a><var>3.35</var>their ranking on the Pollution Control Agency's project priority list. The authority shall <br/>
<a id="pl.4.1"></a><var>4.1</var>reserve funds for a project when the applicant receives a funding commitment from the <br/>
<a id="pl.4.2"></a><var>4.2</var>United States Department of Agriculture Rural Development (USDA/RECD) or submits <br/>
<a id="pl.4.3"></a><var>4.3</var>plans and specifications to the Pollution Control Agency. Funds must be reserved in <br/>
<a id="pl.4.4"></a><var>4.4</var>an amount based on the project cost estimate submitted to the authority prior to the <br/>
<a id="pl.4.5"></a><var>4.5</var>appropriation of the funds and awarded in the amount reserved or an amount based on the <br/>
<a id="pl.4.6"></a><var>4.6</var>as-bid costs, whichever is less based on the lesser of that amount or the as-bid cost.<br/>
<br/>
<a id="bill.0.5.0"></a><a id="pl.4.7"></a><var>4.7</var>    Sec. 5. Minnesota Statutes 2008, section 446A.072, subdivision 5a, is amended to read:<br/>
<a id="pl.4.8"></a><var>4.8</var>    Subd. 5a. <b>Type and amount of assistance.</b> (a) For a governmental unit receiving <br/>
<a id="pl.4.9"></a><var>4.9</var>grant funding from the USDA/RECD, the authority shall is authorized to provide <br/>
<a id="pl.4.10"></a><var>4.10</var>assistance in the form of a grant of up to 65 percent of the eligible grant need determined <br/>
<a id="pl.4.11"></a><var>4.11</var>by USDA/RECD. A governmental unit may not receive a grant under this paragraph <br/>
<a id="pl.4.12"></a><var>4.12</var>for more than $4,000,000 per project or $15,000 per existing connection, whichever <br/>
<a id="pl.4.13"></a><var>4.13</var>is less, unless specifically approved by law. In the case of a sanitary district or other <br/>
<a id="pl.4.14"></a><var>4.14</var>multijurisdictional project for which the USDA/RECD is unable to fully fund its share of <br/>
<a id="pl.4.15"></a><var>4.15</var>the eligible grant need, the authority may provide up to an additional $1,000,000 for each <br/>
<a id="pl.4.16"></a><var>4.16</var>additional governmental unit participating up to a maximum of $8,000,000 or $15,000 <br/>
<a id="pl.4.17"></a><var>4.17</var>per existing connection, whichever is less, but not to exceed the maximum grant level <br/>
<a id="pl.4.18"></a><var>4.18</var>determined by the USDA/RECD as needed to keep the project affordable.<br/>
<a id="pl.4.19"></a><var>4.19</var>    (b) For a governmental unit not receiving grant funding from the USDA/RECD <br/>
<a id="pl.4.20"></a><var>4.20</var>receiving a loan from the clean water revolving fund under section 446A.07, the authority <br/>
<a id="pl.4.21"></a><var>4.21</var>shall is authorized to provide assistance under this section in the form of a loan for the <br/>
<a id="pl.4.22"></a><var>4.22</var>eligible project costs plus the outstanding balance on any existing wastewater system debt <br/>
<a id="pl.4.23"></a><var>4.23</var>that together exceed five percent of the market value of properties in the project service <br/>
<a id="pl.4.24"></a><var>4.24</var>area, less the amount of any other grant funding received by the governmental unit for <br/>
<a id="pl.4.25"></a><var>4.25</var>the project. A governmental unit may not receive a loan under this paragraph for more <br/>
<a id="pl.4.26"></a><var>4.26</var>than grant if the average annual residential wastewater system cost after completion of the <br/>
<a id="pl.4.27"></a><var>4.27</var>project would otherwise exceed 1.4 percent of the median household income of the project <br/>
<a id="pl.4.28"></a><var>4.28</var>service area. In determining whether the average annual residential wastewater system <br/>
<a id="pl.4.29"></a><var>4.29</var>cost would exceed 1.4 percent, the authority must consider the total costs associated with <br/>
<a id="pl.4.30"></a><var>4.30</var>building, operating, and maintaining the wastewater system, including existing wastewater <br/>
<a id="pl.4.31"></a><var>4.31</var>debt service, debt service on the eligible project cost, and operation and maintenance <br/>
