NO. 134. AN ACT RELATING TO CREATING NEW REVOLVING FUNDS FOR THE IMPROVEMENT AND PROTECTION OF PUBLIC WATER SUPPLIES.
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 24 V.S.A. § 4753 is amended to read:
§ 4753. REVOLVING LOAN FUNDS
(a) There is hereby established a series of special funds to be known as:
(1) The Vermont environmental protection agency (EPA) pollution control revolving fund which shall be used to provide loans to municipalities for planning sewage systems and sewage disposal plans as defined in sections 3501(6) and 3601 of this title, for constructing publicly-owned sewage systems and sewage disposal plants as defined in sections 3501(6) and 3601 of this title, and for implementing related management programs.
(2) The Vermont pollution control revolving fund which shall be used to provide loans to municipalities for planning pollution control facilities and for constructing publicly-owned pollution control facilities.
(3) The Vermont environmental protection agency (EPA) drinking water state revolving fund which shall be used to provide loans to municipalities and certain privately-owned water systems for:
(A) planning, designing, constructing, repairing or improving a public water system in order to comply with state and federal standards and protect public health; and
(B) implementing related management programs.
(4) The Vermont solid waste revolving fund which shall be used to provide loans to municipalities (including union municipal districts formed under subchapter 3 of chapter 121 of this title) for planning solid waste handling and disposal facilities as enumerated in section 2203a of this title, and for constructing publicly-owned solid waste handling and disposal facilities as enumerated in section 2203a of this title.
(5) The Vermont drinking water planning loan fund which shall be used for providing loans to municipalities with populations of less than 10,000, conducting feasibility studies, and conducting planning and preliminary designs for making improvements to public water systems in order to comply with state and federal standardsand to protect public health.
(6) The Vermont drinking water source protection fund which shall be used to provide loans to municipalities for purchasing land or conservation easements in order to protect public water sources and ensure compliance with state and federal drinking water regulations.
(b) Each of such funds shall be established and held separate and apart from any other funds or moneys of state and shall be used and administered exclusively for the purpose of this chapter with the exception of transferring funds from the Vermont drinking water planning loan fund and the Vermont drinking water source protection fund to the Vermont environmental protection agency (EPA) drinking water state revolving fund when authorized by the secretary. These funds shall be administered by the bond bank on behalf of the state, except that the fund shall be administered by VEDA concerning loans to privately-owned water systems under subdivision (a)(3) of this section. The funds shall be invested in the same manner as permitted for investment of funds belonging to the state or held in the treasury. The funds shall consist of the following:
(1) Such sums as may be appropriated or transferred thereto from time to time by the general assembly, the state emergency board or the joint fiscal committee during such times as the general assembly is not in session.
(2) Principal and interest received from the repayment of loans made from each of such funds.
(3) Capitalization grants and awards made to the state by the United States of America for any of the purposes for which such funds have been established.
(4) Interest earned from the investment of fund balances.
(5) Private gifts, bequests and donations made to the state for any of the purposes for which such funds have been established.
(6) Other funds from any public or private source intended for use for any of the purposes for which such funds have been established.
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Sec. 2. 24 V.S.A. § 4756 is amended to read:
§ 4756. ELIGIBILITY CERTIFICATION
(a) No construction loan or loan for the purchase of land or conservation easements to a municipality shall be made under this chapter, nor shall any part of any revolving fund which is designated for project construction be expended under section 4757 of this title, until such time as:
(1) the secretary shall certify to the bond bank that all water supply and wastewater permits, land use, subdivision, public building and discharge permits, necessary to construct *[
and operate]* the improvements to be financed by the loan *[ have been]* will be issued to the applicant municipality prior to disbursement of funds under the loan for construction;
(2) the applicant municipality shall certify to the bond bank that it *[
has]* will have secured all state and federal permits, licenses and approvals necessary to construct *[ and operate]* the improvements to be financed by the loan prior to expending funds under the loan;
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(d) Loans awarded from the same revolving fund under subsections (b) and (c) of this section may be consolidated, and may also be consolidated with loans awarded under subsection (a) of this section. One loan may be issued for construction and preparation of final engineering plans and specifications.
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Sec. 3. 24 V.S.A. § 4759 is amended to read:
§ 4759. REGULATIONS
The secretary and the bond bank may adopt rules and policies necessary to implement the provisions of this chapter in order to ensure the self-sustaining nature of the funds created under section 4753 of this chapter, and also to ensure compliance with the requirements of Title VI of the federal Clean Water Act and section 1452 of the federal Safe Drinking Water Act, and with any regulations promulgated by the U.S. Environmental Protection Agency which may require the state to implement a stateenvironmental review process as a condition to receipt of federal funding.
