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PAG LIN 1 1 Section 1. Section 16.131, Code 1997, is amended to read 1 2 as follows: 1 3 16.131 IOWA SEWAGE TREATMENTWORKSAND DRINKING WATER 1 4 FACILITIES FINANCING PROGRAM – DEFINITIONS – FUNDING – 1 5 BONDS AND NOTES. 1 6 1. The authority shall cooperate with the department of 1 7 natural resources in the creation, administration, and 1 8 financing of the Iowa sewage treatmentworksand drinking 1 9 water facilities financing program established in sections 1 10 455B.291 through 455B.299. 1 11 2. Terms used in this part have the meanings given them in 1 12 sections 455B.101 and 455B.291 unless the context requires 1 13 otherwise. 1 14 3. The authority may issue its bonds and notes for the 1 15 purpose of funding the revolving loanfundfunds created under 1 16 section 455B.295 and defraying the costs of payment of the 1 17 twenty percent state matching funds required for federal funds 1 18 received for projects. 1 19 4. The authority may issue its bonds and notes for the 1 20 purposes established and may enter into one or more lending 1 21 agreements or purchase agreements with one or more bondholders 1 22 or noteholders containing the terms and conditions of the 1 23 repayment of and the security for the bonds or notes. The 1 24 authority and the bondholders or noteholders or a trustee 1 25 agent designated by the authority may enter into agreements to 1 26 provide for any of the following: 1 27 a. That the proceeds of the bonds and notes and the 1 28 investments of the proceeds may be received, held, and 1 29 disbursed by the authority or by a trustee or agent designated 1 30 by the authority. 1 31 b. That the bondholders or noteholders or a trustee or 1 32 agent designated by the authority may collect, invest, and 1 33 apply the amount payable under the loan agreements or any 1 34 other instruments securing the debt obligations under the loan 1 35 agreements. 2 1 c. That the bondholders or noteholders may enforce the 2 2 remedies provided in the loan agreements or other instruments 2 3 on their own behalf without the appointment or designation of 2 4 a trustee. If there is a default in the principal of or 2 5 interest on the bonds or notes or in the performance of any 2 6 agreement contained in the loan agreements or other 2 7 instruments, the payment or performance may be enforced in 2 8 accordance with the loan agreement or other instrument. 2 9 d. Other terms and conditions as deemed necessary or 2 10 appropriate by the authority. 2 11 5. The powers granted the authority under this section are 2 12 in addition to other powers contained in this chapter. All 2 13 other provisions of this chapter, except section 16.28, 2 14 subsection 4, apply to bonds or notes issued and powers 2 15 granted to the authority under this section except to the 2 16 extent they are inconsistent with this section. 2 17 6. All bonds or notes issued by the authority in 2 18 connection with the program are exempt from taxation by this 2 19 state and the interest on the bonds or notes is exempt from 2 20 state income tax. 2 21 Sec. 2. Section 16.132, subsection 1, paragraphs c and d, 2 22 Code 1997, are amended to read as follows: 2 23 c. The amounts on deposit in the revolving loanfund2 24 funds. 2 25 d. The amounts payable to the department by municipalities 2 26 or water systems pursuant to loan agreements with 2 27 municipalities or water systems. 2 28 Sec. 3. Section 16.132, subsection 5, Code 1997, is 2 29 amended to read as follows: 2 30 5. The bonds or notes issued by the authority are not an 2 31 indebtedness or other liability of the state or of a political 2 32 subdivision of the state within the meaning of any 2 33 constitutional or statutory debt limitations but are special 2 34 obligations of the authority, and are payable solely from the 2 35 income and receipts or other funds or property of the 3 1 department, and the amounts on deposit in the revolving loan 3 2fundfunds, and the amounts payable to the department under 3 3 its loan agreements with the municipalities and water systems 3 4 to the extent that the amounts are designated in the 3 5 resolution, trust agreement, or other instrument of the 3 6 authority authorizing the issuance of the bonds or notes as 3 7 being available as security for such bonds or notes. The 3 8 authority shall not pledge the faith or credit of the state or 3 9 of a political subdivision of the state to the payment of any 3 10 bonds or notes. The issuance of any bonds or notes by the 3 11 authority does not directly, indirectly, or contingently 3 12 obligate the state or a political subdivision of the state to 3 13 apply money from, or levy or pledge any form of taxation 3 14 whatever to the payment of the bonds or notes. 