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Key: (1) language to be deleted (2) new language

                            CHAPTER 141-S.F.No. 1626 
                  An act relating to municipalities; making certain 
                  changes regarding storm and sanitary sewer 
                  authorizations; amending Minnesota Statutes 2002, 
                  section 444.075, subdivisions 1, 1a, 2, 3. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2002, section 444.075, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of The 
        definitions in this subdivision apply in this section, the term. 
           (a) "Municipality" means a home rule charter or statutory 
        city, except a city of the first class, or a town that is not in 
        an orderly annexation process on October 3, 1989.  The term 
           (b) "Governing body" means the town board with respect to 
        towns. 
           (c) "Waterworks" means waterworks systems, including mains, 
        valves, hydrants, service connections, wells, pumps, reservoirs, 
        tanks, treatment plants, and other appurtenances of a waterworks 
        system. 
           (d) "Sanitary sewer" means sanitary sewer systems, 
        including sewage treatment works, disposal systems, and other 
        facilities for disposing of sewage, industrial waste, or other 
        wastes. 
           (e) "Storm sewer" means storm sewer systems, including 
        mains, holding areas and ponds, and other appurtenances and 
        related facilities for the collection and disposal of storm 
        water. 
           (f) "Facilities" means and includes waterworks, sanitary 
        sewer and storm sewer systems, or any portion or portions 
        thereof. 
           Sec. 2.  Minnesota Statutes 2002, section 444.075, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [AUTHORIZATION.] Any municipality may build, 
        construct, reconstruct, repair, enlarge, improve, or in any 
        other manner obtain 
           (i) waterworks systems, including mains, valves, hydrants, 
        service connections, wells, pumps, reservoirs, tanks, treatment 
        plants, and other appurtenances of a waterworks system, 
           (ii) sewer systems, sewage treatment works, disposal 
        systems, and other facilities for disposing of sewage, 
        industrial waste, or other wastes, and 
           (iii) storm sewer systems, including mains, holding areas 
        and ponds, and other appurtenances and related facilities for 
        the collection and disposal of storm water, all hereinafter 
        called facilities, and maintain and operate the facilities 
        inside or outside its corporate limits, and acquire by gift, 
        purchase, lease, condemnation, or otherwise any and all land and 
        easements required for that purpose.  The authority hereby 
        granted is in addition to all other powers with reference to the 
        facilities otherwise granted by the laws of this state or by the 
        charter of any municipality.  The authority regarding storm 
        sewers granted in clause (iii) to municipalities which have 
        territory within a watershed which has adopted a watershed plan 
        pursuant to section 103B.231 shall be exercised, with respect to 
        facilities acquired following the adoption of the watershed 
        plan, only for facilities which are not inconsistent with the 
        watershed plan.  The authority regarding storm sewers granted in 
        clause (iii) to municipalities which have adopted local water 
        management plans pursuant to section 103B.235 shall be 
        exercised, with respect to facilities acquired following the 
        adoption of a local plan, only for facilities which are not 
        inconsistent with the local plan.  Counties, except counties in 
        the seven-county metropolitan area, shall have the same 
        authority granted to municipalities by this subdivision except 
        for areas of the county organized into cities and areas of the 
        county incorporated within a sanitary district established by 
        special act of the legislature. 
           Sec. 3.  Minnesota Statutes 2002, section 444.075, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FINANCING.] For the purpose of paying the cost 
        of building, constructing, reconstructing, repairing, enlarging, 
        improving, or in other manner obtaining the facilities or any 
        portion of them, and of obtaining and complying with permits 
        required by law, a municipality or county may issue and sell its 
        general obligations, which may be made payable primarily from 
        taxes or from special assessments to be levied to pay the cost 
        of the facilities or from net revenues derived from water or 
        sewer facilities service charges or from other nontax revenues 
        pledged for their payment under charter or other statutory 
        authority, or from two or more of the sources; or it may issue 
        special obligations, payable solely from taxes or special 
        assessments or from revenues, or from two or more of the 
        sources.  Real estate tax revenues should be used only, and then 
        on a temporary basis, to pay general or special obligations when 
        the other revenues are insufficient to meet the obligations.  
