N.Y. Public Authorities Law § 1285-j: Water pollution control revolving fund

§ 1285-j. Water pollution control revolving fund. 1. (a) The

corporation shall undertake and provide assistance in support of the

program to make financial assistance available to municipalities to

encourage and support the planning, development and construction of

municipal water pollution control projects in accordance with the

provisions of this section, section 17-1909 of the environmental

conservation law, and to make financial assistance available to eligible

borrowers through linked deposits made in accordance with article

sixteen of the state finance law.

(b) There is hereby established in the custody of the corporation a

special fund to be known as the water pollution control revolving fund.

Moneys in the water pollution control revolving fund shall be segregated

from all other funds of or in the custody of the corporation subject to

any rights of holders of corporation bonds or notes issued for the

purposes of this section. Moneys in the water pollution control

revolving fund shall only be used in accordance with the provisions of

this section and section 17-1909 of the environmental conservation law.

The moneys in such fund shall be applied to or paid out for authorized

purposes of such fund on the direction of the chairman of the

corporation in accordance with subdivision four of this section and

section 17-1909 of the environmental conservation law, or such other

person as the corporation shall authorize to make such direction. In

consultation with the director of the division of the budget, the

corporation may, subject to subparagraph (ii) of paragraph a of

subdivision seven of section 17-1909 of the environmental conservation

law, and shall, at the direction of the commissioner of environmental

conservation pursuant to such subdivision, establish within the water

pollution control revolving fund additional accounts or subaccounts and

specify any conditions applicable to the transfer of moneys between such

accounts or subaccounts. With respect to each eligible project, the

corporation shall establish and maintain a record of the allocation

provided for the benefit of such project in accordance with the terms of

the applicable project financing agreement or loan agreement.

2. As used in this section, the terms "allocation", "construction",

"eligible project", "fund", and "project financing agreement" shall have

the meanings set forth in section 17-1909 of the environmental

conservation law.

3. Such fund shall consist of all of the following: (a) federal

capitalization grants and awards or other federal assistance provided

pursuant to Title II or Title VI of the Federal Water Pollution Control

Act, exclusive of any such grants, awards or assistance available under

Title II, except as may be necessary to avoid the loss to New York state

of any unobligated Title II money which can not be made available as a

grant or grant increase to a municipality, for purposes of deposit in

the fund and appropriated by the state for deposit therein, (b) federal

capitalization grants and awards or other federal assistance provided

pursuant to, or for the purposes of, the Omnibus Consolidated

Rescissions and Appropriations Act of 1996 (Pub. L. 104-134) or wet

weather quality grants as provided in the Consolidated Appropriations

Act of 2001 (Pub. L. 106-554), (c) moneys appropriated by the state

legislature for the purpose of such fund or otherwise transferred by the

state for deposit therein by the comptroller as required by law, (d)

payments of principal and interest made by municipalities pursuant to

loan or other agreements entered into pursuant to subdivisions eight and

nine of this section: provided, however, if such loans were financed by

the issuance of bonds or notes of the corporation, deposit of such

payments into the fund shall be subject to the rights of the holders of

such bonds or notes to receive such moneys, (e) investment earnings on

amounts in such fund, (f) any other payments received from

municipalities pursuant to a loan or other agreement made pursuant to

subdivisions eight and nine of this section for costs of managing and

administering the program, (g) the proceeds of bonds or notes issued by

the corporation for purposes of providing financial assistance to

municipalities, (h) the balance of any fees or penalties paid pursuant

to the terms and conditions of a compliance or enforcement agreement for

violations of the federal Marine Protection, Research and Sanctuaries

Act, as amended (33 U.S.C. §§ 1401 et seq.), occurring prior to December

thirty-first, nineteen hundred ninety-four, after payment has been made

to the administrator of the United States environmental protection

agency, a trust account, the ocean dumping alternatives account, and (i)

the balance of any amount in a trust account or, if applicable,

municipal trust accounts of the clean oceans fund upon a finding by the

administrator of the United States environmental protection agency that

fees or penalties were not paid into such trust account or municipal

trust account as required by the Marine Protection, Research, and

Sanctuaries Act, or an applicable compliance or enforcement agreement.

