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H.B. 99

This document includes House Committee Amendments incorporated into the bill on Mon, Jan 22, 2007 at 10:15 AM by ddonat. -->              1     

WATER LOAN PROGRAM AMENDMENTS

             2     
2007 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Patrick Painter

             5     
Senate Sponsor: Margaret Dayton

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends the loan and grant programs for water projects administered by the
             10      Department of Environmental Quality.
             11      Highlighted Provisions:
             12          This bill:
             13          .    changes the type of wastewater project that the Water Quality Board may fund;
             14          .    changes the type of drinking water project that the Drinking Water Board may fund;
             15          .    authorizes the Water Quality Board to give a grant for a nonpoint source project;
             16          .    authorizes the Water Quality Board and Drinking Water Board to charge an
             17      origination fee;
             18          .    creates two origination fee subaccounts; and
             19          .    makes technical changes.
             20      Monies Appropriated in this Bill:
             21          None
             22      Other Special Clauses:
             23          None
             24      Utah Code Sections Affected:
             25      AMENDS:
             26          73-10c-2, as last amended by Chapter 175, Laws of Utah 2001
             27          73-10c-4, as last amended by Chapter 296, Laws of Utah 2002



             28          73-10c-4.5, as enacted by Chapter 282, Laws of Utah 2000
             29          73-10c-5, as last amended by Chapters 12 and 175, Laws of Utah 2001
             30      ENACTS:
             31          73-10c-10, Utah Code Annotated 1953
             32      Uncodified Material Affected:
             33      ENACTS UNCODIFIED MATERIAL
             34     
             35      Be it enacted by the Legislature of the state of Utah:
             36          Section 1. Section 73-10c-2 is amended to read:
             37           73-10c-2. Definitions.
             38          As used in this chapter:
             39          (1) "Board" means the Board of Water Resources [of the Department of Natural
             40      Resources] created in Section 73-10-1.5 .
             41          (2) "Council" means the Water Development Coordinating Council created [pursuant
             42      to Section] by Sections 63-34-3 [, and this chapter] and 73-10c-3 .
             43          (3) "Credit enhancement agreement" means [any] an agreement entered into [under]
             44      according to this chapter between the Drinking Water Board or the Water Quality Board, on
             45      behalf of the state, and a political subdivision, for the purpose of providing methods and
             46      assistance to political subdivisions to improve the security for and marketability of drinking
             47      water project obligations and wastewater project obligations.
             48          (4) "Drinking Water Board" means the Drinking Water Board [created in Title 19,
             49      Chapter 4, Safe Drinking Water Act] appointed according to Section 19-4-103 .
             50          (5) "Drinking water or wastewater project obligation" means, as appropriate, any bond,
             51      note, or other obligation of a political subdivision issued to finance all or part of the cost of
             52      acquiring, constructing, expanding, upgrading, or improving a drinking water project or
             53      wastewater project.
             54          (6) (a) "Drinking water project" means any work or facility that is necessary or
             55      desirable to provide water for human consumption and other domestic uses[, which] and:
             56          (i) has at least 15 service connections; or
             57          (ii) serves an average of 25 individuals daily for at least 60 days of the year [and].
             58          (b) "Drinking water project" includes:


