A BILL TO BE ENTITLED
AN ACT to make various amendments to the north carolina clean water revolving loan and grant act including the following: expand both the projects and applicants that are eligible to receive loans and grants from the revolving loan and grant fund, allow the department of environment and natural resources to set lower interest rates and extend repayment terms to thirty years of the expected life of a project, to direct the department to negotiate with the environmental protection agency to develop an integrated priority system that will address both point and nonpoint source wastewater projects and to make other clarifying, technical, and conforming changes; and to clarify that Stormwater planning projects and water supply planning projects are purposes that may be funded by the clean water management trust fund.
The General Assembly of North Carolina enacts:
SECTION 1.  Chapter 159G of the General Statutes reads as rewritten:
"Chapter 159G.
"North Carolina Clean Water and Drinking Water Revolving Loan and Grant Act.
"§ 159G‑1.  Short title.
This Chapter shall be known and may be cited as the "North Carolina Clean Water and Drinking Water Revolving Loan and Grant Act.
"§ 159G‑2.  Purpose.
The General Assembly hereby recognizes that a critical need exists in this State to provide for a low‑interest funding source for  water and wastewater capital facilities. Local government efforts to meet this need have been restricted by the inability of many units to finance necessary improvements to inadequate or nonexistent water supply and wastewater treatment systems. The decrease in financial capacity has resulted in large part from the diminished availability of federal loans and grants and the elimination of the federal general revenue sharing program, which funded a wide range of local capital improvements.
The problems have been further complicated by the uncertainty concerning Clean Water Act funding, the growing number of local units which are under moratoriums against additional connections for sewer service, and the July 1, 1988, deadline for compliance with federal effluent standards.
It is the intent and purpose of the General Assembly by this Chapter to create a program to facilitate early construction of these environmental and public health improvements by establishing a revolving loan fund for financing such projects. This fund will enable wastewater and drinking water systems to obtain low‑interest loans for financing infrastructure projects  and for certain emergency purposes. This fund will also enable eligible systems to obtain low‑interest loans for financing projects for water supply facilities, wastewater facilities, and to address stormwater quality and other nonpoint sources of pollution. It is the further intent and purpose of the General Assembly to provide grants to eligible systems for wastewater treatment and  water supply facilities. The General Assembly seeks by this Chapter to encourage and assist wastewater and drinking water systems to meet their responsibilities  to maintain a clean and healthful environment and an abundant supply of safe drinking water and further to provide an adequate base for economic growth.
"§ 159G‑3.  Definitions.
As used in this Chapter, the following words shall have the meanings indicated, unless the context clearly requires otherwise:
(1)	Repealed by Session Laws 1991, c. 186, s. 1.
(2)	"Applicant" means a local government unit or a nonprofit water or wastewater corporation that is incorporated in compliance with Chapter 55A of the General Statutes solely for the purpose of providing drinking water or wastewater services and that is an eligible applicant for a federal loan or grant from the Rural Utility Services Division, U.S. Department of Agriculture that applies for a revolving loan or grant under the provisions of this Chapter. In addition, a local government may provide funds to a nonprofit agency which is currently under contract and authorized to provide wastewater treatment or drinking water  services to that local government unit. (2a)	"Bond rating" means the numerical rating of a local government unit developed by the North Carolina Municipal Council, Inc., or any successor thereto. The rating formula is based on 100 being a theoretically "perfect" local government unit and is an assessment of the creditworthiness of the unit. Local government units with a rating below 75 or with no ratings have limited, if any, access to the private markets for financing water and sewer or other debt.
(3)	"Clean Water and Drinking Water Revolving Loan and Grant Fund" means the fund established in the Department of Environment and Natural Resources to carry out the provisions of this Chapter, with various accounts therein as herein provided.
