Senate File 339 - Enrolled
SENATE FILE 339
RELATING TO WASTEWATER TREATMENT AND PROVIDING AN EFFECTIVE
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
WASTEWATER TREATMENT FINANCIAL ASSISTANCE PROGRAM
Section 1. Section 16.134, Code 2009, is amended to read
16.134 WASTEWATER TREATMENT FINANCIAL ASSISTANCE PROGRAM.
1. The Iowa finance authority shall establish and
administer a wastewater treatment financial assistance
program. The purpose of the program shall be to provide
grants financial assistance to enhance water quality and to
assist communities to comply with water quality standards
adopted by the department of natural resources. The program
shall be administered in accordance with rules adopted by the
authority pursuant to chapter 17A.
2. A wastewater treatment financial assistance fund is
created under the authority of the Iowa finance authority.
The fund shall consist of appropriations made to the fund and
transfers of interest, earnings, and moneys from other funds
as provided by law. Moneys in the fund are not subject to
section 8.33. Notwithstanding section 12C.7, subsection 2,
interest or earnings on moneys in the fund shall be credited
to the fund.
3. Financial assistance under the program shall be used to
install or upgrade wastewater treatment facilities and
systems, and for engineering or technical assistance for
facility planning and design.
4. The authority shall distribute financial assistance in
the fund in accordance with the following:
0a. The goal of the program shall be to base awards on the
impact of the grant combined with other sources of financing
to ensure that sewer rates do not exceed one and one=half
percent of a community's median household income.
a. Communities shall be eligible for financial assistance
by qualifying as a disadvantaged community and seeking
financial assistance for the installation or upgrade of
wastewater treatment facilities due to regulatory activity in
response to water quality standards adopted by the department
of natural resources in calendar year 2006. For purposes of
this section, the term "disadvantaged community" means the
same as defined by the department of natural resources for the
drinking water facilities revolving loan fund established in
section 455B.295. Communities with a population of three
thousand or more do not qualify for financial assistance under
b. Priority shall be given to projects in which the
financial assistance is used to obtain financing under the
Iowa water pollution control works and drinking water
facilities financing program pursuant to section 16.131 or
other federal or state financing.
c. Priority shall also be given to projects whose
completion will provide significant improvement to water
quality in the relevant watershed.
d. Priority shall also be given to communities that employ
an alternative wastewater treatment technology pursuant to
e. Priority shall be also given to those communities where
sewer rates are the highest as a percentage of that
community's median household income.
d. A community meeting the criteria of paragraph "a" shall
be required to provide matching moneys in accordance with the
(1) Unsewered incorporated communities with a population
of less than five hundred and communities with a population of
less than five hundred shall be required to provide a five
(2) Communities with a population of five hundred or more
but less than one thousand shall be required to provide a ten
(3) Communities with a population of one thousand or more
but less than one thousand five hundred shall be required to
provide a twenty percent match.
(4) Communities with a population of one thousand five
hundred or more but less than two thousand shall be required
to provide a thirty percent match.
(5) Communities with a population of two thousand or more
but less than three thousand shall be required to provide a
forty percent match.
e. f. Financial assistance in the form of grants shall be
issued on a quarterly an annual basis.
g. An applicant shall not receive a grant that exceeds
five hundred thousand dollars.
5. The authority in cooperation with the department of
natural resources shall share information and resources when
determining the qualifications of a community for financial
assistance from the fund.
6. The authority may use an amount of not more than four
percent of any moneys appropriated for deposit in the fund for
7. It is the intent of the general assembly that for the
fiscal period beginning July 1, 2007, and ending June 30,
2016, a minimum of four million dollars shall be appropriated
each fiscal year to the authority for deposit in the
wastewater treatment financial assistance fund.
Sec. 2. NEW SECTION. 16.135 WASTEWATER VIABILITY
1. The authority, in cooperation with the department of
natural resources and the department of economic development,
shall require the use of a wastewater viability assessment for
any wastewater treatment facility seeking a grant under the
wastewater treatment financial assistance program. A
wastewater viability assessment shall determine the long=term
operational and financial capacity of the facility and its
ratepayers. The authority shall develop minimum criteria for
eligibility based on the viability assessment.
2. The authority, in cooperation with the department of
natural resources, shall develop a wastewater viability
assessment. The assessment shall include as part of the
assessment all of the following factors:
a. The ability of the applicant to provide proper
oversight and management through a certified operator.
b. The financial ability of the users to support the
existing system, improvements to the system, and the long=term
maintenance of the system.
Sec. 3. Section 384.80, subsection 12, Code 2009, is
amended to read as follows:
12. "Project" means the acquisition, construction,
reconstruction, extending, remodeling, improving, repairing,
and equipping of all or part of a city utility, combined
utility system, city enterprise, or combined city enterprise,
or a water resource restoration project within or without the
corporate limits of the city.
Sec. 4. Section 384.80, Code 2009, is amended by adding
the following new subsection:
NEW SUBSECTION. 15. "Water resource restoration project"
means the acquisition of real property or improvements or
other activity or undertaking that will assist in improving
the quality of the water in the watershed where a city water
or wastewater utility is located.
