1.1                          A bill for an act 
  1.2             relating to municipalities; making certain changes 
  1.3             regarding storm and sanitary sewer authorizations; 
  1.4             amending Minnesota Statutes 2002, section 444.075, 
  1.5             subdivisions 1, 1a, 2, 3. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2002, section 444.075, 
  1.8   subdivision 1, is amended to read: 
  1.9      Subdivision 1.  [DEFINITIONS.] ~~For purposes of~~ The 
  1.10  definitions in this subdivision apply in this section~~, the term~~. 
  1.11     (a) "Municipality" means a home rule charter or statutory 
  1.12  city~~, except a city of the first class,~~ or a town that is not in 
  1.13  an orderly annexation process on October 3, 1989.  ~~The term~~ 
  1.14     (b) "Governing body" means the town board with respect to 
  1.15  towns. 
  1.16     (c) "Waterworks" means waterworks systems, including mains, 
  1.17  valves, hydrants, service connections, wells, pumps, reservoirs, 
  1.18  tanks, treatment plants, and other appurtenances of a waterworks 
  1.19  system. 
  1.20     (d) "Sanitary sewer" means sanitary sewer systems, 
  1.21  including sewage treatment works, disposal systems, and other 
  1.22  facilities for disposing of sewage, industrial waste, or other 
  1.23  wastes. 
  1.24     (e) "Storm sewer" means storm sewer systems, including 
  1.25  mains, holding areas and ponds, and other appurtenances and 
  2.1   related facilities for the collection and disposal of storm 
  2.2   water. 
  2.3      (f) "Facilities" means and includes waterworks, sanitary 
  2.4   sewer and storm sewer systems, or any portion or portions 
  2.5   thereof. 
  2.6      Sec. 2.  Minnesota Statutes 2002, section 444.075, 
  2.7   subdivision 1a, is amended to read: 
  2.8      Subd. 1a.  [AUTHORIZATION.] Any municipality may build, 
  2.9   construct, reconstruct, repair, enlarge, improve, or in any 
  2.10  other manner obtain 
  2.11     ~~(i) waterworks systems, including mains, valves, hydrants,~~ 
  2.12  ~~service connections, wells, pumps, reservoirs, tanks, treatment~~ 
  2.13  ~~plants, and other appurtenances of a waterworks system,~~ 
  2.14     ~~(ii) sewer systems, sewage treatment works, disposal~~ 
  2.15  ~~systems, and other facilities for disposing of sewage,~~ 
  2.16  ~~industrial waste, or other wastes, and~~ 
  2.17     ~~(iii) storm sewer systems, including mains, holding areas~~ 
  2.18  ~~and ponds, and other appurtenances and related facilities for~~ 
  2.19  ~~the collection and disposal of storm water, all hereinafter~~ 
  2.20  ~~called~~ facilities, and maintain and operate the facilities 
  2.21  inside or outside its corporate limits, and acquire by gift, 
  2.22  purchase, lease, condemnation, or otherwise any and all land and 
  2.23  easements required for that purpose.  The authority hereby 
  2.24  granted is in addition to all other powers with reference to the 
  2.25  facilities otherwise granted by the laws of this state or by the 
  2.26  charter of any municipality.  The authority regarding storm 
  2.27  sewers granted ~~in clause (iii)~~ to municipalities which have 
  2.28  territory within a watershed which has adopted a watershed plan 
  2.29  pursuant to section 103B.231 shall be exercised, with respect to 
  2.30  facilities acquired following the adoption of the watershed 
  2.31  plan, only for facilities which are not inconsistent with the 
  2.32  watershed plan.  The authority regarding storm sewers granted ~~in~~ 
  2.33  ~~clause (iii)~~ to municipalities which have adopted local water 
  2.34  management plans pursuant to section 103B.235 shall be 
  2.35  exercised, with respect to facilities acquired following the 
  2.36  adoption of a local plan, only for facilities which are not 
  3.1   inconsistent with the local plan.  Counties, except counties in 
  3.2   the seven-county metropolitan area, shall have the same 
  3.3   authority granted to municipalities by this subdivision except 
  3.4   for areas of the county organized into cities and areas of the 
  3.5   county incorporated within a sanitary district established by 
  3.6   special act of the legislature. 
  3.7      Sec. 3.  Minnesota Statutes 2002, section 444.075, 
  3.8   subdivision 2, is amended to read: 
  3.9      Subd. 2.  [FINANCING.] For the purpose of paying the cost 
  3.10  of building, constructing, reconstructing, repairing, enlarging, 
  3.11  improving, or in other manner obtaining the facilities or any 
  3.12  portion of them, and of obtaining and complying with permits 
  3.13  required by law, a municipality or county may issue and sell its 
  3.14  general obligations, which may be made payable primarily from 
  3.15  taxes or from special assessments to be levied to pay the cost 
  3.16  of the facilities or from net revenues derived from ~~water or~~ 
  3.17  ~~sewer~~ facilities service charges or from other nontax revenues 
  3.18  pledged for their payment under charter or other statutory 
  3.19  authority, or from two or more of the sources; or it may issue 
  3.20  special obligations, payable solely from taxes or special 
  3.21  assessments or from revenues, or from two or more of the 
  3.22  sources.  Real estate tax revenues should be used only, and then 
  3.23  on a temporary basis, to pay general or special obligations when 
  3.24  the other revenues are insufficient to meet the obligations.  
