PRINTER'S NO. 1081
No. 909 Session of 2007
INTRODUCED BY C. WILLIAMS, MUSTO, O'PAKE, COSTA, KASUNIC,
TARTAGLIONE, BRUBAKER, RAFFERTY, ERICKSON, GREENLEAF, PIPPY,
WAUGH AND SCARNATI, JUNE 1, 2007
REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, JUNE 1, 2007
AN ACT
1 Amending the act of March 1, 1988 (P.L.82, No.16), entitled "An
2 act providing for the establishment, implementation and
3 administration of the Pennsylvania Infrastructure Investment
4 Authority; imposing powers and duties on a board of trustees;
5 transferring the rights, powers, duties and obligations of
6 the Water Facilities Loan Board to the Pennsylvania
7 Infrastructure Investment Authority; providing for the
8 issuance of notes and bonds; providing for financial
9 assistance and for a comprehensive water facilities plan;
10 authorizing a referendum to incur indebtedness; making an
11 appropriation; and making repeals," further providing for
12 definitions; establishing the Water and Wastewater System
13 Connection Funding Program to provide certain low-interest
14 loans; providing for transfer of certain moneys; and making
15 editorial changes.
16 The General Assembly of the Commonwealth of Pennsylvania
17 hereby enacts as follows:
18 Section 1. The act of March 1, 1988 (P.L.82, No.16), known
19 as the Pennsylvania Infrastructure Investment Authority Act, is
20 amended by adding a chapter heading to read:
21 CHAPTER 1
22 PRELIMINARY PROVISIONS
23 Section 2. Section 1 heading of the act is amended to read:
24 Section [1] 101. Short title.
1 * * *
2 Section 3. Section 2 heading of the act, amended December
3 16, 1992 (P.L.1137, No.149), is amended to read:
4 Section [2] 102. Legislative intent.
5 * * *
6 Section 4. Section 3 of the act, amended December 16, 1992
7 (P.L.1137, No.149) and July 14, 2005 (P.L.299, No.51), is
8 amended to read:
9 Section [3] 103. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Authority." The Pennsylvania Infrastructure Investment
14 Authority.
15 "Board." The board of directors of the authority.
16 "Bonds." Bonds, notes or other evidences of indebtedness
17 issued by the authority pursuant to this act.
18 "Borrower." For purposes of Chapter 5, an individual owner
19 of a housing unit, manufactured home or mobile home and eligible
20 owners of other enterprises.
21 "Department." The Department of Environmental [Resources]
22 Protection of the Commonwealth.
23 "Eligible cost." The cost of all labor, materials, machinery
24 and equipment, lands, property, rights and easements, plans and
25 specifications, surveys or estimates of costs and revenues, pre-
26 feasibility studies, engineering and legal services, and all
27 other expenses necessary or incident to the acquisition,
28 construction, improvement, expansion, extension, repair or
29 rehabilitation of all or part of a project.
30 "Federal poverty guidelines." The poverty measure issued
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1 annually by the United States Department of Health and Human
2 Services as published in the Federal Register based on family
3 size and household income.
4 "Governmental unit." Any agency of the Commonwealth or any
5 county, municipality or school district, or any agency,
6 instrumentality, authority or corporation thereof, or any public
7 body having local or regional jurisdiction or power.
8 "Housing unit." A detached or attached single-family
9 residential structure, including, but not limited to, a
10 manufactured home on a permanent foundation, which is a
11 permanent residence and is owned and occupied by one or more
12 individuals.
13 "Loan origination fees." Fees paid by a borrower to a local
14 lending institution for originating the borrower's loan.
15 "Loan servicing fees." Fees paid to a local lending
16 institution.
17 "Local lending institution." For purposes of Chapter 5, a
18 bank, savings and loan or other financial institution authorized
19 to extend financial assistance under the Water and Wastewater
20 System Connection Funding Program.
21 "Manufactured home." A movable, single-family dwelling unit
22 designed for long-term occupancy, built on a chassis at a
23 factory, not less than eight feet wide and 32 feet long, with or
24 without a permanent foundation, and consisting of a complete
25 package with major appliances, plumbing and electrical
26 facilities prepared for appropriate connections.
27 "Manufactured home community." An area under single
28 ownership where designated spaces for manufactured homes are
29 rented or leased, having three or more such houses occupied as
30 residences.
