1997 Minnesota Statutes

     446A.072 Wastewater infrastructure funding program. 

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

    Subd. 2.    Type of supplemental assistance.  
 Supplemental assistance shall be in the form of zero percent 
 loans, with loan repayments beginning February 20 or August 20 
 following the scheduled date of the project obtaining the 
 operational performance standards established by the agency.  
 Upon receipt of notice from the agency that the project 
 operational performance standards have been met, the authority 
 will forgive the scheduled loan repayments made under this 
 section.  If not forgiven, loan repayments shall be deferred 
 upon request from the commissioner of the agency for six-month 
 periods, provided the commissioner has determined that 
 satisfactory progress is being made to achieve project 
 performance or is developing or implementing a corrective action 
 plan. 

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

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

    (b) A municipality may not receive more than $4,000,000 
 under this section unless specifically approved by law. 

    (c) The authority will calculate the grant amount needed 
 for the essential project component costs by first determining 
 the amount needed to reduce a municipality's monthly residential 
 sewer service charge to $25 or to an annual residential sewer 
 service charge in excess of 1.5 percent of the municipality's 
 median household income, whichever is less, and then multiplying 
 that amount by 80 percent to determine the actual award amount 
 to supplement loans under section 446A.07 or provide up to 
 one-third of the amount of the grant funding level required by 
 USDA/RECD for projects listed on the agency's intended use plan. 

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

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

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

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

    Subd. 4a.    Loan repayment; new development.  (a) For 
 the purposes of this subdivision, "loan" includes a loan that 
 has been forgiven under this section. 

    (b) A municipality that receives a supplemental assistance 
 loan under this section that, within 20 years after receiving 
 the assistance, extends sewer service to serve a residential, 
 industrial, or commercial development that is completed on 
 unplatted land after March 1, 1996, or that is on a lot whose 
 plat was recorded after that date, must repay a portion of the 
 loan to the authority before providing the sewer connection.  
 The commissioner shall calculate the amount to be repaid by 
 first determining the number of households included in the 
 extension financed by the original loan.  The commissioner must 
 then determine the present value of the original loan amount.  
 The interest rate used to calculate the present value must be 
 equivalent to the interest rate on the loan made to the 
 municipality under section 446A.07 at the time of the original 
 supplemental assistance loan under this section.  The 
 commissioner must then divide the present value of the loan by 
 the number of households included in the original loan.  For an 
 extension to a residential development, the repayment to the 
 authority must be equal to the per household amount calculated 
 for the original loan multiplied by the number of households in 
 the proposed extension.  For an extension to a commercial or 
 industrial development, the commissioner shall determine the 
 repayment to the authority by using the per household amount 
 calculated for the original loan to calculate a proportionally 
 equivalent amount based on the projected wastewater discharge 
 from the proposed development.  The total repayments to the 
 authority under this paragraph may not exceed the original 
 amount of the supplemental assistance loan.  The repayment must 
 be processed as provided in subdivision 7. 

    (c) The authority shall waive the loan repayment if the 
 commissioner determines that the community in which the sewer 
 extension is undertaken meets the following conditions: 

    (1) there is a shortage of decent, safe, and affordable 
 housing; 

    (2) the housing units served by the sewer extension are 
 located in an incorporated area; and 

    (3) the housing units served by the sewer extension are 
 moderately priced. 

    The authority shall also waive the loan repayment if the 
 commissioner determines that the population of the community in 
 which the sewer extension is undertaken has declined by more 
 than ten percent since the preceding federal decennial census. 

    The commissioner shall provide the determinations made 
 under this paragraph to the authority to be included in the 
 reports required by subdivision 11. 

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

    Subd. 6.    Disbursements.  Disbursements made by the 
 authority to recipients must be made for eligible project costs 
 as incurred by the recipients, and must be made by the authority 
 in accordance with the project financing agreement and 
 applicable state and federal laws and rules governing the 
 payments. 

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

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

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

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

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

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

    HIST: 1996 c 463 s 45; 1997 c 246 s 18