§ 1285-j. Water pollution control revolving fund. 1. (a) The
corporation shall undertake and provide assistance in support of the
program to make financial assistance available to municipalities to
encourage and support the planning, development and construction of
municipal water pollution control projects in accordance with the
provisions of this section, section 17-1909 of the environmental
conservation law, and to make financial assistance available to eligible
borrowers through linked deposits made in accordance with article
sixteen of the state finance law.

(b) There is hereby established in the custody of the corporation a
special fund to be known as the water pollution control revolving fund.
Moneys in the water pollution control revolving fund shall be segregated
from all other funds of or in the custody of the corporation subject to
any rights of holders of corporation bonds or notes issued for the
purposes of this section. Moneys in the water pollution control
revolving fund shall only be used in accordance with the provisions of
this section and section 17-1909 of the environmental conservation law.
The moneys in such fund shall be applied to or paid out for authorized
purposes of such fund on the direction of the chairman of the
corporation in accordance with subdivision four of this section and
section 17-1909 of the environmental conservation law, or such other
person as the corporation shall authorize to make such direction. In
consultation with the director of the division of the budget, the
corporation may, subject to subparagraph (ii) of paragraph a of
subdivision seven of section 17-1909 of the environmental conservation
law, and shall, at the direction of the commissioner of environmental
conservation pursuant to such subdivision, establish within the water
pollution control revolving fund additional accounts or subaccounts and
specify any conditions applicable to the transfer of moneys between such
accounts or subaccounts. With respect to each eligible project, the
corporation shall establish and maintain a record of the allocation
provided for the benefit of such project in accordance with the terms of
the applicable project financing agreement or loan agreement.

2. As used in this section, the terms "allocation", "construction",
"eligible project", "fund", and "project financing agreement" shall have
the meanings set forth in section 17-1909 of the environmental
conservation law.

3. Such fund shall consist of all of the following: (a) federal
capitalization grants and awards or other federal assistance provided
pursuant to Title II or Title VI of the Federal Water Pollution Control
Act, exclusive of any such grants, awards or assistance available under
Title II, except as may be necessary to avoid the loss to New York state
of any unobligated Title II money which can not be made available as a
grant or grant increase to a municipality, for purposes of deposit in
the fund and appropriated by the state for deposit therein, (b) federal
capitalization grants and awards or other federal assistance provided
pursuant to, or for the purposes of, the Omnibus Consolidated
Rescissions and Appropriations Act of 1996 (Pub. L. 104-134) or wet
weather quality grants as provided in the Consolidated Appropriations
Act of 2001 (Pub. L. 106-554), (c) moneys appropriated by the state
legislature for the purpose of such fund or otherwise transferred by the
state for deposit therein by the comptroller as required by law, (d)
payments of principal and interest made by municipalities pursuant to
loan or other agreements entered into pursuant to subdivisions eight and
nine of this section: provided, however, if such loans were financed by
the issuance of bonds or notes of the corporation, deposit of such
payments into the fund shall be subject to the rights of the holders of
such bonds or notes to receive such moneys, (e) investment earnings on
amounts in such fund, (f) any other payments received from
municipalities pursuant to a loan or other agreement made pursuant to
subdivisions eight and nine of this section for costs of managing and
administering the program, (g) the proceeds of bonds or notes issued by
the corporation for purposes of providing financial assistance to
municipalities, (h) the balance of any fees or penalties paid pursuant
to the terms and conditions of a compliance or enforcement agreement for
violations of the federal Marine Protection, Research and Sanctuaries
Act, as amended (33 U.S.C. §§ 1401 et seq.), occurring prior to December
thirty-first, nineteen hundred ninety-four, after payment has been made
to the administrator of the United States environmental protection
agency, a trust account, the ocean dumping alternatives account, and (i)
the balance of any amount in a trust account or, if applicable,
municipal trust accounts of the clean oceans fund upon a finding by the
administrator of the United States environmental protection agency that
fees or penalties were not paid into such trust account or municipal
trust account as required by the Marine Protection, Research, and
Sanctuaries Act, or an applicable compliance or enforcement agreement.

