new text begin Subdivision 1. new text end

new text begin Purpose. new text end

new text begin The purpose of the Clean Water Legacy Act is to protect,
restore, and preserve the quality of Minnesota's surface waters by providing authority,
direction, and resources to achieve and maintain water quality standards for surface waters
as required by section 303(d) of the federal Clean Water Act, United States Code, title 33,
section 1313(d), and applicable federal regulations.
new text end

new text begin Subd. 2. new text end

new text begin Findings. new text end

new text begin The legislature finds that:
new text end

new text begin (1) there is a close link between protecting, restoring, and preserving the quality of
Minnesota's surface waters and the ability to develop the state's economy, enhance its
quality of life, and protect its human and natural resources;
new text end

new text begin (2) achieving the state's water quality goals will require long-term commitment and
cooperation by all state and local agencies, and other public and private organizations
and individuals, with responsibility and authority for water management, planning, and
protection; and
new text end

new text begin (3) all persons and organizations whose activities affect the quality of waters,
including point and nonpoint sources of pollution, have a responsibility to participate in
and support efforts to achieve the state's water quality goals.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin The definitions provided in this section apply to the
terms used in this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Citizen monitoring. new text end

new text begin "Citizen monitoring" means monitoring of surface
water quality by individuals and nongovernmental organizations that is consistent
with Pollution Control Agency guidance on monitoring procedures, quality assurance
protocols, and data management.
new text end

new text begin Subd. 3. new text end

new text begin Clean water council. new text end

new text begin "Clean Water Council" or "council" means the Clean
Water Council created pursuant to section 114D.30, subdivision 1.
new text end

new text begin Subd. 4. new text end

new text begin Federal TMDL requirements. new text end

new text begin "Federal TMDL requirements" means the
requirements of section 303(d) of the Clean Water Act, United States Code, title 33,
section 1313(d), and associated regulations and guidance.
new text end

new text begin Subd. 5. new text end

new text begin Impaired water. new text end

new text begin "Impaired water" means surface water that does not
meet applicable water quality standards.
new text end

new text begin Subd. 6. new text end

new text begin Public agencies. new text end

new text begin "Public agencies" means all state agencies, political
subdivisions, joint powers organizations, and special purpose units of government with
authority, responsibility, or expertise in protecting, restoring, or preserving the quality of
surface waters, managing or planning for surface waters and related lands, or financing
waters-related projects. "Public agencies" also includes the University of Minnesota and
other public education institutions.
new text end

new text begin Subd. 7. new text end

new text begin Restoration. new text end

new text begin "Restoration" means actions, including effectiveness
monitoring, that are taken to achieve and maintain water quality standards for impaired
waters in accordance with a TMDL that has been approved by the United States
Environmental Protection Agency under federal TMDL requirements.
new text end

new text begin Subd. 8. new text end

new text begin Surface waters. new text end

new text begin "Surface waters" means waters of the state as defined
in section 115.01, subdivision 22, excluding groundwater as defined in section 115.01,
subdivision 6.
new text end

new text begin Subd. 9. new text end

new text begin Third-party TMDL. new text end

new text begin "Third-party TMDL" means a TMDL that is
developed by a qualified public agency other than the Pollution Control Agency consistent
with the goals, policies, and priorities in section 114D.20.
new text end

new text begin Subd. 10. new text end

new text begin Total maximum daily load or TMDL. new text end

new text begin "Total maximum daily load"
or "TMDL" means a calculation of the maximum amount of a pollutant that may be
introduced into a surface water and still ensure that applicable water quality standards
for that water are achieved and maintained. A TMDL is the sum of the pollutant load
allocations for all sources of the pollutant, including a load allocation for point sources, a
load allocation for nonpoint sources and natural background, a load allocation for future
growth of point and nonpoint sources, and a margin of safety to account for uncertainty
about the relationship between pollutant loads and the quality of the receiving surface
water. "Natural background" means characteristics of the water body resulting from the
multiplicity of factors in nature, including climate and ecosystem dynamics, that affect
the physical, chemical, or biological conditions in a water body, but does not include
measurable and distinguishable pollution that is attributable to human activity or influence.
A TMDL must take into account seasonal variations.
new text end

new text begin Subd. 11. new text end

new text begin Water quality standards. new text end

new text begin "Water quality standards" for Minnesota
surface waters are found in Minnesota Rules, chapters 7050 and 7052.
new text end