             59          (i) collection, treatment, storage, and distribution facilities under the control of the
             60      operator and used primarily with the system [and];
             61          (ii) collection pretreatment or storage facilities used primarily in connection with the
             62      system but not under [its] operator's control[.]; and
             63          (iii) studies, planning, education activities, and design work that will promote
             64      protecting the public from waterborne health risks.
             65          (7) "Financial assistance programs" means the various programs administered by the
             66      state whereby loans, grants, and other forms of financial assistance are made available to
             67      political subdivisions of this state to finance the costs of water and wastewater projects.
             68          (8) "Hardship Grant Assessment" means the charge the Water Quality Board or
             69      Drinking Water Board assesses to recipients of loans [under] made from the subaccount created
             70      in Subsection 73-10c-5 (2)(b) or 73-10c-5 (3)(b) in lieu of or in addition to interest charged on
             71      these loans.
             72          (9) "Nonpoint source project" means [any] a facility, system, practice, study, activity,
             73      or mechanism [to abate, prevent, or reduce] that abates, prevents, or reduces the pollution of
             74      waters of this state [caused] by a nonpoint [sources] source.
             75          (10) "Political subdivision" means [any] a county, city, town, improvement district,
             76      water conservancy district, special service district, drainage district, metropolitan water district,
             77      irrigation district, separate legal or administrative entity created under Title 11, Chapter 13,
             78      Interlocal Cooperation Act, or any other entity constituting a political subdivision under the
             79      laws of this state.
             80          (11) "Security fund" means the Water Development Security Fund created [by this
             81      chapter] in Section 73-10c-5 .
             82          (12) "Wastewater project" means: [any]
             83          (a) a sewer, storm or sanitary sewage system, sewage treatment facility, lagoon, sewage
             84      collection facility and system, and related pipelines, and all similar systems, [and] works, and
             85      facilities necessary or desirable to collect, hold, cleanse, or purify any sewage or other polluted
             86      waters of this state[.]; and
             87          (b) a study, pollution prevention activity, or pollution education activity that will
             88      protect the waters of this state.
             89          (13) "Waters of this state" means any stream, lake, pond, marsh, watercourse,


             90      waterway, well, spring, irrigation system, drainage system, or other body or accumulation of
             91      water whether surface, underground, natural, artificial, public, private, or other water resource
             92      of the state which is contained within or flows in or through the state.
             93          (14) "Water Quality Board" means the Water Quality Board [created in Title 19,
             94      Chapter 5, Water Quality Act] appointed according to Section 19-5-103 .
             95          Section 2. Section 73-10c-4 is amended to read:
             96           73-10c-4. Credit enhancement and interest buy-down agreements -- Loans or
             97      grants -- Hardship grants.
             98          (1) On behalf of the state, the Water Quality Board and the Drinking Water Board may
             99      each enter into credit enhancement agreements with political subdivisions containing terms and
             100      provisions that the acting board determines will reasonably improve the security for or
             101      marketability of drinking water and wastewater project obligations, including any of the
             102      following:
             103          (a) a term providing security for drinking water and wastewater project obligations, as
             104      provided in Subsection 73-10c-6 (2)(b), by agreeing to purchase the drinking water or
             105      wastewater project obligations of, or to make loans to, political subdivisions from a subaccount
             106      of the security fund for the purpose of preventing defaults in the payment of principal and
             107      interest on drinking water and wastewater project obligations;
             108          (b) a term making loans to political subdivisions to pay the cost of obtaining:
             109          (i) letters of credit from banks, savings and loan institutions, insurance companies, or
             110      other financial institutions;
             111          (ii) municipal bond insurance; or
             112          (iii) other forms of insurance or security to provide security for drinking water and
             113      wastewater project obligations; and
             114          (c) a term providing other methods and assistance to political subdivisions [which] that
             115      are reasonable and proper to enhance the marketability of or security for drinking water and
             116      wastewater project obligations.
             117          (2) (a) The Drinking Water Board and the Water Quality Board may each make loans
             118      from a security fund subaccount to political subdivisions to finance all or part of drinking water
             119      and wastewater project costs by following the procedures and requirements of Sections
             120      73-10c-4.1 and 73-10c-4.2 .