3 15 Sec. 4. Section 16.132, subsection 6, Code 1997, is 3 16 amended to read as follows: 3 17 6. The state pledges to and agrees with the holders of 3 18 bonds or notes issued under the Iowa sewage treatmentworks3 19 and drinking water facilities financing program, that the 3 20 state will not limit or alter the rights and powers vested in 3 21 the authority to fulfill the terms of a contract made by the 3 22 authority with respect to the bonds or notes, or in any way 3 23 impair the rights and remedies of the holders until the bonds 3 24 or notes, together with the interest on them including 3 25 interest on unpaid installments of interest, and all costs and 3 26 expenses in connection with an action or proceeding by or on 3 27 behalf of the holders, are fully met and discharged. The 3 28 authority is authorized to include this pledge and agreement 3 29 of the state, as it refers to holders of bonds or notes of the 3 30 authority, in a contract with the holders. 3 31 Sec. 5. Section 455B.177, subsection 2, Code 1997, is 3 32 amended to read as follows: 3 33 2. The general assembly further finds and declares that 3 34 because the federal Safe Drinking Water Act,Pub. L. No. 93-3 3552342 U.S.C. } 300f et seq., as amended by Pub. L. No. 104- 4 1 182, provides for the implementation ofsaidthe Act by states 4 2 which have adequate authority to do so, it is in the interest 4 3 of the people of Iowa to implement the provisions of the 4 4 federal Safe Drinking Water Act and federal regulations and 4 5 guidelines issued pursuanttheretoto the Act. 4 6 Sec. 6. Section 455B.183, subsection 1, Code 1997, is 4 7 amended to read as follows: 4 8 1. The construction, installation, or modification of any 4 9 disposal system or public water supply system or part thereof 4 10 or any extension or addition thereto except those sewer 4 11 extensions and water supply distribution system extensions 4 12 that are subject to review and approval by a city or county 4 13 public works department pursuant to this section and private 4 14 sewage disposal systems.AUnless federal law or regulation 4 15 requires the review and approval of plans and specifications, 4 16 a permit shall be issued for the construction, installation, 4 17 or modification of a public water supply system or part of a 4 18 system if a qualified, registered engineer certifies to the 4 19 department that the plans for the system or part of the system 4 20 meet the requirements of state and federal law or regulations. 4 21 The permit shall state that approval is based only upon the 4 22 engineer's certification that the system's design meets the 4 23 requirements of all applicable state and federal laws and 4 24 regulations and the review of the department shall be 4 25 advisory. 4 26 Sec. 7. Section 455B.291, Code 1997, is amended to read as 4 27 follows: 4 28 455B.291 DEFINITIONS. 4 29 As used in this part, unless the context requires 4 30 otherwise: 4 31 1. "Administrative funds" means the sewage treatment works 4 32 administration fund and the drinking water facilities 4 33 administration fund. 4 34 2. "Authority" means the Iowa finance authority 4 35 established in section 16.2. 5 123. "Clean Water Act" means the federal Water Pollution 5 2 Control Act of 1972, Pub. L. No. 92-500, as amended by the 5 3 Water Quality Act of 1987, Pub. L. No. 100-4, as published in 5 4 33 U.S.C. } 1251–1376. 5 534. "Cost" means all costs, charges, expenses, or other 5 6 indebtedness incurred by a municipality or water system and 5 7 determined by the director as reasonable and necessary for 5 8 carrying out all works and undertakings necessary or 5 9 incidental to the accomplishment of any project. 5 10 5. "Drinking water facilities administration fund" means 5 11 the drinking water facilities administration fund established 5 12 in section 455B.295. 5 13 6. "Drinking water treatment revolving loan fund" means 5 14 the drinking water treatment revolving loan fund established 5 15 in section 455B.295. 5 1647. "Municipality" means a city, county, sanitary 5 17 district, state agency, or other governmental body or 5 18 corporation empowered to provide sewage collection and 5 19 treatment services, or any combination of two or more of the 5 20 governmental bodies or corporations acting jointly, in 5 21 connection with a project. 5 2258. "Program" means the Iowa sewage treatmentworksand 5 23 drinking water facilities financing program created pursuant 5 24 to section 455B.294. 