2005 Minnesota Statutes

CHAPTER 446A. Public facilities authority

     446A.01 Minnesota Public Facilities Authority Act. 

    This chapter may be cited as the "Minnesota Public 
 Facilities Authority Act." 

    HIST: 1987 c 386 art 3 s 18; 1999 c 86 art 1 s 69 

     446A.02 Definitions. 

    Subdivision 1.    Applicability.  For the purposes of 
 this chapter, the terms in this section have the meanings given 
 them. 

    Subd. 1a.    Agency.  "Agency" means the Minnesota 
 Pollution Control Agency. 

    Subd. 2.    Authority.  "Authority" means the Minnesota 
 Public Facilities Authority. 

    Subd. 3.    Commissioner.  "Commissioner" means the 
 commissioner of employment and economic development. 

    Subd. 4.    Federal Water Pollution Control Act.  
 "Federal Water Pollution Control Act" means the Federal Water 
 Pollution Control Act, as amended, United States Code, title 33, 
 sections 1251 et seq. 

    Subd. 5.    Governmental unit.  "Governmental unit" 
 means a state agency, home rule charter or statutory city, 
 county, sanitary district, or other governmental subdivision. 

    Subd. 6.    Project.  "Project" means the acquisition, 
 construction, improvement, expansion, repair, or rehabilitation 
 of all or part of any structure, facility, or equipment 
 necessary for a wastewater treatment system or water supply 
 system. 

    HIST: 1987 c 312 art 1 s 26 subd 2; 1987 c 386 art 3 s 19; 
 1989 c 354 s 3; 1994 c 632 art 2 s 40,41; 1Sp2003 c 4 s 1 

     446A.03 Minnesota Public Facilities Authority. 

    Subdivision 1.    Membership.  The Minnesota Public 
 Facilities Authority consists of the commissioner of employment 
 and economic development, the commissioner of finance, the 
 commissioner of the Pollution Control Agency, the commissioner 
 of agriculture, the commissioner of health, and the commissioner 
 of transportation. 

    Subd. 2.    Chair; other officers.  The commissioner of 
 employment and economic development shall serve as the chair and 
 chief executive officer of the authority.  The authority may 
 elect other officers as necessary from its members. 

    Subd. 3. Repealed, 1994 c 632 art 2 s 67 

    Subd. 3a.    Delegation.  In addition to any powers to 
 delegate that members of the authority have as commissioners, 
 they may delegate to the commissioner of employment and economic 
 development their responsibilities as members of the authority 
 for reviewing and approving financing of eligible projects that 
 have been certified to the authority. 

    Subd. 4.    Board actions.  (a) A majority of the 
 authority, excluding vacancies, constitutes a quorum to conduct 
 its business, to exercise its powers, and for all other purposes.

    (b) The board may conduct its business by any technological 
 means available, including teleconference calls or interactive 
 video, that allows for an interaction between members.  If a 
 meeting is conducted under this paragraph, a specific location 
 must be available for the public to attend the meeting and at 
 least one member must be present at that location. 

    Subd. 5.    Executive director.  The commissioner shall 
 employ, with the concurrence of the authority, an executive 
 director.  The director shall perform duties that the authority 
 may require in carrying out its responsibilities.  

    Subd. 6.    Administrative services.  The commissioner 
 shall provide administrative services to the authority.  

    Subd. 7.    Personal liability.  Members and officers of 
 the authority are not liable personally for any debt or 
 obligation of the authority.  

    HIST: 1987 c 186 s 15; 1987 c 312 art 1 s 26 subd 2; 1987 c 
 386 art 3 s 20; 1991 c 238 art 1 s 16; 1993 c 163 art 1 s 30; 
 1993 c 327 s 17; 1994 c 632 art 2 s 42,43; 1995 c 232 s 8; 1997 
 c 141 s 8; 1Sp2003 c 4 s 1 

     446A.04 Powers; duties. 

    Subdivision 1.    Bylaws; rules.  The authority shall 
 adopt bylaws for its organization and internal management.  The 
 commissioner may adopt rules covering the authority's 
 operations, properties, and facilities. 

    Subd. 2.    Power to sue; enter contracts.  The 
 authority may sue and be sued.  The authority may make and enter 
 into contracts, leases, and agreements necessary to perform its 
 duties and exercise its powers. 

    Subd. 3.    Gifts; grants.  The authority may apply for, 
 accept, and disburse gifts, grants, loans, or other property 
 from the United States, the state, private sources, or any other 
 source for any of its purposes.  Money received by the authority 
 under this subdivision must be deposited in the state treasury 
 and is appropriated to the authority to carry out its duties. 

    Subd. 4.    Contract for services.  The authority may 
 retain or contract for the services of accountants, financial 
 advisors, and other consultants or agents needed to perform its 
 duties and exercise its powers. 

    Subd. 5.    Fees.  (a) The authority may set and collect 
 fees for costs incurred by the authority for audits, arbitrage 
 accounting, and payment of fees charged by the State Board of 
 Investment.  The authority may also set and collect fees for 
 costs incurred by the commissioner, the Department of Health, 
 the Pollution Control Agency, and the Department of 
 Transportation, including costs for personnel and administrative 
 services, for financings and the establishment and maintenance 
 of reserve funds.  Fees charged directly to borrowers or 
 grantees upon executing a loan or grant agreement must not 
 exceed one-half of one percent of the loan or grant amount.  
 Servicing fees assessed to loan repayments must not exceed two 
 percent of the loan repayment.  The disposition of fees 
 collected for costs incurred by the authority is governed by 
 section 446A.11, subdivision 13.  The authority shall enter into 
 interagency agreements to transfer funds into appropriate 
 administrative accounts established for fees collected under 
 this subdivision for costs incurred by the commissioner, the 
 Department of Health, or the Pollution Control Agency.  Fees 
 collected under this subdivision for costs incurred by the 
 commissioner of transportation must be credited to the fund or 
 account which is the source of the loan to which the fees are 
 related. 

    (b) The authority shall annually report to the chairs of 
 the finance and appropriations committees of the legislature on: 

    (1) the amount of fees collected under this subdivision for 
 costs incurred by the authority; 

    (2) the purposes for which the fee proceeds have been 
 spent; and 

    (3) the amount of any remaining balance of fee proceeds. 

    Subd. 6.    Property.  The authority may acquire, 
 encumber, hold, and convey through lease, purchase, gift, or 
 otherwise, any real or personal property. 

    Subd. 7.    In general.  The authority has all the 
 powers necessary and convenient to carry out its duties under 
 this chapter. 

    HIST: 1987 c 386 art 3 s 21; 1988 c 546 s 1,2; 1992 c 601 s 
 11; 1997 c 141 s 9; 1997 c 200 art 5 s 2; 1999 c 86 art 1 s 70; 
 2005 c 20 art 1 s 38 

     446A.05 Project loans. 

    Subdivision 1.    Loans and loan purchases.  The 
 authority may make and contract to make loans to governmental 
 units to finance projects that the governmental unit may 
 construct or acquire or may acquire or contract to acquire notes 
 and bonds issued by governmental units to finance those 
 projects.  A loan may not be used to pay current expenses or 
 obligations, except for temporary financing.  A loan made by the 
 authority must be secured by notes or bonds of the borrowing 
 governmental unit. 

    Subd. 2.    Rules.  The commissioner may adopt rules 
 governing loans awarded under this section. 

    HIST: 1987 c 386 art 3 s 22; 1988 c 546 s 3 

     446A.051 Project financial assistance. 

    The authority shall assist eligible governmental units in 
 determining what grants or loans under sections 446A.06 and 
 446A.07 to apply for to finance projects and the manner in which 
 the governmental unit will pay for its portion of the project 
 cost.  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.  

    HIST: 1988 c 546 s 4 

     446A.06 Independent wastewater treatment grants. 

    Subdivision 1.    Award of grants.  The authority shall 
 award independent state grants to municipalities selected by the 
 Pollution Control Agency upon certification by the agency that 
 the municipalities' projects and applications have been reviewed 
 and approved by the agency in accordance with sections 116.16 to 
 116.18 and agency rules. 

    Subd. 2.    Rules.  The commissioner shall adopt rules 
 containing procedures for the administration of the authority's 
 duties as provided in subdivision 1. 

    HIST: 1987 c 386 art 3 s 23 

     446A.07 Water pollution control revolving fund. 

