99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB3559
 
Introduced , by Rep. Sheri L Jesiel
 
SYNOPSIS AS INTRODUCED:

      
415 ILCS 5/19.1 from Ch. 111 1/2, par. 1019.1
415 ILCS 5/19.3 from Ch. 111 1/2, par. 1019.3
415 ILCS 5/19.4 from Ch. 111 1/2, par. 1019.4

 Amends the Environmental Protection Act. Provides that local taxing authorities may receive grants under the Water Pollution Control Loan Program. Effective immediately.



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A BILL FOR
 


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1 AN ACT concerning safety.


2 Be it enacted by the People of the State of Illinois,

3represented in the General Assembly:



4 Section 5. The Environmental Protection Act is amended by 
5changing Sections 19.1, 19.3, and 19.4 as follows:




6 (415 ILCS 5/19.1) (from Ch. 111 1/2, par. 1019.1)



7 Sec. 19.1. Legislative findings. The General Assembly 
8finds:

9  (a) that local government units and local taxing 
10 authorities require assistance in financing the

11 construction of water treatment works and projects in order 
12 to comply with the
State's program of environmental 
13 protection and federally mandated
requirements;

14  (b) that the federal Water Quality Act of 1987 provides 
15 an important
source of grant awards to the State for 
16 providing assistance to local
government units and local 
17 taxing authorities through the Water Pollution Control 
18 Loan Program;

19  (c) that local government units, local taxing 
20 authorities, and privately owned community water
supplies 
21 require assistance in financing the construction of their 
22 public
water supplies to comply with State and federal 
23 drinking water laws and
regulations;

 
 
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1  (d) that the federal Safe Drinking Water Act ("SDWA"), 
2 P.L. 93-523, as now or hereafter amended, provides an 
3 important source of
capitalization grant awards to the 
4 State to provide assistance to local
government units, 
5 local taxing authorities, and privately owned community 
6 water supplies through the
Public Water Supply Loan 
7 Program;

8  (e) that violations of State and federal drinking water 
9 standards
threaten the public interest, safety, and 
10 welfare, which demands that
the Illinois Environmental 
11 Protection Agency expeditiously adopt
emergency rules to 
12 administer the Public Water Supply Loan Program;

13  (f) that the General Assembly agrees with the 
14 conclusions and
recommendations of the "Report to the 
15 Illinois General Assembly on the Issue
of Expanding Public 
16 Water Supply Loan Eligibility to Privately Owned Community

17 Water Supplies", dated August 1998, including the stated 
18 access to the Public
Water Supply Loan Program by the 
19 privately owned public water supplies so that
the long term 
20 integrity and viability of the corpus of the Fund will be

21 assured;

22  (g) that the American Recovery and Reinvestment Act of 
23 2009 provides a source of capitalization grant awards to 
24 the State to provide loans and additional subsidization, 
25 including, but not limited to, forgiveness of principal, 
26 negative interest loans, and grants, to local government 
 
 
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1 units and local taxing authorities through the Water 
2 Pollution Control Loan Program and to local government 
3 units, local taxing authorities, and privately owned 
4 community water supplies through the Public Water Supply 
5 Loan Program; 
6  (h) that expanding eligibility to include publicly 
7 owned municipal storm water projects eligible for 
8 financing as treatment works, as defined under Section 212 
9 of the Federal Water Pollution Control Act, will provide 
10 the Agency with the statutory authority to use moneys in 
11 the Water Pollution Control Loan Program to provide 
12 financial assistance for eligible projects, including 
13 those that encourage green infrastructure, that manage and 
14 treat storm water, and that maintain and restore natural 
15 hydrology by infiltrating, evapotranspiring, and capturing 
16 and using storm water;
17  (i) that in planning projects for which financing will 
18 be sought from the Water Pollution Control Loan Program, 
19 municipalities may benefit from efforts to consider a 
20 project's lifetime costs; the availability of long-term 
21 funding for the construction, operation, maintenance, and 
22 replacement of the project; the resilience of the project 
23 to the effects of climate change; the project's ability to 
24 increase water efficiency; the capacity of the project to 
25 restore natural hydrology or to preserve or restore 
26 landscape features; the cost-effectiveness of the project; 
 
 
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1 and the overall environmental innovativeness of the 
2 project; and
3  (j) that projects implementing a management program 
4 established under Section 319 of the Federal Water 
5 Pollution Control Act may benefit from the creation of a 
6 linked deposit program that would make loans available at 
7 or below market interest rates through private lenders. 
8(Source: P.A. 98-782, eff. 7-23-14.)





