GSNC

Article 1. General Provisions.

§§ 159G-1 through 159G-18. [Repealed]

Repealed by Session Laws 2005-454, s. 2, effective January 1, 2006.

Eligibility under the Clean Water Revolving Loan and Grant Act.

Session Laws 2005-190, s. 3(d), as amended by Session Laws 2010-142, s. 17, provides: “The definitions set out in G.S. 159G-3 apply to this subsection. The operator of a wastewater treatment works that is owned by an agency of the State may apply for a loan or grant under G.S. 159G-20 on the same basis as any other applicant if the operator is a local government unit and if the local government unit operates the wastewater treatment works pursuant to a contract with the State agency that contemplates that the local government unit will eventually acquire ownership of the wastewater treatment works.”

§ 159G-19.

Reserved for future codification purposes.

§ 159G-20. Definitions.

The following definitions apply in this Chapter:

Affordability. — The relative affordability of a project for a community compared to other communities in North Carolina based on factors that shall include, at a minimum, water and sewer service rates, median household income, poverty rates, employment rates, the population of the served community, and past expenditures by the community on water infrastructure compared to that community’s capacity for financing of water infrastructure improvements. (1a) Asset management plan. — The strategic and systematic application of management practices applied to the infrastructure assets of a local government unit in order to minimize the total costs of acquiring, operating, maintaining, improving, and replacing the assets while at the same time maximizing the efficiency, reliability, and value of the assets.
(1b) Authority. — The State Water Infrastructure Authority created and established pursuant to Article 5 of this Chapter.

(1c) Construction costs. — The costs of planning, designing, and constructing a project for which a loan or grant is available under this Chapter. The term includes the following:
1. Excess or reserve capacity costs attributable to no more than 20-year projected domestic growth plus ten percent (10%) unspecified industrial growth.
2. Legal, fiscal, administrative, and contingency costs.
3. The fee imposed under G.S. 159G-24 to obtain a loan or grant for a project.
4. A fee payable to the Department for a permit to implement a project for which a loan or grant is obtained.
5. The cost to acquire real property or an interest in real property.
CWSRF. — The Clean Water State Revolving Fund established in G.S. 159G-22 as an account in the Water Infrastructure Fund.
Department. — The Department of Environmental Quality.
Repealed by Session Laws 2011-145, s. 13.3(ggg), effective July 1, 2011.
(4a) Distressed unit. — A public water system or wastewater system operated by a local government unit exhibiting signs of failure to identify or address those financial or operating needs necessary to enable that system to become or to remain a local government unit generating sufficient revenues to adequately fund management and operations, personnel, appropriate levels of maintenance, and reinvestment that facilitate the provision of reliable water or wastewater services.
Repealed by Session Laws 2013-360, s. 14.21(d), effective July 1, 2013 and Repealed by Session Laws 2013-413, s. 57(q), effective August 23, 2013.
(5a) Repealed by Session Laws 2013-360, s. 14.21(d), effective July 1, 2013.

(5b) Division. — Division of Water Infrastructure.
Drinking Water Reserve. — The Drinking Water Reserve established in G.S. 159G-22 as an account in the Water Infrastructure Fund.
DWSRF. — The Drinking Water State Revolving Fund established in G.S. 159G-22 as an account in the Water Infrastructure Fund.
Grant. — A sum of money given to an applicant without any obligation on the part of the applicant to repay the sum.
, (10) Repealed by Session Laws 2015-241, s. 14.13(b), effective July 1, 2015. (10a) Investor-owned drinking water corporation. — A corporation owned by investors and incorporated solely for the purpose of providing drinking water services for profit.
(11) Loan. — A sum of money loaned to an applicant with an obligation on the part of the applicant to repay the sum.

(12) Local Government Commission. — The Local Government Commission of the Department of the State Treasurer, established in G.S. 159-3 .

(13) Local government unit. — Any of the following:
1. A city as defined in G.S. 160A-1 .
2. A county.
3. A consolidated city-county as defined in G.S. 160B-2 .
4. Any of the following entities created pursuant to Chapter 162A of the General Statutes:
  1. A water and sewer authority created pursuant to Article 1.
  2. A metropolitan water district created pursuant to Article 4.
  3. A metropolitan sewerage district created pursuant to Article 5.
  4. A metropolitan water and sewerage district created pursuant to Article 5A.
  5. A county water and sewer district created pursuant to Article 6.
5. , f.Repealed by Session Laws 2020-79, s. 1(a), effective July 1, 2020.
  g. A sanitary district created pursuant to Part 2 of Article 2 of Chapter 130A of the General Statutes.
  
  h. A joint agency created pursuant to Part 1 or Part 5 of Article 20 of Chapter 160A of the General Statutes.
  1. A joint agency that was created by agreement between two cities and towns to operate an airport pursuant to G.S. 63-56 and that provided drinking water and wastewater services off the airport premises before 1 January 1995.
    (13a) Merger. — The consolidation of two or more water and/or sewer systems into one system with common ownership, management, and operation.
    
    (14) Nonprofit water corporation. — A nonprofit corporation that is incorporated under Chapter 55A of the General Statutes solely for the purpose of providing drinking water or wastewater services and is an eligible applicant for a federal loan or grant from the Rural Utility Services Division, U.S. Department of Agriculture.
    
    (14a) Operating deficit. — The shortage between revenues plus available reserves and operating expenditures, including capital expenditures, necessary to maintain operations in a distressed unit.
    
    (15) Public water system. — Defined in G.S. 130A-313 .
    
    (16) Regionalization. — The physical interconnecting of an eligible entity’s wastewater system to another entity’s wastewater system for the purposes of providing regional treatment or the physical interconnecting of an eligible entity’s public water system to another entity’s water system for the purposes of providing regional water supply.
    
    (17) Reserved.
    
    (18) Secretary. — The Secretary of Environmental Quality.
    
    (19) State. — The State of North Carolina.
    
    (20) Stormwater quality project. — A project whose primary purpose is to prevent or remove pollution from stormwater rather than collect, store, or convey stormwater for drainage or flood control purposes.
    
    (21) Targeted interest rate project. — Either of the following types of projects:
    
    a. A project that is awarded a loan from the Drinking Water Reserve or the Wastewater Reserve based on affordability.
    
    b. A project that is awarded a loan from the CWSRF or the DWSRF and is in a category for which federal law encourages a special focus.
    
    (22) Treasurer. — The Treasurer of the State elected pursuant to Article III, Section 7, of the Constitution.
    
    (22a) Viable Utility Reserve. — The Viable Utility Reserve established in G.S. 159G-22 as an account in the Water Infrastructure Fund.
    
    (23) Wastewater collection system. — A unified system of pipes, conduits, pumping stations, force mains, and appurtenances for collecting and transmitting water-carried human wastes and other wastewater from residences, industrial establishments, or any other buildings.
    
    (24) Wastewater Reserve. — The Wastewater Reserve established in G.S. 159G-22 as an account in the Water Infrastructure Fund.
    
    (25) Wastewater system. — A wastewater collection system, wastewater treatment works, stormwater quality project, or nonpoint source pollution project.
    
    (26) Wastewater treatment works. — 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 equipment, power and other equipment, and their appurtenances.
    
    (27) Water Infrastructure Fund. — The fund established in G.S. 159G-22.

History. 2005-454, s. 3; 2010-151, s. 1; 2011-145, ss. 13.3(ggg), 13.11A(a); 2013-360, s. 14.21(d); 2013-413, s. 57(q); 2014-115, s. 17; 2015-241, ss. 14.13(a), (b), 14.30(u), (v); 2019-241, s. 11(d); 2020-79, ss. 1(a), 6(a).

Establish Standards and Pilot Program for Highly Treated Wastewater.

Session Laws 2021-180, s. 8.26(a)-(g) provides: “Establish Standards and Pilot Program for Highly Treated Wastewater.

“(a) The following definitions apply in this section:

“(1) Highly treated wastewater. – Effluent discharged from a wastewater system that is designed and operated to meet the following standards:

“a. With respect to the carbonaceous biological oxygen demand (CBOD5), 10mg/L.

“b. With respect to NH3, 10mg/L.

“c. With respect to total nitrogen, 10mg/L, or a minimum of sixty percent (60%) reduction from the influent total Kjeldahl nitrogen.

“d. With respect to total phosphorus, 5mg/L, unless discharged into nutrient sensitive waters.

“e. With respect to fecal coliforms, 10 colonies/100mL.

“f. Capture and removal of residual sludge and biogases.

“g. With respect to total suspended solids, less than or equal to 10mg/L.

“(2) Wastewater system. – Defined in G.S. 130A-334 .

“(b) Funds allocated from the State Fiscal Recovery Fund to the Board of Governors of The University of North Carolina for the Innovative Highly Treated Wastewater Pilot Program (Program) shall be provided to the North Carolina Policy Collaboratory at the University of North Carolina at Chapel Hill (Collaboratory) to establish the Program as described in this subsection. The Collaboratory may use up to one million dollars ($1,000,000) of the funds allocated by this subsection for research and administrative costs related to the Program, of which up to two hundred thousand dollars ($200,000) may be used to reimburse the Department of Environmental Quality for its administrative costs. Project funding from the funds allocated by this section is limited to the lesser of forty percent (40%) of the total project cost or four million dollars ($4,000,000). In implementing the Program, the Collaboratory shall do the following:

“(1) Review and evaluate wastewater systems producing highly treated wastewater, either as a single unit or as a combination of treatment devices for suitability as a wastewater treatment option for local governments, sanitary districts, or public authorities considered distressed, as defined by G.S. 159G-20 , that (i) have no more than 10,000 customers or (ii) include residential or commercial developments or subdivisions that are unable to be served by existing wastewater systems.

“(2) Identify no less than five local governments, sanitary districts, or public authorities meeting the criteria set forth in subdivision (1) of this subsection as participants in the Program.