<a id="pl.4.32"></a><var>4.32</var>costs. Debt service costs for the proposed project are calculated based on the maximum <br/>
<a id="pl.4.33"></a><var>4.33</var>loan term permitted for the clean water revolving fund loan under section 446A.07, <br/>
<a id="pl.4.34"></a><var>4.34</var>subdivision 7. The amount of the grant is equal to 80 percent of the amount needed to <br/>
<a id="pl.4.35"></a><var>4.35</var>reduce the average annual residential wastewater system cost to 1.4 percent of median <br/>
<a id="pl.5.1"></a><var>5.1</var>household income in the project service area, to a maximum of $4,000,000 per project or <br/>
<a id="pl.5.2"></a><var>5.2</var>$15,000 per existing connection, whichever is less, unless specifically approved by law. <br/>
<a id="pl.5.3"></a><var>5.3</var>In the case of a sanitary district or other multijurisdictional project, the authority may <br/>
<a id="pl.5.4"></a><var>5.4</var>provide a loan under this paragraph for up to an additional $1,000,000 for each additional <br/>
<a id="pl.5.5"></a><var>5.5</var>municipality participating up to a maximum of $8,000,000 or $15,000 per existing <br/>
<a id="pl.5.6"></a><var>5.6</var>connection, whichever is less, unless specifically approved by law. A loan under this <br/>
<a id="pl.5.7"></a><var>5.7</var>paragraph must bear no interest, must be repaid as provided in subdivision 7, and must <br/>
<a id="pl.5.8"></a><var>5.8</var>only be provided in conjunction with a loan from the clean water revolving fund under <br/>
<a id="pl.5.9"></a><var>5.9</var>section 
<statute_ref>446A.07</statute_ref>. The eligible project cost is determined by multiplying the total project <br/>
<a id="pl.5.10"></a><var>5.10</var>costs minus any other grants by the essential project component percentage calculated <br/>
<a id="pl.5.11"></a><var>5.11</var>under subdivision 3, paragraph (c), clause (1). In no case may the amount of the grant <br/>
<a id="pl.5.12"></a><var>5.12</var>exceed 80 percent of the eligible project cost.<br/>
<a id="pl.5.13"></a><var>5.13</var>    (c) Notwithstanding the limits in paragraphs (a) and (b), for a governmental <br/>
<a id="pl.5.14"></a><var>5.14</var>unit receiving supplemental assistance under this section after January 1, 2002, if the <br/>
<a id="pl.5.15"></a><var>5.15</var>authority determines that the governmental unit's construction and installation costs are <br/>
<a id="pl.5.16"></a><var>5.16</var>significantly increased due to geological conditions of crystalline bedrock or karst areas <br/>
<a id="pl.5.17"></a><var>5.17</var>and discharge limits that are more stringent than secondary treatment, the authority shall <br/>
<a id="pl.5.18"></a><var>5.18</var>provide assistance in the form of half grant and half loan. Assistance from the authority <br/>
<a id="pl.5.19"></a><var>5.19</var>may maximum award under this section shall not be more than $25,000 per existing <br/>
<a id="pl.5.20"></a><var>5.20</var>connection. Any additional grant amount received for the same project must be used to <br/>
<a id="pl.5.21"></a><var>5.21</var>reduce the amount of the governmental unit's loan from the clean water revolving fund <br/>
<a id="pl.5.22"></a><var>5.22</var>that exceeds five percent of the market value of properties in the project service area.<br/>
<br/>
<a id="bill.0.6.0"></a><a id="pl.5.23"></a><var>5.23</var>    Sec. 6. Minnesota Statutes 2008, section 446A.072, subdivision 9, is amended to read:<br/>
<a id="pl.5.24"></a><var>5.24</var>    Subd. 9. <b>Loan</b><b> </b><b>Funding </b><b>limitation.</b> Supplemental assistance may not be used to <br/>
<a id="pl.5.25"></a><var>5.25</var>reduce the sewer service charges of a significant wastewater contributor, or a single user <br/>
<a id="pl.5.26"></a><var>5.26</var>that has caused the need for the project or whose current or projected flow and load exceed <br/>
<a id="pl.5.27"></a><var>5.27</var>one-half of the current wastewater treatment plant's capacity.<br/>
<br/>
<a id="bill.0.7.0"></a><a id="pl.5.28"></a><var>5.28</var>    Sec. 7. Minnesota Statutes 2009 Supplement, section 446A.075, subdivision 1a, <br/>
<a id="pl.5.29"></a><var>5.29</var>is amended to read:<br/>