    Subdivision 1.    Establishment of fund.  The authority 
 shall establish a water pollution control revolving fund to 
 provide loans for the purposes and eligible costs authorized 
 under title VI of the Federal Water Pollution Control Act.  The 
 fund must be credited with repayments. 

    Subd. 2.    State funds.  A state matching fund is 
 established to be used in compliance with federal matching 
 requirements specified in the Federal Water Pollution Control 
 Act.  A state grant and loan fund is established to provide 
 grants and loans to governmental units for the planning and 
 construction of treatment works as specified in section 116.16, 
 subdivision 2, paragraphs (6) and (7). 

    Subd. 3.    Capitalization grant agreement.  The 
 authority shall enter an agreement with the administrator of the 
 United States Environmental Protection Agency to receive 
 capitalization grants for the revolving fund.  The authority may 
 exercise powers necessary to comply with the requirements 
 specified in the agreement, which must be in compliance with the 
 Federal Water Pollution Control Act. 

    Subd. 4.    Intended use plan.  (a) The Public 
 Facilities Authority shall annually prepare and submit to the 
 United States Environmental Protection Agency an intended use 
 plan.  The plan must identify the intended uses of the amounts 
 available to the water pollution control revolving fund, 
 including a list of wastewater treatment and storm water 
 projects and all other eligible activities to be funded during 
 the fiscal year.  

    (b) To be eligible for placement on the intended use plan: 

    (1) a project must be listed on the Pollution Control 
 Agency's project priority list; 

    (2) the applicant must submit a written request to the 
 Public Facilities Authority, including a brief description of 
 the project, a project cost estimate and the requested loan 
 amount, and a proposed project schedule; and 

    (3) for a construction loan, the project must have a 
 facility plan approved by the Pollution Control Agency. 

    (c) The Pollution Control Agency shall annually provide to 
 the Public Facilities Authority its project priority list of 
 wastewater and storm water projects to be considered for funding.
 The Public Facilities Authority may not submit the plan until it 
 has received the review and comment of the pollution control 
 agency or until 30 days have elapsed since the plan was 
 submitted to the Pollution Control Agency, whichever occurs 
 first.  In addition, the Public Facilities Authority shall offer 
 municipalities seeking placement on the intended use plan an 
 opportunity to review and comment on the plan before it is 
 adopted.  The plan may be amended to add additional projects for 
 consideration for funding as it determines funds are available 
 and additional projects are able to proceed. 

    Subd. 5.    Applications.  Applications by 
 municipalities and other entities identified in the annual 
 intended use plan for loans from the water pollution control 
 revolving fund must be made to the authority on forms requiring 
 information prescribed by the rules of the agency adopted under 
 this section.  The authority shall send the applications to the 
 agency within ten days of receipt.  The director shall certify 
 to the authority those applications that appear to meet the 
 criteria set forth in the Federal Water Pollution Control Act, 
 this section, and rules of the agency. 

    Subd. 6.    Award and terms of loans.  The authority 
 shall award loans to those municipalities and other entities 
 certified by the Pollution Control Agency or shall provide 
 funding for the appropriate state agency or department to make 
 loans for eligible activities certified by the pollution control 
 agency provided the use of funds and the terms and conditions of 
 the loans are in conformance with the federal Water Pollution 
 Control Act, this section, and rules of the Pollution Control 
 Agency and the authority adopted under this section. 

    Subd. 7.    Loan conditions.  When making loans from the 
 revolving fund, the authority shall comply with the conditions 
 of the Federal Water Pollution Control Act, including: 

    (a) Loans must be made at or below market interest rates, 
 including interest-free loans, at terms not to exceed 20 years. 

    (b) The annual principal and interest payments must begin 
 no later than one year after completion of a project.  Loans 
 must be fully amortized no later than 20 years after project 
 completion. 

    (c) A loan recipient shall establish a dedicated source of 
 revenue for repayment of the loan.  

    (d) The fund must be credited with all payments of 
 principal and interest on all loans. 

    Subd. 8.    Other uses of revolving fund.  The water 
 pollution control revolving fund may be used as provided in 
 title VI of the Federal Water Pollution Control Act, including 
 the following uses: 

    (1) to buy or refinance the debt obligation of governmental 
 units for treatment works where debt was incurred and 
 construction begun after March 7, 1985, at or below market 
 rates; 

    (2) to guarantee or purchase insurance for local 
 obligations to improve credit market access or reduce interest 
 rates; 

    (3) to provide a source of revenue or security for the 
 payment of principal and interest on revenue or general 
 obligation bonds issued by the authority if the bond proceeds 
 are deposited in the fund; 

    (4) to provide loan guarantees, loans, or set-aside for 
 similar revolving funds established by a governmental unit other 
 than state agencies, or state agencies under sections 17.117, 
 103F.725, subdivision 1a, 116J.403, and 116J.617; provided that 
 no more than $4,000,000 of the balance in the fund may be used 
 for the small cities block grant program under section 116J.403 
 and the tourism loan program under section 116J.617, taken 
 together; 

    (5) to earn interest on fund accounts; and 

    (6) to pay the reasonable costs incurred by the authority 
 and the agency of administering the fund and conducting 
 activities required under the federal Water Pollution Control 
 Act, including water quality management planning under section 
 205(j) of the act and water quality standards continuing 
 planning under section 303(e) of the act. 

    Amounts spent under clause (6) may not exceed the amount 
 allowed under the Federal Water Pollution Control Act.  

    Subd. 9.    Payments.  Payments from the fund must be 
 made in accordance with the applicable state and federal law 
 governing the payments, except that for projects other than 
 those funded under section 17.117, 103F.725, subdivision 1a, 
 116J.403, 116J.617, or 462A.05, no payment for a project may be 
 made to a governmental unit until and unless the authority has 
 determined the total estimated cost of the project and 
 ascertained that financing of the project is assured by: 

    (1) a loan authorized by state law or the appropriation of 
 proceeds of bonds or other money of the governmental unit to a 
 fund for the construction of the project; and 

    (2) an irrevocable undertaking, by resolution of the 
 governing body of the governmental unit, to use all money made 
 available for the project exclusively for the project, and to 
 pay any additional amount by which the cost of the project 
 exceeds the estimate by the appropriation to the construction 
 fund of additional money or the proceeds of additional bonds to 
 be issued by the governmental unit. 

    Subd. 10.    Rules of authority.  The commissioner shall 
 adopt rules containing procedures for the administration of the 
 authority's duties as provided in this section, including loan 
 interest rates, the amounts of loans, and municipal financial 
 need. 

    Subd. 11.    Rules of agency.  The agency shall adopt 
 rules relating to the procedure for preparation of the annual 
 intended use plan and other matters that the agency considers 
 necessary for proper loan administration.  Eligible activities 
 are those required under the federal Water Pollution Control Act 
 of 1987, as amended. 

    HIST: 1987 c 386 art 3 s 24; 1989 c 354 s 4; 1990 c 564 s 4; 
 1992 c 601 s 12; 1994 c 465 art 1 s 51; 1994 c 632 art 2 s 
 44-48; 1995 c 220 s 122; 1996 c 407 s 47; 2002 c 380 art 2 s 17; 
 2002 c 393 s 64 

    446A.071 Subdivision 1.  Repealed, 1996 c 463 s 61 

    Subd. 2.  Repealed, 1996 c 463 s 61 

    Subd. 3.  Repealed, 1996 c 463 s 61 

    Subd. 4.  Repealed, 1996 c 463 s 61 

    Subd. 5.  Repealed, 1996 c 463 s 61 

    Subd. 6.  Repealed, 1996 c 463 s 61 

    Subd. 7.  Repealed, 1995 c 220 s 141; 1996 c 463 s 
 61 

    Subd. 8.  Repealed, 1996 c 463 s 61 

     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 
 receiving funding through 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.  The purpose of the program is to 
 assist municipalities demonstrating financial need in building 
 cost-efficient projects to address existing environmental or 
 public health problems.  To implement the program, the authority 
 shall establish a wastewater infrastructure fund to provide 
 grants and loans for the purposes authorized under title VI of 
 the Federal Water Pollution Control Act.  The fund shall be 
 credited with all investment income from the fund and all 
 repayments of loans, grants, and penalties. 

    Subd. 2. Repealed, 2002 c 393 s 91 

    Subd. 3.    Program administration.  (a) The authority 
 shall provide supplemental assistance, as provided in 
 subdivision 5a to municipalities: 

    (1) whose projects are listed on the agency's project 
 priority list; 

    (2) that demonstrate their projects are a cost-effective 
 solution to an existing environmental or public health problem; 
 and 

    (3) whose projects are approved by the USDA/RECD or 
 certified by the commissioner of the agency. 

