§ 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-seven, (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-seven, (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.