<a id="pl.5.30"></a><var>5.30</var>    Subd. 1a. <b>Technical assistance grants.</b> If requested, and if it is an eligible use <br/>
<a id="pl.5.31"></a><var>5.31</var>of funds, the authority shall is authorized to provide technical assistance grants to <br/>
<a id="pl.5.32"></a><var>5.32</var>governmental units as provided in this section to analyze possible solutions to problems <br/>
<a id="pl.5.33"></a><var>5.33</var>from seeking to address noncomplying subsurface sewage treatment systems. A grant <br/>
<a id="pl.5.34"></a><var>5.34</var>under this subdivision shall equal must not exceed $10,000 plus $500 per household, <br/>
<a id="pl.6.1"></a><var>6.1</var>not to exceed a for a maximum total of $40,000. Technical assistance grant funds may be <br/>
<a id="pl.6.2"></a><var>6.2</var>used by the governmental unit to: contract with a licensed subsurface sewage treatment <br/>
<a id="pl.6.3"></a><var>6.3</var>system business, the University of Minnesota onsite sewage treatment program, a regional <br/>
<a id="pl.6.4"></a><var>6.4</var>development commission, or other qualified nonprofit organization for one or more of the <br/>
<a id="pl.6.5"></a><var>6.5</var>following services:<br/>
<a id="pl.6.6"></a><var>6.6</var>(1) contract with a licensed subsurface sewage treatment system professional for <br/>
<a id="pl.6.7"></a><var>6.7</var>a preliminary analysis of conduct site evaluations and prepare a report by a certified <br/>
<a id="pl.6.8"></a><var>6.8</var>subsurface sewage treatment system designer indicating the feasibility of installing new <br/>
<a id="pl.6.9"></a><var>6.9</var>subsurface sewage treatment systems meeting the requirements of section 
         <statute_ref>115.55</statute_ref>; and<br/>
<a id="pl.6.10"></a><var>6.10</var>(2) to contract for services from the University of Minnesota Extension Service to <br/>
<a id="pl.6.11"></a><var>6.11</var>advise the governmental unit provide independent advice on the feasibility of possible <br/>
<a id="pl.6.12"></a><var>6.12</var>wastewater subsurface sewage treatment system alternatives and help; and<br/>
<a id="pl.6.13"></a><var>6.13</var>(3) assist the governmental unit to develop the technical, managerial, and financial <br/>
<a id="pl.6.14"></a><var>6.14</var>capacity necessary to build, operate, and maintain individual wastewater subsurface <br/>
<a id="pl.6.15"></a><var>6.15</var>sewage treatment systems.<br/>
<br/>
<a id="bill.0.8.0"></a><a id="pl.6.16"></a><var>6.16</var>    Sec. 8. Minnesota Statutes 2009 Supplement, section 446A.075, subdivision 2, is <br/>
<a id="pl.6.17"></a><var>6.17</var>amended to read:<br/>
<a id="pl.6.18"></a><var>6.18</var>    Subd. 2. <b>Construction loans and grants.</b> (a) The authority shall is authorized to <br/>
<a id="pl.6.19"></a><var>6.19</var>award loans and grants as provided in  this subdivision to governmental units from the <br/>
<a id="pl.6.20"></a><var>6.20</var>small community wastewater treatment account for projects to replace noncomplying <br/>
<a id="pl.6.21"></a><var>6.21</var>subsurface sewage treatment systems with  a subsurface sewage treatment system or <br/>
<a id="pl.6.22"></a><var>6.22</var>systems meeting the requirements of section 
         <statute_ref>115.55</statute_ref>.  A governmental unit receiving a <br/>
<a id="pl.6.23"></a><var>6.23</var>loan or grant from the account shall own the individual wastewater subsurface sewage <br/>
<a id="pl.6.24"></a><var>6.24</var>treatment systems built under the program and shall be responsible, either directly or <br/>
<a id="pl.6.25"></a><var>6.25</var>through a contract with a private vendor, for all inspections, maintenance, and repairs <br/>
<a id="pl.6.26"></a><var>6.26</var>necessary to ensure proper operation of the systems.<br/>
<a id="pl.6.27"></a><var>6.27</var>    (b) Loans may be awarded for up to 100 percent of eligible project costs as described <br/>
<a id="pl.6.28"></a><var>6.28</var>in this section.<br/>
<a id="pl.6.29"></a><var>6.29</var>    (c) When the area to be served by a project has a median household income below <br/>
