SF 1186

2nd Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to public facilities; modifying provisions of the Minnesota Public
Facilities Authority Act; making technical and housekeeping changes; modifying
Pollution Control Agency project priority rule; amending Minnesota Statutes
2006, sections 116.182, subdivision 5; 446A.02; 446A.03; 446A.04; 446A.051;
446A.07; 446A.072; 446A.073; 446A.074; 446A.075; 446A.081; 446A.085;
446A.09; 446A.11, subdivision 13; 446A.17, subdivision 1; repealing Minnesota
Statutes 2006, sections 446A.05; 446A.06; 446A.15, subdivision 6.

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

ARTICLE 1

PUBLIC FACILITIES AUTHORITY TECHNICAL AND
HOUSEKEEPING CHANGES

Section 1.

Minnesota Statutes 2006, section 446A.02, is amended to read:

446A.02 DEFINITIONS.

Subdivision 1.

Applicability.

For the purposes of this chapter, the terms in this
section have the meanings given them.

deleted text begin Subd. 1a. deleted text end

deleted text begin Agency. deleted text end

deleted text begin "Agency" means the Minnesota Pollution Control Agency.
deleted text end

Subd. 2.

Authority.

"Authority" means the Minnesota Public Facilities Authority.

deleted text begin Subd. 3. deleted text end

deleted text begin Commissioner. deleted text end

deleted text begin "Commissioner" means the commissioner of employment
and economic development.
deleted text end

deleted text begin Subd. 4. deleted text end

deleted text begin Federal Water Pollution Control Act. deleted text end

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

new text begin Subd. 4a. new text end

new text begin Eligible recipient. new text end

new text begin "Eligible recipient" means a governmental unit or
other entity that may be defined as an eligible recipient for specific programs within this
chapter, and which may be different from one program to another.
new text end

Subd. 5.

Governmental unit.

"Governmental unit" means a state agency, home rule
charter or statutory city, county, sanitary district, or other governmental subdivision.

Subd. 6.

Project.

"Project" means new text begin any eligible activity authorized in this chapter
including new text end the acquisition, new text begin design, new text end construction, improvement, expansion, repair, or
rehabilitation of all or part of any structure, facility, or equipment deleted text begin necessary for a
wastewater treatment system or water supply system deleted text end .

Sec. 2.

Minnesota Statutes 2006, section 446A.03, is amended to read:

446A.03 MINNESOTA PUBLIC FACILITIES AUTHORITY.

Subdivision 1.

Membership.

The Minnesota Public Facilities Authority consists
of the commissioner of employment and economic development, the commissioner
of finance, the commissioner of the Pollution Control Agency, the commissioner of
agriculture, the commissioner of health, and the commissioner of transportation.

Subd. 2.

Chair; other officers.

The commissioner of employment and economic
development shall serve as the chair and chief executive officer of the authority. The
authority new text begin shall have the position of vice-chair rotate annually among its members. In the
absence of the chair or vice-chair at meetings of the authority members may elect a chair
for the meeting, and new text end may elect other officers as necessary from its members.

Subd. 3a.

Delegation.

In addition to any powers to delegate that members of the
authority have as commissioners, they may delegate to the deleted text begin commissioner of employment
and economic development deleted text end new text begin chair, vice-chair, or executive director new text end their responsibilities as
members of the authority for reviewing and approving financing of eligible projects that
have been certified to the authority new text begin by another department or agency, projects that have
been authorized by law, or programs specifically authorized by resolution of the authority new text end .

Subd. 4.

Board actions.

(a) A majority of the authority, excluding vacancies,
constitutes a quorum to conduct its business, to exercise its powers, and for all other
purposes.

(b) The board may conduct its business by any technological means available,
including teleconference calls or interactive video, that allows for an interaction between
members. If a meeting is conducted under this paragraph, a specific location must be
available for the public to attend the meeting and at least one member must be present at
that location.

Subd. 5.

Executive director new text begin ; staffing new text end .

The deleted text begin commissioner deleted text end new text begin authority new text end shall employ new text begin
and the chair shall appoint new text end , with the concurrence of the authority, an executive director
in the unclassified service. The new text begin executive new text end director shall new text begin be responsible for staff of the
authority. The executive director shall new text end perform duties that the authority may require in
carrying out its responsibilities new text begin to manage and implement the funds and programs in this
chapter, implementation of debt issuance authorized by the authority, compliance with
all state and federal program requirements, and state and federal securities and tax laws
and regulations new text end .

Subd. 6.

Administrative services.

The deleted text begin commissioner shall provide administrative
services to the deleted text end authority new text begin shall enter into agreements for administrative and professional
services, and technical support new text end .

deleted text begin Subd. 7. deleted text end

deleted text begin Personal liability. deleted text end

deleted text begin Members and officers of the authority are not liable
personally for any debt or obligation of the authority.
deleted text end

Sec. 3.

Minnesota Statutes 2006, section 446A.04, is amended to read:

446A.04 POWERS; DUTIES new text begin ; PROGRAM ADMINISTRATION new text end .

deleted text begin Subdivision 1. deleted text end

deleted text begin Bylaws; rules. deleted text end

deleted text begin The authority shall adopt bylaws for its organization
and internal management. The commissioner may adopt rules covering the authority's
operations, properties, and facilities.
deleted text end

Subd. 2.

Power to sue; enter contracts.

The authority may sue and be sued. The
authority may make and enter into contracts, leases, and agreements necessary to perform
its duties and exercise its powers.

Subd. 3.

Gifts; grants.

The authority may apply for, accept, and disburse gifts,
grants, loans, or other property from the United States, the state, private sources, or
any other source for any of its purposes. Money received by the authority under this
subdivision must be deposited in the state treasury and is appropriated to the authority to
carry out its duties.

Subd. 4.

Contract for services.

The authority may retain or contract for the
services of accountants, financial advisors, and other consultants or agents needed to
perform its duties and exercise its powers.

Subd. 5.

Fees.

(a) The authority may set and collect fees for costs incurred by the
authority deleted text begin for audits, arbitrage accounting, and payment of fees charged by the State Board
of Investment. The authority may also set and collect fees for costs incurred by deleted text end new text begin , new text end the
deleted text begin commissioner deleted text end new text begin Department of Employment and Economic Development new text end , the Department
of Health, the Pollution Control Agency, and the Department of Transportation, including
costs for personnel new text begin , professional, new text end and administrative services, for deleted text begin financings deleted text end new text begin debt issuance
related costs new text end and the establishment and maintenance of reserve funds. Fees charged
directly to borrowers or grantees upon executing a loan or grant agreement must not
exceed one-half of one percent of the loan or grant amount. Servicing fees assessed to loan
repayments must not exceed two percent of the loan repayment. The disposition of fees
collected for costs incurred by the authority is governed by section 446A.11, subdivision
13. The authority shall enter into interagency agreements to transfer funds into appropriate
administrative accounts established for fees collected under this subdivision for costs
incurred by the deleted text begin commissioner deleted text end new text begin Department of Employment and Economic Development new text end ,
the Department of Health, or the Pollution Control Agency. Fees collected under this
subdivision for costs incurred by the deleted text begin commissioner deleted text end new text begin Department new text end of Transportation must be
credited to the fund or account which is the source of the loan to which the fees are related.