4. Moneys in the water pollution control revolving fund shall be

applied by the corporation to provide financial assistance to

municipalities for construction of eligible projects and, upon

consultation with the director of the division of the budget and the

commissioner, for such other purposes permitted by the Federal Water

Pollution Control Act, as amended, and to provide for the administrative

and management costs of the program. All moneys from federal

capitalization grants and awards or other federal assistance made

available pursuant to, or for the purposes of, the Omnibus Consolidated

Rescissions and Appropriations Act of 1996 (Pub. L. 104-134) or wet

weather quality grants as provided in the Consolidated Appropriations

Act of 2001 (Pub. L. 106-554), which are deposited into the water

pollution control fund pursuant to subdivision three of this section,

and any corresponding state match moneys, may be used by the corporation

for the purposes permitted by the Omnibus Consolidated Rescissions and

Appropriations Act of 1996 (Pub. L. 104-134) or wet weather quality

grants as provided in the Consolidated Appropriations Act of 2001 (Pub.

L. 106-554), and for no other purposes. As used in this section

"financial assistance to municipalities" means any one or more of the

following:

(a) making loans to municipalities for construction of eligible

projects, provided such loans (i) are made at market or below market

rates, (ii) do not have a final maturity of more than twenty years

following scheduled completion of the eligible project, (iii) have

principal and interest payments which commence not later than one year

after scheduled completion of the eligible project, and (iv) require the

municipality to establish a dedicated source of revenue (which may be a

general obligation of the municipality); unless otherwise determined by

the corporation or directed by the commissioner of environmental

conservation pursuant to subdivision eight of section 17-1909 of the

environmental conservation law, the corporation shall make such loans

only from the proceeds of the corporation's bonds or notes issued for

purposes of this section;

(b) buying or refinancing debt obligations of municipalities at market

or below market rates, if work was commenced and debt was incurred for

the eligible project after March seventh, nineteen hundred eighty-five;

(c) guarantying, or purchasing insurance or other credit enhancement

for municipal obligations where such action would improve credit market

access for or reduce interest rates on such municipal obligations;

(d) providing a source of revenue or security for payment of principal

and interest on bonds or notes issued by the corporation if the proceeds

of the sale of such bonds or notes will be deposited in the fund;

(e) providing interest rate subsidy allocations to subsidize loans to

municipalities made from the proceeds of the corporation's bonds or

notes;

(f) using investment earnings on moneys in the fund to pay, pursuant

to subdivision seven of this section, the costs of the corporation and

the department of environmental conservation of administering and

managing the program described in this section and section 17-1909 of

the environmental conservation law.

Subject to any applicable provisions of federal or state law, any

financial assistance at an interest rate of zero percent provided to

municipalities that meet the financial hardship criteria regulations

established pursuant to section 17-1909 of the environmental

conservation law, may have a final maturity up to forty years following

scheduled completion of the eligible project.

5. The corporation may make payments to the sewage treatment program

management and administration fund in accordance with subdivision seven

of this section to reimburse such fund for expenditures made pursuant to

appropriation to pay the cost of the corporation and the department of

environmental conservation for administering and managing the water

pollution control revolving fund program established in section

ninety-seven-l of the state finance law, for such costs. Such

reimbursement shall be made from (a) available investment earnings on

all amounts in the water pollution control revolving fund excluding all

amounts in the fund which are the subject of allocations or other

financial assistance to a municipality; and (b) payments received from a

municipality for such purpose pursuant to a project financing agreement

or loan agreement; and (c) if the sources of revenue described in this

paragraph and paragraphs (a) and (b) of this subdivision are or are

anticipated to be insufficient, then from the proceeds of federal

capitalization grants, awards or assistance appropriated to the fund for

administration and management of such program.

