BILL REQ. #:  H-4293.5 

Read first time 01/27/10.   Referred to Committee on Capital Budget.

     AN ACT Relating to funding criteria for publically owned nonindustrial water pollution control facilities; and amending RCW 90.50A.030 and 90.48.110.

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

Sec. 1   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:
     (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; and
     (e) The loans will be used in accordance with federal clean water state revolving fund appropriations allowances and restrictions.
     (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 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) 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.
     (6) The department shall give preference to projects that:
     (a) Increase protection and improvement of water quality and public health;
     (b) Cost the residential ratepayers a higher amount to finance without state assistance than other projects cost;
     (c) Require action under federal and state permits and compliance orders, including projects with a history of noncompliance;
     (d) Are ready to proceed with planning, design, or construction;
     (e) Are cost-effective based on an analysis of alternatives, including regionalization;
     (f) Are a Puget Sound partner, as defined in RCW 90.71.010, except that entities that are not eligible to be a Puget Sound partner due to geographic location, composition, exclusion from the scope of the action agenda developed by the Puget Sound partnership under RCW 90.71.310, or for any other reason shall not be given less preferential treatment than Puget Sound partners;
     (g) Are referenced in the action agenda developed by the Puget Sound partnership under RCW 90.71.310;
     (h) Are located in evergreen communities recognized under RCW 35.105.030, except that entities not eligible for designation as an evergreen community shall not be given less preferential treatment than an evergreen community;
     (i) Have established programs to mitigate nonpoint pollution of the surface or subterranean water sought to be protected by the water pollution control facility;
     (j) Are recommended by the Puget Sound partnership, created in RCW 90.71.210, or any other board, council, commission, or group established by the legislature or a state agency to study water pollution control issues in the state; and
     (k) Have adopted and are implementing: (i) A sewer use ordinance and equitable sewer user charge system or (ii) a stormwater ordinance meeting permit requirements and stormwater fee system, whichever is applicable.

Sec. 2   RCW 90.48.110 and 2007 c 343 s 13 are each amended to read as follows:
     (1)(a) Except under subsection (2) of this section, all engineering reports, plans, and specifications for the construction of new sewerage systems, sewage treatment or disposal plants or systems, or for improvements or extensions to existing sewerage systems or sewage treatment or disposal plants, and the proposed method of future operation and maintenance of said facility or facilities, shall be submitted to and be approved by the department, before construction thereof may begin. No approval shall be given until the department is satisfied that said plans and specifications and the methods of operation and maintenance submitted are adequate to protect the quality of the state's waters as provided for in this chapter. Approval under this chapter is not required for large on-site sewage systems permitted by the department of health under chapter 70.118B RCW or for on-site sewage systems regulated by local health jurisdictions under rules of the state board of health.
     (b) The department shall require, through the development of rules, that plans established in this subsection include the following elements:
     (i) Reviews and updates of sewer plans on a six-year cycle, including asset management and financial planning;
     (ii) An equitable sewer user charge system for residential, commercial, and industrial users to cover all financial obligation of the planned community sewer utility;
     (iii) Connection fees for new connections to a sewer system that reflect a fair share cost of infrastructure from which new connections will benefit;
     (iv) A capital wastewater facilities reserve fund dedicated to paying for wastewater infrastructure and equipment replacement; and
     (v) A sewer use ordinance that restricts certain connections and wastes to protect a local government's investment and enhance the wastewater treatment's process stability and effluent quality. At a minimum, the ordinance must:
     (A) Require new sewers and connections to be properly designed and constructed;
     (B) Require a provision with a timeline and proximity in which existing and future residences must connect to the sewer system;
     (C) Prohibit inflow sources into the sewer system; and
     (D) Prohibit introduction of toxic or hazardous wastes into the sewer system in an amount or concentration that endangers the public's safety or the physical integrity of the system which may cause violations of the national pollutant discharge elimination system permit or state waste discharge permit.
     (2) To promote efficiency in service delivery and intergovernmental cooperation in protecting the quality of the state's waters, the department may delegate the authority for review and approval of engineering reports, plans, and specifications for the construction of new sewerage systems, sewage treatment or disposal plants or systems, or for improvements or extensions to existing sewerage system or sewage treatment or disposal plants, and the proposed method of future operations and maintenance of said facility or facilities and industrial pretreatment systems, to local units of government requesting such delegation and meeting criteria established by the department.
     (3) For any new or revised general sewer plan submitted for review under this section, the department shall review and either approve, conditionally approve, reject, or request amendments within ninety days of the receipt of the submission of the plan. The department may extend this ninety-day time limitation for new submittals by up to an additional ninety days if insufficient time exists to adequately review the general sewer plan. For rejections of plans or extensions of the timeline, the department shall provide in writing to the local government entity the reason for such action. In addition, the governing body of the local government entity and the department may mutually agree to an extension of the deadlines contained in this section.