1.1A bill for an act1.2relating to the Public Facilities Authority; reorganizing certain grant programs; 1.3providing for small community wastewater treatment grants;amending 1.4Minnesota Statutes 2012, sections 446A.073, subdivisions 1, 3, 4; 446A.075, 1.5subdivisions 1a, 2, 5, 6; repealing Minnesota Statutes 2012, sections 446A.051, 1.6subdivision 2; 446A.074.1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:1.8    Section 1. Minnesota Statutes 2012, section 446A.073, subdivision 1, is amended to 1.9read:1.10    Subdivision 1. Program established. When money is appropriated for grants under 1.11this program, the authority must make shall award grants up to a maximum of $3,000,000 1.12to governmental units to cover up to one-half the cost of wastewater treatment or storm 1.13water projects made necessary by:1.14(1) a wasteload reductions reduction prescribed under a total maximum daily load 1.15plans plan required by section 303(d) of the federal Clean Water Act, United States Code, 1.16title 33, section 1313(d).;1.17(2) a phosphorus concentration or mass limit which requires discharging one 1.18milligram per liter or less at permitted design flow which is incorporated into a permit 1.19issued by the Pollution Control Agency;1.20(3) any other water quality-based effluent limit established under section 115.03, 1.21subdivision 1, paragraph (e), clause (8), and incorporated into a permit issued by the 1.22Pollution Control Agency that exceeds secondary treatment limits; or1.23(4) a total nitrogen limit of ten milligrams per liter or less for a land-based treatment 1.24system.2.1    Sec. 2. Minnesota Statutes 2012, section 446A.073, subdivision 3, is amended to read:2.2    Subd. 3. Project priorities. When money is appropriated for grants under this 2.3program, the authority shall accept applications during the month of July and reserve 2.4money for projects expected to proceed with construction by the end of the fiscal year in 2.5the order listed on the Pollution Control Agency's project priority list, provided the project 2.6is included in a total maximum daily load plan that has been approved by the United 2.7States Environmental Protection Agency at the time the appropriation became law and in 2.8an amount based on the cost estimate submitted to the authority in the grant application or 2.9the as-bid costs, whichever is less.2.10    Sec. 3. Minnesota Statutes 2012, section 446A.073, subdivision 4, is amended to read:2.11    Subd. 4. Grant approval. The authority must make a grant to a governmental unit, 2.12as defined in section 116.182, subdivision 1, for an eligible project only after:2.13(1) the commissioner of the Pollution Control Agency has certified to the United 2.14States Environmental Protection Agency a total maximum daily load plan for identified 2.15waters of this state that includes a point source wasteload allocation;2.16(2) the Environmental Protection Agency has approved the plan;2.17(3) a governmental unit affected by the plan (1) the applicant has submitted the 2.18as-bid cost for the wastewater treatment or storm water projects necessary to comply with 2.19the point source wasteload allocation project;2.20(4) (2) the Pollution Control Agency has approved the as-bid costs and certified the 2.21grant eligible portion of the project; and2.22(5) (3) the authority has determined that the additional financing necessary to 2.23complete the project has been committed from other sources.2.24    Sec. 4. Minnesota Statutes 2012, section 446A.075, subdivision 1a, is amended to read:2.25    Subd. 1a. Technical assistance grants. If requested, and if it is an eligible use 2.26of funds, the authority may provide technical assistance grants to governmental units 2.27seeking to address noncomplying subsurface sewage treatment systems. A grant under 2.28this subdivision must not exceed $10,000 $20,000 plus $500$1,000 per household, for 2.29a maximum total of $40,000 $60,000. Technical assistance grant funds may be used 2.30by the a county recipient to pay its qualified staff for services listed in clauses (1) to 2.31(3) or by a governmental unit to contract with a licensed subsurface sewage treatment 2.32system business, county, the University of Minnesota on-site sewage treatment program, a 2.33regional development commission, or other qualified nonprofit organization for one or 2.34more of the following services:3.1(1) conduct site evaluations and prepare a report by a certified subsurface sewage 3.2treatment system designer indicating the feasibility of installing new subsurface sewage 3.3treatment systems meeting the requirements of section 
         115.55;3.4(2) provide independent advice on the feasibility of subsurface sewage treatment 3.5system alternatives; and3.6(3) assist the governmental unit to develop the technical, managerial, and financial 3.7capacity necessary to build, operate, and maintain subsurface sewage treatment systems.3.8    Sec. 5. Minnesota Statutes 2012, section 446A.075, subdivision 2, is amended to read:3.9    Subd. 2. Construction loans and grants. (a) The authority may award loans and 3.10grants as provided in this subdivision to governmental units from the small community 3.11wastewater treatment account for projects to replace noncomplying subsurface sewage 3.12treatment systems with a subsurface sewage treatment system or systems meeting the 3.13requirements of section 
