Introduced Version
HOUSE BILL No. 1824
_____
DIGEST OF INTRODUCED BILL
Citations Affected:
IC 13-11-2
;
IC 13-18-13.
Synopsis: Wastewater revolving loan fund. Redefines "participant" for
purposes of financial assistance agreements and the wastewater
revolving loan program. Enables a private entity to participate in the
wastewater revolving loan program in connection with a nonpoint
source pollution reduction project. Makes conforming amendments.
Effective: July 1, 2001.
Weinzapfel
January 17, 2001, read first time and referred to Committee on Environmental Affairs.
Introduced
First Regular Session 112th General Assembly (2001)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in
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Additions: Whenever a new statutory provision is being enacted (or a new constitutional
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NEW will appear in that style type in the introductory clause of each SECTION that adds
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Conflict reconciliation: Text in a statute in
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HOUSE BILL No. 1824
A BILL FOR AN ACT to amend the Indiana Code concerning
environmental law.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 13-11-2-83; (01)IN1824.1.1. -->
SECTION 1.
IC 13-11-2-83
, AS AMENDED BY P.L.132-1999,
SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2001]: Sec. 83. (a) "Financial assistance agreement", for
purposes of IC 13-18-13, refers to an agreement between:
(1) the budget agency; and
(2) a political subdivision; participant;
establishing the terms and conditions of a loan or other financial
assistance, including forgiveness of principal if allowed under federal
law, by the state to the political subdivision. participant.
(b) "Financial assistance agreement", for purposes of
IC 13-19-5
,
means an agreement between the authority and a political subdivision
that:
(1) is approved by the budget agency; and
(2) establishes the terms and conditions of a loan or other
financial assistance by the state to the political subdivision.
(c) "Financial assistance agreement", for purposes of IC 13-18-21,
refers to an agreement between:
(1) the budget agency; and
(2) a participant;
establishing the terms and conditions of a loan or other financial
assistance, including forgiveness of principal if allowed under federal
law, by the state to the participant.
SOURCE: IC 13-11-2-142.5; (01)IN1824.1.2. -->
SECTION 2.
IC 13-11-2-142.5
IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2001]: Sec. 142.5. "Nonpoint source", for
purposes of
section 151.1 of this chapter
and
IC 13-18-13
, means:
(1) a pollution source that is not controlled by effluent
limitations established under Sections 301, 302, or 402 of the
federal Water Pollution Control Act; or
(2) a pollution source identified in a state management plan
produced according to Section 319 of the federal Water
Pollution Control Act;
that is not traceable to a discrete identifiable origin.
SOURCE: IC 13-11-2-151.1; (01)IN1824.1.3. -->
SECTION 3.
IC 13-11-2-151.1
, AS ADDED BY P.L.132-1999,
SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2001]: Sec. 151.1. (a) "Participant", for purposes of
section
83(a) of this chapter
and
IC 13-18-13
, means:
(1) a political subdivision; or
(2) for a nonpoint source pollution reduction project, a
private entity.
(b) "Participant", for purposes of section 83(c) of this chapter and
IC 13-18-21
, means:
(1) a political subdivision; or
(2) any other owner or operator of a public water system.
SOURCE: IC 13-18-13-2; (01)IN1824.1.4. -->
SECTION 4.
IC 13-18-13-2
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 2. (a) The wastewater
revolving loan fund is established to provide money for loans and other
financial assistance to or for the benefit of political subdivisions
participants under this chapter.
(b) The general assembly may appropriate money to the fund.
Grants or gifts of money to the fund from the federal government or
other sources and the proceeds of the sale of:
(1) gifts to the fund; and
(2) loans and other financial assistance, as provided in sections 10
through 14 of this chapter;
shall be deposited in the fund.
(c) Repayments of loans and other financial assistance, including
interest, premiums, and penalties, shall be deposited in the fund.
(d) The treasurer of state shall invest the money in the fund that is:
(1) not currently needed to meet the obligations of the fund; and
(2) not invested under subsection (e);
in the same manner as other public money may be invested. Earnings
that accrue from these investments shall be deposited in the fund.