9 (415 ILCS 5/19.3) (from Ch. 111 1/2, par. 1019.3)



10 Sec. 19.3. Water Revolving Fund. 

11 (a) There is hereby created within the State Treasury a 
12Water Revolving
Fund, consisting of 3 interest-bearing special 
13programs to be known as the
Water Pollution Control Loan 
14Program, the Public Water Supply Loan Program, and
the Loan 
15Support Program, which shall be used and administered by the 
16Agency.

17 (b) The Water Pollution Control Loan Program shall be used 
18and administered
by the Agency to provide assistance for the 
19following purposes:

20  (1) to accept and retain funds from grant awards, 
21 appropriations,
transfers, and payments of interest and 
22 principal;

23  (2) to make direct loans at or below market interest 
24 rates and to provide additional subsidization, including, 
25 but not limited to, forgiveness of principal, negative 
 
 
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1 interest rates, and grants, to any
eligible local 
2 government unit or local taxing authority to finance the 
3 construction of
treatments works, including storm water 
4 treatment systems that are treatment works, and projects 
5 that fulfill federal State Revolving Fund grant 
6 requirements for a green project reserve;

7  (2.5) with respect to funds provided under the American 
8 Recovery and Reinvestment Act of 2009:
9   (A) to make direct loans at or below market 
10 interest rates to any eligible local government unit or 
11 local taxing authority and to provide additional 
12 subsidization to any eligible local government unit or 
13 local taxing authority, including, but not limited to, 
14 forgiveness of principal, negative interest rates, and 
15 grants;
16   (B) to make direct loans at or below market 
17 interest rates to any eligible local government unit or 
18 local taxing authority to buy or refinance debt 
19 obligations for treatment works incurred on or after 
20 October 1, 2008; and
21   (C) to provide additional subsidization, 
22 including, but not limited to, forgiveness of 
23 principal, negative interest rates, and grants for 
24 treatment works incurred on or after October 1, 2008; 
25  (3) to make direct loans at or below market interest 
26 rates and to provide additional subsidization, including, 
 
 
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1 but not limited to, forgiveness of principal, negative 
2 interest rates, and grants, to any
eligible local 
3 government unit or local taxing authority to buy or 
4 refinance debt obligations for costs
incurred after March 
5 7, 1985, for the construction of treatment works, including 
6 storm water treatment systems that are treatment works, and 
7 projects that fulfill federal State Revolving Fund grant 
8 requirements for a green project reserve;

9  (3.5) to make loans, including, but not limited to, 
10 loans through a linked deposit program, at or below market 
11 interest rates for the
implementation of a management 
12 program established under Section 319 of the
Federal Water 
13 Pollution Control Act, as amended;

14  (4) to guarantee or purchase insurance for local 
15 obligations
where such action would improve credit market 
16 access or reduce interest rates;

17  (5) as a source of revenue or security for the payment 
18 of principal and
interest on revenue or general obligation 
19 bonds issued by the State or any
political subdivision or 
20 instrumentality thereof, if the proceeds of such
bonds will 
21 be deposited in the Fund;

22  (6) to finance the reasonable costs incurred by the 
23 Agency in the
administration of the Fund;

24  (7) to transfer funds to the Public Water Supply Loan 
25 Program; and

26  (8) notwithstanding any other provision of this 
 
 
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1 subsection (b), to provide, in accordance with rules 
2 adopted under this Title, any financial assistance that may 
3 be provided under Section 603 of the Federal Water 
4 Pollution Control Act for any projects eligible for 
5 assistance under subsections (c)(1) or (c)(2) of that 
6 Section or federal rules adopted under those subsections. 
7 (c) The Loan Support Program shall be used and administered 
8by the Agency
for the following purposes:

9  (1) to accept and retain funds from grant awards and 
10 appropriations;

11  (2) to finance the reasonable costs incurred by the 
12 Agency in the
administration of the Fund, including 
13 activities under Title III of this
Act, including the 
14 administration of the State
construction grant program;

15  (3) to transfer funds to the Water Pollution Control 
16 Loan
Program and the Public Water Supply Loan Program;