Notwithstanding the foregoing, if the sources of revenues described in

paragraphs (a), (b) and (c) of this subdivision are at any time

insufficient to make a reimbursement to the state pursuant to this

subdivision when due, the corporation shall make such reimbursement from

any other available amounts in the water pollution control revolving

fund, excluding all amounts that are the subject of allocations,

provided, that the amounts paid from fund sources other than those

described in paragraphs (a), (b) and (c) of this subdivision shall be

reimbursed upon a determination by the director of the budget that

future revenues obtained from sources described in paragraphs (a), (b)

and (c) of this subdivision are in excess of the amounts reasonably

needed to make future reimbursements pursuant to this subdivision.

* 6. Moneys in the water pollution control revolving fund may be

invested as provided in subdivision four of section twelve hundred

eighty-four of this title and may be further invested (a) in investment

agreements continuously secured by obligations with any insurance or

reinsurance company or corporate affiliate thereof rated by a nationally

recognized rating agency in one of its two highest categories, any bank,

trust company or broker or dealer, as defined by the securities exchange

act of 1934, which is a dealer in government bonds, which reports to,

trades with and is recognized as a primary dealer by a federal reserve

bank and is a member of the securities investors protection corporation,

if, (i) such obligations securing such investment agreements are

obligations as set forth in section ten of the general municipal law,

(ii) such obligations are delivered to a trustee for the benefit of the

corporation or, with respect to moneys pledged under an indenture of

trust relating to bonds or notes of the corporation, to the trustee

under such indenture, or are supported by a safe keeping receipt issued

by a depository satisfactory to the corporation as applicable, provided

that such investment agreements must provide that the value of the

underlying obligations shall be maintained at a current market value,

calculated no less frequently than monthly, of not less than the amount

deposited thereunder, (iii) a prior perfected security interest in the

obligations which are securing such agreement has been granted to the

corporation, as applicable, and (iv) such obligations are free and clear

of adverse third party claims, or (b) in obligations as set forth in

section ten of the general municipal law that are rated by a nationally

recognized rating agency in one of its two highest rating categories.

* NB Effective until September 30, 2029

* 6. Moneys in the water pollution control revolving fund may be

invested as provided in subdivision four of section twelve hundred

eighty-four of this title and may be further invested (a) in investment

agreements continuously secured by obligations with any insurance or

reinsurance company or corporate affiliate thereof rated by a nationally

recognized rating agency in one of its two highest categories, any bank,

trust company or broker or dealer, as defined by the securities exchange

act of 1934, which is a dealer in government bonds, which reports to,

trades with and is recognized as a primary dealer by a federal reserve

bank and is a member of the securities investors protection corporation,

if, (i) such obligations securing such investment agreements are

obligations as set forth in section ten of the general municipal law,

(ii) such obligations are delivered to a trustee for the benefit of the

corporation or, with respect to moneys pledged under an indenture of

trust relating to bonds or notes of the corporation, to the trustee

under such indenture, or are supported by a safe keeping receipt issued

by a depository satisfactory to the corporation as applicable, provided

that such investment agreements must provide that the value of the

underlying obligations shall be maintained at a current market value,

calculated no less frequently than monthly, of not less than the amount

deposited thereunder, (iii) a prior perfected security interest in the

obligations which are securing such agreement has been granted to the

corporation, as applicable, and (iv) such obligations are free and clear

of adverse third party claims, or (b) in obligations the interest on

which is excludable from gross income under section one hundred three of

the internal revenue code, provided that such obligations are rated by a

nationally recognized rating agency in one of its two highest rating

categories.

* NB Effective September 30, 2029

7. The corporation may transfer to the sewage treatment program

management and administration fund established pursuant to section

ninety-seven-l of the state finance law no less frequently than

semi-monthly amounts from the fund sufficient to reimburse the sewage

treatment program management and administration fund in accordance with

the provisions of subdivision five of this section.

8. In addition to the powers of the corporation granted elsewhere in

this chapter, the corporation shall have the power to enter into project

financing agreements authorized by section 17-1909 of the environmental

conservation law. Notwithstanding the powers granted to the corporation

elsewhere in this title, the corporation's power to finance eligible

projects from the fund is limited to eligible projects for which project

financing agreements have been executed pursuant to section 17-1909 of

the environmental conservation law.