        All obligations shall be issued and sold in accordance with 
        chapter 475.  When special assessments are pledged for the 
        payment of the obligations, they shall be authorized and issued 
        in accordance with the provisions of chapter 429, or of the 
        city's charter if it authorizes these obligations and the 
        governing body determines to proceed under the charter.  When 
        net revenues are pledged to the payment of the obligations, 
        together with or apart from taxes and special assessments, the 
        pledge shall be made in accordance with the provisions of 
        subdivision 3.  
           Sec. 4.  Minnesota Statutes 2002, section 444.075, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CHARGES; NET REVENUES.] (a) To pay for the 
        construction, reconstruction, repair, enlargement, improvement, 
        or other obtainment and, the maintenance, operation and use of 
        the facilities, and of obtaining and complying with permits 
        required by law, the governing body of a municipality or county 
        may impose just and equitable charges for the use and for the 
        availability of the facilities and for connections with them and 
        make contracts for the charges as provided in this section.  The 
        charges may be imposed with respect to facilities made available 
        by agreement with other municipalities, counties or private 
        corporations or individuals, as well as those owned and operated 
        by the municipality or county itself.  
           (b) Charges made for service directly rendered shall be as 
        nearly as possible proportionate to the cost of furnishing the 
        service, and. 
           Subd. 3a.  [SANITARY SEWER CHARGES.] Sanitary sewer charges 
        may be fixed:  
           (1) on the basis of water consumed,; or 
           (2) by reference to a reasonable classification of the 
        types of premises to which service is furnished,; or 
           (3) by reference to the quantity, pollution qualities and 
        difficulty of disposal of sewage and storm water produced,; or 
           (4) on any other equitable basis including, but without 
        limitation, any combination of those equitable bases referred to 
        above in clauses (1) to (3), but specifically excluding use of 
        the basis referred to in subdivision 3b, clause (1); and 
        otherwise without limit. 
           Subd. 3b.  [STORM SEWER CHARGES.] Storm sewer charges may 
        be fixed: 
           (1) by reference to the square footage of the property 
        charged, adjusted for a reasonable calculation of the storm 
        water runoff; or 
           (2) by reference to a reasonable classification of the 
        types of premises to which service is furnished; or 
           (3) by reference to the quantity, pollution qualities, and 
        difficulty of disposal of storm water runoff produced; or 
           (4) on any other equitable basis, including any combination 
        of equitable bases referred to in clauses (1) to (3), but 
        specifically excluding use of the basis referred to in 
        subdivision 3a, clause (1); and otherwise without limit.  
           Subd. 3c.  [MINIMUM CHARGES.] (a) Minimum charges for the 
        availability of water or sewer service may be imposed for all 
        premises abutting on streets or other places where municipal or 
        county water mains or sewers are located, whether or not 
        connected to them.  
           (b) Minimum charges or user charges collected for 
        waterworks, sanitary sewers, or storm sewers must be used only 
        to pay for items for which charges are authorized in subdivision 
        3.  
           Subd. 3d.  [FACILITIES' CONNECTION CHARGES.] Charges for 
        connections to the facilities may in the discretion of the 
        governing body be fixed by reference to the portion of the cost 
        of connection which has been paid by assessment of the premises 
        to be connected, in comparison with other premises, as well as 
        the cost of making or supervising the connection.  
           Subd. 3e.  [WHO MAY BE CHARGED; UNPAID CHARGES.] The 
        governing body may make the charges a charge against the owner, 
        lessee, occupant or all of them and may provide and covenant for 
        certifying unpaid charges to the county auditor with taxes 
        against the property served for collection as other taxes are 
        collected.  
