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HF 1756

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:54am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to the Public Facilities Authority; providing for federal use of funds
allocated to the state by the American Recovery and Reinvestment Act; providing
for clean water and drinking water loans and grants; appropriating money;
amending Minnesota Statutes 2008, sections 446A.07, subdivision 7; 446A.081,
subdivision 8.

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

Section 1.

Minnesota Statutes 2008, section 446A.07, subdivision 7, is amended to
read:


Subd. 7.

Loan conditions.

new text begin(a) new text endWhen making loans from the new text beginclean water new text endrevolving
fund, the authority shall comply with the conditions of the Federal Water Pollution Control
Act, includingdeleted text begin:deleted text endnew text begin the criteria in this subdivision.
new text end

deleted text begin (a)deleted text endnew text begin (b)new text end Loans must be made at or below market interest rates, including interest-free
loans, deleted text beginatdeleted text endnew text begin fornew text end terms not to exceed deleted text begin20 yearsdeleted text endnew text begin that allowed under the federal Water Pollution
Control Act
new text end.

deleted text begin (b)deleted text endnew text begin (c)new text end The annual principal and interest payments must begin no later than one year
after completion of deleted text beginadeleted text endnew text begin thenew text end project. Loans must be fully amortized no later than 20 years
after project completionnew text begin, unless the borrower's average annual residential wastewater
system cost after completion of the project would exceed 1.4 percent of median household
income, in which case the loan must be fully amortized no later than 30 years after
project completion
new text end.

deleted text begin (c)deleted text endnew text begin (d)new text end An eligible recipient shall establish a dedicated source of revenue for
repayment of the loan.

deleted text begin (d)deleted text endnew text begin (e)new text end The fund must be credited with all payments of principal and interest on
all loans.

deleted text begin (e)deleted text endnew text begin (f)new text end A loan may not be used to pay operating expenses or current obligations,
unless specifically allowed by the Federal Water Pollution Control Act.

deleted text begin (f)deleted text endnew text begin (g)new text end A loan made by the authority must be secured by notes or bonds of the
eligible recipient of the loan.

Sec. 2.

Minnesota Statutes 2008, section 446A.081, subdivision 8, is amended to read:


Subd. 8.

Loan conditions.

(a) When making loans from the drinking water
revolving fund, the authority shall comply with the conditions of the federal Safe Drinking
Water Act, including the criteria in deleted text beginparagraphs (b) to (e)deleted text endnew text begin this subdivisionnew text end.

(b) Loans must be made at or below market interest rates, including zero interest
loans, for terms not to exceed deleted text begin20 yearsdeleted text endnew text begin that allowed under the federal Safe Drinking
Water Act
new text end.

(c) The annual principal and interest payments must begin no later than one year after
completion of the project. Loans must be amortized no later than 20 years after project
completionnew text begin, unless the borrower's average annual residential wastewater system cost after
completion of the project would exceed 1.4 percent of median household income, in which
case the loan must be fully amortized no later than 30 years after project completion
new text end.

(d) A loan recipient must identify and establish a dedicated source of revenue for
repayment of the loan, and provide for a source of revenue to properly operate, maintain,
and repair the water system.

(e) The fund must be credited with all payments of principal and interest on all loans,
except the costs as permitted under section 446A.04, subdivision 5, paragraph (a).

(f) A loan may not be used to pay operating expenses or current obligations, unless
specifically allowed by the federal Safe Drinking Water Act.

(g) A loan made by the authority must be secured by notes or bonds of the
governmental unit and collateral to be determined by the authority for private borrowers.

Sec. 3. new text beginFEDERAL STIMULUS FUNDS FOR CLEAN WATER AND DRINKING
WATER.
new text end

new text begin Subdivision 1. new text end

new text begin Clean water revolving fund loans and grants. new text end

new text begin (a) Pursuant to
Public Law 111-5, the American Recovery and Reinvestment Act of 2009, referred to in
this section as "the Act," the federal money allocated under the Act for capitalization grants
for clean water state revolving funds is appropriated to the Public Facilities Authority for
deposit into the clean water revolving fund under Minnesota Statutes, section 446A.07, for
the purpose of making loans and grants to eligible projects as provided in this subdivision,
Minnesota Statutes, section 446A.07, and the Act. Authorization to make loans and grants
under this subdivision expires when all funds appropriated under the Act for the clean
water state revolving fund are expended.
new text end

new text begin (b) Fifty percent of the total funds received under the Act for the clean water state
revolving fund must be used to provide grants to eligible projects as provided in paragraph
(d), or to provide grants to eligible projects for up to 65 percent of the eligible grant
need identified by the United States Department of Agriculture Rural Economic and
Community Development Program.
new text end