“(3) Work with Program participants to submit permit applications to the Department of Environmental Quality and, upon permit approval, to construct the wastewater systems.

“(4) Conduct research and monitoring to quantify the efficacy of the wastewater systems funded and built as part of the Program. The Collaboratory shall share results of this research with Program participants and the Department.

“(c) The Department of Environmental Quality shall do the following with respect to entities receiving wastewater systems producing highly treated wastewater under subsection (b) of this section to the extent not inconsistent with its National Pollutant Discharge Elimination System permitting authority delegated from the United States Environmental Protection Agency:

“(1) Review and qualify wastewater systems producing highly treated wastewater, either as a single unit or as a combination of treatment devices. The Department shall require the manufacturer of the wastewater system within five days of the qualification under this subdivision to file with the Department a performance bond or other surety with a minimum term of five years to be executed in favor of the permittee in the amount sufficient to cover system replacement. Operation, maintenance, abuse, or change in hydraulic flows or wastewater characteristics shall not be attached to the performance bond or surety.

“(2) Work with the entities identified under subsection (b) of this section to permit the wastewater systems meeting the standards for highly treated wastewater set forth in subsection (a) of this section. The system must be consistent with the action plan developed by the entities as set forth in G.S. 159G-45(b)(3).

“(d) No later than December 1, 2024, the Collaboratory, with the assistance of the Department of Environmental Quality, shall provide a report to the Environmental Management Commission and the Environmental Review Commission evaluating the systems permitted under the pilot program established in this section. The report shall assess the effectiveness of these systems compared to the systems previously operated by the local government, sanitary district, or public authority, along with suggestions for further legislation and rulemaking necessary to support the adoption of highly treated wastewater systems.

“(e) The Commission for Public Health shall adopt temporary and permanent rules to provide for approval of treatment system applications for use in the State and create benefits for systems producing higher wastewater treatment levels that are proportional and graduated. These rules shall include, at a minimum, the following:

“(1) Subject to the requirements of subdivision (4) of this subsection, applications for provisional wastewater systems, as defined in G.S. 130A-343(a)(7), from manufacturers of wastewater systems with certification and listing for one or more years from a nationally recognized certification body, as defined in G.S. 130A-343(a)(6), shall be approved within 45 days of receipt of a complete application. The proposed wastewater system listed in the application shall be identical in design and features to the wastewater system certified and listed by the nationally recognized certification body.

“(2) Subject to the requirements of subdivision (4) of this subsection, applications for proposed wastewater systems without certification and listing from a nationally recognized certification body, as defined in G.S. 130A-343(a)(6), shall be approved as provisional and shall allow the issuance of a maximum of 200 improvement permits and authorizations for wastewater system construction.

“(3) Subject to the requirements of subdivision (4) of this subsection, applications for innovative status of a wastewater system shall be approved (i) after two years of certification and listing by a nationally recognized certification body and one year of field data in this State or other states or countries approved by DHHS or (ii) if not listed by a nationally recognized body, after completion of provisional status requirements in accordance with G.S. 130A-343(f). For systems receiving innovative status as a result of receiving national certification, those systems shall be identical to the system certified and listed by the nationally recognized certification body and identical to the systems installed in this State and approved by DHHS or other states or countries.

“(4) Applications for wastewater systems and dispersal products received after the effective date of this subsection shall demonstrate structural integrity, including subjecting the trench system to axle load of 16,000 pounds when covered with 12 inches of compacted soil and 4,000 pounds when covered with 6 inches of compacted soil without breakage, collapse, fracture, or compression that prevents the downline distribution of wastewater. Wastewater treatment devices with identifying surface or above grade access for operation and maintenance shall be excluded from load testing when installed and backfilled in accordance with the rules or the product approval.

“(5) Wastewater systems found by DHHS to meet standards for reclaimed water based on (i) field demonstrations over a two-year period in this State or other states approved by DHHS that the system meets reclaimed water standards or (ii) certification and listing by a nationally recognized body, such as the National Sanitation Foundation Standard 350, shall be approved for designs that eliminate repair area rules in Type I soils. Elimination of repair areas shall be considered for domestic strength wastewater only. Systems permitted without repair area under this subsection shall be classified by DHHS as a Type VI(b) system under DHHS rules and shall be inspected no less than 12 times per year.

“(6) Vertical and horizontal restrictions to property lines and limiting conditions for systems approved under this subsection shall be reduced proportionally to the graduated increases in wastewater quality.

“(f) The Commission for Public Health and the Department of Health and Human Services shall report quarterly on their implementation of subsection (d) of this section beginning no later than May 1, 2022, and shall continue quarterly reporting until rulemaking activities required by this section have been completed.

“(g) This section is effective when it becomes law. Funds allocated by this section that are not spent or encumbered by June 30, 2024, shall revert to the Wastewater Reserve to be used for any of the purposes authorized in G.S. 159G-32(b) .”

Editor’s Note.

The definitions have been put in alphabetical order at the direction of the Revisor of Statutes.

Subdivision (28) as added by Session Laws 2010-151, s. 1, was renumbered as subdivision (1), at the direction of the Revisor of Statutes. Former subdivision (1) was renumbered as subdivision (1a), also at the direction of the Revisor of Statutes.

Session Laws 2015-241, s. 1.1, provides: “This act shall be known as ‘The Current Operations and Capital Improvements Appropriations Act of 2015.’ ”

Session Laws 2015-241, s. 33.6, is a severability clause.

Session Laws 2019-241, s. 11(d), amended this section by adding a subdivision (14a), contingent upon 2019 SB 553 or 2019 HB 966 or substantially similar provision becoming law. SB 553 and HB 966 were both vetoed, and the General Assembly failed to override. Session Laws 2020-79, s. 6(a), repealed Session Laws 2019-241, s. 11(d).

Session Laws 2021-180, s. 1.1, provides: “This act shall be known as the ‘Current Operations Appropriations Act of 2021.’”

Session Laws 2021-180, s. 43.5, provides: “Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2021-2023 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2021-2023 fiscal biennium.”

Session Laws 2021-180, s. 43.7, is a severability clause.

Effect of Amendments.

Session Laws 2010-151, s. 1, effective July 1, 2010, and applicable to applications for loans and grants submitted on or after that date, added subdivision (28) (now (1)).

Session Laws 2011-145, ss. 13.3(ggg), 13.11A(a), effective July 1, 2011, deleted subdivision (4), which was the definition of “Division of Environmental Health”; and added subdivisions (5a) and (10a).

Session Laws 2013-360, s. 14.21(d), effective July 1, 2013, deleted subdivisions (5) and (5a); and added subdivision (5b).

Session Laws 2013-413, s. 57(q), effective August 23, 2015, repealed subdivision (5).

Session Laws 2015-241, s. 14.13(a), (b), effective July 1, 2015, added subdivisions (1), (1b), (13a), and (16); redesignated former subdivision (1) as (1a) and former subdiviion (1a) as (1c); deleted former subdivisions (9) and (10), which defined “High-unit-cost project” and “High-unit-cost threshold”; and rewrote sub-subdivision (21)a., which formerly read: “A high-unit-cost project that is awarded a loan.”

Session Laws 2015-241, s. 14.30(u), (v), effective July 1, 2015, substituted “Department of Environmental Quality” for “Department of Environment and Natural Resources” in subdivision (3); and substituted “Secretary of Environmental Quality” for “Secretary of Environment and Natural Resources” in subdivision (18).

Session Laws 2020-79, s. 1(a), effective July 1, 2020, added subdivision (4a); rewrote sub-subdivision (13)d.; deleted subdivisions (13)e. and (13)f.; added “or Part 5” in sub-subdivision (13)h.; and added subdivisions (14a) and (22a).

§ 159G-21. Revenue for water projects.

This Chapter governs the use of the following revenue:

Revenue appropriated to the Department to match federal funds received for loans and grants for wastewater and drinking water projects and revenue received by the Department from the repayment of loans made with the use of the federal funds.
Revenue appropriated to the Department to provide a source of State funds to make loans and grants for wastewater and drinking water projects and revenue received by the Department from the repayment of loans made with the use of these funds.

History. 2005-454, s. 3.

§ 159G-22. Water Infrastructure Fund.

