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SF 762

5th Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

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

Current Version - 5th Engrossment

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A bill for an act
relating to the environment; modifying provisions for cost-sharing contracts
for erosion control and water management; creating the Clean Water Legacy
Act; providing authority, direction, and funding to achieve and maintain water
quality standards according to section 303(d) of the federal Clean Water Act;
creating loan and grant programs; providing for nutrient loading offset; requiring
a report on phosphorus discharge rules; appropriating money; amending
Minnesota Statutes 2004, sections 103C.501, subdivision 5; 115.03, by adding a
subdivision; 446A.051; Minnesota Statutes 2005 Supplement, section 446A.073,
subdivisions 1, 2; proposing coding for new law in Minnesota Statutes, chapter
446A; proposing coding for new law as Minnesota Statutes, chapter 114D.

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

Section 1.

Minnesota Statutes 2004, section 103C.501, subdivision 5, is amended to
read:


Subd. 5.

Contracts by districts.

(a) A district board may contract on a cost-share
basis to furnish financial aid to a land occupier or to a state agency for permanent systems
for erosion or sedimentation control or water quality improvement that are consistent with
the district's comprehensive and annual work plans.

(b) The duration of the contract deleted text beginmaydeleted text endnew text begin must, at a minimum,new text end be the time required to
complete the planned systems. A contract must specify that the land occupier is liable
for monetary damagesdeleted text begin, not to exceed thedeleted text endnew text begin and penalties in annew text end amount deleted text beginofdeleted text endnew text begin up to 150 percent
of the
new text end financial assistance received from the district, for failure to complete the systems
or practices in a timely manner or maintain the systems or practices as specified in the
contract.

(c) A contract may provide for cooperation or funding with federal agencies. A land
occupier or state agency may provide the cost-sharing portion of the contract through
services in kind.

(d) The state board or the district board may not furnish any financial aid for
practices designed only to increase land productivity.

new text begin (e) When a district board determines that long-term maintenance of a system or
practice is desirable, the board may require that maintenance be made a covenant upon
the land for the effective life of the practice. A covenant under this subdivision shall be
construed in the same manner as a conservation restriction under section 84.65.
new text end

Sec. 2.

new text begin [114D.05] CITATION.
new text end

new text begin This chapter may be cited as the "Clean Water Legacy Act."
new text end

Sec. 3.

new text begin [114D.10] LEGISLATIVE PURPOSE AND FINDINGS.
new text end

new text begin Subdivision 1. new text end

new text begin Purpose. new text end

new text begin The purpose of the Clean Water Legacy Act is to protect,
restore, and preserve the quality of Minnesota's surface waters by providing authority,
direction, and resources to achieve and maintain water quality standards for surface waters
as required by section 303(d) of the federal Clean Water Act, United States Code, title 33,
section 1313(d), and applicable federal regulations.
new text end

new text begin Subd. 2. new text end

new text begin Findings. new text end

new text begin The legislature finds that:
new text end

new text begin (1) there is a close link between protecting, restoring, and preserving the quality of
Minnesota's surface waters and the ability to develop the state's economy, enhance its
quality of life, and protect its human and natural resources;
new text end

new text begin (2) achieving the state's water quality goals will require long-term commitment and
cooperation by all state and local agencies, and other public and private organizations
and individuals, with responsibility and authority for water management, planning, and
protection; and
new text end

new text begin (3) all persons and organizations whose activities affect the quality of waters,
including point and nonpoint sources of pollution, have a responsibility to participate in
and support efforts to achieve the state's water quality goals.
new text end

Sec. 4.

new text begin [114D.15] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin The definitions provided in this section apply to the
terms used in this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Citizen monitoring. new text end

new text begin "Citizen monitoring" means monitoring of surface
water quality by individuals and nongovernmental organizations that is consistent with
section 115.06, subdivision 4, and Pollution Control Agency guidance on monitoring
procedures, quality assurance protocols, and data management.
new text end

new text begin Subd. 3. new text end

new text begin Clean Water Council. new text end

new text begin "Clean Water Council" or "council" means the
Clean Water Council created pursuant to section 114D.30, subdivision 1.
new text end

new text begin Subd. 4. new text end

new text begin Federal TMDL requirements. new text end

new text begin "Federal TMDL requirements" means the
requirements of section 303(d) of the Clean Water Act, United States Code, title 33,
section 1313(d), and associated regulations and guidance.
new text end

