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HF 2989

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/19/2024 04:34pm

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

Current Version - as introduced

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A bill for an act
relating to capital investment; creating a new green infrastructure grant program;
amending criteria for certain projects funded through the clean water and drinking
water revolving funds; requiring rules and the prioritization of clean water and
drinking water projects in certain project priority lists to factor in new criteria;
appropriating money; amending Minnesota Statutes 2022, sections 116.182,
subdivision 5; 446A.07, subdivisions 1a, 7, 8; 446A.081, subdivisions 1, 8, 9, 12;
proposing coding for new law in Minnesota Statutes, chapter 116.

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

Section 1.

Minnesota Statutes 2022, section 116.182, subdivision 5, is amended to read:


Subd. 5.

Rules.

The agency shall adopt rules for the administration of the financial
assistance program. For wastewater treatment projects, the rules must include:

(1) application requirements;

(2) criteria for the ranking of projects in order of priority based on factors includingnew text begin :
new text end

new text begin (i)new text end the type of project deleted text begin anddeleted text end new text begin ;
new text end

new text begin (ii)new text end the degree of environmental impactdeleted text begin , anddeleted text end new text begin ;
new text end

new text begin (iii)new text end scenic and wild river standards; and

new text begin (iv) affordability criteria, as defined under section 446A.07, subdivision 1a, paragraph
(b); and
new text end

(3) criteria for determining essential project components.

Sec. 2.

new text begin [116.196] GREEN INFRASTRUCTURE GRANT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment of program. new text end

new text begin The commissioner shall establish a green
infrastructure grant program to provide grants for green infrastructure projects.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have the
meanings given.
new text end

new text begin (b) "Commissioner" means the commissioner of the Pollution Control Agency.
new text end

new text begin (c) "Green infrastructure" has the meaning given in United States Code, title 33, section
1362, as amended through December 31, 2019, and also includes trails, bridges, roads, and
recreational amenities designed to mitigate stormwater impacts.
new text end

new text begin (d) "Political subdivision" means a county, home rule charter or statutory city, town, or
other political subdivision of the state.
new text end

new text begin (e) "Project" means a green infrastructure project or stormwater infrastructure project
to be owned and administered by a political subdivision.
new text end

new text begin (f) "Stormwater infrastructure" means a project that does one or more of the following:
new text end

new text begin (1) increases stormwater capacity or stormwater storage;
new text end

new text begin (2) addresses environmental damage caused by weather extremes;
new text end

new text begin (3) prevents localized flooding;
new text end

new text begin (4) creates stormwater systems that can manage flows from heavy rains;
new text end

new text begin (5) addresses public safety concerns caused by undersized stormwater systems; or
new text end

new text begin (6) ensures continuation of critical services during severe weather.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility. new text end

new text begin A political subdivision is eligible to apply for and receive a grant
under this section.
new text end

new text begin Subd. 4. new text end

new text begin Application. new text end

new text begin An application by a political subdivision for a grant under this
section must be made at the time and in the form and manner prescribed by the commissioner.
The commissioner must consult with the commissioner of management and budget on the
form of the application, the content of a request for proposals published to solicit applications
for the program under this section, and any prioritization criteria the commissioner intends
to apply to the program.
new text end

new text begin Subd. 5. new text end

new text begin Eligible project. new text end

new text begin A grant may be used to acquire land or an interest in land,
predesign, design, renovate, construct, furnish, and equip a project that is qualified to be
funded by state general obligation bonds under the Minnesota Constitution, article XI,
section 5, paragraph (a). Money from the general fund may also be used for green
infrastructure and stormwater infrastructure that would not qualify to be funded by state
general obligation bonds.
new text end

new text begin Subd. 6. new text end

new text begin Grants. new text end

new text begin (a) To be eligible for a grant under this section, a political subdivision
must timely submit an application to the commissioner and pass a resolution in support of
the project. The commissioner may give priority to a political subdivision that provides a
local match of funds for the project.
new text end

new text begin (b) A grant awarded under this section must be no less than the amount required to
complete the project, less any local funds committed to the project as required by section
16A.502.
new text end

new text begin (c) A grant under this section is in addition to any loan, principal forgiveness, or grant
awarded by the Public Facilities Authority under section 446A.07, subdivision 8, paragraph
(a), clause (8), or 446A.081, subdivision 9, paragraph (a), clause (9).
new text end

new text begin Subd. 7. new text end

new text begin Cancellation. new text end

new text begin A grant under this section is available until the project is
completed or abandoned subject to section 16A.642.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 3.