5 2569. "Project" means one of the following: 5 26 a. In the context of sewage treatment facilities, the 5 27 acquisition, construction, reconstruction, extension, 5 28 equipping, improvement, or rehabilitation of any works and 5 29 facilities useful for the collection, treatment, and disposal 5 30 of sewage and industrial waste in a sanitary manner including 5 31 treatment works as defined in section 212 of the Clean Water 5 32 Act, or the implementation and development of management 5 33 programs established under sections 319 and 320 of the Clean 5 34 Water Act. 5 35 b. In the context of drinking water facilities, the 6 1 acquisition, construction, reconstruction, extending, 6 2 remodeling, improving, repairing, or equipping of waterworks, 6 3 water mains, extensions, or treatment facilities useful for 6 4 providing potable water to residents served by a water system, 6 5 including the acquisition of real property needed for any of 6 6 the foregoing purposes, and such other programs as may be 6 7 authorized under the Safe Drinking Water Act. 6 8 10. "Revolving loan funds" means the sewage treatment 6 9 works revolving loan fund and the drinking water treatment 6 10 revolving loan fund. 6 11 11. "Safe Drinking Water Act" means Title XIV of the 6 12 federal Pubic Health Service Act, commonly known as the "Safe 6 13 Drinking Water Act", 42 U.S.C. } 300f et seq., as amended by 6 14 the Safe Drinking Water Amendments of 1996, Pub. L. No. 104- 6 15 182. 6 16712. "Sewage treatment works administration fund"or6 17"administration fund"means the sewage treatment works 6 18 administration fund established in section 455B.295. 6 19813. "Sewage treatment works revolving loan fund"or6 20"revolving loan fund"means the sewage treatment works 6 21 revolving loan fund established in section 455B.295. 6 22 14. "Water system" means any community water system or 6 23 nonprofit noncommunity water system, each as defined in the 6 24 Safe Drinking Water Act, that is eligible under the rules of 6 25 the department to receive a loan under the program for the 6 26 purposes of undertaking a project. 6 27 Sec. 8. Section 455B.292, Code 1997, is amended to read as 6 28 follows: 6 29 455B.292 FINDINGS. 6 30 The general assembly finds that the proper construction, 6 31 rehabilitation, operation, and maintenance of modern and 6 32 efficientsewer systems andwastewater treatment works and 6 33 drinking water facilities are essential to protecting and 6 34 improving the state's water quality and the health of its 6 35 citizens; that protecting and improving water quality is an 7 1 issue of concern to the citizens of the state; that in 7 2 addition to protecting and improving the state's water 7 3 quality, adequate wastewater treatment works and drinking 7 4 water facilities are essential to economic growth and 7 5 development; that during the last several years the amount of 7 6 federal grant money available to states and local governments 7 7 for assistance in constructing and improving wastewater 7 8 treatment works and safe drinking water facilities has sharply 7 9 diminished and will likely continue to diminish; and that it 7 10 is proper for the state to encourage local governments to 7 11 undertake wastewater treatment and drinking water projects 7 12 through the establishment of a state mechanism to provide 7 13 loans at the lowest reasonable rates. 7 14 Sec. 9. Section 455B.293, Code 1997, is amended to read as 7 15 follows: 7 16 455B.293 POLICY. 7 17 It is the policy of the general assembly that it is in the 7 18 public interest to establish a sewage treatmentworksand 7 19 drinking water facilities financing program andarevolving 7 20 loanfundfunds and administrationfundfunds to make loans 7 21 available from the state to municipalitiesto acquire,7 22construct, reconstruct, extend, equip, and improve works and7 23facilities useful for the collection, treatment, and disposal7 24of sewage and industrial waste in a sanitary mannerand water 7 25 systems for the purpose of undertaking projects. This section 7 26 shall be broadly construed to effect and accomplish that 7 27 purpose. 7 28 Sec. 10. Section 455B.294, Code 1997, is amended to read 7 29 as follows: 7 30 455B.294 ESTABLISHMENT OF THE IOWA SEWAGE TREATMENTWORKS7 31 AND DRINKING WATER FACILITIES FINANCING PROGRAM. 7 32 The Iowa sewage treatmentworksand drinking water 7 33 facilities financing program is established for the purpose of 7 34 making loans available to municipalities and water systems to 7 35 finance all or part of the costs of projects. The program 8 1 shall be a joint and cooperative undertaking of the department 8 2 and the authority. The department and the authority may enter 8 3 into and provide any agreements, documents, instruments, 8 4 certificates, data, or information necessary in connection 8 5 with the operation, administration, and financing of the 8 6 program consistent with this part, the Safe Drinking Water 8 7 Act, the Clean Water Act, the rules of the department and the 8 8 commission, the rules of the authority, and state law. The 8 9 authority and the department may act to conform the program to 8 10 the applicable guidance and regulations adopted by the United 8 11 States environmental protection agency. 