  3.25  All obligations shall be issued and sold in accordance with 
  3.26  chapter 475.  When special assessments are pledged for the 
  3.27  payment of the obligations, they shall be authorized and issued 
  3.28  in accordance with the provisions of chapter 429, or of the 
  3.29  city's charter if it authorizes these obligations and the 
  3.30  governing body determines to proceed under the charter.  When 
  3.31  net revenues are pledged to the payment of the obligations, 
  3.32  together with or apart from taxes and special assessments, the 
  3.33  pledge shall be made in accordance with the provisions of 
  3.34  subdivision 3.  
  3.35     Sec. 4.  Minnesota Statutes 2002, section 444.075, 
  3.36  subdivision 3, is amended to read: 
  4.1      Subd. 3.  [CHARGES; NET REVENUES.] (a) To pay for the 
  4.2   construction, reconstruction, repair, enlargement, improvement, 
  4.3   or other obtainment ~~and~~, the maintenance, operation and use of 
  4.4   the facilities, and of obtaining and complying with permits 
  4.5   required by law, the governing body of a municipality or county 
  4.6   may impose just and equitable charges for the use and for the 
  4.7   availability of the facilities and for connections with them and 
  4.8   make contracts for the charges as provided in this section.  The 
  4.9   charges may be imposed with respect to facilities made available 
  4.10  by agreement with other municipalities, counties or private 
  4.11  corporations or individuals, as well as those owned and operated 
  4.12  by the municipality or county itself.  
  4.13     (b) Charges made for service ~~directly~~ rendered shall be as 
  4.14  nearly as possible proportionate to the cost of furnishing the 
  4.15  service~~, and~~. 
  4.16     Subd. 3a.  [SANITARY SEWER CHARGES.] Sanitary sewer charges 
  4.17  may be fixed:  
  4.18     (1) on the basis of water consumed~~,~~; or 
  4.19     (2) by reference to a reasonable classification of the 
  4.20  types of premises to which service is furnished~~,~~; or 
  4.21     (3) by reference to the quantity, pollution qualities and 
  4.22  difficulty of disposal of sewage ~~and storm water~~ produced~~,~~; or 
  4.23     (4) on any other equitable basis including~~, but without~~ 
  4.24  ~~limitation,~~ any combination of ~~those~~ equitable bases referred to 
  4.25  ~~above~~ in clauses (1) to (3), but specifically excluding use of 
  4.26  the basis referred to in subdivision 3b, clause (1); and 
  4.27  otherwise without limit. 
  4.28     Subd. 3b.  [STORM SEWER CHARGES.] Storm sewer charges may 
  4.29  be fixed: 
  4.30     (1) by reference to the square footage of the property 
  4.31  charged, adjusted for a reasonable calculation of the storm 
  4.32  water runoff; or 
  4.33     (2) by reference to a reasonable classification of the 
  4.34  types of premises to which service is furnished; or 
  4.35     (3) by reference to the quantity, pollution qualities, and 
  4.36  difficulty of disposal of storm water runoff produced; or 
  5.1      (4) on any other equitable basis, including any combination 
  5.2   of equitable bases referred to in clauses (1) to (3), but 
  5.3   specifically excluding use of the basis referred to in 
  5.4   subdivision 3a, clause (1); and otherwise without limit.  
  5.5      Subd. 3c.  [MINIMUM CHARGES.] (a) Minimum charges for the 
  5.6   availability of water or sewer service may be imposed for all 
  5.7   premises abutting on streets or other places where municipal or 
  5.8   county water mains or sewers are located, whether or not 
  5.9   connected to them.  
  5.10     (b) Minimum charges or user charges collected for 
  5.11  waterworks, sanitary sewers, or storm sewers must be used only 
  5.12  to pay for items for which charges are authorized in subdivision 
  5.13  3.  
  5.14     Subd. 3d.  [FACILITIES' CONNECTION CHARGES.] Charges for 
  5.15  connections to the facilities may in the discretion of the 
  5.16  governing body be fixed by reference to the portion of the cost 
  5.17  of connection which has been paid by assessment of the premises 
  5.18  to be connected, in comparison with other premises, as well as 
  5.19  the cost of making or supervising the connection.  
