No. 30384 (Amendment): R317-102. Utah Wastewater State Revolving Fund (SRF) Program

DAR File No.: 30384
Filed: 08/30/2007, 04:31
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The proposed changes are to comply with statutory changes to Title 73, Chapter 10c from H.B. 99, 2007 General Legislative Session. (DAR NOTE: H.B. 99 (2007) is found at Chapter 142, Laws of Utah 2007, and was effective 04/30/2007.)

Summary of the rule or change:

This change deletes Sections R317-102-5, Loans For Underground Wastewater Disposal Systems, and R317-102-6, Loans for Non-point Source Pollution Projects, from this rule and adds the information to revised sections in Rule R317-101, Utah Wastewater Project Assistance Program, via a concurrent rulemaking action. As revised, Rule R317-101 is a more appropriate location for these sections. (DAR NOTE: The proposed amendment to Rule R317-101 is under DAR No. 30387 in this issue, September 15, 2007, of the Bulletin.)

State statutory or constitutional authorization for this rule:

Section 19-5-105 and Title 73, Chapter 10c

Anticipated cost or savings to:

the state budget:

No costs are associated to the state budget with these amendments. Two sections are deleted from this rule, modified, and added to Rule R317-101 via a concurrent rulemaking action.

local governments:

No costs are associated to local government with these amendments. Two sections are deleted from this rule, modified, and added to Rule R317-101 via a concurrent rulemaking action.

small businesses and persons other than businesses:

No costs are associated to anyone with these amendments. Two sections are deleted from this rule, modified, and added to Rule R317-101 via a concurrent rulemaking action.

Compliance costs for affected persons:

No costs are associated to anyone with these amendments. Two sections are deleted from this rule, modified, and added to Rule R317-101 via a concurrent rulemaking action.

Comments by the department head on the fiscal impact the rule may have on businesses:

No costs are associated with these amendments. Two sections are deleted from this rule, modified, and added to Rule R317-101 via a concurrent rulemaking action. Rick Sprott, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Environmental Quality
Water Quality
CANNON HEALTH BLDG
288 N 1460 W
SALT LAKE CITY UT 84116-3231

Direct questions regarding this rule to:

Dave Wham at the above address, by phone at 801-538-6052, by FAX at 801-538-6016, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/15/2007

This rule may become effective on:

10/22/2007

Authorized by:

Walter Baker, Director

RULE TEXT

R317. Environmental Quality, Water Quality.

R317-102. Utah Wastewater State Revolving Fund (SRF) Program.

R317-102-3. Definitions and Eligibility.

A. Eligible Activities of the SRF. All funds within the SRF must be used solely to provide loans and other authorized forms of financial assistance[, but not grants]:

1. for the construction of publicly owned wastewater treatment works as defined in Section 212 of the CWA that appear on the Utah State Project Priority List as described in R317-100-1;

2. for implementation of a nonpoint source pollution control management program under Section 319 of the CWA.

B. First Use Requirement. The categories of funds described below must first be used for any major and minor publicly owned treatment works (POTW) that EPA Region VIII and Utah has previously identified as part of the National Municipal Policy universe:

1. the Federal capitalization grant award under section 205(m) and Title VI of the CWA;

2. repayments of initial loans awarded from the grant; and

3. the State match.

In order for Utah to use these funds for other kinds of treatment works, without unmet enforceable requirements under 212 or programs for nonpoint pollution sources, the Utah Division of Water Quality must certify that the POTWs described above are:

a. in compliance, or

b. on an enforceable schedule, or

c. have an enforcement action filed, or

d. have a funding commitment during or prior to the first year covered by the Intended Use Plan.

C. Types of Financial Assistance

1. Loans

a. Interest Rate. Loans may be made at or below market interest rates.

b. Repayment. Annual repayments of principal and interest will be made to begin not later than one year after project completion. Project Completion shall be defined as the date operations of the treatment works are capable of being initiated. Where a treatment works has been phased or segmented, the repayment requirement applies to the completion of individual phases or segments. At the discretion of the Water Quality Board, principal and interest payments may begin earlier than one year after operations are initiated.