<a id="pl.6.30"></a><var>6.30</var>the state average median household income, the governmental unit may receive 50 percent <br/>
<a id="pl.6.31"></a><var>6.31</var>of the funding provided under this  subdivision in the form of a grant.  An applicant may <br/>
<a id="pl.6.32"></a><var>6.32</var>submit income survey data collected by an independent party if it believes the most recent <br/>
<a id="pl.6.33"></a><var>6.33</var>United States census does not accurately reflect the median household income of the <br/>
<a id="pl.6.34"></a><var>6.34</var>area to be served.<br/>
<br/>
<a id="bill.0.9.0"></a><a id="pl.7.1"></a><var>7.1</var>    Sec. 9. Minnesota Statutes 2009 Supplement, section 446A.075, subdivision 4, is <br/>
<a id="pl.7.2"></a><var>7.2</var>amended to read:<br/>
<a id="pl.7.3"></a><var>7.3</var>    Subd. 4. <b>Applications.</b> Governmental units with projects on the project priority <br/>
<a id="pl.7.4"></a><var>7.4</var>list shall submit applications for loans or grants under this program to the authority on <br/>
<a id="pl.7.5"></a><var>7.5</var>forms prescribed by the authority. An application for technical assistance funds shall <br/>
<a id="pl.7.6"></a><var>7.6</var>include the number of households served by subsurface sewage treatment systems in the <br/>
<a id="pl.7.7"></a><var>7.7</var>community and a workplan and schedule for the proposed use of funds. An application for <br/>
<a id="pl.7.8"></a><var>7.8</var>construction funds shall include:<br/>
<a id="pl.7.9"></a><var>7.9</var>    (1) a list of the subsurface sewage treatment systems proposed to be replaced over a <br/>
<a id="pl.7.10"></a><var>7.10</var>period of up to three years;<br/>
<a id="pl.7.11"></a><var>7.11</var>    (2) a project schedule and cost estimate for each year of the project;<br/>
<a id="pl.7.12"></a><var>7.12</var>    (3) a financing plan for repayment of the loan; and <br/>
<a id="pl.7.13"></a><var>7.13</var>    (4) a management plan providing for the inspection, maintenance, and repairs <br/>
<a id="pl.7.14"></a><var>7.14</var>necessary to ensure proper operation of the systems.<br/>
<br/>
<a id="bill.0.10.0"></a><a id="pl.7.15"></a><var>7.15</var>    Sec. 10. Minnesota Statutes 2009 Supplement, section 446A.075, subdivision 5, <br/>
<a id="pl.7.16"></a><var>7.16</var>is amended to read:<br/>
<a id="pl.7.17"></a><var>7.17</var>    Subd. 5. <b>Awards.</b> (a) The authority shall must award loans and grants as provided <br/>
<a id="pl.7.18"></a><var>7.18</var>in this section to governmental units with approved applications based on their ranking on <br/>
<a id="pl.7.19"></a><var>7.19</var>the Pollution Control Agency's project priority list.<br/>
<a id="pl.7.20"></a><var>7.20</var>(b) Except as provided in paragraph (c), prior to the award of construction loans or <br/>
<a id="pl.7.21"></a><var>7.21</var>grants under subdivision 2, paragraph (b), the Pollution Control Agency shall certify that <br/>
<a id="pl.7.22"></a><var>7.22</var>the subsurface sewage treatment systems to be built appear to meet the criteria set forth in <br/>
<a id="pl.7.23"></a><var>7.23</var>section 
         <statute_ref>115.55</statute_ref> and rules of the Pollution Control Agency.<br/>
<a id="pl.7.24"></a><var>7.24</var>(c) If a governmental unit receives preliminary approval by the Pollution Control <br/>
<a id="pl.7.25"></a><var>7.25</var>Agency of its feasibility report prepared under subdivision 1a, clause (1), the authority <br/>
<a id="pl.7.26"></a><var>7.26</var>may make a partial construction award for eligible design costs.<br/>
<a id="pl.7.27"></a><var>7.27</var>(d) The total amount awarded for construction loans and grants under subdivision 2, <br/>
<a id="pl.7.28"></a><var>7.28</var>paragraph (b), shall be based on the estimated project costs for the portion of the project <br/>
<a id="pl.7.29"></a><var>7.29</var>expected to be completed within one year, up to an annual maximum of $500,000.  For <br/>
<a id="pl.7.30"></a><var>7.30</var>projects expected to take more than one year to complete, the authority may make a <br/>
<a id="pl.7.31"></a><var>7.31</var>multiyear commitment for a period not to exceed three years, contingent on the future <br/>