Minnesota Statutes 2022, section 446A.07, subdivision 1a, is amended to read:


Subd. 1a.

Definitions.

(a) For the purposes of this section, the terms in this subdivision
have the meanings given deleted text begin themdeleted text end .

new text begin (b) "Affordability criteria," pursuant to section 603(i)(2) of the federal Clean Water Act,
means a project service area that includes, in whole or in part, a census tract where at least
three of the following apply as determined using the most recently published data from the
United States Census Bureau or United States Centers for Disease Control and Prevention:
new text end

new text begin (1) 20 percent or more of the residents have income below the federal poverty thresholds;
new text end

new text begin (2) the tract has a United States Centers for Disease Control and Prevention Social
Vulnerability Index greater than 0.80;
new text end

new text begin (3) the upper limit of the lowest quintile of household income is less than the state upper
limit of the lowest quintile;
new text end

new text begin (4) the housing vacancy rate is greater than the state average; or
new text end

new text begin (5) the percent of the population receiving Supplemental Nutrition Assistance Program
(SNAP) benefits is greater than the state average.
new text end

deleted text begin (b)deleted text end new text begin (c)new text end "Eligible recipients" means governmental units or other entities eligible to receive
loans or other assistance as provided in title VI of the Federal Water Pollution Control Act.

deleted text begin (c)deleted text end new text begin (d)new text end "Federal Water Pollution Control Act" means the Federal Water Pollution Control
Act, as amended, United States Code, title 33, sections 1251 et seq.

new text begin (e) "Green infrastructure" has the meaning given in section 116.196, subdivision 2,
paragraph (c).
new text end

Sec. 4.

Minnesota Statutes 2022, section 446A.07, subdivision 7, is amended to read:


Subd. 7.

Loan conditions.

(a) When making loans from the clean water revolving fund,
the authority shall comply with the conditions of the Federal Water Pollution Control Act,
including the criteria in this subdivision.

(b) Loans must be made at or below market interest rates, including interest-free loans,
for terms not to exceed those allowed under the Federal Water Pollution Control Act.

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

(d) An eligible recipient shall establish a dedicated source of revenue for repayment of
the loan.

(e) The fund must be credited with all payments of principal and interest on all loans.

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

(g) A loan made by the authority must be secured by notes or bonds of the eligible
recipient of the loan.

new text begin (h) Notwithstanding Minnesota Rules, part 7380.0272, the interest rate for loans made
for the purpose of green infrastructure is zero percent.
new text end

Sec. 5.

Minnesota Statutes 2022, section 446A.07, subdivision 8, is amended to read:


Subd. 8.

Other uses of revolving fund.

(a) The clean water revolving fund may be used
as provided in title VI of the Federal Water Pollution Control Act, including the following
uses:

(1) to buy or refinance the debt obligation of governmental units for treatment works
where debt was incurred and construction begun after March 7, 1985, at or below market
rates;

(2) to guarantee or purchase insurance for local obligations to improve credit market
access or reduce interest rates;

(3) to provide a source of revenue or security for the payment of principal and interest
on revenue or general obligation bonds issued by the authority if the bond proceeds are
deposited in the fund;

(4) to provide loan guarantees, loans, or set-aside for similar revolving funds established
by a governmental unit other than state agencies, or state agencies under sections 17.117,
103F.725, subdivision 1a, and 116J.617;

(5) to earn interest on fund accounts;

(6) to pay the reasonable costs incurred by the authority and the Pollution Control Agency
of administering the fund and conducting activities required under the Federal Water Pollution
Control Act, including water quality management planning under section 205(j) of the act
and water quality standards continuing planning under section 303(e) of the act;

(7) to provide principal forgiveness or grants to the extent permitted under the Federal
Water Pollution Control Act and other federal lawdeleted text begin , based on the criteria and requirements
established for the wastewater infrastructure funding program under section 446A.072
deleted text end new text begin to
projects that meet affordability criteria
new text end ; and

(8) to provide loans, principal forgiveness, or grantsnew text begin , including grants under section
116.196 in coordination with the Pollution Control Agency,
new text end to the extent permitted under
the Federal Water Pollution Control Act and other federal law to address green infrastructure,
water or energy efficiency improvements, or other environmentally innovative activities.

(b) Amounts spent under paragraph (a), clause (6), may not exceed the amount allowed
under the Federal Water Pollution Control Act.

