Minnesota Session Laws - 2009, Regular Session

CHAPTER 16--S.F.No. 1329

An act

relating to the Public Facilities Authority; providing for use of federal funds allocated to the state by the American Recovery and Reinvestment Act; providing for clean water and drinking water loans and grants; appropriating money;

amending Minnesota Statutes 2008, sections 446A.07, subdivision 7; 446A.081, subdivision 8.

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

Section 1.

Minnesota Statutes 2008, section 446A.07, subdivision 7, is amended to read:

Subd. 7.

Loan conditions.

new text begin (a) new text end When making loans from the new text begin clean water new text end revolving fund, the authority shall comply with the conditions of the Federal Water Pollution Control Act, including deleted text begin : deleted text end new text begin the criteria in this subdivision. new text end

deleted text begin (a) deleted text end new text begin (b) new text end Loans must be made at or below market interest rates, including interest-free loans, deleted text begin at deleted text end new text begin for new text end terms not to exceed deleted text begin 20 years deleted text end new text begin those allowed under the federal Water Pollution Control Act new text end .

deleted text begin (b) deleted text end new text begin (c) new text end The annual principal and interest payments must begin no later than one year after completion of deleted text begin a deleted text end new text begin the new text end project. Loans must be fully amortized no later than 20 years after project completion new text begin , unless the recipient's average annual residential wastewater system cost after completion of the project would exceed 1.4 percent of median household income in the recipient governmental unit or entity, in which case the loan must be fully amortized no later than 30 years after project completion new text end .

deleted text begin (c) deleted text end new text begin (d) new text end An eligible recipient shall establish a dedicated source of revenue for repayment of the loan.

deleted text begin (d) deleted text end new text begin (e) new text end The fund must be credited with all payments of principal and interest on all loans.

deleted text begin (e) deleted text end new text begin (f) new text end A loan may not be used to pay operating expenses or current obligations, unless specifically allowed by the Federal Water Pollution Control Act.

deleted text begin (f) deleted text end new text begin (g) new text end A loan made by the authority must be secured by notes or bonds of the eligible recipient of the loan.

Sec. 2.

Minnesota Statutes 2008, section 446A.081, subdivision 8, is amended to read:

Subd. 8.

Loan conditions.

(a) When making loans from the drinking water revolving fund, the authority shall comply with the conditions of the federal Safe Drinking Water Act, including the criteria in deleted text begin paragraphs (b) to (e) deleted text end new text begin this subdivision new text end .

(b) Loans must be made at or below market interest rates, including zero interest loans, for terms not to exceed deleted text begin 20 years deleted text end new text begin those allowed under the federal Safe Drinking Water Act new text end .

(c) The annual principal and interest payments must begin no later than one year after completion of the project. Loans must be amortized no later than 20 years after project completion new text begin , unless the recipient's average annual residential drinking water system cost after completion of the project would exceed 1.4 percent of median household income in the recipient governmental unit or entity, in which case the loan must be fully amortized no later than 30 years after project completion new text end .

(d) A loan recipient must identify and establish a dedicated source of revenue for repayment of the loan, and provide for a source of revenue to properly operate, maintain, and repair the water system.

(e) The fund must be credited with all payments of principal and interest on all loans, except the costs as permitted under section 446A.04, subdivision 5, paragraph (a).

(f) A loan may not be used to pay operating expenses or current obligations, unless specifically allowed by the federal Safe Drinking Water Act.

(g) A loan made by the authority must be secured by notes or bonds of the governmental unit and collateral to be determined by the authority for private borrowers.

Sec. 3.

new text begin FEDERAL STIMULUS MONEY FOR CLEAN WATER. new text end

new text begin Subdivision 1. new text end

new text begin Clean water revolving fund loans and grants. new text end

new text begin Pursuant to Public Law 111-5, the American Recovery and Reinvestment Act of 2009, referred to in this section as "the Act," federal money allocated under the Act for capitalization grants for clean water state revolving funds must be credited to the clean water revolving fund under Minnesota Statutes, section 446A.07, for the purpose of making loans and grants to eligible projects as provided in this section, Minnesota Statutes, section 446A.07, and the Act. Authorization to make loans and grants under this section expires when all money received under the Act and credited to the clean water revolving fund has been expended. For the purpose of this section, the term "grant" includes principal forgiveness that is granted at the time a loan is made. new text end

new text begin Subd. 2. new text end

new text begin Grants required. new text end

new text begin Not less than 50 percent of the money received under the Act and credited to the clean water revolving fund must be used to provide grants to eligible projects as provided in subdivision 4, or to provide grants to eligible projects for up to 65 percent of the eligible grant need identified by the United States Department of Agriculture Rural Economic and Community Development Program. new text end

new text begin Subd. 3. new text end

new text begin Green infrastructure. new text end

new text begin To the extent that there are sufficient eligible project applications, not less than 20 percent of the money received under the Act and credited to the clean water revolving fund must be used for grants and loans for projects to address green infrastructure, water or energy efficiency improvements, or other environmentally innovative activities. Grants made under this subdivision count toward the 50 percent requirement in subdivision 2. new text end