new text begin Subdivision 1. new text end

new text begin Coordination and cooperation. new text end

new text begin In implementing this chapter,
public agencies shall take into consideration the relevant provisions of local and other
applicable water management, conservation, land use, land management, and development
plans and programs. Public agencies with authority for local water management,
conservation, land use, land management, and development plans shall take into
consideration the manner in which their plans affect the implementation of this chapter.
Public agencies shall identify opportunities to participate and assist in the successful
implementation of this chapter, including the funding or technical assistance needs, if any,
that may be necessary. In implementing this chapter, public agencies shall endeavor
to engage the cooperation of organizations and individuals whose activities affect the
quality of surface waters, including point and nonpoint sources of pollution, and who
have authority and responsibility for water management, planning, and protection. To
the extent practicable, public agencies shall endeavor to enter into formal and informal
agreements and arrangements with federal agencies and departments to jointly utilize
staff and resources to deliver programs or conduct activities to achieve the intent of this
chapter, including efforts under the federal Clean Water Act and other federal farm and
soil and water conservation programs.
new text end

new text begin Subd. 2. new text end

new text begin Goals for implementation. new text end

new text begin The following goals must guide the
implementation of this chapter:
new text end

new text begin (1) to identify impaired waters in accordance with federal TMDL requirements
within ten years after the effective date of this section and thereafter to ensure continuing
evaluation of surface waters for impairments;
new text end

new text begin (2) to submit TMDL's to the United States Environmental Protection Agency for all
impaired waters in a timely manner in accordance with federal TMDL requirements;
new text end

new text begin (3) to set a reasonable time for implementing restoration of each identified impaired
water;
new text end

new text begin (4) to provide assistance and incentives to prevent waters from becoming impaired
and to improve the quality of waters that are listed as impaired but do not have an
approved TMDL addressing the impairment; and
new text end

new text begin (5) to promptly seek the delisting of waters from the impaired waters list when those
waters are shown to achieve the designated uses applicable to the waters.
new text end

new text begin Subd. 3. new text end

new text begin Implementation policies. new text end

new text begin The following policies must guide the
implementation of this chapter:
new text end

new text begin (1) develop regional and watershed TMDL's, and TMDL's for multiple pollutants,
where reasonable and feasible;
new text end

new text begin (2) maximize use of available organizational, technical, and financial resources to
perform sampling, monitoring, and other activities to identify impaired waters, including
use of citizen monitoring;
new text end

new text begin (3) maximize opportunities for restoration of impaired waters, by prioritizing and
targeting of available programmatic, financial, and technical resources and by providing
additional state resources to complement and leverage available resources;
new text end

new text begin (4) use existing regulatory authorities to achieve restoration for point and nonpoint
sources of pollution where applicable, and promote the development and use of effective
nonregulatory measures to address pollution sources for which regulations are not
applicable;
new text end

new text begin (5) use restoration methods that have a demonstrated effectiveness in reducing
impairments and provide the greatest long-term positive impact on water quality protection
and improvement and related conservation benefits while incorporating innovative
approaches on a case-by-case basis;
new text end

new text begin (6) identify for the legislature any innovative approaches that may strengthen or
complement existing programs; and
new text end

new text begin (7) identify and encourage implementation of measures to prevent waters from
becoming impaired and to improve the quality of waters that are listed as impaired but
have no approved TMDL addressing the impairment using the best available data and
technology, and establish and report outcome-based performance measures that monitor
the progress and effectiveness of protection and restoration measures.
new text end

new text begin Subd. 4. new text end

new text begin Priorities for identifying impaired waters. new text end

new text begin The Pollution Control
Agency, in accordance with federal TMDL requirements, shall set priorities for identifying
impaired waters, giving consideration to:
new text end

new text begin (1) waters where impairments would pose the greatest potential risk to human or
aquatic health; and
new text end

new text begin (2) waters where data developed through public agency or citizen monitoring or
other means provides evidence that an impaired condition exists.
new text end

new text begin Subd. 5 new text end

new text begin Priorities for preparation of TMDL's. new text end

new text begin The Clean Water Council shall
recommend priorities for scheduling and preparing TMDL's taking into account the
severity of the impairment, the designated uses of those waters, and other applicable
federal TMDL requirements. In recommending priorities, the council shall also give
consideration to waters and watersheds:
new text end

new text begin (1) with impairments that pose the greatest potential risk to human health;
new text end