The yearly amount of the principal repayment and the interest payment is set at the discretion of the Water Quality Board.

c. Dedicated Repayment Source. Loan recipients must establish one or more dedicated sources of revenue for repayment of the loan.

2. Refinancing Existing Debt Obligations. The Water Quality Board may use funds from the SRF to buy or refinance local debt obligations at or below market interest rate, where such debt was incurred after March 7, 1985. Refinanced projects must comply with the requirements imposed by the CWA as though they were projects receiving initial financing from the SRF. Further, where the original debt was in the form of a multi-purpose bond incurred for purposes in addition to wastewater treatment facility construction, refinancing from the SRF may be provided only for eligible purposes, and not for the entire debt.

3. Guarantee or Purchase Insurance for Local Debt Obligations.

4. Guarantee SRF Debt Obligations. Resources in the SRF may be used as security or as a source of revenue for the payment of principal and interest on revenue or general obligation bonds issued by the State and deposited in the SRF.

5. Loan Guarantees for sub-State Revolving Funds.

6. Earn Interest on Fund Accounts.

7. SRF Administrative Expenses.

 

[R317-102-5. Loans For Underground Wastewater Disposal Systems.

Replacement or repair of underground wastewater disposal systems (UWDS), as defined in R317-501-1.1, are eligible for funding through the SRF if they have malfunctioned or are in non-compliance with state administrative rules or local regulations governing the same. The following procedures apply to UWDS loans:

A. Loans will only be made for the repair or replacement of existing malfunctioning UWDS, as determined by the local health department and as defined in R317-501-1.34, when the malfunction is not attributable to inadequate system operation and maintenance.

B. Projects will be prioritized according to criteria established in R317-100-4, Utah State Project Priority System for the Utah Wastewater Project Assistance Program.

C. UWDS loan applications will be received by the local health department which will evaluate the need, priority, eligibility and technical feasibility of each project. The local health department will issue a certificate of qualification (COQ) for projects which qualify for a UWDS loan. The COQ and completed loan application will be forwarded to the Division of Water Quality for its review.

D. The maximum term of the UWDS loan will be 10 years.

E. The maximum loan amount for a system serving an individual residence will be $15,000. A larger loan may be considered for a system serving multiple residences.

F. The interest rate on UWDS loans will be equal to 60% of the interest rate on a 30-year U.S. Treasury bill.

G. UWDS loan recipients must have a total household income no greater than 150% of the state median adjusted household income, as determined from the Utah Tax Commission's most recently published data.

H. UWDS loan projects are exempt from environmental reviews under the National Environmental Policy Act (NEPA) as long as the funding of these projects is identified in Utah's Non-point Source Pollution Management Plan.

I. Security for UWDS Loans

a. The borrower must adequately secure the loan with real property or chattel.

b. The ratio of the loan amount to the value of the pledged security must not be greater than 70%.

J. Eligible activities under the UWDS loan program include:

1. Septic tank

2. Absorption system

3. Building sewer

4. Appurtenant facilities

5. Conventional or alternate UWDS

6. Connection of the residence to an existing centralized sewer system, including connection or hook-up fees, if this is determined to be the best means of resolving the failure of an UWDS.

7. Costs for construction, permits, legal work, engineering, and administration.

K. Ineligible project components include:

1. UWDS systems serving commercial establishments;

2. land;

3. interior plumbing fixtures;

4. impact fees, if connecting to a centralized sewer system is determined to be the best means of resolving the failure of an UWDS;

5. UWDS for new homes or developments;

6. UWDS operation and maintenance.

L. The local health department will certify the completion of the project to the Division of Water Quality.

M. To be reimbursed for project expenditures the borrower must maintain and submit invoices, financial records, or receipts which document the expenditures or costs.

N. UWDS loan recipients will be billed for monthly payments of principal and interest beginning 60 days after execution of the loan agreement.