(e) As an alternative to subsection (d), the budget agency may invest
or cause to be invested all or a part of the fund in a fiduciary account
or accounts with a trustee that is a financial institution.
Notwithstanding any other law, any investment may be made by the
trustee in accordance with at least one (1) trust agreement or indenture.
A trust agreement or indenture may permit disbursements by the trustee
to:
(1) the department;
(2) the budget agency;
(3) a political subdivision; participant;
(4) the Indiana bond bank; or
(5) any person to which the department, the budget agency, or a
political subdivision participant is obligated, as provided in the
trust agreement or indenture.
The state board of finance must approve any trust agreement or
indenture before execution.
(f) Except as provided in the federal Clean Water Act, the cost of
administering the fund may be paid from the fund.
(g) All money accruing to the fund is appropriated continuously for
the purposes specified in this chapter.
(h) Money in the fund does not revert to the state general fund at the
end of a state fiscal year.
SOURCE: IC 13-18-13-3; (01)IN1824.1.5. -->
SECTION 5.
IC 13-18-13-3
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 3. Money in the fund
may be used to do the following:
(1) Provide loans or other financial assistance to political
subdivisions participants for:
(A) the planning, designing, construction, renovation,
improvement, or expansion of wastewater collection and
treatment systems and other activities necessary or convenient
to complete these tasks; or
(B) a nonpoint source pollution reduction project.
(2) Pay the cost of administering the fund and the program.
(3) Conduct all other activities that are permitted by the federal
Clean Water Act.
SOURCE: IC 13-18-13-6; (01)IN1824.1.6. -->
SECTION 6.
IC 13-18-13-6
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 6. The budget agency
shall do the following:
(1) Manage and implement the financial aspects of the program
and supplemental program.
(2) Cooperate with the department in the administration and
management of the program and supplemental program.
(3) If not accepted and held by the department, accept and hold
any letter of credit from the federal government through which the
state receives grant payments for the program and disbursements
to the fund.
(4) Be the point of contact with political subdivisions
participants and other interested persons in preparing and
providing program information.
(5) Negotiate, jointly with the department, the negotiable aspects
of each financial assistance agreement.
(6) Prepare or cause to be prepared each financial assistance
agreement.
(7) Sign each financial assistance agreement.
(8) Conduct or cause to be conducted an evaluation as to the
financial ability of each political subdivision participant to pay
the loan or other financial assistance and other obligations
evidencing the loans or other financial assistance, if required to
be paid, and comply with the financial assistance agreement in
accordance with the terms of the agreement.
(9) Prepare, jointly with the department, annual reports
concerning the following:
(A) The fund.
(B) The program.
(C) The supplemental fund.
(D) The supplemental program.
(10) Submit the reports prepared under subdivision (9) to the
governor and the general assembly.
(11) Enter into memoranda of understanding with the department
concerning the administration and management of the following:
(A) The fund.
(B) The program.
(C) The supplemental fund.
(D) The supplemental program.
SOURCE: IC 13-18-13-8; (01)IN1824.1.7. -->
SECTION 7.
IC 13-18-13-8
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 8. (a) The department
and the budget agency may:
(1) provide services to a political subdivision participant in
connection with a loan or other financial assistance, including
advisory and other services; and
(2) charge a fee for services provided.
(b) The department and the budget agency may charge a fee for
costs and services incurred in the review or consideration of an
application for a proposed loan or other financial assistance to or for
the benefit of a political subdivision participant under this chapter,
regardless of whether the application is approved or rejected.
(c) A political subdivision participant may pay fees charged under
this section.
SOURCE: IC 13-18-13-9; (01)IN1824.1.8. -->
SECTION 8.
IC 13-18-13-9
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 9. (a) The department
shall use a priority ranking system to recommend loans or other
financial assistance from the fund. The department shall develop the
priority ranking system to achieve optimum water quality consistent
with the water quality goals of the state and the federal Clean Water
Act.
(b) Based on the recommendations made under subsection (a), the
budget agency may make loans and provide other financial assistance
from the fund to or for the benefit of political subdivisions.
participants.
SOURCE: IC 13-18-13-10; (01)IN1824.1.9. -->
SECTION 9.