(4)	"Construction costs" means the actual costs of planning, designing and constructing any project for which a revolving loan or grant is made under this Chapter including planning; environmental assessment; wastewater system analysis, evaluation and rehabilitation; engineering; legal, fiscal, administrative and contingency costs for water supply systems, wastewater collection systems, stormwater quality projects, nonpoint source pollution projects, wastewater treatment works and any extensions, improvements, remodeling, additions, or alterations to existing systems. Construction costs may include excess or reserve capacity costs, attributable to no more than 20‑year projected domestic growth, plus ten percent (10%) unspecified industrial growth. In addition, construction costs shall include any fees payable to the Department of Environment and Natural Resources for review of applications and grant of permits, and fees for inspections under G.S. 159G‑14. Construction costs may also include the costs for purchase or acquisition of real property.
(4a)	"Department" means the Department of Environment and Natural Resources.
(5)	"Grant" means a sum of money given by the State to an applicant to subsidize the construction costs of a project authorized by this Chapter, without any obligation on the part of such unit to repay such sum.
(6)	"Commission for Health Services" means the Commission for Health Services created by G.S. 130A‑29.
(6a)	"Debt instrument" means an instrument in the nature of a promissory note executed by an applicant under the provisions of this Chapter, to evidence a debt to the State and obligation to repay the principal, plus interest, under stated terms.
(7)	"Division of Environmental Health" means the Division of Environmental Health of the Department of Environment and Natural Resources.
(7a)	"Economically distressed local government unit" means a local government unit located, in whole or in part, in a county designated as economically distressed by the Secretary of Commerce under G.S. 143B‑437A.
(8)	"Environmental Management Commission" means the Environmental Management Commission of the Department of Environment and Natural Resources.
(9)	"Local Government Commission" means the Local Government Commission of the Department of the State Treasurer, established by Article 2 of Chapter 159 of the General Statutes.
(10)	"Local government unit" means a county, city, town, incorporated village, consolidated city‑county, as defined by G.S. 160B‑2(1), including such a consolidated city‑county acting with respect to an urban service district defined by a consolidated city‑county, sanitary district, metropolitan sewerage district, metropolitan water district, county water and sewer district, water and sewer authority, joint agency authorized by agreement between two cities and towns to operate an airport pursuant to G.S. 63‑56 and that also provided water and wastewater services off the airport premises before January 1, 1995, joint agency created pursuant to Part 1 of Article 20 of Chapter 160A of the General Statutes, or the Eastern Band of Cherokee Indians in North Carolina.
(11)	Repealed by Session Laws 1991, c. 186, s. 1.
(12)	"Receiving agency" means the Division of Environmental Health with respect to receipt of applications for revolving loans and grants for water supply systems, and  the Division of Water Quality with respect to receipt of applications for revolving loans and grants for wastewater systems.
(13)	"Revolving construction loan" means a sum of money loaned by the State to an applicant to subsidize the construction costs of a project authorized by this Chapter, with an obligation on the part of the applicant to repay such sum, the proceeds of such repayment to be deposited in the fund from which the loan was made.
(14)	"Revolving emergency loan" means a sum of money loaned by the State to a local government unit upon a certification, as provided in this Chapter, of a serious public health hazard, with an obligation on the part of such unit to repay such sum.
(15)	"Revolving loan" includes a revolving construction loan and an emergency loan.
(15a)	"State" means the State of North Carolina.
(15b)	"State Treasurer" means the Treasurer of the State elected pursuant to Article III, Section 7 of the Constitution or his designated representative.
(16)	"Wastewater Accounts" means the various accounts in the Clean Water and Drinking Water Revolving Loan and Grant Fund established in the Department of Environment and Natural Resources under this Chapter for revolving loans and grants for wastewater treatment work and wastewater collection system projects.
(17)	"Wastewater collection system" means a unified system of pipes, conduits, pumping stations, force mains, and appurtenances other than interceptor sewers, for collecting and transmitting water‑carried human wastes and other wastewater from residences, industrial establishments or any other buildings.
(18)	"Wastewater treatment works" means the various facilities and devices used in the treatment of sewage, industrial waste or other wastes of a liquid nature, including the necessary interceptor sewers, outfall sewers, nutrient removal equipment, pumping, power and other equipment and their appurtenances.
(19)	"Water Supply Accounts" means the various accounts in the Clean Water and Drinking Water Revolving Loan and Grant Fund established in the Department of Environment and Natural Resources under this Chapter for revolving loans and grants for water supply system projects.