new text begin (2) with impairments that pose the greatest potential risk to threatened or endangered
species;
new text end

new text begin (3) with impairments that pose the greatest potential risk to aquatic health;
new text end

new text begin (4) where other public agencies and participating organizations and individuals,
especially local, basinwide, or regional agencies or organizations, have demonstrated
readiness to assist in carrying out the responsibilities, including availability and
organization of human, technical, and financial resources necessary to undertake the
work; and
new text end

new text begin (5) where there is demonstrated coordination and cooperation among cities,
counties, watershed districts, and soil and water conservation districts in planning and
implementation of activities that will assist in carrying out the responsibilities.
new text end

new text begin Subd. 6. new text end

new text begin Priorities for restoration of impaired waters. new text end

new text begin In implementing
restoration of impaired waters, in addition to the priority considerations in subdivision 5
the Clean Water Council shall give priority in its recommendations for restoration funding
from the clean water legacy account to restoration projects that:
new text end

new text begin (1) coordinate with and utilize existing local authorities and infrastructure for
implementation;
new text end

new text begin (2) can be implemented in whole or in part by providing support for existing or
ongoing restoration efforts;
new text end

new text begin (3) most effectively leverage other sources of restoration funding, including federal,
state, local, and private sources of funds;
new text end

new text begin (4) show a high potential for early restoration and delisting based upon data
developed through public agency or citizen monitoring or other means; and
new text end

new text begin (5) show a high potential for long-term water quality and related conservation
benefits.
new text end

new text begin Subd. 7. new text end

new text begin Priorities for funding prevention actions. new text end

new text begin The Clean Water Council
shall apply the priorities applicable under subdivision 6, as far as practicable, when
recommending priorities for funding actions to prevent waters from becoming impaired
and to improve the quality of waters that are listed as impaired but do not have an
approved TMDL.
new text end

new text begin Subdivision 1. new text end

new text begin General duties and authorities. new text end

new text begin (a) The Pollution Control Agency,
in accordance with federal TMDL requirements, shall: identify impaired waters and
propose a list of the waters for review and approval by the United States Environmental
Protection Agency; develop and approve TMDL's for listed impaired waters and submit
the approved TMDL's to the United States Environmental Protection Agency for final
approval; and propose to delist waters from the United States Environmental Protection
Agency impaired waters list.
new text end

new text begin (b) A TMDL must include a statement of the facts and scientific data supporting the
TMDL and a list of potential implementation options, including:
new text end

new text begin (1) a range of estimates of the cost of implementation of the TMDL; and
new text end

new text begin (2) for point sources, the individual wasteload data and the estimated cost of
compliance addressed by the TMDL.
new text end

new text begin The implementation information does not need to be sent to the United States
Environmental Protection Agency for review.
new text end

new text begin Subd. 2. new text end

new text begin Administrative procedures for TMDL approval. new text end

new text begin Before approving a
TMDL, the agency shall give written notice to the public of the proposed TMDL and
provide a 30-day opportunity for submission of written comments. The agency shall
distribute the notice in the same manner as a notice of a proposed permit is distributed
under agency rules. The approval of a TMDL by the Pollution Control Agency is a final
decision of the agency under section 115.05, subdivision 11, clause (1), and is subject
to the contested case procedures of sections 14.57 to 14.62 in accordance with agency
procedural rules. The agency shall not submit an approved TMDL to the United States
Environmental Protection Agency until the time for commencing judicial review has
run or the judicial review process has been completed. A TMDL is not subject to the
rulemaking requirements of chapter 14, including section 14.386.
new text end

new text begin Subd. 3. new text end

new text begin Third-party TMDL development. new text end

new text begin The Pollution Control Agency may
enter agreements with any qualified public agency setting forth the terms and conditions
under which that entity is authorized to develop a third-party TMDL. In determining
whether the public agency is qualified to develop a third-party TMDL, the Pollution
Control Agency shall consider the technical and administrative qualifications of the public
agency and shall avoid any potential organizational conflict of interest, as defined in
section 16C.02, subdivision 10a, of the public agency with respect to the development of
the third-party TMDL. A third-party TMDL is subject to modification and approval by the
Pollution Control Agency, and must be approved by the Pollution Control Agency before it
is submitted to the United States Environmental Protection Agency. The Pollution Control
Agency shall consider authorizing the development of third-party TMDL's consistent with
the goals, policies, and priorities determined under section 116.384.
new text end