Sec. 5. Section 384.82, subsection 1, unnumbered paragraph
1, Code 2009, is amended to read as follows:
A city may carry out projects, borrow money, and issue
revenue bonds and pledge orders to pay all or part of the cost
of projects, which may include a qualified water resource
restoration project, such revenue bonds and pledge orders to
be payable solely and only out of the net revenues of the city
utility, combined utility system, city enterprise, or combined
city enterprise involved in the project. The cost of a
project includes the construction contracts, interest upon the
revenue bonds and pledge orders during the period or estimated
period of construction and for twelve months thereafter, or
for twelve months after the acquisition date, such reserve
funds as the governing body may deem advisable in connection
with the project and the issuance of revenue bonds and pledge
orders, and the costs of engineering, architectural, technical
and legal services, preliminary reports, surveys, property
valuations, estimates, plans, specifications, notices,
acquisition of real and personal property, consequential
damages or costs, easements, rights=of=way, supervision,
inspection, testing, publications, printing and sale of bonds
and provisions for contingencies. A city may sell revenue
bonds or pledge orders at public or private sale in the manner
prescribed by chapter 75 and may deliver revenue bonds and
pledge orders to the contractors, sellers, and other persons
furnishing materials and services constituting a part of the
cost of the project in payment therefor.
Sec. 6. Section 384.84, Code 2009, is amended by adding
the following new subsection:
NEW SUBSECTION. 1A. The governing body of a city water or
wastewater utility may enter into an agreement with a
qualified entity to use proceeds from revenue bonds for a
water resource restoration project if the rate imposed is no
greater than if there was not a water resource restoration
project agreement. For purposes of this subsection,
"qualified entity" is an entity created pursuant to chapter
28E or two entities that have entered into an agreement
pursuant to chapter 28E, whose purpose is to undertake a
watershed project that has been approved for water quality
improvements in the watershed.
Sec. 7. NEW SECTION. 455B.199 WATER RESOURCE RESTORATION
1. The department shall establish and administer a water
resource restoration sponsor program to assist in enhancing
water quality in the state through the provision of financial
assistance to communities for a variety of impairment=based,
locally directed watershed projects.
2. For purposes of this section, unless the context
a. "Qualified entity" means the same as defined in section
b. "Sponsor project" means a water resource restoration
project as defined in section 384.80.
3. Moneys in the water pollution control works revolving
loan fund created in section 455B.295, and the drinking water
facilities revolving loan fund created in section 455B.295,
shall be used for the water resource restoration sponsor
program. The department shall establish on an annual basis
the percentage of moneys available for the sponsor program
from the funds.
4. The interest rate on the loan under the program for
communities participating in a sponsor project shall be set at
a level that requires the community to pay not more than the
amount the community would have paid if they did not
participate in a sponsor project.
5. Not more than ninety percent of the projected interest
payments on bonds issued under section 384.84 or the total
cost of the sponsor project shall be advanced to the
community, whichever is lower.
6. A proposed sponsor project must be compatible with the
goals of the water resource restoration sponsor program, shall
include the application of best management practices for the
primary purpose of water quality protection and improvement,
and may include but not be limited to any of the following:
a. Riparian buffer acquisition, enhancement, expansion, or
b. Conservation easements.
c. Riparian zone or wetland buffer extension or
d. Wetland restoration in conjunction with an adjoining
high=quality water resource.
e. Stream bank stabilization and natural channel design
f. In=stream habitat enhancements and dam removals.
7. A proposed sponsor project shall not include any of the
a. Passive recreation activities and trails including bike
trails, playgrounds, soccer fields, picnic tables, and picnic
b. Parking lots.
c. Diverse habitat creation contrary to the botanical
history of the area.
d. Planting of nonnative plant species.
f. Supplemental environmental projects required as a part
of a consent decree.
8. A sponsor project must be approved by the department
prior to participating in the water resource restoration
9. A resolution by the city council must be approved and
included as part of an application for the water resource
restoration sponsor program. After approval of the project,
the city council shall enter into an agreement pursuant to
chapter 28E with the qualified entity who shall implement the
10. A water resource restoration project shall not include
the acquisition of property, an interest in property, or
improvements to property through condemnation.
11. The commission shall adopt rules pursuant to chapter
17A necessary for the administration of this section.