(20)	"Water supply system" means a public water  system as defined in G.S. 130A‑313 consisting of facilities and works for supplying, treating and distributing potable water including, but not limited to, impoundments, reservoirs, wells, intakes, water filtration plants and other treatment facilities, tanks and other storage facilities, transmission mains, distribution piping, pipes connecting the system to other public water  systems, pumping equipment and all other necessary appurtenances, equipment and structures.
"§ 159G‑4.  Appropriations.
(a)	Of the funds appropriated to the Clean Water and Drinking Water Revolving Loan and Grant Fund, the amount required in each fiscal year to provide the State match of any federal funds deposited into the Water Pollution Control Revolving Fund and the Drinking Water Treatment Revolving Loan Fund shall be allocated to that fund.
							(c)	All payments of interest and repayments of principal resulting from revolving loans shall be credited to the respective accounts from which the revolving loan funds were disbursed. Terms and conditions for repayment of revolving loans shall be established by the Department, with the assistance of the Local Government Commission, consistent with the requirements of the Federal Water Pollution Control Act, the Federal Safe Drinking Water Act, and this Chapter. Provided, the interest rate for all revolving loans authorized by this Chapter shall  not  exceed the lesser of four percent (4%) or one half (1/2) the prevailing national market rate for tax exempt general obligation debt of similar maturities derived from a published indicator. Provided further, the interest rate may be fixed at a lower rate per annum and the maximum maturity may not exceed the lesser of 30 years or the project's expected life if authorized by the Federal Water Pollution Control Act or the Federal Safe Drinking Water Act. 
"§ 159G‑5.  Clean Water and Drinking Water Revolving Loan and Grant Fund.
(a)	There is established in the Department a fund to be known as the Clean Water and Drinking Water Revolving Loan and Grant Fund. The Fund is to be administered by the Department which shall be responsible for receipt and disbursement of all moneys as appropriated and provided for in this Chapter.
(b)	Funds in the various accounts in the Clean Water and Drinking Water Revolving Loan and Grant Fund may be invested in the same manner as permitted for investments of funds belonging to the State or held in the State Treasury. Interest earnings derived from such investments shall be credited to the respective accounts from which funds were used to make such investments.
(c)	Within the Clean Water and Drinking Water Revolving Loan and Grant Fund there shall be a special account known as the Water Pollution Control Revolving Fund. This account shall be established and managed in accordance with the requirements of Title VI of the Federal Water Quality Act of 1987 (P.L. 100‑4), to achieve the purposes and goals of the Federal Water Pollution Control Act. The funds in the Water Pollution Control Revolving Fund shall be available in perpetuity and exclusively for the purpose of providing revolving construction loans and other assistance as specified in Title VI of the Federal Water Quality Act of 1987 and the regulations thereunder, including making grants to the extent permitted thereby.
(d)	The Drinking Water Treatment Revolving Loan Fund is established as a special account within the Clean Water and Drinking Water Revolving Loan and Grant Fund. This account shall be established and managed in accordance with the requirements of section 130 of Title I of the federal Safe Drinking Water Act of 1996 and subsequent amendments  (Pub. L. 104‑182; 110 Stat. 1662; 42 U.S.C. § 300j‑12), to achieve the purposes and goals of the federal Safe Drinking Water Act of 1996 and subsequent  amendments. The funds in the Drinking Water Treatment Revolving Loan Fund may be used only for the purposes of providing revolving construction loans and other assistance as set forth in section 130 of Title I of the federal Safe Drinking Water Act of 1996 and subsequent amendments  and the regulations promulgated thereunder, including making grants to the extent permitted by these amendments or these regulations.
"§ 159G‑6.  Distribution of funds.
(a)	Revolving loans and grants.
(1)	All funds appropriated or accruing to the Clean Water and Drinking Water Revolving Loan and Grant Fund, other than funds set aside for administrative expenses, shall be used for revolving loans and grants to applicants for construction costs of wastewater treatment works, wastewater collection systems and water supply systems and other assistance as provided in this Chapter.
