HF 4736

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 04/08/2022 12:20pm

A bill for an act
relating to environment; requiring rulemaking to address certain climate issues for
wastewater and water supply projects; modifying water infrastructure funding
program; providing for lead service line replacement; appropriating money;
amending Minnesota Statutes 2020, sections 116.182, subdivision 5; 446A.072,
subdivision 5a; 446A.081, subdivision 12.

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

Section 1.

Minnesota Statutes 2020, section 116.182, subdivision 5, is amended to read:

Subd. 5.

Rules.

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 new text begin :
new text end

new text begin (i) new text end the type of project deleted text begin and deleted text end new text begin ;
new text end

new text begin (ii) new text end the degree of environmental impact deleted text begin , and deleted text end new text begin ;
new text end

new text begin (iii) new text end scenic and wild river standards;

new text begin (iv) climate resiliency; and
new text end

new text begin (v) reduction of greenhouse gas emissions; new text end and

(3) criteria for determining essential project components.

Sec. 2.

Minnesota Statutes 2020, section 446A.072, subdivision 5a, is amended to read:

Subd. 5a.

Type and amount of assistance.

(a) For a governmental unit receiving grant
funding from the USDA/RECD, the authority may provide assistance in the form of a grant
of up to 65 percent of the eligible grant need determined by USDA/RECD. A governmental
unit may not receive a grant under this paragraph for more than $5,000,000 per project or
$20,000 per existing connection, whichever is less, unless specifically approved by law.

(b) For a governmental unit receiving a loan from the clean water revolving fund under
section 446A.07, the authority may provide assistance under this section in the form of a
grant if the deleted text begin average annual residential wastewater system cost after completion of the project
would otherwise exceed 1.4 percent of the median household income of the project service
area. 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 existing wastewater debt
service, debt service on the eligible project cost, and operation and maintenance costs. Debt
service costs for the proposed project are calculated based on the maximum loan term
permitted for the clean water revolving fund loan under section 446A.07, subdivision 7.
The amount of the 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 project service area, to a maximum of $5,000,000 per project or $20,000 per existing
connection, whichever is less, unless specifically approved by law. The eligible project cost
is determined by multiplying the total project costs minus any other grants by the essential
project component percentage calculated under subdivision 3, paragraph (c), clause (1). deleted text end
new text begin project service area includes, in whole or in part, a census tract where at least three of the
following apply as determined using the most recently published data from the United States
Census Bureau or United States Centers for Disease Control and Prevention:
new text end

new text begin (1) 20 percent or more of the residents have income below the federal poverty thresholds;
new text end

new text begin (2) the tract has a United States Centers for Disease Control and Prevention Social
Vulnerability Index greater than 0.80;
new text end

new text begin (3) the upper limit of the lowest quintile of household income is less than the state upper
limit of the lowest quintile;
new text end

new text begin (4) the housing vacancy rate is greater than the state average; or
new text end

new text begin (5) the percent of the population receiving Supplemental Nutrition Assistance Program
(SNAP) benefits is greater than the state average.
new text end

In no case may the amount of the grant exceed 80 percent of the eligible project cost.

(c) For a governmental unit receiving a loan from the drinking water revolving fund
under section 446A.081, the authority may provide assistance under this section in the form
of a grant if the deleted text begin average annual residential drinking water system cost after completion of
the project would otherwise exceed 1.2 percent of the median household income of the
project service area. In determining whether the average annual residential drinking water
system cost would exceed 1.2 percent, the authority must consider the total costs associated
with building, operating, and maintaining the drinking water system, including existing
drinking water debt service, debt service on the eligible project cost, and operation and
maintenance costs. Debt service costs for the proposed project are calculated based on the
maximum loan term permitted for the drinking water revolving fund loan under section
446A.081, subdivision 8, paragraph (c). The amount of the grant is equal to 80 percent of
the amount needed to reduce the average annual residential drinking water system cost to
1.2 percent of median household income in the project service area, to a maximum of
$5,000,000 per project or $20,000 per existing connection, whichever is less, unless
specifically approved by law. The eligible project cost is determined by multiplying the
total project costs minus any other grants by the essential project component percentage
calculated under subdivision 3, paragraph (c), clause (1). deleted text end new text begin project service area includes, in
whole or in part, a census tract where at least three of the following apply as determined
using the most recently published data from the United States Census Bureau or United
States Centers for Disease Control and Prevention:
new text end

new text begin (1) 20 percent or more of the residents have income below the federal poverty thresholds;
new text end

new text begin (2) the tract has a United States Centers for Disease Control and Prevention Social
Vulnerability Index greater than 0.80;
new text end

new text begin (3) the upper limit of the lowest quintile of household income is less than the state upper
limit of the lowest quintile;
new text end

new text begin (4) the housing vacancy rate is greater than the state average; or
new text end

new text begin (5) the percent of the population receiving SNAP benefits is greater than the state average.
new text end

In no case may the amount of the grant exceed 80 percent of the eligible project cost.