new text begin Subd. 5. new text end

new text begin Impaired water. new text end

new text begin "Impaired water" means surface water that does not
meet applicable water quality standards.
new text end

new text begin Subd. 6. new text end

new text begin Public agencies. new text end

new text begin "Public agencies" means all state agencies, political
subdivisions, joint powers organizations, and special purpose units of government with
authority, responsibility, or expertise in protecting, restoring, or preserving the quality of
surface waters, managing or planning for surface waters and related lands, or financing
waters-related projects. Public agencies includes the University of Minnesota and other
public education institutions.
new text end

new text begin Subd. 7. new text end

new text begin Restoration. new text end

new text begin "Restoration" means actions, including effectiveness
monitoring, that are taken to achieve and maintain water quality standards for impaired
waters in accordance with a TMDL that has been approved by the United States
Environmental Protection Agency under federal TMDL requirements.
new text end

new text begin Subd. 8. new text end

new text begin Surface waters. new text end

new text begin "Surface waters" means waters of the state as defined
in section 115.01, subdivision 22, excluding groundwater as defined in section 115.01,
subdivision 6.
new text end

new text begin Subd. 9. new text end

new text begin Third-party TMDL. new text end

new text begin "Third-party TMDL" means a TMDL by the
Pollution Control Agency that is developed in whole or in part by a qualified public
agency other than the Pollution Control Agency consistent with the goals, policies, and
priorities in section 114D.20.
new text end

new text begin Subd. 10. new text end

new text begin Total maximum daily load or TMDL. new text end

new text begin "Total maximum daily load" or
"TMDL" means a scientific study that contains a calculation of the maximum amount of a
pollutant that may be introduced into a surface water and still ensure that applicable
water quality standards for that water are restored and maintained. A TMDL also is
the sum of the pollutant load allocations for all sources of the pollutant, including a
wasteload allocation for point sources, a load allocation for nonpoint sources and natural
background, an allocation for future growth of point and nonpoint sources, and a margin
of safety to account for uncertainty about the relationship between pollutant loads and
the quality of the receiving surface water. "Natural background" means characteristics of
the water body resulting from the multiplicity of factors in nature, including climate and
ecosystem dynamics, that affect the physical, chemical, or biological conditions in a water
body, but does not include measurable and distinguishable pollution that is attributable to
human activity or influence. A TMDL must take into account seasonal variations.
new text end

new text begin Subd. 11. new text end

new text begin TMDL implementation plan. new text end

new text begin "TMDL implementation plan" means a
document detailing restoration activities needed to meet the approved TMDL's pollutant
load allocations for point and nonpoint sources.
new text end

new text begin Subd. 12. new text end

new text begin Water quality standards. new text end

new text begin "Water quality standards" for Minnesota
surface waters are found in Minnesota Rules, chapters 7050 and 7052.
new text end

Sec. 5.

new text begin [114D.20] IMPLEMENTATION; COORDINATION; GOALS;
POLICIES; AND PRIORITIES.
new text end

new text begin Subdivision 1. new text end

new text begin Coordination and cooperation. new text end

new text begin In implementing this chapter,
public agencies and private entities shall take into consideration the relevant provisions of
local and other applicable water management, conservation, land use, land management,
and development plans and programs. Public agencies with authority for local water
management, conservation, land use, land management, and development plans shall
take into consideration the manner in which their plans affect the implementation of
this chapter. Public agencies shall identify opportunities to participate and assist in the
successful implementation of this chapter, including the funding or technical assistance
needs, if any, that may be necessary. In implementing this chapter, public agencies shall
endeavor to engage the cooperation of organizations and individuals whose activities
affect the quality of surface waters, including point and nonpoint sources of pollution, and
who have authority and responsibility for water management, planning, and protection. To
the extent practicable, public agencies shall endeavor to enter into formal and informal
agreements and arrangements with federal agencies and departments to jointly utilize
staff and educational, technical, and financial resources to deliver programs or conduct
activities to achieve the intent of this chapter, including efforts under the federal Clean
Water Act and other federal farm and soil and water conservation programs. Nothing in
this chapter affects the application of silvicultural exemptions under any federal, state, or
local law or requires silvicultural practices more stringent than those recommended in
the timber harvesting and forest management guidelines adopted by the Minnesota Forest
Resources Council under section 89A.05.
new text end