(b) The authority shall annually report to the chairs of the finance and appropriations
committees of the legislature on:

(1) the amount of fees collected under this subdivision for costs incurred by the
authority;

(2) the purposes for which the fee proceeds have been spent; and

(3) the amount of any remaining balance of fee proceeds.

Subd. 6.

Property.

The authority may acquire, encumber, hold, and convey through
lease, purchase, gift, or otherwise, any real or personal property.

new text begin Subd. 6a. new text end

new text begin Loans; grants. new text end

new text begin The authority may make and contract to make loans and
grants to eligible recipients to finance projects that the eligible recipient may construct
or acquire. The authority may acquire or contract to acquire notes and bonds issued by
eligible recipients to finance those projects.
new text end

new text begin Subd. 6b. new text end

new text begin Debt. new text end

new text begin The authority may borrow money to administer its programs
and may issue bonds or notes as evidence of the borrowing in accordance with sections
446A.12 to 446A.20.
new text end

Subd. 7.

In general.

The authority has all the powers necessary and convenient
to carry out its duties under this chapter.

Sec. 4.

Minnesota Statutes 2006, section 446A.051, is amended to read:

446A.051 PROJECT FINANCIAL ASSISTANCE.

new text begin Subdivision 1. new text end

new text begin Determination of financial assistance. new text end

The authority shall assist
eligible deleted text begin governmental units deleted text end new text begin recipients new text end in determining what grants or loans under sections
446A.06, 446A.07, 446A.072, 446A.073, 446A.074, 446A.075, and 446A.081 to apply
for to finance projects and the manner in which the deleted text begin governmental unit deleted text end new text begin eligible recipient new text end
will pay for its portion of the project cost.

new text begin Subd. 2. new text end

new text begin Grant limitations. new text end

If a project is eligible for a grant under section
446A.073, 446A.074, or 446A.075, the total grant shall not exceed the greater of the
maximum amount from a single program or the amount the project could receive under
section 446A.072.

new text begin Subd. 3. new text end

new text begin Financial feasibility review. new text end

new text begin (a) new text end The authority shall review the proposed
financing for each project certified deleted text begin by the agency deleted text end to new text begin the authority to new text end ascertain whether or
not: (1) total financing of a project is assured; deleted text begin and deleted text end (2) the governmental unit's financial
plan to pay for its portion of the project cost is feasible new text begin ; (3) the proposed project and
financing plan is an eligible use of the money; and (4) the proposal is in compliance with
applicable state and federal tax and securities laws and regulations new text end .

new text begin (b) Unless a project is specifically authorized by law, the authority may reject the
proposed financing for a project meeting the requirements in paragraph (a) if a majority
of members believe the financing of the project would not be in the best interests of the
state or would be detrimental to the authority's funds or programs. A determination to
reject a proposed project shall not be made in an arbitrary and capricious manner and must
be supported by substantive evidence and documented by a resolution of the authority
stating its findings.
new text end

Sec. 5.

Minnesota Statutes 2006, section 446A.07, is amended to read:

446A.07 new text begin CLEAN new text end WATER deleted text begin POLLUTION CONTROL deleted text end REVOLVING FUND.

Subdivision 1.

Establishment of fund.

The authority shall establish a new text begin clean new text end water
deleted text begin pollution control deleted text end revolving fund to provide loans for the purposes and eligible costs
authorized under title VI of the Federal Water Pollution Control Act. The fund must be
credited with repayments.

new text begin Subd. 1a. new text end

new text begin Definitions. new text end

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

new text begin (b) "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.
new text end

new text begin (c) "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 end

Subd. 2.

State funds.

A state matching fund is established to be used in compliance
with federal matching requirements specified in the Federal Water Pollution Control Act.
deleted text begin A state grant and loan fund is established to provide grants and loans to governmental
units for the planning and construction of treatment works as specified in section 116.16,
subdivision 2, paragraphs (6) and (7).
deleted text end

Subd. 3.

Capitalization grant agreement.

The authority shall enter an agreement
with the administrator of the United States Environmental Protection Agency to receive
capitalization grants for the new text begin clean water new text end revolving fund. The authority may exercise
powers necessary to comply with the requirements specified in the agreement, which must
be in compliance with the Federal Water Pollution Control Act.

Subd. 4.

Intended use plan.

(a) The deleted text begin Public Facilities deleted text end authority shall annually
prepare and submit to the United States Environmental Protection Agency an intended use
plan. The plan must identify the intended uses of the amounts available to the new text begin clean new text end water
deleted text begin pollution control deleted text end revolving fund, including a list of wastewater treatment and storm water
projects and all other eligible activities to be funded during the fiscal year.

(b) To be eligible for placement on the intended use plan:

(1) a project must be listed on the Pollution Control Agency's project priority list;

(2) the applicant must submit a written request to the deleted text begin Public Facilities deleted text end authority,
including a brief description of the project, a project cost estimate and the requested loan
amount, and a proposed project schedule; and

(3) for a construction loan, the project must have a facility plan approved by the
Pollution Control Agency.

(c) The Pollution Control Agency shall annually provide to the deleted text begin Public Facilities deleted text end
authority its project priority list of wastewater and storm water projects to be considered
for funding. The deleted text begin Public Facilities deleted text end authority may not submit the plan until it has received
the review and comment of the Pollution Control Agency or until 30 days have elapsed
since the plan was submitted to the Pollution Control Agency, whichever occurs first. In
addition, the deleted text begin Public Facilities deleted text end authority shall offer deleted text begin municipalities deleted text end new text begin eligible recipients new text end seeking
placement on the intended use plan an opportunity to review and comment on the plan
before it is adopted. The plan may be amended to add additional projects for consideration
for funding as it determines funds are available and additional projects are able to proceed.

Subd. 5.

Applications.

Applications by deleted text begin municipalities and other entities identified
in the annual intended use plan deleted text end new text begin eligible recipients new text end for loans from the new text begin clean new text end water deleted text begin pollution
control deleted text end revolving fund must be made to the authority on forms requiring information
prescribed by the deleted text begin rules of the agency adopted under this section. The authority shall send
the applications to the agency within ten days of receipt deleted text end new text begin authority new text end . The deleted text begin director deleted text end new text begin Pollution
Control Agency new text end shall certify to the authority those deleted text begin applications deleted text end new text begin projects new text end that appear to
meet the criteria set forth in the Federal Water Pollution Control Act, this section, and
rules of the new text begin Pollution Control new text end Agency.

Subd. 6.

Award and terms of loans.

The authority shall award loans deleted text begin to those
municipalities and other entities deleted text end new text begin for projects new text end certified by the Pollution Control Agency
or shall provide funding for the appropriate state agency or department to make loans
for eligible activities deleted text begin certified by the pollution control agency deleted text end new text begin identified in the intended
use plan, new text end provided the use of funds and the terms and conditions of the loans are in
conformance with the federal Water Pollution Control Act, this section, and rules of the
Pollution Control Agency and the authority adopted under this section.

