1.1.................... moves to amend H.F. No. 2125, the second engrossment, as follows:
1.2Page 183, after line 31, insert:

1.3    "Sec. 9. [446A.077] RURAL MUNICIPALITY WATER TREATMENT FACILITY
1.4RENOVATION FUNDING.
1.5    Subdivision 1. Definitions. For purposes of this section, the following terms have the
1.6meanings given:
1.7(1) "rural municipality" means a statutory or home rule charter city, town, county, or
1.8sanitary district; an organization formed for the joint exercise of powers under section
1.9471.59; and any other special purpose district or authority that operates a wastewater
1.10treatment facility or water main and that is located outside of the metropolitan area as defined
1.11in section 473.121, subdivision 2; and
1.12(2) "wastewater treatment facility" has the meaning given under section 115.71,
1.13subdivision 6.
1.14    Subd. 2. Establishment of account. A water treatment facility renovation account is
1.15created in the special revenue fund. The authority shall make low or no interest loans from
1.16the account to rural municipalities as provided in this section. Money in the account is
1.17annually appropriated to the authority and does not lapse. The authority shall manage and
1.18administer the account and, for these purposes, may exercise all powers provided in this
1.19chapter. The account shall be credited with:
1.20(1) all loan repayments and interest collected under this section; and
1.21(2) money appropriated from local government aid under section 477A.03, subdivision
1.222d.
2.1    Subd. 3. Renovation loans; eligibility. (a) The authority may award loans as provided
2.2in this section to rural municipalities to renovate, rehabilitate, or update wastewater treatment
2.3facilities that pose a risk to groundwater quality or the water quality in lakes, rivers, or
2.4streams or to replace water mains that pose a risk to drinking water sources. A rural
2.5municipality receiving a loan from the account is responsible, either directly or through a
2.6contract with a private vendor, for all inspections and repairs necessary to ensure proper
2.7operation of the wastewater treatment facility or water main.
2.8(b) Loans may be awarded for up to 100 percent of eligible project costs minus any
2.9funding available from other sources.
2.10(c) The authority must award loans as provided in this section to rural municipalities
2.11with approved applications based on their ranking on the project priority lists under
2.12subdivision 4.
2.13    Subd. 4. Project priority lists. (a) Rural municipalities seeking loans for a wastewater
2.14treatment facility renovation must first submit a project proposal to the Pollution Control
2.15Agency on a form prescribed by the Pollution Control Agency. The Pollution Control
2.16Agency shall rank project proposals on its project priority list used for the clean water
2.17revolving fund under section 446A.07.
2.18(b) Rural municipalities seeking loans for replacing a water main must first submit a
2.19project proposal to the Department of Health on a form prescribed by the Department of
2.20Health. The Department of Health shall rank project proposals on its project priority list
2.21used for the drinking water revolving fund under section 446A.081.
2.22    Subd. 5. Applications. Rural municipalities with projects on a project priority list shall
2.23submit applications for loans under this section to the authority on forms prescribed by the
2.24authority. An application must include:
2.25(1) a description of the wastewater treatment facility or water main renovations to be
2.26made;
2.27(2) a project schedule and cost estimate for each year of the project; and
2.28(3) a financing plan for repayment of the loan.
2.29    Subd. 6. Loan terms and conditions. Loans from the water treatment facility renovation
2.30account must comply with the following terms and conditions:
2.31(1) principal and interest payments must begin no later than two years after the loan is
2.32awarded;
3.1(2) loans must be fully amortized within 20 years but not to exceed the expected design
3.2life of the facility or water main; and
3.3(3) a rural municipality receiving a loan must establish a dedicated source or sources of
3.4revenues for repayment of the loan and must issue a general obligation note to the authority
3.5for the full amount of the loan.
3.6    Subd. 7. Disbursements. Loan disbursements by the authority under this section must
3.7be made for eligible project costs as incurred by the recipients and must be made in
3.8accordance with the project loan agreement and applicable state law.
3.9    Subd. 8. Audits. A rural municipality receiving a loan under this section must annually
3.10provide to the authority for the term of the loan a copy of its annual independent audit or,
3.11if the rural municipality is not required to prepare an independent audit, a copy of the annual
3.12reporting form it provides to the state auditor."
3.13Page 185, after line 9, insert:

3.14    "Sec. 13. Minnesota Statutes 2018, section 477A.013, subdivision 8, is amended to read:
3.15    Subd. 8. City formula aid. (a) For aids payable in 2018 and thereafter, the formula aid
3.16for a city is equal to the product of (1) the difference between its unmet need and its certified
3.17aid in the previous year and before any aid adjustment under subdivision 13, and (2) the aid
3.18gap percentage.
3.19    (b) The applicable aid gap percentage must be calculated by the Department of Revenue
3.20so that the total of the aid under subdivision 9 equals the total amount available for aid under
3.21section 477A.03; however, the aid gap percentage may not be less than zero. The aid gap
3.22percentage must be the same for all cities subject to paragraph (a). Data used in calculating
3.23aids to cities under sections 477A.011 to 477A.013 shall be the most recently available data
3.24as of January 1 in the year in which the aid is calculated.
3.25EFFECTIVE DATE.This section is effective for aids payable in 2020 and thereafter."
3.26Page 185, after line 23, insert:
3.27"(c) Notwithstanding paragraphs (a) and (b), if the aid gap percentage calculated in
3.28subdivision 8 is zero and the total aid distributed under this paragraph to all cities would be
3.29greater than the maximum amount available under section 477A.03, then the aid for a city
3.30under this subdivision shall be equal to its certified aid under this subdivision in the previous
3.31year multiplied by an adjustment factor. The adjustment factor, which must be the same for
4.1all cities, must be calculated by the Department of Revenue so that the total aid to all cities
4.2under this subdivision is equal to the amount available for this aid under this section."
4.3Page 188, after line 4, insert:

4.4    "Sec. 18. Minnesota Statutes 2018, section 477A.03, is amended by adding a subdivision
4.5to read:
4.6    Subd. 2d. Wastewater treatment dedication. Each calendar year, five percent of the
4.7appropriation amount under each of subdivisions 2a to 2c shall be retained by the
4.8commissioner of revenue and deposited in the water treatment facility renovation account
4.9under section 446A.077, subdivision 2.
4.10EFFECTIVE DATE.This section is effective for aids payable in 2020 and thereafter."
4.11Renumber the sections in sequence and correct the internal references
4.12Amend the title accordingly