new text begin Subd. 2. new text end

new text begin Goals for implementation. new text end

new text begin The following goals must guide the
implementation of this chapter:
new text end

new text begin (1) to identify impaired waters in accordance with federal TMDL requirements
within ten years after the effective date of this section and thereafter to ensure continuing
evaluation of surface waters for impairments;
new text end

new text begin (2) to submit TMDL's to the United States Environmental Protection Agency for all
impaired waters in a timely manner in accordance with federal TMDL requirements;
new text end

new text begin (3) to set a reasonable time for implementing restoration of each identified impaired
water;
new text end

new text begin (4) to provide assistance and incentives to prevent waters from becoming impaired
and to improve the quality of waters that are listed as impaired but do not have an
approved TMDL addressing the impairment;
new text end

new text begin (5) to promptly seek the delisting of waters from the impaired waters list when those
waters are shown to achieve the designated uses applicable to the waters; and
new text end

new text begin (6) to achieve compliance with federal Clean Water Act requirements in Minnesota.
new text end

new text begin Subd. 3. new text end

new text begin Implementation policies. new text end

new text begin The following policies must guide the
implementation of this chapter:
new text end

new text begin (1) develop regional and watershed TMDL's and TMDL implementation plans, and
TMDL's and TMDL implementation plans for multiple pollutants, where reasonable and
feasible;
new text end

new text begin (2) maximize use of available organizational, technical, and financial resources to
perform sampling, monitoring, and other activities to identify impaired waters, including
use of citizen monitoring and citizen monitoring data used by the Pollution Control
Agency in assessing water quality must meet the requirements in Appendix D of the
Volunteer Surface Water Monitoring Guide, Minnesota Pollution Control Agency (2003);
new text end

new text begin (3) maximize opportunities for restoration of impaired waters, by prioritizing and
targeting of available programmatic, financial, and technical resources and by providing
additional state resources to complement and leverage available resources;
new text end

new text begin (4) use existing regulatory authorities to achieve restoration for point and nonpoint
sources of pollution where applicable, and promote the development and use of effective
nonregulatory measures to address pollution sources for which regulations are not
applicable;
new text end

new text begin (5) use restoration methods that have a demonstrated effectiveness in reducing
impairments and provide the greatest long-term positive impact on water quality protection
and improvement and related conservation benefits while incorporating innovative
approaches on a case-by-case basis;
new text end

new text begin (6) identify for the legislature any innovative approaches that may strengthen or
complement existing programs;
new text end

new text begin (7) identify and encourage implementation of measures to prevent waters from
becoming impaired and to improve the quality of waters that are listed as impaired but
have no approved TMDL addressing the impairment using the best available data and
technology, and establish and report outcome-based performance measures that monitor
the progress and effectiveness of protection and restoration measures; and
new text end

new text begin (8) monitor and enforce cost-sharing contracts and impose monetary damages in an
amount up to 150 percent of the financial assistance received for failure to comply.
new text end

new text begin Subd. 4. new text end

new text begin Priorities for identifying impaired waters. new text end

new text begin The Pollution Control
Agency, in accordance with federal TMDL requirements, shall set priorities for identifying
impaired waters, giving consideration to:
new text end

new text begin (1) waters where impairments would pose the greatest potential risk to human or
aquatic health; and
new text end

new text begin (2) waters where data developed through public agency or citizen monitoring or
other means, provides scientific evidence that an impaired condition exists.
new text end

new text begin Subd. 5. new text end

new text begin Priorities for preparation of TMDL's. new text end

new text begin The Clean Water Council shall
recommend priorities for scheduling and preparing TMDL's and TMDL implementation
plans, taking into account the severity of the impairment, the designated uses of those
waters, and other applicable federal TMDL requirements. In recommending priorities, the
council shall also give consideration to waters and watersheds:
new text end

new text begin (1) with impairments that pose the greatest potential risk to human health;
new text end

new text begin (2) with impairments that pose the greatest potential risk to threatened or endangered
species;
new text end

new text begin (3) with impairments that pose the greatest potential risk to aquatic health;
new text end

new text begin (4) where other public agencies and participating organizations and individuals,
especially local, basinwide, watershed, or regional agencies or organizations, have
demonstrated readiness to assist in carrying out the responsibilities, including availability
and organization of human, technical, and financial resources necessary to undertake
the work; and
new text end