4. Moneys in the water pollution control revolving fund shall be
applied by the corporation to provide financial assistance to
municipalities for construction of eligible projects and, upon
consultation with the director of the division of the budget and the
commissioner, for such other purposes permitted by the Federal Water
Pollution Control Act, as amended, and to provide for the administrative
and management costs of the program. All moneys from federal
capitalization grants and awards or other federal assistance made
available pursuant to, or for the purposes of, the Omnibus Consolidated
Rescissions and Appropriations Act of 1996 (Pub. L. 104-134) or wet
weather quality grants as provided in the Consolidated Appropriations
Act of 2001 (Pub. L. 106-554), which are deposited into the water
pollution control fund pursuant to subdivision three of this section,
and any corresponding state match moneys, may be used by the corporation
for the purposes permitted by the Omnibus Consolidated Rescissions and
Appropriations Act of 1996 (Pub. L. 104-134) or wet weather quality
grants as provided in the Consolidated Appropriations Act of 2001 (Pub.
L. 106-554), and for no other purposes. As used in this section
"financial assistance to municipalities" means any one or more of the
following:

(a) making loans to municipalities for construction of eligible
projects, provided such loans (i) are made at market or below market
rates, (ii) do not have a final maturity of more than twenty years
following scheduled completion of the eligible project, (iii) have
principal and interest payments which commence not later than one year
after scheduled completion of the eligible project, and (iv) require the
municipality to establish a dedicated source of revenue (which may be a
general obligation of the municipality); unless otherwise determined by
the corporation or directed by the commissioner of environmental
conservation pursuant to subdivision eight of section 17-1909 of the
environmental conservation law, the corporation shall make such loans
only from the proceeds of the corporation's bonds or notes issued for
purposes of this section;

(b) buying or refinancing debt obligations of municipalities at market
or below market rates, if work was commenced and debt was incurred for
the eligible project after March seventh, nineteen hundred eighty-five;

(c) guarantying, or purchasing insurance or other credit enhancement
for municipal obligations where such action would improve credit market
access for or reduce interest rates on such municipal obligations;

(d) providing a source of revenue or security for payment of principal
and interest on bonds or notes issued by the corporation if the proceeds
of the sale of such bonds or notes will be deposited in the fund;

(e) providing interest rate subsidy allocations to subsidize loans to
municipalities made from the proceeds of the corporation's bonds or
notes;

(f) using investment earnings on moneys in the fund to pay, pursuant
to subdivision seven of this section, the costs of the corporation and
the department of environmental conservation of administering and
managing the program described in this section and section 17-1909 of
the environmental conservation law.

Subject to any applicable provisions of federal or state law, any
financial assistance at an interest rate of zero percent provided to
municipalities that meet the financial hardship criteria regulations
established pursuant to section 17-1909 of the environmental
conservation law, may have a final maturity up to forty years following
scheduled completion of the eligible project.

5. The corporation may make payments to the sewage treatment program
management and administration fund in accordance with subdivision seven
of this section to reimburse such fund for expenditures made pursuant to
appropriation to pay the cost of the corporation and the department of
environmental conservation for administering and managing the water
pollution control revolving fund program established in section
ninety-seven-l of the state finance law, for such costs. Such
reimbursement shall be made from (a) available investment earnings on
all amounts in the water pollution control revolving fund excluding all
amounts in the fund which are the subject of allocations or other
financial assistance to a municipality; and (b) payments received from a
municipality for such purpose pursuant to a project financing agreement
or loan agreement; and (c) if the sources of revenue described in this
paragraph and paragraphs (a) and (b) of this subdivision are or are
anticipated to be insufficient, then from the proceeds of federal
capitalization grants, awards or assistance appropriated to the fund for
administration and management of such program.

