Minnesota Legislature
SF 1329
2nd Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:20am
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A bill for an act
relating to the Public Facilities Authority; providing for use of federal funds
allocated to the state by the American Recovery and Reinvestment Act; providing
for clean water and drinking water loans and grants; appropriating money;
amending Minnesota Statutes 2008, sections 446A.07, subdivision 7; 446A.081,
subdivision 8.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2008, section 446A.07, subdivision 7, is amended to
read:
Subd. 7.
Loan conditions.
new text begin (a) new text end When making loans from the new text begin clean water new text end revolving
fund, the authority shall comply with the conditions of the Federal Water Pollution Control
Act, includingdeleted text begin :deleted text end new text begin the criteria in this subdivision.
new text end
deleted text begin (a)deleted text end new text begin (b)new text end Loans must be made at or below market interest rates, including interest-free
loans, deleted text begin atdeleted text end new text begin fornew text end terms not to exceed deleted text begin 20 yearsdeleted text end new text begin those allowed under the federal Water Pollution
Control Actnew text end .
deleted text begin (b)deleted text end new text begin (c)new text end The annual principal and interest payments must begin no later than one year
after completion of deleted text begin adeleted text end new text begin thenew text end project. Loans must be fully amortized no later than 20 years
after project completionnew text begin , unless the recipient's average annual residential wastewater
system cost after completion of the project would exceed 1.4 percent of median household
income in the recipient governmental unit or entity, in which case the loan must be fully
amortized no later than 30 years after project completionnew text end .
deleted text begin (c)deleted text end new text begin (d)new text end An eligible recipient shall establish a dedicated source of revenue for
repayment of the loan.
deleted text begin (d)deleted text end new text begin (e)new text end The fund must be credited with all payments of principal and interest on
all loans.
deleted text begin (e)deleted text end new text begin (f)new text end A loan may not be used to pay operating expenses or current obligations,
unless specifically allowed by the Federal Water Pollution Control Act.
deleted text begin (f)deleted text end new text begin (g)new text end A loan made by the authority must be secured by notes or bonds of the
eligible recipient of the loan.
Sec. 2.
Minnesota Statutes 2008, section 446A.081, subdivision 8, is amended to read:
Subd. 8.
Loan conditions.
(a) When making loans from the drinking water
revolving fund, the authority shall comply with the conditions of the federal Safe Drinking
Water Act, including the criteria in deleted text begin paragraphs (b) to (e)deleted text end new text begin this subdivisionnew text end .
(b) Loans must be made at or below market interest rates, including zero interest
loans, for terms not to exceed deleted text begin 20 yearsdeleted text end new text begin those allowed under the federal Safe Drinking
Water Actnew text end .
(c) The annual principal and interest payments must begin no later than one year
after completion of the project. Loans must be amortized no later than 20 years after
project completionnew text begin , unless the recipient's average annual residential drinking water system
cost after completion of the project would exceed 1.4 percent of median household income
in the recipient governmental unit or entity, in which case the loan must be fully amortized
no later than 30 years after project completionnew text end .
(d) A loan recipient must identify and establish a dedicated source of revenue for
repayment of the loan, and provide for a source of revenue to properly operate, maintain,
and repair the water system.
(e) The fund must be credited with all payments of principal and interest on all loans,
except the costs as permitted under section 446A.04, subdivision 5, paragraph (a).
(f) A loan may not be used to pay operating expenses or current obligations, unless
specifically allowed by the federal Safe Drinking Water Act.
(g) A loan made by the authority must be secured by notes or bonds of the
governmental unit and collateral to be determined by the authority for private borrowers.
Sec. 3. new text begin FEDERAL STIMULUS MONEY FOR CLEAN WATER.
new text end
new text begin Subdivision 1. new text end
new text begin Clean water revolving fund loans and grants. new text end
new text begin
Pursuant to Public
Law 111-5, the American Recovery and Reinvestment Act of 2009, referred to in this
section as "the Act," federal money allocated under the Act for capitalization grants for
clean water state revolving funds must be credited to the clean water revolving fund
under Minnesota Statutes, section 446A.07, for the purpose of making loans and grants
to eligible projects as provided in this section, Minnesota Statutes, section 446A.07,
and the Act. Authorization to make loans and grants under this section expires when all
money received under the Act and credited to the clean water revolving fund has been
expended. For the purpose of this section, the term "grant" includes principal forgiveness
that is granted at the time a loan is made.
new text end
new text begin Subd. 2. new text end
new text begin Grants required. new text end
new text begin
Not less than 50 percent of the money received under
the Act and credited to the clean water revolving fund must be used to provide grants to
eligible projects as provided in subdivision 4, or to provide grants to eligible projects for
up to 65 percent of the eligible grant need identified by the United States Department of
Agriculture Rural Economic and Community Development Program.
new text end
new text begin Subd. 3. new text end
new text begin Green infrastructure. new text end
new text begin
To the extent that there are sufficient eligible
project applications, not less than 20 percent of the money received under the Act
and credited to the clean water revolving fund must be used for grants and loans for
projects to address green infrastructure, water or energy efficiency improvements, or other
environmentally innovative activities. Grants made under this subdivision count toward
the 50 percent requirement in subdivision 2.
