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Minnesota Legislature

Office of the Revisor of Statutes

HF 372

as introduced - 91st Legislature (2019 - 2020) Posted on 01/24/2019 02:16pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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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 2018, 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.077] 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 2018, section 477A.013, subdivision 8, is amended to read:


Subd. 8.

City formula aid.

(a) For aids payable in 2018 and thereafter, the formula aid
for a city is equal to the product of (1) the difference between its unmet need and its certified
aid in the previous year and before any aid adjustment under subdivision 13, and (2) the aid
gap percentage.

(b) 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.03new text begin; however, the aid gap percentage may not be less than zeronew text end. The aid gap
percentage must be the same for all cities subject to paragraph (a). 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 2020 and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2018, section 477A.013, subdivision 9, is amended to read:


Subd. 9.

City aid distribution.

(a) In calendar year 2018 and thereafter, if a city's
certified aid before any aid adjustment under subdivision 13 for the previous year is less
than its current unmet need, the city shall receive an aid distribution equal to the sum of (1)
its certified aid in the previous year before any aid adjustment under subdivision 13, (2) the
city formula aid under subdivision 8, and (3) its aid adjustment under subdivision 13.

(b) For aids payable in 2018 and thereafter, if a city's certified aid before any aid
adjustment under subdivision 13 for the previous year is equal to or greater than its current
unmet need, the total aid for a city is equal to the greater of (1) its unmet need plus any aid
adjustment under subdivision 13, or (2) 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. No city may have a total aid amount less than $0.

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 2020 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2018, 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.077, subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in 2020 and thereafter.
new text end