S.F. No. 3057, the capital improvements bill, as amended by the Committee on Finance appropriates $949 million for capital improvements to state and local facilities.

Major projects financed by the bill include $110 million for higher education asset preservation at the University of Minnesota and the Minnesota State Colleges and Universities; $60 million to expand the Minnesota Correctional Facility at Faribault; $40 million to replace and rehabilitate local bridges; $39 million for wastewater infrastructure grants; $30 million for flood hazard mitigation grants; $24 million to construct the Minnesota Planetarium; $23 million for the conservation reserve enhancement program (CREP); $22 million to construct and renovate middle school and high school facilities on the Red Lake Indian Reservation; $20 million for a biotechnology research facility for the University of Minnesota and Mayo Clinic; $20 million for housing for the homeless; and $19 million for improvements to metropolitan parks.

The appropriations are detailed in a related spreadsheet. This summary will focus only on the language of the bill that goes beyond describing the various projects for which the appropriations are made.

Section 2. University of Minnesota.

Page 4, subdivision 6, provides that, except for higher education asset preservation and replacement, the appropriations in this section represent approximately two-thirds of the cost of each project and that the remaining costs must be paid from university sources.

Page 4, subdivision 7, requires the Commissioner of Finance to create an account for amounts budgeted for contingencies for projects in this section. Once the projects have been completed or abandoned, any remaining money must be used for higher education asset preservation and replacement.

Section 3. Minnesota State Colleges and Universities.

Page 6, lines 2 to 5, require a nonstate match of $200,000 for improvements at Dakota Technical College.

Page 9, subdivision 26, requires that the board of trustees pay one-third of the debt service on projects in this section, except for higher education asset preservation and replacement, with a credit for the amount that they raise in the form of nonstate match.

Section 4. Education.

Page 10, lines 12 to 25, require the Commissioner of Education to review the proposed school construction at Independent School District No. 38 - Red Lake, to ensure that the project will be economical and report to the Legislature by January 10, 2005, on any reductions made as a result of that review.

Page 10, lines 51 to 53, modify the statutory limits on grants to rehabilitate facilities for early childhood learning and child protection programs from $200,000 per program and $500,000 per facility down to $75,000 per program and $200,000 per facility.

Section 7. Natural Resources.

Page 12, lines 16 to 20, provide that if a flood hazard mitigation project for which money has been appropriated is not ready to proceed, the Commissioner of Natural Resources may allocate that project's money to the next project on the commissioner's priority list.

Page 12, lines 21 to 30, authorize state grants for flood hazard mitigation to be used to pay the local share of project costs for certain projects in the Red River and Minnesota River Valleys, to the extend that the local share exceeds two percent of the median household income in the municipality multiplied by the number of households in the municipality.

Page 12, lines 31 and 32, forgive the local match requirement for the Canisteo Mine project.

Page 12, lines 33 to 35, increase the state share of flood hazard mitigation grants for Roseau River, Palmville, and Malung from 50 percent to 75 percent.

Page 12, lines 36 to 44, grant a four-year extension to a grant to the city of Stillwater for flood hazard mitigation.

Page 14, lines 16 to 21, require the Commissioner of Natural Resources to consult with representatives of local units of government, nonprofit organizations, and other interested parties in setting priorities for metro greenways and natural areas.

Page 15, lines 11 to 16, require an equal match for $500,000 appropriated to construct part of the Paul Bunyan Trail in the city of Bemidji.

Page 15, lines 35 to 38, require an equal match for grants to counties for reforestation of county-administered lands.

Page 17, lines 1 to 6, provide that for purposes of funding metropolitan regional parks Columbia Parkway, Ridgeway Parkway, and Stinson Boulevard in Minneapolis are considered to part of the metropolitan regional recreation open space system.

Section 10. Board of Water and Soil Resources.

Page 19, lines 27 to 40, require that the purchase price paid for wetlands to replace those lost due to public road projects must be the fair market value as determined by the Board of Water and Soil Resources and authorize the Board to enter into agreements with public and private entities to acquire and restore and create wetlands and to acquire existing wetland banking credits.

Page 20, lines 5 to 8, require a 25 percent local match for grants to develop flood water retention systems in Area II of the Minnesota River Basin.

Section 13. Administration.

Page 21, lines 25 to 29, provide that the debt service on bonds sold for improvements to state parking facilities will be paid from parking fees.

Section 14. Capitol Area Architectural and Planning Board.

Page 21, lines 45 to 53, require that the appropriation to renovate the interior of the Capitol Building not be spent on any project that affects space under the control of the Senate without the approval of the Secretary of the Senate nor on any project that affects space under the control of the House of Representatives without the approval of the Chief Clerk of the House.

Section 17. Veterans Affairs.

Page 22, lines 33 to 41, require that the appropriation for the World War II Veteran's Memorial on the Capitol Mall be the final appropriation for the project and make it contingent on sufficient nonstate money being received and deposited into a segregated account for perpetual maintenance of the memorial. The design is subject to approval by the Capitol Area Architectural and Planning Board.

Section 18. Commerce.