Subd. 7.

Loan conditions.

When making loans from the revolving fund, the
authority shall comply with the conditions of the Federal Water Pollution Control Act,
including:

(a) Loans must be made at or below market interest rates, including interest-free
loans, at terms not to exceed 20 years.

(b) The annual principal and interest payments must begin no later than one year
after completion of a project. Loans must be fully amortized no later than 20 years after
project completion.

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

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

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

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

Subd. 8.

Other uses of revolving fund.

The new text begin clean new text end water deleted text begin pollution control deleted text end 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, deleted text begin 116J.403, deleted text end and 116J.617; deleted text begin provided that no more
than $4,000,000 of the balance in the fund may be used for the small cities block grant
program under section 116J.403 and the tourism loan program under section 116J.617,
taken together;
deleted text end

(5) to earn interest on fund accounts; and

(6) to pay the reasonable costs incurred by the authority and the new text begin Pollution Control
new text end 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.

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

Subd. 9.

Payments.

Payments from the fund must be made in accordance with the
applicable state and federal law governing the payments, except that for projects other
than those funded under section 17.117, 103F.725, subdivision 1a, deleted text begin 116J.403, deleted text end 116J.617,
or 462A.05, no payment for a project may be made to deleted text begin a governmental unit deleted text end new text begin an eligible
recipient new text end until and unless the authority has determined the total estimated cost of the
project and ascertained that financing of the project is assured by:

(1) a loan authorized by state law or the appropriation of proceeds of bonds or other
money of the governmental unit to a fund for the construction of the project; and

(2) an irrevocable undertaking, by resolution of the deleted text begin governing body deleted text end new text begin eligible recipient
new text end of the governmental unit, to use all money made available for the project exclusively for
the project, and to pay any additional amount by which the cost of the project exceeds the
estimate by the appropriation to the construction fund of additional money or the proceeds
of additional bonds to be issued by the deleted text begin governmental unit deleted text end new text begin eligible recipient new text end .

deleted text begin Subd. 10. deleted text end

deleted text begin Rules of authority. deleted text end

deleted text begin The commissioner shall adopt rules containing
procedures for the administration of the authority's duties as provided in this section,
including loan interest rates, the amounts of loans, and municipal financial need.
deleted text end

Subd. 11.

Rules of new text begin Pollution Control new text end Agency.

The new text begin Pollution Control new text end Agency
shall adopt rules relating to the deleted text begin procedure for preparation of the annual intended use plan deleted text end
new text begin certification of projects to the authority for funding, new text end and other matters that the new text begin Pollution
Control new text end Agency considers necessary for proper deleted text begin loan deleted text end administration new text begin of its duties under this
section new text end . Eligible activities are those required under the Federal Water Pollution Control
Act of 1987, as amended.

Sec. 6.

Minnesota Statutes 2006, section 446A.072, is amended to read:

446A.072 WASTEWATER INFRASTRUCTURE FUNDING PROGRAM.

Subdivision 1.

Establishment of program.

The authority will establish a
wastewater infrastructure funding program to provide supplemental assistance to
deleted text begin municipalities deleted text end new text begin governmental units new text end receiving funding through the new text begin clean new text end water deleted text begin pollution
control deleted text end revolving deleted text begin loan deleted text end new text begin fund new text end program or the United States Department of Agriculture
Rural Economic and Community Development's (USDA/RECD) Water and Waste
Disposal Loans and Grants program for the design and planning, improvements to, and
construction of municipal wastewater treatment systems. The purpose of the program
is to assist deleted text begin municipalities deleted text end new text begin governmental units new text end demonstrating financial need in building
cost-efficient projects to address existing environmental or public health problems. To
implement the program, the authority shall establish a wastewater infrastructure fund to
provide grants and loans for the purposes authorized under title VI of the Federal Water
Pollution Control Act. The fund shall be credited with all investment income from the
fund and all repayments of loans, grants, and penalties.

Subd. 3.

Program administration.

(a) The authority shall provide supplemental
assistance, as provided in subdivision 5a to deleted text begin municipalities deleted text end new text begin governmental units new text end :

(1) whose projects are listed on the new text begin Pollution Control new text end Agency's project priority list;

(2) that demonstrate their projects are a cost-effective solution to an existing
environmental or public health problem; and

(3) whose projects are approved by the USDA/RECD or certified by the
commissioner of the new text begin Pollution Control new text end Agency.

(b) For a deleted text begin municipality deleted text end new text begin governmental unit new text end receiving grant funding from the
USDA/RECD, applications must be made to the USDA/RECD with additional
information submitted to the authority as required by the authority. Eligible project costs
and affordability criteria shall be determined by the USDA/RECD.

(c) For a deleted text begin municipality deleted text end new text begin governmental unit new text end not receiving grant funding from the
USDA/RECD, application must be made to the authority on forms prescribed by the
authority for the new text begin clean new text end water deleted text begin pollution control deleted text end revolving fund program with additional
information as required by the authority. In accordance with section 116.182, the new text begin Pollution
Control new text end Agency shall:

(1) calculate the essential project component percentage which must be multiplied
by the total project cost to determine the eligible project cost; and

(2) review and certify approved projects to the authority.

(d) At the time funds are appropriated under this section, the authority shall reserve
supplemental assistance for projects in order of their rankings on the new text begin Pollution Control
new text end Agency's project priority list and in an amount based on their most recent cost estimates
submitted to the authority or the as-bid costs, whichever is less.

Subd. 5a.

Type and amount of assistance.

(a) For a deleted text begin municipality deleted text end new text begin governmental
unit new text end receiving grant funding from the USDA/RECD, the authority shall provide assistance
in the form of a grant of up to one-half of the eligible grant amount determined by
USDA/RECD. A deleted text begin municipality deleted text end new text begin governmental unit new text end may not receive a grant under this
paragraph for more than $4,000,000 or $15,000 per existing connection, whichever
is less, unless specifically approved by law. In the case of a sanitary district or other
multijurisdictional project for which the USDA/RECD is unable to fully fund up to
one-half of the eligible grant amount, the authority may provide up to an additional
$1,000,000 for each additional deleted text begin municipality deleted text end new text begin governmental unit new text end participating up to a
maximum of $8,000,000 or $15,000 per existing connection, whichever is less, but not to
exceed the maximum grant level determined by the USDA/RECD as needed to keep the
project affordable.