    (b) For a municipality receiving grant funding from the 
 USDA/RECD, applications must be made to the USDA/RECD with 
 additional information submitted to the authority as required by 
 the authority.  Eligible project costs and affordability 
 criteria shall be determined by the USDA/RECD. 

    (c) For a municipality not receiving grant funding from the 
 USDA/RECD, application must be made to the authority on forms 
 prescribed by the authority for the water pollution control 
 revolving fund program with additional information as required 
 by the authority.  In accordance with section 116.182, the 
 agency shall: 

    (1) calculate 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 approved projects to the authority. 

    (d) At the time funds are appropriated under this section, 
 the authority shall reserve supplemental assistance for projects 
 in order of their rankings on the agency's project priority list 
 and in an amount based on their most recent cost estimates 
 submitted to the authority or the as-bid costs, whichever is 
 less. 

    Subd. 4. Repealed, 2002 c 393 s 91 

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

    Subd. 5. Repealed, 2002 c 393 s 91 

    Subd. 5a.    Type and amount of assistance.  (a) For a 
 municipality receiving grant funding from the USDA/RECD, the 
 authority shall provide assistance in the form of a grant of up 
 to one-half of the eligible grant amount determined by 
 USDA/RECD.  A municipality may not receive a grant under this 
 paragraph for more than $4,000,000 or $15,000 per existing 
 connection, whichever is less, unless specifically approved by 
 law.  In the case of a sanitary district or other 
 multijurisdictional project for which the USDA/RECD is unable to 
 fully fund up to one-half of the eligible grant amount, the 
 authority may provide up to an additional $1,000,000 for each 
 additional municipality participating up to a maximum of 
 $8,000,000 or $15,000 per existing connection, whichever is 
 less, but not to exceed the maximum grant level determined by 
 the USDA/RECD as needed to keep the project affordable. 

    (b) For a municipality not receiving grant funding from the 
 USDA/RECD, the authority shall provide assistance in the form of 
 a loan for the eligible project costs that exceed five percent 
 of the market value of properties in the project service area.  
 A municipality may not receive a loan under this paragraph for 
 more than $4,000,000 or $15,000 per existing connection, 
 whichever is less, unless specifically approved by law.  In the 
 case of a sanitary district or other multijurisdictional 
 project, the authority may provide a loan under this paragraph 
 for up to an additional $1,000,000 for each additional 
 municipality participating up to a maximum of $8,000,000 or 
 $15,000 per existing connection, whichever is less, unless 
 specifically approved by law.  A loan under this paragraph must 
 bear no interest, must be repaid as provided in subdivision 7, 
 and must only be provided in conjunction with a loan from the 
 water pollution control revolving fund under section 446A.07. 

    (c) Notwithstanding the limits in paragraphs (a) and (b), 
 for a municipality receiving supplemental assistance under this 
 section after January 1, 2002, if the authority determines that 
 the municipality'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 authority shall 
 provide assistance in the form of half grant and half loan.  
 Assistance from the authority may not be more than $25,000 per 
 existing connection.  Any additional grant amount received for 
 the same project must be used to reduce the amount of the 
 municipality's loan from the water pollution control revolving 
 fund that exceeds five percent of the market value of properties 
 in the project service area. 

    Subd. 5b.    Special assessment deferral.  A 
 municipality receiving a loan under subdivision 5a that levies 
 special assessments to repay the loan under subdivision 5a or 
 section 446A.07 may defer payment of such assessments under the 
 provisions of sections 435.193 to 435.195. 

    Subd. 6.    Disbursements.  Disbursements of grants or 
 loans awarded 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 and federal 
 laws and rules governing the payments. 

    Subd. 7.    Loan repayments.  A municipality receiving a 
 loan under this section shall repay the loan in semiannual 
 payment amounts determined by the authority.  The payment amount 
 must be based on the average payments on the municipality's 
 water pollution control revolving fund loan or, if greater, the 
 minimum amount required to fully repay the loan by the maturity 
 date.  Payments must begin within one year of the date of the 
 municipality's final payment on the water pollution control 
 revolving fund loan.  The maturity date of the loan must be no 
 later than 20 years from the date of the first payment. 

    Subd. 8.    Eligibility.  A municipality is eligible for 
 assistance under this section 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. 

    Subd. 10. Repealed, 2002 c 393 s 91 

    Subd. 11.    Report on needs.  By February 1 of each 
 even-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 municipality 
 receiving a loan under this section shall establish a system 
 replacement fund and shall annually deposit a minimum of $.50 
 per 1,000 gallons of flow for major rehabilitation, expansion, 
 or replacement of the treatment system at the end of its useful 
 life.  Money must remain in the account, for the life of the 
 loan unless use of the fund is approved in writing by the 
 authority for major rehabilitation, expansion, or replacement of 
 the treatment system.  By March 1 each year during the life of 
 the loan, each municipality shall submit a report to the 
 authority regarding the amount deposited and the fund balance 
 for the prior calendar year.  Failure to comply with the 
 requirements of this subdivision shall result in the authority 
 assessing a penalty fee to the municipality equal to one percent 
 of the outstanding loan balance for each year of noncompliance.  
 Failure to make the required deposit or pay the penalty fee as 
 required constitutes a default on the loan. 

    Subd. 13. Repealed, 2002 c 393 s 91 

    Subd. 14.    Consistency with land use plans.  A 
 municipality applying for a project in an unsewered area shall 
 include in its application to the authority a certification from 
 the county in which the project is located that: 

    (1) the project is consistent with the county comprehensive 
 land use plan, if the county has adopted one; 

    (2) the project is consistent with the county water plan, 
 if the county has adopted one; and 

    (3) the county has adopted specific land use ordinances or 
 controls so as to meet or exceed the requirements of Minnesota 
 Rules, part 7080.0305. 

    HIST: 1996 c 463 s 45; 1997 c 246 s 18; 1998 c 404 s 50-52; 
 1999 c 223 art 2 s 48; 2000 c 492 art 1 s 60; 2002 c 393 s 65-75 

     446A.073 Total maximum daily load grants. 

    Subdivision 1.    Program established.  The authority 
 must make grants to municipalities to cover up to one-half the 
 cost of wastewater treatment projects 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). 

    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 authority.  In 
 accordance with section 116.182, the Pollution Control Agency 
 shall: 

    (1) calculate 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 approved projects to the authority. 

    Subd. 3.    Project priorities.  When money is 
 appropriated for grants under this program, the authority shall 
 reserve money for projects in the order that their total maximum 
 daily load plan was approved by the United States Environmental 
 Protection Agency and in an amount based on their most recent 
 cost estimates submitted to the authority or the as-bid costs, 
 whichever is less. 

    Subd. 4.    Grant approval.  The authority must make a 
 grant to a municipality, as defined in section 116.182, 
 subdivision 1, only after: 

    (1) the commissioner of the Minnesota Pollution Control 
 Agency has certified to the United States Environmental 
 Protection Agency a total maximum daily load plan for identified 
 waters of this state that includes a point source wasteload 
 allocation; 

    (2) the Environmental Protection Agency has approved the 
 plan; 

    (3) a municipality affected by the plan has estimated the 
 cost to it of wastewater treatment projects necessary to comply 
 with the point source wasteload allocation; 

    (4) the Pollution Control Agency has approved the cost 
 estimate; and 

    (5) the authority has determined that the additional 
 financing necessary to complete the project has been committed 
 from other sources. 

    Subd. 5.    Grant disbursement.  Disbursement of a grant 
 must be made for eligible project costs as incurred by the 
 municipality and in accordance with a project financing 
 agreement and applicable state and federal laws and rules 
 governing the payments. 

    HIST: 2005 c 20 art 1 s 39 

  446A.08 Repealed, 1994 c 632 art 2 s 67 

     446A.081 Drinking water revolving fund. 

    Subdivision 1.    Definitions.  (a) For the purposes of 
 this section, the terms in this subdivision have the meanings 
 given them.  

    (b) "Act" means the Safe Drinking Water Act Amendments of 
 1996, Public Law 104-182. 

    (c) "Department" means the Department of Health.  