Fund Established. — The Water Infrastructure Fund is established as a special revenue fund. The Fund is comprised of the accounts set out in this section. The Fund provides revenue through its accounts for loans and grants as provided in this Chapter to meet the water infrastructure needs of the State. The Treasurer is responsible for distributing and investing all revenue received by the Fund. Interest and other investment income earned by the Fund accrues to it and must be allocated to the account to which the income is attributable. Accounts to which federal funds are credited must be kept separate from accounts that do not receive federal funds. A payment of the principal of or interest on a loan made from an account of the Fund must be credited to the account from which the loan was made.
CWSRF. — The Clean Water State Revolving Fund is established as an account within the Water Infrastructure Fund. The account receives federal funds for wastewater projects and the State funds required to match the federal funds. The account is established under and must be managed in accordance with Title VI of the Federal Water Quality Act of 1987, Pub. L. 100-4, to achieve the purposes of that act and the Federal Water Pollution Control Act of 1972, 33 U.S.C. §§ 1251 through 1387. The account must comply with these federal acts and the federal regulations adopted to implement the acts. Revenue credited to the account is available in perpetuity and must be used only to provide construction loans and other assistance allowed under federal law. Grants are available from this account only to the extent allowed under federal law.
DWSRF. — The Drinking Water State Revolving Fund is established as an account within the Water Infrastructure Fund. The account receives federal funds for public water systems and the State funds required to match the federal funds. The account is established under and must be managed in accordance with section 130 of Title 1 of the federal Safe Drinking Water Act of 1996 as amended, 42 U.S.C. § 300J-12, to achieve the purposes of that act. The account must comply with that act and the federal regulations adopted to implement the act. Revenue credited to the account is available in perpetuity and must be used only to provide construction loans and other assistance allowed under federal law. Grants are available from this account only to the extent allowed under federal law.
Wastewater Reserve. — The Wastewater Reserve is established as an account within the Water Infrastructure Fund. The account is established to receive State funds that are to be used for loans and grants for wastewater systems. Revenue credited to the Reserve is neither received from the federal government nor provided as a match for federal funds.
Wastewater Accounts. — The Department is directed to establish accounts within the Wastewater Reserve to administer loans and grants for wastewater collection systems, wastewater treatment works, stormwater quality projects, and nonpoint source pollution projects. The wastewater accounts must include an account for each type of loan or grant set out in G.S. 159G-33 .
Drinking Water Reserve. — The Drinking Water Reserve is established as an account within the Water Infrastructure Fund. The account is established to receive State funds that are to be used for loans and grants for public water systems. Revenue credited to the Reserve is neither received from the federal government nor provided as a match for federal funds.
Drinking Water Accounts. — The Department is directed to establish accounts within the Drinking Water Reserve to administer loans and grants for public water systems. The drinking water accounts must include an account for each type of loan or grant set out in G.S. 159G-34 .
Viable Utility Reserve. — The Viable Utility Reserve is established as an account within the Water Infrastructure Fund. The account is established to receive appropriated State funds to be used for grants to local government units for those purposes authorized under this Article. Revenue credited to the Viable Utility Reserve is neither received from the federal government nor provided as a match for federal funds.
Viable Utility Accounts. — The Department is directed to establish accounts within the Viable Utility Reserve to administer grants for public water systems or wastewater systems owned by local government units.
Unused CWSRF and DWSRF State Match. — Funds appropriated to the Department for the Clean Water State Revolving Fund or the Drinking Water State Revolving Fund to provide State matching funds that are in excess of the amount required to draw down all available federal capitalization grant funds may also be used for water and wastewater infrastructure grants awarded from the Wastewater Reserve, the Drinking Water Reserve, or the Viable Utility Reserve.

History. 2005-454, s. 3; 2020-79, s. 1(b); 2021-180, s. 12.12(a).

Editor’s Note.

Session Laws 2013-360, s. 14.20, provides: “Notwithstanding G.S. 159G-22 , the Department of Environment and Natural Resources may transfer State funds from the Drinking Water Reserve to the Drinking Water State Revolving Fund for the 2013-2014 fiscal year and shall use any such funds to match maximum available federal grant monies authorized by section 1453 of the federal Safe Drinking Water Act of 1996, 42 U.S.C. § 300j-12, as amended.”

Session Laws 2013-360, s. 14.21(a), provides: “The Division of Water Infrastructure is established as a new division within the environmental area of the Department of Environment and Natural Resources [now Department of Environmental Quality]. All functions, powers, duties, and obligations previously vested in the Division of Water Quality of the Department of Environment and Natural Resources pertaining to the implementation and administration of Chapter 159G of the General Statutes are transferred to and vested in the Division of Water Infrastructure by a Type II transfer, as defined in G.S. 143A-6 . All functions, powers, duties, and obligations previously vested in the Division of Water Resources of the Department of Environment and Natural Resources pertaining to the implementation and administration of Chapter 159G of the General Statutes are transferred to and vested in the Division of Water Infrastructure by a Type II transfer, as defined in G.S. 143A-6 . The Water Infrastructure Fund established under G.S. 159G-22 and all accounts within the Water Infrastructure Fund under G.S. 159G-22 shall be transferred to and administered by the Division of Water Infrastructure. In addition to its other duties set forth in Chapter 159G, the Division of Water Infrastructure shall be responsible for administering the program whereby local government units are awarded funds by the State Water Infrastructure Authority created by this section for infrastructure projects from community development block grant funds.”

Session Laws 2015-241, s. 33.6, is a severability clause.

Session Laws 2017-57, s. 39.6, is a severability clause.

Session Laws 2021-180, s. 1.1, provides: “This act shall be known as the ‘Current Operations Appropriations Act of 2021.’”

Session Laws 2021-180, s. 43.7, is a severability clause.

Effect of Amendments.

Session Laws 2020-79, s. 1(b), effective July 1, 2020, added subsections (h) and (i).

Session Laws 2021-180, s. 12.12(a), effective July 1, 2021, added subsection (j).

§ 159G-23. Priority consideration for loan or grant from Wastewater Reserve or Drinking Water Reserve.

The considerations for priority in this section apply to a loan or grant from the Wastewater Reserve or the Drinking Water Reserve. The Division of Water Infrastructure must consider the following items when evaluating applications:

Public necessity. — A project that promotes public health and protects the environment, improves a system that is not in compliance with permit requirements or is under orders from the Department, enables a moratorium to be lifted, or replaces failing septic tanks with a wastewater collection system.
Effect on impaired waters. — A project that improves designated impaired waters of the State, with greater priority given to projects that improve designated impaired waters of the State that serve as a public water supply for a large public water system. For purposes of this subdivision, a large public water system is one serving more than 175,000 service connections.
Efficiency. — A project that achieves efficiencies in meeting the State’s water infrastructure needs or reduces vulnerability to drought consistent with Part 2A of Article 21 and Article 38 of Chapter 143 of the General Statutes by one of the following methods:
1. The combination of two or more wastewater or public water systems into a regional wastewater or public water system by merger, consolidation, or another means.
2. Conservation or reuse of water, including bulk water reuse facilities and waterlines to supply reuse water for irrigation and other approved uses.
3. Construction of an interconnection between water systems intended for use in drought or other water shortage emergency.
4. Repair or replacement of leaking waterlines to improve water conservation and efficiency or to prevent contamination.
5. Replacement of meters and installation of new metering systems.
Comprehensive land-use plan. — A project that is located in a city or county that has adopted or has taken significant steps to adopt a comprehensive land-use plan under Article 18 of Chapter 153A of the General Statutes or Article 19 of Chapter 160A of the General Statutes. The existence of a plan has more priority than steps taken to adopt a plan, such as adoption of a zoning ordinance. A plan that exceeds the minimum State standards for protection of water resources has higher priority than one that does not. A project is considered to be located in a city or county if it is located in whole or in part in that unit. A land-use plan is not considered a comprehensive land-use plan unless it has provisions that protect existing water uses and ensure compliance with water quality standards and classifications in all waters of the State affected by the plan.
Flood hazard ordinance. — A project that is located in a city or county that has adopted a flood hazard prevention ordinance under G.S. 143-215.54 A. A plan that exceeds the minimum standards under G.S. 143-215.54 A for a flood hazard prevention ordinance has higher priority than one that does not. A project is considered to be located in a city or county if it is located in whole or in part in that unit. If no part of the service area of a project is located within the 100-year floodplain, the project has equal consideration under this subdivision as if it were located in a city or county that has adopted a flood hazard prevention ordinance. The most recent maps prepared pursuant to the National Flood Insurance Program or approved by the Department determine whether an area is within the 100-year floodplain.
Sound management. — A project submitted by a local government unit that has demonstrated a willingness and ability to meet its responsibilities through sound fiscal policies and efficient operation and management.
(6a) Asset management plan. — A project submitted by a local government unit with more than 1,000 service connections that has developed and is implementing an asset management plan.
Capital improvement plan. — A project that implements the applicant’s capital improvement plan for the wastewater system or public water system it manages, so long as the capital improvement plan sets out the applicant’s expected water infrastructure needs for at least 10 years.
Coastal habitat protection. — A project that implements a recommendation of a Coastal Habitat Protection Plan adopted by the Environmental Management Commission, the Coastal Resources Commission, and the Marine Fisheries Commission pursuant to G.S. 143B-279.8. If no part of the service area of a project is located within a county subject to that Plan, the project has equal priority under this subdivision with a project that receives priority under this subdivision.
Affordability. — The relative affordability of a project for a community compared to other communities in North Carolina.
Merger and Regionalization. — A project to provide for the planning of regional public water and wastewater systems, to provide for the orderly coordination of local actions relating to public water and wastewater systems, or to help realize economies of scale in regional public water and wastewater systems through consolidation, management, merger, or interconnection of public water and wastewater systems. If an applicant demonstrates that it is not feasible for the project to include regionalization, the funding agency shall assign the project the same priority under this subdivision as a project that includes regionalization.
Improve regional coordination. — A project that addresses a potential conflict between local plans or implements a measure in which local water supply plans could be better coordinated.
Water conservation measures for drought. — A project that includes adoption of water conservation measures by a local government unit that are more stringent than the minimum water conservation measures required pursuant to G.S. 143-355.2 .
Low-income residents. — A project that is located in an area annexed by a municipality under Article 4A of Chapter 160A of the General Statutes in order to provide water or sewer services to low-income residents.
Disproportionate burden to protect water supply of higher-wealth neighboring local government unit. — Wastewater system improvements made by a local government unit in order to protect or preserve the water supply of a neighboring local government unit that has a lower poverty rate, lower utility bills, higher population growth, higher median household incomes, and lower unemployment.

History. 2005-454, s. 3; 2008-143, s. 15; 2010-151, s. 2; 2011-145, s. 13.3(hhh); 2011-396, s. 11.2; 2013-360, s. 14.21(e); 2013-413, s. 57(r); 2014-115, s. 17; 2015-241, s. 14.13(c); 2021-117, s. 4(a).

Editor’s Note.

Subdivision (9), enacted by Session Laws 2011-396, s. 11.2, was renumbered as subdivision (13) at the direction of the Revisor of Statutes.

Session Laws 2008-143, s. 20, provides: “Nothing in this act shall be construed to expand or limit the authority of a unit of government or public water supply system to regulate water use from a well located outside of its jurisdiction, a well not connected to its water system, or any other private well.”

Session Laws 2011-396, s. 12, provides: “Except for Sections 10, 11.1, and 11.2, this act does not apply to any municipality that in its charter requires that an annexation must be approved by (i) either the voters in a referendum or at the request of a majority of the property owners; (ii) the voters in a referendum; or (iii) the request of a majority of the property owners.” Sections 10, 11.1, and 11.2 amended G.S. 160A-31 , 143B-437.04(a), and 159G-23, respectively.