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1 "Program." The Water and Wastewater System Connection
2 Funding Program established under section 502.
3 "Project." The eligible costs associated with the
4 acquisition, construction, improvement, expansion, extension,
5 repair, rehabilitation or security measures of all or part of
6 any facility or system, whether publicly or, in the case of
7 paragraph (1) or (2), privately owned:
8 (1) for the collection, treatment or disposal of
9 wastewater, including industrial waste;
10 (2) for the supply, treatment, storage or distribution
11 of drinking water;
12 (3) for the control of storm water, which may include,
13 but need not be limited to, the transport, storage and the
14 infiltration of storm water; or
15 (4) for the best management practices to address point
16 or nonpoint source pollution associated with storm water
17 runoff or any other innovative techniques identified in the
18 county-prepared watershed plans pursuant to the act of
19 October 4, 1978 (P.L.864, No.167), known as the Storm Water
20 Management Act.
21 "Property lateral." The pipe connecting a housing unit to
22 the street lateral.
23 "Secretary." The Secretary of Environmental [Resources]
24 Protection of the Commonwealth.
25 "Security measures." Infrastructure improvements to publicly
26 or privately owned water or wastewater systems designed in whole
27 or in part for the protection of the collection, treatment and
28 distribution of potable water and treatment of wastewater from
29 threats and vulnerabilities to ensure the public health of the
30 systems' customers in accordance with the Environmental
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1 Protection Agency's Drinking Water State Revolving Fund Program
2 and the Clean Water State Revolving Fund Program established
3 under section 1452 of the Safe Drinking Water Act (Public Law
4 93-523, 42 U.S.C. § 300j-12) and Title VI of the Federal Water
5 Pollution Control Act (62 Stat. 1155, 33 U.S.C. §§ 1381-1387),
6 respectively, and any other program for which there are funds or
7 accounts administered by the authority.
8 "Statewide median household income." The median household
9 income reported for Pennsylvania in the most recently available
10 Census of Population and Housing, as conducted and reported by
11 the United States Bureau of the Census. This amount shall be
12 adjusted annually to account for inflation, as computed and
13 reported by the United States Bureau of Labor Statistics.
14 "Storm water." Drainage runoff from the surface of the land
15 resulting from precipitation or snow or ice melt.
16 "Water Facilities Loan Board." The board established under
17 32 Pa.C.S. § 7504 (relating to Water Facilities Loan Board).
18 Section 5. The act is amended by adding a chapter heading to
19 read:
20 CHAPTER 3
21 PENNSYLVANIA INFRASTRUCTURE INVESTMENT
22 AUTHORITY
23 Section 6. Section 4 heading of the act is amended to read:
24 Section [4] 301. Pennsylvania Infrastructure Investment
25 Authority; board of directors.
26 * * *
27 Section 7. Section 5 heading and (a), amended December 16,
28 1992 (P.L.1137, No.149), are amended to read:
29 Section [5] 302. Revenues of authority.
30 (a) Sources of revenues.--The authority may receive money
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1 from sources of revenue, including, but not limited to, the
2 following:
3 (1) State funds appropriated to the authority.
4 (2) Federal funds appropriated to or granted to the
5 authority.
6 (3) Proceeds from the sale of bonds of the authority
7 authorized under section [7] 304.
8 (4) Proceeds from the sale of bonds issued on or after
9 the effective date of this act from the remaining unused
10 authorization in addition to any other funds that remain
11 unencumbered on the effective date of this act from the act
12 of July 12, 1981 (P.L.263, No.88), entitled "An act
13 authorizing the incurring of indebtedness, with approval of
14 the electors, of $300,000,000 for the repair, construction,
15 reconstruction, rehabilitation, extension and improvement of
16 community water supply systems, and for the repair,
17 reconstruction or rehabilitation of flood control facilities,
18 dams and port facilities and providing the allotment of
19 proceeds from borrowing hereunder," approved by the
20 electorate on November 3, 1981.
21 (5) Proceeds from the sale of bonds not to exceed a
22 total sum of $150,000,000 issued for site development under
23 the provisions of Article XVI-B of the act of April 9, 1929
24 (P.L.343, No.176), known as The Fiscal Code. This paragraph
25 shall expire on December 31, 1989, except that the board may
26 fund projects approved prior to December 31, 1989.