  5.20     Subd. 3e.  [WHO MAY BE CHARGED; UNPAID CHARGES.] The 
  5.21  governing body may make the charges a charge against the owner, 
  5.22  lessee, occupant or all of them and may provide and covenant for 
  5.23  certifying unpaid charges to the county auditor with taxes 
  5.24  against the property served for collection as other taxes are 
  5.25  collected.  
  5.26     Subd. 3f.  [TAX LEVIES FOR PUBLIC CHARGES.] The governing 
  5.27  body may fix and levy taxes for the payment of reasonable 
  5.28  charges to the municipality or county itself for the use and 
  5.29  availability of the facilities for fire protection, for 
  5.30  maintaining sanitary conditions, and for proper storm water 
  5.31  drainage in and for public buildings, parks, streets, and other 
  5.32  public places.  
  5.33     Subd. 3g.  [REASONABLENESS OF CHARGES.] In determining the 
  5.34  reasonableness of the charges to be imposed, the governing body 
  5.35  may give consideration to all costs of the establishment, 
  5.36  operation, maintenance, depreciation and necessary replacements 
  6.1   of the system, and of improvements, enlargements and extensions 
  6.2   necessary to serve adequately the territory of the municipality 
  6.3   or county including the principal and interest to become due on 
  6.4   obligations issued or to be issued and the costs of obtaining 
  6.5   and complying with permits required by law. 
  6.6      Subd. 3h.  [WHEN CHARGES ARE NOT UNREASONABLE.] When net 
  6.7   revenues have been appropriated to the payment of the cost of 
  6.8   the establishment, or of any specified replacement, improvement, 
  6.9   enlargement or extension, or to pay the principal and interest 
  6.10  due on obligations to be issued for such purpose, no charges 
  6.11  imposed to produce net revenues adequate for the purpose shall 
  6.12  be deemed unreasonable by virtue of the fact that the project to 
  6.13  be financed has not been commenced or completed, if proceedings 
  6.14  for it are taken with reasonable dispatch and the project, when 
  6.15  completed, may be expected to make service available to the 
  6.16  premises charged which will have a value reasonably commensurate 
  6.17  with the charges.  
  6.18     Subd. 3i.  [COLLECTIONS FIRST FOR CURRENT COSTS.] All 
  6.19  charges, when collected, and all moneys received from the sale 
  6.20  of any facilities or equipment or any by-products, shall be 
  6.21  placed in a separate fund, and used first to pay the normal, 
  6.22  reasonable and current costs of operating and maintaining the 
  6.23  facilities.  
  6.24     Subd. 3j.  [EXCESS NET REVENUES MAY BE USED FOR DEBT.] The 
  6.25  net revenues received in excess of the costs may be pledged by 
  6.26  resolutions of the governing body, or may be used though not so 
  6.27  pledged, for the payment of principal and interest on 
  6.28  obligations issued as provided in subdivision 2, or to pay the 
  6.29  portion of the principal and interest as may be directed in the 
  6.30  resolutions, and net revenues derived from any facilities of the 
  6.31  types listed in subdivision 1a, whether or not financed by the 
  6.32  issuance of the obligations, may be pledged or used to pay 
  6.33  obligations issued for other facilities of the same types.  
  6.34     Subd. 3k.  [COVENANTS TO SECURE DEBT PAYMENTS.] In 
  6.35  resolutions authorizing the issuance of either general or 
  6.36  special obligations and pledging net revenues to them, the 
  7.1   governing body may make covenants for the protection of holders 
  7.2   of the obligations and taxpayers of the municipality or county 
  7.3   as it deems necessary, including, but without limitation, a 
  7.4   covenant that the municipality or county will impose and collect 
  7.5   charges of the nature authorized by this section at the times 
  7.6   and in the amounts required to produce, together with any taxes 
  7.7   or special assessments designated as a primary source of payment 
  7.8   of the obligations, net revenues adequate to pay all principal 
  7.9   and interest when due on the obligations and to create and 
  7.10  maintain reserves securing the payments as may be provided in 
  7.11  the resolutions.  
  7.12     Subd. 3l.  [ENFORCEABILITY OF COVENANT.] When a covenant is 
  7.13  made it shall be enforceable by appropriate action on the part 
  7.14  of any holder of the obligations or any taxpayer of the 
  7.15  municipality or county in a court of competent jurisdiction, and 
  7.16  the obligations shall be deemed to be payable wholly from the 
  7.17  income of the system whose revenues are so pledged, within the 
  7.18  meaning of sections 475.51 and 475.58. 
  7.19     Sec. 5.  [EFFECTIVE DATE.] 
  7.20     Sections 1 to 4 are effective January 1, 2006, except that 
  7.21  the inclusion of cities of the first class in the definition of 
  7.22  municipality in Minnesota Statutes, section 444.075, subdivision 
  7.23  1, paragraph (a), is effective August 1, 2004.