Session Laws 2011-396, s. 13, is a severability clause.

Session Laws 2011-396, s. 14, provides: “This act is effective when it becomes law [July 1, 2011] and applies to annexations initiated by municipalities on or after that date and to petitions for annexation under Part 1 and Part 4 of Article 4A of Chapter 160A of the General Statutes presented on or after that date. Annexations initiated prior to the effective date of this act by any action under Part 2 or Part 3 of Article 4A of Chapter 160A of the General Statutes, but for which an annexation ordinance has not been adopted, shall terminate and may be reinitiated in compliance with Part 7 of Article 4A of Chapter 160A of the General Statutes as enacted by this act.”

Session Laws 2013-360, s. 14.21(o), provides, in part: “The Revisor of Statutes may conform names and titles changed by this section and may correct statutory references as required by this section throughout the General Statutes.” Pursuant to this authority, the Revisor of Statutes made conforming changes in this section.

Session Laws 2015-241, s. 33.6, is a severability clause.

Session Laws 2021-117, s. 4(b), made the amendments to subdivisions (2), (11), and (14) of this section by Session Laws 2021-117, s. 4(a), effective September 1, 2021, and applicable to applications for loans or grants from the Wastewater Reserve or the Drinking Water Reserve received by the Division of Water Infrastructure on or after that date.

Effect of Amendments.

Session Laws 2008-143, s. 15, effective July 31, 2008, in subdivision (3), inserted “or reduces vulnerability to drought consistent with Part 2A of Article 21 of Chapter 143 of the General Statutes” in the introductory language; in subdivision (3)b, added “including bulk water reuse facilities and waterlines to supply reuse water for irrigation and other approved uses”; and added subdivisions (3)c through (3)e.

Session Laws 2011-145, s. 13.3(hhh), effective July 1, 2011, substituted “Division of Water Resources” for “Division of Environmental Health” in the introductory paragraph.

Session Laws 2011-396, s. 11.2, effective July 1, 2011, added subdivision (13). For applicability, see editor’s note.

Session Laws 2013-360, s. 14.21(e), effective July 1, 2013, substituted “Infrastructure” for “Quality and the Division of Water Resources” in the second sentence of the introductory paragraph.

Session Laws 2013-413, s. 57(r), in the second sentence of the introductory paragraph, deleted “Division of Water Quality and the” preceding “Division of Water” and “each” preceding “establish.” For effective date, see Editor’s note.

Session Laws 2015-241, s. 14.13(c), effective July 1, 2015, rewrote the section.

Session Laws 2021-117, s. 4(a), rewrote subdivisions (2) and (11); and added subdivision (14). For effective date and applicability, see editor’s note.

§ 159G-24. Fee imposed on a loan or grant from Water Infrastructure Fund.

A loan awarded from the Water Infrastructure Fund is subject to a fee of two percent (2%) of the loan. A grant awarded from the Water Infrastructure Fund is subject to a fee of one and one-half percent (1 1/2%) of the grant. The fee is payable when a loan or grant is awarded.
Departmental Receipt. — The fee on a loan from the Water Infrastructure Fund is a departmental receipt and must be applied to the Department’s and the Local Government Commission’s costs in administering loans from these Reserves. The Department and the Local Government Commission must determine how to allocate the fee receipts between their agencies. The fee on a grant from the Water Infrastructure Fund is a departmental receipt of the Department and must be applied to the Department’s costs in administering grants from these Reserves.

History. 2005-454, s. 3; 2012-142, s. 12.01.

Effect of Amendments.

Session Laws 2012-142, s. 12.01, effective July 1, 2012, substituted “Water Infrastructure Fund” for “Wastewater Reserve or the Drinking Water Reserve” throughout the section; and, in subsection (a), substituted “two percent (2%)” for “two and one-half percent (2 1/2%)”.

§ 159G-25. Expenditure for emergency corrective action at a wastewater treatment works.

The Department may use revenue in any account of the Wastewater Reserve to provide funds for emergency corrective action at a wastewater treatment works under the circumstances set out in this section. The amount expended in a fiscal year for corrective action under this section may not exceed two hundred thousand dollars ($200,000). An expenditure for emergency corrective action is authorized only under the following circumstances:
1. A person holding a wastewater discharge or nondischarge permit issued under Article 21 of Chapter 143 of the General Statutes is violating the terms of the permit.
2. The wastewater treatment works operated under the permit has a design flow capacity of no more than 100,000 gallons a day.
3. The Department has given the permit holder written notice of the violation.
4. The permit holder refuses to take the action required to comply with the permit.
5. The inaction by the permit holder poses a threat to public health.
6. The Department has informed the permit holder in writing that the Department plans to take emergency corrective action and then bring a civil action against the permit holder to recover the cost of the emergency corrective action.
The Department may bring a civil action against the holder of the permit for the wastewater treatment works to recover the amount expended from the Wastewater Reserve for the emergency corrective action. The amount recovered in a civil action must be credited to the account in the Wastewater Reserve from which the funds were expended.

History. 2005-454, s. 3.

§ 159G-25.5. [Repealed]

Repealed by Session Laws 2019-241, s. 11(a), effective November 6, 2019.

History. 2019-226, s. 1; repealed by 2019-241, s. 11(a), effective November 6, 2019.

Editor’s Note.

Former G.S. 159G-25.5 pertained to emergency expenditure for operating deficits incurred by certain public water systems and wastewater systems.

§ 159G-26. Annual reports on Water Infrastructure Fund.

Requirement. — The Department shall publish a report each year on the accounts in the Water Infrastructure Fund that are administered by the Division of Water Infrastructure. The report shall be published by November 1 of each year and cover the preceding fiscal year. The Department shall make the report available to the public and shall give a copy of the report to the Environmental Review Commission, the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, and the Fiscal Research Division with the report required by G.S. 159G-72 as a single report.
Content. — The report required by this section must contain the following information concerning the accounts of the Water Infrastructure Fund:
1. The beginning and ending balance of the account for the fiscal year.
2. The amount of revenue credited to the account during the fiscal year, by source.
3. The total amount of loans and grants awarded from the account, by type, and the amount of any expenditure for emergency corrective action made from the account.
4. For each loan or grant awarded, the recipient of the award, the amount of the award, the amount of the award that was disbursed, and the amount of the award remaining to be disbursed in a subsequent fiscal year.
5. The amount disbursed for loans and grants awarded but not disbursed in a prior fiscal year and the amount remaining to be disbursed in a subsequent fiscal year.
6. An assessment of the expected impact on water quality and water supply of the projects for which the loans and grants were awarded.

History. 2005-454, s. 3; 2011-145, s. 13.3(iii); 2013-360, s. 14.21(f); 2013-413, s. 57(s); 2014-115, s. 17; 2017-10, s. 4.17(a).

Editor’s Note.

Effect of Amendments.

Session Laws 2011-145, s. 13.3(iii), effective July 1, 2011, substituted “Division of Water Resources” for “Division of Environmental Health” in the second sentence of subsection (a).

Session Laws 2013-360, s. 14.21(f), effective July 1, 2013, in subsection (a), substituted “Infrastructure” for “Quality or the Division of Water Resources” in the first sentence and substituted “Legislative Services Commission” for “General Assembly” at the end of the last sentence.

Session Laws 2013-413, s. 57(s), deleted “Division of Water Quality or the” preceding “Division of Water” in the first sentence of subsection (a). For effective date, see Editor’s note.

Session Laws 2017-10, s. 4.17(a), effective May 4, 2017, substituted “shall” for “must” wherever it appears; in the second sentence, substituted “Commission, the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, and the” for “Commission and the”; substituted “Division with the report required by G.S. 159G-72 as a single report” for “Division of the Legislative Services Commission”; and made a stylistic change.

§§ 159G-27 through 159G-29.

Reserved for future codification purposes.

Article 2. Water Infrastructure Loans and Grants Administered by Department.

§ 159G-30. Department’s responsibility.

The Department, through the Division, administers the following:

Loans and grants made from the CWSRF, the DWSRF, the Wastewater Reserve, and the Drinking Water Reserve.
The award of funds by the Authority from the Community Development Block Grant program to local government units for infrastructure projects.
Grants made from the Viable Utility Reserve.

History. 2005-454, s. 3; 2011-145, s. 13.3(jjj); 2013-360, s. 14.21(g); 2013-413, s. 57(t); 2014-115, s. 17; 2015-241, s. 14.13(c1); 2020-79, s. 1(c).

Editor’s Note.

Effect of Amendments.

Session Laws 2011-145, s. 13.3(jjj), effective July 1, 2011, twice substituted “Division of Water Resources” for “Division of Environmental Health.”

Session Laws 2013-360, s. 14.21(g), effective July 1, 2013, substituted “Infrastructure” for “Quality or the Division of Water Resources,” and deleted the former second and third sentences, which read: “The Division of Water Quality administers loans and grants from the CWSRF and the Wastewater Reserve. The Division of Water Resources administers loans and grants from the DWSRF and the Drinking Water Reserve.”

Session Laws 2013-413, s. 57(t), deleted “the Division of Water Quality and” preceding “the Division of Water” and deleted the former second and third sentences, which read: “The Division of Water Quality administers loans and grants from the CWSRF and the Wastewater Reserve. The Division of Water Resources administers loans and grants from the DWSRF and the Drinking Water Reserve.” For effective date, see Editor’s note.

Session Laws 2015-241, s. 14.13(c1), effective July 1, 2015, added “and shall administer the award of funds by the State Water Infrastructure Authority from the Community Development Block Grant program to local government units for infrastructure projects.”

Session Laws 2020-79, s. 1(c), effective July 1, 2020, rewrote the section.

§ 159G-31. Entities eligible to apply for loan or grant.