27 (6) Proceeds from the sale of any Commonwealth general
28 obligation bonds issued under sections [16 and 17] 313 and
29 314.
30 (7) Proceeds from the sale of any Commonwealth general
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1 obligation bonds issued under section 12 of the act of March
2 16, 1992 (P.L.10, No.5), known as the Small Water Systems
3 Assistance Act.
4 (8) Proceeds from the sale of authority assets.
5 (9) Repayment of loan principal.
6 (10) Payment of interest on loans made by the authority.
7 (11) Interest earned on the investments of authority
8 moneys.
9 * * *
10 Section 8. The headings of sections 6, 7, 8 and 9 of the act
11 are amended to read:
12 Section [6] 303. Powers and duties of authority.
13 * * *
14 Section [7] 304. Specific power to issue bonds.
15 * * *
16 Section [8] 305. Covenants and express conditions on
17 obligations.
18 * * *
19 Section [9] 306. Nature and effect of pledges.
20 * * *
21 Section 9. Section 10 heading and (f) of the act are amended
22 to read:
23 Section [10] 307. Financial assistance.
24 * * *
25 (f) Loans.--Subject to any agreements with the holders of
26 bonds, the board shall have the power to set terms applicable to
27 loans in any manner it deems appropriate, subject to the
28 provisions of this subsection. The board may consider such
29 factors as it deems relevant, including current market interest
30 rates, the financial and economic distress of the area which the
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1 project serves, and the necessity to maintain the authority
2 funds in a financially sound manner. Loans may be made based on
3 the ability to repay the loan from future revenue to be derived
4 from the project, by a mortgage or other property lien, or on
5 any other fiscal matters which the authority deems appropriate.
6 The board shall have the power to defer principal on loans for
7 up to five years. In the event of a default on the repayment of
8 a loan, the board may apply to the court of common pleas of the
9 county where the project is located for the appointment of a
10 receiver to assume operation and supervision of the facility
11 under the supervision of the court. The minimum rate of interest
12 to be paid on any loan made pursuant to this act shall be 1%.
13 The maximum rate of interest shall not exceed the following:
14 (1) For projects in counties whose unemployment rate
15 exceeds the Statewide unemployment rate by 40% or more, 1%
16 for the first five years and 25% of the bond issue rate for
17 the remainder of the loan.
18 (2) For projects in counties whose unemployment rate
19 exceeds the Statewide unemployment rate, but exceeds it by
20 less than 40%, 30% of the bond issue rate for the first five
21 years and 60% of the bond issue rate for the remainder of the
22 loan.
23 (3) For all other projects, 60% of the bond issue rate
24 for the first five years and 75% of the bond issue rate for
25 the remainder of the loan.
26 (4) For projects located within municipalities for which
27 unemployment rates exist which would qualify the project for
28 lower interest rates than if the relevant county unemployment
29 rate were used, the unemployment rate of that municipality
30 may be used in determining the interest rate on the loan.
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1 For purposes of this subsection, the phrase "unemployment rate
2 of the county" shall mean the average unemployment rate for the
3 county in the most recent calendar year for which data has been
4 finalized. For the projects which serve multiple counties, the
5 highest unemployment rate of the counties involved shall be
6 used. The unemployment data utilized shall be data reported by
7 the Department of Labor and Industry. For purposes of this
8 subsection, the phrase "bond interest rate" shall be the rate of
9 interest paid by the Commonwealth immediately preceding the date
10 of the loan for the bonds issued under sections [16 and 17] 313
11 and 314.
12 * * *
13 Section 10. The headings of sections 11 and 12 of the act
14 are amended to read:
15 Section [11] 308. Comprehensive water facilities plan.
16 * * *
17 Section [12] 309. Audits.
18 * * *
19 Section 11. Section 13 of the act is amended to read:
20 Section [13] 310. Annual report.
21 The board shall provide the General Assembly with an annual
22 report detailing all projects funded under section [10] 307.
23 Section 12. Section 14 heading of the act is amended to
24 read:
25 Section [14] 311. Expedited approval of rate relief.
26 * * *
27 Section 13. Section 15 of the act is amended to read:
28 Section [15] 312. Transfer of Water Facilities Loan Board.
29 (a) Removal of members.--All existing members of the Water
30 Facilities Loan Board shall cease to hold office on the day that
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1 the Governor certifies by publication in the Pennsylvania
2 Bulletin the existence of a quorum on the board created under
3 section [4] 301.