Sec. 8. Section 455B.295, subsection 2, Code 2009, is
amended to read as follows:
2. Each of the revolving loan funds shall include sums
appropriated to the revolving loan funds by the general
assembly, sums transferred by action of the governor under
section 455B.296, subsection 3, sums allocated to the state
expressly for the purposes of establishing each of the
revolving loan funds under the Clean Water Act and the Safe
Drinking Water Act, all receipts by the revolving loan funds,
and any other sums designated for deposit to the revolving
loan funds from any public or private source. All moneys
appropriated to and deposited in the revolving loan funds are
appropriated and shall be used for the sole purpose of making
loans to eligible entities to finance all or part of the cost
of projects, including sponsor projects under the water
resource restoration sponsor program established in section
455B.199. The moneys appropriated to and deposited in the
water pollution control works revolving loan fund shall not be
used to pay the nonfederal share of the cost of projects
receiving grants under the Clean Water Act. The moneys in the
revolving loan funds are not considered part of the general
fund of the state, are not subject to appropriation for any
other purpose by the general assembly, and in determining a
general fund balance shall not be included in the general fund
of the state but shall remain in the revolving loan funds to
be used for their respective purposes. The revolving loan
funds are separate dedicated funds under the administration
and control of the authority and subject to section 16.31.
Moneys on deposit in the revolving loan funds shall be
invested by the treasurer of state in cooperation with the
authority, and the income from the investments shall be
credited to and deposited in the appropriate revolving loan
PERMITTING == VARIANCES == ALTERNATIVE
WASTEWATER TREATMENT TECHNOLOGIES
Sec. 9. NEW SECTION. 455B.199A PRIORITIZATION OF
MUNICIPAL WATER QUALITY IMPROVEMENT PROJECTS.
1. The department may allow schedules of compliance to be
included in permits whenever authorized by federal law or
regulations. Such schedules shall be established to maximize
benefits and minimize local financial impact while improving
water quality, where such opportunities arise. If information
is provided showing that the anticipated costs of compliance
with a schedule have no reasonable relationship to
environmental or public health needs or benefits, or may
result in other detrimental environmental impacts, such as
significant greenhouse gas emissions, the projects may be
deferred, in whole or in part as determined appropriate by the
department, and a variance granted, as consistent with
applicable federal law or regulations.
2. Unless otherwise restricted by federal law or
regulations, the department may allow compliance schedules of
up to thirty years in national pollutant discharge elimination
system permits, particularly where the costs of compliance
with federal program mandates will adversely impact the
construction of other necessary local capital improvement
projects. If the department determines an existing condition
constitutes a significant public health or environmental
threat, the schedule of compliance shall be based on the
shortest practicable time frame for remedying the condition.
Sec. 10. NEW SECTION. 455B.199B DISADVANTAGED
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 using
all of the following criteria:
a. Median household income in the community as a
percentage of statewide household income.
b. Annual water and sewer rates as a percentage of median
c. Families below the poverty level in the community as a
percentage of the statewide number of families below the
d. Per capita outstanding debt of the system as a
percentage of median household income.
e. Cost effectiveness calculated by determining
construction costs per user.
3. 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 the
conditions of any variance 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.
4. 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
sections 455B.291 through 455B.299, as allowed by federal law
5. The department of economic development shall utilize
the disadvantaged community criteria in this section to
determine eligibility for water or sewer community development
block grants as provided in section 15.108, subsection 1,
Sec. 11. NEW SECTION. 455B.199C ALTERNATIVE WASTEWATER
TREATMENT TECHNOLOGIES == LEGISLATIVE INTENT AND PURPOSE.
1. The intent of the general assembly is to address the
rising costs of water and wastewater treatment compliance for
regulated entities and affected communities by authorizing the
use of alternative treatment technologies. The purpose of
this section is to eliminate regulatory barriers that limit or
prevent the use of new or innovative technologies.
2. The department shall produce and publish design
guidance documents for alternative wastewater treatment
technologies. The guidance documents shall be intended to
encourage regulated entities to use such technologies and to
assist design engineers with the submission of projects
employing alternative wastewater treatment technologies that
can be readily approved by the department.
3. In writing design guidance documents for alternative
wastewater treatment technologies the department shall review
all of the following:
a. The on=site sewage design and reference manual
published by the department of natural resources.
b. The guidance manual for the management of on=site and
decentralized wastewater systems published by the United
States environmental protection agency.
c. Other credible sources of information on the design,
operation, and performance of alternative wastewater treatment
Sec. 12. Section 455B.176A, subsection 7, 8, and 9, Code
2009, are amended by striking the subsections.
Sec. 13. Section 358.16, subsection 2, unnumbered
paragraph 1, Code 2009, is amended to read as follows:
The board of trustees may require connection to the
sanitary sewer system established, maintained, or operated by
the district from any adjacent property within the district,
and require the installation of sanitary toilets or other
sanitary sewage facilities and removal of other toilet and
other sewage facilities on the property. However, the board
of trustees shall not regulate, restrict the use, or require
the connection of a private sewage disposal facility
previously approved by the county board of health pursuant to
section 455B.172 without the prior approval of that board of
Sec. 14. EFFECTIVE DATE. This division of this Act, being
deemed of immediate importance, takes effect upon enactment.
JOHN P. KIBBIE
President of the Senate
PATRICK J. MURPHY
Speaker of the House
I hereby certify that this bill originated in the Senate and
is known as Senate File 339, Eighty=third General Assembly.
MICHAEL E. MARSHALL
Secretary of the Senate
Approved , 2009
CHESTER J. CULVER