    Subd. 2.    Establishment of fund.  The authority shall 
 establish a drinking water revolving fund to provide loans and 
 other forms of financial assistance authorized by the act, as 
 determined by the authority under the rules adopted under this 
 section for the purposes and eligible costs authorized under the 
 act.  The fund must be credited with repayments.  The act 
 requires that the fund corpus must be managed so as to be 
 available in perpetuity for the financing of drinking water 
 systems in the state.  At a minimum, 15 percent of the funds 
 received each federal fiscal year shall be available solely for 
 providing loans to public water systems which regularly serve 
 fewer than 10,000 individuals.  

    Subd. 3.    State funds.  A state matching fund is 
 established to be used in compliance with federal matching 
 requirements specified in the act.  

    Subd. 4.    Capitalization grant agreement.  The 
 authority shall enter into an agreement with the administrator 
 of the United States Environmental Protection Agency to receive 
 capitalization grants for the fund.  The authority and the 
 department shall enter into an operating agreement with the 
 administrator of the United States Environmental Protection 
 Agency to satisfy the criteria in the act to operate the fund.  
 The authority and the department may exercise the powers 
 necessary to comply with the requirements specified in the 
 agreements and to ensure that loan recipients comply with all 
 applicable federal and state requirements.  

    Subd. 5.    Intended use plan.  The authority shall 
 annually prepare and submit to the United States Environmental 
 Protection Agency an intended use plan.  The plan must identify 
 the intended uses of the amounts available to the drinking water 
 revolving loan fund.  The department shall provide a prioritized 
 list of drinking water projects and other eligible activities to 
 be considered for funding by the authority.  The plan may be 
 amended by the authority and include additional eligible 
 projects proposed by the department. 

    Subd. 6.    Applications.  Applications by 
 municipalities, privately owned public water systems, and 
 eligible entities identified in the annual intended use plan for 
 loans from the fund must be made to the authority on the forms 
 prescribed by the rules of the authority and the rules of the 
 department adopted under this section.  The authority shall 
 forward the application to the department within ten days of 
 receipt.  The department shall approve those applications that 
 appear to meet the criteria in the act, this section, and the 
 rules of the department or the authority.  

    Subd. 7.    Award and terms of loans.  The authority 
 shall award loans to those municipalities, privately owned 
 public water systems, and other eligible entities approved by 
 the department, provided that the applicant is able to comply 
 with the terms and conditions of the authority loan, which must 
 be in conformance with the act, this section, and the rules of 
 the authority adopted under this section.  

    Subd. 8.    Loan conditions.  (a) When making loans from 
 the drinking water revolving fund, the authority shall comply 
 with the conditions of the act, including the criteria in 
 paragraphs (b) to (e).  

    (b) Loans must be made at or below market interest rates, 
 including zero interest loans, for terms not to exceed 20 years. 

    (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.  

    (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). 

    Subd. 9.    Other uses of fund.  The drinking water 
 revolving loan fund may be used as provided in the act, 
 including the following uses: 

    (1) to buy or refinance the debt obligations, at or below 
 market rates, of public water systems for drinking water 
 systems, where such debt was incurred after the date of 
 enactment of the act, for the purposes of construction of the 
 necessary improvements to comply with the national primary 
 drinking water regulations under the federal Safe Drinking Water 
 Act; 

    (2) to purchase or guarantee insurance for local 
 obligations to improve credit market access or reduce interest 
 rates; 

    (3) to provide a source of revenue or security for the 
 payment of principal and interest on revenue or general 
 obligation bonds issued by the authority if the bond proceeds 
 are deposited in the fund; 

    (4) to provide loans or loan guarantees for similar 
 revolving funds established by a governmental unit or state 
 agency; 

    (5) to earn interest on fund accounts; 

    (6) to pay the reasonable costs incurred by the authority, 
 the Department of Employment and Economic Development, and the 
 department for conducting activities as authorized and required 
 under the act up to the limits authorized under the act; and 

    (7) to develop and administer programs for water system 
 supervision, source water protection, and related programs 
 required under the act. 

    Subd. 10.    Payments.  Payments from the fund to 
 borrowers must be in accordance with the applicable state and 
 federal laws governing such payments, except no payment for a 
 project may be made to a borrower until and unless the authority 
 has determined that the total estimated cost of the project and 
 the financing of the project are assured by:  

    (1) a loan authorized by state law or appropriation of 
 proceeds of bonds or other money of the borrower to a fund for 
 the construction of the project; and 

    (2) an irrevocable undertaking, by resolution of the 
 governing body of the borrower, to use all money made available 
 for the project exclusively for the project, and to pay any 
 additional amount by which the cost of the project exceeds the 
 estimate by the appropriation to the construction fund of 
 additional money or proceeds of additional bonds to be issued by 
 the borrower.  

    Subd. 11.    Rules of the authority.  The commissioner 
 of employment and economic development shall adopt rules 
 containing the procedures for the administration of the 
 authority's duties as provided by this section that include:  
 setting of interest rates, which shall take into account the 
 financial need of the applicant; the amount of project financing 
 to be provided; the collateral required for public drinking 
 water systems and for privately owned public water systems; 
 dedicated sources of revenue or income streams to ensure 
 repayment of loans; and the requirements to ensure proper 
 operation, maintenance, and repair of the water systems financed 
 by the authority.  

    Subd. 12.    Rules of the department.  The department 
 shall adopt rules relating to the procedures for administration 
 of the department's duties under the act and this section.  The 
 department and the commissioner of the Department of Employment 
 and Economic Development may adopt a single set of rules for the 
 program. 

    HIST: 1994 c 632 art 2 s 50; 1997 c 200 art 5 s 3-5; 1Sp2003 c 
 4 s 1 

     446A.083 Methamphetamine laboratory cleanup revolving 
  account. 

    Subdivision 1.    Definitions.  As used in this section: 

    (1) "clandestine lab site" has the meaning given in section 
 152.0275, subdivision 1, paragraph (a); 

    (2) "property" has the meaning given in section 152.0275, 
 subdivision 2, paragraph (a), but does not include motor 
 vehicles; and 

    (3) "remediate" has the meaning given to remediation in 
 section 152.0275, subdivision 1, paragraph (a).  

    Subd. 2.    Account established.  The authority shall 
 establish a methamphetamine laboratory cleanup revolving account 
 in the public facility authority fund to provide loans to 
 counties and cities to remediate clandestine lab sites.  The 
 account must be credited with repayments.  

    Subd. 3.    Applications.  Applications by a county or 
 city for a loan from the account must be made to the authority 
 on the forms prescribed by the authority.  The application must 
 include, but is not limited to:  

    (1) the amount of the loan requested and the proposed use 
 of the loan proceeds; 

    (2) the source of revenues to repay the loan; and 

    (3) certification by the county or city that it meets the 
 loan eligibility requirements of subdivision 4.  

    Subd. 4.    Loan eligibility.  A county or city is 
 eligible for a loan under this section if the county or city: 

    (1) identifies a site or sites designated by a local public 
 health department or law enforcement as a clandestine lab site; 

    (2) has required the site's property owner to remediate the 
 site at cost, under a local public health nuisance ordinance 
 that addresses clandestine lab remediation; 

    (3) certifies that the property owner cannot pay for the 
 remediation immediately; 

    (4) certifies that the property owner has not properly 
 remediated the site; and 

    (5) issues a revenue bond, secured as provided in 
 subdivision 8, payable to the authority to secure the loan.  

    Subd. 5.    Use of loan proceeds; reimbursement by 
 property owner.  (a) A loan recipient shall use the loan to 
 remediate the clandestine lab site or if this has already been 
 done to reimburse the applicable county or city fund for costs 
 paid by the recipient to remediate the clandestine lab site.  

    (b) A loan recipient shall seek reimbursement from the 
 owner of the property containing the clandestine lab site for 
 the costs of the remediation.  In addition to other lawful means 
 of seeking reimbursement, the loan recipient may recover its 
 costs through a property tax assessment by following the 
 procedures specified in section 145A.08, subdivision 2, 
 paragraph (c).  

    (c) A mortgagee is not responsible for cleanup costs under 
 this section solely because the mortgagee becomes an owner of 
 real property through foreclosure of the mortgage or by receipt 
 of the deed to the mortgaged property in lieu of foreclosure. 

    Subd. 6.    Award and disbursement of funds.  The 
 authority shall award loans to recipients on a first-come, 
 first-served basis, provided that the recipient is able to 
 comply with the terms and conditions of the authority loan, 
 which must be in conformance with this section.  The authority 
 shall make a single disbursement of the loan upon receipt of a 
 payment request that includes a list of remediation expenses and 
 evidence that a second-party sampling was undertaken to ensure 
 that the remediation work was successful or a guarantee that 
 such a sampling will be undertaken.  

