NY Env Conserv L § 17-1909 (2021)
2021 New York Laws ENV - Environmental Conservation Article 17 - Water Pollution Control Title 19 - State Aid: Collection, Treatment, and Disposal of Sewage 17-1909 - Water Pollution Control Revolving Fund Agreements.

§ 17-1909. Water pollution control revolving fund agreements.   1. As used in this section:   a.  "Allocation"  means  the  amount  of  moneys allocated to reduce a municipality's or group of municipalities' total financing costs for one or more eligible projects.   b.  "Construction"  means   the   erection,   building,   acquisition, alteration,  reconstruction, improvement, enlargement or extension of an eligible project;  the  inspection  and  supervision  thereof;  and  the engineering,  architectural,  legal, fiscal, and economic investigations and studies, surveys, designs, plans, working drawings,  specifications, procedures, and other actions necessary thereto.   c.  "Corporation"  means  the  New York state environmental facilities corporation, continued pursuant to section twelve hundred eighty-two  of the public authorities law, or any successor thereto.   d.  "Eligible  project" means a project for construction of a facility which would be eligible for financing under the Federal Water  Pollution Control Act:  (i) for which all required federal and state permits have been issued; and  (ii) which the commissioner has determined:  (a)  is  in  accord  with applicable comprehensive studies and reports made pursuant to sections 17-0303 and 17-1901 of this article; and  (b) is necessary for the accomplishment of the state  water  pollution control  program  formulated pursuant to sections 17-0303 and 17-1901 of this article; and  (c) represents a reasonable effort to develop  economic  viability  in planning, design and construction; and  (d)  is a project for which financial assistance is available from the fund; and  (e) conforms with applicable rules and regulations of the  department, including  a  demonstration that design and construction consider future physical climate risk due to sea level rise, and/or storm surges  and/or flooding,  based  on  available data predicting the likelihood of future extreme  weather  events,  including  hazard  risk  analysis   data   if applicable.   e.  "Financial  assistance  to a municipality" has the same meaning as set forth in subdivision four of section twelve hundred eighty-five-j of the public authorities law.   f. "Fund" means the water pollution control revolving fund established under section twelve hundred eighty-five-j  of  the  public  authorities law.   g. "Intended use plan" means the plan prepared pursuant to subdivision two  of  this  section,  identifying  the  intended  uses of the amounts available in the fund, including but not limited to: (i) a list of those projects for construction of  publicly  owned  treatment  works  on  the priority  list  developed  pursuant  to subdivision two of this section; (ii) a list of projects developed pursuant to subdivision  two  of  this section  anticipated  to  be  financed  by  the  fund  through the water pollution control linked deposit program; (iii)  a  description  of  the short  and  long term goals and objectives of the fund; (iv) information on the activities to be supported, including a  description  of  project categories,  discharge  requirements  under  the Federal Water Pollution Control Act, terms  of  financial  assistance,  and  eligible  borrowers pursuant  to  the water pollution control linked deposit program served; (v) the criteria and method established for the distribution  of  funds; and  (vi)  the amount of moneys from the fund, not to exceed ten million dollars annually, to be made available for linked loans under the  water  pollution  control  linked  deposit program during the period covered by such intended use plan.   h.  "Municipality"  means  any  county,  city, town, village, district corporation, county or town  improvement  district,  Indian  reservation wholly  within  New York state, any public benefit corporation or public authority established pursuant to the laws of New York or any agency  of New  York  state which is empowered to construct and operate an eligible project, or any two or more of the foregoing which are acting jointly in connection with an eligible project.   i. "Project  financing  agreement"  means  an  agreement  between  the corporation  and  one or more municipalities meeting the requirements of subdivision four of this section.   2. The commissioner is required to establish and maintain  a  list  of potentially eligible projects and shall establish, pursuant to rules and regulations,   a  process  for  listing  potentially  eligible  projects identified by municipalities and eligible borrowers pursuant to  article sixteen  of  the state finance law and a priority ranking system for the purpose of providing financial assistance to municipalities and eligible borrowers for such projects under this  section.  In  establishing  such system, the commissioner shall take into account:   a.   