Notwithstanding the foregoing, if the sources of revenues described in
paragraphs (a), (b) and (c) of this subdivision are at any time
insufficient to make a reimbursement to the state pursuant to this
subdivision when due, the corporation shall make such reimbursement from
any other available amounts in the water pollution control revolving
fund, excluding all amounts that are the subject of allocations,
provided, that the amounts paid from fund sources other than those
described in paragraphs (a), (b) and (c) of this subdivision shall be
reimbursed upon a determination by the director of the budget that
future revenues obtained from sources described in paragraphs (a), (b)
and (c) of this subdivision are in excess of the amounts reasonably
needed to make future reimbursements pursuant to this subdivision.

* 6. Moneys in the water pollution control revolving fund may be
invested as provided in subdivision four of section twelve hundred
eighty-four of this title and may be further invested (a) in investment
agreements continuously secured by obligations with any insurance or
reinsurance company or corporate affiliate thereof rated by a nationally
recognized rating agency in one of its two highest categories, any bank,
trust company or broker or dealer, as defined by the securities exchange
act of 1934, which is a dealer in government bonds, which reports to,
trades with and is recognized as a primary dealer by a federal reserve
bank and is a member of the securities investors protection corporation,
if, (i) such obligations securing such investment agreements are
obligations as set forth in section ten of the general municipal law,
(ii) such obligations are delivered to a trustee for the benefit of the
corporation or, with respect to moneys pledged under an indenture of
trust relating to bonds or notes of the corporation, to the trustee
under such indenture, or are supported by a safe keeping receipt issued
by a depository satisfactory to the corporation as applicable, provided
that such investment agreements must provide that the value of the
underlying obligations shall be maintained at a current market value,
calculated no less frequently than monthly, of not less than the amount
deposited thereunder, (iii) a prior perfected security interest in the
obligations which are securing such agreement has been granted to the
corporation, as applicable, and (iv) such obligations are free and clear
of adverse third party claims, or (b) in obligations as set forth in
section ten of the general municipal law that are rated by a nationally
recognized rating agency in one of its two highest rating categories.

* NB Effective until September 30, 2026

* 6. Moneys in the water pollution control revolving fund may be
invested as provided in subdivision four of section twelve hundred
eighty-four of this title and may be further invested (a) in investment
agreements continuously secured by obligations with any insurance or
reinsurance company or corporate affiliate thereof rated by a nationally
recognized rating agency in one of its two highest categories, any bank,
trust company or broker or dealer, as defined by the securities exchange
act of 1934, which is a dealer in government bonds, which reports to,
trades with and is recognized as a primary dealer by a federal reserve
bank and is a member of the securities investors protection corporation,
if, (i) such obligations securing such investment agreements are
obligations as set forth in section ten of the general municipal law,
(ii) such obligations are delivered to a trustee for the benefit of the
corporation or, with respect to moneys pledged under an indenture of
trust relating to bonds or notes of the corporation, to the trustee
under such indenture, or are supported by a safe keeping receipt issued
by a depository satisfactory to the corporation as applicable, provided
that such investment agreements must provide that the value of the
underlying obligations shall be maintained at a current market value,
calculated no less frequently than monthly, of not less than the amount
deposited thereunder, (iii) a prior perfected security interest in the
obligations which are securing such agreement has been granted to the
corporation, as applicable, and (iv) such obligations are free and clear
of adverse third party claims, or (b) in obligations the interest on
which is excludable from gross income under section one hundred three of
the internal revenue code, provided that such obligations are rated by a
nationally recognized rating agency in one of its two highest rating
categories.

* NB Effective September 30, 2026

7. The corporation may transfer to the sewage treatment program
management and administration fund established pursuant to section
ninety-seven-l of the state finance law no less frequently than
semi-monthly amounts from the fund sufficient to reimburse the sewage
treatment program management and administration fund in accordance with
the provisions of subdivision five of this section.

8. In addition to the powers of the corporation granted elsewhere in
this chapter, the corporation shall have the power to enter into project
financing agreements authorized by section 17-1909 of the environmental
conservation law. Notwithstanding the powers granted to the corporation
elsewhere in this title, the corporation's power to finance eligible
projects from the fund is limited to eligible projects for which project
financing agreements have been executed pursuant to section 17-1909 of
the environmental conservation law.

