Senate File 339 - Enrolled




                                           SENATE FILE 339

                             AN ACT
 RELATING TO WASTEWATER TREATMENT AND PROVIDING AN EFFECTIVE
    DATE.

 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

                           DIVISION I
        WASTEWATER TREATMENT FINANCIAL ASSISTANCE PROGRAM
    Section 1.  Section 16.134, Code 2009, is amended to read
 as follows:
    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
 the program.
    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
 section 455B.199C.
    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
 following:
    (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
 percent match.
    (2)  Communities with a population of five hundred or more
 but less than one thousand shall be required to provide a ten
 percent match.
    (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
 administration purposes.
    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
 ASSESSMENT.
    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.
                           DIVISION II
                       SPONSORED PROJECTS
    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
 SPONSOR PROGRAM.
    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
 otherwise requires:
    a.  "Qualified entity" means the same as defined in section
 384.84.
    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
 restoration.
    b.  Conservation easements.
    c.  Riparian zone or wetland buffer extension or
 restoration.
    d.  Wetland restoration in conjunction with an adjoining
 high=quality water resource.
    e.  Stream bank stabilization and natural channel design
 techniques.
    f.  In=stream habitat enhancements and dam removals.
    7.  A proposed sponsor project shall not include any of the
 following:
    a.  Passive recreation activities and trails including bike
 trails, playgrounds, soccer fields, picnic tables, and picnic
 grounds.
    b.  Parking lots.
    c.  Diverse habitat creation contrary to the botanical
 history of the area.
    d.  Planting of nonnative plant species.
    e.  Dredging.
    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
 sponsor program.
    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
 project.
    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
 funds.
                          DIVISION III
             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
 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 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
 household income.
    c.  Families below the poverty level in the community as a
 percentage of the statewide number of families below the
 poverty level.
    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
 or regulations.
    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,
 paragraph "a".
    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
 technologies.
    Sec. 12.  Section 455B.176A, subsection 7, 8, and 9, Code
 2009, are amended by striking the subsections.
                           DIVISION IV
                       SANITARY DISTRICTS
    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
 health.
    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
 Governor

                             -1-