READ FIRST TIME 01/18/08.   

     AN ACT Relating to water system acquisition and rehabilitation; adding a new section to chapter 70.119A RCW; and creating new sections.

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

NEW SECTION.  Sec. 1   The legislature finds that it is the state's policy to maintain the highest quality and reliability of drinking water supplies to all citizens of the state. Small water systems may face greater challenges in this regard because of declining quality in water sources, catastrophic events such as flooding that impair water sources, the age of the system's infrastructure, saltwater intrusion into water sources, inadequate rate base for conducting necessary improvements, and other challenges. In response to these needs, the water system acquisition and rehabilitation program was created through biennial budget law, and through the current biennium has a total of nine million seven-hundred fifty thousand dollars toward assisting dozens of water systems to improve the quality of water supply service to thousands of customers.
     It is the purpose of this act to establish an ongoing water system acquisition and rehabilitation program, to direct a review of the program to date, and to provide for recommendations for strengthening the program and increasing the financial assistance available under the program.

NEW SECTION.  Sec. 2   A new section is added to chapter 70.119A RCW to read as follows:
     Subject to the availability of amounts appropriated for this specific purpose, the department shall provide financial assistance through a water system acquisition and rehabilitation program, hereby created. The program shall be jointly administered with the public works board and the department of community, trade, and economic development. The agencies shall adopt guidelines for the program using as a model the procedures and criteria of the drinking water revolving loan program authorized under RCW 70.119A.170. All financing provided through the program must be in the form of grants that partially cover project costs. The maximum grant to any eligible entity may not exceed twenty-five percent of the funds allocated to the appropriation in any fiscal year.

NEW SECTION.  Sec. 3   (1) The department of health, in consultation with the public works board, shall prepare a report on the water system acquisition and rehabilitation program in section 2 of this act and make recommendations regarding strengthening the program and increasing the financial assistance provided through the program.
     (2) The report shall:
     (a) Identify the state's policies and objectives regarding water system management, operation, and regulation, including regionalization, satellite management, and prevention of the proliferation of small water systems; and
     (b) Review the program's projects initiated and completed to date, and other state funding assistance for water system acquisition and rehabilitation.
     (3) The report shall also review and make recommendations on the following:
     (a) Funding levels and funding sources;
     (b) The form of assistance provided, whether grants or loans;
     (c) Funding cycles, including an annual or open cycle;
     (d) Eligibility of group B systems for assistance;
     (e) Consideration of benefits other than public health or water quality benefits, such as economic benefits;
     (f) Activities that may be funded beyond acquisition, preconstruction design, and construction, including the cost to agencies to operate the program;
     (g) The project priority setting process and relative priority for funding projects for systems that serve few residential customers;
     (h) Requiring installation of service meters in funded projects;
     (i) Eligibility for grants of municipalities that have not owned and operated a group A water system for at least five years;
     (j) Allowing an eligible purveyor that has already acquired a failing water system to be eligible for grants to cover any outstanding costs of the rehabilitation of the failing water system;
     (k) Tiering of project priorities to provide the highest priority to assisting systems with a high public health risk; and
     (l) Consideration of the system's rate base and the ability of the households on the system to afford rate increases to fund a portion of the necessary system rehabilitation.
     (4) The report shall include a survey of estimated water system acquisition and rehabilitation program funding needs, based on existing informal survey information from local governments, the utilities and transportation commission, and purveyors.
     (5) The report shall be provided to the fiscal and water policy committees of the senate and house of representatives not later than January 1, 2009.