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S.F. No. 2839 - Omnibus Capital Investment Bill (As Proposed to be Amended by the A-4 Delete-Everything)
Author: Senator LeRoy A. Stumpf
Prepared By: Stephanie James, Senate Counsel (651/296-0103)
Date: May 2, 2016


Article 1 - Appropriations

Section 1 [Capital Improvement Appropriations] states that the appropriations in this article are from the bond proceeds fund, or another named fund. Notes that bond proceeds must be spent as permitted by the Minnesota Constitution. Permits use of appropriations to pay agency staff costs that are attributed directly to the capital project or program. Makes appropriations available until a project is completed or abandoned, subject to a four-year time limit. Money appropriated in the article may not be used for asset preservation if the work can be done in a reasonable time frame using the state energy improvement financing program in Minnesota Statutes, section 16A.322, or the guaranteed energy saving program in section 16C.144. Notes that if a project is fully funded by the appropriation, no additional nonstate money is required. General fund appropriations are onetime, in fiscal year 2017.

Sections 2-30 appropriate money for specified programs and projects, as detailed on the spreadsheet.

Section 31 [Bond Sale Authorization]

Subd. 1 [Bond proceeds fund] authorizes sale and issuance of bonds to provide money appropriated from the bond proceeds fund.

Subd. 2 [Transportation fund] authorizes the sale and issuance of bonds to provide money appropriated from the state transportation fund.

Subd. 3 [Trunk highway fund] authorizes the sale and issuance of trunk highway bonds.

Subd. 4 [Maximum effort school loan fund] authorizes sale and issuance of bonds to provide the money appropriated from the maximum effort school loan fund.

Section 32 [Cancellations; Bond Sale Authorization Reductions] reduces the bond sale authorization from previous years, for amounts that were not needed because of projects being under budget or abandoned.

Section 33 [Bond Sale Schedule] requires the commissioner of management and budget to sell general obligation bonds on a schedule so that during the biennium no more than a specified amount is transferred from the general fund to the state bond fund to pay principal and interest on state general obligation bonds.  Appropriates the amount needed to pay debt service from the general fund to the state bond fund.

Section 34 [Effective date] sets the effective date for Article 1 as the day following enactment.

Article 2 – Miscellaneous

Section 1 [Lewis and Clark Appropriation Bonds] amends statute relating to appropriation bonds for the Lewis and Clark project that brings water from an aquifer near the Missouri River in South Dakota to certain communities in southwest Minnesota. Authorizes $11.5 million in appropriation bonds to finance Phase 3.

Subd. 1 [Definitions] makes conforming changes.

Subd. 2 [Authorization to issue appropriation bonds] and subdivision 2a [Project authorization] make clarifying changes to, and reorganizes, provisions related to the 2015 authorization to sell appropriation bonds.

Subd. 2b [Additional project authorization] authorizes for the commissioner of management and budget to sell $11,500,000 in appropriation bonds for Phase 3 of the Lewis and Clark project, including extending the project from the Lincoln-Pipestone Rural Water System connection near Adrian to Worthington, constructing a reservoir in Nobles County and a meter building in Worthington, and acquiring and installing a control and data acquisition system.  Requires a nonstate match of $9,000,000 for Phase 3.

Subds. 3 [Form; procedure], 4 [Refunding bonds], 5 [Appropriation bonds as legal investments] and 6 [No full faith and credit; state not required to make appropriations] do not change current law.

Subd. 7 [Appropriation of proceeds] specifies that the recipient of appropriated bond proceeds is the Public Facilities Authority for a grant to the Lewis and Clark Joint Powers Board.

Subd. 8 [Appropriation for debt service and other purposes] appropriates $855,000 from the general fund to pay principal and interest on appropriation bonds issued for Phase 3 of the project. The appropriation is available in fiscal year 2018 through fiscal year 2039.

Subd. 9 [Waiver of immunity] does not change current law.

