1999 Minnesota Statutes

     446A.072 Wastewater infrastructure funding program. 

    Subdivision 1.    Establishment of program.  The 
 authority will establish a wastewater infrastructure funding 
 program to provide supplemental assistance to municipalities 
 applying for funding under the water pollution control revolving 
 loan program or the United States Department of Agriculture 
 Rural Economic and Community Development's (USDA/RECD) Water and 
 Waste Disposal Loans and Grants program for the design and 
 planning, improvements to, and construction of municipal 
 wastewater treatment systems. 

    Subd. 2.    Type of supplemental assistance.  
 Supplemental assistance shall be in the form of grants.  If one 
 year after the initiation of operation of the project, the 
 project does not meet the operational performance standards 
 established by the agency, the grant must be repaid.  Grant 
 repayments shall be deferred upon request from the commissioner 
 of the agency for six-month periods, provided the commissioner 
 has determined that satisfactory progress is being made to 
 achieve project performance or is developing or implementing a 
 corrective action plan. 

    Subd. 3.    Program administration.  The authority shall 
 provide supplemental assistance, as provided in subdivision 2, 
 to municipalities demonstrating financial need, as provided in 
 subdivision 4, whose projects have been certified to the 
 authority by the commissioner of the agency.  The authority 
 shall reserve supplemental assistance for projects in order of 
 their priority ranking established by the agency. 

    Subd. 4.    Funding level.  (a) The authority shall 
 provide supplemental assistance for essential project component 
 costs as certified by the commissioner of the pollution control 
 agency under section 116.182, subdivision 4.  

    (b) Except as provided in paragraph (c), a municipality may 
 not receive more than $4,000,000 under this section unless 
 specifically approved by law.  If a project would be eligible 
 for more than $4,000,000 under paragraph (e), the authority 
 shall include a description of the project and the financing 
 plan in its report on needs in subdivision 11. 

    (c) A sanitary district or multijurisdictional wastewater 
 treatment district may receive an additional $1,000,000 for each 
 municipality participating up to a maximum grant of $8,000,000, 
 unless a higher amount is specifically approved by law.  If a 
 project would be eligible for more than $8,000,000 under 
 paragraph (e), the authority shall include a description of the 
 project and the financing plan in its report on needs in 
 subdivision 11. 

    (d) The authority shall provide supplemental assistance for 
 up to one-half of the eligible grant funding level determined by 
 the United States Department of Agriculture Rural Development 
 funding for projects listed on the agency's project priority 
 list, in priority order.  For municipalities that are not 
 eligible for United States Department of Agriculture Rural 
 Development funding for wastewater, the authority shall provide 
 supplemental assistance for:  (1) essential project component 
 costs calculated by first determining the amount needed to 
 reduce a municipality's annual residential sewer costs to 1.4 
 percent of the municipality's median household income or $25 per 
 month per household, whichever is greater, and then multiplying 
 that amount by 80 percent to determine the actual award amount 
 to supplement loans under section 446A.07; and (2) up to 50 
 percent of the incremental costs specifically identified by the 
 agency as being attributable to more stringent wastewater 
 standards required to protect outstanding resource value waters 
 or outstanding international resource value waters. 

    (e) Notwithstanding paragraph (b), in the event that a 
 municipality's monthly residential sewer service charges average 
 above $50, the authority will provide 90 percent of the grant 
 amount needed to reduce the average monthly sewer service charge 
 to $50, provided the project is ranked in the top 50 percentile 
 of the agency's intended use plan. 

    (f) The authority shall provide supplemental assistance to 
 a municipality that would not otherwise qualify for supplemental 
 assistance if: 

    (1) the municipality voluntarily accepts a sewer connection 
 from another governmental unit to serve residential, industrial, 
 or commercial developments that were completed before March 1, 
 1996, or are on lots whose plats were recorded before that date; 
 and 

    (2) fees charged by the municipality for the connection 
 must take into account state and federal grants used by the 
 municipality for the construction of the treatment plant. 

