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116.18 WATER POLLUTION CONTROL FUNDS; APPROPRIATIONS AND BONDS.
    Subdivision 1. Appropriation from the bond proceeds fund. The sum of $167,000,000,
or so much thereof as may be necessary, is appropriated from the bond proceeds fund in the
state treasury to the Pollution Control Agency, for the period commencing on July 23, 1971, to
be granted and disbursed to municipalities and agencies of the state in aid of the construction
of projects conforming to section 116.16, in accordance with the rules, priorities, and criteria
therein described.
    Subd. 2.[Repealed, 1Sp1985 c 14 art 19 s 38]
    Subd. 2a. State matching grants program beginning October 1, 1987. For projects
tendered, on or after October 1, 1987, a grant of federal money under section 201(g), section 202,
203, or 206(f) of the Federal Water Pollution Control Act, as amended, United States Code,
title 33, sections 1251 to 1376, at 55 percent or more of the eligible cost for construction of the
treatment works, state money appropriated under subdivision 1 must be expended for 50 percent
of the nonfederal share of the eligible cost of construction for municipalities with populations of
25,000 or less.
    Subd. 3.[Repealed, 1973 c 423 s 10]
    Subd. 3a. State independent grants program. (a) The Public Facilities Authority must
adopt the objective of maintaining financial assistance to municipalities that the agency has
listed on its annual municipal project list of approximately 50 percent of the eligible cost of
construction for municipalities with populations over 25,000 and 80 percent of the eligible cost
for municipalities with populations of 25,000 or less. Financial assistance may be provided by the
Public Facilities Authority through a combination of low interest loans under the state revolving
fund under chapter 446A, independent state grants, and other financial assistance available to
the municipality. The Public Facilities Authority may award independent grants for projects
certified by the state pollution control commissioner for 35 percent or, if the population of the
municipality is 25,000 or less, 65 percent of the eligible cost of construction. These grants may
be awarded in separate steps for planning and design in addition to actual construction. Not
more than $2,000,000 of the total amount of grants awarded under this subdivision in any single
fiscal year may be awarded to a single grantee.
(b) Up to $1,000,000 of the money to be awarded as grants under this subdivision in any
single fiscal year shall be set aside for municipalities having substantial economic development
projects that cannot come to fruition without municipal wastewater treatment improvements. The
agency shall forward its municipal needs list to the authority at the beginning of each fiscal
year, and the authority shall review the list and identify those municipalities having substantial
economic development projects. After the available money is allocated to municipalities in
accordance with agency priorities, the set-aside shall be used by the authority to award grants to
remaining municipalities that have been identified.
(c) Grants may also be awarded under this subdivision to reimburse municipalities willing to
proceed with projects and be reimbursed in a subsequent year at the grant percentage determined
in paragraph (a).
(d) Municipalities that entered into an intent to award agreement with the agency under
paragraph (c), in the state fiscal years 1985 to 1988, will be reimbursed at 55 percent or, if the
population of the municipality is 25,000 or less, 85 percent of the eligible cost of construction.
    Subd. 3b. Capital cost component grant. (a) The definitions of "capital cost component,"
"capital cost component grant," "service fee," "service contract," and "private vendor" in section
471A.02 apply to this subdivision.
(b) Beginning in fiscal year 1989, up to $1,500,000 of the money to be awarded as grants
under subdivision 3a in any single fiscal year may be set aside for the award of capital cost
component grants to municipalities on the municipal needs list for part of the capital cost
component of the service fee under a service contract for a term of at least 20 years with a private
vendor for the purpose of constructing and operating wastewater treatment facilities.
(c) The amount granted to a municipality shall be 50 percent of the average total eligible costs
of municipalities of similar size recently awarded state and federal grants under the provisions of
subdivisions 2a and 3a and the Federal Water Pollution Control Act, United States Code, title 33,
sections 1281 to 1299. Federal and state eligibility requirements for determining the amount of
grant dollars to be awarded to a municipality are not applicable to municipalities awarded capital
cost component grants. Federal and state eligibility requirements for determining which cities
qualify for state and federal grants are applicable, except as provided in this subdivision.
(d) Except as provided in this subdivision, municipalities receiving capital cost component
grants shall not be required to comply with federal and state regulations regarding facilities
planning and procurement contained in sections 116.16 to 116.18, except those necessary to
issue a national pollutant discharge elimination system permit or state disposal system permit
and those necessary to assure that the proposed facilities are reasonably capable of meeting the
conditions of the permit over 20 years. The municipality and the private vendor shall be parties
to the permit. Municipalities receiving capital cost component grants may also be exempted by
rules of the agency from other state and federal regulations relating to the award of state and
federal grants for wastewater treatment facilities, except those necessary to protect the state
from fraud or misuse of state funds.
(e) Funds shall be distributed from the set-aside to municipalities that apply for the funds in
accordance with these provisions in the order of their ranking on the municipal needs list.
(f) The authority shall award capital cost component grants to municipalities selected
by the state pollution control commissioner upon certification by the state pollution control
commissioner that the municipalities' projects and applications have been reviewed and approved
in accordance with this subdivision and agency rules adopted under paragraph (g).
(g) The agency shall adopt permanent rules to provide for the administration of grants
awarded under this subdivision.
(h) The commissioner of employment and economic development may adopt rules
containing procedures for administration of the authority's duties as set forth in paragraph (f).