O. The UWDS loan must be paid in full if the property served by the project is sold or transferred.

P. UWDS loan applications may be prioritized in accordance with R317-100-4 so that the limited funds which are available are allocated first to the highest priority projects.

Q. The Utah Division of Water Quality, or its designee, will evaluate the financial aspects of the project and the credit worthiness of the applicant.

R. The Executive Secretary to the Water Quality Board, and/or another whom the Water Quality Board may designate, will execute UWDS loan agreements with the borrower.

S. UWDS loans in amounts in excess of $150,000 will be presented to and authorized funding by the Water Quality Board. Loans of less than $150,000 will be considered and authorized funding by the Executive Secretary to the Water Quality Board.

 

R317-102-6. Loans For Non-point Source Pollution Projects.

Non-point Source Pollution (NPS) Projects, as defined in UAC 73-10c-2(9), are eligible for funding through the SRF. The following procedures apply to NPS project loans:

A. Loans to individuals in amounts in excess of $150,000 will be presented to and authorized funding by the Water Quality Board. Loans of less than $150,000 will be considered and authorized funding by the Executive Secretary to the Water Quality Board.

B. The Executive Secretary to the Water Quality Board, and/or another whom the Water Quality Board may designate, will execute NPS project loan agreements with the borrower.

C. Projects will be prioritized according to criteria established in R317-100-4, Utah State Project Priority System for the Utah Wastewater Project Assistance Program.

D. Following authorization of funds by the Water Quality Board or Executive Secretary, as appropriate, the applicant has a period of six months to meet the conditions of the loan authorization and complete a loan closing. If a loan closing for the project has not occurred within six months of the loan authorization, the funding may be rescinded.

E. The maximum term of NPS project loans will be twenty years but not beyond the depreciable life of the project.

F. The interest rate on NPS project loans will be zero percent.

G. NPS project loans are exempt from environmental reviews under the National Environmental Policy Act (NEPA) as long as the funding of these projects is identified in Utah's Non-point Source Pollution Management Plan.

H. Security for NPS project loans

1. NPS project loans to individuals in amounts greater than $15,000 will be secured by the borrower with water stock or real estate. Such loans less than $15,000 may be secured with other assets.

2. For NPS project loans to individuals the ratio of the loan amount to the value of the pledged security must not be greater than 70%.

3. NPS loans to political subdivisions of the state will be secured by a revenue bond, general obligation bond or some other acceptable instrument of debt.

I. Eligible projects under the NPS project loan program include projects which:

1. abate or reduce untreated or uncontrolled runoff;

2. improve critical aquatic habitat;

3. conserve soil, water, or other natural resources;

4. protect and improve ground water quality;

5. preserve and protect the beneficial uses of water of the state;

6. reduce the number of water bodies not achieving water quality standards;

7. improve watershed management;

8. prepare and implement total maximum daily load (TMDL) assessments.

J. NPS projects which will serve concentrated animal feeding operations (CAFOs), as defined by EPA, are ineligible for NPS project loans.

K. The Division of Water Quality will determine project eligibility and priority. Periodic payments will be made to the borrower, contractors or consultants for work relating to the planning, design and construction of the project. The borrower must maintain and submit the financial records which document expenditures or costs.

L. The Division of Water Quality, or its designee, will perform periodic project inspections. Final payment on the NPS loan project will not occur until a final inspection has occurred and an acceptance letter issued for the completed project.

M. NPS project loan recipients will be billed periodically for payments of principal and interest as agreed to in the executed loan agreements or bond documents.

N. NPS project loan applications may be prioritized so that the limited funds which are available are allocated first to the highest priority projects.

O. The Utah Division of Water Quality, or its designee, will evaluate the financial aspects of the NPS project and the credit worthiness of the applicant.

P. The Executive Secretary, or other individuals the Water Quality Board may designate, will execute NPS project loan agreements with the borrower.]

 

KEY: wastewater, loans, water quality

Date of Enactment or Last Substantive Amendment: [August 24, 2001]2007

Notice of Continuation: November 29, 2005

Authorizing, and Implemented or Interpreted Law: 19-5-104