The  environmental  significance  of  such  potentially  eligible projects which shall include, but need not be limited to, an  assessment of  (i)  public  health  and  safety;  (ii)  protection of environmental resources; (iii) population affected; (iv)  attainment  of  state  water quality  goals  and standards; and (v) compliance with state and federal law, rules and regulations;   b. A municipality's inability as determined by the corporation to  pay for such potentially eligible project prior to receipt of such financial assistance;   c. The regional distribution of environmentally significant projects;   d.  For  agricultural  projects  funded  through  the  water pollution control linked deposit program, in consultation with the commissioner of agriculture and markets, the extent to which the  project  will  reduce, abate,  control,  or prevent non-point source pollution originating from agricultural  sources  and/or  propose  to  implement  best   management practices,  as  identified  in  section  three  of  the  soil  and water conservation districts law; and   e. For residential and small  business  on-site  wastewater  treatment system  projects  funded  through  the  water  pollution  control linked deposit program, in consultation  with  the  department  of  state,  the extent  to  which  the  project will prevent an increase in nutrients in water bodies or the extent to which  the  project  will  enhance  source water or watershed protection.   3.  a.  The  corporation  is  authorized  to  promulgate  regulations, developed in consultation with the commissioner and the director of  the division   of   the   budget,  for  the  purpose  of  carrying  out  its responsibilities under this section, including establishing criteria and standards for determining  the  amount  of  financial  assistance  to  a municipality for an eligible project. To the extent financial assistance to a municipality for an eligible project is provided as a loan from the proceeds  of  bonds  or  notes  of  the  corporation,  the  amount of an allocation applicable to the portion of such eligible  project  financed with  such  loan shall be, subject to such maximum financial limitations as may otherwise be necessary and prescribed by the commissioner and the director of the division  of  the  budget,  thirty-three  and  one-third percent of the principal amount of such loan outstanding at any time for such eligible project, to the extent reasonably practicable, and subject to   such  deviation  as  may  be  necessary,  in  connection  with  the  administration and investment of moneys in the fund, unless  allocations in  differing  amounts  are necessary to preclude a determination by the commissioner or the corporation pursuant to paragraph e  of  subdivision eight  of  this section or unless an allocation in a differing amount is required for an innovative technology demonstration  project;  provided, however,  that  in  the  case  of any municipality which has, during the period commencing on June first, nineteen hundred ninety-two and  ending on  September  thirtieth,  two  thousand  twenty-four,  (i) submitted an application for financial assistance in the form of such a loan  for  an eligible   project,   which   application   has  been  accepted  by  the corporation, (ii) closed on such loan, and (iii) commenced  construction of  such  eligible  project, the allocation applicable to the portion of such project financed with  such  loan  shall  be,  subject  to  maximum financial  limitations  as  may otherwise be necessary and prescribed by the commissioner and the director of the division of the  budget,  fifty percent  of  the  principal balance outstanding on such loan at any time for such eligible project, to the  extent  reasonably  practicable,  and subject  to  such  deviation as may be necessary, in connection with the administration and investment of moneys in the fund, unless  allocations in  differing  amounts  are necessary to preclude a determination by the commissioner or the corporation pursuant to paragraph e  of  subdivision eight  of  this section or unless an allocation in a differing amount is required for an innovative technology demonstration project.   b. The corporation may enter into a project financing  agreement  with up  to three municipalities which provides for up to one hundred percent subsidy of the interest on the amount of principal not to  exceed  three million   dollars   for   the   construction  of  innovative  technology demonstration projects which shall be waste water  treatment  facilities which  utilize  innovative  technology  approved  by the commissioner as defined in regulations promulgated by the  United  States  environmental protection agency in accordance with the Federal Water Pollution Control Act.  The  commissioner shall prepare criteria for selection of eligible projects pursuant to this paragraph including, but not limited  to,  the use  of innovative technology which has been proven reasonably effective on at least a demonstration model basis.   c. The department is authorized to promulgate  regulations,  developed in consultation with the director of the division of the budget, for the purpose of carrying out its responsibilities under this section.   4.  