<a id="pl.7.32"></a><var>7.32</var>availability of funds.  Each year of a multiyear commitment must be funded by a separate <br/>
<a id="pl.7.33"></a><var>7.33</var>loan or loan and grant agreement meeting the terms and conditions in subdivision 6.  A <br/>
<a id="pl.7.34"></a><var>7.34</var>governmental unit receiving a loan or loan and grant under a multiyear commitment shall <br/>
<a id="pl.7.35"></a><var>7.35</var>have priority for additional loan and grant funds in subsequent years.<br/>
<br/>
<a id="bill.0.11.0"></a><a id="pl.8.1"></a><var>8.1</var>    Sec. 11. Minnesota Statutes 2009 Supplement, section 446A.081, subdivision 8, <br/>
<a id="pl.8.2"></a><var>8.2</var>is amended to read:<br/>
<a id="pl.8.3"></a><var>8.3</var>    Subd. 8. <b>Loan conditions.</b> (a) When making loans from the drinking water <br/>
<a id="pl.8.4"></a><var>8.4</var>revolving fund, the authority shall comply with the conditions of the federal Safe Drinking <br/>
<a id="pl.8.5"></a><var>8.5</var>Water Act, including the criteria in this subdivision.<br/>
<a id="pl.8.6"></a><var>8.6</var>(b) Loans must be made at or below market interest rates, including zero interest <br/>
<a id="pl.8.7"></a><var>8.7</var>loans, for terms not to exceed those allowed under the federal Safe Drinking Water Act.<br/>
<a id="pl.8.8"></a><var>8.8</var>(c) The annual principal and interest payments must begin no later than one year <br/>
<a id="pl.8.9"></a><var>8.9</var>after completion of the project. Loans must be amortized no later than 20 years after <br/>
<a id="pl.8.10"></a><var>8.10</var>project completion, unless the recipient's average annual residential drinking water system <br/>
<a id="pl.8.11"></a><var>8.11</var>cost after completion of the project would exceed 1.4 1.2 percent of median household <br/>
<a id="pl.8.12"></a><var>8.12</var>income in the recipient governmental unit or entity, in which case the loan must be fully <br/>
<a id="pl.8.13"></a><var>8.13</var>amortized no later than 30 years after project completion.<br/>
<a id="pl.8.14"></a><var>8.14</var>(d) A loan recipient must identify and establish a dedicated source of revenue for <br/>
<a id="pl.8.15"></a><var>8.15</var>repayment of the loan, and provide for a source of revenue to properly operate, maintain, <br/>
<a id="pl.8.16"></a><var>8.16</var>and repair the water system.<br/>
<a id="pl.8.17"></a><var>8.17</var>(e) The fund must be credited with all payments of principal and interest on all loans, <br/>
<a id="pl.8.18"></a><var>8.18</var>except the costs as permitted under section 
         <statute_ref>446A.04, subdivision 5</statute_ref>, paragraph (a). <br/>
<a id="pl.8.19"></a><var>8.19</var>(f) A loan may not be used to pay operating expenses or current obligations, unless <br/>
<a id="pl.8.20"></a><var>8.20</var>specifically allowed by the federal Safe Drinking Water Act.<br/>
<a id="pl.8.21"></a><var>8.21</var>(g) A loan made by the authority must be secured by notes or bonds of the <br/>
<a id="pl.8.22"></a><var>8.22</var>governmental unit and collateral to be determined by the authority for private borrowers.<br/>
<br/>
<a id="bill.0.12.0"></a><a id="pl.8.23"></a><var>8.23</var>    Sec. 12. Minnesota Statutes 2008, section 446A.081, subdivision 9, is amended to read:<br/>
<a id="pl.8.24"></a><var>8.24</var>    Subd. 9. <b>Other uses of fund.</b> (a) The drinking water revolving loan fund may be <br/>
<a id="pl.8.25"></a><var>8.25</var>used as provided in the act, including the following uses:<br/>
<a id="pl.8.26"></a><var>8.26</var>(1) to buy or refinance the debt obligations, at or below market rates, of public <br/>
<a id="pl.8.27"></a><var>8.27</var>water systems for drinking water systems, where  the debt was incurred after the date of <br/>
<a id="pl.8.28"></a><var>8.28</var>enactment of the act, for the purposes of construction of the necessary improvements <br/>
<a id="pl.8.29"></a><var>8.29</var>to comply with the national primary drinking water regulations under the federal Safe <br/>
<a id="pl.8.30"></a><var>8.30</var>Drinking Water Act;<br/>