new text begin (5) where there is demonstrated coordination and cooperation among cities,
counties, watershed districts, and soil and water conservation districts in planning and
implementation of activities that will assist in carrying out the responsibilities.
new text end

new text begin Subd. 6. new text end

new text begin Priorities for restoration of impaired waters. new text end

new text begin In implementing
restoration of impaired waters, in addition to the priority considerations in subdivision 5,
the Clean Water Council shall give priority in its recommendations for restoration funding
from the clean water legacy account to restoration projects that:
new text end

new text begin (1) coordinate with and utilize existing local authorities and infrastructure for
implementation;
new text end

new text begin (2) can be implemented in whole or in part by providing support for existing or
ongoing restoration efforts;
new text end

new text begin (3) most effectively leverage other sources of restoration funding, including federal,
state, local, and private sources of funds;
new text end

new text begin (4) show a high potential for early restoration and delisting based upon scientific
data developed through public agency or citizen monitoring or other means; and
new text end

new text begin (5) show a high potential for long-term water quality and related conservation
benefits.
new text end

new text begin Subd. 7. new text end

new text begin Priorities for funding prevention actions. new text end

new text begin The Clean Water Council
shall apply the priorities applicable under subdivision 6, as far as practicable, when
recommending priorities for funding actions to prevent waters from becoming impaired
and to improve the quality of waters that are listed as impaired but do not have an
approved TMDL.
new text end

Sec. 6.

new text begin [114D.25] ADMINISTRATION; POLLUTION CONTROL AGENCY.
new text end

new text begin Subdivision 1. new text end

new text begin General duties and authorities. new text end

new text begin (a) The Pollution Control Agency,
in accordance with federal TMDL requirements, shall:
new text end

new text begin (1) identify impaired waters and propose a list of the waters for review and approval
by the United States Environmental Protection Agency;
new text end

new text begin (2) develop and approve TMDL's for listed impaired waters and submit the approved
TMDL's to the United State Environmental Protection Agency for final approval; and
new text end

new text begin (3) propose to delist waters from the Environmental Protection Agency impaired
waters list.
new text end

new text begin (b) A TMDL must include a statement of the facts and scientific data supporting the
TMDL and a list of potential implementation options, including:
new text end

new text begin (1) a range of estimates of the cost of implementation of the TMDL; and
new text end

new text begin (2) for point sources, the individual wasteload data and the estimated cost of
compliance addressed by the TMDL.
new text end

new text begin (c) The implementation information need not be sent to the United States
Environmental Protection Agency for review and approval.
new text end

new text begin Subd. 2. new text end

new text begin Administrative procedures for TMDL approval. new text end

new text begin The approval of a
TMDL by the Pollution Control Agency is a final decision of the agency for purposes of
section 115.05, and is subject to the contested case procedures of sections 14.57 to 14.62 in
accordance with agency procedural rules. The agency shall not submit an approved TMDL
to the United States Environmental Protection Agency until the time for commencing
judicial review has run or the judicial review process has been completed. A TMDL is not
subject to the rulemaking requirements of chapter 14, including section 14.386.
new text end

new text begin Subd. 3. new text end

new text begin TMDL submittal requirement. new text end

new text begin Before submitting a TMDL to the United
States Environmental Protection Agency, the Pollution Control Agency shall comply with
the notice and procedure requirements of this section. If a contested case proceeding is not
required for a proposed TMDL, the agency may submit the TMDL to the United States
Environmental Protection Agency no earlier than 30 days after the notice required in
subdivision 4. If a contested case proceeding is required for a TMDL, the TMDL may be
submitted to the United States Environmental Protection Agency after the contested case
proceeding and appeal process is completed.
new text end

new text begin Subd. 4. new text end

new text begin TMDL notice; contents. new text end

new text begin The Pollution Control Agency shall give notice
of its intention to submit a TMDL to the United States Environmental Protection Agency.
The notice must be given by publication in the State Register and by United States mail to
persons who have registered their names with the agency. The notice must include either a
copy of the proposed TMDL or an easily readable and understandable description of its
nature and effect and an announcement of how free access to the proposed TMDL can
be obtained. In addition, the agency shall make reasonable efforts to notify persons or
classes of persons who may be significantly affected by the TMDL by giving notice of
its intention in newsletters, newspapers, or other publications, or through other means of
communication. The notice must include a statement informing the public:
new text end