             121          (b) These loans may only be made after credit enhancement agreements, interest
             122      buy-down agreements, and all other financing alternatives have been evaluated by the acting
             123      board and the board determines those options are unavailable or unreasonably expensive for the
             124      subdivision requesting assistance.
             125          (c) Loans may be made from the security fund subaccount at interest rates determined
             126      by the board.
             127          [(d) Loans may not be made from the $5,000,000 appropriated to the security fund
             128      subaccount by the Legislature for fiscal year 1983-84.]
             129          (3) (a) The Drinking Water Board and the Water Quality Board may each make loans
             130      or grants from the security fund to political subdivisions for interest buy-down agreements for
             131      drinking water or wastewater project obligations.
             132          (b) The Drinking Water Board may make loans or grants from the security account to
             133      political subdivisions for planning for drinking water projects.
             134          (4) (a) Of the total amount of money annually available to the Drinking Water Board
             135      and Water Quality Board for financial assistance to political subdivisions, at least 10% shall be
             136      allocated by each board for credit enhancement and interest buy-down agreements.
             137          (b) The requirement specified in Subsection (4)(a) shall apply only so long as sales and
             138      use tax is transferred to the Utah Wastewater Loan Program Subaccount and Drinking Water
             139      Loan Program Subaccount as provided in Section 59-12-103 .
             140          (5) To the extent money is available in the hardship grant subaccounts of the security
             141      fund, the Drinking Water Board and the Water Quality Board may each make grants to political
             142      subdivisions that meet the drinking water or wastewater project loan considerations
             143      respectively, but whose projects are determined by the granting board to not be economically
             144      feasible unless grant assistance is provided.
             145          (6) The Drinking Water and Water Quality Boards may at any time transfer money out
             146      of their respective hardship grant subaccounts of the security fund to their respective loan
             147      program subaccounts.
             148          (7) The Water Quality Board may make a grant from the Hardship Grant Program for
             149      Wastewater Projects Subaccount created in Subsection 73-10c-5 (2)(c) for a nonpoint source
             150      project as provided by Section 73-10c-4.5 if:
             151          (a) money is available in the subaccount; and


             152          (b) the Water Quality Board determines that the project would not be economically
             153      feasible unless a grant were made.
             154          Section 3. Section 73-10c-4.5 is amended to read:
             155           73-10c-4.5. Nonpoint source project loans and grants -- Project objectives --
             156      Water Quality Board duties.
             157          (1) The Water Quality Board may make [loans] a loan from the Utah Wastewater Loan
             158      Program Subaccount created in Subsection 73-10c-5 (2)(a) or from the Utah State Revolving
             159      Fund for Wastewater Projects Subaccount created in Subsection 73-10c-5 (2)(b) or a grant from
             160      the Hardship Grant Program for Wastewater Projects Subaccount created in Subsection
             161      73-10c-5 (2)(c) to a political [subdivisions, individuals, corporations, associations] subdivision,
             162      individual, corporation, association, state or federal agency, or other private [entities] entity to
             163      acquire, construct, or implement a nonpoint source [projects] project.
             164          (2) The Water Quality Board may only award [the loans only] a loan or grant for a
             165      nonpoint source [projects] project that will achieve one or more of the following objectives:
             166          (a) abate or reduce raw sewage discharges;
             167          (b) repair or replace failing individual on-site wastewater disposal systems;
             168          (c) abate or reduce untreated or uncontrolled runoff;
             169          (d) improve critical aquatic habitat resources;
             170          (e) conserve soil, water, or other natural resources;
             171          (f) protect and improve ground water quality;
             172          (g) preserve and protect the beneficial uses of waters of the state;
             173          (h) reduce the number of water bodies not achieving water quality standards;
             174          (i) improve watershed management; or
             175          (j) prepare and implement total maximum daily load (TMDL) assessments.
             176          (3) The Water Quality Board shall:
             177          (a) determine the amount, term, and interest rate for each loan made under this section;
             178          (b) assure that adequate security is obtained for each loan;
             179          (c) establish criteria and procedures for determining priority nonpoint source projects
             180      and award loans in accordance with those priorities; and
             181          (d) make rules to implement this section in accordance with Title 63, Chapter 46a,
             182      Utah Administrative Rulemaking Act.


