2023 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; and
(f)  includes  consideration  of  county-wide  or  regional wastewater
planning.
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,  school  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; (v) compliance with state and federal law,
rules and regulations; and  (vi)  the  extent  to  which  such  projects
reflect county-wide or regional wastewater planning;
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.