4 (b) Board of directors to serve as Water Facilities Loan
5 Board.--For purposes of satisfying all outstanding obligations
6 of the Water Facilities Loan Board and for purposes of
7 collecting loan and interest repayments, the board established
8 in section [4] 301 shall constitute the membership of the Water
9 Facilities Loan Board.
10 (c) Transfer of function.--All remaining unencumbered funds,
11 rights, powers, duties, obligations, liabilities, records and
12 equipment of the Water Facilities Loan Board are transferred to
13 the authority.
14 Section 14. Section 16 heading of the act is amended to
15 read:
16 Section [16] 313. Referendum.
17 Section 15. Section 17 of the act is amended to read:
18 Section [17] 314. Bonds.
19 (a) Issuance of general obligation bonds.--As evidence of
20 the indebtedness if authorized under section [16] 313, general
21 obligation bonds of the Commonwealth shall be issued from time
22 to time to fund and retire notes issued pursuant to section [16]
23 313 to carry out the purposes of this act, or both, for such
24 total amounts, in such form, in such denominations and subject
25 to such terms and conditions of issue, redemption and maturity,
26 rate of interest and time of payment of interest as the issuing
27 officials direct except that the latest stated maturity date
28 shall not exceed 30 years from the date of the debt first issued
29 for each series.
30 (b) Execution of bonds.--All bonds and notes issued under
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1 the authority of section [16] 313 shall bear facsimile
2 signatures of the issuing officials and a facsimile of the great
3 seal of the Commonwealth and shall be countersigned by a duly
4 authorized loan and transfer agent of the Commonwealth.
5 (c) Direct obligation of Commonwealth.--All bonds and notes
6 issued in accordance with section [16] 313 shall be direct
7 obligations of the Commonwealth, and the full faith and credit
8 of the Commonwealth are hereby pledged for the payment of the
9 interest thereon as it becomes due and the payment of the
10 principal at maturity. The principal of and interest on the
11 bonds and notes shall be payable in lawful money of the United
12 States of America.
13 (d) Exemption from taxation.--All bonds and notes issued
14 under the provisions of this section shall be exempt from
15 taxation for State and local purposes.
16 (e) Form of bonds.--The bonds may be issued as coupon bonds
17 or registered as to both principal and interest as the issuing
18 officials may determine. If interest coupons are attached, they
19 shall contain the facsimile signature of the State Treasurer.
20 (f) Bond amortization.--The issuing officials shall provide
21 for the amortization of the bonds in substantial and regular
22 amounts over the term of the debt. The first retirement of
23 principal shall be stated to mature prior to the expiration of a
24 period of time equal to one-tenth of the time from the date of
25 the first obligation issued to evidence the debt to the date of
26 the expiration of the term of the debt. Retirements of principal
27 shall be regular and substantial if made in annual or semiannual
28 amounts, whether by stated serial maturities or by mandatory
29 sinking fund retirements.
30 (g) Refunding bonds.--The issuing officials are authorized
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1 to provide, by resolution, for the issuance of refunding bonds
2 for the purpose of refunding any bonds issued under this section
3 and then outstanding, either by voluntary exchange with the
4 holders of the outstanding bonds, or to provide funds to redeem
5 and retire the outstanding bonds with accrued interest, any
6 premium payable thereon and the costs of issuance and retirement
7 of bonds, at maturity or at any call date. The issuance of the
8 refunding bonds, the maturities and other details thereof, the
9 rights of the holders thereof and the duties of the issuing
10 officials in respect to the same shall be governed by the
11 provisions of this section, insofar as they may be applicable.
12 Refunding bonds may be issued by the issuing officials to refund
13 bonds originally issued or to refund bonds previously issued for
14 refunding purposes.
15 (h) Quorum.--Whenever any action is to be taken or decision
16 made by the Governor, the Auditor General and the State
17 Treasurer acting as issuing officials and the three officers are
18 not able unanimously to agree, the action or decision of the
19 Governor and either the Auditor General or State Treasurer shall
20 be binding and final.
21 (i) Public sale.--Whenever bonds are issued, they shall be
22 offered for sale at not less than 98% of the principal amount
23 and accrued interest and shall be sold by the issuing officials
24 to the highest and best bidder or bidders after due public
25 advertisement on such terms and conditions and upon such open
26 competitive bidding as the issuing officials shall direct. The
27 manner and character of the advertisement and the time of
28 advertising shall be prescribed by the issuing officials.
