MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Environment Prot, Cons and Water Res

By: Senator(s) Cuevas

AN ACT TO AMEND SECTION 49-17-86, MISSISSIPPI CODE OF 1972, TO AUTHORIZE LOANS FROM THE WATER POLLUTION CONTROL EMERGENCY LOAN FUND TO ASSIST POLITICAL SUBDIVISIONS IN DEFRAYING THE COSTS OF FACILITIES PLANNING AND PRELIMINARY ENGINEERING DESIGN FOR WATER POLLUTION CONTROL REVOLVING FUND PROJECTS; TO LIMIT THE AMOUNT OF LOANS; TO AMEND SECTION 49-17-85, MISSISSIPPI CODE OF 1972, TO REQUIRE LOANS FROM THE WATER POLLUTION CONTROL REVOLVING FUND TO COVER CERTAIN COSTS AND BE MADE IN A MANNER TO MINIMIZE THE NEED FOR INTERIM FINANCING BY POLITICAL SUBDIVISIONS; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 49-17-86, Mississippi Code of 1972, is amend as follows:

49-17-86. (1) (a) There is created a fund in the State Treasury to be designated as the "Water Pollution Control Emergency Loan Fund" hereinafter referred to as "emergency fund."

(b) The emergency fund may receive proceeds from the sale of taxable bonds, grants, gifts, donations or funds from any source, public or private. The emergency fund shall be credited with all repayments of principal and interest derived from loans made from the emergency fund.

(c) The monies in the emergency fund may be expended only in amounts appropriated by the Legislature.

(d) The emergency fund shall be maintained in perpetuity for the purposes established in this act. Unexpended amount remaining in the emergency fund at the end of a fiscal year shall not lapse into the State General Fund. Any interest earned on amounts in the emergency fund shall be deposited to the credit of the fund.

(2) The commission shall establish a loan program to assist political subdivisions in making emergency improvements such as repairs to or replacement of machinery, equipment, materials, structures or devices in existing water pollution abatement projects or such other emergency water pollution abatement projects as the commission deems necessary. In addition, loans from the emergency fund may be made to assist political subdivisions in defraying the costs of facilities planning and engineering design for water pollution control revolving fund projects; however, the amount of any loan for these purposes shall not exceed Twenty-five Thousand Dollars ($25,000.00). Loans from the emergency fund may be made to political subdivisions as set forth in a loan agreement in amounts not exceeding one hundred percent (100%) of eligible project costs as established by the commission. The commission may require local participation or funding from other sources, or otherwise limit the percentage of costs covered by loans from the emergency fund. The commission may establish a maximum amount for any loan.

(3) The emergency fund may be used only:

(a) To make loans on the condition that:

(i) Loans are made at or below market interest rates, at terms not to exceed ten (10) years after project completion; the interest rate may vary from time to time and from loan to loan at the discretion of the commission.

(ii) Periodic principal and interest payments will commence when required by the commission but not later than one (1) year after project completion and all loans will be fully amortized when required by the commission but not later than ten (10) years after project completion.

(iii) The recipient of a loan shall establish a dedicated source of revenue for repayment of loans. In addition, the commission may require any loan recipient to impose a per connection surcharge on each customer for repayment of any loan funds provided under this section.

(iv) The recipient of the loan is not in arrears in repayments to the Water Pollution Control Revolving Fund, the Water Pollution Control Emergency Loan Fund or under the Water Pollution Abatement Loan Program.

(b) To provide financial assistance to political subdivisions in making emergency improvements such as repairs to or replacement of machinery, equipment, materials, structures or devices in existing water pollution abatement projects or such other emergency water pollution abatement projects as the commission deems necessary.

(4) The commission shall establish a system of evaluating the eligibility of projects, including a determination of the emergency nature of a situation for which funding is sought.

(5) The fund will be credited with all payments of principal and interest derived from the fund uses described in subsection (3) of this section.

(6) The commission may establish and collect fees to defray the reasonable costs of administering the emergency fund. Any administrative fees may be included in loan amounts to political subdivisions for the purpose of facilitating payment to the commission; fees may not exceed five percent (5%) of the loan amount. The commission may also use administrative fees collected pursuant to Section 49-17-85 to defray the reasonable costs of administering the emergency fund.

SECTION 2. Section 49-17-85, Mississippi Code of 1972, is amended as follows:

49-17-85. (1) There is established in the State Treasury a fund to be known as the "Water Pollution Control Revolving Fund" which shall be administered by the commission acting through the department. The revolving fund shall be maintained in perpetuity for the purposes established in this section.