new text begin Subdivision 1. new text end

new text begin Creation; duties. new text end

new text begin A Clean Water Council is created to advise on the
administration and implementation of this chapter, and foster coordination and cooperation
as described in section 114D.20, subdivision 1. The council may also advise on the
development of appropriate processes for expert scientific review as described in section
114D.35, subdivision 2. The Pollution Control Agency shall provide administrative
support for the council with the support of other member agencies. The members of the
council shall elect a chair from the nonagency members of the council.
new text end

new text begin Subd. 2. new text end

new text begin Membership; appointment. new text end

new text begin The commissioners of natural resources,
agriculture, and the Pollution Control Agency, and the executive director of the Board of
Water and Soil Resources shall appoint one person from their respective agency to serve
as a member of the council. Seventeen additional nonagency members of the council shall
be appointed as follows:
new text end

new text begin (1) two members representing statewide farm organizations, appointed by the
governor;
new text end

new text begin (2) one member representing business organizations, appointed by the governor;
new text end

new text begin (3) one member representing environmental organizations, appointed by the
governor;
new text end

new text begin (4) one member representing soil and water conservation districts, appointed by
the governor;
new text end

new text begin (5) one member representing watershed districts, appointed by the governor;
new text end

new text begin (6) one member representing organizations focused on improvement of Minnesota
lakes or streams, appointed by the governor;
new text end

new text begin (7) two members representing an organization of county governments, one member
representing the interests of rural counties, and one member representing the interests of
counties in the seven-county metropolitan area, appointed by the governor;
new text end

new text begin (8) two members representing organizations of city governments, appointed by
the governor;
new text end

new text begin (9) one member representing the Metropolitan Council established under section
473.123, appointed by the governor;
new text end

new text begin (10) one township officer, appointed by the governor;
new text end

new text begin (11) one member of the house of representatives, appointed by the speaker;
new text end

new text begin (12) one member of the senate, appointed by the majority leader;
new text end

new text begin (13) one member representing the University of Minnesota or a Minnesota state
university, appointed by the governor; and
new text end

new text begin (14) one member representing the interests of tribal governments, appointed by
the governor.
new text end

new text begin The members of the council appointed by the governor are subject to the advice
and consent of the senate. At least six of the members appointed by the governor must
reside in the seven-county metropolitan area. In making appointments, the governor must
attempt to provide for geographic balance.
new text end

new text begin Subd. 3. new text end

new text begin Terms; compensation; removal. new text end

new text begin The initial terms of members
representing state agencies and the Metropolitan Council expire on the first Monday in
January, 2007. Thereafter, the terms of members representing the state agencies and
the Metropolitan Council are four years and are coterminous with the governor. The
terms of other members of the council shall be as provided in section 15.059, subdivision
2. Members may serve until their successors are appointed and qualify. Compensation
and removal of council members is as provided in section 15.059, subdivisions 3 and 4.
A vacancy on the council may be filled by the appointing authorities, as provided in
subdivision 1, for the remainder of the unexpired term.
new text end

new text begin Subd. 4. new text end

new text begin Implementation plan. new text end

new text begin The Clean Water Council shall recommend a
plan for implementation of this chapter. The recommended plan shall address general
procedures and time frames for implementing this chapter, and shall include a more
specific implementation work plan for the next fiscal biennium and a framework for setting
priorities to address impaired waters consistent with section 114D.20, subdivisions 2 to 7.
The council shall issue the first recommended plan under this subdivision by December 1,
2005, and shall issue a revised plan by December 1 of each even-numbered year thereafter.
new text end

new text begin Subd. 5. new text end

new text begin Recommendations on appropriation of funds. new text end

new text begin The Clean Water Council
shall recommend to the governor the manner in which money from the clean water legacy
account should be appropriated for the purposes identified in section 114D.45, subdivision
3. The council's recommendations must be consistent with the purposes, policies, goals,
and priorities in sections 114D.05 to 114D.35, and shall allocate adequate support
and resources to identify impaired waters, develop TMDL's, implement restoration of
impaired waters, and provide assistance and incentives to prevent waters from becoming
impaired and improve the quality of waters which are listed as impaired but have no
approved TMDL.
new text end