(c) Principal forgiveness or grants provided under paragraph (a), clause (8), may not
exceed 25 percent of the eligible project costs as determined by the Pollution Control Agency
for project components directly related to green infrastructure, water or energy efficiency
improvements, or other environmentally innovative activities, up to a maximum of
$1,000,000.new text begin The authority must use the maximum amount of federal funds available for the
purposes of green infrastructure each fiscal year beginning in fiscal year 2024. If in any
fiscal year there is no maximum amount stated in federal law, regulation, or guidance as
being available for the purposes of green infrastructure, the authority must use no less than
20 percent of the federal funds in the clean water revolving fund for green infrastructure
and stormwater infrastructure projects eligible for funding through the green infrastructure
grant program under section 116.196.
new text end

Sec. 6.

Minnesota Statutes 2022, section 446A.081, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) For the purposes of this section, the terms in this
subdivision have the meanings given deleted text begin themdeleted text end .

new text begin (b) "Disadvantaged community," pursuant to section 1452(d) of the federal Safe Drinking
Water Act, means a project service area that includes, in whole or in part, a census tract
where at least three of the following apply as determined using the most recently published
data from the United States Census Bureau or United States Centers for Disease Control
and Prevention:
new text end

new text begin (1) 20 percent or more of the residents have income below the federal poverty thresholds;
new text end

new text begin (2) the tract has a United States Centers for Disease Control and Prevention Social
Vulnerability Index greater than 0.80;
new text end

new text begin (3) the upper limit of the lowest quintile of household income is less than the state upper
limit of the lowest quintile;
new text end

new text begin (4) the housing vacancy rate is greater than the state average; or
new text end

new text begin (5) the percent of the population receiving Supplemental Nutrition Assistance Program
(SNAP) benefits is greater than the state average.
new text end

deleted text begin (b)deleted text end new text begin (c)new text end "Eligible recipient" means governmental units or other entities eligible to receive
loans or other assistance as provided in the federal Safe Drinking Water Act.

deleted text begin (c)deleted text end new text begin (d)new text end "Federal Safe Drinking Water Act" means the federal Safe Drinking Water Act,
as amended, United States Code, title 42, sections 300f et seq.

new text begin (e) "Green infrastructure" has the meaning given in section 116.196, subdivision 2,
paragraph (c).
new text end

Sec. 7.

Minnesota Statutes 2022, 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 this subdivision.

(b) Loans must be made at or below market interest rates, including zero interest loans,
for terms not to exceed those allowed under the federal Safe Drinking Water Act.

(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
completion, unless the deleted text begin recipient's average annual residential drinking water system cost
after completion of the project would exceed 1.2 percent of median household income in
the recipient governmental unit or entity
deleted text end new text begin project is identified as being located in a
disadvantaged community
new text end , in which case the loan must be fully amortized no later than 30
years after project completion.

(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.

new text begin (h) Notwithstanding Minnesota Rules, part 7380.0272, the interest rate for loans made
for the purpose of green infrastructure is zero percent.
new text end

Sec. 8.

Minnesota Statutes 2022, section 446A.081, subdivision 9, is amended to read:


Subd. 9.

Other uses of fund.

(a) The drinking water revolving loan fund may be used
as provided in the act, including the following uses:

(1) to buy or refinance the debt obligations, at or below market rates, of public water
systems for drinking water systems, where the debt was incurred after the date of enactment
of the act, for the purposes of construction of the necessary improvements to comply with
the national primary drinking water regulations under the federal Safe Drinking Water Act;

(2) to purchase or guarantee insurance for local obligations to improve credit market
access or reduce interest rates;

(3) to provide a source of revenue or security for the payment of principal and interest
on revenue or general obligation bonds issued by the authority if the bond proceeds are
deposited in the fund;

(4) to provide loans or loan guarantees for similar revolving funds established by a
governmental unit or state agency;

(5) to earn interest on fund accounts;

(6) to pay the reasonable costs incurred by the authority, the Department of Employment
and Economic Development, and the Department of Health for conducting activities as
authorized and required under the act up to the limits authorized under the act;

(7) to develop and administer programs for water system supervision, source water
protection, and related programs required under the act;

(8) to provide principal forgiveness or grants to the extent permitted under the federal
Safe Drinking Water Act and other federal lawdeleted text begin , based on the criteria and requirements
established for drinking water projects under the water infrastructure funding program under
section 446A.072
deleted text end new text begin to disadvantaged communitiesnew text end ;

(9) to provide loans, principal forgiveness or grantsnew text begin , including grants under section
116.196 in coordination with the Pollution Control Agency,
new text end to the extent permitted under
the federal Safe Drinking Water Act and other federal law to address green infrastructure,
water or energy efficiency improvements, or other environmentally innovative activities;

(10) to provide principal forgiveness, or grants for 80 percent of project costs up to a
maximum of $100,000 for projects needed to comply with national primary drinking water
standards for an existing nonmunicipal community public water system; and

(11) to provide principal forgiveness or grants to the extent permitted under the federal
Safe Drinking Water Act and other federal laws for 50 percent of the project costs up to a
maximum of $250,000 for projects to replace the privately owned portion of drinking water
lead service lines.