    Subd. 3c. Individual on-site treatment systems and alternative discharging sewage
systems program. (a) Beginning in fiscal year 1989, up to ten percent of the money to be awarded
as grants under subdivision 3a in any single fiscal year, up to a maximum of $1,000,000, may be
set aside for the award of grants by the agency to municipalities to reimburse owners of individual
on-site wastewater treatment systems or alternative discharging sewage systems for a part of the
costs of upgrading or replacing the systems.
(b) An individual on-site treatment system is a wastewater treatment system, or part thereof,
that uses soil treatment and disposal technology to treat 5,000 gallons or less of wastewater per
day from dwellings or other establishments.
(c) An alternative discharging sewage system is a system permitted under section 115.58 that:
(1) serves one or more dwellings and other establishments;
(2) discharges less than 10,000 gallons of water per day; and
(3) uses any treatment and disposal methods other than subsurface soil treatment and disposal.
(d) Municipalities may apply yearly for grants of up to 50 percent of the cost of replacing or
upgrading individual on-site treatment systems, including conversion to an alternative discharging
sewage system, within their jurisdiction, up to a limit of $5,000 per system or per connection to a
cluster system. Before agency approval of the grant application, a municipality must certify that:
(1) it has adopted and is enforcing the requirements of Minnesota Rules governing individual
sewage treatment systems;
(2) the existing systems for which application is made do not conform to those rules, are
at least 20 years old, do not serve seasonal residences, and were not constructed with state
or federal funds; and
(3) the costs requested do not include administrative costs, costs for improvements or
replacements made before the application is submitted to the agency unless it pertains to the
plan finally adopted, and planning and engineering costs other than those for the individual
site evaluations and system design.
(e) The federal and state regulations regarding the award of state and federal wastewater
treatment grants do not apply to municipalities or systems funded under this subdivision, except
as provided in this subdivision.
(f) The agency shall adopt permanent rules regarding priorities, distribution of funds,
payments, inspections, procedures for administration of the agency's duties, and other matters that
the agency finds necessary for proper administration of grants awarded under this subdivision.
    Subd. 3d. Adjustments to matching grants and state independent grants. A municipality
with a population of 25,000 or less that was tendered a state matching grant under subdivision
2a, or a state independent grant under subdivision 3a, or a federal grant under the Federal Water
Pollution Control Act, United States Code, title 33, sections 1281 to 1299, from October 1, 1984,
through September 30, 1987, shall, after the municipality has awarded bids for construction of the
treatment works, and upon request, receive a grant increase of 2.5 percent of the total eligible
costs of construction, up to the maximum entitlement for grants awarded on or after October 1,
1987, under subdivisions 2a and 3a. The municipality must inform other entities that are providing
funding for construction of the treatment works of the grant increase, and repay any funds to
which it is not entitled. A municipality must not receive funding for more than 100 percent of the
total costs of the treatment works. Documentation of money received from other sources must be
submitted with the request for the grant increase. Money remaining after all grants have been
awarded under this subdivision may be used for the award of grants under subdivisions 2a and 3a.
An adjustment grant awarded after July 1, 1989, that is a continuation of a previously awarded
adjustment grant must be awarded through a letter from the agency to the municipality stating
the grant amount. A formal grant agreement is not required.
    Subd. 4. Bond authorization. For the purpose of providing money appropriated in
subdivision 1 for grants to municipalities and agencies of the state for the acquisition and
betterment of public land, buildings, and improvements of a capital nature needed for the
prevention, control, and abatement of water pollution, the commissioner of finance is authorized
upon request of the Pollution Control Agency to sell and issue Minnesota state water pollution
control bonds in the amount of $156,000,000, in the manner and upon the conditions prescribed
in section 116.17 and in the Constitution, article XI, sections 4 to 7. The proceeds of the bonds,
except as provided in section 116.17, subdivision 5, are appropriated and shall be credited to a
Minnesota state water pollution control account in the bond proceeds fund. The amount of bonds
issued pursuant to this authorization shall not exceed at any time the amount needed to produce a
balance in the water pollution control account equal to the aggregate amount of grants then
approved and not previously disbursed, plus the amount of grants to be approved in the current
and the following fiscal year, as estimated by the Pollution Control Agency.
    Subd. 5. Federal and other funds. All federal and other funds made available for any
purpose of the water pollution control program are also appropriated for the program.
    Subd. 6. Continuance of appropriations. None of the appropriations made in this section
shall lapse until the purpose for which it is made has been accomplished or abandoned. The
amount of each grant approved for the water pollution control program shall be and remain
appropriated for that purpose until the grant is fully disbursed or part or all thereof is revoked
by the Pollution Control Agency.
History: Ex1971 c 20 s 3; 1973 c 423 s 8,9; 1973 c 492 s 14; 1973 c 771 s 1,2; 1975 c 354 s
1,2; 1976 c 2 s 172; 1977 c 418 s 2,3; 1979 c 285 s 1,2; 1981 c 361 s 14,15; 1983 c 301 s 117;
1984 c 597 s 47; 1Sp1985 c 14 art 19 s 4-6; 1987 c 186 s 15; 1987 c 277 s 1,2; 1987 c 312 art
1 s 26 subd 2; 1987 c 386 art 3 s 7,8; 1988 c 686 art 1 s 59; 1989 c 271 s 25-28; 1989 c 300
art 1 s 28; 1989 c 354 s 1,2; 1990 c 564 s 3; 1993 c 180 s 5; 1997 c 246 s 13; 1998 c 401 s 44;
1998 c 404 s 38; 1Sp2003 c 4 s 1

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Revisor of Statutes