29 (j) Private sale.--Any portion of any bond issue so offered
30 and not sold or subscribed for may be disposed of by private
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1 sale by the issuing officials in such manner and at such prices,
2 not less than 98% of the principal amount and accrued interest,
3 as the issuing officials shall direct. No commission shall be
4 allowed or paid for the sale of any bonds issued under the
5 authority of this section.
6 (k) Bond series.--When bonds are issued from time to time,
7 the bonds of each issue shall constitute a separate series to be
8 designated by the issuing officials or may be combined for sale
9 as one series with other general obligation bonds of the
10 Commonwealth.
11 (l) Temporary bonds.--Until permanent bonds can be prepared,
12 the issuing officials may in their discretion issue, in lieu of
13 permanent bonds, temporary bonds in such form and with such
14 privileges as to registration and exchange for permanent bonds
15 as may be determined by the issuing officials.
16 (m) Disposition and use of proceeds.--The proceeds realized
17 from the sale of bonds and notes, except funding bonds,
18 refunding bonds and renewal notes, under the provisions of this
19 section are specifically dedicated to the purposes of the
20 referendum to be implemented by this act and shall be paid into
21 the special funds established in the State Treasury in such
22 amounts as may be specified by the board pursuant to section
23 [5(c)] 302(c). The proceeds shall be paid by the State Treasurer
24 periodically to the board to expend them at such times and in
25 such amounts as may be necessary to satisfy the funding needs of
26 the board. The proceeds of the sale of funding bonds, refunding
27 bonds and renewal notes shall be paid to the State Treasurer and
28 applied to the payment of principal, the accrued interest and
29 premium, if any, and costs of redemption of the bonds and notes
30 for which such obligations shall have been issued.
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1 (n) Investment of funds.--Pending their application to the
2 purposes authorized, moneys held or deposited by the State
3 Treasurer may be invested or reinvested as are other funds in
4 the custody of the State Treasurer in the manner provided by
5 law. All earnings received from the investment or deposit of
6 such funds shall be paid into the State Treasury to the credit
7 of the funds established by the board in section [5(c)] 302(c)
8 in such amounts as may be specified by the board pursuant to
9 that section.
10 (o) Registration of bonds.--The Auditor General shall
11 prepare the necessary registry book to be kept in the office of
12 the duly authorized loan and transfer agent of the Commonwealth
13 for the registration of any bonds, at the request of owners
14 thereof, according to the terms and conditions of issue directed
15 by the issuing officials.
16 (p) Expenses of preparation for issue and sale of bonds and
17 notes.--There is hereby appropriated to the State Treasurer from
18 the proceeds of the bonds and notes issued as much money as may
19 be necessary for all costs and expenses in connection with the
20 issue of and sale and registration of the bonds and notes in
21 connection with this act.
22 Section 16. The act is amended by adding a chapter to read:
23 CHAPTER 5
24 WATER AND WASTEWATER SYSTEM CONNECTION FUNDING
25 Section 501. Scope.
26 This chapter applies to financial assistance provided to
27 owners of a housing unit.
28 Section 502. Water and Wastewater System Connection Funding
29 Program.
30 (a) Establishment.--There is hereby established the Water
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1 and Wastewater System Connection Funding Program for the purpose
2 of authorizing financial assistance in the form of low-interest
3 loans to homeowners for tapping or facilities extension fees and
4 eligible costs relating to the installation of a water or
5 wastewater lateral for homes constructed prior to the
6 installation of a publicly or privately owned water distribution
7 system or a publicly or privately owned wastewater collection
8 system servicing the property or relating to the replacement of
9 water or wastewater laterals to housing units as part of an
10 upgrading or reconstruction of a publicly or privately owned
11 water distribution system or publicly or privately owned
12 wastewater collection system.
13 (b) Regulations.--
14 (1) The authority shall develop regulations as may be
15 necessary for the application for and approval of program
16 funds for loan recipients which at a minimum shall be
17 required to repay program loans to the local lending
18 institution within 15 years from the date of the loan at an
19 annual interest rate not to exceed the maximum rate
20 established for the county in which the residence is located.