The  corporation  may enter into project financing agreements with municipalities providing for the construction and financing of  eligible projects.   The   corporation   shall  prepare  each  project  financing agreement, which shall include but  is  not  limited  to  the  following provisions:   a. A description of the eligible project;   b.  An  estimate  of the reasonable cost of the eligible project and a projected cash flow schedule for meeting that cost;   c. A schedule for construction of the eligible project;   d. A right of the corporation to approve all  contracts  for  services and  construction  funded pursuant to a project financing agreement, and to inspect and review the construction of eligible projects;   e. Notwithstanding the provisions of any other law,  general,  special or  local, inconsistent with this section, a right of the corporation to invest proceeds of the corporation's bonds or notes, including  proceeds of  bonds  or notes of the municipality, as provided in subdivision four of section twelve hundred eighty-four and  subdivision  six  of  section twelve hundred eighty-five-j of the public authorities law.    Such right shall include the right to invest such monies together with any  other  monies held by the corporation pursuant to the provisions of section twelve hundred eighty-five-j of the public authorities law;   f.  Remedies  in  the event of a municipality's failure to comply with the terms of a project financing agreement;   g. An agreement by the corporation to:  (i) lend to the municipality  for  the  construction  of  an  eligible project  a specified amount from the proceeds of the corporation's bonds or notes, not to exceed the estimated reasonable cost of construction of the eligible project established in the project financing  agreement  or any loan agreement, subject to the ability of the corporation to provide such  financing,  including  but  not  limited  to  the  approval of the corporation's board and any other approvals required by state or federal law;  (ii) use all reasonable efforts to issue its  bonds  or  notes  in  an amount  sufficient  to  finance  the  estimated  reasonable  cost of the eligible project, including but not limited to costs of issuance, credit support fees, if any, trustees fees, interest during  construction,  and such  reserve funds, if any, as may be necessary to secure such bonds or notes;  (iii)  in  the  alternative,  provide  financial  assistance  to   the municipality  for the construction of an eligible project in a specified amount from the proceeds of any  federal  capitalization  grant,  award, assistance, or any state moneys appropriated to or otherwise transferred into   the  fund,  not  to  exceed  the  estimated  reasonable  cost  of construction  of  the  eligible  project  established  in  the   project financing  agreement  or  any  loan  agreement,  as  determined  by  the corporation or as directed by the commissioner pursuant  to  subdivision eight  of  this  section  or  subdivision four of section twelve hundred eighty-five-j of the public authorities law;  (iv) make reimbursements for the administrative and  management  costs of  the  department  and the corporation in accordance with subdivisions five and seven of section twelve hundred  eighty-five-j  of  the  public authorities law;  (v)  provide  to the municipality, for any loan made from the proceeds of the corporation's bonds or notes, an interest rate subsidy allocation for the eligible project  in  accordance  with  section  twelve  hundred eighty-five-j of the public authorities law and this section;  (vi)  administer  any  federal  rebate  requirement in connection with obligations of  the  corporation  and  of  any  municipality  issued  in accordance with a project financing or loan agreement;   h. An agreement by the municipality to:  (i)  proceed  expeditiously  with and complete the eligible project in accordance with plans approved pursuant to titles  seven  and  eight  of this article;  (ii)  commence  operation of the eligible project on completion of the project, and not discontinue operation of or  dispose  of  the  eligible project  as  long as a loan to the municipality for such project remains outstanding, without approval of the  commissioner;  provided,  however, that  the  commissioner  shall  not  approve disposition of the eligible project  without  the  concurrent  approvals,  as  appropriate,  of  the corporation and the state comptroller. None of the foregoing shall limit the  commissioner's authority to terminate or impose conditions upon the operation of an eligible project pursuant  to  the  provisions  of  this chapter and any implementing regulations thereto;  (iii)  operate  and  maintain  the eligible project in accordance with applicable requirements of federal and state law;  (iv) establish and maintain project accounts in  accordance  with  the project financing agreement and generally accepted government accounting standards;  (v)  establish  a  dedicated  source  of  revenue (which may include a general obligation of the municipality) providing for:  (a) operation and  maintenance  costs  of  the  eligible  project  and equipment renewal and replacement; and  (b)  loan  repayment  regardless of whether the eligible project is in operation;  (vi) permit any reviews or audits and provide assistance determined to be reasonable and necessary by the department or the corporation;  (vii) retain public ownership of the eligible project; and  (viii) notwithstanding the  provisions  of  any  other  law,  general, special  or  local,  inconsistent  with  this  section,  delegate to the corporation the authority to invest proceeds of bonds or notes issued by the corporation or the municipality on behalf of the municipality.   