HF 4037

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to capital improvements; establishing and appropriating money for clean
water legacy phosphorus reduction and small community wastewater treatment
programs; authorizing the issuance of general obligation bonds; amending
Minnesota Statutes 2005 Supplement, section 116.182, subdivision 2; proposing
coding for new law in Minnesota Statutes, chapter 446A.

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

Section 1.

Minnesota Statutes 2005 Supplement, section 116.182, subdivision 2,
is amended to read:

Subd. 2.

Applicability.

This section governs the commissioner's certification of
projects seeking financial assistance under section 103F.725, subdivision 1a; new text begin 446A.04;
new text end 446A.07; 446A.072; deleted text begin or deleted text end 446A.073 new text begin ; or 446A.074 new text end .

Sec. 2.

new text begin [446A.073] CLEAN WATER LEGACY PHOSPHORUS REDUCTION
GRANTS.
new text end

new text begin Subdivision 1. new text end

new text begin Creation of fund; appropriation. new text end

new text begin The authority shall establish a
clean water legacy capital improvement fund and shall make grants from the fund as
provided in this section. Money in the clean water legacy capital improvement fund,
including interest earned, is appropriated to the authority for the purposes of this section.
new text end

new text begin Subd. 2. new text end

new text begin Grants. new text end

new text begin The authority shall award grants from the clean water legacy
capital improvement fund to governmental units for the capital costs of wastewater
treatment facility projects or a portion thereof that will reduce the discharge of total
phosphorus from the facility to one milligram per liter or less. A project is eligible for a
grant if it meets the following requirements:
new text end

new text begin (1) the applicable phosphorus discharge limit is incorporated in a permit issued by
the agency for the wastewater treatment facility on or after March 28, 2000, the grantee
agrees to comply with the applicable limit as a condition of receiving the grant, or the
grantee made improvements to a wastewater treatment facility on or after March 28, 2000,
that include infrastructure to reduce the discharge of total phosphorus to one milligram
per liter or less;
new text end

new text begin (2) the governmental unit has submitted a facilities plan for the project to the agency
and a grant application to the authority on a form prescribed by the authority; and
new text end

new text begin (3) the agency has approved the application and facilities plan, and certified the
eligible costs for the project to the authority.
new text end

new text begin Subd. 3. new text end

new text begin Eligible capital costs. new text end

new text begin Eligible capital costs for phosphorus reduction
grants under subdivision 4, paragraph (a), include the as-bid construction costs and
engineering planning and design costs. Eligible capital costs for phosphorus reduction
grants under subdivision 4, paragraph (b), include the final, incurred construction,
engineering, planning, and design costs.
new text end

new text begin Subd. 4. new text end

new text begin Grant amounts and priorities. new text end

new text begin (a) Priority must be given to projects that
start construction on or after July 1, 2005. If a facility's plan for a project is approved
by the agency before July 1, 2009, the amount of the grant is 75 percent of the eligible
capital cost of the project. If a facility's plan for a project is approved by the agency on
or after July 1, 2009, the amount of the grant is 50 percent of the eligible capital cost of
the project. Priority in awarding grants under this paragraph must be based on the date of
approval of the facility's plan for the project.
new text end

new text begin (b) Projects that meet the eligibility requirements in subdivision 2 and have started
construction before July 1, 2005, are eligible for grants to reimburse 75 percent of the
eligible capital cost of the project, less any amounts previously received in grants from
other sources. Application for a grant under this paragraph must be submitted to the
agency no later than June 30, 2007. Priority for award of grants under this paragraph must
be based on the date of agency approval of the application for the grant.
new text end

new text begin (c) In each fiscal year that money is available for grants, the authority shall first
award grants under paragraph (a) to projects that met the eligibility requirements of
subdivision 2 by May 1 of that year. The authority shall use any remaining money
available that year to award grants under paragraph (b). Grants that have been approved
but not awarded in a previous fiscal year carry over and must be awarded in subsequent
fiscal years in accordance with the priorities in this paragraph.
new text end

new text begin (d) Disbursements of grants under this section by the authority to recipients must
be made for eligible project costs as incurred by the recipients, and must be made by the
authority in accordance with the project financing agreement and applicable state law.
new text end

new text begin Subd. 5. new text end

new text begin Fees. new text end

new text begin The authority may charge the grant recipient a fee for its
administrative costs not to exceed one-half of one percent of the grant amount, to be
paid upon execution of the grant agreement.
new text end

Sec. 3.

