SUMMARY--Provides for acceptance of subsidies under Safe Drinking Water Act. (BDR 40-92)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: No.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to water systems; establishing procedures for the acceptance by this state of subsidies under the federal Safe Drinking Water Act; increasing the amount of general obligation bonds that may be issued to provide grants to publicly owned water systems for capital improvements; repealing the authority of the board for financing water projects to make loans to community water systems for capital improvements; making an appropriation; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
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Section 1 Chapter 445A of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 24, inclusive, of this act.
Sec. 2. As used in sections 2 to 24, inclusive, of this act, unless the context otherwise requires, the words and terms defined in sections 3 to 14, inclusive, of this act, have the meanings ascribed to them in those sections.
Sec. 3. "Account for the revolving fund" means the account created pursuant to section 16 of this act to finance the construction of projects.
Sec. 4. "Account for set-aside programs" means the account created pursuant to section 16 of this act to fund activities, other than projects, authorized by the Safe Drinking Water Act pursuant to sections 19 and 20 of this act.
Sec. 5. "Administrator" means the administrator of the division.
Sec. 6. "Board" means the state board of health.
Sec. 7. "Construction" includes:
1. Preliminary planning to determine the feasibility of a project;
2. Engineering, architectural, legal, environmental, fiscal or economic investigations or studies, surveys, designs, plans, working drawings, specifications or procedures that comply with the Safe Drinking Water Act, and regulations adopted pursuant thereto; and
3. Other necessary actions related to a project including the erection, building, acquisition, alteration, remodeling, improvement or extension of a project, or the inspection or supervision of any item set forth in this section.
Sec. 8. "Division" means the health division of the department of human resources.
Sec. 9. "Federal grant" means money authorized by the Safe Drinking Water Act to:
1. Create a revolving fund to assist public water systems to finance the costs of facilities needed to achieve or maintain compliance with the Safe Drinking Water Act and regulations adopted pursuant thereto and to protect public health; and
2. Fund set-aside programs authorized by the Safe Drinking Water Act.
Sec. 10. "Project" means the initial construction, or renovation, modification or expansion, of portions of a public water system for:
1. The impoundment, collection, pumping, treatment, storage or distribution of water;
2. Increasing, sustaining or reducing water pressure; or
3. The supervision, monitoring, administration, management, operation or maintenance of the water system, including acquisition of water rights,
subject to any restrictions set forth in the Safe Drinking Water Act.
Sec. 11. "Public water system" means a system, regardless of ownership, that provides the general public with piped water for human consumption, if the system has 15 or more connections used by residents of the state throughout the year or regularly serves 25 or more persons for 60 or more days a year. The term includes:
1. A facility for the collection, pumping, treatment, storage or distribution of water which is controlled by the operator of the system and used primarily in connection with the system; and
2. A facility for the collection or storage before treatment of water which is not controlled by the operator of the system but is used primarily in connection with the system.
Sec. 12. "Safe Drinking Water Act" means 42 U.S.C. §§ 300f et seq., as amended.
Sec. 13. "Small water system" means a public water system serving less than 10,000 persons.
Sec. 14. "State securities" means securities of the kinds described in NRS 349.198 authorized to be issued in the name and on behalf of the state upon the authorization of the administrator.
Sec. 15. The legislature finds and declares that any state securities issued pursuant to section 24 of this act are necessary for the protection and preservation of the property and natural resources of this state and for the purpose of obtaining the benefits thereof, and their issuance constitutes an exercise of the authority conferred by the second paragraph of section 3 of article 9 of the constitution of the State of Nevada.
Sec. 16. 1. The account to finance the construction of projects, to be known as the account for the revolving fund, is hereby created in the state treasury.
2. The account to fund activities, other than projects, authorized by the Safe Drinking Water Act, to be known as the account for set-aside programs, is hereby created in the state treasury.
3. The money in the account for the revolving fund and the account for set-aside programs may be used only for the purposes set forth in the Safe Drinking Water Act.
4. All claims against the account for the revolving fund and the account for set-aside programs must be paid as other claims against the state are paid.
5. The faith of the state is hereby pledged that the money in the account for the revolving fund and the account for set-aside programs will not be used for purposes other than those authorized by the Safe Drinking Water Act.
Sec. 17. 1. The interest and income earned on money in the account for the revolving fund and the account for set-aside programs must be credited to the account for the revolving fund and the account for set-aside programs, respectively.
2. All payments of principal and interest on all loans made to a public water system and all proceeds from the sale, refunding or prepayment of obligations of a public water system acquired or loans made in carrying out the purposes of the account for the revolving fund must be deposited in the state treasury for credit to the account for the revolving fund.