(d) Notwithstanding the limits in paragraphs (a), (b), and (c), for a governmental unit
receiving supplemental assistance under this section after January 1, 2002, if the authority
determines that the governmental unit's 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 maximum award under this
section shall not be more than $25,000 per existing connection.

Sec. 3.

Minnesota Statutes 2020, section 446A.081, subdivision 12, is amended to read:

Subd. 12.

Rules of the department.

new text begin (a) new text end The Department of Health shall adopt rules
relating to the procedures for administration of the Department of Health's duties under the
act and this section.

new text begin (b) Rules that establish criteria for ranking new or upgrade water supply system projects
in order of priority must assign priority points for projects that:
new text end

new text begin (1) address climate resiliency; and
new text end

new text begin (2) reduce greenhouse gas emissions.
new text end

Sec. 4. new text begin INTERIM PROJECT PRIORITY LIST RECOMMENDATIONS;
POLLUTION CONTROL AGENCY.
new text end

new text begin Until rules factoring in climate resiliency and greenhouse gas emissions are adopted
under Minnesota Statutes, section 116.182, subdivision 5, the commissioner of the Pollution
Control Agency must review each project priority list developed and provide
recommendations to the Public Facilities Authority that prioritize the projects based on
climate resiliency and the reduction of greenhouse gas emissions. The Public Facilities
Authority must use the recommendations when developing the intended use plan developed
under Minnesota Statutes, section 446A.07, and when making other funding decisions
dependent on the Pollution Control Agency's project priority list.
new text end

Sec. 5. new text begin INTERIM PROJECT PRIORITY LIST RECOMMENDATIONS;
COMMISSIONER OF HEALTH.
new text end

new text begin Until rules factoring climate resiliency and greenhouse gas emissions are adopted under
Minnesota Statutes, section 446A.081, subdivision 12, the commissioner of health must
review each project priority list developed and provide recommendations to the Public
Facilities Authority that prioritize the projects based on climate resiliency and the reduction
of greenhouse gas emissions. The Public Facilities Authority must use the recommendations
when developing the intended use plan developed under Minnesota Statutes, section
446A.081, subdivision 5, and when making other funding decisions dependent on the
Department of Health's project priority list.
new text end

Sec. 6. new text begin LEAD SERVICE LINE REPLACEMENT; APPROPRIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

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

new text begin (b) "Community water system" has the meaning given in United States Code, title 42,
section 300f(15).
new text end

new text begin (c) "Lead service line" means a water supply connection that is made of or lined with a
material consisting of lead and that connects a water main to a building. A lead pigtail, lead
gooseneck, or other lead fitting is considered a lead service line, regardless of the composition
of the service line or other portions of piping to which the piece is attached. A galvanized
service line is considered a lead service line.
new text end

new text begin (d) "Service line" means any piping, tubing, or fitting connecting a water main to a
building. Service line includes the property owner side and the system side of a service line.
new text end

new text begin (e) "System side" means the portion of a service line that is owned by a community
water system.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin $2,335,000 in fiscal year 2023 is appropriated from the general
fund to the Metropolitan Council for grants to cities and other entities operating community
water systems to replace the privately owned portion of residential lead service lines. Grants
from this appropriation must first be used to supplement any federal money provided to the
state as principal forgiveness or grants under Public Law 117-58, the Infrastructure
Investment and Jobs Act, to cover 100 percent of the cost to replace privately owned
residential lead service lines.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility. new text end

new text begin Grants awarded under this section must be used to replace or partially
replace lead service lines within census tracts where at least three of the following apply
using the most recently published data from the United States Census Bureau or United
States Centers for Disease Control and Prevention:
new text end

new text begin (1) 20 percent or more of the residents have income below the federal poverty thresholds;
new text end

new text begin (2) the tract has a United States Centers for Disease Control and Prevention Social
Vulnerability Index greater than 0.80;
new text end

new text begin (3) the upper limit of the lowest quintile of household income is less than the state upper
limit of the lowest quintile;
new text end

new text begin (4) the housing vacancy rate is greater than the state average; or
new text end

new text begin (5) the percent of the population receiving Supplemental Nutrition Assistance Program
(SNAP) benefits is greater than the state average.
new text end

new text begin Subd. 4. new text end

new text begin Prevailing wage. new text end

new text begin Laborers and mechanics performing work on a project funded
by a grant under this section, including removal of lead service lines and installation of
replacement service lines, must be paid the prevailing wage rate for the work as defined in
Minnesota Statutes, section 177.42, subdivision 6. The project is subject to the requirements
and enforcement provisions of Minnesota Statutes, sections 177.30 and 177.41 to 177.45.
new text end