IC 13-18-13-10
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 10. The budget agency
may make loans or provide other financial assistance from the fund to
or for the benefit of a
political subdivision participant under the
following conditions:
(1) The loan or other financial assistance must be used:
(A) for planning, designing, constructing, renovating,
improving, or expanding wastewater collection and treatment
systems and other activities necessary or convenient to
complete these tasks;
(B) to:
(i) establish reserves or sinking funds; or
(ii) provide interest subsidies;
(C) to pay financing charges, including interest on the loan or
other financial assistance during construction and for a
reasonable period after the completion of construction;
or
(D) to pay the following:
(i) Consultant, advisory, and legal fees.
(ii) Any other costs or expenses necessary or incident to the
loan, other financial assistance, or the administration of the
fund and the program;
or
(E) for nonpoint source pollution reduction projects.
(2) Subject to section 15 of this chapter, upon recommendation of
the budget agency the state board of finance shall establish the
interest rate or parameters for establishing the interest rate on
each loan, including parameters for establishing the amount of
interest subsidies.
(3) The budget agency shall establish the terms and conditions
that the budget agency considers necessary or convenient to:
(A) make loans; or
(B) provide other financial assistance under this chapter.
SOURCE: IC 13-18-13-11; (01)IN1824.1.10. -->
SECTION 10.
IC 13-18-13-11
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 11. A loan or other
financial assistance from the fund must be accompanied by the
following:
(1) All papers and opinions required by the budget agency.
(2) Unless otherwise provided by rule, the following:
(A) An approving opinion of nationally recognized bond
counsel if required by the budget agency.
(B) A certification and guarantee of signatures.
(C) A certification that, as of the date of the loan or other
financial assistance:
(i) no litigation is pending challenging the validity of or
entry into the loan or other financial assistance or any
security for the loan or other financial assistance; or
(ii) if litigation is pending, the litigation will not have a
material adverse effect on the validity of the loan or other
financial assistance or any security for the loan or other
financial assistance.
(D) If litigation is pending, as an alternative to the certification
described in clause (C), an opinion of legal counsel that the
litigation will not have a material adverse effect on the validity
of the loan or other financial assistance.
SOURCE: IC 13-18-13-12; (01)IN1824.1.11. -->
SECTION 11.
IC 13-18-13-12
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 12. A political
subdivision participant receiving a loan or other financial assistance
from the fund shall enter into a financial assistance agreement. A
financial assistance agreement is a valid, binding, and enforceable
agreement of the political subdivision. participant.
SOURCE: IC 13-18-13-13; (01)IN1824.1.12. -->
SECTION 12.
IC 13-18-13-13
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 13. The budget agency
may sell loans or evidences of other financial assistance and other
obligations of
political subdivisions participants evidencing the loans
or other financial assistance from the fund periodically at any price and
on terms acceptable to the budget agency. Proceeds of sales under this
section shall be deposited in the fund.
SOURCE: IC 13-18-13-14; (01)IN1824.1.13. -->
SECTION 13.
IC 13-18-13-14
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 14. (a) The budget
agency may pledge loans or evidences of other financial assistance and
other obligations of political subdivisions participants evidencing the
loans or other financial assistance from the fund to secure:
(1) other loans or financial assistance from the fund to or for the
benefit of political subdivisions; participants; or
(2) other loans or financial assistance from the supplemental fund
to or for the benefit of political subdivisions; participants;
to the extent permitted by the federal Clean Water Act.
(b) The budget agency must approve the terms of a pledge under
this section.
(c) Notwithstanding any other law, a pledge of property made by the
department and the budget agency under this section or
IC 4-23-21-8
(e)
(before its repeal) is binding from the time the pledge is made.
Revenues, other money, or other property pledged and thereafter
received are immediately subject to the lien of the pledge without any
further act. The lien of a pledge is binding against all parties having
claims of any kind in tort, contract, or otherwise against:
(1) the department;
(2) the budget agency; or
(3) the fund;
regardless of whether the parties have notice of any lien.
(d) A resolution, an indenture, or other instrument by which a
pledge is created does not have to be filed or recorded, except in the
records of the budget agency.
