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Chapter 446A

Section 446A.072

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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    Subd. 2.[Repealed, 2002 c 393 s 91]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. Notwithstanding the limitations set forth in section 475.54,
subdivision 1, this subdivision shall govern the maturities and mandatory sinking fund
redemptions of the loans under this section. 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 final maturity date of the loan
under this section must be no later than 20 years from the date of the first payment on the loan
under this section and no later than 40 years from the date of the first payment on the water
pollution control revolving fund loan.
    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.
History: 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; 2006 c 281 art 4 s 24

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Revisor of Statutes