(b) For a deleted text begin municipality deleted text end new text begin governmental unit new text end not receiving grant funding from the
USDA/RECD, the authority shall provide assistance in the form of a loan for the eligible
project costs that exceed five percent of the market value of properties in the project
service area new text begin , less the amount of any other grant funding received by the governmental
unit for the project new text end . A deleted text begin municipality deleted text end new text begin governmental unit new text end may not receive a loan under
this paragraph for more than $4,000,000 or $15,000 per existing connection, whichever
is less, unless specifically approved by law. In the case of a sanitary district or other
multijurisdictional project, the authority may provide a loan under this paragraph for up to
an additional $1,000,000 for each additional municipality participating up to a maximum
of $8,000,000 or $15,000 per existing connection, whichever is less, unless specifically
approved by law. A loan under this paragraph must bear no interest, must be repaid as
provided in subdivision 7, and must only be provided in conjunction with a loan from the
new text begin clean new text end water deleted text begin pollution control deleted text end revolving fund under section 446A.07.

(c) Notwithstanding the limits in paragraphs (a) and (b), for a deleted text begin municipality deleted text end new text begin
governmental unit new text end receiving supplemental assistance under this section after January 1,
2002, if the authority determines that the deleted text begin municipality's deleted text end new text begin governmental unit's new text end construction
and installation costs are significantly increased due to geological conditions of crystalline
bedrock or karst areas and discharge limits that are more stringent than secondary
treatment, the authority shall provide assistance in the form of half grant and half loan.
Assistance from the authority may not be more than $25,000 per existing connection. Any
additional grant amount received for the same project must be used to reduce the amount
of the deleted text begin municipality's deleted text end new text begin governmental unit's new text end loan from the water pollution control revolving
fund that exceeds five percent of the market value of properties in the project service area.

Subd. 5b.

Special assessment deferral.

A deleted text begin municipality deleted text end new text begin governmental unit new text end
receiving a loan under subdivision 5a that levies special assessments to repay the loan
under subdivision 5a or section 446A.07 may defer payment of such assessments under
the provisions of sections 435.193 to 435.195.

Subd. 6.

Disbursements.

Disbursements of grants or loans awarded 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 and federal laws and rules governing the payments.

Subd. 7.

Loan repayments.

Notwithstanding the limitations set forth in section
475.54, subdivision 1, this subdivision shall govern the maturities and mandatory sinking
fund redemptions of the loans under this section. A deleted text begin municipality deleted text end new text begin governmental unit new text end
receiving a loan under this section shall repay the loan in semiannual payment amounts
determined by the authority. The payment amount must be based on the average payments
on the deleted text begin municipality's deleted text end new text begin governmental unit's clean new text end water deleted text begin pollution control deleted text end revolving fund
loan or, if greater, the minimum amount required to fully repay the loan by the maturity
date. Payments must begin within one year of the date of the deleted text begin municipality's deleted text end new text begin governmental
unit's new text end final payment on the new text begin clean new text end water deleted text begin pollution control deleted text end revolving fund loan. The final
maturity date of the loan under this section must be no later than 20 years from the date of
the first payment on the loan under this section and no later than 40 years from the date of
the first payment on the new text begin clean new text end water deleted text begin pollution control deleted text end revolving fund loan.

Subd. 8.

Eligibility.

A deleted text begin municipality deleted text end new text begin governmental unit new text end is eligible for assistance
under this section only after new text begin applying for new text end grant funding from other sources new text begin and funding new text end
has been deleted text begin applied for, deleted text end obtained, rejected, or the authority has determined that the potential
funding is unlikely.

Subd. 9.

Loan limitation.

Supplemental assistance may not be used to reduce
the sewer service charges of a significant wastewater contributor, or a single user that
has caused the need for the project or whose current or projected flow and load exceed
one-half of the current wastewater treatment plant's capacity.

Subd. 11.

Report on needs.

By February 1 of each even-numbered year, the
authority, in conjunction with the Pollution Control Agency, shall prepare a report to the
Finance Division of the senate Environment and Natural Resources Committee and the
house Environment and Natural Resources Finance Committee on wastewater funding
assistance needs of deleted text begin municipalities deleted text end new text begin governmental units new text end under this section.

Subd. 12.

System replacement fund.

Each deleted text begin municipality deleted text end new text begin governmental unit new text end
receiving a loan new text begin or grant new text end under this section shall establish a system replacement fund
and shall annually deposit a minimum of $.50 per 1,000 gallons of flow for major
rehabilitation deleted text begin , deleted text end new text begin or new text end expansion new text begin of the treatment system new text end , or replacement of the treatment
system at the end of its useful life. Money must remain in the account deleted text begin , deleted text end for the life of the
loan new text begin from the authority or USDA/RECD, new text end unless use of the fund is approved in writing by
the authority for major rehabilitation, expansion, or replacement of the treatment system.
By March 1 each year during the life of the loan, each deleted text begin municipality deleted text end new text begin recipient new text end shall submit
a report to the authority regarding the amount deposited and the fund balance for the
prior calendar year. Failure to comply with the requirements of this subdivision shall
result in the authority assessing a penalty fee to the deleted text begin municipality deleted text end new text begin recipient new text end equal to one
percent of the deleted text begin outstanding loan balance deleted text end new text begin supplemental assistance amount new text end for each year of
noncompliance. Failure to make the required deposit or pay the penalty fee as required
constitutes a default on the loan.

Subd. 14.

Consistency with land use plans.

A deleted text begin municipality deleted text end new text begin governmental unit new text end
applying for a project in an unsewered area shall include in its application to the authority
a certification from the county in which the project is located that:

(1) the project is consistent with the county comprehensive land use plan, if the
county has adopted one;

(2) the project is consistent with the county water plan, if the county has adopted
one; and

(3) the county has adopted specific land use ordinances or controls so as to meet or
exceed the requirements of Minnesota Rules, part 7080.0305.

Sec. 7.

Minnesota Statutes 2006, section 446A.073, is amended to read:

446A.073 TOTAL MAXIMUM DAILY LOAD GRANTS.

Subdivision 1.

Program established.

When money is appropriated for grants
under this program, the authority must make grants new text begin up to a maximum of $3,000,000 new text end to
deleted text begin municipalities deleted text end new text begin governmental units new text end to cover up to one-half the cost of wastewater treatment
or stormwater projects made necessary by wasteload reductions under total maximum
daily load plans required by section 303(d) of the federal Clean Water Act, United States
Code, title 33, section 1313(d).

Subd. 2.

Grant application.

Application for a grant must be made to the authority
on forms prescribed by the authority for the total maximum daily load grant program, with
additional information as required by the authority, including a project schedule and cost
estimate for the work necessary to comply with the point source wasteload allocation. The
Pollution Control Agency shall:

(1) in accordance with section 116.182, calculate the essential project component
percentage, which must be multiplied by the total project cost to determine the eligible
project cost; and

(2) review and certify to the authority those projects that have plans and
specifications approved under section 115.03, subdivision 1, paragraph (f).

Subd. 3.

Project priorities.

When money is appropriated for grants under this
program, the authority shall new text begin accept applications during the month of July and new text end reserve
money for projects new text begin expected to proceed with construction by the end of the fiscal year new text end in
the order deleted text begin that their deleted text end new text begin listed on the Pollution Control Agency's project priority list, provided
the project is included in a new text end total maximum daily load plan deleted text begin was deleted text end new text begin that has been new text end approved by
the United States Environmental Protection Agency new text begin at the time the appropriation became
law new text end and in an amount based on deleted text begin their most recent deleted text end new text begin the new text end cost deleted text begin estimates deleted text end new text begin estimate new text end submitted to
the authority new text begin in the grant application new text end or the as-bid costs, whichever is less.

