Amend Senate File 407 as follows:
   1.  Page 1, line 14, by striking<paragraph> and inserting <paragraphs>
   2.  Page 1, after line 18 by inserting: 
   <NEW PARAGRAPH.  g.  Upon the submission of a petition by a regulated entity, the director shall consult with the entity regarding a disadvantaged community variance under section 455B.199B.>
   3.  Page 2, after line 23 by inserting: 
   <Sec. ___.  Section 455B.199B, Code 2011, is amended by striking the section and inserting in lieu thereof the following:
   455B.199B  Disadvantaged communities variance.
   1.  The department may provide for a variance of regulations pursuant to this part when it determines that regulations adopted pursuant to this part affect a disadvantaged community. Such a variance shall be consistent with federal rules and regulations. In considering an application for a variance, the department shall consider the substantial and widespread economic and social impact to the ratepayers and the affected community that may occur as a result of compliance with a federal regulation, a rule adopted by the department, or an order of the department pursuant to this part. In considering an application for a variance, the department shall take into account the rules adopted pursuant to this part with which a regulated entity and the commensurate affected community are required to comply.
   2.  The department shall find that a regulated entity and the affected community are a disadvantaged community by evaluating all of the following:
   a.  The ability of the regulated entity and the affected community to pay for a project based on the ratio of the total annual compliance costs to median household income.
   b.  Debt, socioeconomic, and financial management indicators. 
   c.  The annual water and sewer rates as a percentage of median household income.
   d.  The per capita outstanding debt of the pollution control system as a percentage of median household income.
   3.  The department shall find that an unsewered community is a disadvantaged community by evaluating:
   a.  The ability of the community to pay for a project based upon the ratio of the total annual compliance costs to median household income.
   b.  Debt, socioeconomic, and financial management indicators.
   c.  The annual water and sewer rates as a percentage of median household income.
   4.  The department shall not consider a regulated entity, affected community, or unsewered community as a disadvantaged community if the ratio of compliance costs to median household income is below one percent.
   5.  The department may grant a regulated entity a variance from complying with a rule adopted pursuant to this part, or as otherwise allowed by federal law or regulations, if the department determines that the regulated entity or the affected community will suffer substantial and widespread economic and social impact. The department shall ensure that the conditions of any variance granted improve water quality and represent reasonable progress toward complying with rules adopted pursuant to this part but do not result in substantial and widespread economic and social impact.
   6.  The department shall not require an unsewered community to install a wastewater treatment system if the department determines that the unsewered community will suffer substantial and widespread economic and social impact and until alternative treatment options are approved.
   7.  The Iowa finance authority, in cooperation with the department, shall utilize the disadvantaged community criteria in this section to determine the appropriate interest rates for loans awarded from the revolving loan funds created in section 455B.295, as allowed by federal law or regulations.
   8.  The department of economic development shall utilize the disadvantaged community criteria in this section to determine eligibility for water or sewer community development block grant moneys pursuant to section 15.108, subsection 1, paragraph “a”.>
   4.  Title page, line 1, by striking<delegating to counties> and inserting <relating to counties and other regulated entities and>
   5.  By renumbering as necessary.

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MERLIN BARTZ