446A.075 SMALL COMMUNITY WASTEWATER TREATMENT PROGRAM.
Subdivision 1. Creation of account.
A small community wastewater treatment account is
created in the special revenue fund. The authority shall make loans and grants from the account as
provided in this section. Money in the fund is annually appropriated to the authority and does
not lapse. The account shall be credited with all loan repayments and investment income from
the account and servicing fees assessed under section
, subdivision 5. The authority
shall manage and administer the small community wastewater treatment account and for these
purposes, may exercise all powers provided in this chapter.
Subd. 1a. Technical assistance grants.
If requested, and if it is an eligible use of funds, the
authority shall provide technical assistance grants to governmental units as provided in this
section to analyze possible solutions to problems from noncomplying individual sewage treatment
systems. A grant under this subdivision shall equal $10,000 plus $500 per household, not to
exceed a total of $40,000. Technical assistance grant funds may be used to:
(1) contract with a licensed individual sewage treatment system professional for a
preliminary analysis of the feasibility of installing new systems meeting the requirements of
(2) to contract for services from the University of Minnesota Extension Service to advise the
governmental unit on the feasibility of possible wastewater treatment alternatives and help the
governmental unit develop the technical, managerial, and financial capacity necessary to build,
operate, and maintain individual wastewater treatment systems.
Subd. 2. Construction loans and grants.
(a) The authority shall award loans and grants
as provided in this subdivision to governmental units from the small community wastewater
treatment account for projects to replace noncomplying individual sewage treatment systems with
an individual sewage treatment system or systems meeting the requirements of section
governmental unit receiving a loan or grant from the account shall own the individual 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 ensure
proper operation of the systems.
(b) Loans may be awarded for up to 100 percent of eligible project costs as described
in this section.
(c) When the area to be served by a project has a median household income below the state
average median household income, the governmental unit may receive 50 percent of the funding
provided under this subdivision in the form of a grant. An applicant may submit income survey
data collected by an independent party if it believes the most recent United States census does not
accurately reflect the median household income of the area to be served.
Subd. 3. Project priority list.
Governmental units seeking loans or grants from the small
community wastewater treatment program shall first submit a project proposal to the Pollution
Control Agency on a form prescribed by the Pollution Control Agency. A project proposal shall
include the compliance status for all individual sewage treatment systems in the project area. The
Pollution Control agency shall rank project proposals on its project priority list used for the clean
water revolving fund under section
Subd. 4. Applications.
Governmental units with projects on the project priority list shall
submit applications for loans or grants under this program to the authority on forms prescribed by
the authority. An application for technical assistance funds shall include the number of households
served by individual sewage treatment systems in the community and the proposed use of funds.
An application for construction funds shall include:
(1) a list of the individual sewage treatment systems proposed to be replaced over a period
of up to three years;
(2) a project schedule and cost estimate for each year of the project;
(3) a financing plan for repayment of the loan; and
(4) a management plan providing for the inspection, maintenance, and repairs necessary to
ensure proper operation of the systems.
Subd. 5. Awards.
The authority shall award loans and grants as provided in this section to
governmental units with approved applications based on their ranking on the Pollution Control
Agency's project priority list. Prior to the award of construction loans or grants under subdivision
2, paragraph (b), the Pollution Control Agency shall certify that the individual sewage treatment
systems to be built appear to meet the criteria set forth in section
and rules of the Pollution
Control Agency. The total amount awarded for construction loans and grants under subdivision 2,
paragraph (b), 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 or loan and grant agreement meeting the terms
and conditions in subdivision 6. A governmental unit receiving a loan or loan and grant under a
multiyear commitment shall have priority for additional loan and grant funds in subsequent years.
Subd. 6. Loan terms and conditions.
Loans from the small community wastewater
treatment account shall comply with the following terms and conditions:
(1) principal and interest payments must begin no later than two years after the loan is
(2) loans shall carry an interest rate of one percent;
(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;
(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
(5) each property owner voluntarily seeking assistance for repair or replacement of
an individual treatment system under this program must provide a utility easement to the
governmental unit to allow access to the system for management and repairs.
Subd. 7. Special assessment deferral.
(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
(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.
Subd. 8. Eligible costs.
(a) Eligible costs for technical assistance grants as provided in
subdivision 1a shall include the cost of soil borings.
(b) Eligible costs for construction loans and grants shall include the costs for design,
construction, related legal fees, and land acquisition.
Subd. 9. Disbursements.
Loan and grant 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 or grant and loan agreement and applicable state law.
Subd. 10. Audits.
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.
History: 2006 c 251 s 15; 2007 c 96 art 1 s 9