415 ILCS 5/19.3.1: Drinking Water State Revolving Fund.

(a) There is hereby created within the State treasury a Drinking Water State Revolving Fund, consisting of 2 interest-bearing special programs to be known as the Public Water Supply Loan Program and the Public Water Supply Loan Support Program, which shall be used and administered by the Agency.

(b) The Public Water Supply Loan Program shall be used and administered by the Agency to provide assistance for the following purposes:

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

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

(2.5) with respect to funds provided under the American Recovery and Reinvestment Act of 2009:

(A) to make direct loans at or below market interest rates to any eligible local government unit or to any eligible privately owned community water supply, and to provide additional subsidization to any eligible local government unit or to any eligible privately owned community water supply, including, but not limited to, forgiveness of principal, negative interest rates, and grants;

(B) to buy or refinance the debt obligation of a local government unit for costs incurred on or after October 1, 2008; and

(C) to provide additional subsidization, including, but not limited to, forgiveness of principal, negative interest rates, and grants for a local government unit for costs incurred on or after October 1, 2008;

(3) to make direct loans at or below market interest rates and to provide additional subsidization including, but not limited to, forgiveness of principal, negative interest rates, and grants to any eligible local government unit or to any eligible privately owned community water supply to buy or refinance debt obligations for costs incurred on or after July 17, 1997, for the construction of water supplies and projects that fulfill federal State Revolving Fund requirements for a green project reserve;

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

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

(6) to transfer funds from the Drinking Water State Revolving Fund to the Clean Water State Revolving Fund for the Water Pollution Control Loan Program and the Water Pollution Control Loan Support Program; and

(7) notwithstanding any other provision of this subsection (b), to provide to local government units and privately owned community water supplies any other financial assistance that may be provided under Section 1452 of the federal Safe Drinking Water Act for any expenditures eligible for assistance under that Section or federal rules adopted to implement that Section.

(c) The Public Water Supply Loan Support Program shall be used and administered by the Agency for the following purposes:

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

(2) to finance the reasonable costs incurred by the Agency in the administration of the Drinking Water State Revolving Fund, including activities under Title III and Title IV of this Act, including the administration of the State construction grant program;

(3) to transfer funds to the Water Pollution Control Loan Program and the Public Water Supply Loan Program within the Clean Water State Revolving Fund and the Drinking Water State Revolving Fund;

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

(5) to finance the development of low interest loan programs for public water supply projects;

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

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

(d) The Agency is designated as the administering agency of the Drinking Water State Revolving Fund. The Agency shall submit to the Regional Administrator of the United States Environmental Protection Agency an intended use plan that outlines the proposed use of funds available to the State. The Agency shall take all actions necessary to secure to the State the benefits of the Federal Water Pollution Control Act and the federal Safe Drinking Water Act, as now or hereafter amended.

(e) The Agency shall have the power to enter into intergovernmental agreements with the federal government or the State, or any instrumentality thereof, for purposes of capitalizing the Drinking Water State Revolving Fund. Moneys on deposit in the Drinking Water State Revolving Fund may be used for the creation of reserve funds or pledged funds that secure the repayment of loans made under this Section. For the purpose of obtaining capital for deposit into the Drinking Water State Revolving Fund, the Agency may also enter into agreements with financial institutions and other persons for the purpose of selling loans and developing a secondary market for such loans. The Agency shall have the power to create and establish such reserve funds and accounts as may be necessary or desirable to accomplish its purposes under this subsection and to allocate its available moneys into such funds and accounts. Investment earnings on moneys held in the Drinking Water State Revolving Fund, including any reserve fund or pledged fund, shall be deposited into the Drinking Water State Revolving Fund.