new text begin Subd. 6. new text end

new text begin Biennial report to legislature. new text end

new text begin By December 1 of each even-numbered
year, the council shall submit a report to the legislature on the activities for which money
from the clean water legacy account has been or will be spent for the current biennium,
the activities for which money from the account is recommended to be spent in the next
biennium, and the impact on economic development of the implementation of the impaired
waters program. The report due on December 1, 2014, must include an evaluation of the
progress made through June 30, 2014, in implementing this chapter, the need for funding of
future implementation of those sections, and recommendations for the sources of funding.
new text end

new text begin Subdivision 1. new text end

new text begin Public and stakeholder participation. new text end

new text begin Public agencies involved
in the implementation of this chapter shall encourage participation by the public and
stakeholders, including local citizens, landowners and managers, and public and private
organizations, in the identification of impaired waters, in developing TMDL's, and in
planning and implementing restoration of impaired waters. In particular, the Pollution
Control Agency shall make reasonable efforts to provide timely information to the public
and to stakeholders about impaired waters that have been identified by the agency. The
agency shall seek broad and early public and stakeholder participation in scoping the
activities necessary to develop a TMDL, including the scientific models, methods, and
approaches to be used in TMDL development, and to implement restoration pursuant to
section 114D.15, subdivision 7.
new text end

new text begin Subd. 2. new text end

new text begin Expert scientific advice. new text end

new text begin The Clean Water Council and public
agencies shall make use of available expertise from educational, research, and technical
organizations, including the University of Minnesota and other higher education
institutions, to provide appropriate independent expert advice on models, methods, and
approaches used in identifying impaired waters, developing TMDL's, and implementing
prevention and restoration.
new text end

new text begin Subd. 3. new text end

new text begin Education. new text end

new text begin The Clean Water Council shall develop strategies for
informing, educating, and encouraging the participation of citizens, stakeholders, and
others regarding the identification of impaired waters, development of TMDL's, and
development and implementation of restoration for impaired waters. Public agencies shall
be responsible for implementing the strategies.
new text end

new text begin Subdivision 1. new text end

new text begin Creation. new text end

new text begin The clean water legacy account is created as an account
in the environmental fund. Money in the account must be made available for the
implementation of this chapter and sections 446A.073, 446A.074, and 446A.075, without
supplanting or taking the place of any other funds which are currently available or may
become available from any other source, whether federal, state, local, or private, for
implementation of those sections.
new text end

new text begin Subd. 2. new text end

new text begin Sources of revenue. new text end

new text begin The following revenues must be deposited in the
clean water legacy account:
new text end

new text begin (1) money transferred to the account; and
new text end

new text begin (2) interest accrued on the account.
new text end

new text begin Subd. 3. new text end

new text begin Purposes. new text end

new text begin Subject to appropriation by the legislature, the clean water
legacy account may be spent for the following purposes:
new text end

new text begin (1) to provide grants, loans, and technical assistance to public agencies and others
who are participating in the process of identifying impaired waters, developing TMDL's,
implementing restoration plans for impaired waters, and monitoring the effectiveness
of restoration;
new text end

new text begin (2) to support measures to prevent waters from becoming impaired and to improve
the quality of waters that are listed as impaired but have no approved TMDL addressing
the impairment;
new text end

new text begin (3) to provide grants and loans for wastewater and storm water treatment projects
through the Public Facilities Authority;
new text end

new text begin (4) to support the efforts of public agencies associated with individual sewage
treatment systems and financial assistance for upgrading and replacing the systems; and
new text end

new text begin (5) to provide funds to state agencies to carry out their responsibilities under this
chapter.
new text end

new text begin Subdivision 1. new text end

new text begin Creation of fund; appropriation. new text end

new text begin The authority shall establish a
clean water legacy capital improvement fund and shall make grants from the fund as
provided in this section. Money in the clean water legacy capital improvement fund,
including interest earned, is appropriated to the authority for the purposes of this section.
new text end

new text begin Subd. 2. new text end

new text begin Grants. new text end

new text begin The authority shall award grants from the clean water legacy
capital improvement fund to governmental units for the capital costs of wastewater
treatment facility projects or a portion thereof that will reduce the discharge of total
phosphorus from the facility to one milligram per liter or less. A project is eligible for a
grant if it meets the following requirements:
new text end

new text begin (1) the applicable phosphorus discharge limit is incorporated in a permit issued by
the agency for the wastewater treatment facility on or after March 28, 2000, the grantee
agrees to comply with the applicable limit as a condition of receiving the grant, or the
grantee made improvements to a wastewater treatment facility on or after March 28, 2000,
that include infrastructure to reduce the discharge of total phosphorus to one milligram
per liter or less;
new text end

