BILL REQ. #:  H-1467.2 

Read first time 02/10/09.   Referred to Committee on Agriculture & Natural Resources.

     AN ACT Relating to funding for water pollution control; amending RCW 90.50A.020, 90.50A.030, 90.50A.040, and 90.50A.060; adding a new section to chapter 90.50A RCW; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 90.50A.020 and 1993 c 329 s 1 are each amended to read as follows:
     (1) The water pollution control revolving fund is hereby established in the state treasury. Moneys in this fund may be spent only after legislative appropriation. Moneys in the fund may be spent only in a manner consistent with this chapter.
     (2) The water pollution control revolving fund shall consist of:
     (a) All capitalization grants provided by the federal government under the federal water quality act of 1987;
     (b) Any moneys provided by the federal government for water pollution control facilities and related activities to achieve federal water pollution requirements;
     (c) All state matching funds appropriated or authorized by the legislature;
     (((c))) (d) Any other revenues derived from gifts or bequests pledged to the state for the purpose of providing financial assistance for water pollution control projects;
     (((d))) (e) All repayments of moneys borrowed from the fund;
     (((e))) (f) All interest payments made by borrowers from the fund;
     (((f))) (g) Any other fee or charge levied in conjunction with administration of the fund; and
     (((g))) (h) Any new funds as a result of leveraging.
     (3) The state treasurer may invest and reinvest moneys in the water pollution control revolving fund in the manner provided by law. All earnings from such investment and reinvestment shall be credited to the water pollution control revolving fund.

Sec. 2   RCW 90.50A.030 and 2007 c 341 s 38 are each amended to read as follows:
     The department shall use the moneys in the water pollution control revolving fund to provide financial assistance, as provided in the water quality act of 1987 and ((as provided in)) RCW 90.50A.040, and pursuant to other federal requirements for achieving state and federal water pollution control for protection of the state's waters:
     (1) To make loans, on the condition that:
     (a) Such loans are made at or below market interest rates, including interest free loans, at terms not to exceed twenty years;
     (b) Annual principal and interest payments will commence not later than one year after completion of any project and all loans will be fully amortized not later then twenty years after project completion;
     (c) The recipient of a loan will establish a dedicated source of revenue for repayment of loans; and
     (d) The fund will be credited with all payments of principal and interest on all loans.
     (2) Loans may be made for the following purposes:
     (a) To public bodies for the construction or replacement of water pollution control facilities as defined in section 212 of the federal water quality act of 1987;
     (b) For the implementation of a management program established under section 319 of the federal water quality act of 1987 relating to the management of nonpoint sources of pollution, subject to the requirements of that act; and
     (c) For development and implementation of a conservation and management plan under section 320 of the federal water quality act of 1987 relating to the national estuary program, subject to the requirements of that act.
     (3) The department may not use the moneys in the water pollution control revolving fund for grants, forgiveness of principal, and negative interest unless approved by congress. Grants, forgiveness of principal, and negative interest may be made for the following purposes:
     (a) To public bodies for the construction or replacement of water pollution control facilities as defined in section 212 of the federal water quality act of 1987;
     (b) For the implementation of a management program established under section 319 of the federal water quality act of 1987 relating to the management of nonpoint sources of pollution, subject to the requirements of that act;
     (c) For development and implementation of a conservation and management plan under section 320 of the federal water quality act of 1987 relating to the national estuary program, subject to the requirements of that act;
     (d) For stormwater projects as required by a national pollution discharge elimination system permit; and
     (e) For combined sewer overflow projects.
     (4) If grants are approved by congress, the department shall accept grant applications for moneys provided from the federal government through the end of December 2009. The department shall prioritize grants for water pollution control facilities that have a history of noncompliance.
     (5) The department may also use the moneys in the fund for the following purposes:
     (a) To buy or refinance the water pollution control facilities' debt obligations of public bodies at or below market rates, if such debt was incurred after March 7, 1985;
     (b) To guarantee, or purchase insurance for, public body obligations for water pollution control facility construction or replacement or activities if the guarantee or insurance would improve credit market access or reduce interest rates, or to provide loans to a public body for this purpose;
     (c) As a source of revenue or security for the payment of principal and interest on revenue or general obligation bonds issued by the state if the proceeds of the sale of such bonds will be deposited in the fund;
     (d) To earn interest on fund accounts; and
     (e) To pay the expenses of the department in administering the water pollution control revolving fund according to administrative reserves authorized by federal and state law.
     (((4))) (6) The department shall present a biennial progress report on the use of moneys from the account to the appropriate committees of the legislature. The report shall consist of a list of each recipient, project description, and amount of the grant, loan, or both.
     (((5) The department may not use the moneys in the water pollution control revolving fund for grants.))
     (7) When prioritizing project applications for loans, grants, forgiveness of principal, and negative interest for water pollution control facilities, the department shall consider the following:
     (a) The protection and improvement of water quality and public health;
     (b) The cost to residential ratepayers if they must finance water pollution control facilities without state assistance;
     (c) Actions required under federal and state permits and compliance orders;
     (d) Readiness of the project to proceed with planning, design, or construction;
     (e) The cost-effectiveness of the project based on an analysis of alternatives, including regionalization;
     (f) Whether the water pollution control facility has a history of noncompliance;
     (g) Whether the entity receiving assistance is a Puget Sound partner, as defined in RCW 90.71.010;
     (h) Whether the project is referenced in the action agenda developed by the Puget Sound partnership under RCW 90.71.310;
     (i) Effective one calendar year following the development and statewide availability of model evergreen community management plans and ordinances under RCW 35.105.050, whether the project is sponsored by an entity that has been recognized, and what gradation of recognition was received, in the evergreen community recognition program created in RCW 35.105.030;
     (j) The extent to which the applicant county or city, or if the applicant is another public body, the extent to which the county or city in which the applicant public body is located, has established programs to mitigate nonpoint pollution of the surface or subterranean water sought to be protected by the water pollution control facility named in the application for state assistance; and
     (k) The recommendations of the Puget Sound partnership, created in RCW 90.71.210, and any other board, council, commission, or group established by the legislature or a state agency to study water pollution control issues in the state.