21 This maximum rate shall be determined in accordance with
22 section 307(f). The authority shall develop regulations for
23 the implementation of the program, which shall include, but
24 not be limited to, procedures for local lending institutions
25 participating in the program under section 507 to qualify for
26 funding from the program when the residential borrower
27 defaults on the loan.
28 (2) The authority may promulgate any additional
29 regulations that it deems necessary for carrying out the
30 provisions of this chapter.
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1 Section 503. Applicant eligibility.
2 (a) Owner occupancy required.--Except as provided in
3 subsection (b), an applicant is eligible if he is an owner-
4 occupier of a housing unit and any of the following conditions
5 exists:
6 (1) The housing unit is served or is to be served by a
7 publicly or privately owned water or wastewater system.
8 (2) The owner-occupier is required to replace private
9 water or wastewater laterals as part of an upgrading or
10 reconstruction of a publicly or privately owned water or
11 wastewater system.
12 (3) The owner of the real property into which the
13 property lateral will be installed is the owner of the
14 housing unit located thereon.
15 (b) Land leased property.--An owner of land leased to an
16 owner-occupier or renter of a single-family home or manufactured
17 home, including an owner of a manufactured home community, shall
18 be eligible for funding under the program for each single-family
19 home and manufactured home in which the owner-occupier or renter
20 of the home meets the requirements of subsection (a)(1) and (2).
21 (c) Maximum income allowable.--Loans may be provided under
22 the program if the applicant's household income does not exceed
23 the Statewide median household income. Local lending
24 institutions shall comply with regulations of the authority if
25 they participate in the program pursuant to section 507.
26 Section 504. Project eligibility.
27 The following conditions shall be satisfied for an eligible
28 project:
29 (1) The property is located in an area that is served or
30 will be served by a publicly or privately owned water or
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1 wastewater system and the property is required by the
2 municipality or municipal authority to connect to the system.
3 (2) For a publicly owned water or wastewater system,
4 that the system has established a tapping fee in accordance
5 with 53 Pa.C.S. Ch. 56 (relating to municipal authorities).
6 (3) For a privately owned water or wastewater system,
7 that the system has established a facilities extension fee,
8 as part of its tariff, on file with the Public Utility
9 Commission, in accordance with 52 Pa. Code § 65.21 (relating
10 to duty of public utility to make line extensions).
11 (4) The certified inspector has certified that the
12 property lateral meets all permit requirements under
13 applicable State and municipal laws and regulations.
14 (5) The construction activity to be financed by a loan
15 under the program has not commenced and the tapping or
16 facilities extension fee has not been paid prior to the time
17 of application approval to the local lending institution.
18 Section 505. Eligible costs.
19 Eligible costs shall include:
20 (1) All testing, design, materials and construction
21 costs associated with the property lateral, including a
22 grinder pump, if required.
23 (2) Permit and inspection fees.
24 (3) Interest during construction or financing of the
25 project and allowance for funds used during construction.
26 (4) Costs relating to the closing of an applicant's
27 loan, such as legal fees, credit reports, title reports,
28 insurance, judgment reports, lien certificates, appraisal
29 fees and loan origination fees.
30 (5) Tapping or facilities extension fees.
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1 Section 506. Ineligible costs.
2 Loans awarded under the program may not be used for the costs
3 of acquisition of land or right-of-way for a project.
4 Section 507. Financial assistance terms and conditions.
5 (a) Financial assistance.--Financial assistance under the
6 program shall be in the form of loans as further specified in
7 this chapter. The program shall provide loans to local lending
8 institutions that make loans for projects consistent with the
9 requirements of this chapter.
10 (1) The interest rate offered on loans to borrowers
11 shall not be less than 1% per annum or more than the maximum
12 rate established for the county in which the residence is
13 located. This maximum rate shall be determined in accordance
14 with section 307(f).
15 (2) The maximum amount of a loan to borrowers shall be
16 no greater than 90% of eligible costs and in no case may
17 exceed $15,000.
18 (3) The minimum amount of a loan to borrowers shall be
19 $1,500.
20 (4) The maximum term of a loan to borrowers shall be 15
21 years.
22 (5) Loan repayment shall commence no later than 60 days
23 after the date of loan closing.
24 (b) Collateral.--Collateral shall be determined by the local
25 lending institution under regulations established by the
26 authority and may include, but are not limited to, a mortgage on
27 the borrower's property subordinate only to the debt outstanding
28 at the time of loan approval by the local lending institution.
