1.1                          A bill for an act 
  1.2             relating to the environment; increasing the amount of 
  1.3             water pollution control revolving fund money that may 
  1.4             be appropriated for the agricultural best management 
  1.5             practices loan program; creating a drinking water 
  1.6             infrastructure funding program; appropriating money 
  1.7             for water infrastructure programs; amending Minnesota 
  1.8             Statutes 1998, sections 17.117, subdivision 3; and 
  1.9             116.182, subdivision 6; proposing coding for new law 
  1.10            in Minnesota Statutes, chapter 446A. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1998, section 17.117, 
  1.13  subdivision 3, is amended to read: 
  1.14     Subd. 3.  [APPROPRIATIONS.] Up to $40,000,000 $140,000,000 
  1.15  of the balance in the water pollution control revolving fund in 
  1.16  section 446A.07, as determined by the public facilities 
  1.17  authority, is appropriated to the commissioner for the 
  1.18  establishment of this program. 
  1.19     Sec. 2.  Minnesota Statutes 1998, section 116.182, 
  1.20  subdivision 6, is amended to read: 
  1.21     Subd. 6.  [TRANSFER OF FUNDS.] As the projects in the 
  1.22  programs specified under section 116.18, except the program 
  1.23  under subdivision 3c of that section, are completed, any amounts 
  1.24  remaining from appropriations for the programs are appropriated 
  1.25  to the authority for the wastewater infrastructure funding 
  1.26  program in section 446A.072, and the drinking water 
  1.27  infrastructure funding program in section 446A.075, provided 
  1.28  this use of the funds does not violate applicable provisions of 
  2.1   any bond or note resolutions, indentures, or other instruments, 
  2.2   contracts, or agreements associated with the source of the funds.
  2.3      Sec. 3.  [446A.075] [DRINKING WATER INFRASTRUCTURE FUNDING 
  2.4   PROGRAM.] 
  2.5      Subdivision 1.  [ESTABLISHMENT OF PROGRAM.] The authority 
  2.6   shall establish a drinking water infrastructure funding program 
  2.7   to provide supplemental assistance to municipalities applying 
  2.8   for funding under the drinking water revolving fund or the 
  2.9   United States Department of Agriculture Rural Economic and 
  2.10  Community Development's (USDA/RECD) Water and Waste Disposal 
  2.11  Loans and Grants program for the design and planning, 
  2.12  improvements to, and construction of drinking water treatment 
  2.13  systems. 
  2.14     Subd. 2.  [TYPE OF SUPPLEMENTAL ASSISTANCE.] Supplemental 
  2.15  assistance shall be in the form of grants.  Grant repayments 
  2.16  shall be deferred upon request from the commissioner of health 
  2.17  for six-month periods, provided the commissioner has determined 
  2.18  that satisfactory progress is being made to achieve project 
  2.19  performance. 
  2.20     Subd. 3.  [PROGRAM ADMINISTRATION.] The authority shall 
  2.21  provide supplemental assistance, as provided in subdivision 2, 
  2.22  to municipalities demonstrating financial need, as provided in 
  2.23  subdivision 4, whose projects have been certified to the 
  2.24  authority by the commissioner of the department of health.  The 
  2.25  authority shall reserve supplemental assistance for projects in 
  2.26  order of their priority ranking established by the commissioner 
  2.27  of health. 
  2.28     Subd. 4.  [FUNDING LEVEL.] (a) The authority shall provide 
  2.29  supplemental assistance for eligible costs certified by the 
  2.30  commissioner of health for municipalities that are not eligible 
  2.31  for funding by the United States Department of Agriculture Rural 
  2.32  Development. 
  2.33     (b) A municipality may not receive more than $4,000,000 
  2.34  under this section unless specifically approved by law. 
  2.35     (c) The authority shall provide supplemental assistance for 
  2.36  up to one-half of the eligible grant funding level determined by 
  3.1   the United States Department of Agriculture Rural Development 
  3.2   funding for projects listed on the project priority list by the 
  3.3   commissioner of health, in priority order.  For municipalities 
  3.4   that are not eligible for United States Department of 
  3.5   Agriculture Rural Development funding for drinking water, the 
  3.6   authority shall provide supplemental assistance for eligible 
  3.7   costs as determined in paragraph (a), calculated by first 
  3.8   determining the amount needed to reduce a municipality's annual 
  3.9   residential drinking water costs to 1.4 percent of the 
  3.10  municipality's median household income or $25 per month per 
  3.11  household, whichever is greater, and then multiplying that 
  3.12  amount by 80 percent to determine the actual award amount to 
  3.13  supplement loans under section 446A.081. 