<a id="pl.8.31"></a><var>8.31</var>(2) to purchase or guarantee insurance for local obligations to improve credit market <br/>
<a id="pl.8.32"></a><var>8.32</var>access or reduce interest rates;<br/>
<a id="pl.8.33"></a><var>8.33</var>(3) to provide a source of revenue or security for the payment of principal and <br/>
<a id="pl.8.34"></a><var>8.34</var>interest on revenue or general obligation bonds issued by the authority if the bond <br/>
<a id="pl.8.35"></a><var>8.35</var>proceeds are deposited in the fund;<br/>
<a id="pl.9.1"></a><var>9.1</var>(4) to provide loans or loan guarantees for similar revolving funds established by a <br/>
<a id="pl.9.2"></a><var>9.2</var>governmental unit or state agency;<br/>
<a id="pl.9.3"></a><var>9.3</var>(5) to earn interest on fund accounts;<br/>
<a id="pl.9.4"></a><var>9.4</var>(6) to pay the reasonable costs incurred by the authority, the Department of <br/>
<a id="pl.9.5"></a><var>9.5</var>Employment and Economic Development, and the Department of Health for conducting <br/>
<a id="pl.9.6"></a><var>9.6</var>activities as authorized and required under the act up to the limits authorized under the <br/>
<a id="pl.9.7"></a><var>9.7</var>act; and<br/>
<a id="pl.9.8"></a><var>9.8</var>(7) to develop and administer programs for water system supervision, source water <br/>
<a id="pl.9.9"></a><var>9.9</var>protection, and related programs required under the act.;<br/>
<a id="pl.9.10"></a><var>9.10</var>(8) notwithstanding Minnesota Rules, part 7380.0280, to provide principal <br/>
<a id="pl.9.11"></a><var>9.11</var>forgiveness or grants to the extent permitted under the federal Safe Drinking Water Act <br/>
<a id="pl.9.12"></a><var>9.12</var>and other federal law;<br/>
<a id="pl.9.13"></a><var>9.13</var>(9) to provide loans, principal forgiveness or grants to the extent permitted under the <br/>
<a id="pl.9.14"></a><var>9.14</var>Federal Safe Drinking Water Act and other federal law to address green infrastructure, <br/>
<a id="pl.9.15"></a><var>9.15</var>water or energy efficiency improvements, or other environmentally innovative activities; <br/>
<a id="pl.9.16"></a><var>9.16</var>and<br/>
<a id="pl.9.17"></a><var>9.17</var>(10) to provide principal forgiveness or grants for 50 percent of the project cost up <br/>
<a id="pl.9.18"></a><var>9.18</var>to a maximum of $10,000 for projects needed to comply with national primary drinking <br/>
<a id="pl.9.19"></a><var>9.19</var>water standards for an existing community or noncommunity public water system.<br/>
<a id="pl.9.20"></a><var>9.20</var>(b) Principal forgiveness or grants under paragraph (a), clause (8), must only be <br/>
<a id="pl.9.21"></a><var>9.21</var>provided if the average annual residential drinking water system cost after completion of <br/>
<a id="pl.9.22"></a><var>9.22</var>the project would otherwise exceed 1.2 percent of the median household income in the <br/>
<a id="pl.9.23"></a><var>9.23</var>project service area. In determining whether the average annual residential drinking <br/>
<a id="pl.9.24"></a><var>9.24</var>water system cost would exceed 1.2 percent, the authority must consider the total costs <br/>
<a id="pl.9.25"></a><var>9.25</var>associated with building, operating, and maintaining the drinking water system, including <br/>
<a id="pl.9.26"></a><var>9.26</var>debt service and operation and maintenance costs. Debt service costs for the proposed <br/>
<a id="pl.9.27"></a><var>9.27</var>project must be calculated based on the maximum loan term permitted for the drinking <br/>
<a id="pl.9.28"></a><var>9.28</var>water revolving fund loan under this section. The amount of the principal forgiveness or <br/>
<a id="pl.9.29"></a><var>9.29</var>grant must be equal to 80 percent of the amount needed to reduce the average annual <br/>
<a id="pl.9.30"></a><var>9.30</var>residential drinking water system cost to 1.2 percent of median household income in the <br/>
<a id="pl.9.31"></a><var>9.31</var>project service area, to a maximum of $4,000,000 or $15,000 per connection, whichever is <br/>
<a id="pl.9.32"></a><var>9.32</var>less, and not to exceed 80 percent of the total project cost.<br/>
