3rd Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to economic development; coordinating funding 1.3 for wastewater and drinking water programs; modifying 1.4 the wastewater infrastructure funding program; 1.5 increasing bonding authority for the public facilities 1.6 authority; amending Minnesota Statutes 2000, sections 1.7 446A.07, subdivision 4; 446A.072, subdivisions 1, 3, 1.8 6, 7, 8, 9, 11, 12, by adding subdivisions; 446A.12, 1.9 subdivision 1; repealing Minnesota Statutes 2000, 1.10 section 446A.072, subdivisions 2, 4, 5, 10, 13. 1.11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.12 Section 1. Minnesota Statutes 2000, section 446A.07, 1.13 subdivision 4, is amended to read: 1.14 Subd. 4. [INTENDED USE PLAN.] (a) The
pollution control1.15 agencypublic facilities authority shall annually prepare and 1.16 submit to the United States Environmental Protection Agency an 1.17 intended use plan. The plan must identify the intended uses of 1.18 the amounts available to the water pollution control revolving 1.19 fund, including a list of wastewater treatment and storm water 1.20 projects and all other eligible activities to be funded during 1.21 the fiscal year. Information regarding eligible activities must1.22 be submitted to the pollution control agency by the appropriate1.23 state agency or department within 30 days of written1.24 notification by the pollution control agency.1.25 (b) To be eligible for placement on the intended use plan: 1.26 (1) a project must be listed on the pollution control 1.27 agency's project priority list; 1.28 (2) the applicant must submit a written request to the 2.1 public facilities authority, including a brief description of 2.2 the project, a project cost estimate and the requested loan 2.3 amount, and a proposed project schedule; and 2.4 (3) for a construction loan, the project must have a 2.5 facility plan approved by the pollution control agency. 2.6 (c) The pollution control agency shall annually provide to 2.7 the public facilities authority its project priority list of 2.8 wastewater and storm water projects to be considered for 2.9 funding. The pollution control agencypublic facilities 2.10 authority may not submit the plan until it has received the 2.11 review and comment of the authoritypollution control agency or 2.12 until 30 days have elapsed since the plan was submitted to 2.13 the authoritypollution control agency, whichever occurs first. 2.14 In addition, the public facilities authority shall offer 2.15 municipalities seeking placement on the intended use plan an 2.16 opportunity to review and comment on the plan before it is 2.17 adopted. The plan may be amended to add additional projects for 2.18 consideration for funding as it determines funds are available 2.19 and additional projects are able to proceed. 2.20 Sec. 2. Minnesota Statutes 2000, section 446A.072, 2.21 subdivision 1, is amended to read: 2.22 Subdivision 1. [ESTABLISHMENT OF PROGRAM.] The authority 2.23 will establish a wastewater infrastructure funding program to 2.24 provide supplemental assistance to municipalities applying2.25 forreceiving funding underthrough the water pollution control 2.26 revolving loan program or the United States Department of 2.27 Agriculture Rural Economic and Community Development's 2.28 (USDA/RECD) Water and Waste Disposal Loans and Grants program 2.29 for the design and planning, improvements to, and construction 2.30 of municipal wastewater treatment systems. The purpose of the 2.31 program is to assist municipalities demonstrating financial need 2.32 in building cost-efficient projects to address existing 2.33 environmental or public health problems. To implement the 2.34 program, the authority shall establish a wastewater 2.35 infrastructure fund to provide grants and loans for the purposes 2.36 authorized under title VI of the Federal Water Pollution Control 3.1 Act. The fund shall be credited with all investment income from 3.2 the fund and all repayments of loans, grants, and penalties. 3.3 Sec. 3. Minnesota Statutes 2000, section 446A.072, 3.4 subdivision 3, is amended to read: 3.5 Subd. 3. [PROGRAM ADMINISTRATION.] (a) The authority shall 3.6 provide supplemental assistance, as provided in subdivision 2,3.7 5a to municipalities demonstrating financial need, as provided3.8 in subdivision 4, whose projects have been certified to the3.9 authority by the commissioner of the agency. The authority3.10 shall reserve supplemental assistance for projects in order of3.11 their priority ranking established by the agency.: 3.12 (1) whose projects are listed on the agency's project 3.13 priority list; 3.14 (2) that demonstrate their projects are a cost-effective 3.15 solution to an existing environmental or public health problem; 3.16 and 3.17 (3) whose projects are approved by the USDA/RECD or 3.18 certified by the commissioner of the agency. 3.19 (b) For a municipality receiving grant funding from the 3.20 USDA/RECD, applications must be made to the USDA/RECD with 3.21 additional information submitted to the authority as required by 3.22 the authority. Eligible project costs and affordability 3.23 criteria shall be determined by the USDA/RECD. 3.24 (c) For a municipality not receiving grant funding from the 3.25 USDA/RECD, application must be made to the authority on forms 3.26 prescribed by the authority for the water pollution control 3.27 revolving fund program with additional information as required 3.28 by the authority. In accordance with section 116.182, the 3.29 agency shall: 3.30 (1) calculate the essential project component percentage 3.31 which must be multiplied by the total project cost to determine 3.32 the eligible project cost; and 3.33 (2) review and certify approved projects to the authority. 