new text begin (1) that the public has 30 days in which to submit comment in support of or in
opposition to the proposed TMDL and that comment is encouraged;
new text end

new text begin (2) that each comment should identify the portion of the proposed TMDL addressed,
the reason for the comment, and any change proposed;
new text end

new text begin (3) of the manner in which persons must request a contested case proceeding on
the proposed TMDL;
new text end

new text begin (4) that the proposed TMDL may be modified if the modifications are supported
by the data and facts; and
new text end

new text begin (5) the date on which the 30-day comment period ends.
new text end

new text begin Subd. 5. new text end

new text begin Third-party TMDL development. new text end

new text begin The Pollution Control Agency may
enter into agreements with any qualified public agency setting forth the terms and
conditions under which that agency is authorized to develop a third-party TMDL. In
determining whether the public agency is qualified to develop a third-party TMDL, the
Pollution Control Agency shall consider the technical and administrative qualifications of
the public agency, cost, and shall avoid any potential organizational conflict of interest,
as defined in section 16C.02, subdivision 10a, of the public agency with respect to the
development of the third-party TMDL. A third-party TMDL is subject to modification
and approval by the Pollution Control Agency, and must be approved by the Pollution
Control Agency before it is submitted to the United States Environmental Protection
Agency. The Pollution Control Agency shall only consider authorizing the development
of third-party TMDL's consistent with the goals, policies, and priorities determined
under section 114D.20.
new text end

Sec. 7.

new text begin [114D.30] CLEAN WATER COUNCIL.
new text end

new text begin Subdivision 1. new text end

new text begin Creation; duties. new text end

new text begin A Clean Water Council is created to advise on the
administration and implementation of this chapter, and foster coordination and cooperation
as described in section 114D.20, subdivision 1. The council may also advise on the
development of appropriate processes for expert scientific review as described in section
114D.35, subdivision 2. The Pollution Control Agency shall provide administrative
support for the council with the support of other member agencies. The members of the
council shall elect a chair from the nonagency members of the council.
new text end

new text begin Subd. 2. new text end

new text begin Membership; appointment. new text end

new text begin The commissioners of natural resources,
agriculture, and the Pollution Control Agency, and the executive director of the Board
of Water and Soil Resources shall appoint one person from their respective agency to
serve as a member of the council. Agency members serve as nonvoting members of the
council. Seventeen additional nonagency members of the council shall be appointed by
the governor as follows:
new text end

new text begin (1) two members representing statewide farm organizations;
new text end

new text begin (2) one member representing business organizations;
new text end

new text begin (3) one member representing environmental organizations;
new text end

new text begin (4) one member representing soil and water conservation districts;
new text end

new text begin (5) one member representing watershed districts;
new text end

new text begin (6) one member representing nonprofit organizations focused on improvement of
Minnesota lakes or streams;
new text end

new text begin (7) two members representing organizations of county governments, one member
representing the interests of rural counties and one member representing the interests of
counties in the seven-county metropolitan area;
new text end

new text begin (8) two members representing organizations of city governments;
new text end

new text begin (9) one member representing the Metropolitan Council established under section
473.123;
new text end

new text begin (10) one township officer;
new text end

new text begin (11) one member representing the interests of tribal governments;
new text end

new text begin (12) one member representing statewide hunting organizations;
new text end

new text begin (13) one member representing the University of Minnesota or a Minnesota state
university; and
new text end

new text begin (14) one member representing statewide fishing organizations.
new text end

new text begin Members appointed under clauses (1) to (14) must not be registered lobbyists. In making
appointments, the governor must attempt to provide for geographic balance. The members
of the council appointed by the governor are subject to the advice and consent of the senate.
new text end

new text begin Subd. 3. new text end

new text begin Conflict of interest. new text end

new text begin A Clean Water Council member may not participate
in or vote on a decision of the council relating to an organization in which the member has
either a direct or indirect personal financial interest. While serving on the Clean Water
Council, a member shall avoid any potential conflict of interest.
new text end