             183          Section 4. Section 73-10c-5 is amended to read:
             184           73-10c-5. Water Development Security Fund created -- Water Quality Security
             185      and Drinking Water Security Subaccounts created -- Use -- Revolving loan funds --
             186      Hardship grants.
             187          (1) There is established an enterprise fund known as the Water Development Security
             188      Fund which includes the Water Quality Security Subaccount and the Drinking Water Security
             189      Subaccount.
             190          (2) The Water Quality Security Subaccount consists of [three] four subaccounts:
             191          (a) the Utah Wastewater Loan Program Subaccount, which consists of:
             192          (i) money appropriated to the subaccount by the Legislature;
             193          (ii) money received from the repayment of the principal of loans made by the Water
             194      Quality Board under Sections 73-10c-4 and 73-10c-6 from the Utah Wastewater Loan Program
             195      Subaccount; and
             196          (iii) money deposited in the subaccount under any other law;
             197          (b) the Utah State Revolving Fund for Wastewater Projects Subaccount, which consists
             198      of:
             199          (i) money appropriated to the subaccount by the Legislature;
             200          (ii) money received from the Utah Wastewater Loan Program Subaccount applied to
             201      meet match requirements for federal funds under 33 U.S.C.A. 1251 et seq., federal Clean
             202      Water Act;
             203          (iii) money received from the repayment of loans made by the Water Quality Board
             204      under Section 73-10c-4 from the Utah State Revolving Fund for Wastewater Projects
             205      Subaccount;
             206          (iv) money received from the repayment of loans made by the Water Quality Board
             207      under Section 73-10c-4.5 ;
             208          (v) money deposited in the subaccount under any other law;
             209          (vi) money received under and subject to the restrictions of 33 U.S.C.A. 1251 et seq.,
             210      federal Clean Water Act, and which is eligible for use in state revolving loan funds established
             211      to meet the requirements of the act; and
             212          (vii) all investment income derived from money in the Utah State Revolving Fund for
             213      Wastewater Projects Subaccount; [and]


             214          (c) the Hardship Grant Program for Wastewater Projects Subaccount, which consists
             215      of:
             216          (i) money appropriated to the subaccount by the Legislature;
             217          (ii) money received as interest payments on loans made by the Water Quality Board
             218      under Sections 73-10c-4 and 73-10c-6 , from the Utah Wastewater Loan Program Subaccount;
             219          (iii) money deposited in the subaccount under any other law;
             220          (iv) the Hardship Grant Assessment charged to State Revolving Fund loan recipients;
             221      and
             222          (v) all investment income derived from money in the Utah Wastewater Loan Program
             223      Subaccount or the Hardship Grant Program for Wastewater Projects Subaccount[.]; and
             224          (d) the Water Quality Origination Fee Subaccount, which consists of the origination
             225      fee paid under Section 73-10c-10 .
             226          (3) The Drinking Water Security Subaccount consists of [three] four subaccounts:
             227          (a) the Drinking Water Loan Program Subaccount, which consists of:
             228          (i) money appropriated to the subaccount by the Legislature;
             229          (ii) money received from the repayment of the principal of loans made by the Drinking
             230      Water Board under Sections 73-10c-4 and 73-10c-6 , from the Drinking Water Loan Program
             231      Subaccount; and
             232          (iii) money deposited in the subaccount under any other law;
             233          (b) the State Revolving Fund for Drinking Water Projects Subaccount, which consists
             234      of:
             235          (i) money appropriated to the subaccount by the Legislature;
             236          (ii) money received from the Utah Drinking Water Loan Program Subaccount and
             237      applied to meet match requirements for federal funds under 42 U.S.C.A. 300f et seq., federal
             238      Safe Drinking Water Act;
             239          (iii) money received from the repayment of loans made by the Drinking Water Board
             240      under Section 73-10c-4 from the State Revolving Fund for Drinking Water Projects
             241      Subaccount;
             242          (iv) money deposited in the subaccount under any other law;
             243          (v) money received under and subject to the restrictions of 42 U.S.C.A. 300f et seq.,
             244      federal Safe Drinking Water Act, and which is eligible for use in state revolving loan funds