(2)	The maximum principal amount of a revolving loan or a grant may be one hundred percent (100%) of the nonfederal share of the construction costs of any eligible project. The maximum principal amount of revolving loans made to any one applicant during any fiscal year shall be eight million dollars ($8,000,000).
(2a)	The maximum principal amount of grants made to any applicant over a period of three fiscal years shall be three million dollars ($3,000,000). The Department may limit the maximum principal amount of a grant under this subdivision to two million dollars ($2,000,000) or two‑thirds of the eligible project cost, whichever is less, when the bond rating of the local government unit equals or is greater than 75 during any fiscal year and when one million dollars ($1,000,000) or one‑third of the eligible project cost, whichever is less, is available to the local government unit as a loan from any source.
(2b)	Notwithstanding G.S. 159G‑6(a)(2a), the maximum principal amount of grants made to any applicant for a high‑unit cost wastewater project under G.S. 159G‑6(b)(2) during any fiscal year shall be three million dollars ($3,000,000) if the applicant is a sewer district that includes three or more local government units. Notwithstanding G.S. 159G‑6(a)(2a), the maximum principal amount of grants made to any applicant for a high‑unit cost water supply system under G.S. 159G‑6(c)(2) during any fiscal year shall be three million dollars ($3,000,000) if the applicant is either: (i) a water district that includes three or more local government units, or (ii) a county in which less than fifty percent (50%) of the population of the county is served by a public water system that is owned or operated by a local government unit or a nonprofit water corporation.
(3)	The State Treasurer shall be responsible for investing and distributing all funds appropriated or accruing to the Clean Water and Drinking Water Revolving Loan and Grant Fund for revolving loans and grants under this Chapter. In fulfilling his responsibilities under this section, the State Treasurer shall make a written request to the Department to arrange for the appropriated funds to be (i) transferred from the appropriate accounts to an applicant to provide funds for one or more revolving loans or grants or (ii) invested as authorized by this Chapter with the interest on and the principal of such investments to be transferred to the applicant to provide funds for one or more revolving loans or grants.
(b)	Wastewater Accounts. – The sums allocated in G.S. 159G‑4 and accruing to the various Wastewater Accounts in each fiscal year shall be used to make revolving loans and grants to local government units as provided below. 
(1)	General Wastewater Revolving Loan and Grant Account. – The funds in the General Wastewater Revolving Loan and Grant Account shall be used exclusively for the purpose of providing for revolving construction loans or grants in connection with approved wastewater treatment work or wastewater collection system projects.
(2)	High‑Unit Cost Wastewater Account. – The funds in the High‑Unit Cost Wastewater Account shall be available for grants to applicants for high‑unit cost wastewater projects. Eligibility of an applicant for such a grant shall be determined by comparing estimated average household user fees for water and sewer service, for debt service and operation and maintenance costs, to one and one‑half percent (1.5%) of the median household income in the local government unit or service area in which the project is located. The projects which would require estimated average household water and sewer user fees greater than one and one‑half percent (1.5%) of the median household income are defined as high‑unit cost wastewater projects and will be eligible for a grant equal to the excess cost, subject to the limitations in subdivision (a)(2) of this section. However, if the applicant upon completion of the project will have only a single utility service, then the eligibility of the applicant for such a grant shall be determined by comparing estimated average household user fees for the single utility service that will be offered, for debt service and operation and maintenance costs, to three‑fourths percent (3/4%) of the median household income in the local government unit or service area in which the project is located. The single utility projects which would require estimated average household water or sewer user fees (as appropriate) greater than three‑fourths percent (3/4%) of the median household income are defined as high‑unit cost wastewater projects and will be eligible for a grant equal to the excess cost, subject to the limitations in subdivision (a)(2) of this section.
(3)	Emergency Wastewater Revolving Loan Account. – The funds in the Emergency Wastewater Revolving Loan Account shall be available for revolving emergency loans to applicants in the event the Department certifies that a serious public health hazard, related to the inadequacy of existing wastewater facilities, is present or imminent in a community.
(c)	Water Supply Accounts. – The sums accruing to the various Water Supply Accounts in each fiscal year shall be used to provide revolving loans and grants to applicants as provided below. The Department shall disburse no funds from the Water Supply Accounts except upon receipt of written approval of the disbursement from the Secretary of Environment and Natural Resources.