new text begin Subd. 4. new text end

new text begin Terms; compensation; removal. new text end

new text begin The initial terms of members
representing state agencies and the Metropolitan Council expire on the first Monday in
January 2007. Thereafter, the terms of members representing the state agencies and the
Metropolitan Council are four years and are coterminous with the governor. The terms
of other members of the council shall be as provided in section 15.059, subdivision 2.
Members may serve until their successors are appointed and qualify. Compensation and
removal of council members is as provided in section 15.059, subdivisions 3 and 4. A
vacancy on the council may be filled by the appointing authority provided in subdivision 1
for the remainder of the unexpired term.
new text end

new text begin Subd. 5. new text end

new text begin Implementation plan. new text end

new text begin The Clean Water Council shall recommend a
plan for implementation of this chapter. The recommended plan shall address general
procedures and time frames for implementing this chapter, and shall include a more
specific implementation work plan for the next fiscal biennium and a framework for setting
priorities to address impaired waters consistent with section 114D.20, subdivisions 2 to 7.
The council shall issue the first recommended plan under this subdivision by December 1,
2005, and shall issue a revised plan by December 1 of each even-numbered year thereafter.
new text end

new text begin Subd. 6. new text end

new text begin Recommendations on appropriation of funds. new text end

new text begin The Clean Water Council
shall recommend to the governor the manner in which money from the clean water legacy
account should be appropriated for the purposes identified in section 114D.45, subdivision
3. The council's recommendations must be consistent with the purposes, policies, goals,
and priorities in sections 114D.05 to 114D.35, and shall allocate adequate support and
resources to identify impaired waters, develop TMDL's, implement restoration of impaired
waters, and provide assistance and incentives to prevent waters from becoming impaired
and improve the quality of waters which are listed as impaired but have no approved
TMDL. The council must recommend methods of ensuring that awards of grants, loans, or
other funds from the clean water legacy account specify the outcomes to be achieved as a
result of the funding and specify standards to hold the recipient accountable for achieving
the desired outcomes. Expenditures from the account must be appropriated by law.
new text end

new text begin Subd. 7. new text end

new text begin Biennial report to legislature. new text end

new text begin By December 1 of each even-numbered
year, the council shall submit a report to the legislature on the activities for which money
has been or will be spent for the current biennium, the activities for which money is
recommended to be spent in the next biennium, and the impact on economic development
of the implementation of the impaired waters program. The report due on December
1, 2014, must include an evaluation of the progress made through June 30, 2014, in
implementing this chapter, the need for funding of future implementation of those
sections, and recommendations for the sources of funding.
new text end

Sec. 8.

new text begin [114D.35] PUBLIC AND STAKEHOLDER PARTICIPATION;
SCIENTIFIC REVIEW; EDUCATION.
new text end

new text begin Subdivision 1. new text end

new text begin Public and stakeholder participation. new text end

new text begin Public agencies and private
entities involved in the implementation of this chapter shall encourage participation by
the public and stakeholders, including local citizens, landowners and managers, and
public and private organizations, in the identification of impaired waters, in developing
TMDL's, and in planning, priority setting, and implementing restoration of impaired
waters. In particular, the Pollution Control Agency shall make reasonable efforts to
provide timely information to the public and to stakeholders about impaired waters that
have been identified by the agency. The agency shall seek broad and early public and
stakeholder participation in scoping the activities necessary to develop a TMDL, including
the scientific models, methods, and approaches to be used in TMDL development, and to
implement restoration pursuant to section 114D.15, subdivision 7.
new text end

new text begin Subd. 2. new text end

new text begin Expert scientific advice. new text end

new text begin The Clean Water Council and public agencies
and private entities shall make use of available public and private expertise from
educational, research, and technical organizations, including the University of Minnesota
and other higher education institutions, to provide appropriate independent expert advice
on models, methods, and approaches used in identifying impaired waters, developing
TMDL's, and implementing prevention and restoration.
new text end

new text begin Subd. 3. new text end

new text begin Education. new text end

new text begin The Clean Water Council shall develop strategies for
informing, educating, and encouraging the participation of citizens, stakeholders,
and others regarding the identification of impaired waters, development of TMDL's,
development of TMDL implementation plans, and implementation of restoration for
impaired waters. Public agencies shall be responsible for implementing the strategies.
new text end

Sec. 9.