             245      established to meet the requirements of the act; and
             246          (vi) all investment income derived from money in the State Revolving Fund for
             247      Drinking Water Projects Subaccount; [and]
             248          (c) the Hardship Grant Program for Drinking Water Projects Subaccount, which
             249      consists of:
             250          (i) money appropriated to the subaccount by the Legislature;
             251          (ii) money received from interest payments on loans made by the Drinking Water
             252      Board under Sections 73-10c-4 and 73-10c-6 , from the Drinking Water Loan Program
             253      Subaccount;
             254          (iii) money deposited in the subaccount under any other law;
             255          (iv) the Hardship Grant Assessment charged to State Revolving Fund loan recipients;
             256      and
             257          (v) all investment income derived from money in the Drinking Water Loan Program
             258      Subaccount or the Hardship Grant Program for Drinking Water Projects Subaccount[.]; and
             259          (d) the Drinking Water Origination Fee Subaccount, which consists of the origination
             260      fee paid under Section 73-10c-10 .
             261          (4) State monies in the Water Quality Security Subaccount and the Drinking Water
             262      Security Subaccount may be applied to meet match requirements for federal funds under [33
             263      U.S.C.A. 1251 et seq., federal Clean Water Act and 42 U.S.C.A. 300f et seq., federal Safe
             264      Drinking Water Act] the Clean Water Act, 33 U.S.C. Sec. 1251 et seq. and the Safe Drinking
             265      Water Act, 42 U.S.C. Sec. 300f et seq.
             266          (5) If the money in the security fund is insufficient for the purposes for which the
             267      security fund is established, the council shall ask the governor to request the Legislature to
             268      appropriate additional money to the account.
             269          (6) (a) The Drinking Water Board and Water Quality Board may use the money in the
             270      appropriate security fund subaccount only to the extent of the money available in the account,
             271      for the support of drinking water projects and wastewater projects in accordance with the terms
             272      of credit enhancement agreements, grant agreements, and loan agreements.
             273          (b) Repayments to the security fund from loans made by the acting board, monies
             274      allocated by the Legislature, and interest accrued on these monies shall remain available for use
             275      by that board for further project funding.


             276          (c) The Drinking Water Board and Water Quality Board may use the money in the
             277      origination fee subaccount to administer this chapter.
             278          (7) Funds received under [Section 1452 of the federal] the Safe Drinking Water Act, 42
             279      [U.S.C.A.] U.S.C. Sec. 300f et seq.[,] may be used for providing financial assistance to
             280      community water systems and nonprofit noncommunity water systems as defined and within
             281      the limits of that act.
             282          Section 5. Section 73-10c-10 is enacted to read:
             283          73-10c-10. Origination fee.
             284          (1) The Drinking Water Board and the Water Quality Board may establish an
             285      origination fee for a loan to fund the administration of the programs created by this chapter by
             286      following the procedures and requirements of Section 63-38-3.2 .
             287          (2) The origination fee shall be part of the department fee schedule established under
             288      Section 19-1-201 .
             289          (3) Notwithstanding Subsection 63-38-3.2 (2)(e), the board shall deposit the fee in the
             290      origination fee subaccount created in Section 73-10c-5 and use the fee to administer this
             291      chapter.
             292          (4) The loan H. [ or grant ] .H recipient may pay the origination fee from the loan
             292a      H. [ or grant ] .H
             293      proceeds.
             294          Section 6. Fee and repeal date.
             295          (1) The department may initially establish and assess the origination fee authorized
             296      under Section 73-10c-10 without legislative approval by following the procedures and
             297      requirements for setting regulatory fees for a new program under Subsection 63-38-3.2 (5).
             298          (2) This uncodified section is repealed July 1, 2008.




Legislative Review Note
    as of 1-8-07 7:02 AM


Office of Legislative Research and General Counsel


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