Subd. 4.

Grant approval.

The authority must make a grant to a deleted text begin municipality deleted text end new text begin
governmental unit new text end , as defined in section 116.182, subdivision 1, only after:

(1) the commissioner of the deleted text begin Minnesota deleted text end Pollution Control Agency has certified to
the United States Environmental Protection Agency a total maximum daily load plan for
identified waters of this state that includes a point source wasteload allocation;

(2) the Environmental Protection Agency has approved the plan;

(3) a deleted text begin municipality deleted text end new text begin governmental unit new text end affected by the plan has deleted text begin estimated the cost to it
of deleted text end new text begin submitted the as-bid cost for the new text end wastewater treatment new text begin or storm water new text end projects necessary
to comply with the point source wasteload allocation;

(4) the Pollution Control Agency has approved the deleted text begin cost estimate deleted text end new text begin as-bid costs and
certified the grant eligible portion of the project new text end ; and

(5) the authority has determined that the additional financing necessary to complete
the project has been committed from other sources.

Subd. 5.

Grant disbursement.

Disbursement of a grant must be made for eligible
project costs as incurred by the deleted text begin municipality deleted text end new text begin governmental unit new text end and in accordance with
a project financing agreement and applicable state and federal laws and rules governing
the payments.

Sec. 8.

Minnesota Statutes 2006, section 446A.074, is amended to read:

446A.074 CLEAN WATER LEGACY PHOSPHORUS REDUCTION
GRANTS.

Subdivision 1.

Creation of account.

A clean water legacy capital improvement
account is created in the deleted text begin bond proceeds fund deleted text end new text begin state treasury new text end . Money in the account may
only be used for grants for eligible capital costs as provided in this section. Money in
the clean water legacy capital improvement deleted text begin fund deleted text end new text begin account new text end , including interest earned, is
appropriated to the authority for the purposes of this section.

Subd. 2.

Grants.

The authority shall award grants from the clean water legacy
capital improvement account 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:

(1) the applicable phosphorus discharge limit is incorporated in a permit issued by
the new text begin Pollution Control new text end 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;

(2) the governmental unit has submitted deleted text begin a facilities plan deleted text end new text begin plans and specifications new text end
for the project to the new text begin Pollution Control new text end Agency and a grant application to the authority
on a form prescribed by the authority; and

(3) the new text begin Pollution Control new text end Agency has approved the deleted text begin facilities plan deleted text end new text begin plans and
specifications new text end , and certified the new text begin project and the as-bid or final new text end eligible costs deleted text begin for the project
deleted text end to the authority.

Subd. 3.

Eligible capital costs.

Eligible capital costs for phosphorus reduction
grants under subdivision 4, paragraph (a), include engineering and inspection costs
and the as-bid construction costs for phosphorus treatment. Eligible capital costs for
phosphorus reduction grants under subdivision 4, paragraph (b), include the final, incurred
construction, engineering, and inspection costs for phosphorus treatment.

Subd. 4.

Grant amounts and priorities.

(a) Priority must be given to projects that
start construction on or after July 1, 2006 new text begin , and rank on the Pollution Control Agency's
project priority list new text end . If a deleted text begin facility's plan for a deleted text end project is approved new text begin and certified new text end by the
new text begin Pollution Control new text end Agency before July 1, 2010, the amount of the grant is 75 percent of
the eligible capital cost of the project new text begin up to a maximum of $500,000 new text end . If a deleted text begin facility's plan
for a deleted text end project is approved new text begin and certified new text end by the new text begin Pollution Control new text end Agency on or after July
1, 2010, the amount of the grant is 50 percent of the eligible capital cost of the project
new text begin up to a maximum of $500,000 new text end . deleted text begin Priority in awarding grants under this paragraph must be
based on the date of approval of the facility's plan for the project.
deleted text end

(b) Projects that meet the eligibility requirements in subdivision 2 and have started
construction before July 1, 2006, may be eligible for grants to reimburse up to 75 percent
of the eligible capital cost of the project, less any amounts previously received in grants
from other sources, provided that reimbursement is an eligible use of funds. Application
for a grant under this paragraph must be submitted to the authority no later than June 30,
2008. Priority for award of grants under this paragraph must be based on the date of
new text begin Pollution Control new text end Agency approval of the deleted text begin facility plan deleted text end new text begin project plans and specifications new text end .

(c) In each fiscal year that money is available for grants, the authority shall new text begin accept
applications during the month of July. Money shall new text end first deleted text begin award grants deleted text end new text begin be reserved until
May 1 of that fiscal year for projects new text end under paragraph (a) deleted text begin to projects that met the eligibility
requirements of subdivision 2 deleted text end new text begin in the order listed on the Pollution Control Agency's
project priority list and in an amount based on the cost estimate submitted to the authority
in the grant application or the as-bid costs, whichever is less. Any money reserved for
projects that are not approved and certified by the Pollution Control Agency new text end by May 1 of
that year deleted text begin . The authority deleted text end shall deleted text begin use any remaining money deleted text end new text begin be new text end available deleted text begin that year deleted text end to award
grants under paragraph (b). deleted text begin 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.
deleted text end

(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.

Subd. 5.

Fees.

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.

Sec. 9.

Minnesota Statutes 2006, section 446A.075, is amended to read:

446A.075 SMALL COMMUNITY WASTEWATER TREATMENT
PROGRAM.

Subdivision 1.

Creation of account.

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

new text begin Subd. 1a. new text end

new text begin Technical assistance grants. new text end

new text begin If requested, and if it is an eligible use of
funds, the authority shall provide technical assistance grants to governmental units as
provided in this section to analyze possible solutions to problems from noncomplying
individual sewage treatment systems. A grant under this subdivision shall equal $10,000
plus $500 per household, not to exceed a total of $40,000. Technical assistance grant
funds may be used to:
new text end

new text begin (1) contract with a licensed individual sewage treatment system professional for a
preliminary analysis of the feasibility of installing new systems meeting the requirements
of section 115.55; and
new text end

new text begin (2) to contract for services from the University of Minnesota Extension Service
to advise the governmental unit on the feasibility of possible wastewater treatment
alternatives and help the governmental unit develop the technical, managerial, and
financial capacity necessary to build, operate, and maintain individual wastewater
treatment systems.
new text end

Subd. 2.

new text begin Construction new text end loans and grants.

(a) The authority shall award loans deleted text begin as
provided in paragraph (b) deleted text end and grants as provided in deleted text begin paragraphs (c) and (d) deleted text end new text begin this subdivision
new text end to governmental units from the small community wastewater treatment account for
projects to replace noncomplying individual sewage treatment systems with deleted text begin a community
wastewater treatment deleted text end new text begin an individual sewage treatment new text end system or systems meeting the
requirements of section 115.55. A governmental unit receiving a loan or deleted text begin loan and deleted text end grant
from the account shall own the individual wastewater treatment systems deleted text begin or community
wastewater treatment systems deleted text end 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 ensure proper operation of the systems.

