HF 163

as introduced - 89th Legislature (2015 - 2016) Posted on 01/14/2015 11:06am

A bill for an act
relating to environment; dedicating a portion of local government aid to create a
loan program to renovate rural municipal water treatment facilities; appropriating
money; amending Minnesota Statutes 2014, sections 477A.013, subdivisions 8,
9; 477A.03, by adding a subdivision; proposing coding for new law in Minnesota
Statutes, chapter 446A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [446A.076] RURAL MUNICIPALITY WATER TREATMENT
FACILITY RENOVATION FUNDING.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the following terms have
the meanings given:
new text end

new text begin (1) "rural municipality" means a statutory or home rule charter city, town, county, or
sanitary district; an organization formed for the joint exercise of powers under section
471.59; and any other special purpose district or authority that operates a wastewater
treatment facility or water main and that is located outside of the metropolitan area as
defined in section 473.121, subdivision 2; and
new text end

new text begin (2) "wastewater treatment facility" has the meaning given under section 115.71,
subdivision 6.
new text end

new text begin Subd. 2. new text end

new text begin Establishment of account. new text end

new text begin A water treatment facility renovation account
is created in the special revenue fund. The authority shall make low or no interest loans
from the account to rural municipalities as provided in this section. Money in the account
is annually appropriated to the authority and does not lapse. The authority shall manage
and administer the account and, for these purposes, may exercise all powers provided in
this chapter. The account shall be credited with:
new text end

new text begin (1) all loan repayments and interest collected under this section; and
new text end

new text begin (2) money appropriated from local government aid under section 477A.03,
subdivision 2d.
new text end

new text begin Subd. 3. new text end

new text begin Renovation loans; eligibility. new text end

new text begin (a) The authority may award loans as
provided in this section to rural municipalities to renovate, rehabilitate, or update
wastewater treatment facilities that pose a risk to groundwater quality or the water quality
in lakes, rivers, or streams or to replace water mains that pose a risk to drinking water
sources. A rural municipality receiving a loan from the account is responsible, either
directly or through a contract with a private vendor, for all inspections and repairs
necessary to ensure proper operation of the wastewater treatment facility or water main.
new text end

new text begin (b) Loans may be awarded for up to 100 percent of eligible project costs minus
any funding available from other sources.
new text end

new text begin (c) The authority must award loans as provided in this section to rural municipalities
with approved applications based on their ranking on the project priority lists under
subdivision 4.
new text end

new text begin Subd. 4. new text end

new text begin Project priority lists. new text end

new text begin (a) Rural municipalities seeking loans for a
wastewater treatment facility renovation must first submit a project proposal to the
Pollution Control Agency on a form prescribed by the Pollution Control Agency. The
Pollution Control Agency shall rank project proposals on its project priority list used for
the clean water revolving fund under section 446A.07.
new text end

new text begin (b) Rural municipalities seeking loans for replacing a water main must first submit a
project proposal to the Department of Health on a form prescribed by the Department of
Health. The Department of Health shall rank project proposals on its project priority list
used for the drinking water revolving fund under section 446A.081.
new text end

new text begin Subd. 5. new text end

new text begin Applications. new text end

new text begin Rural municipalities with projects on a project priority list
shall submit applications for loans under this section to the authority on forms prescribed
by the authority. An application must include:
new text end

new text begin (1) a description of the wastewater treatment facility or water main renovations to
be made;
new text end

new text begin (2) a project schedule and cost estimate for each year of the project; and
new text end

new text begin (3) a financing plan for repayment of the loan.
new text end

new text begin Subd. 6. new text end

new text begin Loan terms and conditions. new text end

new text begin Loans from the water treatment facility
renovation account must comply with the following terms and conditions:
new text end

new text begin (1) principal and interest payments must begin no later than two years after the
loan is awarded;
new text end

new text begin (2) loans must be fully amortized within 20 years but not to exceed the expected
design life of the facility or water main; and
new text end

new text begin (3) a rural municipality receiving a loan must establish a dedicated source or sources
of revenues for repayment of the loan and must issue a general obligation note to the
authority for the full amount of the loan.
new text end

new text begin Subd. 7. new text end

new text begin Disbursements. new text end

new text begin Loan disbursements by the authority under this section
must be made for eligible project costs as incurred by the recipients and must be made in
accordance with the project loan agreement and applicable state law.
new text end

new text begin Subd. 8. new text end

new text begin Audits. new text end

new text begin A rural municipality receiving a loan under this section must
annually provide to the authority for the term of the loan a copy of its annual independent
audit or, if the rural municipality is not required to prepare an independent audit, a copy of
the annual reporting form it provides to the state auditor.
new text end

Sec. 2.

Minnesota Statutes 2014, section 477A.013, subdivision 8, is amended to read:

Subd. 8.

City formula aid.

(a) For aids payable in 2014 only, the formula aid for a
city is equal to the sum of (1) its 2013 certified aid, and (2) the product of (i) the difference
between its unmet need and its 2013 certified aid, and (ii) the aid gap percentage.

(b) For aids payable in 2015 and thereafter, the formula aid for a city is equal to the
sum of (1) its formula aid in the previous year and (2) the product of (i) the difference
between its unmet need and its formula aid in the previous year, and (ii) the aid gap
percentage.

(c) For aids payable in 2015 and thereafter, if a city's certified aid from the previous
year is greater than the sum of its unmet need plus its aid adjustment under subdivision 13,
its formula aid is adjusted to equal its unmet need.

(d) No city may have a formula aid amount less than zero. The aid gap percentage
must be the same for all cities subject to paragraph (b).

(e) The applicable aid gap percentage must be calculated by the Department of
Revenue so that the total of the aid under subdivision 9 equals the total amount available
for aid under section 477A.03 new text begin ; however, the aid gap percentage may not be less than zero new text end .
Data used in calculating aids to cities under sections 477A.011 to 477A.013 shall be the
most recently available data as of January 1 in the year in which the aid is calculated.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in 2016 and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2014, section 477A.013, subdivision 9, is amended to read:

Subd. 9.

City aid distribution.

(a) In calendar year 2014 and thereafter, each
city shall receive an aid distribution equal to the sum of (1) the city formula aid under
subdivision 8, and (2) its aid adjustment under subdivision 13.

(b) For aids payable in 2014 only, the total aid for a city may not be less than the
amount it was certified to receive in 2013 plus any increase under subdivision 13. For aids
payable in 2015 and thereafter, the total aid for a city must not be less than the amount
it was certified to receive in the previous year minus the lesser of $10 multiplied by its
population, or five percent of its net levy in the year prior to the aid distribution.

new text begin (c) Notwithstanding paragraphs (a) and (b), if the aid gap percentage calculated in
subdivision 8 is zero and the total aid distributed under this paragraph to all cities would be
greater than the maximum amount available under section 477A.03, then the aid for a city
under this subdivision shall be equal to its certified aid under this subdivision in the previous
year multiplied by an adjustment factor. The adjustment factor, which must be the same
for all cities, must be calculated by the Department of Revenue so that the total aid to all
cities under this subdivision is equal to the amount available for this aid under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in 2016 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2014, section 477A.03, is amended by adding a subdivision
to read:

new text begin Subd. 2d. new text end

new text begin Wastewater treatment dedication. new text end

new text begin Each calendar year, five percent of
the appropriation amount under each of subdivisions 2a to 2c shall be retained by the
commissioner of revenue and deposited in the water treatment facility renovation account
under section 446A.076, subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in 2016 and thereafter.
new text end