Sec. 3   RCW 90.50A.040 and 2007 c 341 s 39 are each amended to read as follows:
     Moneys deposited in the water pollution control revolving fund shall be administered by the department. In administering the fund, the department shall:
     (1) Consistent with RCW 90.50A.030 and 90.50A.080, allocate funds for loans, grants, forgiveness of principal, and negative interest in accordance with the annual project priority list in accordance with section 212 of the federal water pollution control act as amended in 1987, and allocate funds under sections 319 and 320 according to the provisions of that act;
     (2) Use accounting, audit, and fiscal procedures that conform to generally accepted government accounting standards;
     (3) Prepare any reports required by the federal government as a condition to awarding federal capitalization grants;
     (4) Adopt by rule any procedures or standards necessary to carry out the provisions of this chapter;
     (5) Enter into agreements with the federal environmental protection agency;
     (6) Cooperate with local, substate regional, and interstate entities regarding state assessment reports and state management programs related to the nonpoint source management programs as noted in section 319(c) of the federal water pollution control act amendments of 1987 and estuary programs developed under section 320 of that act;
     (7) Comply with provisions of the water quality act of 1987; and
     (8) After January 1, 2010, not provide funding for projects designed to address the restoration of Puget Sound that are in conflict with the action agenda developed by the Puget Sound partnership under RCW 90.71.310.

NEW SECTION.  Sec. 4   A new section is added to chapter 90.50A RCW to read as follows:
     Any public body receiving a grant from the fund shall:
     (1) Appear on the annual project priority list to be identified for funding under section 212 of the federal water pollution control act amendments of 1987 or be eligible under sections 319 and 320 of that act;
     (2) Submit an application to the department;
     (3) Establish and maintain a dedicated source of revenue or other acceptable source of revenue for the repayment of the loan; and
     (4) Demonstrate to the satisfaction of the department it has sufficient legal authority to incur the debt for which it is applying.

Sec. 5   RCW 90.50A.060 and 1988 c 284 s 7 are each amended to read as follows:
     If a public body defaults on loan payments due to the fund, the state may withhold any amounts otherwise due to the public body and direct that such funds be applied to the indebtedness and deposited into the account.

NEW SECTION.  Sec. 6   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.