A local government unit or a nonprofit water corporation is eligible to apply for a loan or grant from the CWSRF, the DWSRF, the Wastewater Reserve, or the Drinking Water Reserve. An investor-owned drinking water corporation is also eligible to apply for a loan or grant from the DWSRF. Other entities are not eligible for a loan or grant from these accounts.
Entities eligible in subsection (a) of this section for grants from the Wastewater Reserve and the Drinking Water Reserve may be limited, based on affordability, to a portion of the total construction costs for the project types defined in G.S. 159G-33(a)(2) and G.S. 159G-34(a)(2).
To the extent that funds are available, loans shall be considered for the portion of construction costs not eligible for grant funding.
A local government unit is eligible to apply for a grant from the Viable Utility Reserve.
The Local Government Commission may submit an application on behalf of a distressed unit for an emergency grant from the Viable Utility Reserve to cover operating deficits of that local government unit’s public water system or wastewater system, and any such application shall be deemed approved by the Local Government Commission upon submission.

History. 2005-454, s. 3; 2011-145, s. 13.11A(b); 2015-241, s. 14.13(c2); 2019-241, s. 11(h); 2020-79, ss. 1(d), 6(a).

Editor’s Note.

Session Laws 2015-241, s. 1.1, provides: “This act shall be known as ‘The Current Operations and Capital Improvements Appropriations Act of 2015.’ ”

Session Laws 2015-241, s. 33.6, is a severability clause.

Session Laws 2019-241, s. 11(h), amended this section by adding a subsection (e), contingent upon 2019 SB 553 or 2019 HB 966 or substantially similar provision becoming law. SB 553 and HB 966 were both vetoed, and the General Assembly failed to override. Session Laws 2020-79, s. 6(a), repealed Session Laws 2019-241, s. 11(h).

Effect of Amendments.

Session Laws 2011-145, s. 13.11A(b), effective July 1, 2011, added the second sentence.

Session Laws 2015-241, s. 14.13(c2), effective July 1, 2015, added the subsection (a) designation and added subsections (b) and (c).

Session Laws 2020-79, s. 1(d), effective July 1, 2020, added subsections (d) and (e).

§ 159G-32. Projects eligible for loan or grant.

CWSRF and DWSRF. — Federal law determines whether a project is eligible for a loan or grant from the CWSRF and the DWSRF. A project must meet the eligibility requirements set under federal law.
Wastewater Reserve. — The Department is authorized to make loans and grants from the Wastewater Reserve for the following types of projects:
1. Wastewater collection system.
2. Wastewater treatment works.
3. Stormwater quality projects, including innovative stormwater management projects and pilot projects.
4. Nonpoint source pollution project.
Drinking Water Reserve. — The Department is authorized to make loans and grants from the Drinking Water Reserve for public water system projects.
Viable Utility Reserve. — The Department is authorized to make grants from the Viable Utility Reserve to do any of the following:
1. Provide physical interconnection and extension of public water or wastewater infrastructure to provide regional service.
2. Rehabilitate existing public water or wastewater infrastructure.
3. Decentralize an existing public water system or wastewater system into smaller viable parts.
4. Fund a study of any one or more of the following:
  1. Rates.
  2. Asset inventory and assessment.
  3. Merger and regionalization options.
5. Fund other options deemed feasible which result in local government units generating sufficient revenues to adequately fund management and operations, personnel, appropriate levels of maintenance, and reinvestment that facilitate the provision of reliable water or wastewater services.
6. Provide emergency grants for operating deficits in accordance with G.S. 159G-34.5(a)(4).

History. 2005-454, s. 3; 2013-360, s. 14.21(h); 2019-241, s. 11(e); 2020-79, ss. 1(e), 6(a).

Editor’s Note.

Session Laws 2019-241, s. 11(e), amended this section by adding a subdivision (d)(6), contingent upon 2019 SB 553 or 2019 HB 966 or substantially similar provision becoming law. SB 553 and HB 966 were both vetoed, and the General Assembly failed to override. Session Laws 2020-79, s. 6(a), repealed Session Laws 2019-241, s. 11(e).

Effect of Amendments.

Session Laws 2013-360, s. 14.21(h), effective July 1, 2013, added “, including innovative stormwater management projects and pilot projects” in subdivision (b)(3).

Session Laws 2020-79, s. 1(e), effective July 1, 2020, added subsection (d).

§ 159G-33. Loans and grants available from Wastewater Reserve.

Types. — The Department is authorized to make the types of loans and grants listed in this subsection from the Wastewater Reserve. Each type of loan or grant must be administered through a separate account within the Wastewater Reserve.
1. Loan. — A loan is available for a project authorized in G.S. 159G-32(b) .
2. Project grant. — A project grant is available for a portion of the construction costs of a wastewater collection system project, a wastewater treatment works project, or a stormwater quality project as authorized in G.S. 159G-32(b) .
3. Merger/regionalization feasibility grant. — A merger/regionalization feasibility grant is available to determine the feasibility of consolidating the management of multiple utilities into a single utility operation or to provide regional treatment and the best way of carrying out the consolidation or regionalization. The Department shall not make a loan or grant under this subdivision for a merger or regionalization proposal that would result in a new surface water transfer regulated under G.S. 143-215.22 L. (3a) Asset inventory and assessment grant. — An asset inventory and assessment grant is available to inventory the existing water and/or sewer system and document the condition of the inventoried infrastructure.
4. Emergency loan. — An emergency loan is available in the event the Secretary certifies that a serious public health hazard related to the inadequacy of an existing wastewater collection system or wastewater treatment works is present or imminent in a community.
5. Repealed by Session Laws 2019-241, s. 11(a), effective November 6, 2019.
Interaccount Transfer. — The Secretary may use revenue in any account in the Wastewater Reserve to provide funds for an emergency loan.

History. 2005-454, s. 3; 2015-241, s. 14.13(d), (e); 2019-226, s. 2; 2019-241, s. 11(a).

Editor’s Note.

At the direction of the Revisor of Statutes, subdivision (a)(4), as added by Session Laws 2015-241, s. 14.13(e), was redesignated as subdivision (a)(3a).

Session Laws 2017-57, s. 39.6, is a severability clause.

Session Laws 2019-241, s. 11(b), (c), provides: “(b) Notwithstanding G.S. 159G-33(a) and G.S. 159B-34(a) , during the 2019-2020 fiscal year, the Department may use funds in the Wastewater Reserve or the Drinking Water Reserve to provide grants to the Local Government Commission to cover operating deficits in an enterprise fund accounting for a public water or wastewater system. For purposes of this section, ‘operating deficit’ is defined as a shortfall in an enterprise fund accounting for a public water or wastewater system between revenues plus available reserves and operating expenditures, including capital expenditures, necessary to maintain operations.

“Funding provided by this section is available only under either of the following circumstances:

“(1) The Local Government Commission has exercised its powers under G.S. 159-181 to assume full or partial control over the affairs of the public water or wastewater system or of the unit of local government or public authority that owns or operates the public water or wastewater system.

“(2) The charter of the unit of local government or public authority that owns or operates the public water or wastewater system has been suspended or revoked by local act.

“(c) Funds for the purposes described in subsection (b) of this section may not exceed one million dollars ($1,000,000) in each fiscal year. An application for a grant under this section for an emergency grant for operating deficits must be filed by the Local Government Commission on behalf of the local government unit. Applications for emergency grants for operating deficits are not subject to G.S. 159G-37(b).” Session Laws 2019-241, s. 11(i), provides that this 2019-241, s. 11(b), (c), expires on the earlier of (i) the date that House Bill 966, 2019 Regular Session, becomes law or (ii) June 30, 2020. House Bill 966 did not become law, and subsections (b) and (c) of Session Laws 2019-241 expired on June 30, 2020.

Effect of Amendments.

Session Laws 2015-241, s. 14.13(d), (e), effective July 1, 2015, substituted “Loan. — A loan is” for “General. — A loan or grant is” in subdivision (a)(1); rewrote subdivisions (a)(2) and (a)(3); inserted subdivision (a)(4) (now (a)(3a)), pertaining to Asset inventory and assessment grant; and redesignated former subdivision (a)(4) as (a)(5) (now (a)(4)).

Session Laws 2019-226, s. 2, effective October 1, 2019, added subdivision (a)(5).

Session Laws 2019-241, s. 11(a), effective November 6, 2019, repealed subdivision (a)(5).

§ 159G-34. Loans and grants available from Drinking Water Reserve.

Types. — The Department is authorized to make the types of loans and grants listed in this section from the Drinking Water Reserve. Each type of loan or grant must be administered through a separate account within the Drinking Water Reserve.
1. Loan. — A loan is available for a project for a public water system.
2. Project grant. — A project grant is available for a portion of the construction costs of a public water system project as defined in G.S. 159G-32(c) .
3. Merger/regionalization feasibility grant. — A merger/regionalization grant is available to determine the feasibility of consolidating the management of multiple utilities into a single utility operation or to provide regional water supply and the best way of carrying out the consolidation or regionalization. The Department shall not make a loan or grant under this subdivision for a merger or regionalization proposal that would result in a new surface water transfer regulated under G.S. 143-215.22 L. (3a) Asset inventory and assessment grant. — An asset inventory and assessment grant is available to inventory the existing water and/or sewer system and document the condition of the inventoried infrastructure.
4. Emergency loan. — An emergency loan is available to an applicant in the event the Secretary certifies that either a serious public health hazard or a drought emergency related to the water supply system is present or imminent in a community.
5. Repealed by Session Laws 2019-241, s. 11(a), effective November 6, 2019.
Interaccount Transfer. — The Secretary may use revenue in any account in the Drinking Water Reserve to provide funds for an emergency loan.

History. 2005-454, s. 3; 2015-241, s. 14.13(f), (g); 2019-226, s. 3; 2019-241, s. 11(a).

Editor’s Note.

