Senate Counsel, Research
and Fiscal Analysis
Minnesota Senate Bldg.
95 University Avenue W. Suite 3300
St. Paul, MN 55155
(651) 296-4791
Tom Bottern
State of Minnesota
S.F. No. 543 - Lewis and Clark Regional Water System Use Purpose Modification - Second Engrossment
Author: Senator Bill Weber
Prepared By: Stephanie James, Senate Counsel (651/296-0103)
Casey J. Muhm, Senate Fiscal Analyst (651/296-2500)
Date: April 25, 2017


Sections 1 and 2 (16A.967) allow the bond sale authorization and proceeds for Phase 2 of the Lewis and Clark Regional Water System project to be used for Phase 3 of the project.  Phase 3 includes extending the system from Lincoln-Pipestone to Worthington, constructing a reservoir in Nobles County, constructing a meter building in Worthington, and acquiring a supervisory control and data acquisition system.  The Phase 2 authorization, contained in the bonding bill that was passed in the 2015 Special Session, was $19 million, but only $11.79 million has been issued under that authorization. The bond proceeds are appropriated to the Public Facilities Authority to administer grants to the Lewis and Clark Regional Water Systems, Inc.

Sections 3 and 4 (462A.37) authorize the Minnesota Housing Finance Agency (MHFA) to sell an additional $16.5 million in housing infrastructure bonds that are payable with an appropriation from the state, up to specified limits.  This authorization is an increase over amounts authorized in 2014 ($80 million) and 2015 ($10 million). 

The specified limits on the state’s appropriations for debt service are not increased in this bill; these limits remain at $6.4 million annually for the 2014 authorization and $800,000 annually for the 2015 authorization.




The current annual appropriation in 2016 for bonds sold under the current authorizations were $5.4 million (on the $80 million authorization) and $445,000 (on the $10 million authorization).  This amount is estimated to increase as summarized in the following table:

Authorization Bonds Authorized Statutory Cap on State's Contribution toward Debt Service Current Annual Payment by State for Debt Service Additional Bond Authorizations in this Bill  Expected Debt Service Payments After Increasing the Authorization*
§462A.37, Subd. 2a (2014) $80 million $6.4 million $5.4 million $17 million $6.4 million**
§462A.37, Subd. 2b (2015) $10 million $800,000 $445,000 $3 million $630,000

*Estimated figures assume a five percent coupon rate when bonds are sold on the market.  Actual amounts will vary depending on the coupon rate obtained and the amortization schedule established upon bond issuance.

**If the full amount authorized in Minnesota Statutes, section 462A.37, subdivision 2a, were sold, the debt service payment would likely exceed the statutory cap of $6.4 million.  As a result, MHFA will likely be unable to sell the full amount authorized in section 462A.37, subdivision 2a.

The February 2017 budget forecast uses the statutory cap amounts of $6.4 million and $800,000 as the estimate of the debt service payment on these bonds, regardless of the actual debt service required.  Therefore, the additional debt service on bonds newly authorized in this bill does not have a cost as compared to that forecast.

Check on the status of this bill
Back to Senate Counsel and Research Bill Summaries page

This page is maintained by the Office of Senate Counsel, Research, and Fiscal Analysis for the Minnesota Senate.
Last review or update: 04/25/2017
If you see any errors on this page, please e-mail us at