Page 22, line 50, to page 23, line 14, require that the biomass fueled heating and cooling systems to be predesigned with this appropriation be procured in an environmentally sustainable manner. Grants may be either for new systems or upgrades of existing systems, with preference given to projects for planning for future conversion to cogeneration and projects seeking federal matching money. Proposals submitted by interested municipalities or state colleges and universities must be evaluated by a technically knowledgeable, nonpartisan organization, such as the United States Department of Energy's National Renewable Energy Laboratory.

Section 20. Transportation.

Page 24, lines 30 to 36, require an equal match for the $1.5 million appropriated for a railroad bypass in or near the city of Willmar.

Page 24, line 55, to page 25, line 1, require that the state appropriation of $2 million for the Northstar Commuter Rail Line be matched by $2 million from local governments and provide that approval to proceed to final design must have been authorized by the Federal Transit Administration.

Page 25, lines 22 to 25, require a one-to-one match by the city of Duluth for the appropriation of $1 million for restoration of the aerial lift bridge.

Section 21. Health.

Page 26, lines 31 to 35, require an equal match for the $1.4 million appropriated for the Hennepin County Crisis Intervention Center.

Section 22. Human Services.

Page 27, lines 29 to 32, require that grave markers or memorial monuments at regional treatment centers not be placed if the family of the deceased resident objects to the placement of the monument.

Section 25. Employment and Economic Development.

Page 29, lines 45 to 53, require the Public Facilities Authority to make grants from the wastewater infrastructure funding program in accordance with the 2004 project priority list in priority order.

Page 30, lines 25 to 28, require a one-to-one match for a $4.95 million appropriation for a grant to the city of Duluth for design and construction of sanitary sewer overflow storage facilities.

Page 30, lines 39 to 43, require a match of $325,000 for a $1.5 million appropriation for a grant to the city of Two Harbors to construct an equalization basin and chlorine-contact tank adjacent to the city's wastewater treatment plant.

Page 31, lines 26 to 34, require a match of $6 million for a $3 million appropriation for a water treatment facility in the city of Burnsville. Amounts spent since January 1, 2002, to plan, design, and construct this project may be counted as part of the nonstate match.

Page 31, lines 54 to 59, waive the usual criteria, limitations, and repayment requirements for a grant of $600,000 to the city of Red Lake Falls to develop emergency riverbank protection and erosion control measures along the Red Lake River.

Page 32, lines 5 to 9, require an equal match for a $500,000 appropriation to renovate the Detroit Lakes Regional Pavilion.

Page 32, lines 21 to 24, require a one-to-one match for an appropriation of $400,000 to design and construct exhibits and facility improvements at the Lake Superior Zoo.

Page 32, lines 31 to 35, require an equal match for a $375,000 appropriation for a grant to the city of Gaylord to develop the Gaylord Multicultural and Lifelong Learning Center.

Page 32, lines 55 to 58, require a one-to-one match for a $2 million appropriation for the Lewis and Clark Rural Water System and note that the federal government will be providing $8 for each $1 of state and $1 of local money appropriated for the system.

Page 33, lines 21 to 25, require an equal match for the $2 million appropriation for the Colin Powell Youth Leadership Center.

Page 33, lines 43 to 47, authorize the city of Minneapolis to enter into a lease or a management agreement to operate the Minnesota Shubert Center.

Page 33, line 59, to page 34, line 4, require an equal match for the $1 million appropriation to the city of Moorhead for asset preservation at the Heritage Hjemkomst Center.

Page 34, lines 27 to 31, waive the usual criteria, limitations, and repayment requirements for a $10 million grant to the city of Roseau to repair flood damage.

Page 34, lines 32 to 37, authorize reimbursement of capital costs of the Roseau flood damage repair that are incurred in calendar year 2004 after the effective date of the appropriation.

Page 34, lines 42 to 46, require an equal match for the $500,000 appropriation for a grant to the city of St. Cloud to predesign the expansion of the St. Cloud Civic Center.

Page 35, lines 1 to 6, authorize the city of St. Paul to operate a performing arts center and enter into a lease or management agreement for the Ordway Center for the Performing Arts.

Page 35, lines 21 to 24, authorize the city of Winona to enter into a lease or management agreement for the Great River Shakespeare Festival Theater.

Page 35, lines 24 to 28, require an equal match for the $125,000 appropriation for a grant to the city of Winona to predesign the Great River Shakespeare Festival Theater.

Section 27. Iron Range Resources and Rehabilitation Board.

Page 36, lines 2 to 5, require a match of $800,000 for the $1.8 million appropriation complete construction of Mesabi Station along the Mesabi Trail.

Section 28. Minnesota Historical Society.

Page 36, lines 35 to 39, require an equal match for the $150,000 appropriation for a grant to the city of Maplewood to complete restoration of the Bruentrup Farm in Maplewood.

Section 30 modifies the amount set aside for debt service on bonds to be issued during the current biennium to reflect the amount of bonds authorized in this bill.

Section 31 authorizes the sale of bonds to fund the various appropriations in the bill from the bond proceeds fund, the maximum effort school loan fund, and the transportation fund.