 The amount of supplemental assistance under this paragraph must 
 be sufficient to reduce debt service payments under section 
 446A.07 to an extent equivalent to a zero percent loan in an 
 amount up to the other governmental unit's project costs 
 necessary for connection.  Eligibility for supplemental 
 assistance under this paragraph ends three years after the 
 agency certifies that the connection has met the operational 
 performance standards established by the agency. 

    Subd. 4a. Repealed, 1998 c 404 s 84 

    Subd. 5.    Applications.  Applications for the 
 wastewater infrastructure funding program must be made to the 
 authority on forms prescribed by the authority and the agency 
 for the water pollution control revolving loan program.  The 
 commissioner of the pollution control agency shall determine if 
 the project meets the criteria in section 116.182.  The 
 commissioner of the pollution control agency shall certify 
 projects to the authority under section 116.182, and shall rank 
 the certified applications in accordance with section 116.182, 
 and determine the essential project component percentage for 
 each certified application. 

    Subd. 6.    Disbursements.  Disbursements made 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 and federal laws and rules governing the 
 payments. 

    Subd. 7.    Loan repayments.  All loan repayments 
 received by the authority under subdivision 2 must be used to 
 provide additional assistance under this section. 

    Subd. 8.    Eligibility.  A municipality is eligible 
 only after grant funding from other sources has been applied 
 for, obtained, rejected, or the authority has determined that 
 the potential funding is unlikely. 

    Subd. 9.    Loan limitation.  Supplemental assistance 
 may not be used to reduce the sewer service charges of a 
 significant wastewater contributor, or a single user that has 
 caused the need for the project or whose current or projected 
 flow and load exceed one-half of the current wastewater 
 treatment plant's capacity, unless the applicant can demonstrate 
 to the authority that the significant wastewater contributor 
 cannot pay its fair share.  Funding will not be provided for 
 projects that are not qualified for assistance or that would 
 violate the state's constitution or laws regarding the use of 
 funds appropriated for the program. 

    Subd. 10.    High cost projects.  The authority shall 
 not award supplemental assistance for projects in excess of 
 $10,000 per household unless the agency has ranked the project 
 in the top half of the project priority list.  

    Subd. 11.    Report on needs.  By October 15 of each 
 odd-numbered year, the authority, in conjunction with the 
 pollution control agency, shall prepare a report to the finance 
 division of the senate environment and natural resources 
 committee and the house environment and natural resources 
 finance committee on wastewater funding assistance needs of 
 municipalities under this section. 

    Subd. 12.    System replacement fund.  Each recipient of 
 assistance under this section shall establish a system 
 replacement fund setting aside a minimum of $.10 per 1,000 
 gallons of flow for major rehabilitation, expansion, or 
 replacement of the treatment plant at the end of its useful 
 life.  Money must remain in the account, for the life of the 
 loan associated with the supplemental assistance under this 
 section, unless use of the fund is approved by the authority for 
 major rehabilitation, expansion, or replacement of the treatment 
 plant.  Failure to maintain the fund will cancel the loan 
 forgiveness provided under subdivision 2. 

    Subd. 13.    Planning grants.  In order to determine the 
 feasibility of providing wastewater treatment in unsewered areas 
 and encourage multijurisdictional coordination, the authority 
 may provide grants to local governments to prepare preliminary 
 engineering plans and develop, as appropriate, intermunicipal 
 agreements, joint powers boards, or sanitary sewer districts.  
 Planning grants shall be equal to one-half of the eligible 
 engineering, legal, and administrative costs as determined by 
 the authority, up to a maximum of $50,000.  The authority shall 
 award planning grants based on the severity of the environmental 
 need and the potential for cooperation among local governments. 

    HIST: 1996 c 463 s 45; 1997 c 246 s 18; 1998 c 404 s 50-52; 
 1999 c 223 art 2 s 48 

*   NOTE:  The amendment to subdivision 4 by Laws 1999, chapter 
*223, article 2, section 48, is effective March 1, 2000.  Laws 
*1999, chapter 223, article 2, section 81.