(b) Loans may be awarded for up to 100 percent of eligible project costs as described
in this section.

(c) When the area to be served by a project has a median household income below
the state average median household income, the governmental unit may receive 50 percent
of the funding provided under this deleted text begin section deleted text end new text begin subdivision new text end in the form of a grant. An applicant
may submit income survey data collected by an independent party if it believes the most
recent United States census does not accurately reflect the median household income
of the area to be served.

deleted text begin (d) If requested, and if it is an eligible use of funds, a governmental unit receiving
funding under this section may receive a grant equal to ten percent of its first year's
award, up to a maximum of $30,000, to contract for technical assistance services from
the University of Minnesota Extension Service to develop the technical, managerial, and
financial capacity necessary to build, operate, and maintain the systems.
deleted text end

Subd. 3.

Project priority list.

Governmental units seeking loans or deleted text begin loans and deleted text end grants
from the small community wastewater treatment program shall first submit a project
proposal to the new text begin Pollution Control new text end Agency on a form prescribed by the new text begin Pollution Control
new text end Agency. A project proposal shall include the compliance status for all individual sewage
treatment systems in the project area. The new text begin Pollution Control new text end agency shall rank project
proposals on its project priority list used for the new text begin clean new text end water deleted text begin pollution control deleted text end revolving
fund under section 446A.07.

Subd. 4.

Applications.

Governmental units with projects on the project priority list
shall submit applications new text begin for loans or grants under this program new text end to the authority on forms
prescribed by the authority. new text begin An application for technical assistance funds shall include the
number of households served by individual sewage treatment systems in the community
and the proposed use of funds. new text end deleted text begin The deleted text end new text begin An new text end application new text begin for construction funds new text end shall include:

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

(2) a project schedule and cost estimate for each year of the project;

(3) a financing plan for repayment of the loan; and

(4) a management plan providing for the inspection, maintenance, and repairs
necessary to ensure proper operation of the systems.

Subd. 5.

Awards.

The authority shall award loans deleted text begin or loans deleted text end and grants as provided
in deleted text begin subdivision 2 deleted text end new text begin this section new text end to governmental units with approved applications based on
their ranking on the new text begin Pollution Control new text end Agency's project priority list. new text begin Prior to the award
of construction loans or grants under subdivision 2, paragraph (b), the Pollution Control
Agency shall certify that the individual sewage treatment systems to be built appear to
meet the criteria set forth in section 115.55 and rules of the Pollution Control Agency. new text end The
total amount awarded new text begin for construction loans and grants under subdivision 2, paragraph
(b), new text end 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 or loan
and grant agreement meeting the terms and conditions in subdivision 6. A governmental
unit receiving a loan or loan and grant under a multiyear commitment shall have priority
for additional loan and grant funds in subsequent years.

Subd. 6.

Loan terms and conditions.

Loans from the small community wastewater
treatment account shall comply with the following terms and conditions:

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

(2) loans shall carry an interest rate of one percent;

(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;

(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

(5) each property owner voluntarily seeking assistance for repair or replacement of
an individual treatment system under this program must provide deleted text begin an deleted text end new text begin a utility new text end easement to
the governmental unit to allow access to the system for management and repairs.

Subd. 7.

Special assessment deferral.

(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.

(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.

Subd. 8.

Eligible costs.

new text begin (a) Eligible costs for technical assistance grants as provided
in subdivision 1a shall include the cost of soil borings.
new text end

new text begin (b) new text end Eligible costs for deleted text begin small community wastewater treatment deleted text end new text begin construction new text end loans
and grants shall include the costs deleted text begin of technical assistance as provided in subdivision 2,
paragraph (d), deleted text end new text begin for new text end design, construction, related legal fees, and land acquisition.

Subd. 9.

Disbursements.

Loan and grant 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 or grant and loan agreement and applicable
state law.

Subd. 10.

Audits.

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.

Sec. 10.

Minnesota Statutes 2006, section 446A.081, is amended to read:

446A.081 DRINKING WATER REVOLVING FUND.

Subdivision 1.

Definitions.

(a) For the purposes of this section, the terms in this
subdivision have the meanings given them.

deleted text begin (b) "Act" means the Safe Drinking Water Act Amendments of 1996, Public Law
104-182.
deleted text end

deleted text begin (c) "Department" means the Department of Health.
deleted text end

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

new text begin (c) "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 end

Subd. 2.

Establishment of fund.

The authority shall establish a drinking water
revolving fund to provide loans and other forms of financial assistance authorized by the
new text begin federal Safe Drinking Water new text end Act, as determined by the authority under the rules adopted
under this section for the purposes and eligible costs authorized under the new text begin federal Safe
Drinking Water new text end Act. The fund must be credited with repayments. The new text begin federal Safe
Drinking Water new text end Act requires that the fund corpus must be managed so as to be available
in perpetuity for the financing of drinking water systems in the state. At a minimum, 15
percent of the funds received each federal fiscal year shall be available solely for providing
loans to public water systems which regularly serve fewer than 10,000 individuals.

Subd. 3.

State funds.

A state matching fund is established to be used in compliance
with federal matching requirements specified in the new text begin federal Safe Drinking Water new text end Act.

Subd. 4.

Capitalization grant agreement.

The authority shall enter into an
agreement with the administrator of the United States Environmental Protection Agency
to receive capitalization grants for the fund. The authority and the Department new text begin of Health
new text end shall enter into an operating agreement with the administrator of the United States
Environmental Protection Agency to satisfy the criteria in the act to operate the fund. The
authority and the Department new text begin of Health new text end may exercise the powers necessary to comply with
the requirements specified in the agreements and to ensure that loan recipients comply
with all applicable federal and state requirements.

Subd. 5.

Intended use plan.

The authority shall annually prepare and submit
to the United States Environmental Protection Agency an intended use plan. The plan
must identify the intended uses of the amounts available to the drinking water revolving
loan fund. The Department new text begin of Health new text end shall provide a prioritized list of drinking water
projects and other eligible activities to be considered for funding by the authority. The
plan may be amended by the authority and include additional eligible projects proposed by
the Department new text begin of Health new text end .

Subd. 6.

Applications.

Applications by municipalities, privately owned public
water systems, and eligible entities identified in the annual intended use plan for loans
from the fund must be made to the authority on the forms prescribed by the rules of the
authority and the rules of the Department new text begin of Health new text end adopted under this section. The
authority shall forward the application to the Department new text begin of Health new text end within ten days
of receipt. The Department new text begin of Health new text end shall approve those applications that appear to
meet the criteria in the new text begin federal Safe Drinking Water new text end Act, this section, and the rules of
the Department new text begin of Health new text end or the authority.

Subd. 7.

Award and terms of loans.