At the direction of the Revisor of Statutes, subdivision (a)(4), as added by Session Laws 2015-241, s. 14.13(g), was redesignated as subdivision (a)(3a).

Session Laws 2017-57, s. 39.6, is a severability clause.

“Funding provided by this section is available only under either of the following circumstances:

“(2) The charter of the unit of local government or public authority that owns or operates the public water or wastewater system has been suspended or revoked by local act.

Effect of Amendments.

Session Laws 2015-241, s. 14.13(f), (g), effective July 1, 2015, substituted “Loan. — A loan is” for “General. — A loan or grant is” in subdivision (a)(1); rewrote subdivisions (a)(2) and (a)(3); inserted subdivision (a)(4) (now (a)(3a)), pertaining to Asset inventory and assessment grant; and redesignated former subdivision (a)(4) as (a)(5) (now (a)(4)).

Session Laws 2019-2265, s. 3, effective October 1, 2019, added subdivision (a)(5).

Session Laws 2019-241, s. 11(a), effective November 6, 2019, repealed subdivision (a)(5).

§§ 159G-34.1 through 159G-34.4.

Reserved for future codification purposes.

§ 159G-34.5. Grant types available from Viable Utility Reserve.

The Department is authorized to make the following types of grants from the Viable Utility Reserve:
1. Asset assessment and rate study grant. — An asset inventory and assessment grant is available to inventory the existing public water or wastewater system, or both, document the condition of the inventoried infrastructure, and conduct a rate study to determine a rate structure sufficient to prevent the local government unit from becoming a distressed unit.
2. Merger/regionalization feasibility grant. — A merger/regionalization grant is available to determine the feasibility of consolidating the management of multiple water or wastewater systems into a single operation or to provide regional treatment or water supply and the best way of carrying out the consolidation or regionalization. The Department shall not make a grant under this subdivision for a merger or regionalization proposal that would result in a new surface water transfer regulated under G.S. 143-215.22 L.
3. Project grant. — A project grant is available for a portion of the costs of a public water system or wastewater project as defined in G.S. 159G-32(d) .
4. Emergency grant for operating deficit. — An emergency grant for operating deficits is available for distressed units if the Local Government Commission has exercised its powers under G.S. 159-181 to assume full or partial control over the affairs of the public water or wastewater system or of the local government unit or public authority that owns or operates the public water or wastewater system.
A grant awarded from the Viable Utility Reserve may be awarded to a regional council of government created under Part 2 of Article 20 of Chapter 160A of the General Statutes or to a regional planning commission created under Article 19 of Chapter 153A of the General Statutes, if the Department and the Local Government Commission determine it is in the best interest of the local government unit.
Each type of grant must be administered through a separate account within the Viable Utility Reserve.

History. 2019-241, s. 11(f); 2020-79, ss. 1(f), 6(a).

Editor’s Note.

Session Laws 2020-79, s. 14, made this section effective July 1, 2020.

Session Laws 2019-241, s. 11(f), amended this section by adding a subdivision (a)(4), contingent upon 2019 SB 553 or 2019 HB 966 or substantially similar provision becoming law. SB 553 and HB 966 were both vetoed, and the General Assembly failed to override. Session Laws 2020-79, s. 6(a), repealed Session Laws 2019-241, s. 11(f).

§ 159G-35. Criteria for loans and grants.

CWSRF and DWSRF. — Federal law determines the criteria for awarding a loan or grant from the CWSRF or the DWSRF. An award of a loan or grant from one of these accounts must meet the criteria set under federal law. The Department is directed to establish through negotiation with the United States Environmental Protection Agency the criteria for evaluating applications for loans and grants from the CWSRF and the DWSRF and the priority assigned to the criteria. The Department must incorporate the negotiated criteria and priorities in the Capitalization Grant Operating Agreement between the Department and the United States Environmental Protection Agency. The criteria and priorities incorporated in the Agreement apply to a loan or grant from the CWSRF or the DWSRF. The priority considerations in G.S. 159G-23 do not apply to a loan or grant from the CWSRF or the DWSRF.
Certain Reserves. — The priority considerations in G.S. 159G-23 apply to a loan or grant from the Wastewater Reserve or the Drinking Water Reserve. The Department may establish by rule other criteria that apply to a loan or grant from the Wastewater Reserve or the Drinking Water Reserve.
Viable Utility Reserve. — The Local Government Commission and the Authority shall jointly develop evaluation criteria for grants from the Viable Utility Reserve. These evaluation criteria shall be used to review applications and award grants as provided in G.S. 159G-39 .

History. 2005-454, s. 3; 2015-241, s. 14.13(h); 2020-79, s. 1(g).

Editor’s Note.

Session Laws 2015-241, s. 1.1, provides: “This act shall be known as ‘The Current Operations and Capital Improvements Appropriations Act of 2015.’ ”

Session Laws 2015-241, s. 33.6, is a severability clause.

Effect of Amendments.

Session Laws 2015-241, s. 14.13(h), effective July 1, 2015, substituted “priority considerations” for “common criteria” in the last sentence of subsection (a) and in subsection (b).

Session Laws 2020-79, s. 1(g), effective July 1, 2020, added “Certain” in the heading of subsection (b); and added subsection (c).

§ 159G-36. Limits on loans and grants.

CWSRF and DWSRF. — Federal law governs loans and grants from the CWSRF and the DWSRF. An award of a loan or grant from one of these accounts must be consistent with federal law.
Certain Reserve Cost Limit. — The amount of a loan or grant from the Wastewater Reserve or the Drinking Water Reserve may not exceed the construction costs of a project. A loan or grant from one of these Reserves is available only to the extent that other funding sources are not reasonably available to the applicant.
(b1) Viable Utility Reserve Cost Limit. — The amount of a grant from the Viable Utility Reserve shall not exceed the construction costs of a project. A grant from this Reserve is available only to the extent that other funding sources are not reasonably available to the applicant.
Certain Reserve Recipient Limit. — The following limits apply to the loan or grant types made from the Wastewater Reserve or the Drinking Water Reserve to the same local government unit or nonprofit water corporation:
1. The amount of loans awarded for a fiscal year may not exceed three million dollars ($3,000,000).
2. The amount of loans awarded for three consecutive fiscal years for targeted interest rate projects may not exceed three million dollars ($3,000,000).
3. The amount of project grants awarded for three consecutive fiscal years may not exceed three million dollars ($3,000,000).
4. The amount of merger/regionalization feasibility grants awarded for three consecutive fiscal years may not exceed fifty thousand dollars ($50,000).
5. The amount of asset inventory and assessment grants awarded for three consecutive fiscal years may not exceed one hundred fifty thousand dollars ($150,000).
Viable Utility Reserve Recipient Limit. — Grants under the Viable Utility Reserve are limited as follows:
1. Grants for the purposes set forth in subdivisions (1) through (5) of G.S. 159-32(d) shall not exceed fifteen million dollars ($15,000,000) to any single local government unit. Where two or more local government units are merging into a single utility, the total grant awarded shall not exceed thirty million dollars ($30,000,000).
2. Grants for the purpose set forth in G.S. 159-32(d)(6) to any single local government unit shall not (i) exceed seven hundred fifty thousand dollars ($750,000) in any fiscal year and (ii) be awarded for more than three consecutive fiscal years.

History. 2005-454, s. 3; 2015-241, s. 14.13(i); 2019-241, s. 11(g); 2020-79, ss. 1(h), 6(a).

Limitation on Certain Grants.

Session Laws 2021-180, s. 12.13(b), provides: “Notwithstanding G.S. 159G-36(c), the amount of grants awarded under subdivision (a)(4) of this section may not exceed four hundred thousand dollars ($400,000) to the same grant recipient for the 2021-2023 fiscal biennium.”

Editor’s Note.

Session Laws 2015-241, s. 1.1, provides: “This act shall be known as ‘The Current Operations and Capital Improvements Appropriations Act of 2015.’ ”

Session Laws 2015-241, s. 33.6, is a severability clause.

Session Laws 2019-241, s. 11(g), amended subsection (d) of this section, contingent upon 2019 SB 553 or 2019 HB 966 or substantially similar provision becoming law. SB 553 and HB 966 were both vetoed, and the General Assembly failed to override. Session Laws 2020-79, s. 6(a), repealed Session Laws 2019-241, s. 11(g).

Session Laws 2021-180, s. 1.1, provides: “This act shall be known as the ‘Current Operations Appropriations Act of 2021.’”

Session Laws 2021-180, s. 43.7, is a severability clause.

Effect of Amendments.

Session Laws 2015-241, s. 14.13(i), effective July 1, 2015, substituted “the loan or grant types” for “a loan or grant” in the introductory paragraph of subsection (c); substituted “project grants” for “high-unit-cost grants” in subdivision (c)(3); substituted “merger/regionalization feasibility” for “technical assistance” in subdivision (c)(4); and added subdivision (c)(5).

Session Laws 2020-79, s. 1(h), effective July 1, 2020, added “Certain” in the subsection (b) heading; and added subsections (b1) and (d).

§ 159G-37. Application to CWSRF, Wastewater Reserve, DWSRF, Drinking Water Reserve, and Viable Utility Reserve.

Application. — An application for a loan or grant from the CWSRF, the Wastewater Reserve, the DWSRF, or the Drinking Water Reserve, or a grant from the Viable Utility Reserve, must be filed with the Division. An application must be submitted on a form prescribed by the Division and must contain the information required by the Division. An applicant must submit to the Division any additional information requested by the Division to enable the Division to make a determination on the application. An application that does not contain information required on the application or requested by the Division is incomplete and is not eligible for consideration. An applicant may submit an application in as many categories as it is eligible for consideration under this Article.
Certification. — The Division shall require all local governments applying for loans or grants for water or wastewater purposes to certify that no funds received from water or wastewater utility operations have been transferred to the local government’s general fund for the purpose of supplementing the resources of the general fund. The prohibition in this section shall not be interpreted to include payments made to the local government to reimburse the general fund for expenses paid from that fund that are reasonably allocable to the regular and ongoing operations of the utility, including, but not limited to, rent and shared facility costs, engineering and design work, plan review, and shared personnel costs.

