Senate Bill No. 457
(By Senators Tomblin (Mr. President) and Buckalew
By Request of the Executive)
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[Introduced March 24, 1997; referred to the Committee
on Health and Human Resources; and then to the Committee on
finance.]
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A BILL to amend article one, chapter sixteen of the code of West
Virginia, one thousand nine hundred thirty-one, as amended,
by adding thereto a new section, designated section nine-b,
relating to creating the drinking water state revolving
fund; and allowing the division of health to manage and
administer the new drinking water state revolving fund
program.
Be it enacted by the Legislature of West Virginia:
That article one, chapter sixteen of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated nine-b, to
read as follows:
ARTICLE 1. STATE DIVISION OF HEALTH.
§16-1-9b. Drinking water state revolving fund.
Unless the context in which used clearly requires a
different meaning, as used in this section:
(a) "Authority" means the water development authority
provided for in chapter twenty-two-c, section four, article one.
(b) "Capacity development" means the public water systems
technical, managerial and financial capability.
(c) "Cost" means the cost of all labor, materials,
machinery, equipment, lands, property, rights and easements,
plans and specifications and all other expenses necessary or
incident to the acquisition, construction, improvement,
expansion, extension, repair or rehabilitation of all or part of
a project.
(d) "Disadvantaged community" means the service area of a
public water system that meets affordability criteria established
after public review and comment by the state.
(e) "Fund" means the drinking water state revolving fund
provided for in this section as it may be expanded or modified
from time to time pursuant to the federal safe drinking water
act, as amended.
(f) "Instrumentality" means the division of health as having
the primary responsibility for administering the fund pursuant to
the federal safe drinking water act, as amended.
(g) "Local Entity" means any municipality, public utility,
or person, including any individual, firm, partnership, association, not-for-profit corporation or other corporation
organized and existing under the laws of the state which is
empowered to construct and operate an eligible project.
(h) "Public water system" means that term as defined in
section nine-a, article one, chapter sixteen of the code.
(i) "Project" means a project for improving a drinking water
system for the purpose of achieving or maintaining compliance
with applicable state and federal drinking water regulations.
(k) "Set-aside accounts" means those accounts that may be
set up for activities required by the safe drinking water act, as
amended, and the moneys for these accounts may be taken from the
federal capitalization grant for these nonproject activities
before the capitalization grant is deposited into the fund.
The division of health shall act as the instrumentality that
is empowered to enter into capitalization agreements with the
"United States Environmental Protection Agency" and to accept
capitalization grant awards made under the federal safe drinking
water act, as amended, to administer and manage the drinking
water state revolving fund provided for in this section in
accordance with the requirements of the federal laws.
As allowed by the federal safe drinking water act, as
amended, set-aside accounts may be set up in separate accounts
from the drinking water state revolving fund. These set-asides
shall include, but not be limited to, administration costs, source water protection, operator training and certification,
technical assistance to systems, local assistance, and other
state activities. The commissioner of the division of health or
his or her designee shall direct the authority to establish and
administer the set-aside accounts as allowed in the federal safe
drinking water act. An application fee may be charged and
deposited into the administrative account to defray the cost of
administering the program.
The commissioner of the division of health or his or her
designee shall propose regulations in accordance with provisions
of article three, chapter twenty-nine-a of the code. These
include, but shall not be limited to requirements for: (1)
Capacity development; (2) environmental review; (3) disadvantaged
community designation; (4) receipt and disbursement of fund
moneys; and (5) establishment of a drinking water state
revolving fund program to direct the financial management of the
fund to water systems and establish the interest rates and
repayment terms of the loans.
Under the direction of the division of health, the authority
shall establish, administer and manage a perpetual fund to be
known as the "West Virginia drinking water state revolving
fund." The fund shall be comprised of moneys appropriated to the
fund by the Legislature, moneys allocated to the state by the
federal government expressly for the purpose of establishing and maintaining a drinking water state revolving fund, all receipts
from loans made from the fund, all income from the investment of
moneys held in the fund, and all other sums designated for
deposits to the fund from any source, public or private. Moneys
in the fund shall be used solely to make loans or other allowable
financial assistance to eligible projects for public water
systems, as described in the federal safe drinking water act, as
amended.
In order to carry out the administration and management of
the fund, the authority is authorized to employ officers,
employees, agents, advisors and consultants, including attorneys,
financial advisors, engineers, other technical advisors and
public accountants, and notwithstanding any provisions of this
code to the contrary, to determine their duties and compensation
without the approval of any other agency or instrumentality.
The authority shall propose legislative rules in accordance
with the provisions of article three chapter twenty-nine-a of
this code to govern the pledge of loans to secure bonds of the
authority.
All moneys belonging to the fund shall be kept in
appropriate depositories and secured in conformance with this
code. Disbursements from the fund shall be authorized for
payment by the director of the authority or the director's
designee. Any depository or officer of the depository to which moneys of the fund are paid shall act as trustee of the moneys
and shall hold and apply them solely for the purposes for which
the moneys are provided under this article. Moneys in the fund
shall not be commingled with other money of the authority.
Notwithstanding any provision of this code to the contrary,
amounts in the fund shall be deposited by the authority in one or
more banking institutions:
Provided, That any moneys so
deposited shall be deposited in a banking institution located in
this state. The banking institution shall be selected by the
authority by competitive bid. If not needed for immediate use
or disbursement, moneys in the fund may be invested or reinvested
by the authority in obligations or securities which are
considered lawful investments for public funds under this code.
The authority shall manage the funds for accounting
purposes. The authority shall cause an audit of its books and
accounts to be made at least once each fiscal year and the cost
thereof may be defrayed as administrative expense under
provisions of this section. The audit shall be conducted by a
certified public accountant and provide an auditors opinion on
the fund financial statements, a report on the internal controls
and a report compliance with the safe drinking water act, as
amended.
In order to ensure the timely payment of all sums due and
owing to the fund under a revolving fund loan agreement between the state and a local entity, and notwithstanding any provisions
of this code to the contrary, the authority has and may, at its
option, exercise the following rights and remedies in the event
of any default by a local entity under a loan agreement:
(a) The authority may directly impose, in its own name and
for its own benefit, service charges upon all users of a project
funded by a loan distributed to a local entity pursuant to this
section, and may proceed directly to enforce and collect the
service charges, together with all necessary costs of the
enforcement and collection.
(b) The authority may exercise, in its own name or in the
name of and as the agent for a particular local entity, all of
the rights, powers and remedies of the local entity with respect
to the project or which may be conferred upon the local entity by
statute, rule, regulation or judicial decision, including all
rights and remedies with respect to users of the project funded
by the loan distributed to that local entity pursuant to this
article.
(c) The authority may, by civil action, mandamus or other
judicial or administrative proceeding, compel performance by a
local entity of all the terms and conditions of the loan
agreement between the state and that local entity including:
(1) The adjustment of service charges as required to repay
the loan or otherwise satisfy the terms of the loan agreement;
(2) The enforcement and collection of service charges; and
(3) The enforcement by the local entity of all rights and
remedies conferred by statute, rule, regulation or judicial
decision.
The rights and remedies enumerated in this section are in
addition to rights and remedies conferred upon the authority by
law or pursuant to the loan agreement.
The provisions of this section shall be liberally construed
to the end that its beneficial purposes may be effectuated.
Insofar as the provisions of this article are inconsistent with
the provisions of any other general, special or local law, the
provisions of this section are controlling.
NOTE: The purpose of this bill is to set up the Drinking
Water State Revolving Fund and define the requirements to
administer and manage the program.
This section is new; therefore, strike throughs and
underscoring have been omitted.