<a id="pl.9.33"></a><var>9.33</var>(c) Principal forgiveness or grants provided under paragraph (a), clause (9), may <br/>
<a id="pl.9.34"></a><var>9.34</var>not exceed 25 percent of the eligible project costs as determined by the Department of <br/>
<a id="pl.9.35"></a><var>9.35</var>Health for project components directly related to green infrastructure, water or energy <br/>
<a id="pl.10.1"></a><var>10.1</var>efficiency improvements, or other environmentally innovative activities, up to a maximum <br/>
<a id="pl.10.2"></a><var>10.2</var>of $1,000,000.<br/>
<a id="pl.10.3"></a><var>10.3</var>(d) The authority is authorized to reduce the percentage of median household <br/>
<a id="pl.10.4"></a><var>10.4</var>income at which a loan term could extend to 30 years under subdivision 8, paragraph (c), <br/>
<a id="pl.10.5"></a><var>10.5</var>and at which principal forgiveness or grants could be provided under paragraph (b) if it <br/>
<a id="pl.10.6"></a><var>10.6</var>determines that the federal funds allotted to the state cannot be fully utilized without <br/>
<a id="pl.10.7"></a><var>10.7</var>such a reduction. If it determines that such a reduction is necessary to fully utilize the <br/>
<a id="pl.10.8"></a><var>10.8</var>federal funds, the authority must effect the change through its approval of the annual <br/>
<a id="pl.10.9"></a><var>10.9</var>intended use plan.<br/>
<br/>
<a id="bill.0.13.0"></a><a id="pl.10.10"></a><var>10.10</var>    Sec. 13. Minnesota Statutes 2008, section 446A.086, subdivision 1, is amended to read:<br/>
<a id="pl.10.11"></a><var>10.11</var>    Subdivision 1. <b>Definitions.</b> (a) As used in this section, the following terms have <br/>
<a id="pl.10.12"></a><var>10.12</var>the meanings given.<br/>
<a id="pl.10.13"></a><var>10.13</var>    (b) "Authority" means the Minnesota Public Facilities Authority.<br/>
<a id="pl.10.14"></a><var>10.14</var>    (c) "Commissioner" means the commissioner of management and budget.<br/>
<a id="pl.10.15"></a><var>10.15</var>    (d) "Debt obligation" means:<br/>
<a id="pl.10.16"></a><var>10.16</var>    (1) a general obligation bond or note issued by a county, a bond or note to which the <br/>
<a id="pl.10.17"></a><var>10.17</var>general obligation of a county is pledged under section 
         <statute_ref>469.034</statute_ref>, subdivision 2, or a bond <br/>
<a id="pl.10.18"></a><var>10.18</var>or note payable from a county lease obligation under section 
         <statute_ref>641.24</statute_ref>, to provide funds <br/>
<a id="pl.10.19"></a><var>10.19</var>for the construction of:<br/>
<a id="pl.10.20"></a><var>10.20</var>    (i) jails;<br/>
<a id="pl.10.21"></a><var>10.21</var>    (ii) correctional facilities;<br/>
<a id="pl.10.22"></a><var>10.22</var>    (iii) law enforcement facilities;<br/>
<a id="pl.10.23"></a><var>10.23</var>    (iv) social services and human services facilities;<br/>
<a id="pl.10.24"></a><var>10.24</var>    (v) solid waste facilities; or<br/>
<a id="pl.10.25"></a><var>10.25</var>    (vi) qualified housing development projects as defined in section 
         <statute_ref>469.034</statute_ref>, <br/>
<a id="pl.10.26"></a><var>10.26</var>subdivision 2; or<br/>
<a id="pl.10.27"></a><var>10.27</var>    (2) a general obligation bond or note issued by a governmental unit to provide funds <br/>
<a id="pl.10.28"></a><var>10.28</var>for the construction, improvement, or rehabilitation of:<br/>
<a id="pl.10.29"></a><var>10.29</var>    (i) wastewater facilities;<br/>
<a id="pl.10.30"></a><var>10.30</var>    (ii) drinking water facilities;<br/>
<a id="pl.10.31"></a><var>10.31</var>    (iii) stormwater facilities; or<br/>
<a id="pl.10.32"></a><var>10.32</var>    (iv) any publicly owned building or infrastructure improvement that has received <br/>
<a id="pl.10.33"></a><var>10.33</var>partial funding from grants awarded by the commissioner of employment and economic <br/>
<a id="pl.10.34"></a><var>10.34</var>development related to redevelopment, contaminated site cleanup, bioscience, small cities <br/>