3.34 (d) At the time funds are appropriated under this section, 3.35 the authority shall reserve supplemental assistance for projects 3.36 in order of their rankings on the agency's project priority list 4.1 and in an amount based on their most recent cost estimates 4.2 submitted to the authority or the as-bid costs, whichever is 4.3 less. 4.4 Sec. 4. Minnesota Statutes 2000, section 446A.072, is 4.5 amended by adding a subdivision to read: 4.6 Subd. 5a. [TYPE AND AMOUNT OF ASSISTANCE.] (a) For a 4.7 municipality receiving grant funding from the USDA/RECD, the 4.8 authority shall provide assistance in the form of a grant of up 4.9 to one-half of the eligible grant amount determined by 4.10 USDA/RECD. A municipality may not receive a grant under this 4.11 paragraph for more than $4,000,000 or $15,000 per existing 4.12 connection, whichever is less, unless specifically approved by 4.13 law. In the case of a sanitary district or other 4.14 multijurisdictional project for which the USDA/RECD is unable to 4.15 fully fund up to one-half of the eligible grant amount, the 4.16 authority may provide up to an additional $1,000,000 for each 4.17 additional municipality participating up to a maximum of 4.18 $8,000,000 or $15,000 per existing connection, whichever is 4.19 less, but not to exceed the maximum grant level determined by 4.20 the USDA/RECD as needed to keep the project affordable. 4.21 (b) For a municipality not receiving grant funding from the 4.22 USDA/RECD, the authority shall provide assistance in the form of 4.23 a loan for the eligible project costs that exceed five percent 4.24 of the market value of properties in the project service area. 4.25 A municipality may not receive a loan under this paragraph for 4.26 more than $4,000,000 or $15,000 per existing connection, 4.27 whichever is less, unless specifically approved by law. In the 4.28 case of a sanitary district or other multijurisdictional 4.29 project, the authority may provide a loan under this paragraph 4.30 for up to an additional $1,000,000 for each additional 4.31 municipality participating up to a maximum of $8,000,000 or 4.32 $15,000 per existing connection, whichever is less, unless 4.33 specifically approved by law. A loan under this paragraph must 4.34 bear no interest, must be repaid as provided in subdivision 7, 4.35 and must only be provided in conjunction with a loan from the 4.36 water pollution control revolving fund under section 446A.07. 5.1 (c) Notwithstanding the limits in paragraphs (a) and (b), 5.2 for a municipality receiving supplemental assistance under this 5.3 section after January 1, 2002, if the authority determines that 5.4 the municipality's construction and installation costs are 5.5 significantly increased due to geological conditions of 5.6 crystalline bedrock or karst areas and discharge limits that are 5.7 more stringent than secondary treatment, the authority shall 5.8 provide assistance in the form of half grant and half loan. 5.9 Assistance from the authority may not be more than $25,000 per 5.10 existing connection. In addition, if the municipality also 5.11 receives a grant from the United States Army Corps of Engineers 5.12 section 569 program for the same project, the authority must 5.13 match the amount of the section 569 grant. The state and 5.14 federal grant money must be used to reduce the amount of the 5.15 municipality's loan from the water pollution control revolving 5.16 fund that exceeds five percent of the market value of properties 5.17 in the project service area. 5.18 Sec. 5. Minnesota Statutes 2000, section 446A.072, is 5.19 amended by adding a subdivision to read: 5.20 Subd. 5b. [SPECIAL ASSESSMENT DEFERRAL.] A municipality 5.21 receiving a loan under subdivision 5a that levies special 5.22 assessments to repay the loan under subdivision 5a or section 5.23 446A.07 may defer payment of the assessments under the 5.24 provisions of sections 435.193 to 435.195. 5.25 Sec. 6. Minnesota Statutes 2000, section 446A.072, 5.26 subdivision 6, is amended to read: 5.27 Subd. 6. [DISBURSEMENTS.] Disbursements madeof grants or 5.28 loans awarded under this section by the authority to recipients 5.29 must be made for eligible project costs as incurred by the 5.30 recipients, and must be made by the authority in accordance with 5.31 the project financing agreement and applicable state and federal 5.32 laws and rules governing the payments. 5.33 Sec. 7. Minnesota Statutes 2000, section 446A.072, 5.34 subdivision 7, is amended to read: 5.35 Subd. 7. [LOAN REPAYMENTS.] All loan repayments received5.36 by the authority under subdivision 2 must be used to provide6.1 additional assistance under this section.A municipality 6.2 receiving a loan under this section shall repay the loan in 6.3 semiannual payment amounts determined by the authority. The 6.4 payment amount must be based on the average payments on the 6.5 municipality's water pollution control revolving fund loan or, 6.6 if greater, the minimum amount required to fully repay the loan 6.7 by the maturity date. Payments must begin within one year of 6.8 the date of the municipality's final payment on the water 6.9 pollution control revolving fund loan. The maturity date of the 6.10 loan must be no later than 20 years from the date of the first 6.11 payment. 