(e) Action taken to:
(1) enforce a pledge under this section or
IC 4-23-21-8
(e) (before
its repeal); and
(2) realize the benefits of the pledge;
is limited to the property pledged.
(f) A pledge under this section or
IC 4-23-21-8
(e) (before its repeal)
does not create a liability or indebtedness of the state.
SOURCE: IC 13-18-13-15; (01)IN1824.1.14. -->
SECTION 14.
IC 13-18-13-15
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 15. (a) In
recommending to the state board of finance the interest rate or
parameters for establishing the interest rate on each loan, as provided
in section 10 of this chapter, the budget agency shall recommend and
the state board of finance shall establish the following:
(1) A base or subsidized interest rate that:
(A) would be payable by
political subdivisions participants
other than political subdivisions participants described in
subdivision (2) or (3); and
(B) may provide for the payment of no interest during all or a
part of the estimated construction period for the wastewater
treatment system.
(2) A base reduced or more heavily subsidized interest rate, that:
(A) would be payable by political subdivisions participants
whose median household incomes are:
(i) not more than the state nonmetropolitan median
household income, as determined and reported by the
federal government periodically; and
(ii) not less than eighty-one percent (81%) of the state
nonmetropolitan median household income; and
(B) may provide for the payment of no interest during all or a
part of the estimated construction period for the wastewater
collection and treatment system.
(3) A base zero (0) or most heavily subsidized interest rate that:
(A) would be payable on loans made to political subdivisions
participants whose median household incomes are not more
than eighty percent (80%) of the state nonmetropolitan
household income; and
(B) may provide for the payment of no interest during all or a
part of the estimated construction period of the wastewater
collection and treatment system.
(b) The budget agency, in recommending to the state board of
finance the interest rate or parameters for establishing the interest rate
on each loan under section 10 of this chapter, shall take into account
the following:
(1) Credit risk.
(2) Environmental enforcement and protection.
(3) Affordability.
(4) Other fiscal factors the budget agency considers relevant.
(c) In enacting this section, the general assembly understands that,
in financing the program, the Indiana bond bank issued at the budget
agency's request, and will continue to issue at the budget agency's
request:
(1) revenue bonds payable from and secured by political
subdivisions; participants; and
(2) loan payments made by and loan payments made to political
subdivisions. participants.
It is not the intent of the general assembly to cause the budget agency
or the state board of finance to establish interest rates on loans or
parameters for establishing interest rates that would cause the bond
bank's revenue bonds to be insecure or otherwise negatively affect the
ability of the state to continue to finance the program.
SOURCE: IC 13-18-13-16; (01)IN1824.1.15. -->
SECTION 15.
IC 13-18-13-16
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 16. The budget agency
shall require that a political subdivision receiving participant that
owns or operates a wastewater collection and treatment system and
that receives a loan or other financial assistance under this chapter to
establish under applicable statute and maintain sufficient user charges
or other charges, fees, taxes, special assessments, or revenues available
to the political subdivision participant to:
(1) operate and maintain the wastewater collection and treatment
system; and
(2) pay the obligations of the system.
SOURCE: IC 13-18-13-17; (01)IN1824.1.16. -->
SECTION 16.
IC 13-18-13-17
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 17. (a) Notwithstanding
any other law and if provided in a financial assistance agreement, any
state department or state agency, including the treasurer of state:
(1) that is the custodian of money payable to a political
subdivision, participant, other than money in payment for goods
or services provided by the political subdivision; participant; and
(2) after written notice from the budget director that the political
subdivision participant is in default on the payment of principal
or interest on a loan or evidence of other financial assistance;
may withhold payment of money from that political subdivision
participant and pay over the money to the budget agency or the
Indiana bond bank, as directed by the budget director, for the purpose
of curing the default.
(b) The withholding of payment from the political subdivision
participant and payment to:
(1) the budget agency; or
(2) the Indiana bond bank;
as applicable, may not adversely affect the validity of the defaulted
loan or other financial assistance.
SOURCE: IC 13-18-13-19; (01)IN1824.1.17. -->
SECTION 17.