new text begin (c) To the extent that there are sufficient eligible project applications, 20 percent
of the total funds appropriated must be used for grants and loans for projects to address
green infrastructure, water or energy efficiency improvements, or other environmentally
innovative activities. Grants made under this paragraph count toward the 50 percent
requirement in paragraph (b).
new text end

new text begin (d) Grants under this subdivision must be based on as-bid costs and awarded to
eligible projects in the order that projects are certified by the Pollution Control Agency
and as-bid costs are submitted to the Public Facilities Authority as provided in the
following clauses:
new text end

new text begin (1) Except for projects that receive a grant under clause (3), a base grant must be
provided for five percent of the funds approved from the clean water revolving fund, up
to a maximum of $2,000,000 per project.
new text end

new text begin (2) Except for projects that receive a grant under clause (3), a supplemental grant
must be provided if the average annual residential wastewater system cost after completion
of the project would otherwise exceed 1.4 percent of the median household income of
the borrower. In determining whether the average annual residential wastewater system
cost would exceed 1.4 percent, the authority must consider the total costs associated with
building, operating, and maintaining the wastewater system, including debt service and
operation and maintenance costs. The amount of the supplemental grant is equal to 80
percent of the amount needed to reduce the average annual residential wastewater system
cost to 1.4 percent of median household income, to a maximum of $4,000,000 or $15,000
per connection, whichever is less. The amount of the supplemental grant must not exceed
80 percent of the total amount approved from the clean water revolving fund.
new text end

new text begin (3) For eligible projects to address green infrastructure, water or energy efficiency
improvements, or other environmentally innovative activities, a grant must be provided
for 25 percent of the funds approved from the clean water revolving fund, to a maximum
of $2,000,000 per project.
new text end

new text begin Subd. 2. new text end

new text begin Drinking water revolving fund loans and grants. new text end

new text begin (a) Pursuant to
Public Law 111-5, the American Recovery and Reinvestment Act of 2009, federal money
allocated under the Act for capitalization grants for drinking water state revolving funds
is appropriated to the Public Facilities Authority for deposit into the drinking water
revolving fund under Minnesota Statutes, section 446A.081, for the purpose of making
loans and grants to eligible projects as provided in this subdivision, Minnesota Statutes,
section 446A.081, and the Act. Authorization to make loans and grants under this
subdivision expires when all funds appropriated under the Act for the drinking water
state revolving fund are expended.
new text end

new text begin (b) Fifty percent of the total funds received under the Act for the drinking water
state revolving fund must be used to provide grants to eligible projects as provided in
paragraph (d), or to provide grants to eligible projects for up to 65 percent of the eligible
grant need identified by the United States Department of Agriculture Rural Economic
and Community Development Program.
new text end

new text begin (c) To the extent that there are sufficient eligible project applications, 20 percent
of the total funds appropriated must be used for grants and loans for projects to address
green infrastructure, water or energy efficiency improvements, or other environmentally
innovative activities. Grants made under this paragraph count toward the 50 percent
requirement in paragraph (b).
new text end

new text begin (d) Grants under this subdivision must be based on as-bid costs and awarded to
eligible projects in the order that projects are certified by the Department of Health and
as-bid costs are submitted to the Public Facilities Authority as provided in the following
clauses:
new text end

new text begin (1) Except for projects that receive a grant under clause (3) or (4), a base grant must
be provided for ten percent of the funds approved from the drinking water revolving fund,
up to a maximum of $2,000,000 per project.
new text end

new text begin (2) Except for projects that receive a grant under clause (3) or (4), a supplemental
grant must be provided if the average annual residential drinking water system cost after
completion of the project would otherwise exceed 1.4 percent of the median household
income of the borrower. In determining whether the average annual residential drinking
water system cost would exceed 1.4 percent, the authority must consider the total costs
associated with building, operating and maintaining the drinking water system, including
debt service and operation and maintenance costs. The amount of the supplemental grant
is equal to 80 percent of the amount needed to reduce the average annual residential
drinking water system cost to 1.4 percent of median household income, to a maximum of
$4,000,000 or $15,000 per connection. The amount of the supplemental grant must not
exceed 80 percent of the total amount approved from the drinking water revolving fund.
new text end

new text begin (3) For eligible projects to address green infrastructure, water or energy efficiency
improvements, or other environmentally innovative activities, a grant must be provided for
25 percent of the funds approved from the drinking water revolving fund, to a maximum
of $2,000,000 per project.
new text end

new text begin (4) For projects needed to comply with national primary drinking water standards for
an existing community public water system or for an existing noncommunity public water
system, a grant must be provided for 50 percent of the project cost, up to a maximum of
$10,000. Total grants approved under this clause must not exceed $250,000.
new text end