History. 2005-454, s. 3; 2011-145, s. 13.3(kkk); 2013-360, s. 14.21(i); 2013-413, s. 57(u); 2014-100, s. 14.17; 2014-115, s. 17; 2020-79, s. 1(i).

Editor’s Note.

This section above was amended by Session Laws 2013-360, s. 14.21(i), and Session Laws 2013-413, s. 57(u) in the coded bill drafting format provided by G.S. 120-20.1 . The amendment by Session Laws 2013-413, s. 57(u) failed to incorporate the changes made by Session Laws 2013-360, s. 14.21(i). This section is set out in the form above at the direction of the Revisor of Statutes.

Session Laws 2014-100, s. 14.16, provides: “The Department of Environment and Natural Resources, Division of Water Infrastructure, and the State Water Infrastructure Authority shall give priority to loan and grant applications received from any local government meeting all of the following criteria:

“(1) The local government is located in a development tier one area.

“(2) The application seeks funding for a project that is required to be completed due to an EPA administrative order.

“(3) The application is deemed complete by the Division and meets the minimum requirements for the program from which it is seeking funding.”

Session Laws 2014-100, s. 1.1, provides: “This act shall be known as ‘The Current Operations and Capital Improvements Appropriations Act of 2014.’ ”

Session Laws 2014-100, s. 38.4, provides: “Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2014-2015 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2014-2015 fiscal year.”

Session Laws 2014-100, s. 38.7, is a severability clause.

Effect of Amendments.

Session Laws 2011-145, s. 13.3(kkk), effective July 1, 2011, substituted “Division of Water Resources” for “Division of Environmental Health” in the second sentence.

Session Laws 2013-360, s. 14.21(i), effective July 1, 2013, in the first sentence, substituted “CWSRF, the DWSRF, the Wastewater Reserve, or the Drinking Water Reserve” for “CWSRF or the Wastewater Reserve” and “Infrastructure” for “Quality of the Department. An application for a loan or grant from the DWSRF or the Drinking Water Reserve must be file with the Division of Water Resources.”

Session Laws 2013-413, s. 57(u), substituted “CWSRF, the Wastewater Reserve, the DWSRF, or the Drinking Water Reserve must be filed with the” for “CWSRF or the Wastewater Reserve must be filed with the Division of Water Quality of the Department. An application for a loan or grant from the DWSRF or the Drinking Water Reserve must be filed with the” in the first sentence. For effective date, see Editor’s note.

Session Laws 2014-100, s. 14.17, effective July 1, 2014, added the subsection (a) designation; in present subsection (a), added the subsection heading, in the first sentence, inserted “for a load or grant from the” and “of the Department,” inserted “An application must” at the beginning of the present second sentence, and inserted “or” in the present next-to-last sentence; and added subsection (b).

Session Laws 2020-79, s. 1(i), effective July 1, 2020, added “and Viable Utility Reserve” at the end of the section heading; substituted “Reserve, or a grant from the Viable Utility Reserve, must be filed with the Division” for “Reserve, must be filed with the Division of Water Infrastructure of the Department” in the first sentence of subsection (a); and deleted “of Water Infrastructure” following “The Division” in the first sentence of subsection (b).

§ 159G-38. Environmental assessment and public hearing.

Establish Environmental Assessment Process; Required Information. — The Division shall establish an environmental assessment process for projects funded from the CWSRF and DWSRF programs that is sufficient to meet federal environmental assessment requirements for such projects. Projects funded by the CWSRF or DWSRF shall meet the requirements of the environmental assessment process established pursuant to this subsection.
Repealed by Session Laws 2015-90, s. 6, effective June 19, 2015.
Hearing. — The Division may hold a public hearing on an application for a loan or grant under this Article if it determines that holding a hearing will serve the public interest. An individual who is a resident of any county in which a proposed project is located may submit a written request for a public hearing. The request must set forth each objection to the proposed project or other reason for requesting a hearing and must include the name and address of the individual making the request. The Division may consider all written objections to the proposed project, any statement submitted with the hearing request, and any significant adverse effects the proposed project may have on the environment. The Division’s decision on whether to hold a hearing is conclusive. The Division must keep all written requests for a hearing on an application as part of the records pertaining to the application.

History. 2005-454, s. 3; 2011-145, s. 13.3(lll), (mmm); 2013-360, s. 14.21(j), (o); 2013-413, s. 57(v); 2014-115, s. 17; 2015-90, s. 6.

Editor’s Note.

Session Laws 2015-90, s. 8, made the amendment to this section by Session Laws 2015-90, s. 6, applicable to State agency action occurring on or after June 19, 2015.

Effect of Amendments.

Session Laws 2011-145, ss. 13.3( lll ) and 13.3(mmm), effective July 1, 2011, in the second sentence of subsections (b) and (c), substituted “Division of Water Resources” for “Division of Environmental Health.”

Session Laws 2013-360, s. 14.21(j), effective July 1, 2013, substituted “Infrastructure” for “Quality or the Division of Water Resources, as appropriate” in the first sentence of subsections (b) and (c).

Session Laws 2013-413, s. 57(v), substituted “Division of Water Resources” for “Division of Water Quality or the Division of Water Resources, as appropriate” in the first sentence of subsections (b) and (c). For effective date, see Editor’s note.

Session Laws 2015-90, s. 6, effective June 19, 2015, rewrote subsection (a); deleted former subsection (b), relating to division review; and substituted “The Division” for “The Division of Water Infrastructure” in the first sentence of subsection (c). For applicability, see editor’s note.

§ 159G-39. Review of applications and award of loan or grant.

Point Assignment. — The Division of Water Infrastructure must review all applications filed for a loan or grant under this Article for an application period. The Division must rank each application in accordance with the points assigned to the evaluation criteria. The Division must make a written determination of an application’s rank and attach the determination to the application for the Authority’s review. The Authority must consider the Division’s determination of rank when the Authority determines an application’s rank. The Authority’s determination of rank is conclusive.
Initial Consideration. — The Division may consider an application for an emergency loan from the Wastewater Reserve or the Drinking Water Reserve at any time. The Division must consider all other loan applications and all grant applications filed during an application period at the same time in order to rank the applications. The Division shall forward all applications received for the application period to the State Water Infrastructure Authority.
Reconsideration. — When the Authority determines an application’s rank is too low to receive an award of a loan or grant for an application period, the Division must include the application with those considered for the next application period. If the application’s rank is again too low to receive an award, the application is not eligible for consideration in a subsequent application period. An applicant whose application does not receive an award after review in two application periods may file a new application.
Notification of Decision. — When the Authority determines that an application’s rank makes it eligible for an award of a loan or grant, the Division must send the applicant a letter of intent to award the loan or grant. The notice must set out any conditions the applicant must meet to receive an award of a loan or grant. When the applicant satisfies the conditions set out in the letter of intent, the Division must send the applicant an offer to award a loan or grant. The applicant must give the Division written notice of whether it accepts or rejects the offer. A loan or grant is considered awarded when an offer to award the loan or grant is issued.
Viable Utility Reserve Approval. — The Department shall not award a grant from the Viable Utility Reserve Fund unless the Local Government Commission approves the award of the grant and the terms of the grant. Any emergency grant application submitted under G.S. 159G-31(e) shall be deemed approved by the Local Government Commission upon submission.
Grant Terms. —
1. Viable Utility Reserve. — The Department and the Local Government Commission may, in their discretion, impose specific performance measures or conditions on any grant awarded from the Viable Utility Reserve, including any grant submitted under G.S. 159G-31(e) .
2. Drinking Water Reserve or Wastewater Reserve. — The Department may impose specific performance measures or conditions on any grant awarded from the Drinking Water Reserve or Wastewater Reserve to ensure an adequately funded program for the repair, maintenance, and management of the water or wastewater infrastructure.”

History. 2005-454, s. 3; 2011-145, s. 13.3(nnn); 2013-360, s. 14.21(k); 2013-413, s. 57(w); 2014-115, s. 17; 2020-79, s. 1(j); 2021-180, s. 12.12(b).

Editor’s Note.

“(1) The local government is located in a development tier one area.

“(2) The application seeks funding for a project that is required to be completed due to an EPA administrative order.

“(3) The application is deemed complete by the Division and meets the minimum requirements for the program from which it is seeking funding.”

Session Laws 2014-100, s. 1.1, provides: “This act shall be known as ‘The Current Operations and Capital Improvements Appropriations Act of 2014.’ ”

Session Laws 2014-100, s. 38.7, is a severability clause.

Session Laws 2021-180, s. 1.1, provides: “This act shall be known as the ‘Current Operations Appropriations Act of 2021.’”

Session Laws 2021-180, s. 43.7, is a severability clause.

Effect of Amendments.

Session Laws 2011-145, s. 13.3(nnn), effective July 1, 2011, substituted “Division of Water Resources” for “Division of Environmental Health” in the second sentence of subsection (a).

Session Laws 2013-360, s. 14.21(k), effective July 1, 2013, in subsection (a), substituted “Infrastructure” for “Quality or the Division of Water Resources, as appropriate” in the first sentence and substituted “application for the Authority’s review” for “application. The Division’s determination of rank is conclusive,” and added the last two sentences; added the last sentence in subsection (b); inserted “the Authority determines” in the first sentence of subsection (c); and substituted “Authority” for “Division” in the first sentence of subsection (d).

Session Laws 2013-413, s. 57(w), substituted “Division of Water Resources” for “Division of Water Quality or the Division of Water Resources, as appropriate” in the first sentence in subsection (a). For effective date, see Editor’s note.

Session Laws 2020-79, s. 1(j), effective July 1, 2020, added subsection (e).

Session Laws 2021-180, s. 12.12(b), effective July 1, 2021, in subsection (e), substituted “Approval” for “Terms”; and added subsection (f).