8 12 Sec. 11. Section 455B.295, Code 1997, is amended to read 8 13 as follows: 8 14 455B.295 FUNDS AND ACCOUNTS. 8 15 1.TwoFour separate funds are established in the state 8 16 treasury, to be known as the"sewage treatment works revolving 8 17 loan fund", and the"sewage treatment works administration 8 18 fund", the drinking water treatment revolving loan fund, and 8 19 the drinking water facilities administration fund. 8 20 2.TheEach of the revolving loanfundfunds shall include 8 21 sums appropriated to the revolving loanfundfunds by the 8 22 general assembly, sums transferred by action of the governor 8 23 under section 455B.296, subsection 3, sums allocated to the 8 24 state expressly for the purposes of establishingaeach of the 8 25 revolving loanfundfunds under the Clean Water Act and the 8 26 Safe Drinking Water Act, all receipts by the revolving loan 8 27fundfunds, and any other sums designated for deposit to the 8 28 revolving loanfundfunds from any public or private source. 8 29 All moneys appropriated to and deposited in the revolvingfund8 30 loan funds are appropriated and shall be used for the sole 8 31 purpose of making loans to the municipalities and water 8 32 systems, as applicable, to finance all or part of the cost of 8 33 projects. The moneys appropriated to and deposited in the 8 34 sewage treatment works revolving loan fund shall not be used 8 35 to pay the nonfederal share of the cost of projects receiving 9 1 grants under the Clean Water Act. The moneys in the revolving 9 2 loanfundfunds are not consideredas apart of the general 9 3 fund of the state, are not subject to appropriation for any 9 4 other purpose by the general assembly, and in determining a 9 5 general fund balance shall not be included in the general fund 9 6 of the state but shall remain in the revolving loanfundfunds 9 7 to be used foritstheir respective purposes. The revolving 9 8 loanfund is afunds are separate dedicatedfundfunds under 9 9 the administration and control of the authority and subject to 9 10 section 16.31. Moneys on deposit in the revolving loanfund9 11 funds shall be invested by the treasurer of state in 9 12 cooperation with the authority, and the income from the 9 13 investments shall be credited to and deposited in the 9 14 appropriate revolving loanfundfunds. 9 15 3. Thesewage treatment worksadministrationfundfunds 9 16 shall include sums appropriated to the administrationfund9 17 funds by the general assembly, sums allocated to the state for 9 18 the express purposes of administering theprogramprograms, 9 19 policies, and undertakings authorized by the Clean Water Act 9 20 and the Safe Drinking Water Act, and all receipts by the 9 21 administrationfundfunds from any public or private source. 9 22 All moneys appropriated to and deposited in the administration 9 23fundfunds are appropriated for and shall be used and 9 24 administered by the department to pay the costs and expenses 9 25 associated with the program, including administration of the 9 26 program, as may be determined by the department. 9 27 4. The department and the authority may establish and 9 28 maintain other funds or accounts determined to be necessary to 9 29 carry out the purposes of this part and shall provide for the 9 30 funding, administration, investment, restrictions, and 9 31 disposition of the funds and accounts. The department and the 9 32 authority may combine the financial administration of the 9 33 revolving loan funds and the administration of the revolving 9 34 loan funds and the administration funds to the extent 9 35 permitted by the Safe Drinking Water Act. 10 1 Sec. 12. Section 455B.296, Code 1997, is amended to read 10 2 as follows: 10 3 455B.296 INTENDED USE PLANS – CAPITALIZATION GRANTS – 10 4 ACCOUNTING. 10 5 1. Each fiscal year beginning July 1, 1988, the department 10 6 may prepare and deliver intended use plans and enter into 10 7 capitalization grant agreements with the administrator of the 10 8 United States environmental protection agency under the terms 10 9 and conditions set forth inTitle VI ofthe Clean Water Act 10 10 and the Safe Drinking Water Act and federal regulations 10 11 adopted pursuant to theActActs and may accept capitalization 10 12 grants for each of the revolving loanfundfunds in accordance 10 13 with payment schedules established by the administrator. All 10 14 payments from the administrator shall be deposited in the 10 15 appropriate revolving loanfundfunds. 