         115.55 or a land-based treatment system with a state disposal 3.14system permit. A governmental unit receiving a loan or grant from the account shall own 3.15the subsurface sewage treatment systems built under the program and shall be responsible, 3.16either directly or through a contract with a private vendor, for all inspections, maintenance, 3.17and repairs necessary to ensure proper operation of the systems.3.18    (b) Loans as provided in subdivision 6 may be awarded for up to 100 percent 3.19of eligible project costs as described in this section minus any grants awarded under 3.20paragraph (c) or from other sources.3.21    (c) When the area to be served by a project has a median household income below 3.22the state average median household income, the governmental unit may receive 50 percent 3.23of the funding provided under this subdivision in the form of a grant. An applicant may 3.24submit income survey data collected by an independent party if it believes the most recent 3.25United States census does not accurately reflect the median household income of the area 3.26to be served. The authority may award a grant to a project if the estimated average annual 3.27residential wastewater system cost after completion of the project would otherwise exceed 3.281.4 percent of the median household income of the project service area. In determining the 3.29estimated average annual residential wastewater system cost, the authority must consider 3.30the total costs associated with building, operating, and maintaining the wastewater system 3.31including debt service. The amount of the grant shall be 80 percent of the amount 3.32needed to reduce the average annual residential wastewater system cost to 1.4 percent of 3.33the median household income, but not to exceed 80 percent of the eligible project cost 3.34minus any other grants.4.1    Sec. 6. Minnesota Statutes 2012, section 446A.075, subdivision 5, is amended to read:4.2    Subd. 5. Awards. (a) The authority must award loans and grants as provided in this 4.3section to governmental units with approved applications based on their ranking on the 4.4Pollution Control Agency's project priority list.4.5(b) Except as provided in paragraph (c), prior to the award of construction loans or 4.6grants under subdivision 2, paragraph (b), the Pollution Control Agency shall certify 4.7that the subsurface sewage land-based treatment systems to be built appear to meet are 4.8designed according to the criteria set forth in section 
         115.55 and rules of the Pollution 4.9Control Agency.4.10(c) If a governmental unit receives preliminary approval by the Pollution Control 4.11Agency of its feasibility report prepared under subdivision 1a, clause (1), the authority 4.12may make a partial construction award for eligible design costs.4.13(d) The total amount awarded for a construction loans and grants project under 4.14subdivision 2, paragraph (b), shall be based on the estimated project costs for the portion 4.15of the project expected to be completed within one year, up to an annual maximum of 4.16$500,000. For projects expected to take more than one year to complete, the authority 4.17may make a multiyear commitment for a period not to exceed three years, contingent on 4.18the future availability of funds. Each year of a multiyear commitment must be funded 4.19by a separate loan or loan and grant agreement meeting the terms and conditions in 4.20subdivision 6. A governmental unit receiving a loan or loan and grant under a multiyear 4.21commitment shall have priority for additional loan and grant funds in subsequent years4.22 must not exceed $2,000,000.4.23    Sec. 7. Minnesota Statutes 2012, section 446A.075, subdivision 6, is amended to read:4.24    Subd. 6. Loan terms and conditions. Loans from the small community wastewater 4.25treatment account shall comply with the following terms and conditions:4.26    (1) principal and interest payments must begin no later than two years after the 4.27loan is awarded;4.28    (2) loans shall carry an interest rate of one percent;4.29    (3) loans shall be fully amortized within ten years of the first scheduled payment 4.30or, if the loan amount exceeds $10,000 per household, shall be fully amortized within 20 4.31years but not to exceed the expected design life of the system;4.32    (4) a governmental unit receiving a loan must establish a dedicated source or sources 4.33of revenues for repayment of the loan and must issue a general obligation note to the 4.34authority for the full amount of the loan; and5.1    (5) each property owner voluntarily seeking assistance for repair or replacement of 5.2an individual treatment system under this program must provide a utility easement to the 5.3governmental unit to allow access to the system for management and repairs.5.4    Sec. 8. WASTEWATER INFRASTRUCTURE FUNDING; CONVERSION OF 5.5CERTAIN LOANS TO GRANTS.5.6For supplemental assistance provided under its wastewater infrastructure funding 5.7program in the form of a loan, the public facilities authority may convert the loan to a 5.8grant to the extent that the authority determines that the governmental unit would have 5.9met, at the time the loan was made, the criteria in Minnesota Statutes 2012, section 5.10446A.072, subdivision 5a, paragraph (b). If a loan is converted to a grant only in part, 5.11then, notwithstanding section 446A.072, subdivision 7, the authority may determine the 5.12manner in which the repayment schedule for the loan is to be adjusted.5.13    Sec. 9. INSTRUCTIONS TO REVISOR.5.14(a) In Minnesota Statutes, the revisor shall remove references to the sections 5.15repealed in section 10.5.16(b) In Minnesota Statutes, the revisor shall change the headnote to section 446A.073 5.17to "Point Source Implementation Grants."5.18    Sec. 10.  REPEALER.5.19Minnesota Statutes 2012, sections 446A.051, subdivision 2; and 446A.074, are 5.20repealed.