The authority shall award loans to those
municipalities, privately owned public water systems, and other eligible entities approved
by the Department new text begin of Health new text end , provided that the applicant is able to comply with the terms
and conditions of the authority loan, which must be in conformance with the new text begin federal Safe
Drinking Water Act new text end , this section, and the rules of the authority adopted under this section.

Subd. 8.

Loan conditions.

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

(b) Loans must be made at or below market interest rates, including zero interest
loans, for terms not to exceed 20 years.

(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.

(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).

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

new text begin (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 end

Subd. 9.

Other uses of fund.

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 deleted text begin such deleted text end new text begin the new text end 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 new text begin of Health new text end for conducting
activities as authorized and required under the act up to the limits authorized under the
act; and

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

Subd. 10.

Payments.

Payments from the fund to borrowers must be in accordance
with the applicable state and federal laws governing deleted text begin such deleted text end new text begin the new text end payments, except no payment
for a project may be made to a borrower until and unless the authority has determined that
the total estimated cost of the project and the financing of the project are assured by:

(1) a loan authorized by state law or appropriation of proceeds of bonds or other
money of the borrower to a fund for the construction of the project; and

(2) an irrevocable undertaking, by resolution of the governing body of the borrower,
to use all money made available for the project exclusively for the project, and to pay
any additional amount by which the cost of the project exceeds the estimate by the
appropriation to the construction fund of additional money or proceeds of additional
bonds to be issued by the borrower.

deleted text begin Subd. 11. deleted text end

deleted text begin Rules of the authority. deleted text end

deleted text begin The commissioner of employment and economic
development shall adopt rules containing the procedures for the administration of the
authority's duties as provided by this section that include: setting of interest rates, which
shall take into account the financial need of the applicant; the amount of project financing
to be provided; the collateral required for public drinking water systems and for privately
owned public water systems; dedicated sources of revenue or income streams to ensure
repayment of loans; and the requirements to ensure proper operation, maintenance, and
repair of the water systems financed by the authority.
deleted text end

Subd. 12.

Rules of the department.

The Department new text begin of Health new text end shall adopt rules
relating to the procedures for administration of the deleted text begin department's deleted text end new text begin Department of Health's new text end
duties under the act and this section. deleted text begin The department and the commissioner of the
Department of Employment and Economic Development may adopt a single set of rules
for the program.
deleted text end

Sec. 11.

Minnesota Statutes 2006, section 446A.085, is amended to read:

446A.085 TRANSPORTATION REVOLVING LOAN FUND.

Subdivision 1.

Definitions.

(a) For the purposes of this section, the terms defined in
this subdivision have the meanings given them.

(b) "Act" means the National Highway System Designation Act of 1995, Public
Law 104-59, as amended.

(c) "Borrower" means the state, counties, cities, and other governmental entities
eligible under the act and state law to apply for and receive loans from the transportation
revolving loan fund.

(d) "Loan" means financial assistance provided for all or part of the cost of a
project including money disbursed in anticipation of reimbursement or repayment, loan
guarantees, lines of credit, credit enhancements, equipment financing leases, bond
insurance, or other forms of financial assistance.

deleted text begin (e) "Transportation Committee" means a committee of the Minnesota Public
Facilities Authority, acting on behalf of the Minnesota Public Facilities Authority,
consisting of the commissioner of the Department of Employment and Economic
Development, the commissioner of finance, and the commissioner of transportation.
deleted text end

Subd. 2.

Purpose.

The purpose of the transportation revolving loan fund is
to provide loans for public transportation projects eligible for financing or aid under
any federal act or program or state law, including, without limitation, the study of
the feasibility of construction, reconstruction, resurfacing, restoring, rehabilitation, or
replacement of transportation facilities; acquisition of right-of-way; and maintenance,
repair, improvement, or construction of city, town, county, or state highways, roads,
streets, rights-of-way, bridges, tunnels, railroad-highway crossings, drainage structures,
signs, maintenance and operation facilities, guardrails, and protective structures used in
connection with highways or transit projects. Enhancement items, including without
limitation bicycle paths, ornamental lighting, and landscaping, are eligible for financing
provided they are an integral part of overall project design and construction of a
federal-aid highway. Money in the fund may not be used for any toll facilities project or
congestion-pricing project.

Subd. 3.

Establishment of fund.

A transportation revolving loan fund is established
to make loans for the purposes described in subdivision 2. A highway account is
established in the fund for highway projects eligible under United States Code, title 23. A
transit account is established in the fund for transit capital projects eligible under United
States Code, title 49. A state funds general loan account is established in the fund for
transportation projects eligible under state law. Other accounts may be established in the
fund as necessary for its management and administration. The transportation revolving
loan fund receives federal money under the act and money from any source. Money
received under this section must be paid to the commissioner of finance and credited to
the transportation revolving loan fund. Money in the fund is annually appropriated to the
authority and does not lapse. The fund must be credited with investment income, and with
repayments of principal and interest, except for servicing fees assessed under sections
446A.04, subdivision 5, and 446A.11, subdivision 8.

Subd. 4.

Management of fund and accounts.

The authority shall manage and
administer the transportation revolving loan fund and individual accounts in the fund. For
those purposes, the authority may exercise all powers provided in this chapter.

deleted text begin Subd. 6. deleted text end

deleted text begin Transportation Committee. deleted text end

deleted text begin The Transportation Committee may
authorize the making of loans to borrowers by the authority for transportation purposes
authorized by the act or this section, without further action by the authority. The authority
may not make loans for transportation purposes without the approval of the Transportation
Committee. Each project must be certified by the commissioner of transportation before
its consideration by the Transportation Committee.
deleted text end

Subd. 7.

Applications.

new text begin (a) new text end Applicants for loans must submit an application to the
deleted text begin Transportation Committee deleted text end new text begin authority new text end on forms prescribed by the deleted text begin Transportation Committee deleted text end
new text begin authority new text end . The applicant must provide the following information:

(1) the estimated cost of the project and the amount of the loan sought;

(2) other possible sources of funding in addition to loans sought from the
transportation revolving loan fund;

(3) the proposed methods and sources of funds to be used for repayment of loans
received; and

(4) information showing the financial status and ability of the borrower to repay
loans.

new text begin (b) Each project must be certified by the commissioner of transportation under
subdivision 8 before its consideration by the authority.
new text end

Subd. 8.

Certification of projects.

The commissioner of transportation shall
consider the following information when evaluating projects to certify deleted text begin for funding deleted text end to
the deleted text begin Transportation Committee deleted text end new text begin authority new text end :

(1) a description of the nature and purpose of the proposed transportation project
including an explanation of the need for the project and the reasons why it is in the
public interest;

(2) the relationship of the project to the area transportation improvement program,
the approved statewide transportation improvement program, and to any transportation
plans required under state or federal law;

(3) the estimated cost of the project and the amount of loans sought;

(4) proposed sources of funding in addition to loans sought from the transportation
revolving loan fund;

(5) the need for the project as part of the overall transportation system;

(6) the overall economic impact of the project; and

(7) the extent to which completion of the project will improve the movement of
people and freight.