10 16 2. The department and the authority shall establish fiscal 10 17 controls and accounting procedures during appropriate 10 18 accounting periods for payments and disbursements received and 10 19 made by the revolving loanfundfunds, the administrationfund10 20 funds, and other funds established pursuant to section 10 21 455B.295, subsection 4, and to fund balances at the beginning 10 22 and end of the accounting periods. 10 23 3. Upon receipt of the joint recommendation of the 10 24 department and the authority with respect to the amounts to be 10 25 so reserved and transferred, and subject in all respects to 10 26 the applicable provisions of the Safe Drinking Water Act, the 10 27 governor may direct that the recommended portion of a 10 28 capitalization grant made in respect of one of the revolving 10 29 loan funds in any year be reserved for the transfer to the 10 30 other revolving loan fund. The authority and the department 10 31 may effect the transfer of any funds reserved for such 10 32 purpose, as directed by the governor, and shall cause the 10 33 records of the program to reflect the transfer. Any sums so 10 34 transferred shall be expended in accordance with the intended 10 35 use plan for the applicable revolving loan fund. 11 1 Sec. 13. Section 455B.297, Code 1997, is amended to read 11 2 as follows: 11 3 455B.297 LOANS TO MUNICIPALITIES AND WATER SYSTEMS. 11 4 Moneys deposited in the revolving loanfundfunds shall be 11 5 used for thesoleprimary purpose of making loans to 11 6 municipalities and water systems to finance the cost of 11 7 projects in accordance with the intended use plans developed 11 8 by the department under section 455B.296. The municipalities 11 9 and water systems to which loans are to be made, the purposes 11 10 of the loan, the amount of each loan, the interest rate of the 11 11 loan, and the repayment terms of the loan, shall be determined 11 12 by the director, in accordance with rules adopted by the 11 13 commission, in compliance with and subject to the terms and 11 14 conditions ofTitle VI ofthe Clean Water Act and the Safe 11 15 Drinking Water Act, as applicable, and any resolution, 11 16 agreement, indenture, or other document of the authority, and 11 17 rules adopted by the authority, relating to any bonds, notes, 11 18 or other obligations issued for the program which may be 11 19 applicable to the loan. 11 20 Sec. 14. Section 455B.298, Code 1997, is amended to read 11 21 as follows: 11 22 455B.298 POWERS AND DUTIES OF THE DIRECTOR. 11 23 The director shall: 11 24 1. Process and review loan applications to determine if an 11 25 application meets the eligibility requirements set by the 11 26 rules of the department. 11 27 2. Approve loan applications of municipalities and water 11 28 systems which satisfy the rules adopted by the commission, and 11 29 the intended useplanplans developed by the department under 11 30 section 455B.296. 11 31 3. Process and review all documents relating to projects 11 32 and the extending of loans. 11 33 4. Prepare and process, in coordination with the 11 34 authority, documents relating to the extending of loans to 11 35 municipalities and water systems, the sale and issuance of 12 1 bonds, notes, or other obligations of the authority relating 12 2 to the program, and the administration of the program. 12 3 5. Include in the budget prepared pursuant to section 12 4 455A.4, subsection 1, paragraph "c", an annual budget for the 12 5 administration of the program and the use and disposition of 12 6 amounts on deposit in the administrationfundfunds. 12 7 6. Charge each municipality and water system receiving a 12 8 loan from the appropriate revolving loan fund a loan 12 9 origination fee and an annual loan servicing fee. The amount 12 10 of the loan origination fees and the loan servicing fees 12 11 established shall be relative to the amount of a loan made 12 12 from the revolving loan fund. The director shall deposit the 12 13 receipts from the loan origination fees and the loan servicing 12 14 fees in the appropriate administration fund. 12 15 7. Consult with and receive the approval of the authority 12 16 concerning the terms and conditions of loan agreements with 12 17 municipalities and water systems as to the financial integrity 12 18 of the loan. 12 19 8. Perform other acts and assume other duties and 12 20 responsibilities necessary for the operation of the program. 12 21 EXPLANATION 12 22 This bill creates a drinking water treatment revolving loan 12 23 fund which is similar to the sewage treatment works revolving 12 24 loan fund. The bill adds the drinking water treatment 12 25 revolving loan program to the Code sections dealing with the 12 26 sewage treatment works revolving loan program. 