IC 13-18-13-19
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 19. (a) Notwithstanding
any other law, a
political subdivision participant may borrow money
from the budget agency by negotiating a loan or other financial
assistance directly and without complying with requirements for the
competitive sale of bonds, notes, or other obligations or evidences of
indebtedness. A
political subdivision participant shall observe any
existing contractual commitments to bondholders or other persons
when entering into a financial assistance agreement.
(b) Notwithstanding any other law, a political subdivision
participant may issue and sell its notes, the principal and accrued
interest on which shall be paid with proceeds from the issuance of its
bonds or other available money at the time the notes are due. The notes
must be issued pursuant to a resolution or ordinance and the proceeds
must be used to carry out the purposes specified in this chapter.
(c) A political subdivision participant that issues notes under
subsection (b) or
IC 4-23-21-13
(before its repeal) may renew or extend
the notes periodically on terms agreed to with the budget agency, and
the budget agency may purchase and sell the renewed or extended
notes. Accrued interest on the date of renewal or extension may be paid
or added to the principal amount of the note being renewed or
extended.
(d) The notes issued by a political subdivision participant under
subsection (b), including any renewals or extensions, must mature:
(1) in the amounts; and
(2) at the times not exceeding four (4) years from the date of
original issuance;
that are agreed to by the political subdivision participant and the
budget agency.
(e) Compliance with subsection (b) constitutes full authority for a
political subdivision participant to issue its notes and sell the notes to
the department and the budget agency, and the political subdivision
participant is not required to comply with any other law applicable to
the authorization, approval, issuance, and sale of its notes. These notes
are:
(1) valid and binding obligations of the political subdivision;
participant;
(2) enforceable in accordance with the terms of the notes; and
(3) payable solely from the sources specified in the resolution or
ordinance authorizing the issuance of the notes.
(f) If the political subdivision participant issues bonds, all or part
of the proceeds of which will be used to pay the notes issued under
subsection (b), neither:
(1) the provisions of this section; nor
(2) the actual issuance by a political subdivision participant of
notes under subsection (b);
relieves the political subdivision participant of the obligation to
comply with the statutory requirements for the issuance of bonds.
SOURCE: IC 13-18-13-20; (01)IN1824.1.18. -->
SECTION 18.
IC 13-18-13-20
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 20. (a) As an
alternative to making loans or providing other financial assistance to
political subdivisions, participants, the budget agency may use the
money in the fund or the supplemental fund to provide a leveraged loan
program and other financial assistance programs permitted by the
federal Clean Water Act to or for the benefit of political subdivisions,
participants, including using money in the fund or the supplemental
fund to enhance the obligations of political subdivisions participants
issued for the purposes of this chapter by:
(1) granting money to:
(A) be deposited in:
(i) a capital or reserve fund established under IC 5-1.5 or
another statute or a trust agreement or indenture as
contemplated by IC 13-18-13-2(e); or
(ii) an account established within such a fund; or
(B) provide interest subsidies;
(2) paying bond insurance premiums, reserve insurance
premiums, or credit enhancement, liquidity support, remarketing,
or conversion fees, or other similar fees or costs for obligations of
a political subdivision participant or for bonds issued by the
Indiana bond bank if credit market access is improved or interest
rates are reduced; or
(3) guaranteeing all or a part of obligations issued by political
subdivisions participants or of bonds issued by the Indiana bond
bank.
(b) The budget agency may enter into any agreements with the
Indiana bond bank or political subdivisions participants to carry out
the purposes specified in this chapter.
(c) A guarantee of obligations or bonds under subsection (a)(3) must
be limited to money in the fund and the supplemental fund. A
guarantee under subsection (a)(3) does not create a liability or
indebtedness of the state.
SOURCE: ; (01)IN1824.1.19. -->
SECTION 19. [EFFECTIVE JULY 1, 2001]
(a) On or before
December 31, 2002, the water pollution control board and the
budget agency shall jointly amend:
(1) 85 IAC 1-1-1 through 85 IAC 2-14-1; and
(2) 327 IAC 13;
to reflect the amendments to IC 13-11 and IC 13-18 by this act.
(b) This SECTION expires January 1, 2003.