new text begin Subd. 4. new text end

new text begin Grant and loan terms. new text end

new text begin (a) Grants under this section must be based on as-bid costs and awarded to eligible projects as provided in this subdivision in the order that projects are certified by the Pollution Control Agency and as-bid costs are submitted to the Public Facilities Authority. new text end

new text begin (b) Except for projects that receive a grant under paragraph (d), a base grant must be provided for 20 percent of the amount approved to be paid from the clean water revolving fund, up to a maximum of $2,000,000 per project. new text end

new text begin (c) Except for projects that receive a grant under paragraph (d), a supplemental grant must be provided if the average annual residential wastewater system cost after completion in the project would otherwise exceed 1.4 percent of the median household income in the recipient governmental unit or entity. In determining whether the average annual residential wastewater system cost would exceed 1.4 percent, the authority must consider the total costs associated with building, operating, and maintaining the wastewater system, including debt service and operation and maintenance costs. The amount of the supplemental grant is equal to 80 percent of the amount needed to reduce the average annual residential wastewater system cost to 1.4 percent of median household income in the recipient, to a maximum of $4,000,000 or $15,000 per connection, whichever is less. The amount of the supplemental grant must not exceed 80 percent of the total amount approved to be paid from the clean water revolving fund. new text end

new text begin (d) For eligible projects to address green infrastructure, water or energy efficiency improvements, or other environmentally innovative activities, a grant must be provided for 25 percent of the amount approved to be paid from the clean water revolving fund, to a maximum of $2,000,000 per project. new text end

Sec. 4.

new text begin FEDERAL STIMULUS MONEY FOR DRINKING WATER. new text end

new text begin Subdivision 1. new text end

new text begin Drinking water revolving fund loans and grants. new text end

new text begin Pursuant to Public Law 111-5, the American Recovery and Reinvestment Act of 2009, federal money allocated under the Act for capitalization grants for drinking water state revolving funds must be credited to the drinking water revolving fund under Minnesota Statutes, section 446A.081, for the purpose of making loans and grants to eligible projects as provided in this section, Minnesota Statutes, section 446A.081, and the Act. Authorization to make loans and grants under this section expires when all money received under the Act and credited to the drinking water revolving fund has been expended. For the purpose of this section, the term "grant" includes principal forgiveness that is granted at the time a loan is made. new text end

new text begin Subd. 2. new text end

new text begin Grants required. new text end

new text begin Not less than 50 percent of the money received under the Act and credited to the drinking water state revolving fund must be used to provide grants to eligible projects as provided in subdivision 4, or to provide grants to eligible projects for up to 65 percent of the eligible grant need identified by the United States Department of Agriculture Rural Economic and Community Development Program. new text end

new text begin Subd. 3. new text end

new text begin Green infrastructure. new text end

new text begin To the extent that there are sufficient eligible project applications, not less than 20 percent of the money received under the Act and credited to the drinking water revolving fund must be used for grants and loans for projects to address green infrastructure, water or energy efficiency improvements, or other environmentally innovative activities. Grants made under this subdivision count toward the 50 percent requirement in subdivision 2. new text end

new text begin Subd. 4. new text end

new text begin Grant and loan terms. new text end

new text begin (a) Grants under this section must be based on as-bid costs and awarded as provided in this subdivision to eligible projects in the order that projects are certified by the Department of Health and as-bid costs are submitted to the Public Facilities Authority. new text end

new text begin (b) Except for projects that receive a grant under paragraph (d) or (e), a base grant must be provided for 20 percent of the amount approved to be paid from the drinking water revolving fund, up to a maximum of $2,000,000 per project. new text end

new text begin (c) Except for projects that receive a grant under paragraph (d) or (e), a supplemental grant must be provided if the average annual residential drinking water system cost after completion of the project would otherwise exceed 1.4 percent of the median household income in the recipient governmental unit or entity. In determining whether the average annual residential drinking water system cost would exceed 1.4 percent, the authority must consider the total costs associated with building, operating and maintaining the drinking water system, including debt service and operation and maintenance costs. The amount of the supplemental grant is equal to 80 percent of the amount needed to reduce the average annual residential drinking water system cost to 1.4 percent of median household income in the recipient, to a maximum of $4,000,000 or $15,000 per connection. The amount of the supplemental grant must not exceed 80 percent of the total amount approved to be paid from the drinking water revolving fund. new text end

new text begin (d) For eligible projects to address green infrastructure, water or energy efficiency improvements, or other environmentally innovative activities, a grant must be provided for 25 percent of the amount approved to be paid from the drinking water revolving fund, to a maximum of $2,000,000 per project. new text end

new text begin (e) For projects needed to comply with national primary drinking water standards for an existing community public water system or for an existing noncommunity public water system, a grant must be provided for 50 percent of the project cost, up to a maximum of $10,000. Total grants approved under this paragraph must not exceed $250,000. new text end

Sec. 5.

new text begin EFFECTIVE DATE. new text end

new text begin This act is effective the day following final enactment. new text end

Presented to the governor April 7, 2009

Signed by the governor April 8, 2009, 3:12 p.m.