    Subd. 7.    Loan conditions and terms.  (a) When making 
 loans from the revolving account, the authority shall comply 
 with the criteria in paragraphs (b) to (e).  

    (b) Loans must be made at a two percent per annum interest 
 rate for terms not to exceed ten years unless the recipient 
 requests a 20-year term due to financial hardship. 

    (c) The annual principal and interest payments must begin 
 no later than one year after completion of the cleanup.  Loans 
 must be amortized no later than 20 years after completion of the 
 cleanup.  

    (d) A loan recipient must identify and establish a source 
 of revenue for repayment of the loan and must undertake whatever 
 steps are necessary to collect payments within one year of 
 receipt of funds from the authority.  

    (e) The account 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) Loans must be made only to recipients with clandestine 
 lab ordinances that address remediation.  

    Subd. 8.    Authority to incur debt.  Counties and 
 cities may incur debt under this section by resolution of the 
 board or council authorizing issuance of a revenue bond to the 
 authority.  The county or city may secure and pay the revenue 
 bond only with proceeds derived from the property containing the 
 clandestine lab site, including assessments and charges under 
 section 145A.08, subdivision 2, paragraph (c); payments by the 
 property owner; or similar revenues. 

    HIST: 2005 c 136 art 7 s 15 

     446A.085 Transportation revolving loan fund. 

    Subdivision 1.    Definitions.  (a) For the purposes of 
 this section, the terms defined in this subdivision have the 
 meanings given them. 

    (b) "Act" means the National Highway System Designation Act 
 of 1995, Public Law 104-59, as amended. 

    (c) "Borrower" means the state, counties, cities, and other 
 governmental entities eligible under the act and state law to 
 apply for and receive loans from the transportation revolving 
 loan fund. 

    (d) "Loan" means financial assistance provided for all or 
 part of the cost of a project including money disbursed in 
 anticipation of reimbursement or repayment, loan guarantees, 
 lines of credit, credit enhancements, equipment financing 
 leases, bond insurance, or other forms of financial assistance. 

    (e) "Transportation Committee" means a committee of the 
 Minnesota Public Facilities Authority, acting on behalf of the 
 Minnesota Public Facilities Authority, consisting of the 
 commissioner of the Department of Employment and Economic 
 Development, the commissioner of finance, and the commissioner 
 of transportation. 

    Subd. 2.    Purpose.  The purpose of the transportation 
 revolving loan fund is to provide loans for public 
 transportation projects eligible for financing or aid under any 
 federal act or program or state law, including, without 
 limitation, the study of the feasibility of construction, 
 reconstruction, resurfacing, restoring, rehabilitation, or 
 replacement of transportation facilities; acquisition of 
 right-of-way; and maintenance, repair, improvement, or 
 construction of city, town, county, or state highways, roads, 
 streets, rights-of-way, bridges, tunnels, railroad-highway 
 crossings, drainage structures, signs, maintenance and operation 
 facilities, guardrails, and protective structures used in 
 connection with highways or transit projects. Enhancement items, 
 including without limitation bicycle paths, ornamental lighting, 
 and landscaping, are eligible for financing provided they are an 
 integral part of overall project design and construction of a 
 federal-aid highway.  Money in the fund may not be used for any 
 toll facilities project or congestion-pricing project. 

    Subd. 3.    Establishment of fund.  A transportation 
 revolving loan fund is established to make loans for the 
 purposes described in subdivision 2.  A highway account is 
 established in the fund for highway projects eligible under 
 United States Code, title 23.  A transit account is established 
 in the fund for transit capital projects eligible under United 
 States Code, title 49.  A state funds general loan account is 
 established in the fund for transportation projects eligible 
 under state law.  Other accounts may be established in the fund 
 as necessary for its management and administration.  The 
 transportation revolving loan fund receives federal money under 
 the act and money from any source.  Money received under this 
 section must be paid to the commissioner of finance and credited 
 to the transportation revolving loan fund.  Money in the fund is 
 annually appropriated to the authority and does not lapse.  The 
 fund must be credited with investment income, and with 
 repayments of principal and interest, except for servicing fees 
 assessed under sections 446A.04, subdivision 5, and 446A.11, 
 subdivision 8. 

    Subd. 4.    Management of fund and accounts.  The 
 authority shall manage and administer the transportation 
 revolving loan fund and individual accounts in the fund.  For 
 those purposes, the authority may exercise all powers provided 
 in this chapter. 

    Subd. 5. Repealed by amendment, 1Sp2001 c 8 art 2 s 67 

    Subd. 6.    Transportation Committee.  The 
 Transportation Committee may authorize the making of loans to 
 borrowers by the authority for transportation purposes 
 authorized by the act or this section, without further action by 
 the authority.  The authority may not make loans for 
 transportation purposes without the approval of the 
 Transportation Committee.  Each project must be certified by the 
 commissioner of transportation before its consideration by the 
 Transportation Committee. 

    Subd. 7.    Applications.  Applicants for loans must 
 submit an application to the Transportation Committee on forms 
 prescribed by the Transportation Committee.  The applicant must 
 provide the following information: 

    (1) the estimated cost of the project and the amount of the 
 loan sought; 

    (2) other possible sources of funding in addition to loans 
 sought from the transportation revolving loan fund; 

    (3) the proposed methods and sources of funds to be used 
 for repayment of loans received; and 

    (4) information showing the financial status and ability of 
 the borrower to repay loans. 

    Subd. 8.    Certification of projects.  The commissioner 
 of transportation shall consider the following information when 
 evaluating projects to certify for funding to the Transportation 
 Committee: 

    (1) a description of the nature and purpose of the proposed 
 transportation project including an explanation of the need for 
 the project and the reasons why it is in the public interest; 

    (2) the relationship of the project to the area 
 transportation improvement program, the approved statewide 
 transportation improvement program, and to any transportation 
 plans required under state or federal law; 

    (3) the estimated cost of the project and the amount of 
 loans sought; 

    (4) proposed sources of funding in addition to loans sought 
 from the transportation revolving loan fund; 

    (5) the need for the project as part of the overall 
 transportation system; 

    (6) the overall economic impact of the project; and 

    (7) the extent to which completion of the project will 
 improve the movement of people and freight. 

    Subd. 9.    Loan conditions.  When making loans from the 
 transportation revolving loan fund, the Transportation Committee 
 shall comply with the applicable provisions of the act and state 
 law.  In addition, a loan made under this section must: 

    (1) bear interest at or below market rates or as otherwise 
 specified in federal law; 

    (2) have a repayment term not longer than 30 years; 

    (3) be fully amortized no later than 30 years after project 
 completion; 

    (4) be subject to repayment of principal and interest 
 beginning not later than five years after the facility financed 
 with a loan has been completed, or in the case of a highway 
 project, five years after the facility has opened to traffic; 
 and 

    (5) be disbursed for specific project elements only after 
 all applicable environmental requirements have been met. 

    Subd. 10.    Loans in anticipation of future 
 apportionments.  A loan may be made to a county, or to a 
 statutory or home rule charter city having a population of 5,000 
 or more, in anticipation of repayment of the loan from sums that 
 will be apportioned to a county from the county state-aid 
 highway fund under section 162.07 or to a city from the 
 municipal state-aid street fund under section 162.14. 

    Subd. 11.    Payment by county or city.  Notwithstanding 
 the allocation provisions of section 162.08 for counties, and 
 the apportionment provisions of section 162.14 for cities, sums 
 apportioned under section 162.13 to a statutory or home rule 
 charter city, or under section 162.07 to a county, that has loan 
 repayments due to the transportation revolving loan fund, shall 
 be paid by the commissioner of transportation to the appropriate 
 loan fund to offset the loan repayments that are due. 

    Subd. 12.    Rules of Transportation Committee and 
 authority.  The commissioner of the Department of Employment 
 and Economic Development shall adopt administrative rules 
 specifying the procedures that will be used for the 
 administration of the duties of the Transportation Committee and 
 authority.  The rules must include criteria, standards, and 
 procedures that will be used for making loans, determining 
 interest rates to be charged on loans, the amount of project 
 financing to be provided, the collateral that will be required, 
 the requirements for dedicated sources of revenue or income 
 streams to ensure repayment of loans, and the length of 
 repayment terms.  

