§ 64-ee. Peconic Bay region septic system replacement loan program. 1.
As used in this section, the following words and terms shall have the
following meanings:

(a) "Peconic Bay region" means the towns of East Hampton, Riverhead,
Shelter Island, Southampton and Southold.

(b) "Cesspool" means a drywell that receives untreated sanitary waste
containing human excreta, which sometimes has an open bottom and/or
perforated sides.

(c) "Septic system" means a system that provides for the treatment
and/or disposition of the combination of human and sanitary waste with
water not exceeding one thousand gallons per day, serving a single
parcel of land.

(d) "Septic system project" means the replacement of a cesspool with a
septic system, the installation, replacement or upgrade of a septic
system or septic system components, or installation of enhanced
treatment technologies, including an advanced nitrogen removal system,
to significantly and quantifiably reduce environmental and/or public
health impacts associated with effluent from a cesspool or septic system
to groundwater used as drinking water, or a threatened or an impaired
waterbody.

(e) "Fund" means the community preservation fund created pursuant to
subdivision two of section sixty-four-e of this article.

2. The town board of any town in the Peconic Bay region may, by local
law, establish a septic system replacement loan program using a portion
of the water quality improvement monies from the fund, pursuant to
paragraph (e) of subdivision three of section sixty-four-e of this
article.

3. Such program may make loans to the owners of real property located
within the town to finance the installation of septic system projects.
The town shall establish priority areas within the town, which would
receive water quality and public health benefits from the installation
of septic system projects, for such loans in order to maximize
environmental and public health benefits.

4. To be eligible for a loan pursuant to this section, the septic
system project shall be listed as an approved water quality improvement
project in the town's community preservation project plan pursuant to
subdivision six of section sixty-four-e of this article and be proposed
for real property located within an established priority area of the
town. Monies from the fund may only be loaned for projects which have
been included in such plan and shall not include costs associated with
routine maintenance such as a pump out of a septic tank.

5. A local law establishing the septic system replacement loan program
shall provide for the criteria for making such loans and the terms and
conditions for repayment of such loans provided that:

(a) For loans made to an owner of real property that is a commercial
entity, not-for-profit organization, or entity other than an individual,
the town board shall have the authority by local law to impose
requirements on the maximum amount that may be borrowed through such
loan, which may consider factors including but not limited to the
property value, expected environmental and water quality benefit and
existing indebtedness secured by such property.

(b) For loans made to an owner of real property who is an individual,
the principal amount of each such loan, excluding interest, shall not
exceed the lesser of ten percent of the appraised real property value or
the actual cost of the septic system project including the costs of
installation, necessary equipment, materials, and labor.

(c) No such loan shall be made unless such septic system project will
significantly and quantifiably reduce environmental and/or public health
impacts associated with effluent from a cesspool or septic system from
the proposed real property site to groundwater used as drinking water,
or a threatened or an impaired waterbody.

6. Every loan made under the septic system replacement loan program
shall be repaid over a term not to exceed ten years. The town shall set
a fixed rate of interest for the repayment of the principal amount of
each loan at the time the loan is made provided that no interest rate
shall exceed two and one-half percent and no applicant shall receive a
loan more than once in any five-year period.

7. The principal amount of each such loan, excluding interest, shall
not exceed the actual cost of installing the septic system project,
including the costs of necessary equipment, materials, and labor.

8. No such loan shall be made for a septic system replacement project
unless such system is approved by the Suffolk County Department of
Health Services.

9. The loan made under the septic system replacement loan program
shall constitute a lien upon the real property benefitted by such loan.

10. The town may require the loan made under the septic system loan
program to be repaid by the property owner through a charge on the real
property benefitted by such loan. Such charge shall be on the real
property and shall be levied and collected at the same time and in the
same manner as town taxes, provided that such charge shall be separately
listed on the tax bill, and provided further that in the event such
charge should not be paid in a timely manner, no other municipal
corporation shall be required to credit or otherwise guarantee the
amount of such unpaid charge to the municipal corporation which
authorized the loan, notwithstanding any provision of law to the
contrary.

11. All revenues received by the town from the repayment of loans
shall be deposited in the fund.