           Subd. 3f.  [TAX LEVIES FOR PUBLIC CHARGES.] The governing 
        body may fix and levy taxes for the payment of reasonable 
        charges to the municipality or county itself for the use and 
        availability of the facilities for fire protection, for 
        maintaining sanitary conditions, and for proper storm water 
        drainage in and for public buildings, parks, streets, and other 
        public places.  
           Subd. 3g.  [REASONABLENESS OF CHARGES.] In determining the 
        reasonableness of the charges to be imposed, the governing body 
        may give consideration to all costs of the establishment, 
        operation, maintenance, depreciation and necessary replacements 
        of the system, and of improvements, enlargements and extensions 
        necessary to serve adequately the territory of the municipality 
        or county including the principal and interest to become due on 
        obligations issued or to be issued and the costs of obtaining 
        and complying with permits required by law. 
           Subd. 3h.  [WHEN CHARGES ARE NOT UNREASONABLE.] When net 
        revenues have been appropriated to the payment of the cost of 
        the establishment, or of any specified replacement, improvement, 
        enlargement or extension, or to pay the principal and interest 
        due on obligations to be issued for such purpose, no charges 
        imposed to produce net revenues adequate for the purpose shall 
        be deemed unreasonable by virtue of the fact that the project to 
        be financed has not been commenced or completed, if proceedings 
        for it are taken with reasonable dispatch and the project, when 
        completed, may be expected to make service available to the 
        premises charged which will have a value reasonably commensurate 
        with the charges.  
           Subd. 3i.  [COLLECTIONS FIRST FOR CURRENT COSTS.] All 
        charges, when collected, and all moneys received from the sale 
        of any facilities or equipment or any by-products, shall be 
        placed in a separate fund, and used first to pay the normal, 
        reasonable and current costs of operating and maintaining the 
        facilities.  
           Subd. 3j.  [EXCESS NET REVENUES MAY BE USED FOR DEBT.] The 
        net revenues received in excess of the costs may be pledged by 
        resolutions of the governing body, or may be used though not so 
        pledged, for the payment of principal and interest on 
        obligations issued as provided in subdivision 2, or to pay the 
        portion of the principal and interest as may be directed in the 
        resolutions, and net revenues derived from any facilities of the 
        types listed in subdivision 1a, whether or not financed by the 
        issuance of the obligations, may be pledged or used to pay 
        obligations issued for other facilities of the same types.  
           Subd. 3k.  [COVENANTS TO SECURE DEBT PAYMENTS.] In 
        resolutions authorizing the issuance of either general or 
        special obligations and pledging net revenues to them, the 
        governing body may make covenants for the protection of holders 
        of the obligations and taxpayers of the municipality or county 
        as it deems necessary, including, but without limitation, a 
        covenant that the municipality or county will impose and collect 
        charges of the nature authorized by this section at the times 
        and in the amounts required to produce, together with any taxes 
        or special assessments designated as a primary source of payment 
        of the obligations, net revenues adequate to pay all principal 
        and interest when due on the obligations and to create and 
        maintain reserves securing the payments as may be provided in 
        the resolutions.  
           Subd. 3l.  [ENFORCEABILITY OF COVENANT.] When a covenant is 
        made it shall be enforceable by appropriate action on the part 
        of any holder of the obligations or any taxpayer of the 
        municipality or county in a court of competent jurisdiction, and 
        the obligations shall be deemed to be payable wholly from the 
        income of the system whose revenues are so pledged, within the 
        meaning of sections 475.51 and 475.58. 
           Sec. 5.  [EFFECTIVE DATE.] 
           Sections 1 to 4 are effective January 1, 2006, except that 
        the inclusion of cities of the first class in the definition of 
        municipality in Minnesota Statutes, section 444.075, subdivision 
        1, paragraph (a), is effective August 1, 2004. 
           Presented to the governor March 25, 2004 
           Signed by the governor March 26, 2004, 6:50 p.m.