    Subd. 13.    Authority and rules of department.  The 
 commissioner of transportation shall establish, adopt rules for, 
 and implement a program to identify, assist with the development 
 of, and certify projects eligible for loans under the act to the 
 Transportation Committee.  Until rules are adopted by the 
 commissioner of transportation, the commissioner of 
 transportation may certify to the Transportation Committee any 
 project that has been reviewed through an approved planning 
 process that qualifies the project to be included in the 
 statewide transportation program or amended into the statewide 
 transportation improvement program. 

    Subd. 14.    Joint rules.  The commissioner of the 
 Department of Employment and Economic Development and the 
 commissioner of transportation may adopt a single set of rules. 

    HIST: 1997 c 141 s 10; 1998 c 389 art 16 s 17; 1999 c 230 s 
 34,35; 1Sp2001 c 8 art 2 s 67; 2003 c 112 art 2 s 50; 1Sp2003 c 
 4 s 1 

     446A.09 Report; audit. 

    The authority shall report to the legislature and the 
 governor by January 1 of each year.  The report must include a 
 complete operating and financial statement covering the 
 authority's operations during the year, including amounts of 
 income from all sources.  Books and records of the authority are 
 subject to audit by the legislative auditor in the manner 
 prescribed for state agencies.  

    HIST: 1987 c 386 art 3 s 26 

  446A.10 Repealed, 1996 c 310 s 1 

     446A.11 Program administration. 

    Subdivision 1.    Powers.  In implementing the purposes 
 and the programs described in this chapter, the authority has 
 the powers in this section.  

    Subd. 2.    Rules.  It may adopt, amend, and repeal 
 rules necessary to effectuate its purposes. 

    Subd. 3.    Personal property.  It may acquire, hold, 
 and dispose of personal property for its corporate purposes. 

    Subd. 4.    Real property.  It may acquire real 
 property, or an interest in real property, in its own name, by 
 purchase or foreclosure, where the acquisition is necessary or 
 appropriate to protect a loan in which the authority has an 
 interest and may sell, transfer, and convey the property to a 
 buyer and, in the event the sale, transfer, or conveyance cannot 
 be effected with reasonable promptness or at a reasonable price, 
 may lease the property to a tenant. 

    Subd. 5.    Notes; mortgages; obligations; sale of.  It 
 may sell, at public or private sale, any note, mortgage or other 
 instrument or obligation evidencing or securing a loan. 

    Subd. 6.    Insurance.  It may procure insurance against 
 a loss in connection with its property in the amounts, and from 
 the insurers, as may be necessary or desirable.  

    Subd. 7.    Loan terms; modification.  It may consent, 
 whenever it considers it necessary or desirable in the 
 fulfillment of its purpose, to the modification of the rate of 
 interest, time of payment, installment of principal or interest, 
 or other term, of a contract or agreement to which the authority 
 is a party. 

    Subd. 8.    Loan payments; interest and amortization.  
 It may establish and collect reasonable interest and 
 amortization payments on loans, and in connection with them may 
 establish and collect or authorize the collection of reasonable 
 fees and charges or require money to be placed in escrow, 
 sufficient to provide for the payment and security of its bonds, 
 notes, commitments and other obligations and for their 
 servicing, to provide reasonable allowances for or insurance 
 against losses which may be incurred and to cover the cost of 
 issuance of obligations and technical, consultative, and project 
 assistance services.  

    Subd. 9.    Investments.  (a) It may cause any money not 
 required for immediate disbursement, including the general 
 reserve account, to be invested in direct obligations of or 
 obligations guaranteed as to principal and interest by the 
 United States, or in insured savings accounts, up to the amount 
 of the insurance, in any institution the accounts of which are 
 insured by the Federal Savings and Loan Insurance Corporation or 
 to be deposited in a savings or other account in a bank insured 
 by the Federal Deposit Insurance Corporation or to be invested 
 in time certificates of deposit issued by a bank insured by the 
 Federal Deposit Insurance Corporation and maturing within one 
 year or less and in the investments described in section 11A.24, 
 subdivision 4, except clause (d).  It may deposit money in 
 excess of the amount insured with security as provided in 
 chapter 118A.  

    (b) Notwithstanding paragraph (a), it may invest and 
 deposit money into accounts established pursuant to resolutions 
 or indentures securing its bonds or notes in investments and 
 deposit accounts or certificates, and with security, agreed upon 
 with the holders or a trustee for the holders. 

    Subd. 10.    Consultative and technical services.  It 
 may provide general consultative and technical services to 
 assist in financing the entities to which loans may be made.  It 
 may enter into agreements or other transactions concerning the 
 receipt or provision of those services.  

    Subd. 11.    Financial information.  Financial 
 information, including credit reports, financial statements and 
 net worth calculations, received or prepared by the authority 
 regarding an authority loan, financial assistance, or insurance 
 is private data with regard to data on individuals as defined in 
 section 13.02, subdivision 12 and nonpublic data with regard to 
 data not on individuals as defined in section 13.02, subdivision 
 9.  

    Subd. 12.    Appropriations; gifts; grants.  The 
 authority may accept appropriations, gifts, grants, bequests, 
 and devises and use or dispose of them for its purposes.  All 
 gifts, grants, bequests, and revenues from those sources are 
 appropriated to the authority. 

    Subd. 13.    Proceeds appropriated to authority.  
 Proceeds of the authority's bonds, notes, and other obligations; 
 amounts granted or appropriated to the authority for the making 
 or purchase or the insurance or guaranty of loans or for bond 
 reserves; income from investment; money in the funds; and all 
 revenues from loans, fees, and charges of the authority 
 including rentals, royalties, dividends, or other proceeds in 
 connection with technology-related products, energy conservation 
 products, or other equipment are annually appropriated to the 
 authority for the accomplishment of its corporate purposes and 
 must be spent, administered, and accounted for in accordance 
 with the applicable provisions of all bond and note resolutions, 
 indentures, and other instruments, contracts, and agreements of 
 the agency.  Notwithstanding section 16A.28, these 
 appropriations are available until expended.  

    Subd. 14.    General purpose.  The authority may do all 
 things necessary and proper to fulfill its purpose. 

    HIST: 1987 c 386 art 3 s 29; 1994 c 632 art 2 s 51; 1995 c 233 
 art 2 s 56; 2001 c 7 s 90 

BOND ISSUANCE

     446A.12 Issuance of bonds. 

    Subdivision 1.    Bonding authority.  The authority may 
 issue negotiable bonds in a principal amount that the authority 
 determines necessary to provide sufficient funds for achieving 
 its purposes, including the making of loans and purchase of 
 securities, the payment of interest on bonds of the authority, 
 the establishment of reserves to secure its bonds, the payment 
 of fees to a third party providing credit enhancement, and the 
 payment of all other expenditures of the authority incident to 
 and necessary or convenient to carry out its corporate purposes 
 and powers, but not including the making of grants.  Bonds of 
 the authority may be issued as bonds or notes or in any other 
 form authorized by law.  The principal amount of bonds issued 
 and outstanding under this section at any time may not exceed 
 $1,250,000,000, excluding bonds for which refunding bonds or 
 crossover refunding bonds have been issued. 

    Subd. 2.    Refunding of bonds.  The authority may issue 
 bonds to refund outstanding bonds of the authority, to pay any 
 redemption premiums on those bonds, and to pay interest accrued 
 or to accrue to the redemption date next succeeding the date of 
 delivery of the refunding bonds.  The authority may apply the 
 proceeds of any refunding bonds to the purchase or payment at 
 maturity of the bonds to be refunded, or to the redemption of 
 outstanding bonds on the redemption date next succeeding the 
 date of delivery of the refunding bonds and may, pending the 
 application, place the proceeds in escrow to be applied to the 
 purchase, retirement, or redemption.  Pending use, escrowed 
 proceeds may be invested and reinvested in obligations issued or 
 guaranteed by the state or the United States or by any agency or 
 instrumentality of the state or the United States, or in 
 certificates of deposit or time deposits secured in a manner 
 determined by the authority, maturing at a time appropriate to 
 assure the prompt payment of the principal and interest and 
 redemption premiums, if any, on the bonds to be refunded.  The 
 income realized on any investment may also be applied to the 
 payment of the bonds to be refunded.  After the terms of the 
 escrow have been fully satisfied, any balance of the proceeds 
 and any investment income may be returned to the authority for 
 use by it in any lawful manner.  All refunding bonds issued 
 under this subdivision must be issued and secured in the manner 
 provided by resolution of the authority. 