Subd. 9.

Loan conditions.

deleted text begin When making loans from the transportation revolving
loan fund, the Transportation Committee shall comply with the applicable provisions of
the act and state law. In addition, deleted text end A loan made under this section must:

(1) bear interest at or below market rates or as otherwise specified in federal law;

(2) have a repayment term not longer than 30 years;

(3) be fully amortized no later than 30 years after project completion;

(4) be subject to repayment of principal and interest beginning not later than five
years after the facility financed with a loan has been completed, or in the case of a highway
project, five years after the facility has opened to traffic; and

(5) be disbursed for specific project elements only after all applicable environmental
requirements have been met.

Subd. 10.

Loans in anticipation of future apportionments.

A loan may be made
to a county, or to a statutory or home rule charter city having a population of 5,000 or
more, in anticipation of repayment of the loan from sums that will be apportioned to a
county from the county state-aid highway fund under section 162.07 or to a city from the
municipal state-aid street fund under section 162.14.

Subd. 11.

Payment by county or city.

Notwithstanding the allocation provisions of
section 162.08 for counties, and the apportionment provisions of section 162.14 for cities,
sums apportioned under section 162.13 to a statutory or home rule charter city, or under
section 162.07 to a county, that has loan repayments due to the transportation revolving
loan fund, shall be paid by the commissioner of transportation to the appropriate loan fund
to offset the loan repayments that are due.

deleted text begin Subd. 12. deleted text end

deleted text begin Rules of Transportation Committee and authority. deleted text end

deleted text begin The commissioner
of the Department of Employment and Economic Development shall adopt administrative
rules specifying the procedures that will be used for the administration of the duties of the
Transportation Committee and authority. The rules must include criteria, standards, and
procedures that will be used for making loans, determining interest rates to be charged on
loans, the amount of project financing to be provided, the collateral that will be required,
the requirements for dedicated sources of revenue or income streams to ensure repayment
of loans, and the length of repayment terms.
deleted text end

Subd. 13.

deleted text begin Authority deleted text end new text begin Duties new text end and Rules of Department new text begin of Transportation new text end .

The commissioner of transportation shall establish deleted text begin , adopt rules for, deleted text end and new text begin adopt rules to
new text end implement a program to identify, assist with deleted text begin the deleted text end development deleted text begin of deleted text end , and certify projects
eligible for loans under deleted text begin the act deleted text end new text begin this section new text end to the deleted text begin Transportation Committee. Until rules
are adopted by the commissioner of transportation, the commissioner of transportation
may certify to the Transportation Committee any project that has been reviewed through
an approved planning process that qualifies the project to be included in the statewide
transportation program or amended into the statewide transportation improvement
program deleted text end new text begin authority new text end .

deleted text begin Subd. 14. deleted text end

deleted text begin Joint rules. deleted text end

deleted text begin The commissioner of the Department of Employment and
Economic Development and the commissioner of transportation may adopt a single set
of rules.
deleted text end

Sec. 12.

Minnesota Statutes 2006, section 446A.09, is amended to read:

446A.09 REPORT; AUDIT.

The authority shall report to the legislature and the governor by January deleted text begin 1 deleted text end new text begin 15 new text end of each
year. The report must include a complete operating and financial statement covering the
authority's operations during the year, including amounts of income from all sources. new text begin The
report must also include the authority's analysis of the interest rate subsidy provided to
borrowers on loans made during the year. new text end Books and records of the authority are subject
to audit by the legislative auditor in the manner prescribed for state agencies.

Sec. 13.

Minnesota Statutes 2006, section 446A.11, subdivision 13, is amended to read:

Subd. 13.

Proceeds appropriated to authority.

Proceeds of the authority's bonds,
notes, and other obligations; amounts granted or appropriated to the authority for the
making or purchase or the insurance or guaranty of loans or for bond reserves; income
from investment; money in the funds; and all revenues from loans, fees, and charges
of the authority including rentals, royalties, dividends, or other proceeds deleted text begin in connection
with technology-related products, energy conservation products, or other equipment deleted text end
are annually appropriated to the authority for the accomplishment of its corporate
purposes and must be spent, administered, and accounted for in accordance with the
applicable provisions of all bond and note resolutions, indentures, and other instruments,
contracts, and agreements of the deleted text begin agency deleted text end new text begin authority new text end . Notwithstanding section 16A.28, these
appropriations are available until expended.

Sec. 14.

Minnesota Statutes 2006, section 446A.17, subdivision 1, is amended to read:

Subdivision 1.

Nonliability of individuals.

No member of the authority new text begin , staff of
the authority, new text end or other person executing the bonds, loans, interest rate swaps, or other
agreements or contracts of the authority is liable personally on the bonds, loans, interest
rate swaps, or other agreements or contracts of the authority or is subject to any personal
liability or accountability by reason of their issuance, execution, delivery, or performance.

Sec. 15. new text begin REVISOR'S INSTRUCTION.
new text end

new text begin (a) The revisor of statutes shall renumber Minnesota Statutes, section 373.45,
as Minnesota Statutes, section 446A.086. The revisor shall also make necessary
cross-reference changes in Minnesota Statutes and Minnesota Rules consistent with the
renumbering.
new text end

new text begin (b) The revisor of statutes shall renumber Minnesota Statutes, section 446A.11,
subdivisions 1 to 14, as Minnesota Statutes, section 446A.04, subdivisions 8 to 21. The
revisor shall also make necessary cross-reference changes in Minnesota Statutes and
Minnesota Rules consistent with the renumbering.
new text end

Sec. 16. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, sections 446A.05; 446A.06; and 446A.15, subdivision
6, new text end new text begin are repealed.
new text end

ARTICLE 2

POLLUTION CONTROL AGENCY PROJECT PRIORITY
RULE MODIFICATION

Section 1.

Minnesota Statutes 2006, section 116.182, subdivision 5, is amended to read:

Subd. 5.

Rules.

new text begin (a) new text end 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 including
the type of project and the degree of environmental impact, and scenic and wild river
standards; and

(3) criteria for determining essential project components.

new text begin (b) Notwithstanding Minnesota Rules, chapter 7077, the agency shall apply the
following criteria to Minnesota Rules, part 7077.0119:
new text end

new text begin (1) ten points shall be assigned if the municipality proposing the project holds a
NPDES permit for a municipal separate storm sewer system and is implementing a storm
water pollution prevention plan pursuant to Code of Federal Regulations, title 40, section
122.34, that addresses requirements resulting from an USEPA-approved TMDL for an
impaired water listed under United States Code, title 33, section 303(d), of the Clean
Water Act; and
new text end

new text begin (2) up to ten points shall be assigned to a municipal storm water project by
multiplying 20 times the ratio of the project area's impervious surface area to the total
project area to be served by the proposed best management practices. A maximum of ten
points shall be awarded and any fraction of a point shall be rounded up to the nearest
whole number.
new text end

new text begin (c) Paragraph (b) expires on June 30, 2012.
new text end