(1)	General Water Supply Revolving Loan and Grant Account. – The funds in the General Water Supply Revolving Loan and Grant Account shall be used exclusively for the purpose of providing for revolving construction loans and grants in connection with water supply systems generally and not upon a county allotment basis.
(2)	High‑Unit Cost Water Supply Account. – The funds in the High‑Unit Cost Water Supply Account shall be available for grants to applicants for high‑unit cost water supply systems, on the same basis as provided in G.S. 159G‑6(b)(2) for high‑unit cost wastewater projects.
(3)	Emergency Water Supply Revolving Loan Account. – The funds in the Emergency Water Supply Revolving Loan Account shall be available for revolving emergency loans to applicants in the event the Secretary of Environment and Natural Resources certifies either that a serious public health hazard or  drought emergency related to the water supply system is present or imminent in a community.
(4)	Inter‑Account Transfers. – The Department may transfer funds from the General Water Supply Revolving Loan and Grant Account to the Emergency Water Supply revolving Loan Account in the event that the Secretary of Environment and Natural Resources certifies either that a serious public health hazard or drought emergency related to the water supply system is present or imminent in a community.
(d)	Repealed by Session Laws 1991, c. 186, s. 4.
(e)	Notwithstanding any other provision of this Chapter, funds in the Water Pollution Control Revolving Fund shall not be available as grants except to the extent permitted by Title VI of the Federal Water Quality Act of 1987 and the regulations thereunder.
"§ 159G‑7.  Reserved for future codification purposes.
"§ 159G‑8.  Application; environmental assessment; notice; hearing.
(a)	Application. – All applications for revolving loans and grants for water supply systems shall be filed with the Division of Environmental Health and all applications for revolving loans and grants for wastewater treatment works or wastewater collection systems shall be filed with the Division of Water Quality. Any application may be filed in as many categories as it is eligible for consideration under this Chapter. Applications for revolving construction loans or grants for wastewater treatment works and wastewater collection systems, except applications for emergency wastewater loans, shall first be submitted for a loan or grant from the Water Pollution Control Revolving Fund established by G.S. 159G‑5(c). If the application is denied, the application shall then be considered for a revolving loan or a grant from the General Wastewater Revolving Loan and Grant account established under G.S. 159G‑6(b)(1).
The Department may develop  and adopt a standard form of application under this Chapter. Any application for construction grants under the Federal Water Pollution Control Act may be considered as an application for revolving construction loans or grants under G.S. 159G‑5(c) and G.S. 159G‑6(b)(1). The information required to be set forth in the application shall be sufficient to permit the respective agencies to determine the eligibility of the applicant and to establish the priority of the  application using the criteria outlined in G.S. 159G‑10 and any other criteria deemed appropriate by the Department, as set forth in this Chapter.
Any applicant shall furnish information in addition or supplemental to the information contained in its application upon request by the receiving agency.
(b)	Environmental Assessment. – Every applicant shall file with its application an assessment setting forth the impact that the project for which funds are sought will have upon the environment of the area within which the project is proposed to be located. The assessment shall set forth the impact of the project upon water resources, other natural resources, land use pattern, and such other factors as required by duly adopted rules. Any environmental assessment required as part of an application for grants under the Federal Water Pollution Control Act shall satisfy the requirement of this provision. If, after reviewing the environmental assessment, the Division of Environmental Health or the Division of Water Quality concludes that an environmental impact statement is required, then the application shall receive no further consideration until a final environmental impact statement has been completed and approved as provided in Article 1 of Chapter 113A of the General Statutes.
(c)	Hearing. – A public hearing may be held by the receiving agency at any time on any application filed pursuant to G.S. 159G‑5(c), 159G‑6(b), or 159G‑6(c) in accordance with the provisions of this subsection. A public hearing may be held by the receiving agency upon written request from any citizen or taxpayer who is a resident of the county or counties in which the project is proposed to be located if it appears that the public interest will be served by this hearing. The written request shall set forth each objection to the proposed project or other reason for requesting a hearing on the application and shall contain the name and address of the person(s) submitting it. The receiving agency may consider all written objections to the proposed project and other statements along with the application, including any significant adverse effects that the proposed project may have on the environment, and shall determine if the public interest will be served by a hearing. The determination by the receiving agency shall be conclusive; but all written requests for a hearing shall be retained as a permanent part of the records pertaining to the application, whether or not the request is granted.