    Subd. 3.    Kind of bonds.  Bonds issued under this 
 section must be negotiable investment securities within the 
 meaning and for all purposes of the Uniform Commercial Code, 
 subject only to the provisions of the bonds for registration.  
 The bonds issued may be either general obligations of the 
 authority, secured by its full faith and credit and payable out 
 of any money, assets, or revenues of the authority, subject to 
 the provisions of resolutions or indenture pledging and 
 appropriating particular money, assets, or revenues to 
 particular bonds, or limited obligations of the authority not 
 secured by its full faith and credit and payable solely from 
 specified sources or assets.  

    Subd. 4.    Resolution and terms of sale.  The bonds of 
 the authority must be authorized by a resolution or resolutions 
 adopted by the authority.  The bonds must bear the date or 
 dates, mature at the time or times, bear interest at a fixed or 
 variable rate, including a rate varying periodically at the time 
 or times and on the terms determined by the authority, or any 
 combination of fixed and variable rates, be in the 
 denominations, be in the form, carry the registration 
 privileges, be executed in the manner, be payable in lawful 
 money of the United States, at the place or places within or 
 without the state, and be subject to the terms of redemption or 
 purchase before maturity as the resolutions or certificates 
 provide.  If, for any reason existing at the date of issue of 
 the bonds or existing at the date of making or purchasing any 
 loan or securities from the proceeds or after that date, the 
 interest on the bonds is or becomes subject to federal income 
 taxation, this fact does not affect the validity or the 
 provisions made for the security of the bonds.  The authority 
 may make covenants and take or have taken actions that are in 
 its judgment necessary or desirable to comply with conditions 
 established by federal law or regulations for the exemption of 
 interest on its obligations.  The authority may refrain from 
 compliance with those conditions if in its judgment this would 
 serve the purposes and policies set forth in this chapter with 
 respect to any particular issue of bonds, unless this would 
 violate covenants made by the authority.  The maximum maturity 
 of a bond, whether or not issued for the purpose of refunding, 
 must be 30 years from its date.  The bonds of the authority may 
 be sold at public or private sale, at a price or prices 
 determined by the authority; provided that (i) the aggregate 
 price at which an issue of bonds is initially offered by 
 underwriters to investors, as stated in the authority's official 
 statement with respect to the offering, must not exceed by more 
 than three percent the aggregate price paid by the underwriters 
 to the authority at the time of delivery; (ii) the commission 
 paid by the authority to an underwriter for placing an issue of 
 bonds with investors must not exceed three percent of the 
 aggregate price at which the issue is offered to investors as 
 stated in the authority's offering statement; and (iii) the 
 spread or commission must be an amount determined by the 
 authority to be reasonable in the light of the risk assumed and 
 the expenses of issuance, if any, required to be paid by the 
 underwriters.  

    Subd. 5.    Exemption.  The notes and bonds of the 
 authority are not subject to sections 16C.03, subdivision 4, and 
 16C.05. 

    HIST: 1988 c 546 s 5; 1989 c 354 s 5; 1990 c 564 s 5; 1991 c 
 354 art 10 s 10; 1994 c 632 art 2 s 52; 1Sp1995 c 2 art 1 s 39; 
 1997 c 200 art 5 s 6; 1998 c 386 art 2 s 91; 2002 c 380 art 2 s 
 18; 2002 c 393 s 76; 2004 c 272 art 4 s 1 

     446A.13 Tender option. 

    An obligation may be issued giving its owner the right to 
 tender or the authority to demand tender of the obligation to 
 the authority or another person designated by it, for purchase 
 at a specified time or times, if the authority has first entered 
 into an agreement with a suitable financial institution 
 obligating the financial institution to provide funds on a 
 timely basis for purchase of bonds tendered.  The obligation is 
 not considered to mature on any tender date and the purchase of 
 a tendered obligation is not considered a payment or discharge 
 of the obligation by the authority.  Obligations tendered for 
 purchase may be remarketed by or on behalf of the authority or 
 another purchaser.  The authority may enter into agreements it 
 considers appropriate to provide for the purchase and 
 remarketing of tendered obligations, including: 

    (1) provisions under which undelivered obligations may be 
 considered tendered for purchase and new obligations may be 
 substituted for them; 

    (2) provisions for the payment of charges of tender agents, 
 remarketing agents, and financial institutions extending lines 
 of credit or letters of credit assuring repurchase; and 

    (3) provisions for reimbursement of advances under letters 
 of credit that may be paid from the proceeds of the obligations 
 or from tax and other revenues appropriated for the payment and 
 security of the obligations and similar or related provisions. 

    HIST: 1988 c 546 s 6 

     446A.14 Interest rate swaps and other agreements. 

    Subdivision 1.    Agreements.  (a) The authority may 
 enter into interest rate exchange or swap agreements, hedges, 
 forward purchase or sale agreements, loan sale or pooling 
 agreements or trusts, or other similar agreements in connection 
 with: 

    (1) the issuance or proposed issuance of bonds; 

    (2) the making, proposed making, or sale of loans or other 
 financial assistance or investments; 

    (3) outstanding bonds, loans, or other financial 
 assistance; or 

    (4) existing similar agreements.  

    (b) The agreements authorized by this subdivision include, 
 without limitation, master agreements, options or contracts to 
 enter into those agreements in the future and related 
 agreements, including, without limitation, agreements to provide 
 credit enhancement, liquidity, or remarketing; valuation; 
 monitoring; or administrative services currently or in the 
 future.  However, the term of an option to enter into an 
 interest rate swap, exchange, hedge, or other similar agreement 
 and the term of a contract to sell, buy, or refund bonds in the 
 future must not exceed five years and the authorization of the 
 authority to enter into option agreements with respect to 
 interest rate swap agreements expires on December 31, 2008; 
 provided that the option agreements entered into prior to that 
 date remain valid agreements of the authority after that date. 

    (c) The agreements authorized by this subdivision or 
 supplements to master agreements may be entered into on the 
 basis of negotiation with a qualified third party or through a 
 competitive proposal process on terms and conditions and with 
 covenants and provisions approved by the authority and may 
 include, without limitation: 

    (1) provisions establishing reserves; 

    (2) pledging assets or revenues of the authority for 
 current or other payments or termination payments; 

    (3) contracting with the other parties to the agreements to 
 provide for the custody, collection, securing, investment, and 
 payment of money of the authority or money held in trust; or 

    (4) requiring the issuance of bonds or entering into loans 
 or other agreements authorized by this subdivision in the future.

    (d) Subject to the terms of the agreement and other 
 agreements of the authority with bondholders or other third 
 parties, the agreements authorized by this subdivision may be 
 general or limited obligations of the authority payable from all 
 available or certain specified funds appropriated to the 
 authority.  The agreements authorized by this subdivision do not 
 constitute debt of the authority for the purposes of the limits 
 on bonds or notes of the authority set forth in section 446A.12, 
 subdivision 1.  

    (e) The authority may issue bonds to provide funds to make 
 payments, including, without limitation, termination payments 
 pursuant to an agreement authorized by this subdivision. 

    (f) The aggregate notional amount of interest rate swap or 
 exchange agreements in effect at any time must not exceed an 
 amount equal to ten percent of the aggregate principal amount of 
 bonds the authority is authorized to have outstanding pursuant 
 to section 446A.12, subdivision 1, including the notional amount 
 of interest rate swap or exchange agreements with respect to 
 which a reversing agreement has been entered into, the effect of 
 which is to terminate the original agreement or a portion 
 thereof, and reversing agreements with respect to all or a 
 portion of existing agreements. 

    Subd. 2.    Powers of authority.  For the purposes of 
 this section, the authority may exercise all powers provided in 
 this chapter.  The authority may consent, whenever it considers 
 it necessary or desirable in connection with agreements entered 
 into under this subdivision, to modifications, amendments, or 
 waivers of the terms of the agreements.  The proceeds of any 
 agreements entered into pursuant to this subdivision are 
 appropriated to the authority pursuant to section 446A.11, 
 subdivision 13.  The agreements entered into pursuant to this 
 subdivision are not subject to sections 16C.03, subdivision 4, 
 and 16C.05. 

    HIST: 1988 c 546 s 7; 2004 c 272 art 4 s 2 

     446A.15 Bond fund. 