Sec. 2 [Upper bluff; lease terms] precludes a DNR lease with a tenant at the upper bluff area at Fort Snelling from allowing a tenant to make capital improvements instead of paying rent.

Section 3 [Variance Assistance for Municipalities] establishes an account for reimbursing eligible municipalities for the fee charged by the Minnesota Pollution Control Agency for a permit variance. Eligibility is based on hardship.  Money is appropriated to this account in Article 1.

Section 4. [Crude Oil and Hazardous Materials Rail Safety Account and Program] establishes a new competitive grant program for reducing risks of transporting hazardous material by rail.  The program funds projects with bond proceeds. May be used for capital costs for public highway-rail grade crossing improvements on rail corridors transporting crude oil and other hazardous materials.  The program may be used to fund upgrades to existing protection systems, the closing of crossing and necessary roadwork, and reconstruction of at-grade crossings to full grade separations. Money is appropriated for this program in Article 1.

Section 5.  [Water Infrastructure Funding Program] expands the existing wastewater infrastructure program to provide supplemental assistance to government entities receiving funding under the drinking water revolving fund program.  (Under current law, the program only provides this supplemental assistance to government entities receiving funding through the clean water revolving fund program or the USDA’s Rural Economic and Community Development Water and Waste Disposal Loans and Grants.)  Adds specifics to the calculation of the essential project component percentage eligible for this program.  Increases the caps for the grants from $4 million to $5 million per project and from $15,000 to $20,000 per existing condition, whichever is less.  Removes certain provisions relating to loans:  eliminates permission for governmental units to defer payment of assessments to repay loans; and eliminates a provision that specifies the amount and timing of loan repayments.  Money is appropriated for this program in Article 1.

Section 6 [Point Source Implementation Grants] makes changes to the point source implementation grant program.  Increases the cap from $3,000,000 to $7,000,000 and up to 80% of the project cost for grants under the point source implementation program and makes other technical changes.  Money is appropriated for this program in Article 1.

Section 7 [Other uses of fund] makes changes to the Drinking Water Revolving Fund program.  Qualifies one of the permitted uses of the fund. Makes changes that are conforming to the expansion of the wastewater infrastructure program to cover drinking water in Sec. 5 of this article.

Section 8 [Bonding authority] increases the cap on bonding authority of the Public Facilities Authority for issued and outstanding bonds from $1.5 billion to $2 billion.

Sections 9 [Definitions] and 10 [Authorization] eliminates authorization to use housing infrastructure bonds to acquire or rehab abandoned or foreclosed properties.

Section 11 [Additional authorization] authorizes the Housing Finance Agency to issue $70 million in new housing infrastructure bonds.

Section 12 [Additional appropriation] appropriates money from the general fund to pay the debt service on the new Housing Finance Agency bonds, authorized in the previous section. This appropriation is capped at $5,600,000 annually from 2018 through 2039.

Sections 13-18 modify the project description for, or extends the availability of, appropriations of bond proceeds from earlier years. Projects affected are:  the Fergus Falls Regional Treatment Center, the St. Louis Park noise barrier, Lake Zumbro, Phillips Community Center pool, the Inver Grove Heights Heritage Village project, and a pedestrian crossing for Robert Street.

Section 19 [Office of Legislative Auditor Report] requires the Office of the Legislative Auditor to evaluate options for funding asset preservation of the state’s capital assets and to report to the legislature by November 15, 2016, with recommendations.

Section 20 [Veterans Homes; Montevideo and Bemidji] increases base funding, beginning in fiscal year 2018 by $10,000,000 for operating expenses at new veterans homes in Montevideo and Bemidji.

Section 21 [Appropriation; Water Supply Sustainability Study] appropriates money for studies relating to the proposed augmentation of White Bear Lake.

Section  22 [Repealer] repeals authorization for the sale and issuance of bonds for the cooperative secondary facilities grant program.




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