"§ 159G‑9.  Eligibility.
No application shall be eligible for a revolving loan or grant under this Chapter unless it shall demonstrate to the satisfaction of the receiving agency that:
(1)	The applicant is an applicant within the meaning of G.S. 159G‑3(2).
(2)	The applicant has the financial capacity to pay the principal of and the interest on its proposed obligations and loans.
(3)	The applicant has substantially complied or will substantially comply with all applicable laws, rules, regulations and ordinances, federal, State and local.
(4)	The applicant has formally agreed  to adopt and place into effect on or before completion of the project a schedule of fees, charges, and other available funds, including but not limited to the funds described in G.S. 159G‑13(b), that will adequately provide for proper operation, maintenance, and administration of the project and for repayment of all principal of and interest on loans.
"§ 159G‑10.  Priorities.
(a)	Determination. – Determination of priorities to be assigned each eligible application shall be made  by each receiving agency during each fiscal year. Every eligible application filed under G.S. 159G‑5(c), G.S. 159G‑5(d), G.S.  159G‑6(b), or G.S.  159G‑6(c) shall be considered by the receiving agency with every other application filed under G.S. 159G‑5(c), G.S. 159G‑5(d), G.S.  159G‑6(b), or G.S.  159G‑6(c), respectively, and eligible for consideration during the same priority period, to determine the priority to be assigned to each application.  Any application which does not contain the information required by this Chapter or regulations adopted by the receiving agency(s) shall not be deemed received until such information is furnished by the applicant to the receiving agency.
(a1)	(See note) Expired.
(b)	Priority Factors. – All applications for revolving loans or grants under this Chapter eligible for consideration during each priority period shall be assigned a priority for funds by the receiving agency. The Department shall negotiate an integrated priority system with the Environmental Protection Agency that will address the point and nonpoint source pollution projects for the Water Pollution Control Revolving Fund for applications filed under G.S. 159G‑5(c). The following priority factors shall apply to eligible applications filed semiannually under G.S. 159G‑6(b) and G.S. 159G‑6(c). Complete applications received under G.S. 159G‑6(b)(3) and G.S. 159G‑6(c)(3) may be considered for funding at any time by the receiving agency.
(1)	General Criteria in Addition to Other Criteria Established by the Department. – 	b.	The existence of a comprehensive land‑use plan that meets the requirements of subsection (e) of this section is a general criterion for prioritizing which applicants will receive a loan or grant. An applicant that is not authorized to adopt a comprehensive land‑use plan but that is located in whole or in part in a local government unit that has adopted a comprehensive land‑use plan shall receive the same priority treatment as an applicant that has authority to adopt a comprehensive land‑use plan. A comprehensive land‑use plan that meets the requirements of subsection (e) of this section and that exceeds the minimum State standards for protection of water resources shall receive more points than a plan that does not exceed those standards. Additional points may be awarded for actions taken toward implementation of a comprehensive land‑use plan. These actions may include the adoption of a zoning ordinance or any other measure that significantly contributes to the implementation of the comprehensive land‑use plan.
c.	The existence of a flood hazard ordinance conforming to the requirements of Part 6 of Article 21 of Chapter 143 of the General Statutes is a general criterion for prioritizing which applicants will receive a loan or a grant. Demonstration, based on the most recent maps prepared pursuant to the National Flood Insurance Program or approved by the Department, that no portion of the applicant's jurisdiction is located within the 100‑year floodplain is a general criterion equivalent to the existence of a flood hazard ordinance conforming to the requirements of Part 6 of Article 21 of Chapter 143 of the General Statutes for prioritizing which applicants will receive a loan or a grant.
