Subject of Possible Rule Making: The department of ecology's water quality program (ecology) is proposing to amend chapter 173-98 WAC, Uses and limitations of the water pollution control revolving fund (revolving fund rule), to implement an administration charge authorized by newly enacted state law. The proposed amendments will allow ecology to assess an administration charge on each revolving fund loan at the point the loan enters repayment status. The rule making is limited to the administration charge. The administration charge will be subtracted from the established interest rate for the loan; thus, it will have no impact on borrowers.

     Statutes Authorizing the Agency to Adopt Rules on this Subject: Chapter 90.50A RCW, Water pollution control facilities -- Federal capitalization grants.

     Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: The revolving fund rule is well established. However, in order to meet the mandate from the United States Environmental Protection Agency (EPA) that the revolving fund be maintained "in perpetuity," ecology needs to amend the existing rule to implement an administration charge. The administration charge will be used strictly for program administration costs. SHB 1141 (chapter 96, Laws of 2013) authorizes ecology to implement this charge.

     Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: Ecology is the agency solely responsible for regulating the revolving fund in Washington state. However, EPA, through the Clean Water Act, established baseline rules for the revolving fund. EPA and ecology have signed an "operating agreement" that specifies ecology's requirements for implementing the revolving fund. Thus, it's essential that ecology coordinate with EPA during rule making. There are two EPA representatives on the financial assistance council that will be reviewing and commenting on draft rule language.

     Process for Developing New Rule: Amend an existing rule. During the rule-development process ecology will work with the existing financial assistance council to develop rule language. Ecology will post rule-making information our rule-making web page and distribute it to our e-mail lists. Ecology will hold one public hearing on the proposal.

     Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication by contacting Daniel Thompson, State Revolving Fund Planner, Department of Ecology, Water Quality Program, Financial Management Section, P.O. Box 47600, Olympia, WA 98504-7600, phone (360) 407-6510, e-mail daniel.thompson@ecy.wa.gov.

     Rule language will be reviewed and discussed by the financial assistance council. Communication with "interested parties" will be conducted through an existing listserv. Documents and information will be available via ecology's current rule-making web page at http://www.ecy.wa.gov/laws-rules/currentactivity.html.

May 29, 2013

Kelly Susewind, P.E., P.G.

Program Manager