6.12 Sec. 8. Minnesota Statutes 2000, section 446A.072, 6.13 subdivision 8, is amended to read: 6.14 Subd. 8. [ELIGIBILITY.] A municipality is eligible for 6.15 assistance under this section only after grant funding from 6.16 other sources has been applied for, obtained, rejected, or the 6.17 authority has determined that the potential funding is unlikely. 6.18 Sec. 9. Minnesota Statutes 2000, section 446A.072, 6.19 subdivision 9, is amended to read: 6.20 Subd. 9. [LOAN LIMITATION.] Supplemental assistance may 6.21 not be used to reduce the sewer service charges of a significant 6.22 wastewater contributor, or a single user that has caused the 6.23 need for the project or whose current or projected flow and load 6.24 exceed one-half of the current wastewater treatment plant's 6.25 capacity , unless the applicant can demonstrate to the authority6.26 that the significant wastewater contributor cannot pay its fair6.27 share. Funding will not be provided for projects that are not6.28 qualified for assistance or that would violate the state's6.29 constitution or laws regarding the use of funds appropriated for6.30 the program. 6.31 Sec. 10. Minnesota Statutes 2000, section 446A.072, 6.32 subdivision 11, is amended to read: 6.33 Subd. 11. [REPORT ON NEEDS.] By October 15February 1 of 6.34 each odd-numberedeven-numbered year, the authority, in 6.35 conjunction with the pollution control agency, shall prepare a 6.36 report to the finance division of the senate environment and 7.1 natural resources committee and the house environment and 7.2 natural resources finance committee on wastewater funding 7.3 assistance needs of municipalities under this section. 7.4 Sec. 11. Minnesota Statutes 2000, section 446A.072, 7.5 subdivision 12, is amended to read: 7.6 Subd. 12. [SYSTEM REPLACEMENT FUND.] Each recipient of7.7 assistancemunicipality receiving a loan under this section 7.8 shall establish a system replacement fund setting asideand 7.9 shall annually deposit a minimum of $.10$.50 per 1,000 gallons 7.10 of flow for major rehabilitation, expansion, or replacement of 7.11 the treatment plantsystem at the end of its useful life. Money 7.12 must remain in the account, for the life of the loan associated7.13 with the supplemental assistance under this section,unless use 7.14 of the fund is approved in writing by the authority for major 7.15 rehabilitation, expansion, or replacement of the treatment 7.16 plant. Failure to maintain the fund will cancel the loan7.17 forgiveness provided under subdivision 2system. By March 1 7.18 each year during the life of the loan, each municipality shall 7.19 submit a report to the authority regarding the amount deposited 7.20 and the fund balance for the prior calendar year. Failure to 7.21 comply with the requirements of this subdivision shall result in 7.22 the authority assessing a penalty fee to the municipality equal 7.23 to one percent of the outstanding loan balance for each year of 7.24 noncompliance. Failure to make the required deposit or pay the 7.25 penalty fee as required constitutes a default on the loan. 7.26 Sec. 12. Minnesota Statutes 2000, section 466A.072, is 7.27 amended by adding a subdivision to read: 7.28 Subd. 14. [CONSISTENCY WITH LAND USE PLANS.] A 7.29 municipality applying for a project in an unsewered area shall 7.30 include in its application to the authority a certification from 7.31 the county in which the project is located that: 7.32 (1) the project is consistent with the county comprehensive 7.33 land use plan, if the county has adopted one; 7.34 (2) the project is consistent with the county water plan, 7.35 if the county has adopted one; and 7.36 (3) the county has adopted specific land use ordinances and 8.1 controls to prevent future development from occurring in a 8.2 manner that could create unsewered area problems in the future. 8.3 Sec. 13. Minnesota Statutes 2000, section 446A.12, 8.4 subdivision 1, is amended to read: 8.5 Subdivision 1. [BONDING AUTHORITY.] The authority may 8.6 issue negotiable bonds in a principal amount that the authority 8.7 determines necessary to provide sufficient funds for achieving 8.8 its purposes, including the making of loans and purchase of 8.9 securities, the payment of interest on bonds of the authority, 8.10 the establishment of reserves to secure its bonds, the payment 8.11 of fees to a third party providing credit enhancement, and the 8.12 payment of all other expenditures of the authority incident to 8.13 and necessary or convenient to carry out its corporate purposes 8.14 and powers, but not including the making of grants. Bonds of 8.15 the authority may be issued as bonds or notes or in any other 8.16 form authorized by law. The principal amount of bonds issued 8.17 and outstanding under this section at any time may not exceed 8.18 $850,000,000$1,000,000,000, excluding bonds for which refunding 8.19 bonds or crossover refunding bonds have been issued. 8.20 Sec. 14. [REPEALER.] 8.21 Minnesota Statutes 2000, section 446A.072, subdivisions 2, 8.22 4, 5, 10, and 13, are repealed. 8.23 Sec. 15. [EFFECTIVE DATE.] 8.24 This act is effective for funds appropriated after January 8.25 1, 2002.