			(5)	Wastewater Treatment Works Improvements to Meet Nitrogen and Phosphorus Limits. – The Department shall adopt a rule specifying priority criteria for modifications to existing permitted wastewater treatment facilities that are owned or operated by local government units and that are subject to G.S. 143‑215.1(c1) or G.S. 143‑215.1(c2) to enable local government units to comply with G.S. 143‑215.1(c1) and G.S. 143‑215.1(c2).
(6)	The total number of points available in the respective categories shall be deemed adjusted in accordance with the provisions of subdivisions (1) and (5) of this subsection.
(c)	Assignment of Priority. – A written statement relative to each priority assigned shall be prepared by the receiving agency and shall be attached to the application. The priority assigned shall be conclusive.
(d)	Failure to Qualify. – Any application filed under G.S. 159G‑5(c), G.S. 159G‑5(d), G.S. 159G‑6(b), or G.S. 159G‑6(c) that does not qualify for a revolving loan or grant as of the priority period in which the application was eligible for consideration by reason of the priority assigned the application shall be considered for a revolving loan or grant during the next succeeding priority period upon request of the applicant. If such application should again fail to qualify for a revolving loan or grant during the second priority period by reason of the priority assigned, the application shall receive no further consideration. An applicant may file a new application at any time, and may amend any pending application to include additional data or information.
(e)	Land‑Use Plan. – Local government units are encouraged to adopt comprehensive land‑use plans. The Division of Community Assistance in the Department of Commerce shall, upon request, provide technical assistance to any economically distressed local government unit in preparing a comprehensive land‑use plan. A comprehensive land‑use plan that meets the requirements of Article 18 of Chapter 153A of the General Statutes or Article 19 of Chapter 160A of the General Statutes shall contain reasonable provisions designed to protect existing water uses and assure compliance with water quality standards and classifications in all waters of the State affected by the land‑use plan.
"§ 159G‑11.  Withdrawal of commitment.
Failure of an applicant, within one year of the date of acceptance of a revolving loan or grant award or within two years of the date of the notification by the Department of intent to make such an award, whichever is later, to (i) arrange for necessary financing of the proposed project, or (ii) award a contract for the construction of the proposed project, shall constitute sufficient cause for withdrawal of the commitment. Prior to withdrawal of a commitment, the receiving agency shall give due consideration to any extenuating circumstances presented by the applicant as reasons for its failure to arrange necessary financing or to award a contract, and the commitment may be extended for an additional period of time if, in the judgment of the receiving agency, such an extension is justified. No project shall be deemed to have less than one year to meet the provisions of this section.
"§ 159G‑12.  Disbursement.
(a)	No funds shall be disbursed by the Department for any revolving loan or grant until it has received from the receiving agency a certificate of eligibility to the effect that the applicant meets all eligibility criteria, and that all procedural requirements of this Chapter have been met.
(b)	In the event that the revolving loan or grant payments are to be made in installments, no payment shall be disbursed by the Department until the receiving agency submits a written request for disbursement.
(c)	The receiving agency, in its sole discretion, may determine whether the payment of any revolving loan or grant made under this Chapter shall be in a lump sum or in installments as progress payments and shall, by adoption of appropriate rules and regulations, provide for the manner of approval and payment of revolving loans or grants. The State Treasurer, with the approval of the receiving agency and consistent with the provisions of G.S. 159G‑6(a)(3), shall, by adoption of appropriate rules, provide for the payment of revolving loans or grants.
"§ 159G‑13.  Revolving loans and grants.
(a)	To be eligible to receive the revolving loans and grants provided for in this Chapter, applicants shall arrange to borrow the amounts necessary to be borrowed in connection therewith pursuant to the Local Government Finance Act or as provided in this Chapter as applicable. Applicants may apply for the revolving loans and grants prior to arranging for such borrowing.
(b)	Revenues received by municipalities from sales and use taxes levied under Articles 40, 41, and 42 of Chapter 105 of the General Statutes which are restricted in use for water and sewage capital outlay, and retirement of indebtedness for those purposes, may be used for periodic payments on revolving loans made under this Article.
"§ 159G‑14.  Inspection.