  3.14     (d) Notwithstanding paragraph (b), in the event that a 
  3.15  municipality's monthly residential drinking water service 
  3.16  charges average above $50, the authority shall provide 90 
  3.17  percent of the grant amount needed to reduce the average monthly 
  3.18  drinking water service charge to $50, provided the project is 
  3.19  ranked in the top half of the authority's intended use plan for 
  3.20  drinking water projects. 
  3.21     (e) Notwithstanding paragraphs (b), (c), and (d), a 
  3.22  municipality with an annual median household income of $40,000 
  3.23  or greater is not eligible for a grant. 
  3.24     Subd. 5.  [APPLICATIONS.] Applications for the drinking 
  3.25  water infrastructure funding program must be made to the 
  3.26  authority on forms prescribed by the authority. 
  3.27     Subd. 6.  [DISBURSEMENTS.] Disbursements made by the 
  3.28  authority to recipients must be made for eligible project costs 
  3.29  as incurred by the recipients, and must be made by the authority 
  3.30  in accordance with the project financing agreement and 
  3.31  applicable state and federal laws and rules governing the 
  3.32  payments. 
  3.33     Subd. 7.  [REPAYMENTS.] All repayments received by the 
  3.34  authority under subdivision 2 must be used to provide additional 
  3.35  assistance under this section. 
  3.36     Subd. 8.  [ELIGIBILITY.] A municipality is eligible only 
  4.1   after grant funding from other sources has been applied for, 
  4.2   obtained, or rejected, or the authority has determined that the 
  4.3   potential funding is unlikely. 
  4.4      Subd. 9.  [LIMITATION.] Funding shall not be provided for 
  4.5   projects that are not qualified for assistance or that would 
  4.6   violate the state's constitution or laws regarding the use of 
  4.7   funds appropriated for the program. 
  4.8      Subd. 10.  [HIGH COST PROJECTS.] The authority shall not 
  4.9   award supplemental assistance for projects in excess of $10,000 
  4.10  per household unless the commissioner of health has ranked the 
  4.11  project in the top one-half of the project priority list. 
  4.12     Subd. 11.  [REPORT ON NEEDS.] By October 15 of each 
  4.13  odd-numbered year, the authority, in conjunction with the 
  4.14  commissioner of health, shall prepare a report to the budget 
  4.15  division of the senate environment and natural resources 
  4.16  committee and the house environment and natural resources 
  4.17  finance committee on funding assistance needs of municipalities 
  4.18  under this section. 
  4.19     Subd. 12.  [SYSTEM REPLACEMENT FUND.] Each recipient of 
  4.20  assistance under this section shall establish a system 
  4.21  replacement fund setting aside a minimum each year of $0.10 per 
  4.22  1,000 gallons pumped for major rehabilitation, expansion, or 
  4.23  replacement of part or all of the drinking water system at the 
  4.24  end of its useful life.  Money must remain in the account for 
  4.25  the life of the loan associated with the supplemental assistance 
  4.26  under this section unless use of the fund is approved by the 
  4.27  authority for major rehabilitation, expansion, or replacement of 
  4.28  the drinking water system.  Failure to maintain the fund through 
  4.29  the life of the loan contract issued by the authority under 
  4.30  section 446A.081 shall require the municipality to repay the 
  4.31  grant funds to the authority. 
  4.32     Sec. 4.  [STATE REVOLVING FUND; APPROPRIATION.] 
  4.33     $27,000,000 in fiscal year 2000 is appropriated from the 
  4.34  general fund to the public facilities authority for state 
  4.35  matching money for federal grants to capitalize the water 
  4.36  pollution control revolving fund and the drinking water 
  5.1   revolving fund under Minnesota Statutes, sections 446A.07 and 
  5.2   446A.081.  Each dollar of state money for the water pollution 
  5.3   control revolving fund must be matched by an equal amount of 
  5.4   federal money and each dollar of state money for the drinking 
  5.5   water revolving fund must be matched by $5 of federal money. 