new text begin [114D.45] CLEAN WATER LEGACY ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Creation. new text end

new text begin The clean water legacy account is created as an account
in the environmental fund. Money in the account must be made available for the
implementation of this chapter and sections 446A.073, 446A.074, and 446A.075, without
supplanting or taking the place of any other funds which are currently available or may
become available from any other source, whether federal, state, local, or private, for
implementation of those sections.
new text end

new text begin Subd. 2. new text end

new text begin Sources of revenue. new text end

new text begin The following revenues must be deposited in the
clean water legacy account:
new text end

new text begin (1) money transferred to the account; and
new text end

new text begin (2) interest accrued on the account.
new text end

new text begin Subd. 3. new text end

new text begin Purposes. new text end

new text begin Subject to appropriation by the legislature, the clean water
legacy account may be spent for the following purposes:
new text end

new text begin (1) to provide grants, loans, and technical assistance to public agencies and others
who are participating in the process of identifying impaired waters, developing TMDL's,
implementing restoration plans for impaired waters, and monitoring the effectiveness
of restoration;
new text end

new text begin (2) to support measures to prevent waters from becoming impaired and to improve
the quality of waters that are listed as impaired but do not have an approved TMDL
addressing the impairment;
new text end

new text begin (3) to provide grants and loans for wastewater and storm water treatment projects
through the Public Facilities Authority;
new text end

new text begin (4) to support the efforts of public agencies associated with individual sewage
treatment systems and financial assistance for upgrading and replacing the systems; and
new text end

new text begin (5) to provide funds to state agencies to carry out their responsibilities under this
chapter.
new text end

Sec. 10.

Minnesota Statutes 2004, section 115.03, is amended by adding a subdivision
to read:


new text begin Subd. 10. new text end

new text begin Nutrient loading offset. new text end

new text begin (a) Prior to the completion of a total maximum
daily load for an impaired water, the Pollution Control Agency may issue a permit for a
new discharger or an expanding discharger if it results in decreased loading to an impaired
water. Where a new discharger or an expanding existing discharger cannot effectively
implement zero discharge options, the agency may issue a permit if the increased loading
is offset by reductions from other sources of loading to the impaired water, so that there is
a net decrease in the pollutant loading of concern. The term "new discharger" is as defined
in Code of Federal Regulations, title 40, section 122.2.
new text end

new text begin (b) The legislature intends this subdivision to confirm and clarify the authority of the
pollution control agency to issue the authorized permits under prior law. The subdivision
must not be construed as a legislative interpretation within the meaning of Minnesota
Statutes, section 645.16, clause (8), or otherwise as the legislature's intent that the agency
did not have authority to issue such a permit under prior law.
new text end

Sec. 11.

Minnesota Statutes 2004, section 446A.051, is amended to read:


446A.051 PROJECT FINANCIAL ASSISTANCE.

The authority shall assist eligible governmental units in determining what grants or
loans under sections 446A.06new text begin,new text end deleted text beginanddeleted text end 446A.07new text begin, 446A.072, 446A.073, 446A.074, 446A.075,
and 446A.081
new text end
to apply for to finance projects and the manner in which the governmental
unit will pay for its portion of the project cost. new text beginIf 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 end The authority shall review the proposed financing for each
project certified by the agency to ascertain whether or not: (1) total financing of a project
is assured; and (2) the governmental unit's financial plan to pay for its portion of the
project cost is feasible.

Sec. 12.

Minnesota Statutes 2005 Supplement, section 446A.073, subdivision 1,
is amended to read:


Subdivision 1.

Program established.

new text beginWhen money is appropriated for grants under
this program,
new text end the authority must make grants to municipalities to cover up to one-half
the cost of wastewater treatment new text beginor stormwater new text endprojects 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).

Sec. 13.

Minnesota Statutes 2005 Supplement, section 446A.073, subdivision 2,
is amended to read:


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 authoritynew text begin, including a project schedule and cost
estimate for the work necessary to comply with the point source wasteload allocation
new text end. deleted text beginIn
accordance with section 116.182,
deleted text end The Pollution Control Agency shall:

(1) new text beginin accordance with section 116.182, new text endcalculate 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 deleted text beginapproved projectsdeleted text end to the authoritynew text begin those projects that have
plans and specifications approved under section 115.03, subdivision 1, paragraph (f)
new text end.