17  (4) to accept and retain a portion of the loan 
18 repayments;

19  (5) to finance the development of the low interest loan

20 programs for water pollution control and public water 
21 supply projects;

22  (6) to finance the reasonable costs incurred by the 
23 Agency to provide
technical assistance for public water 
24 supplies; and

25  (7) to finance the reasonable costs incurred by the 
26 Agency for
public water system supervision programs, to 
 
 
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1 administer or provide for
technical assistance through 
2 source water protection programs, to develop and
implement 
3 a capacity development strategy, to delineate and assess 
4 source water
protection areas, and for an operator 
5 certification program in accordance with
Section 1452 of 
6 the federal Safe Drinking Water Act.

7 (d) The Public Water Supply Loan Program shall be used and 
8administered by
the Agency to provide assistance to local 
9government units, local taxing authority, and privately owned

10community water supplies for public water
supplies for the 
11following public purposes:

12  (1) to accept and retain funds from grant awards, 
13 appropriations,
transfers, and payments of interest and 
14 principal;

15  (2) to make direct loans at or below market interest 
16 rates and to provide additional subsidization, including, 
17 but not limited to, forgiveness of principal, negative 
18 interest rates, and grants, to any eligible
local 
19 government unit, eligible local taxing authority, or to any 
20 eligible privately owned community water supply
to finance 
21 the construction of water supplies and projects that 
22 fulfill federal State Revolving Fund grant requirements 
23 for a green project reserve;

24  (2.5) with respect to funds provided under the American 
25 Recovery and Reinvestment Act of 2009: 
26   (A) to make direct loans at or below market 
 
 
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1 interest rates to any eligible local government unit, 
2 eligible local taxing authority, or to any eligible 
3 privately owned community water supply, and to provide 
4 additional subsidization to any eligible local 
5 government unit, eligible local taxing authority, or 
6 to any eligible privately owned community water 
7 supply, including, but not limited to, forgiveness of 
8 principal, negative interest rates, and grants; 
9   (B) to buy or refinance the debt obligation of a 
10 local government unit or local taxing authority for 
11 costs incurred on or after October 1, 2008; and 

12   (C) to provide additional subsidization, 
13 including, but not limited to, forgiveness of 
14 principal, negative interest rates, and grants for a 
15 local government unit or local taxing authority for 
16 costs incurred on or after October 1, 2008; 
17  (3) to make direct loans at or below market interest 
18 rates and to provide additional subsidization, including, 
19 but not limited to, forgiveness of principal, negative 
20 interest rates, and grants, to any eligible local 
21 government unit, eligible local taxing authority, or to any 
22 eligible privately owned community water supply to buy or 
23 refinance debt obligations for
costs incurred on or after 
24 July 17, 1997, for the construction of water supplies and 
25 projects that fulfill federal State Revolving Fund 
26 requirements for a green project reserve;

 
 
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1  (4) to guarantee local obligations where such action 
2 would improve credit
market access or reduce interest 
3 rates;

4  (5) as a source of revenue or security for the payment 
5 of principal and
interest on revenue or general obligation 
6 bonds issued by the State or any
political subdivision or 
7 instrumentality thereof, if the proceeds of such
bonds will 
8 be deposited into the Fund; and

9  (6) to transfer funds to the Water Pollution Control 
10 Loan Program.

11 (e) The Agency is designated as the administering agency of 
12the Fund.
The Agency shall submit to the Regional Administrator 
13of the United States
Environmental Protection Agency an 
14intended use plan which outlines the
proposed use of funds 
15available to the State. The Agency shall take all
actions 
16necessary to secure to the State the benefits of the federal

17Water Pollution Control Act and the federal Safe Drinking Water 
18Act, as now
or hereafter amended.

19 (f) The Agency shall have the power to enter into 
20intergovernmental
agreements with the federal government or 
21the State, or any instrumentality
thereof, for purposes of 
22capitalizing the Water Revolving Fund.
Moneys on deposit in the 
23Water Revolving Fund may be used for the
creation of reserve 
24funds or pledged funds that secure the obligations
of repayment 
25of loans made pursuant to this Section. For the purpose
of 
26obtaining capital for deposit into the Water Revolving Fund, 
 
 
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1the
Agency may also enter into agreements with financial 
2institutions and other
persons for the purpose of selling loans 
3and developing a secondary market
for such loans. The Agency 
4shall have the power to create and establish such
reserve funds 
5and accounts as may be necessary or desirable to accomplish its

6purposes under this subsection and to allocate its available 
7moneys into such
funds and accounts. Investment earnings on 
8moneys held in the Water Revolving
Fund, including any reserve 
9fund or pledged fund, shall be deposited into the
Water 
10Revolving Fund.