3. The division may accept gifts, appropriations from the state general fund, contributions, grants and bequests of money from any public or private source. The money so accepted must be deposited in the state treasury for credit to the account for the revolving fund, or the account for set-aside programs, and can be used to provide money from the state to match the federal grant, as required by the Safe Drinking Water Act.
4. Amounts deposited in the account for the revolving fund, including repayments of principal and interest on loans, and interest and income earned on money in the account for the revolving fund, may be used only for providing or guaranteeing loans or as a source of reserve and security for leveraged loans, except that repayments of interest on loans, and interest and income earned on money in the account for the revolving fund, may be used to secure the sale of state securities or otherwise be pledged to provide money from the state to match the federal grant, as required by the Safe Drinking Water Act.
5. Except as otherwise provided in subsection 6, only federal money deposited in a separate subaccount of the account for the revolving fund, including repayments of principal and interest on loans made solely from federal money, and interest and income earned on federal money in the account for the revolving fund, may be used to benefit public water systems not governmentally owned.
6. In addition to the sources described in subsection 5, the proceeds of state securities that are solely secured by and solely payable from one or more of the sources set forth in subsection 5 may be used to benefit public water systems not governmentally owned.
Sec. 18. 1. The division shall:
(a) Use the money in the account for the revolving fund and the account for set-aside programs for the purposes set forth in the Safe Drinking Water Act.
(b) Determine whether public water systems which receive money or other assistance from the account for the revolving fund or the account for set-aside programs comply with the Safe Drinking Water Act and regulations adopted pursuant thereto.
2. The division may:
(a) Prepare and enter into required agreements with the Federal Government for the acceptance of grants of money for the account for the revolving fund and the account for set-aside programs.
(b) Bind itself to terms of the required agreements.
(c) Accept grants made pursuant to the Safe Drinking Water Act.
(d) Manage the account for the revolving fund and the account for set-aside programs in accordance with the requirements and objectives of the Safe Drinking Water Act.
(e) Provide services relating to management and administration of the account for the revolving fund and the account for set-aside programs, including the preparation of any agreement, plan or report.
(f) Perform, or cause to be performed by the Nevada Rural Water Association or other agencies or organizations through interagency agreement, contract or memorandum of understanding, set-aside programs pursuant to 42 U.S.C. § 300j-12 of the Safe Drinking Water Act.
3. The division shall not:
(a) Commit any money in the account for the revolving fund for expenditure for the purposes set forth in section 19 of this act; or
(b) Establish the priorities for determining which public water systems will receive money or other assistance from the account for the revolving fund,
without obtaining the prior approval of the board for financing water projects.
Sec. 19. 1. Except as otherwise provided in sections 17 and 20 of this act, money in the account for the revolving fund may be used only to:
(a) Make loans at or below the market rate to public water systems for the construction of projects.
(b) Buy or refinance at or below the market rate the obligations of public water systems if:
(1) The project for which the obligations were incurred complies with the Safe Drinking Water Act and regulations adopted pursuant thereto; and
(2) The obligations were incurred after July 1, 1993.
(c) Guarantee or purchase insurance for local obligations, including nongovernmental debt or municipal debt, if the action would improve access to credit or reduce the rate of interest applicable to the obligation.
(d) Arrange for the sale of state securities, including state securities issued to provide money from the state to match the federal grant, as required by the Safe Drinking Water Act, if the net proceeds from the sale of those state securities are deposited in the account for the revolving fund.
2. Money in the account for set-aside programs may be used only to fund set-aside programs authorized by the Safe Drinking Water Act. Money in the account for set-aside programs may be transferred to the account for the revolving fund pursuant to the Safe Drinking Water Act.
3. A public water system which requests a loan or other financial assistance must demonstrate that it has:
(a) Complied with the Safe Drinking Water Act and regulations adopted pursuant thereto; or
(b) Agreed to take actions that are needed to ensure that it has the capability to comply with the Safe Drinking Water Act and regulations adopted pursuant thereto.
4. Funding from the account for the revolving fund may not be given to an existing public water system unless it has the technical, managerial and financial capability to ensure compliance with the Safe Drinking Water Act and regulations adopted pursuant thereto. A new public water system, to receive such funding, must demonstrate that it has the technical, managerial and financial capability to ensure compliance with the Safe Drinking Water Act and regulations adopted pursuant thereto.
Sec. 20. 1. The administrator shall not:
(a) Spend more than 4 percent of the federal grant for a set-aside program for administration pursuant to 42 U.S.C. § 300j-12(g)(2) of the Safe Drinking Water Act;
(b) Spend more than 10 percent of the federal grant for a set-aside program for activities authorized pursuant to 42 U.S.C. § 300j-12(g)(2) of the Safe Drinking Water Act if matched equally by the state;
(c) Spend more than 2 percent of the federal grant for a set-aside program for technical assistance to small water systems pursuant to 42 U.S.C. § 300j-12(g)(2) of the Safe Drinking Water Act; or
(d) Spend more than 15 percent of the federal grant for a set-aside program for activities authorized pursuant to 42 U.S.C. § 300j-12(k) of the Safe Drinking Water Act.