(b) Principal forgiveness or grants provided under paragraph (a), clause (9), may not
exceed 25 percent of the eligible project costs as determined by the Department of Health
for project components directly related to green infrastructure, water or energy efficiency
improvements, or other environmentally innovative activities, up to a maximum of
$1,000,000.new text begin The authority must use the maximum amount of federal funds available for the
purposes of green infrastructure each fiscal year beginning in fiscal year 2024. If in any
fiscal year there is no maximum amount stated in federal law, regulation, or guidance as
being available for the purposes of green infrastructure, the authority must use no less than
20 percent of the federal funds in the drinking water revolving loan fund for green
infrastructure and stormwater infrastructure projects eligible for funding through the green
infrastructure grant program under section 116.196.
new text end

Sec. 9.

Minnesota Statutes 2022, section 446A.081, subdivision 12, is amended to read:


Subd. 12.

Rules of the department.

new text begin (a) new text end The Department of Health shall adopt rules
relating to the procedures for administration of the Department of Health's duties under the
act and this section.

new text begin (b) Rules that establish criteria for ranking new or upgraded water supply system projects
in order of priority must assign priority points for projects located in disadvantaged
communities.
new text end

Sec. 10. new text begin INTERIM PROJECT PRIORITY LIST RECOMMENDATIONS;
POLLUTION CONTROL AGENCY.
new text end

new text begin Until rules factoring in affordability criteria are adopted under Minnesota Statutes,
section 116.182, subdivision 5, the commissioner of the Pollution Control Agency must
review each project priority list developed and provide recommendations to the Public
Facilities Authority that prioritize the projects based on affordability criteria. The Public
Facilities Authority must use the recommendations when developing the intended use plan
developed under Minnesota Statutes, section 446A.07.
new text end

Sec. 11. new text begin INTERIM PROJECT PRIORITY LIST RECOMMENDATIONS;
COMMISSIONER OF HEALTH.
new text end

new text begin Until rules factoring in disadvantaged communities are adopted under Minnesota Statutes,
section 446A.081, subdivision 12, the commissioner of health must review each project
priority list developed and provide recommendations to the Public Facilities Authority that
prioritize the projects based on being located in a disadvantaged community. The Public
Facilities Authority must use the recommendations when developing the intended use plan
developed under Minnesota Statutes, section 446A.081, subdivision 5.
new text end

Sec. 12. new text begin APPROPRIATIONS; GREEN INFRASTRUCTURE PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Appropriation; state general obligation bonds. new text end

new text begin $....... is appropriated
from the bond proceeds fund to the Pollution Control Agency for grants under Minnesota
Statutes, section 116.196.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation; general fund. new text end

new text begin $....... in fiscal year 2024 is appropriated from
the general fund to the Pollution Control Agency for grants under Minnesota Statutes, section
116.196.
new text end

new text begin Subd. 3. new text end

new text begin Bond sale. new text end

new text begin To provide the money appropriated in this section from the bond
proceeds fund, the commissioner of management and budget shall sell and issue bonds of
the state in an amount up to $....... in the manner, upon the terms, and with the effect
prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota
Constitution, article XI, sections 4 to 7.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 13. new text begin APPROPRIATION; GREEN INFRASTRUCTURE PROJECTS.
new text end

new text begin (a) Of an appropriation in fiscal year 2024 for the green infrastructure grant program
under Minnesota Statutes, section 116.196, the Pollution Control Agency must award grants
to:
new text end

new text begin (1) the Minneapolis Park and Recreation Board to replace, relocate, and improve public
park and water management infrastructure along Shingle, Bassett's, and Minnehaha Creeks
in Minneapolis; and
new text end

new text begin (2) Dakota County for a green infrastructure pilot project on a 2.4-mile segment of the
Mississippi River Greenway.
new text end

new text begin (b) A grant awarded under this section must be no less than the amount required to
complete the project, less any local money committed to the project, as required by Minnesota
Statutes, section 16A.502.
new text end

new text begin (c) The Pollution Control Agency must not award a grant under this section unless the
application required under Minnesota Statutes, section 116.196, subdivision 4, has been
completed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end