(2) There is established in the State Treasury a fund to be known as the "Water Pollution Control Hardship Grants Fund," which shall be administered by the commission acting through the department. The grants fund shall be maintained in perpetuity for the purposes established in this section. Any interest earned on monies in the grants fund shall be credited to that fund.

(3) The commission shall promulgate regulations for the administration of the revolving fund program, the hardship grants program and for related programs authorized under this section. The regulations shall be in accordance with the federal Water Quality Act of 1987, as amended and regulations and guidance issued under that act. The commission may enter into capitalization grant agreements with the United States Environmental Protection Agency and may accept capitalization grant awards made under Title VI of the Water Quality Act of 1987, as amended.

(4) The commission shall establish a loan program which shall commence after October 1, 1988, to assist political subdivisions in the construction of water pollution control projects. In addition, loans made under this program shall include the costs of facilities planning and engineering design for water pollution control projects. Loans shall be made in a manner to minimize the need for interim financing for facilities planning and engineering design by political subdivisions. Loans from the revolving fund may be made to political subdivisions as set forth in a loan agreement in amounts not exceeding one hundred percent (100%) of eligible project costs as established by the commission. Notwithstanding loan amount limitations set forth in Section 49-17-61, the commission may require local participation or funding from other sources, or otherwise limit the percentage of costs covered by loans from the revolving fund. The commission may establish a maximum amount for any loan in order to provide for broad and equitable participation in the program.

(5) The commission shall establish a hardship grants program for rural communities, which shall commence after July 1, 1997, to assist severely economically disadvantaged small rural political subdivisions in the construction of water pollution control projects. The commission may receive and administer state or federal funds, or both, appropriated for the operation of this grants program and may take all actions necessary to implement the program in accordance with the federal hardship grants program. The hardship grants program shall operate in conjunction with the revolving loan program administered under this section.

(6) The commission shall act for the state in all matters and with respect to all determinations under Title VI of the federal Water Quality Act of 1987, as amended and the federal Omnibus Appropriations and Recision Act of 1996.

(7) The revolving fund may be used only:

(a) To make loans on the condition that:

(i) The loans are made at or below market interest rates, at terms not to exceed twenty (20) years after project completion; the interest rate and term may vary from time to time and from loan to loan at the discretion of the commission;

(ii) Periodic principal and interest payments will commence when required by the commission but not later than one (1) year after project completion and all loans will be fully amortized when required by the commission but not later than twenty (20) years after project completion;

(iii) The recipient of a loan will establish a dedicated source of revenue for repayment of loans;

(b) To buy or refinance the debt obligation of political subdivisions at or below market rates, where the debt obligations were incurred after March 7, 1985, and where the projects were constructed in compliance with applicable federal and state regulations;

(c) To guarantee, or purchase insurance for, obligations of political subdivisions where the action would improve credit market access or reduce interest rates;

(d) To provide loan guarantees for similar revolving funds established by municipalities or intermunicipal agencies;

(e) To earn interest on fund accounts;

(f) To establish nonpoint source pollution control management programs;

(g) To establish estuary conservation and management programs;

(h) For the reasonable costs of administering the revolving fund and conducting activities under this act, subject to the limitations established in Section 603(d)(7) of Title VI of the federal Clean Water Act, as amended, and subject to annual appropriation by the Legislature; and

(i) In connection with the issuance, sale and purchase of bonds under Section 31-25-1 et seq., related to the funding of projects, to provide security or a pledge of revenues for the repayment of the bonds.

(8) The hardship grants program shall be used only to provide hardship grants consistent with the federal hardship grants program for rural communities, regulations and guidance issued by the United States Environmental Protection Agency, subsections (3) and (5) of this section and regulations promulgated and guidance issued by the commission under this section.

(9) The commission shall establish by regulation a system of priorities and a priority list of projects eligible for funding with loans from the revolving fund.

(10) The commission may provide a loan from the revolving fund only with respect to a project if that project is on the priority list established by the commission.

(11) The revolving fund shall be credited with all payments of principal and interest derived from the fund uses described in subsection (7) of this section.

(12) The commission may establish and collect fees to defray the reasonable costs of administering the revolving fund if it determines that the administrative costs will exceed the limitations established in Section 603(d)(7) of Title VI of the federal Clean Water Act, as amended. The administration fees may be included in loan amounts to political subdivisions for the purpose of facilitating payment to the commission. The fees may not exceed five percent (5%) of the loan amount.

SECTION 3. This act shall take effect and be in force from and after July 1, 1999.