  5.6      Sec. 5.  [AGRICULTURAL BEST MANAGEMENT PRACTICES LOAN 
  5.7   PROGRAM; APPROPRIATION.] 
  5.8      $10,000,000 in fiscal year 2000 is appropriated from the 
  5.9   general fund to the commissioner of agriculture to provide loans 
  5.10  to counties for loans to property owners under Minnesota 
  5.11  Statutes, section 17.117. 
  5.12     Sec. 6.  [CLEAN WATER PARTNERSHIP LOAN PROGRAM; 
  5.13  APPROPRIATION.] 
  5.14     $3,000,000 in fiscal year 2000 is appropriated from the 
  5.15  general fund to the commissioner of the pollution control agency 
  5.16  for loans to local units of government under the clean water 
  5.17  partnership program.  Any unencumbered balance remaining in the 
  5.18  first year does not cancel and is available for the second year 
  5.19  of the biennium. 
  5.20     Sec. 7.  [WASTEWATER INFRASTRUCTURE FUND; APPROPRIATION.] 
  5.21     $28,900,000 in fiscal year 2000 is appropriated from the 
  5.22  general fund to the public facilities authority for grants to 
  5.23  eligible municipalities under the wastewater infrastructure 
  5.24  funding program established in Minnesota Statutes, section 
  5.25  446A.072. 
  5.26     Sec. 8.  [DRINKING WATER INFRASTRUCTURE PROGRAM; 
  5.27  APPROPRIATION.] 
  5.28     $2,000,000 in fiscal year 2000 is appropriated from the 
  5.29  general fund to the public facilities authority for grants to 
  5.30  eligible municipalities under the drinking water infrastructure 
  5.31  funding program established in Minnesota Statutes, section 
  5.32  446A.075. 
  5.33     Sec. 9.  [INDIVIDUAL SEWAGE TREATMENT SYSTEM PROGRAM; 
  5.34  APPROPRIATION.] 
  5.35     $1,000,000 in fiscal year 2000 is appropriated from the 
  5.36  general fund to the commissioner of the pollution control agency 
  6.1   for grants to municipalities for the purposes specified in 
  6.2   Minnesota Statutes, section 116.18, subdivision 3c. 
  6.3      Sec. 10.  [FEEDLOT WATER QUALITY UPGRADES; APPROPRIATION.] 
  6.4      $3,000,000 in fiscal year 2000 and $3,000,000 in fiscal 
  6.5   year 2001 is appropriated from the general fund to the board of 
  6.6   water and soil resources for grants to soil and water 
  6.7   conservation districts for cost-sharing contracts for water 
  6.8   quality management on feedlots.  Priority must be given to 
  6.9   feedlot operators who have received notices of violation and for 
  6.10  feedlots in counties that are conducting or have completed a 
  6.11  level 2 or level 3 feedlot inventory. 
  6.12     Sec. 11.  [INDIVIDUAL SEWAGE TREATMENT SYSTEM LOANS; 
  6.13  APPROPRIATION.] 
  6.14     $6,000,000 in fiscal year 2000 is appropriated from the 
  6.15  general fund to the commissioner of agriculture to provide loans 
  6.16  to counties for loans to property owners under Minnesota 
  6.17  Statutes, section 17.117 or 115.57. 
  6.18     Individual counties may elect to apply for and administer 
  6.19  the loans under the agricultural best management loan practices 
  6.20  program established in Minnesota Statutes, section 17.117 or 
  6.21  115.57.  Regardless of the section a county applies under, the 
  6.22  commissioner shall review and rank allocation requests from 
  6.23  counties under the procedure and relevant criteria listed in 
  6.24  Minnesota Statutes, section 17.117, subdivision 9.  Loans made 
  6.25  under Minnesota Statutes, section 17.117, with money 
  6.26  appropriated under this section must be used for site 
  6.27  evaluation, design, installation, repair, and replacement of 
  6.28  individual sewage treatment systems only.  Notwithstanding the 
  6.29  eligibility criteria in Minnesota Statutes, section 17.117, 
  6.30  subdivisions 1 and 4, paragraph (e), all private landowners in a 
  6.31  county may apply for loans made under this section.  Counties 
  6.32  receiving funds under this section must use the funds to 
  6.33  administer loan programs on a countywide basis.  For money 
  6.34  appropriated under this section, interest assessed to loan 
  6.35  repayments under Minnesota Statutes, section 115.57, by the 
  6.36  local lender must not exceed three percent. 
  7.1      Sec. 12.  [PLANNING GRANTS; APPROPRIATION.] 
  7.2      $100,000 in fiscal year 2000 is appropriated from the 
  7.3   general fund to the public facilities authority for grants under 
  7.4   Minnesota Statutes, section 446A.072, subdivision 13.