Sec. 4. 24 V.S.A. § 4770(b) is amended to read:
(b) The owner or owners of a privately-owned community water system *[
of which 80 percent or more of the served structures are occupied by year-round residents, and the owner or owners of]* or a privately-owned nonprofit, noncommunity public water system*[ ,]* may apply to VEDA for a loan from the Vermont EPA drinking water state revolving fund established under subchapter 1 of this chapter, the proceeds of which may be used to acquire requisite permits, design, plan, construct, repair, or improve an existing privately-owned public community water system in order to comply with federal and state standards and protect the public health.
(1) A municipality, as defined under section 126 of Title 1, is not eligible for a loan under this subchapter.
(2) A nonprofit organization is eligible to apply for a loan under this subchapter if that organization qualifies as tax exempt.
Sec. 5. 24 V.S.A. § 4772(1)(A) is amended to read:
No loan to an applicant shall be made under this subchapter until:
(1) The applicant has certified to VEDA that:
(A) all state and federal permits and licenses, including land use, subdivision, water supply and wastewater permits and water supply construction and operating permits necessary to undertake the project for which financing has been sought *[
have been issued]* will be obtained prior to expending construction funds under the loan;
Sec. 6. 24 V.S.A. § 4778 is amended to read:
§ 4778. FEDERAL CAPITALIZATION GRANT DISTRIBUTION
The secretary may use any available and lawful funds to match federal funds otherwise available to capitalize the fund created by section 4753(a)(3) of this title. *[
The secretary may direct up to 20 percent of the federal capitalization grant for use by privately-owned public water systems.]* Up to 20 percent of the funds which have been identified in the annual state intended use plan (IUP) and allocated for water supply projects may be used for loans to privately-owned public water systems. Any balance, excepting set-asidesauthorized by federal law, shall be directed to be used for loans to improve municipal water systems.
Sec. 7. 10 V.S.A. § 1624(b) is amended to read:
(1) The secretary may certify to the Vermont municipal bond bank established by section 4571 of Title 24 the award of a loan to a municipality to assist with a potable water supply facility project, when the secretary finds that:
(A) the project is necessary;
(B) the proposed type, size and estimated cost of the project are suitable for its intended purpose; and
(C) the municipality will have the technical, financial and managerial ability to operate the facility in compliance with federal and state law.
(2) The certification by the secretary shall indicate which of the following loan conditions concerning construction loans apply:
(A) The term shall not exceed 20 years, and the annual interest rate shall be no more than three percent or less than zero percent, except that when the applicant municipality is disadvantaged as defined by section 1571(9) of this title, the term shall not exceed 30 years, and the annual interest rate shall be no more than three percent or less than minus three percent.
(B) In no instance shall the annual interest rate be less than necessary to achieve an annual household user cost of one and one-quarter percent of the median household income of the applicant municipality or served area, taking into account:
(i) debt retirement of the project, including any monies a municipality may borrow to match federal funds available to the drinking water state revolving fund pursuant to subsection (d) of this section;
(ii) prior drinking water projects; and
(iii) estimated annual operation and maintenance costs as determined by the secretary.
(3) A municipal legislative body may execute a loan agreement under thissubsection, provided the terms of the loan are authorized by municipal voters and are secured by the full faith and credit of the municipality.
(4) A loan shall be issued and administered pursuant to chapter 120 of Title 24.
(5) Loans shall be available to the extent funds are available and according to priorities established by the secretary.
(6) For purposes of this subsection, the secretary shall determine the median household income of a municipality from the most recent federal census data, or at the option of an applicant municipality, based on the recommendation of an independent contractor hired by the municipality and approved by the secretary. The determination of the secretary shall be final. The cost of an independent contractor may be included in the total cost of a project.
(7) Loans awarded for the purpose of refinancing old debt shall be for a term of no more than 20 years and at an interest rate set by the state treasurer at no less than zero percent and no more than 80 percent of the average rate on marketable obligations of the state, except that municipalities or private water system owners which qualify for loan awards under section 4770 of Title 24 and which incurred debt and initiated construction after April 5, 1997 may receive loans at interest rates and terms pursuant to subdivision (b)(2)(A) of this section.
(8) Loans awarded for the purpose of conducting feasibility studies and preparation of engineering plans and designs shall be for a term of no more than five years at an interest rate of zero percent.
(9) Loans awarded for the purpose of purchasing land or conservation easements to protect public water sources shall be for a term of no more than 20 years at an annual interest rate of three percent.