12 27 Code sections 16.131 and 16.132 deal with provisions for 12 28 the funding of the sewage treatment works financing program. 12 29 The bill includes the drinking water facilities financing 12 30 program in these sections. The bill provides that the 12 31 drinking water facilities financing program shall have the 12 32 same financing and funding provisions as the sewage treatment 12 33 works financing program. 12 34 The bill provides that unless federal law or regulation 12 35 requires the review and approval of plans and specifications, 13 1 a permit shall be issued for the construction, installation, 13 2 or modification of a public water supply system if the plans 13 3 are properly certified to the department of natural resources. 13 4 The bill amends the definitions found in section 455B.291 13 5 to include the drinking water facilities program with the 13 6 sewage treatment financing program in sections 455B.291 to 13 7 455B.299. Definitions are added to define administrative 13 8 funds, drinking water treatment revolving loan fund, drinking 13 9 water facilities administration fund, revolving loan funds, 13 10 Safe Drinking Water Act, and water system. 13 11 The bill provides that the drinking water facilities 13 12 program is essential to protecting and improving the state's 13 13 water quality and the health of its citizens. The bill also 13 14 provides that federal money for the assistance in constructing 13 15 and improving safe drinking water facilities has diminished 13 16 and that it is proper for the state to encourage local 13 17 governments to undertake drinking water projects through the 13 18 establishment of a state mechanism to provide loans. 13 19 The bill provides that it is the policy of the general 13 20 assembly that it is in the public interest to establish a 13 21 drinking water facilities program and revolving loan fund to 13 22 make loans available to water systems for the purpose of 13 23 undertaking projects. This purpose is to be construed 13 24 broadly. 13 25 In establishing the drinking water facilities financing 13 26 program, the bill provides that the department of natural 13 27 resources and the Iowa finance authority must operate, 13 28 administer, and finance the program consistent with state law, 13 29 the Safe Drinking Water Act, and the rules of the department 13 30 and authority. The authority and the department must also act 13 31 to conform the program to the guidance and regulations of the 13 32 United States environmental protection agency. 13 33 The bill establishes the drinking water treatment revolving 13 34 loan fund and the drinking water facilities administration 13 35 fund. The drinking water facilities administration fund is 14 1 similar to the sewage treatment works administration fund, 14 2 except that the drinking water facilities administration fund 14 3 is to be used for the purpose of administering the programs, 14 4 policies, and undertakings authorized by the Safe Drinking 14 5 Water Act. Moneys appropriated to and deposited in the 14 6 drinking water treatment revolving loan fund are to be used 14 7 for the sole purpose of making loans to water systems for 14 8 financing the costs of projects. Moneys in the drinking water 14 9 treatment revolving loan fund are not considered as part of 14 10 the state general fund. The financial administration of the 14 11 revolving loan funds and the administration funds may be 14 12 combined to the extent permitted by the Safe Drinking Water 14 13 Act. 14 14 The bill provides that intended use plans may be prepared 14 15 and capitalization grant agreements may be entered into with 14 16 the United States environmental protection agency under the 14 17 Safe Drinking Water Act. The bill provides that the governor 14 18 has the authority, subject to the joint recommendation of the 14 19 department and the authority and subject to the provisions of 14 20 the Safe Drinking Water Act, to direct that a portion of a 14 21 capitalization grant made in respect of one of the revolving 14 22 funds to be reserved for transfer to the other revolving fund. 14 23 Any transferred funds are to be used in accordance with the 14 24 intended use plan for the applicable revolving loan fund. 14 25 The bill includes water systems in the entities eligible to 14 26 receive loans from a revolving loan fund. The bill also 14 27 provides that the director of the department of natural 14 28 resources has the same powers and duties in administering both 14 29 revolving funds. 14 30 LSB 1277DP 77 14 31 tm/jj/8.1
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