Section 663.120 Safe Drinking Water Act Requirements

TITLE 35: ENVIRONMENTAL PROTECTION

SUBTITLE F: PUBLIC WATER SUPPLIES

CHAPTER II: ENVIRONMENTAL PROTECTION AGENCY

PART 663 PROCEDURES FOR ISSUING LOANS FROM THE PUBLIC WATER SUPPLY LOAN PROGRAM TO PROVIDE FUNDING FOR LEAD SERVICE LINE REPLACEMENT

SECTION 663.120 SAFE DRINKING WATER ACT REQUIREMENTS

Section 663.120  Safe Drinking Water Act Requirements

a)         The Public

Water Supply Loan Program is administered by the Agency in accordance with the Safe

Drinking Water Act and the Illinois Environmental Protection Act.

b)         The LSLR

Capitalization Grant Agreement between the Agency and USEPA contains or

incorporates by reference the following:

1)         the

Operating Agreement between USEPA and the Agency that contains the

organization, administrative framework, and procedures of the PWSLP that are

not expected to change annually;

2)         the

Agency's Intended Use Plan;

3)         agreed

upon payment schedule between USEPA and the Agency;

4)         the

Agency's State environmental review process; and

5)         the

Agency's agreement to the following:

A)        to

accept grant payments in accordance with a negotiated payment schedule;

B)        to

deposit into the Fund an amount that the State is obligated to match;

C)        to

make binding commitments in an amount equal to the amount of each

capitalization grant payment and accompanying State match that is deposited

into the Fund within one year after the receipt of each grant payment;

D)        to

expend all funds in an expeditious and timely manner;

E)        to

first use funds equaling the amount of the grant, all repayments of principal

and payments of interest on the initial loans from the grant, and the State

match to assure maintenance of progress, as determined by the Governor, toward

compliance with national primary drinking water regulations applicable under SDWA

section 1412 (42 U.S.C

l funds in an expeditious and timely manner;

E)        to

first use funds equaling the amount of the grant, all repayments of principal

and payments of interest on the initial loans from the grant, and the State

match to assure maintenance of progress, as determined by the Governor, toward

compliance with national primary drinking water regulations applicable under SDWA

section 1412 (42 U.S.C. 300g-1) or otherwise significantly further the public

health protection objectives of the SDWA;

F)         to

comply with the USEPA general assistance regulations in 2 CFR Part 1500 and the

specific conditions of the capitalization grant;

G)        to commit

or expend each quarterly grant payment in accordance with State laws and

procedures regarding the commitment or expenditure of revenue;

H)        to use

accounting, audit, and fiscal procedures conforming to generally accepted

government accounting standards;

I)         to

require recipients under PWSLP to maintain projects and accounts in accordance

with generally accepted government accounting standards, including standards

relating to the reporting of infrastructure assets;

J)         to

complete and submit a biennial report that describes how it has met the goals

and objectives of the previous two fiscal years as stated in the Intended Use

Plans and capitalization grant agreements;

K)        to

establish, maintain, invest and credit the Fund with repayments so that the

fund balance will be available in perpetuity for activities under the SDWA;

L)        to use

fees charged by the Agency to the recipients of assistance that are considered

as program income for the purpose of financing of the cost of administering the

PWSLP or financing projects or activities eligible for assistance under this

Part;

M)       to an

annual audit of the PWSLP in accordance with the auditing procedures of the

General Accounting Office (31 U.S.C

he SDWA;

L)        to use

fees charged by the Agency to the recipients of assistance that are considered

as program income for the purpose of financing of the cost of administering the

PWSLP or financing projects or activities eligible for assistance under this

Part;

M)       to an

annual audit of the PWSLP in accordance with the auditing procedures of the

General Accounting Office (31 U.S.C. 75);

N)        to

provide USEPA with documentation demonstrating that the Agency has adequate

personnel and resources to establish and manage the PWSLP;

O)        to

promptly deposit PWSLP funds into appropriate accounts as follows:

i)          deposit

the portion of the capitalization grant to be used for projects into the Fund;

ii)         maintain

separate and identifiable accounts for the portion of the capitalization grant

to be used for set-aside activities;

iii)        deposit

net bond proceeds, interest earnings, and repayments into the Fund; and

iv)        deposit

any fees, which include interest earned on fees, into the Fund or into separate

and identifiable accounts;

P)         to

adopt policies and procedures to assure that loan recipients have a dedicated source

of revenue for repayment of loans, or in the case of privately-owned systems,

assure that recipients demonstrate that there is adequate security to assure

repayment of loans;

Q)        to use

all funds in accordance with an Intended Use Plan that was prepared after

providing for public review and comment;