i. An  agreement  by  the  corporation  to  certify,  subject  to  the availability of funds, payment upon submission of a satisfactory request for  disbursement  of  loan  proceeds  by  a  municipality, of an amount equivalent to actual construction costs incurred on or before  the  date of submission of the request for disbursement of loan proceeds, plus any projected  construction  costs which will be incurred within ninety days from the date of submission of the  request  for  disbursement  of  loan proceeds, less any funds already advanced;   j. An agreement in regard to financial assistance provided pursuant to paragraph   (b)   of   subdivision   four   of  section  twelve  hundred eighty-five-j of the  public  authorities  law,  to  waive  programmatic requirements  other  than those mandated by federal law and subparagraph (i) of paragraph d of subdivision one of this section, provided that the project was in compliance with the goals and requirements of the Federal Water Pollution Control Act,  prior  to  July  first,  nineteen  hundred eighty-eight,  or  was  subject  to  an administrative or judicial order requiring compliance with the goals  and  requirements  of  the  Federal Water  Pollution  Control  Act  prior  to  September thirtieth, nineteen hundred eighty-nine; and   k. Such other agreements or covenants as may be required in connection with the issuance by the corporation of its bonds or notes.   5. For the purpose of implementing  the  program  set  forth  in  this section   and   section  twelve  hundred  eighty-five-j  of  the  public authorities law, and ensuring compliance with the requirements of  Title VI  of  the  Federal  Water Pollution Control Act, the corporation shall ensure compliance with each project financing agreement by:   a. retaining the right to inspect and review  work  on  each  eligible project  in  progress  and upon completion, and determining whether such work was undertaken and completed in compliance with all relevant  plans and the terms of such project financing agreement;   b.  retaining  the  right to certify or refuse to certify advances and payments to a municipality pursuant to a project financing agreement  or any  loan  agreement  executed subsequent thereto to finance an eligible project;   c. retaining the right to certify or refuse to  certify  advances  and payments to a municipality pursuant to a project financing agreement and any  loan  agreement  executed subsequent thereto to finance an eligible project based upon the determinations of any review or audit;   d. establishing remedies if work on an eligible project has  not  been completed  in  accordance  with all relevant plans and the terms of such project financing agreement due to  factors  within  the  municipality's control; and    e.  requiring a municipality to maintain project accounts with respect to any eligible project.   Nothing  herein  shall  be construed to affect or diminish the general authority of the department to  inspect  and  review  the  work  on  any project  financed  pursuant  to  this section, or to inspect the records relating to such project, for the purpose of determining compliance with any other provisions of this chapter.   6. In the event the work completed pursuant  to  a  project  financing agreement  or  loan  agreement  is  deemed  not  in compliance with such agreements, the corporation shall expeditiously notify the  municipality of such non-compliance and indicate the reasons for such determination.   7.  For  the  purpose  of  implementing  the program set forth in this section  and  section  twelve  hundred  eighty-five-j  of   the   public authorities  law, and ensuring compliance with the requirements of Title VI of the Federal Water Pollution Control Act, the department shall:   a. Enter into any agreement between the state  of  New  York  and  the administrator  of  the United States environmental protection agency and take all other actions necessary to  comply  with  the  requirements  of Title  VI  of  the  Federal  Water  Pollution Control Act and state law, including but not limited to:  (i) determining a reasonable schedule for financing  and  construction of eligible projects;  (ii) directing the establishment of systems of records or accounts and subaccounts  within  the  water  pollution control revolving fund as the department deems necessary or desirable, and approving  or  disapproving the  establishment of such record systems or accounts and subaccounts as the corporation requests  for  the  operation  of  the  water  pollution control revolving loan fund;  (iii)  determining  the  accounts  or  subaccounts  within  the  water pollution control revolving fund which will  be  used  as  a  source  of funding  for  each  eligible  project  subject  to  the  limitations  of subdivision six of this section; and  (iv) approving each project for qualification as an eligible project.   