29 (c) Repayment.--A loan shall be repaid in full if the
30 property to which it applies is either sold or transferred to
20070S0909B1081 - 18 -
1 other than an immediate family member.
2 (d) Fees.--The borrower may be charged fees for delinquent
3 payment of either principal or interest on a loan if fees are
4 described in the loan agreement entered into and agreed to by
5 the borrower and the local lending institution.
6 (e) Documentation.--An applicant shall apply for funding to
7 a local lending institution by submitting documentation as may
8 be required to demonstrate compliance with standards of the
9 local lending institution.
10 (f) Local lending institution.--Upon receipt of a funding
11 application, the local lending institution shall:
12 (1) Verify that the applicant meets the eligibility
13 criteria of section 503.
14 (2) Verify that the application is valid and contains
15 all required documentation.
16 (3) Verify through the authority that sufficient funds
17 are available to approve the application.
18 (4) Perform credit and security checks needed to ensure
19 that the applicant meets the collateral requirements of the
20 authority.
21 (g) Approval.--A local lending institution may approve an
22 application for funding under the program only if the conditions
23 under this section are satisfied.
24 (h) Completion of review.--Upon completion of its
25 application review, a local lending institution shall notify the
26 applicant of the following:
27 (1) The outcome of its review.
28 (2) Whether the applicant is eligible for a loan.
29 (3) Whether the applicant's loan is approved.
30 (4) The amount and terms of the loan.
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1 (i) Funds.--Funds shall be disbursed to the contractor on
2 behalf of the borrower or to the borrower upon completion of
3 construction and final inspection and certification from the
4 publicly or privately owned water or wastewater system that the
5 project has been completed in accordance with all permit
6 requirements and is operable as designed and intended.
7 (j) Changes.--A change to an approved project which is
8 inconsistent with the approved design for which the permit was
9 issued may not be made unless the publicly or privately owned
10 water or wastewater system gives prior approval to the change.
11 Section 508. Funds and accounts.
12 (a) Establishment of funds.--
13 (1) The authority shall establish the Water and
14 Wastewater System Connection Funding Program Fund. The moneys
15 of this fund are hereby appropriated to carry out the
16 provisions of this chapter.
17 (2) The authority may establish separate funds, accounts
18 or other financial structures as may be needed to implement
19 and operate the program.
20 (b) Source of funding.--
21 (1) The sum of $5,000,000 shall be transferred from any
22 available funds of the authority to the Water and Wastewater
23 System Connection Funding Program Fund established in
24 subsection (a)(1) to carry out the provisions of this
25 chapter.
26 (2) The board may transfer additional moneys in
27 accordance with paragraph (1) at their discretion if it is
28 determined that additional program funding is needed to meet
29 program demand and that such transfers will not adversely
30 affect traditional water, wastewater and storm water project
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1 assistance.
2 (c) Liability.--The authority shall not be held liable for
3 loan offers or approvals made by a local lending institution not
4 in compliance with the regulations established by the authority
5 in the absence of prior authority-approved funding.
6 Section 509. Loan servicing.
7 (a) Monitoring.--The authority shall monitor the program and
8 process established by a local lending institution.
9 (b) Loan servicing fee.--The local lending institution may
10 charge a loan servicing fee to defray the costs that it incurs
11 to service loans under the program. These loan servicing fees
12 shall be charged to and shall be the sole responsibility of
13 program borrowers.
14 Section 510. Program monitoring.
15 The borrower shall submit to the local lending institution
16 receipts for the project in accordance with the schedule and
17 requirements contained in the loan agreement. Failure to provide
18 the receipts in accordance with the schedule shall constitute a
19 violation of the loan agreement.
20 Section 511. Assumption of duties.
21 The board may assume the responsibilities of the local
22 lending institution as provided for in this chapter upon the
23 approval of the board members.
24 Section 17. The act is amended by adding a chapter heading
25 to read:
26 CHAPTER 7
27 MISCELLANEOUS
28 Section 18. The headings of sections 18, 19, 20 and 21 of
29 the act are amended to read:
30 Section [18] 701. Appropriations.
20070S0909B1081 - 21 -
1 * * *
2 Section [19] 702. Severability.
3 * * *
4 Section [20] 703. Repeals.
5 * * *
6 Section [21] 704. Effective date.
7 * * *
8 Section 19. This act shall take effect in 90 days.
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