9. In addition to the powers granted to the corporation elsewhere in
this chapter, the corporation may make loans to municipalities for
purposes of financing eligible projects for which the fund may be used,
subject to the limitations of subdivision eight of this section, may
accept the obligations of any municipality as security for the repayment
of a loan to such municipality, and may assign and pledge such municipal
obligations and loan agreements for the benefit of the holder of
obligations of the corporation from the proceeds of which such loans are
made. Loan proceeds may be disbursed to a municipality in accordance
with such restrictions as may be imposed by the corporation in
connection with such loan or obligations of the corporation from the
proceeds of which such loan is made.

10. The corporation is authorized to arrange for any audits required
by law for the purpose of issuing its bonds or notes to provide
financial assistance to municipalities, and provide for the
implementation of any independently conducted reviews or audits arranged
pursuant to subdivision seven of section 17-1909 of the environmental
conservation law.

11. In the event a municipality shall fail to make any payment due the
corporation pursuant to any loan agreement, financing agreement, or
other obligation of the municipality sold to the corporation or issued
as security for the undertaking of the municipality thereunder, the
corporation shall certify to the comptroller, and notify the chairman of
the senate finance committee, the chairman of the assembly ways and
means committee, the director of the division of the budget and the
governing body of the municipality that such municipality has failed to
make such payment. Such certificate shall be in such form as may be
determined by the corporation provided such certificate shall specify
the exact amount of debt service and surcharge, if applicable, required
to satisfy such municipality's unpaid obligation. The comptroller, upon
receipt of such certificate from the corporation, is authorized to and
shall, to the extent not otherwise prohibited by law and subject to any
other provision of law providing for withholding of payments to the
municipality which take precedence over this subdivision, withhold from
such municipality the next succeeding payments of state aid or local
assistance otherwise payable to it to the extent necessary to meet the
certified amount of debt service and surcharge, if applicable, due the
corporation and shall immediately pay over to the corporation as a debt
service payment on behalf of such municipality the amount so withheld.

12. (a) Notwithstanding the provisions of any general or special law
to the contrary, the commissioner of environmental conservation on
behalf of the state and the corporation, subject to the approval of the
director of the budget, are each hereby authorized to enter into a state
revolving fund service contract or contracts providing for the
administration of the water pollution control revolving fund and the
financing by the corporation of the contributions made by the state to
the water pollution control revolving fund. Any such contract or
contracts shall be upon such terms and conditions as the corporation and
the commissioner of environmental conservation shall determine to be
reasonable, including, but not limited to, provisions relating to the
respective obligations of the state and the corporation with respect to
the administration of the water pollution control revolving fund and
provisions providing for the payment of (i) all fees and other charges
of, and expenses incurred by, the corporation in connection with the
issuance and administration of special obligation bonds to provide funds
to the state or reimburse the state for contributions to the water
pollution control revolving fund and (ii) all debt service payments on
such bonds.

(b) Any such contract entered into pursuant to paragraph (a) of this
subdivision shall provide that the obligation of the state to fund or to
pay the amounts therein provided for shall not constitute a debt of the
state within the meaning of any constitutional or statutory provision
and shall be deemed executory only to the extent of moneys available
therefore and that no liability shall be incurred by the state beyond
the moneys available for such purpose, and that such obligation is
subject to annual appropriation by the legislature.

(c) Any such contract or any payments made or to be made thereunder
may be assigned and pledged by the corporation as security for its bonds
and notes issued for the purpose of financing the state contribution to
the water pollution control revolving fund.

(d) The comptroller is hereby authorized to receive from the
corporation any portion of special obligation bond proceeds paid to
provide funds to or reimburse the state for its contribution to the
water pollution control revolving fund and to credit such amounts to the
capital projects fund or any other appropriate fund.

13. In addition to the powers granted to the corporation in this
section, the corporation is authorized to exercise the powers, perform
the responsibilities and take the actions assigned to it under section
17-1909 of the environmental conservation law.