9. In addition to the powers granted to the corporation elsewhere in

this chapter, the corporation may make loans to municipalities for

purposes of financing eligible projects for which the fund may be used,

subject to the limitations of subdivision eight of this section, may

accept the obligations of any municipality as security for the repayment

of a loan to such municipality, and may assign and pledge such municipal

obligations and loan agreements for the benefit of the holder of

obligations of the corporation from the proceeds of which such loans are

made. Loan proceeds may be disbursed to a municipality in accordance

with such restrictions as may be imposed by the corporation in

connection with such loan or obligations of the corporation from the

proceeds of which such loan is made.

10. The corporation is authorized to arrange for any audits required

by law for the purpose of issuing its bonds or notes to provide

financial assistance to municipalities, and provide for the

implementation of any independently conducted reviews or audits arranged

pursuant to subdivision seven of section 17-1909 of the environmental

conservation law.

11. In the event a municipality shall fail to make any payment due the

corporation pursuant to any loan agreement, financing agreement, or

other obligation of the municipality sold to the corporation or issued

as security for the undertaking of the municipality thereunder, the

corporation shall certify to the comptroller, and notify the chairman of

the senate finance committee, the chairman of the assembly ways and

means committee, the director of the division of the budget and the

governing body of the municipality that such municipality has failed to

make such payment. Such certificate shall be in such form as may be

determined by the corporation provided such certificate shall specify

the exact amount of debt service and surcharge, if applicable, required

to satisfy such municipality's unpaid obligation. The comptroller, upon

receipt of such certificate from the corporation, is authorized to and

shall, to the extent not otherwise prohibited by law and subject to any

other provision of law providing for withholding of payments to the

municipality which take precedence over this subdivision, withhold from

such municipality the next succeeding payments of state aid or local

assistance otherwise payable to it to the extent necessary to meet the

certified amount of debt service and surcharge, if applicable, due the

corporation and shall immediately pay over to the corporation as a debt

service payment on behalf of such municipality the amount so withheld.

12. (a) Notwithstanding the provisions of any general or special law

to the contrary, the commissioner of environmental conservation on

behalf of the state and the corporation, subject to the approval of the

director of the budget, are each hereby authorized to enter into a state

revolving fund service contract or contracts providing for the

administration of the water pollution control revolving fund and the

financing by the corporation of the contributions made by the state to

the water pollution control revolving fund. Any such contract or

contracts shall be upon such terms and conditions as the corporation and

the commissioner of environmental conservation shall determine to be

reasonable, including, but not limited to, provisions relating to the

respective obligations of the state and the corporation with respect to

the administration of the water pollution control revolving fund and

provisions providing for the payment of (i) all fees and other charges

of, and expenses incurred by, the corporation in connection with the

issuance and administration of special obligation bonds to provide funds

to the state or reimburse the state for contributions to the water

pollution control revolving fund and (ii) all debt service payments on

such bonds.

(b) Any such contract entered into pursuant to paragraph (a) of this

subdivision shall provide that the obligation of the state to fund or to

pay the amounts therein provided for shall not constitute a debt of the

state within the meaning of any constitutional or statutory provision

and shall be deemed executory only to the extent of moneys available

therefore and that no liability shall be incurred by the state beyond

the moneys available for such purpose, and that such obligation is

subject to annual appropriation by the legislature.

(c) Any such contract or any payments made or to be made thereunder

may be assigned and pledged by the corporation as security for its bonds

and notes issued for the purpose of financing the state contribution to

the water pollution control revolving fund.

(d) The comptroller is hereby authorized to receive from the

corporation any portion of special obligation bond proceeds paid to

provide funds to or reimburse the state for its contribution to the

water pollution control revolving fund and to credit such amounts to the

capital projects fund or any other appropriate fund.

13. In addition to the powers granted to the corporation in this

section, the corporation is authorized to exercise the powers, perform

the responsibilities and take the actions assigned to it under section

17-1909 of the environmental conservation law.