Section 32 updates the limitation on the amount of certificates of indebtedness the State may sell to meet cash flow requirements by conforming to the current federal arbitrage limitations contained in the Code of Federal Regulations, title 26, section 1.148-6(d)(3)(iii)(B). That limitation is five percent of the actual working capital expenditures from the general fund in the preceding fiscal year.

Section 33 addresses the question of how the proceeds of the sale of state bond financed property are divided between the State and a local government that have both contributed to the improvement of the property. It provides that in calculating the share contributed by each entity, the amount to be attributed to the owner of the property, that is the local government, must be the fair market value of property that was bettered by state bond proceeds at the time the betterment began. This change affects the property known as the Bartholomew House, which was acquired by the Richfield school district in 1965 for about $8,300. The school district is about to receive, in 2004, a grant of $12,100 from the Minnesota Historical Society to improve the house. If the property were later sold, the State and the school district would divide the proceeds according to their prospective shares contributed. The value of the property in 2004 is probably ten times what it was in 1965. The school district would like to have its contribution valued at its fair market value in 2004, when it will be improved, rather than its cost in 1965 when it was purchased.

Section 34 adds a cross-reference to new Minnesota Statutes, section 446A.073, which authorizes the Public Facilities Authority to make grants to municipalities or wastewater treatment projects made necessary by wasteload reductions under total maximum daily load plans. These grants will be reviewed by the Commissioner of the Pollution Agency using the same procedures as for other wastewater treatment grants.

Section 35 creates a new broadband infrastructure grant program to be administered by the Commissioner of Employment and Economic Development. The grants will be to cities for up to 80 percent of the capital costs of public infrastructure necessary for an eligible broadband development project. The city receiving a grant must provide for the remainder of the cost of the project either in cash or in kind or from the private sector. The broadband service must be capable of transmitting video, voice, and data at speeds of at least 256 kilobits per second. The facilities will include fiber optic cable, coaxial cable, copper wire, conduit, wireless, and transmission equipment. A city may receive no more than a total of $200,000 in grants under this section in two consecutive years for one or more projects.

Sections 36 to 41 expand the area covered by the Greater Minnesota redevelopment account to include the entire State, as the predecessor redevelopment account did until 2002.

Section 41 requires that in each grant cycle the Commissioner of Employment and Economic Development make grants so that at least 50 percent of the dollar value of grants for that cycle is for projects located outside of the seven-county metropolitan area.

Section 42 expands the library access grant program to include improvements in addition to removing architectural barriers to people with disabilities. The maximum amount of a grant to improve accessibility is increased from $150,00 to $200,000. The maximum amount of a grant for other renovation or expansion of a library or construction of a new library is set at $1 million or 50 percent of the approved cost, whichever is less.

Section 43 authorizes the Board of Trustees of the Minnesota State Colleges and Universities to sell lands the Board has declared to be surplus and to keep the proceeds of the sale for college and university purposes.

Section 44 creates a rural road safety account in the local road improvement fund to make grants to counties to assist in paying the costs of capital improvement projects on county state-aid highways that are intended primarily to reduce traffic crashes, deaths, injuries, and property damage. One-half the money in the account must be used for projects in the seven-county metro area and the remainder must used for projects elsewhere.

Section 45 allows the Veterans Homes Board to use profits derived from the operation of wood shops at the Minnesota veterans homes for the benefit of the residents of the homes.

Section 46 creates a program of grants by the Public Facilities Authority to municipalities to cover one-half the cost of wastewater treatment projects made necessary by wasteload reductions under total maximum daily load plans required by the federal Clean Air Act. The Pollution Control Agency would calculate the eligible project cost as it does for other wastewater treatment grants. Grants would be made in order of approval by the United States Environmental Protection Agency of a total maximum daily load plan and only after the Public Facilities Authority has determined that the additional financing necessary to complete the project has been committed from other sources.

Section 47 authorizes two or more counties to enter into a joint powers agreement to construct and operate a regional adult detention facility to serve multiple counties.

Section 48 postpones until June 30, 2006, cancellation of a $1 million appropriation made in 2000 for a harbor of refuge at Two Harbors.

Section 49 requires that the parking facility for the Department of Human Services being constructed in St. Paul at the former Capitol Square site must include at least 14 spaces for employees of the St. Paul Fire Department to lease at rates comparable to those for state employees.

Section 50 specifies in detail the permitted uses of the $20 million appropriation made in 2002 to construct a portion of the northwest busway from downtown Minneapolis to Rogers.

Section 51 transfers from the Department of Health to the Board of Trustees of the Minnesota State Colleges and Universities a $775,000 appropriation made in 2003 to construct a community dental clinic at Lake Superior Community College in Duluth and a dental hygiene clinic in Moorhead.

Section 52 encourages the Board of Regents of the University of Minnesota to expand the parking facilities at the University of Minnesota, Duluth campus through the purchase of land and property from willing sellers.

Section 53 makes the article effective the day following final enactment.

Article 2

Adjustment of General Obligation Bond Authorizations

Section 1 reduces bond authorizations in prior laws to reflect amounts that have been canceled since the original appropriation was made.

Section 2 makes the article effective the day following final enactment.

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