    Subdivision 1.    Creation and contents.  The authority 
 may establish a special fund or funds for the security of one or 
 more or all series of its bonds.  The funds must be known as 
 debt service reserve funds.  The authority may pay into each 
 debt service reserve fund: 

    (1) any money appropriated by the state only for the 
 purposes of the fund; 

    (2) the proceeds of sale of bonds to the extent provided in 
 the resolution or indenture authorizing the issuance of them; 

    (3) funds directed to be transferred by the authority to 
 the debt service reserve fund; and 

    (4) other money made available to the authority from any 
 other source only for the purpose of the fund. 

    Subd. 2.    Use of funds.  Except as provided in this 
 section, the money credited to each debt service reserve fund 
 must be used only for the payment of the principal of bonds of 
 the authority as they mature, the purchase of the bonds, the 
 payment of interest on them, or the payment of any premium 
 required when the bonds are redeemed before maturity.  Money in 
 a debt service reserve fund must not be withdrawn at a time and 
 in an amount that reduces the amount of the fund to less than 
 the amount the authority determines to be reasonably necessary 
 for the purposes of the fund.  However, money may be withdrawn 
 to pay principal or interest due on bonds secured by the fund if 
 other money of the authority is not available. 

    Subd. 3.    Investment.  Money in a debt service reserve 
 fund not required for immediate use may be invested in 
 accordance with section 446A.11, subdivision 9, paragraph (b). 

    Subd. 4.    Minimum amount of reserve at issuance.  If 
 the authority establishes a debt service reserve fund for the 
 security of any series of bonds, it shall not issue additional 
 bonds that are similarly secured if the amount of any of the 
 debt service reserve funds at the time of issuance does not 
 equal or exceed the minimum amount required by the resolution 
 creating the fund, unless the authority deposits in each fund at 
 the time of issuance, from the proceeds of the bonds, or 
 otherwise, an amount that when added together with the amount 
 then in the fund will be at least the minimum amount required. 

    Subd. 5.    Transfer of excess.  To the extent 
 consistent with the resolutions and indentures securing 
 outstanding bonds, the authority may at the close of a fiscal 
 year transfer to any other fund or account from any debt service 
 reserve fund any excess in that reserve fund over the amount 
 determined by the authority to be reasonably necessary for the 
 purpose of the reserve fund. 

    Subd. 6.    Certification and budget request.  To assure 
 the payment of the principal of and interest on bonds of the 
 authority issued prior to January 1, 1994, and the continued 
 maintenance of all debt service reserve funds created and 
 established for that payment, the authority shall annually 
 determine and certify to the governor, on or before December 1, 
 the following amounts: 

    (1) the amount then needed to restore each debt service 
 reserve fund securing in whole or in part the payment of 
 principal of and interest on bonds of the authority issued prior 
 to January 1, 1994, to the minimum amount required by the 
 resolution or indenture establishing the fund, but not exceeding 
 the maximum amount of principal and interest to become due and 
 payable in any later year on all bonds issued prior to January 
 1, 1994, that are then outstanding and secured by the fund; and 

    (2) the amount determined by the authority to be needed in 
 the immediately ensuing fiscal year, with other funds pledged 
 and estimated to be received during that year, for the payment 
 of the principal and interest due and payable in that year on 
 all then outstanding bonds secured by a debt service reserve 
 fund securing in whole or in part the payment of principal of 
 and interest on bonds of the authority issued prior to January 
 1, 1994, the amount of which is then less than the minimum 
 amount agreed, but not exceeding the maximum amount of principal 
 and interest to become due and payable in the immediately 
 ensuing fiscal year on bonds prior to January 1, 1994. 

    The governor shall include in the proposed biennial budget 
 for the following fiscal year, or in a supplemental budget if 
 the biennial budget has previously been approved, the amounts 
 certified by the authority in accordance with this subdivision. 

    HIST: 1988 c 546 s 8; 1994 c 632 art 2 s 53 

     446A.16 Money of the authority. 

    Subdivision 1.    Functions of commissioner of finance.  
 Except as otherwise provided in this section, money of the 
 authority must be paid to the commissioner of finance as agent 
 of the authority and the commissioner shall not commingle the 
 money with other money.  The money in the accounts of the 
 authority must be paid out only on warrants drawn by the 
 commissioner of finance on requisition of the chair of the 
 authority or of another officer or employee as the authority 
 authorizes.  Deposits of the authority's money must, if required 
 by the commissioner or the authority, be secured by obligations 
 of the United States or of the state of a market value equal at 
 all times to the amount of the deposit and all banks and trust 
 companies are authorized to give security for the deposits. 

    Subd. 2.    Contracts and security.  Notwithstanding the 
 provisions of this section, the authority may, with the approval 
 of the commissioner of finance, contract with the holders of any 
 of its bonds as to the custody, collection, securing, 
 investment, and payment of money of the authority or money held 
 in trust or otherwise for the payment of bonds, and to carry out 
 the contract.  Money held in trust or otherwise for the payment 
 of bonds or in any way to secure bonds and deposits of the money 
 may be secured in the same manner as money of the authority, and 
 all banks and trust companies are authorized to give security 
 for the deposits.  All money paid to the commissioner as agent 
 of the authority is appropriated to the authority. 

    Subd. 3.    System of accounts.  Subject to agreements 
 with bondholders, the commissioner of finance shall prescribe a 
 system of accounts. 

    HIST: 1988 c 546 s 9; 2003 c 112 art 2 s 50 

     446A.17 Nonliability. 

    Subdivision 1.    Nonliability of individuals.  No 
 member of the authority or other person executing the bonds, 
 loans, interest rate swaps, or other agreements or contracts of 
 the authority is liable personally on the bonds, loans, interest 
 rate swaps, or other agreements or contracts of the authority or 
 is subject to any personal liability or accountability by reason 
 of their issuance, execution, delivery, or performance.  

    Subd. 2.    Nonliability of state.  The state is not 
 liable on bonds, loans, interest rate swaps, or other agreements 
 or contracts of the authority issued or entered into under this 
 chapter and the bonds, loans, interest rate swaps, or other 
 agreements or contracts of the authority are not a debt of the 
 state.  The bonds, loans, interest rate swaps, or other 
 agreements or contracts of the authority must contain on their 
 face a statement to that effect. 

    HIST: 1988 c 546 s 10; 2004 c 272 art 4 s 3 

     446A.18 Purchase and cancellation by authority. 

    Subject to agreements with bondholders that may then exist, 
 the authority may purchase out of funds available for the 
 purpose, bonds of the authority which shall then be canceled, at 
 a price not exceeding the following amounts: 

    (1) if the bonds are then redeemable, the redemption price 
 then applicable plus accrued interest to the next interest 
 payment date of the bonds; or 

    (2) if the bonds are not redeemable, the redemption price 
 applicable on the first date after the purchase upon which the 
 bonds become subject to redemption plus accrued interest to that 
 date. 

    HIST: 1988 c 546 s 11 

     446A.19 State pledge against impairment of contracts. 

    The state pledges and agrees with the holders of bonds 
 issued under sections 446A.051, and 446A.12 to 446A.20 or other 
 parties to any loans, interest rate swaps, or other agreements 
 or contracts of the authority that the state will not limit or 
 alter the rights vested in the authority to fulfill the terms of 
 any agreements made with the bondholders or parties to any 
 loans, interest rate swaps, or other agreements or contracts of 
 the authority or in any way impair the rights and remedies of 
 the holders until the bonds, together with interest on them, 
 with interest on any unpaid installments of interest, and all 
 costs and expenses in connection with any action or proceeding 
 by or on behalf of the bondholders, are fully met and discharged 
 or, with respect to any loans, interest rate swaps, or other 
 agreements or contracts of the authority, the agreements have 
 been fully performed by the authority or otherwise terminated or 
 discharged.  The authority may include this pledge and agreement 
 of the state in any agreement with the holders of bonds issued 
 under sections 446A.051, and 446A.12 to 446A.20 or in any loans, 
 interest rate swaps, or other agreements or contracts of the 
 authority. 

    HIST: 1988 c 546 s 12; 2004 c 272 art 4 s 4 

     446A.20 Reserves; funds; accounts. 

    The authority may establish reserves, funds, or accounts 
 necessary to carry out the purposes of the authority or to 
 comply with any agreement made by or any resolution passed by 
 the authority. 

    HIST: 1988 c 546 s 13 

  446A.21 Repealed, 1999 c 231 s 207