49-1243. Drinking water revolving fund;
purposes; capitalization grants
A. Monies in the drinking water revolving fund may be used for the following
purposes:
1. Making drinking water facility loans including forgivable principal to political
subdivisions of this state, Indian tribes under section 49-1245 and other eligible
entities as determined by the board pursuant to the safe drinking water act.
2. Making drinking water facility loans under section 49-1244.
3. Purchasing or refinancing debt obligations of drinking water facilities at or
below market rate if the debt obligation was issued after July 1, 1993 for the purpose of
constructing, acquiring or improving drinking water facilities.
4. Providing financial assistance to drinking water facilities to purchase
insurance for local drinking water facility bond obligations.
5. Paying the costs to administer the fund but not more than four per cent of the
aggregate of federal capitalization grants may be used to pay these costs. Monies from
other sources may be used without limit to pay these costs.
6. Funding other programs that are authorized pursuant to the safe drinking water
act.
7. Providing linked deposit guarantees through third party lenders by depositing
monies with the lender on the condition that the lender make a loan on terms approved by
the board, at a rate of return on the deposit approved by the board and the state
treasurer and by giving the lender recourse against the deposit of loan repayments that
are not made when due.
B. If the monies pledged to secure water quality bonds become insufficient to pay
the principal and interest on the water quality bonds guaranteed by the drinking water
revolving fund, the board shall direct the state treasurer to liquidate securities in the
fund as may be necessary and shall apply those proceeds to make current all payments then
due on the bonds. The state treasurer shall immediately notify the attorney general and
auditor general of the insufficiency. The auditor general shall audit the circumstances
surrounding the depletion of the fund and report the findings to the attorney
general. The attorney general shall conduct an investigation and report those findings
to the governor and the legislature.
C. All proceeds of capitalization grants received from the United States pursuant
to the safe drinking water act shall be deposited in the capitalization grant transfer
account and shall be used solely to make loans to drinking water facilities to construct,
acquire, restore or rebuild these facilities, to purchase bond insurance or for any other
purpose permitted by the safe drinking water act. All principal received on loan
repayments made by borrowers under this section shall be deposited in the drinking water
revolving fund and shall be invested, used to provide financial assistance or used to
support the administration of the fund subject to the limits defined in the safe drinking
water act.
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