Sec. 14.

new text begin [446A.074] CLEAN WATER LEGACY PHOSPHORUS REDUCTION
GRANTS.
new text end

new text begin Subdivision 1. new text end

new text begin Creation of account. new text end

new text begin A clean water legacy capital improvement
account is created in the bond proceeds fund. 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 fund, including interest earned, is appropriated to the
authority for the purposes of this section.
new text end

new text begin Subd. 2. new text end

new text begin Grants. new text end

new text begin The authority shall award grants from the clean water legacy
capital improvement 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:
new text end

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

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

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

new text begin Subd. 3. new text end

new text begin Eligible capital costs. new text end

new text begin Eligible capital costs for phosphorus reduction
grants under subdivision 4, paragraph (a), include 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.
new text end

new text begin Subd. 4. new text end

new text begin Grant amounts and priorities. new text end

new text begin (a) Priority must be given to projects that
start construction on or after July 1, 2006. If a facility's plan for a project is approved
by the agency before July 1, 2010, the amount of the grant is 75 percent of the eligible
capital cost of the project. If a facility's plan for a project is approved by the agency on
or after July 1, 2010, the amount of the grant is 50 percent of the eligible capital cost of
the project. Priority in awarding grants under this paragraph must be based on the date of
approval of the facility's plan for the project.
new text end

new text begin (b) Projects that meet the eligibility requirements in subdivision 2 and have started
construction before July 1, 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
agency approval of the facility plan.
new text end

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

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

new text begin Subd. 5. new text end

new text begin Fees. new text end

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

Sec. 15.

new text begin [446A.075] SMALL COMMUNITY WASTEWATER TREATMENT
PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Creation of account. new text end

new text begin 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 end

new text begin Subd. 2. new text end

new text begin Loans and grants. new text end

new text begin (a) The authority shall award loans as provided in
paragraph (b) and grants as provided in paragraphs (c) and (d) to governmental units from
the small community wastewater treatment account for projects to replace noncomplying
individual sewage treatment systems with a community wastewater treatment system or
systems meeting the requirements of section 115.55. A governmental unit receiving a
loan or loan and grant from the account shall own the individual wastewater treatment
systems or community wastewater treatment systems built under the program and shall be
responsible, either directly or through a contract with a private vendor, for all inspections,
maintenance, and repairs necessary to ensure proper operation of the systems.
new text end

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

new text begin (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 section 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.
new text end

new 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.
new text end

new text begin Subd. 3. new text end

new text begin Project priority list. new text end

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

new text begin Subd. 4. new text end

new text begin Applications. new text end

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

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

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

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

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

new text begin Subd. 5. new text end

new text begin Awards. new text end

new text begin The authority shall award loans or loans and grants as provided in
subdivision 2 to governmental units with approved applications based on their ranking
on the agency's project priority list. The total amount awarded 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.
new text end

new text begin Subd. 6. new text end

new text begin Loan terms and conditions. new text end

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

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

new text begin (2) loans shall carry an interest rate of one percent;
new text end

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

new text begin (4) a governmental unit receiving a loan must establish a dedicated source or sources
of revenues for repayment of the loan and must issue a general obligation note to the
authority for the full amount of the loan; and
new text end

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

new text begin Subd. 7. new text end

new text begin Special assessment deferral. new text end

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

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

new text begin Subd. 8. new text end

new text begin Eligible costs. new text end

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

new text begin Subd. 9. new text end

new text begin Disbursements. new text end

new text begin Loan 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.
new text end

new text begin Subd. 10. new text end

new text begin Audits. new text end

new text begin A governmental unit receiving a loan under this section must
annually provide to the authority for the term of the loan a copy of its annual independent
audit or, if the governmental unit is not required to prepare an independent audit, a copy of
the annual financial reporting form it provides to the state auditor.
new text end

Sec. 16. new text beginPHOSPHORUS RULE; REPORT.
new text end

new text begin (a) Notwithstanding any law to the contrary, a provision of a Minnesota Pollution
Control Agency rule establishing new or changed limits on phosphorus discharges from a
new or existing wastewater facility must not take effect until July 1, 2007.
new text end

new text begin (b) The Minnesota Pollution Control Agency must report to the legislature by
February 1, 2007, on a proposed or adopted rule changing limits on phosphorus discharges.
The report must address scientific justification for the new rule and the impact the proposed
or adopted rule will have on needed funding to implement the Clean Water Legacy Act.
new text end

Sec. 17. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 1 to 16 are effective the day following final enactment.
new text end