b. Arrange in consultation  with  the  corporation  for  independently conducted  reviews  and  audits on at least an annual basis necessary to carry out the objectives of the fund.   c. Submit a copy of the draft intended use plan to the  governor,  the director  of  the  division  of  the  budget, the chairman of the senate finance committee and the  chairman  of  the  assembly  ways  and  means committee   on   or   before   October  thirty-first,  nineteen  hundred eighty-nine and annually on or before such date thereafter and submit  a copy of the final intended use plan to such persons upon its approval by the administrator of the United States environmental protection agency.   8.  The  corporation  may  or, if so directed by the commissioner, the corporation shall provide financial assistance to  municipalities  as  a loan  pursuant  to  paragraph  (a) of subdivision four of section twelve hundred eighty-five-j of the public authorities law from  any  available moneys in the fund other than the proceeds of the corporation's bonds or notes or moneys needed to comply with subdivision five of section twelve hundred eighty-five-j of the public authorities law if and to the extent any of the following conditions are met:   a.  The  corporation  determines  that  it is unable to, or that it is impracticable to, finance all or a portion of the costs of  an  eligible project from the proceeds of bonds or notes that are special obligations of the corporation; or   b.  The  total  cost of the eligible project and related segments does not exceed four million dollars where such project and related  segments  service  a municipality with a population of three thousand five hundred or less; or   c.  The  commissioner or the corporation determines that failure to do so would jeopardize the receipt or maintenance of federal capitalization grant moneys, awards or assistance; or   d. A determination is made by the corporation that the issuance of and use of the proceeds of the  corporation's  bonds  to  provide  financial assistance  to  municipalities  would  cause  the loss of the tax-exempt status of any bonds or other obligations of New York  state,  all  or  a portion   of  the  proceeds  of  which  are  appropriated  or  otherwise transferred into the fund; or   e. Federal capitalization grants are provided in the form of a  letter of  credit  or  draws  under  capitalization  grant  agreements  and the commissioner or the corporation determines, consistent with the purposes of the fund, that providing financial assistance from  the  proceeds  of corporation  bonds  or  notes  would  delay  receipt  of moneys from the federal government under the Federal Water Pollution Control Act.   The interest rate charged on any loan made by the corporation pursuant to this subdivision shall be no more than two-thirds of the market  rate of interest otherwise applicable thereto, provided, however, that in the case of any municipality which has, during the period commencing on June first,  nineteen  hundred  ninety-two and ending on September thirtieth, two thousand twenty-four, (i) submitted  an  application  for  financial assistance  in  the form of a loan from the corporation pursuant to this subdivision,  for  an  eligible  project,  which  application  has  been accepted  by  the  corporation,  (ii)  closed  on  such  loan, and (iii) commenced construction of  such  eligible  project,  the  interest  rate charged  on  such loan shall be no more than one-half of the market rate otherwise applicable thereto.   9. The contracts for the construction of eligible projects constructed and financed pursuant to a project financing agreement shall be  subject to  the requirements and provisions of article 15-A of the executive law and, for such purposes, any such contract shall be considered  a  "state contract"  and the department shall be the "contracting agency" for each such contract.   10. Notwithstanding the provisions of any other law, general,  special or  local, the following determinations shall be made by the corporation in its sole and absolute discretion:  (a) In connection with any application for financial  assistance  from the  fund  in  the form of a loan from the proceeds of bonds or notes of the corporation,  the  determination  as  to  whether  the  municipality receiving  such loan has qualified for an allocation of fifty percent of the principal amount of such loan outstanding at any time,  pursuant  to subdivision three of this section; and  (b)  In  connection with any application for financial assistance from the fund in the  form  of  a  loan  from  the  corporation  pursuant  to subdivision eight of this section, where the municipality receiving such loan  is  not  qualified  for  an  interest  rate  of  zero percent, the determination as to whether  such  municipality  has  qualified  for  an interest  rate  of  one-half  of  the  market  rate otherwise applicable thereto, pursuant to subdivision eight of this section.