new text begin (2) the governmental unit has submitted a facilities plan for the project to the agency
and a grant application to the authority on a form prescribed by the authority; and
new text end

new text begin (3) the agency has approved the application and facilities plan, and certified the
eligible costs for the project to the authority.
new text end

new text begin Subd. 3. new text end

new text begin Eligible capital costs. new text end

new text begin Eligible capital costs for phosphorus reduction
grants under subdivision 4, paragraph (a), include the as-bid construction costs and
engineering planning and design costs. Eligible capital costs for phosphorus reduction
grants under subdivision 4, paragraph (b), include the final, incurred construction,
engineering, planning, and design costs.
new text end

new text begin Subd. 4. new text end

new text begin Grant amounts and priorities. new text end

new text begin (a) Priority must be given to projects that
start construction on or after July 1, 2005. If a facility's plan for a project is approved
by the agency before July 1, 2009, the amount of the grant is 75 percent of the eligible
capital cost of the project. If a facility's plan for a project is approved by the agency on
or after July 1, 2009, the amount of the grant is 50 percent of the eligible capital cost of
the project. Priority in awarding grants under this paragraph must be based on the date of
approval of the facility's plan for the project.
new text end

new text begin (b) Projects that meet the eligibility requirements in subdivision 2 and have started
construction before July 1, 2005, are eligible for grants to reimburse 75 percent of the
eligible capital cost of the project, less any amounts previously received in grants from
other sources. Application for a grant under this paragraph must be submitted to the
agency no later than June 30, 2007. Priority for award of grants under this paragraph must
be based on the date of agency approval of the application for the grant.
new text end

new text begin (c) In each fiscal year that money is available for grants, the authority shall first
award grants under paragraph (a) to projects that met the eligibility requirements of
subdivision 2 by May 1 of that year. The authority shall use any remaining money
available that year to award grants under paragraph (b). Grants that have been approved
but not awarded in a previous fiscal year carry over and must be awarded in subsequent
fiscal years in accordance with the priorities in this paragraph.
new text end

new text begin (d) Disbursements of grants 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 law.
new text end

new text begin Subd. 5. new text end

new text begin Fees. new text end

new text begin The authority may charge the grant recipient a fee for its
administrative costs not to exceed one-half of one percent of the grant amount, to be
paid upon execution of the grant agreement.
new text end

new text begin Subdivision 1. new text end

new text begin Creation of fund. new text end

new text begin The authority shall establish a small community
wastewater treatment fund and shall make loans from the fund as provided in this section.
Money in the fund is annually appropriated to the authority and does not lapse. The fund
shall be credited with all loan repayments and investment income from the fund, and
servicing fees assessed under section 446A.04, subdivision 5. The authority shall manage
and administer the small community wastewater treatment fund, and for these purposes,
may exercise all powers provided in this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Loans. new text end

new text begin The authority shall award loans to governmental units from
the small community wastewater treatment fund for projects to replace noncomplying
individual sewage treatment systems with a community wastewater treatment system or
systems meeting the requirements of section 115.55. A governmental unit receiving a
loan from the fund shall own the community wastewater treatment systems built under
the program and shall be responsible, either directly or through a contract with a private
vendor, for all inspections, maintenance, and repairs necessary to assure proper operation
of the systems.
new text end

new text begin Subd. 3. new text end

new text begin Project priority list. new text end

new text begin Governmental units seeking loans from the small
community wastewater treatment loan program shall first submit a project proposal to the
agency. A project proposal shall include a compliance determination for all individual
sewage treatment systems in the project area. The agency shall rank project proposals on
its project priority list used for the water pollution control revolving fund under section
446A.07.
new text end

new text begin Subd. 4. new text end

new text begin Loan applications. new text end

new text begin Governmental units with projects on the project
priority list shall submit applications to the authority on forms prescribed by the authority.
The application shall include:
new text end

new text begin (1) a list of the individual sewage treatment systems proposed to be replaced over a
period of up to three years;
new text end

new text begin (2) a project schedule and cost estimate for each year of the project;
new text end

new text begin (3) a financing plan for repayment of the loan; and
new text end

new text begin (4) a management plan providing for the inspection, maintenance, and repairs
necessary to assure proper operation of the systems.
new text end