Inspection of a project for which a revolving loan or grant has been made under this Chapter may be performed by qualified personnel of the Department or may be performed by qualified professional engineers, registered in this State, who have been approved by the Department; but no person shall be approved to perform inspections who is an officer or employee of the applicant to which the revolving loan or grant was made or who is an owner, officer, employee or agent of a contractor or subcontractor engaged in the construction of the project for which the revolving loan or grant was made. For the purpose of payment of inspection fees, inspection services shall be included in the term "construction cost" as used in this Chapter.
"§ 159G‑15.  State loan and grant rules. 
(a)	The Department may adopt, modify and repeal rules establishing the procedures to be followed in the administration of this Chapter and regulations interpreting and applying the provisions of this Chapter, as provided in the Administrative Procedure Act.  
(b)	A copy of its rules adopted to implement the provisions of this Chapter shall be furnished free of charge by the receiving agency and the Department to any applicant.
"§ 159G‑16.  Federal  loan and grant rules.
In order to carry out the purpose of this Chapter to secure the greatest benefits possible to the citizens of this State from the funds herein appropriated, the Department shall adopt such rules and criteria, not inconsistent with the provisions of this Chapter, as are necessary and appropriate to conform to regulations for federal grants and loans for any of the purposes set forth in this Chapter.
"§ 159G‑17.  Annual reports to Joint Legislative Commission on Governmental Operations.
(a)	The Department shall prepare and file on or before July 31 of each year with the Joint Legislative Commission on Governmental Operations a summary report of all allocations made from the Clean Water and Drinking Water Revolving Loan and Grant Fund for each of the previous five fiscal years; the total funds received and allocations made; and unallocated funds on hand in each account as of the end of the preceding fiscal year.
(b)	The  report prepared by the  Department shall also set forth for the preceding fiscal year itemized and total allocations from the Wastewater Accounts  and itemized and total allocations from the Water Supply Accounts of revolving loans and grants authorized by the 
	 Department including:
(1)	Identification of each revolving loan and grant made by the receiving agency during the preceding fiscal year; the total amount of the revolving loan and grant commitments; the sums actually paid during the preceding fiscal year to each revolving loan and grant made and to each revolving loan and grant previously committed but unpaid; and the total revolving loan and grant funds paid during the preceding fiscal year.
(2)	Repealed by Session Laws 1991, c. 186, s. 9.
(3)	A summary for the preceding five years of the total number of revolving loans and grants made; the total funds committed to such revolving loans and grants; and the total sum actually paid to such revolving loans and grants.
(4)	Assessment and evaluation of the effects that approved projects have had upon water pollution control and water supplies within the purposes of this Chapter and with relation to the total water pollution control and water supply problem.
(d)	The report shall be signed by  the  Secretary of the Department.
"§ 159G‑18.  Applicant borrowing authority.
(a)	Applicants may execute debt instruments payable to the State in order to obtain revolving loans provided for in this Chapter. Applicants shall pledge as security for such obligations the user fee revenues derived from operation of the benefited facilities or systems only, or other sources of revenue, or their faith and credit, or any combination thereof. The faith and credit of applicants that are local government units shall not be pledged or be deemed to have been pledged unless the requirements of Article 4, Chapter 159 of the General Statutes have been met. The State Treasurer, with the assistance of the Local Government Commission, shall develop and adopt appropriate debt instruments for use by applicants under this Chapter. The Local Government Commission shall develop and adopt appropriate procedures for the delivery of debt instruments by applicants to the State without any public bidding therefore.
(b)	The Local Government Commission shall review and approve proposed loans to applicants that are local government units under this Chapter under the provisions of Articles 4 and 5, Chapter 159 of the General Statutes, as if the issuance of bonds was proposed, so far as those provisions are applicable. The Local Government Commission shall review and approve proposed loans to all other applicants  under this Chapter under the provisions of G.S. 159‑153, so far as those provisions are applicable. Revolving loans under this Chapter shall be outstanding debt of applicants that are local government units for the purpose of Article 10, Chapter 159 of the General Statutes."
SECTION 2.  G.S. 113A‑253(c) is amended by adding a new subdivision to read:
"(7a)	To facilitate stormwater planning projects and water supply planning projects."
SECTION 3.  This act becomes effective July 1, 2005.