11(Source: P.A. 98-782, eff. 7-23-14.)





12 (415 ILCS 5/19.4) (from Ch. 111 1/2, par. 1019.4)



13 Sec. 19.4. Regulations; priorities. 

14 (a) The Agency shall have the authority to promulgate

15regulations for the administration of this Title, including, 
16but not limited to, rules setting forth procedures and criteria 
17concerning loan
applications and the issuance of loans. For 
18loans to units of local government and local taxing 
19authorities, the regulations shall
include, but need not be 
20limited to, the following elements:

21  (1) loan application requirements;

22  (2) determination of credit worthiness of the loan 
23 applicant;

24  (3) special loan terms, as necessary, for securing the 
25 repayment of the
loan;

 
 
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1  (4) assurance of payment;

2  (5) interest rates;

3  (6) loan support rates;

4  (7) impact on user charges;

5  (8) eligibility of proposed construction;

6  (9) priority of needs;

7  (10) special loan terms for disadvantaged communities;

8  (11) maximum limits on annual distributions of funds to 
9 applicants
or groups of applicants;

10  (12) penalties for noncompliance with loan 
11 requirements and conditions,
including stop-work orders, 
12 termination, and recovery of loan funds; and

13  (13) indemnification of the State of Illinois and the 
14 Agency by the loan
recipient.

15 (b) The Agency shall have the authority to promulgate 
16regulations to set
forth procedures and criteria concerning 
17loan applications for loan recipients
other than units of local 
18government. In addition to all of the elements
required for 
19units of local government under subsection (a), the regulations

20shall include, but need not be limited to, the following 
21elements:

22  (1) types of security required for the loan;

23  (2) types of collateral, as necessary, that can be 
24 pledged for the loan;
and

25  (3) staged access to fund privately owned community 
26 water supplies.

 
 
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1 (c) Rules adopted under this Title shall also include, but 
2shall not be limited to, criteria for prioritizing the issuance 
3of loans under this Title according to applicant need.
Priority 
4in making loans from the Public Water Supply Loan Program must 
5first
be given to local government units, local taxing 
6authorities, and privately owned community water supplies
that 
7need to make capital improvements to
protect human health and 
8to achieve compliance with the State and federal
primary 
9drinking water standards adopted pursuant to this Act and the 
10federal
Safe Drinking Water Act, as now and hereafter amended. 
11Rules for prioritizing loans from the Water Pollution Control 
12Loan Program may include, but shall not be limited to, criteria 
13designed to encourage green infrastructure, water efficiency, 
14environmentally innovative projects, and nutrient pollution 
15removal. 
16 (d) The Agency shall have the authority to promulgate 
17regulations to set forth procedures and criteria concerning 
18loan applications for funds provided under the American 
19Recovery and Reinvestment Act of 2009. In addition, due to time 
20constraints in the American Recovery and Reinvestment Act of 
212009, the Agency shall adopt emergency rules as necessary to 
22allow the timely administration of funds provided under the 
23American Recovery and Reinvestment Act of 2009. Emergency rules 
24adopted under this subsection (d) shall be adopted in 
25accordance with Section 5-45 of the Illinois Administrative 
26Procedure Act. 
 
 
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1 (e) The Agency may adopt rules to create a linked deposit 
2loan program through which loans made pursuant to paragraph 
3(3.5) of subsection (b) of Section 19.3 may be made through 
4private lenders. Rules adopted under this subsection (e) shall 
5include, but shall not be limited to, provisions requiring 
6private lenders, prior to disbursing loan proceeds through the 
7linked deposit loan program, to verify that the loan recipients 
8have been approved by the Agency for financing under paragraph 
9(3.5) of subsection (b) of Section 19.3. 
10(Source: P.A. 98-782, eff. 7-23-14.)



11 Section 99. Effective date. This Act takes effect upon 
12becoming law.