R)        to

comply with all applicable federal cross-cutting authorities; and

S)         to

demonstrate how the Agency is complying with the requirements of capacity

development authority, capacity development strategy, and operator

certification program provisions in order to avoid withholdings of funds under

40 CFR 35.3515(b)(1)(i) through (b)(1)(iii).

c)         Intended Use Plan

1)         After

public review and comment, the Agency must annually prepare an Intended Use

Plan and submit that plan to USEPA

is complying with the requirements of capacity

development authority, capacity development strategy, and operator

certification program provisions in order to avoid withholdings of funds under

40 CFR 35.3515(b)(1)(i) through (b)(1)(iii).

c)         Intended Use Plan

1)         After

public review and comment, the Agency must annually prepare an Intended Use

Plan and submit that plan to USEPA.

2)         The

Intended Use Plan must include:

A)        a

priority system for ranking individual projects for funding that provides

sufficient detail for the public and USEPA to readily understand the criteria

used for ranking;

B)        a listing

and description of projects on the Project Priority List to be provided

financial assistance and the terms of the financial assistance;

C)        a

description of the criteria and methods that the Agency will use to distribute

all funds including:

i)          the

process and rationale for distribution of funds between the Fund and set-aside

accounts;

ii)         the

process for selection of projects to receive assistance;

iii)        the

rationale for providing different types of assistance and terms, including the

method used to determine the market rate and the interest rate;

iv)        the

types, rates, and uses of fees assessed on assistance recipients; and

v)         a

description of the financial planning process undertaken for the Fund and the

impact of funding decisions on the long-term financial health of the fund;

D)        a

description of the sources and uses of PWSLP funds including: the total dollar

amount in the fund; the total dollar amount available for loans, including

loans to small systems; the amount of loan subsidies that may be made available

to disadvantaged communities; the total dollar amount in set-aside accounts,

including the amount of funds or authority reserved; and the total dollar

amount in fee accounts;

E)        the

short and long term goals and objectives of the PWSLP;

F)         identification

of the amount of fund

e for loans, including

loans to small systems; the amount of loan subsidies that may be made available

to disadvantaged communities; the total dollar amount in set-aside accounts,

including the amount of funds or authority reserved; and the total dollar

amount in fee accounts;

E)        the

short and long term goals and objectives of the PWSLP;

F)         identification

of the amount of funds the Agency is electing to use for set-aside activities.

The Agency must also describe how it intends to use these funds, provide a

general schedule for their use, and describe the expected accomplishments that

will result from their use;

G)        for

loans made in accordance with the local assistance and other State programs set

aside under 40 CFR 35.3535(e)(1)(i) and (e)(1)(ii), the Intended Use Plan must,

at a minimum, describe the process by which recipients will be selected and how

funds will be distributed among them;

H)        a

description of how the Agency's disadvantaged community program will operate

including:

i)          the

Agency's definition in Section 663.110(b) of what constitutes a disadvantaged

community;

ii)         a

description of affordability criteria used to determine the amount of

disadvantaged assistance;

iii)        the

amount and type of loan subsidies that may be made available to disadvantaged

communities under this Part; and

iv)        to

the maximum extent practicable, an identification of projects that will receive

disadvantaged assistance and the respective amounts;

I)         If

the Agency decides to transfer funds between the PWSLP and the Water Pollution

Control Loan Program (WPCLP), the Intended Use Plans for each program must

describe the process, including:

i)          the

total amount and type of funds being transferred during the period covered by

the Intended Use Plan;

ii)         the

total amount of authority being reserved for future transfer, including the

authority reserved from previous years; and

iii)        the

impact of the transfer on the am

ogram (WPCLP), the Intended Use Plans for each program must

describe the process, including:

i)          the

total amount and type of funds being transferred during the period covered by

the Intended Use Plan;

ii)         the

total amount of authority being reserved for future transfer, including the

authority reserved from previous years; and

iii)        the

impact of the transfer on the amount of funds available to finance projects and

set-asides and the long-term impact on the Fund;

J)         If

the Agency decides to cross-collateralize fund assets of the PWSLP and WPCLP,

the Intended Use Plans for the PWSLP and the WPCLP must describe the process,

including:

i)          the

type of monies that will be used as security;

ii)         how

monies will be used in the event of a default; and

iii)        whether

or not monies used for a default in the other program will be repaid, and, if

they will not be repaid, what will be the cumulative impact on the funds.

3)         The

priority list of projects, and use of funds, may be amended during the year

under provisions established in the Intended Use Plan as long as additions or

other substantive changes to the list, except projects funded on an emergency

basis, go through public review and comment.