2. The administrator may impose and collect a fee from each public water system that receives a loan or other financial assistance from the account for the revolving fund or the account for set-aside programs. The fee must be used to defray the costs of administering the account for the revolving fund or the account for set-aside programs.
3. If the administrator imposes a fee pursuant to subsection 2, the board shall adopt regulations establishing the amount of the fee to be collected.
Sec. 21. The administrator may employ any legal, fiscal, engineering and other expert services necessary to carry out his duties pursuant to sections 2 to 24, inclusive, of this act.
Sec. 22. 1. The board shall adopt such regulations as are necessary relating to the environmental review required by the Safe Drinking Water Act.
2. Each public water system which receives money from the account for the revolving fund shall prepare an environmental assessment which complies with the regulations adopted by the board and submit it to the division for review.
3. The division shall review each such assessment.
Sec. 23. The board may adopt such regulations as are necessary to carry out the provisions of sections 2 to 24, inclusive, of this act.
Sec. 24. 1. The administrator may authorize the state treasurer to issue, sell or deliver state securities as general obligations or secured by pledged revenue if viable to carry out the purposes of the account for the revolving fund, or to provide money from the state to match the federal grant as required by the Safe Drinking Water Act.
2. If the administrator authorizes the issuance of state securities, the state treasurer may:
(a) Sue and be sued to establish or enforce any right arising out of a project receiving financial assistance or of any state securities issued pursuant to this authorization;
(b) Acquire and hold municipal securities, and exercise all of the rights of holders of those securities;
(c) Sell or otherwise dispose of municipal securities and assets acquired in connection with those securities, unless limited by any agreement which relates to the securities;
(d) Make contracts and execute all necessary or convenient instruments;
(e) Accept grants of money from the Federal Government, the state, any agency or political subdivision thereof, or any other person;
(f) Adopt financial regulations relating to projects receiving financial assistance and the administration of those projects;
(g) Employ for himself or for any public water system, any necessary legal, fiscal, engineering and other expert services in connection with projects receiving financial assistance and with the authorization, sale and issuance of state securities, and the purchase of municipal securities or nongovernmental debt;
(h) Enter into agreements and arrangements consistent with sections 2 to 24, inclusive, of this act concerning the authorization, sale and issuance of state securities and the purchase of municipal securities or nongovernmental debt;
(i) Require, as appropriate to secure a nongovernmental debt, enhancements of credit or the pledge of any variety of collateral or other types of security, such as corporate or personal guarantees; and
(j) Undertake other matters which he determines to be necessary or desirable to accomplish the purposes of sections 2 to 24, inclusive, of this act.
3. The money in the account for the revolving fund which is available for the payment of the interest and installments of principal on the state securities must be pledged as the primary source for the payment of the state securities. The full faith and credit of the state may be pledged as additional security for the payment of the state securities.
Sec. 25. NRS 349.986 is hereby amended to read as follows:
349.986The state board of finance shall issue general obligation bonds of the State of Nevada in the face amount of not more than [$25,000,000] $40,000,000 to support the purposes of the program. The net proceeds from the sale of the bonds must be deposited in the fund. The bonds must be redeemed through the consolidated bond interest and redemption fund.
Sec. 26. NRS 349.970, 349.971, 349.972, 349.973, 349.974, 349.975, 349.976 and 349.978 are hereby repealed.
Sec. 27. The state treasurer shall transfer any balance remaining unexpended on June 30, 1997, in the revolving fund to finance capital improvements to community water systems to the account for the revolving fund created pursuant to section 16 of this act.
Sec. 28. 1. There is hereby appropriated from the state general fund to the health division of the department of human resources the sum of $750,000 to carry out the provisions of sections 1 to 24, inclusive, of this act.
2. Any remaining balance of the appropriation must not be committed for expenditure after June 30, 1999, and reverts to the state general fund as soon as all payments of money committed have been made.
Sec. 29. This act becomes effective upon passage and approval or on June 30, 1997, whichever occurs earlier.
LEADLINES OF REPEALED SECTIONS
349.970Definitions.
349.971Program to provide loans to suppliers of water.
349.972Powers and duties of board for financing water projects: Administration of program; adoption of regulations; imposition of administrative fee.
349.973Loans limited to systems in operation on July 3, 1991; preference for smaller systems; sole discretion of board to make loans; administration of federal money.
349.974Fund to finance capital improvements to community water systems: Creation; use; payment of claims.
349.975Fund to finance capital improvements to community water systems: Deposit of money; interest and income credited to fund.
349.976Revenue bonds.
349.978Applicability of certain provisions governing financing of water projects.