Sec. 8. 10 V.S.A. § 1671 is amended to read:
§ 1671. DEFINITIONS
As used in this chapter:
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(5) "Public water system" means any system, or combination of systems owned orcontrolled by a person, which provides piped drinking water to the public and which:
(A) has at least *[
ten]* 15 service connections; or
(B) serves an average of at least 25 individuals for at least 60 days a year.
Public water system shall also mean any part of a piped system which does not provide drinking water, if use of such a part could affect the quality or quantity of the drinking water supplied by the system. Public water system shall also mean a system which bottles drinking water for public distribution and sale.
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(10) "Community water system" means a public water system which serves at least *[
ten]* 15 service connections used by year-round residents or regularly serves at least 25 year-round residents. The construction of a water system which upon completion of construction could be reasonably expected to serve at least 15 service connections or at least 25 year-round residents shall require a community water system construction permit.
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(12) "Conservation" means methods and procedures designed to promote efficient use of water and to minimize waste of water.
(13) "Capacity" means that a public water system has the technical, financial, and managerial capabilities to consistently comply with current performance standards, including the requirements of the Safe Drinking Water Act, 42 U.S.C. section 300f et seq., as amended.
Sec. 9. 10 V.S.A. § 1672(b) is amended to read:
(b) The secretary may establish by rule, standards or requirements for:
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the monitoring and other requirements for systems with 10 through 14 connections that shall be less stringent than the requirements for larger systems, and shall be limited to bacteriological and nitrate monitoring.]*
(10) obtaining a construction permit for a new water system. At a minimum, the water system shall demonstrate that it possesses the long-term financial, managerial and technical capability to operate and maintain a water system in conformance with federaland state regulatory requirements.
Sec. 10. 10 V.S.A. § 1675(d) is amended to read:
(d) Permit conditions. Public water system permits issued under this chapter may include, but shall not be limited to, conditions which:
(1) require the construction, installation, operation and maintenance of any purification, disinfection of other water processing or treatment facility in accordance with standards and requirements established by the secretary;
(2) require the person owning or controlling the system to adequately control and protect the public water source and source protection area;
(3) require that construction be in accordance with the Vermont standards for water system design and construction;
(4) require notification of the characteristics of the water provided by the system to the public by notice conforming with the requirements of the Federal Safe Drinking Water Act;
(5) limit the number of connections to the system;
(6) limit maximum and daily output of the system;
(7) require the development and submission to the secretary of a long-range plan for expansion, capital improvements and future service area; *[
(8) require the development, submission to the secretary, and implementation of a water conservation plan in accordance with the policy established in section 1684 of this title;
(9) require the development and submission to the secretary of a system-level business plan and comprehensive water supply plan to ensure system capacity in the long-term; and
(10) contain any additional conditions, requirements, schedules or restrictions or monitoring or testing programs which are deemed necessary to assure compliance with this chapter and the rules adopted under this chapter.
Sec. 11. 10 V.S.A. § 1684 is added to read:
§ 1684. CONSERVATION REQUIREMENTS
The general assembly finds that water is a natural resource that should be managed efficiently to reduce waste through promotion of water conservation. It shall be the policy of the state to conserve the water resources of Vermont through technology, methods, and procedures designed to promote efficient use of water; to consider water conservation in all water use decisions; and to reduce or minimize the waste of water through water supply management practices.
Sec. 12. 10 V.S.A. § 1685 is added to read:
§ 1685. PUBLIC WATER SYSTEM CAPACITY
The secretary, by rule, shall establish standards and requirements for implementing a public water system capacity program for community water systems and nontransient, noncommunity water systems. The program shall place particular emphasis on addressing the problems and capital needs facing the state's small, rural community water systems and public water systems operated by school districts. The program may include, but shall not be limited to, the following measures to improve public water system infrastructure and to provide safe drinking water to small community water systems and schools:
(1) source water protection programs;
(2) capital improvement planning;
(3) minimum design and construction standards;
(4) operation and management practices;
(5) development of a program to assess the capacity of public water systems in order to prevent formation of new systems lacking capacity; to assess existing system capacity; and to promote restructuring of systems lacking capacity; and
(6) to the extent it is consistent with federal law, preference in providing state financial and technical assistance to small systems whose water supply is contaminated or threatened by contamination or who fail to comply with state drinking water standards.
Sec. 13. 24 V.S.A. § 3315 is amended to read:
§ 3315. ORDINANCES
Such municipal corporation shall have the power to make, establish, alter, amend or repeal ordinances, regulations and bylaws relating to the matters contained in this chapter and not inconsistent with law, including the authority to require existing customers to remain connected to such municipal system, and to impose penalties for the breach thereof, and enforce the same.
Approved: April 23, 1998