<a id="pl.11.1"></a><var>11.1</var>development programs, and rural business infrastructure programs, for which bonds are <br/>
<a id="pl.11.2"></a><var>11.2</var>issued by the authority under section 
         <statute_ref>446A.087</statute_ref>.<br/>
<a id="pl.11.3"></a><var>11.3</var>    (e) "Governmental unit" means a county or a statutory or home rule charter city.<br/>
<br/>
<a id="bill.0.14.0"></a><a id="pl.11.4"></a><var>11.4</var>    Sec. 14. Minnesota Statutes 2008, section 446A.086, subdivision 2, is amended to read:<br/>
<a id="pl.11.5"></a><var>11.5</var>    Subd. 2. <b>Application.</b> (a) This section provides a state guarantee of the payment of <br/>
<a id="pl.11.6"></a><var>11.6</var>principal and interest on debt obligations if:<br/>
<a id="pl.11.7"></a><var>11.7</var>    (1) the obligations are issued after June 30, 2000 for new projects and are not issued <br/>
<a id="pl.11.8"></a><var>11.8</var>for the purposes of refunding previous obligations;<br/>
<a id="pl.11.9"></a><var>11.9</var>    (2) application to the Public Facilities Authority is made before issuance; and<br/>
<a id="pl.11.10"></a><var>11.10</var>    (3) the obligations are covered by an agreement meeting the requirements of <br/>
<a id="pl.11.11"></a><var>11.11</var>subdivision 3.<br/>
<a id="pl.11.12"></a><var>11.12</var>    (b) Applications to be covered by the provisions of this section must be made in a <br/>
<a id="pl.11.13"></a><var>11.13</var>form and contain the information prescribed by the authority. Applications are subject to <br/>
<a id="pl.11.14"></a><var>11.14</var>either a fee of $500 for each bond issue requested by a county or governmental unit or the <br/>
<a id="pl.11.15"></a><var>11.15</var>applicable fees under section 
         <statute_ref>446A.087</statute_ref>.<br/>
<a id="pl.11.16"></a><var>11.16</var>    (c) Application fees paid under this section must be deposited in a separate <br/>
<a id="pl.11.17"></a><var>11.17</var>credit enhancement bond guarantee account in the general fund. Money in the credit <br/>
<a id="pl.11.18"></a><var>11.18</var>enhancement bond guarantee account is appropriated to the authority for purposes of <br/>
<a id="pl.11.19"></a><var>11.19</var>administering this section.<br/>
<a id="pl.11.20"></a><var>11.20</var>    (d) Neither the authority nor the commissioner is required to promulgate <br/>
<a id="pl.11.21"></a><var>11.21</var>administrative rules under this section and the procedures and requirements established by <br/>
<a id="pl.11.22"></a><var>11.22</var>the authority or commissioner under this section are not subject to chapter 14.<br/>
<br/>
<a id="bill.0.15.0"></a><a id="pl.11.23"></a><var>11.23</var>    Sec. 15. Minnesota Statutes 2008, section 446A.086, subdivision 11, is amended to <br/>
<a id="pl.11.24"></a><var>11.24</var>read:<br/>
<a id="pl.11.25"></a><var>11.25</var>    Subd. 11. <b>Amount of debt obligation authorized.</b> The amount of debt outstanding <br/>
<a id="pl.11.26"></a><var>11.26</var>under this section must not exceed $500,000,000 $1,000,000,000.<br/>
<br/>
<a id="bill.0.16.0"></a><a id="pl.11.27"></a><var>11.27</var>    Sec. 16. <b>EMPLOYEE TRANSFER.</b><br/>
<a id="pl.11.28"></a><var>11.28</var>Employees employed by the Department of Employment and Economic <br/>
<a id="pl.11.29"></a><var>11.29</var>Development and assigned to the Public Facilities Authority are transferred to the Public <br/>
<a id="pl.11.30"></a><var>11.30</var>Facilities Authority in accordance with Minnesota Statutes, section 15.039, subdivision 7. <br/>
<a id="pl.11.31"></a><var>11.31</var>No employee in the classified service shall suffer job loss, have a salary reduced, or have <br/>
<a id="pl.11.32"></a><var>11.32</var>employment benefits reduced as a result of the transfer under this section. No action taken <br/>
<a id="pl.11.33"></a><var>11.33</var>after June 1, 2011, shall be considered a result of the transfer under this section.<br/>
<br/>
<a id="bill.0.17.0"></a><a id="pl.12.1"></a><var>12.1</var>    Sec. 17. <b>EFFECTIVE DATE.</b><br/>
<a id="pl.12.2"></a><var>12.2</var>Sections 1 to 16 are effective the day following final enactment.<br/>