new text begin [446A.074] SMALL COMMUNITY WASTEWATER TREATMENT
LOAN PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Creation of fund. new text end

new text begin The authority shall establish a small community
wastewater treatment fund and shall make loans from the fund as provided in this section.
Money in the fund is annually appropriated to the authority and does not lapse. The fund
shall be credited with all loan repayments and investment income from the fund, and
servicing fees assessed under section 446A.04, subdivision 5. The authority shall manage
and administer the small community wastewater treatment fund, and for these purposes,
may exercise all powers provided in this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Loans. new text end

new text begin The authority shall award loans to governmental units from
the small community wastewater treatment fund for projects to replace noncomplying
individual sewage treatment systems with a community wastewater treatment system or
systems meeting the requirements of section 115.55. A governmental unit receiving a
loan from the fund shall own the community wastewater treatment systems built under
the program and shall be responsible, either directly or through a contract with a private
vendor, for all inspections, maintenance, and repairs necessary to assure proper operation
of the systems.
new text end

new text begin Subd. 3. new text end

new text begin Project priority list. new text end

new text begin Governmental units seeking loans from the small
community wastewater treatment loan program shall first submit a project proposal to the
agency. A project proposal shall include a compliance determination for all individual
sewage treatment systems in the project area. The agency shall rank project proposals on
its project priority list used for the water pollution control revolving fund under section
446A.07.
new text end

new text begin Subd. 4. new text end

new text begin Loan applications. new text end

new text begin Governmental units with projects on the project
priority list shall submit applications to the authority on forms prescribed by the authority.
The application shall include:
new text end

new text begin (1) a list of the individual sewage treatment systems proposed to be replaced over a
period of up to three years;
new text end

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

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

new text begin (4) a management plan providing for the inspection, maintenance, and repairs
necessary to assure proper operation of the systems.
new text end

new text begin Subd. 5. new text end

new text begin Loan awards. new text end

new text begin The authority shall award loans to governmental units with
approved loan applications based on their ranking on the agency's project priority list. The
loan amount shall be based on the estimated project costs for the portion of the project
expected to be completed within one year, up to an annual maximum of $500,000. For
projects expected to take more than one year to complete, the authority may make a
multiyear commitment for a period not to exceed three years, contingent on the future
availability of funds. Each year of a multiyear commitment must be funded by a separate
loan agreement meeting the terms and conditions in subdivision 6. A governmental unit
receiving a loan under a multiyear commitment shall have priority for additional loan
funds in subsequent years.
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 small community wastewater
treatment fund shall 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 shall carry an interest rate of one percent;
new text end

new text begin (3) loans shall be fully amortized within ten years of the first scheduled payment
or, if the loan amount exceeds $10,000 per household, shall be fully amortized within 20
years but not to exceed the expected design life of the system;
new text end

new text begin (4) a governmental unit 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; and
new text end

new text begin (5) each property owner to be served by a community wastewater treatment system
under this program must provide an easement to the governmental unit to allow access to
the system for management and repairs.
new text end

new text begin Subd. 7. new text end

new text begin Special assessment deferral. new text end

new text begin (a) A governmental unit receiving a loan
under this section that levies special assessments to repay the loan may defer payment of
the assessments under the provisions of sections 435.193 to 435.195.
new text end

new text begin (b) A governmental unit that defers payment of special assessments for one or more
properties under paragraph (a) may request deferral of that portion of the debt service on
its loan, and the authority shall accept appropriate amendments to the general obligation
note of the governmental unit. If special assessment payments are later received from
properties that received a deferral, the funds received shall be paid to the authority with
the next scheduled loan payment.
new text end

new text begin Subd. 8. new text end

new text begin Eligible costs. new text end

new text begin Eligible costs for small community wastewater treatment
loans shall include the costs of planning, design, construction, legal fees, administration,
and land acquisition.
new text end

new text begin Subd. 9. 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. 10. new text end

new text begin Audits. new text end

new text begin A governmental unit 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 governmental unit is not required to prepare an independent audit, a copy of
the annual financial reporting form it provides to the state auditor.
new text end

Sec. 4. new text begin APPROPRIATIONS.
new text end

new text begin (a) $16,360,000 is appropriated from the bond proceeds fund to the Public Facilities
Authority for the purposes specified in this section.
new text end

new text begin (1) $10,000,000 is for the phosphorus reduction grant program for grants under
Minnesota Statutes, section 446A.073.
new text end

new text begin (2) $1,000,000 is for the small community wastewater treatment fund for loans and
grants under Minnesota Statutes, section 446A.074.
new text end

new text begin (3) $5,360,000 is to the water pollution control revolving fund under Minnesota
Statutes, section 446.07, for wastewater treatment and stormwater projects.
new text end

new text begin (b) $100,000 is appropriated from the general fund to the Public Facilities Authority
for technical assistance to implement the small community wastewater treatment program
under Minnesota Statutes, section 446A.074.
new text end

new text begin (c) Funds appropriated under this section do not cancel and are available until spent.
new text end

Sec. 5. new text begin BOND SALE.
new text end

new text begin To provide the money appropriated in section 1, paragraph (a), from the bond
proceeds fund, the commissioner of finance shall sell and issue bonds of the state in an
amount up to $16,360,000 in the manner, on 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

Sec. 6. new text begin EFFECTIVE DATE.
new text end

new text begin This act is effective the day following final enactment.
new text end