new text begin Subd. 5. new text end

new text begin Loan awards. new text end

new text begin The authority shall award loans to governmental units with
approved loan applications based on their ranking on the agency's project priority list. The
loan amount shall be based on the estimated project costs for the portion of the project
expected to be completed within one year, up to an annual maximum of $500,000. For
projects expected to take more than one year to complete, the authority may make a
multiyear commitment for a period not to exceed three years, contingent on the future
availability of funds. Each year of a multiyear commitment must be funded by a separate
loan agreement meeting the terms and conditions in subdivision 6. A governmental unit
receiving a loan under a multiyear commitment shall have priority for additional loan
funds in subsequent years.
new text end

new text begin Subd. 6. new text end

new text begin Loan terms and conditions. new text end

new text begin Loans from the small community wastewater
treatment fund shall comply with the following terms and conditions:
new text end

new text begin (1) principal and interest payments must begin no later than two years after the
loan is awarded;
new text end

new text begin (2) loans shall carry an interest rate of one percent;
new text end

new text begin (3) loans shall be fully amortized within ten years of the first scheduled payment
or, if the loan amount exceeds $10,000 per household, shall be fully amortized within 20
years but not to exceed the expected design life of the system;
new text end

new text begin (4) a governmental unit receiving a loan must establish a dedicated source or sources
of revenues for repayment of the loan and must issue a general obligation note to the
authority for the full amount of the loan; and
new text end

new text begin (5) each property owner to be served by a community wastewater treatment system
under this program must provide an easement to the governmental unit to allow access to
the system for management and repairs.
new text end

new text begin Subd. 7. new text end

new text begin Special assessment deferral. new text end

new text begin (a) A governmental unit receiving a loan
under this section that levies special assessments to repay the loan may defer payment of
the assessments under the provisions of sections 435.193 to 435.195.
new text end

new text begin (b) A governmental unit that defers payment of special assessments for one or more
properties under paragraph (a) may request deferral of that portion of the debt service on
its loan, and the authority shall accept appropriate amendments to the general obligation
note of the governmental unit. If special assessment payments are later received from
properties that received a deferral, the funds received shall be paid to the authority with
the next scheduled loan payment.
new text end

new text begin Subd. 8. new text end

new text begin Eligible costs. new text end

new text begin Eligible costs for small community wastewater treatment
loans shall include the costs of planning, design, construction, legal fees, administration,
and land acquisition.
new text end

new text begin Subd. 9. new text end

new text begin Disbursements. new text end

new text begin Loan disbursements by the authority under this section
must be made for eligible project costs as incurred by the recipients, and must be made in
accordance with the project loan agreement and applicable state law.
new text end

new text begin Subd. 10. new text end

new text begin Audits. new text end

new text begin A governmental unit receiving a loan under this section must
annually provide to the authority for the term of the loan a copy of its annual independent
audit or, if the governmental unit is not required to prepare an independent audit, a copy of
the annual financial reporting form it provides to the state auditor.
new text end

Subdivision 1.

Program established.

new text begin From money appropriated for this
program,new text end the authority must make grants to municipalities to cover up to one-half the cost
of wastewater treatment new text begin or stormwater new text end projects made necessary by wasteload reductions
under total maximum daily load plans required by section 303(d) of the federal Clean
Water Act, United States Code, title 33, section 1313(d).

Subd. 2.

Grant application.

Application for a grant must be made to the authority
on forms prescribed by the authority for the total maximum daily load grant program, with
additional information as required by the authority. In accordance with section 116.182,
the Pollution Control 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.

Subd. 3.

Project priorities.

When money is appropriated for grants under this
program, the authority shall reserve money for projects in the order that their total
maximum daily load plan was approved by the United States Environmental Protection
Agency 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.

Grant approval.

The authority must make a grant to a municipality, as
defined in section 116.182, subdivision 1, only after:

(1) the commissioner of the Minnesota Pollution Control Agency has certified to
the United States Environmental Protection Agency a total maximum daily load plan for
identified waters of this state that includes a point source wasteload allocation;

(2) the Environmental Protection Agency has approved the plan;

(3) a municipality affected by the plan has estimated the cost to it of wastewater
treatment projects necessary to comply with the point source wasteload allocation;

(4) the Pollution Control Agency has approved the cost estimate; and

(5) the authority has determined that the additional financing necessary to complete
the project has been committed from other sources.

Subd. 5.

Grant disbursement.

Disbursement of a grant must be made for eligible
project costs as incurred by the municipality and in accordance with a project financing
agreement and applicable state and federal laws and rules governing the payments.