new text end
new text begin Subd. 4. new text end
new text begin Grant and loan terms. new text end
new text begin
(a) Grants under this section must be based on
as-bid costs and awarded to eligible projects as provided in this subdivision in the order
that projects are certified by the Pollution Control Agency and as-bid costs are submitted
to the Public Facilities Authority.
new text end
new text begin
(b) Except for projects that receive a grant under paragraph (d), a base grant must be
provided for 20 percent of the amount approved to be paid from the clean water revolving
fund, up to a maximum of $2,000,000 per project.
new text end
new text begin
(c) Except for projects that receive a grant under paragraph (d), a supplemental grant
must be provided if the average annual residential wastewater system cost after completion
in the project would otherwise exceed 1.4 percent of the median household income in
the recipient governmental unit or entity. In determining whether the average annual
residential wastewater system cost would exceed 1.4 percent, the authority must consider
the total costs associated with building, operating, and maintaining the wastewater
system, including debt service and operation and maintenance costs. The amount of the
supplemental grant is equal to 80 percent of the amount needed to reduce the average
annual residential wastewater system cost to 1.4 percent of median household income in
the recipient, to a maximum of $4,000,000 or $15,000 per connection, whichever is less.
The amount of the supplemental grant must not exceed 80 percent of the total amount
approved to be paid from the clean water revolving fund.
new text end
new text begin
(d) For eligible projects to address green infrastructure, water or energy efficiency
improvements, or other environmentally innovative activities, a grant must be provided
for 25 percent of the amount approved to be paid from the clean water revolving fund,
to a maximum of $2,000,000 per project.
new text end
Sec. 4. new text begin FEDERAL STIMULUS MONEY FOR DRINKING WATER.
new text end
new text begin Subdivision 1. new text end
new text begin Drinking water revolving fund loans and grants. new text end
new text begin
Pursuant to
Public Law 111-5, the American Recovery and Reinvestment Act of 2009, federal money
allocated under the Act for capitalization grants for drinking water state revolving funds
must be credited to the drinking water revolving fund under Minnesota Statutes, section
446A.081, for the purpose of making loans and grants to eligible projects as provided in
this section, Minnesota Statutes, section 446A.081, and the Act. Authorization to make
loans and grants under this section expires when all money received under the Act and
credited to the drinking water revolving fund has been expended. For the purpose of
this section, the term "grant" includes principal forgiveness that is granted at the time a
loan is made.
new text end
new text begin Subd. 2. new text end
new text begin Grants required. new text end
new text begin
Not less than 50 percent of the money received under the
Act and credited to the drinking water state revolving fund must be used to provide grants
to eligible projects as provided in subdivision 4, or to provide grants to eligible projects
for up to 65 percent of the eligible grant need identified by the United States Department
of Agriculture Rural Economic and Community Development Program.
new text end
new text begin Subd. 3. new text end
new text begin Green infrastructure. new text end
new text begin
To the extent that there are sufficient eligible
project applications, not less than 20 percent of the money received under the Act and
credited to the drinking water revolving fund must be used for grants and loans for
projects to address green infrastructure, water or energy efficiency improvements, or other
environmentally innovative activities. Grants made under this subdivision count toward
the 50 percent requirement in subdivision 2.
new text end
new text begin Subd. 4. new text end
new text begin Grant and loan terms. new text end
new text begin
(a) Grants under this section must be based on
as-bid costs and awarded as provided in this subdivision to eligible projects in the order
that projects are certified by the Department of Health and as-bid costs are submitted to
the Public Facilities Authority.
new text end
new text begin
(b) Except for projects that receive a grant under paragraph (d) or (e), a base grant
must be provided for 20 percent of the amount approved to be paid from the drinking
water revolving fund, up to a maximum of $2,000,000 per project.
new text end
new text begin
(c) Except for projects that receive a grant under paragraph (d) or (e), a supplemental
grant must be provided if the average annual residential drinking water system cost after
completion of the project would otherwise exceed 1.4 percent of the median household
income in the recipient governmental unit or entity. In determining whether the average
annual residential drinking water system cost would exceed 1.4 percent, the authority must
consider the total costs associated with building, operating and maintaining the drinking
water system, including debt service and operation and maintenance costs. The amount of
the supplemental grant is equal to 80 percent of the amount needed to reduce the average
annual residential drinking water system cost to 1.4 percent of median household income
in the recipient, to a maximum of $4,000,000 or $15,000 per connection. The amount of
the supplemental grant must not exceed 80 percent of the total amount approved to be paid
from the drinking water revolving fund.
new text end
new text begin
(d) For eligible projects to address green infrastructure, water or energy efficiency
improvements, or other environmentally innovative activities, a grant must be provided
for 25 percent of the amount approved to be paid from the drinking water revolving fund,
to a maximum of $2,000,000 per project.
new text end
new text begin
(e) For projects needed to comply with national primary drinking water standards for
an existing community public water system or for an existing noncommunity public water
system, a grant must be provided for 50 percent of the project cost, up to a maximum of
$10,000. Total grants approved under this paragraph must not exceed $250,000.
new text end
Sec. 5. new text begin EFFECTIVE DATE.
new text end
new text begin
This act is effective the day following final enactment.
new text end