§ 159G-40. Terms of loan and execution of loan documents.

Approval by Local Government Commission. — The Department may not award a loan under this Article unless the Local Government Commission approves the award of the loan and the terms of the loan. The terms of a loan awarded from the CWSRF and the DWSRF must be consistent with federal law. In reviewing a proposed loan to a local government unit, the Local Government Commission must consider the loan as if it were a bond proposal and review the proposed loan in accordance with the factors set out in G.S. 159-52 for review of a proposed bond issue. The Local Government Commission must review a proposed loan to a nonprofit water corporation and to an investor-owned drinking water corporation in accordance with the factors set out in G.S. 159-153 .
Interest Rate and Maturity. — The interest rate payable on and the maximum maturity of a loan are subject to the following limitations:
1. Interest rate. — The interest rate for a loan may not exceed the lesser of four percent (4%) or one half the prevailing national market rate for tax-exempt general obligation debt of similar maturities derived from a published indicator. When recommended by the Department, the Local Government Commission may set an interest rate for a loan for a targeted interest rate project at a rate that is lower than the standard rate to achieve the purpose of the target.
2. Maturity. — The maximum maturity for a loan for a project that is not a targeted interest rate project is 20 years or the project’s expected life, whichever is shorter. The maximum maturity for a loan for a targeted interest rate project is 30 years or the project’s expected life, whichever is shorter.
Security for Loan. — A local government unit may pledge any of the following, alone or in combination, as security for an obligation to repay the principal of and interest on a loan awarded under this Article:
1. User fee revenues derived from operation of the wastewater system or public water system that benefits from the project for which the loan is awarded.
2. A mortgage, deed of trust, security interest, or similar lien on part or all of the real and personal property comprising the wastewater system or public water system that benefits from the project for which the loan is awarded.
3. Its full faith and credit if it meets the requirements of Article 4 of Chapter 159 of the General Statutes.
4. Nontax revenue not included in subdivision (1) of this subsection.
Debt Instrument. — A local government unit, a nonprofit water corporation, and an investor-owned drinking water corporation may execute a debt instrument payable to the State to evidence an obligation to repay the principal of and interest on a loan awarded under this Article. The Treasurer, with the assistance of the Local Government Commission, must develop debt instruments for use by local government units, nonprofit water corporations, and investor-owned drinking water corporations under this section. The Local Government Commission must develop procedures for loan recipients to deliver debt instruments to the State without public bidding.

History. 2005-454, s. 3; 2011-145, s. 13.11A(c); 2015-207, s. 4(a); 2016-94, s. 14.23(a), (b).

Editor’s Note.

Session Laws 2015-207, s. 4(b), as amended by Session Laws 2016-94, s. 14.23(b), provides: “This section is effective when it becomes law [August 11, 2015] and expires October 1, 2016. The sunset does not affect the validity of any loan agreement approved by the Local Government Commission prior to the sunset or loan increases approved after the sunset, provided the loan was approved in accordance with G.S. 159G-40 , as amended by this section, prior to the sunset.”

Session Laws 2016-94, s. 1.2, provides: “This act shall be known as the ‘Current Operations and Capital Improvements Appropriations Act of 2016.’ ”

Session Laws 2016-94, s. 39.7, is a severability clause.

Effect of Amendments.

Session Laws 2011-145, s. 13.11A(c), effective July 1, 2011, in the last sentence of subsection (a), inserted “and to an investor-owned drinking water corporation”; and in subsection (d), in the second sentence, substituted “local government unit, a nonprofit water corporation, and an investor-owned drinking water corporation” for “local government unit and a nonprofit water corporation,” and in the third sentence, substituted “local government units, nonprofit water coporations, and investor-owned drinking water corporations” for “local government units and nonprofit water corporations.”

Session Laws 2015-207, s. 4(a), rewrote subdivision (b)(2). For effective date and sunset provision, see editor’s note.

Session Laws 2016-94, s. 14.23(a), effective October 1, 2016, in subdivision (b)(2), substituted “targeted interest rate project is” for “high-unit-cost project may not exceed” in the first sentence, and substituted “targeted interest rate project” for “high-unit-cost project” in the second sentence.

§ 159G-41. Withdrawal of loan or grant.

A letter of intent to offer an award for a loan or grant for a project is withdrawn if the applicant fails to enter into a construction contract for the project within two years after the date of the letter, unless the Department finds that the applicant has good cause for the failure. An award for a loan or grant for a project is withdrawn if the applicant fails to enter into a construction contract for the project within one year after the date of the award, unless the Department finds that the applicant has good cause for the failure. If the Department finds good cause for an applicant’s failure, the Department must set a date by which the applicant must take action or forfeit the loan or grant.

History. 2005-454, s. 3.

§ 159G-42. Disbursement of loan or grant.

The Department must disburse the proceeds of a loan or grant to a recipient in a series of payments based on the progress of the project for which the loan or grant was awarded. To obtain a payment, a loan or grant recipient must submit a request for payment to the Department and document the expenditures for which the payment is requested.

History. 2005-454, s. 3.

§ 159G-43. Inspection of project.

Authority. — The Department may inspect a project for which it awards a loan or grant under this Article to determine the progress made on the project and whether the construction of the project is consistent with the project described in the loan or grant application. The inspection may be performed by personnel of the Department or by a professional engineer licensed under Chapter 89C of the General Statutes.
Disqualification. — An individual may not perform an inspection of a project under this section if the individual meets any of the following criteria:
1. Is an officer or employee of the local government unit, nonprofit water corporation, or investor-owned drinking water corporation that received the loan or grant award for the project.
2. Is an owner, officer, employee, or agent of a contractor or subcontractor engaged in the construction of the project for which the loan or grant was made.

History. 2005-454, s. 3; 2011-145, s. 13.11A(d).

Effect of Amendments.

Session Laws 2011-145, s. 13.11A(d), effective July 1, 2011, substituted “local government unit, nonprofit water corporation, or investor-owned drinking water corporation” for “local government unit or nonprofit water corporation” in subdivision (b)(1).

§ 159G-44. Rules.

The Department may adopt rules to implement this Chapter. Chapter 150B of the General Statutes, the Administrative Procedure Act, governs the adoption of rules by the Department. A rule adopted to administer a loan or grant from the CWSRF or the DWSRF must be consistent with federal law. The Department must give a copy of the rules adopted to implement this Article without charge to a person who requests a copy.

History. 2005-454, s. 3.

§ 159G-45. Assessment of local government units; assistance.

The Authority and the Local Government Commission shall develop criteria to determine how local government units should be assessed and reviewed in accordance with this section, and these criteria shall address at least all of the following:
1. Whether the public water or wastewater system serves less than 10,000 customers.
2. Whether the public water or wastewater system has an established, operational, and adequately funded program for its repair, maintenance, and management.
3. Whether the annual debt service is disproportionate to the public water or wastewater system’s annual revenue.
4. Whether the local government unit has appropriated funds from its utility or public service enterprise fund in accordance with G.S. 159-13(b)(14) in two or more of the preceding five fiscal years without maintaining a reserve fund sufficient to provide for operating expenses, capital outlay, and debt service.
5. Whether the local government unit has appropriated funds to supplement the operating expenses, capital outlay, or debt service on outstanding utility or enterprise bonds or notes in excess of the user fees collected in two or more of the preceding five fiscal years.
Utilizing the assessment and review process, the Authority and Local Government Commission shall identify distressed units. Each distressed unit identified under this subsection shall do all of the following:
1. Conduct an asset assessment and rate study, as directed and approved by the Authority and the Local Government Commission.
2. Participate in a training and educational program approved by the Authority and the Local Government Commission for that distressed unit. Attendance shall be mandatory for any governing board members and staff whose participation is required by the Authority and Local Government Commission. The scope of training and education, and its method of delivery, shall be at the discretion of the Authority and Local Government Commission.
3. Develop an action plan, taking into consideration all of the following:
  1. A short-term and a long-term plan for infrastructure repair, maintenance, and management.
  2. Continuing education of the governing board and system operating staff.
  3. Long-term financial management to ensure the public water system or wastewater system will generate sufficient revenue to adequately fund management and operations, personnel, appropriate levels of maintenance, and reinvestment that facilitate the provision of reliable water or wastewater services.
  4. Any other matters identified by the Authority or the Local Government Commission.
Once an identified distressed unit has completed all of the requirements of subsection (b) of this section, that unit shall no longer be identified as a distressed unit for the remainder of that assessment and review cycle.
The Authority and the Local Government Commission shall establish the frequency of the cycle for assessment and review of local government units under this section. The frequency of the cycle shall be not less than once every two years.

History. 2020-79, s. 1(k); 2021-180, s. 12.12(c).

Editor’s Note.

Session Laws 2020-79, s. 14, made this section effective July 1, 2020.

Session Laws 2021-180, s. 1.1, provides: “This act shall be known as the ‘Current Operations Appropriations Act of 2021.’”

Session Laws 2021-180, s. 43.7, is a severability clause.

Effect of Amendments.

Session Laws 2021-180, s. 12.12(c), effective July 1, 2021, in subsection (d), substituted “section. The frequency of the cycle shall be not less than once every two years” for “section, which shall be no less than every two years.”

§§ 159G-46 through 159G-50.

Reserved for future codification purposes.

Article 3. [Reserved.]

§§ 159G-51 through 159G-64.

Reserved for future codification purposes.

Article 4. State Water Infrastructure Commission. [Repealed]

§§ 159G-65 through 159G-67. [Repealed]

Repealed by Session Laws 2013-360, s. 14.21(c), effective July 1, 2013.

History. Ss. 159G-65 through 159G-67; 2005-454, s. 3; repealed by 2013-360, s. 14.21(c), effective July 1, 2013.

Editor’s Note.

Former G.S. 159G-65 pertained to the State Water Infrastructure Commission. Former G.S. 159G-66 pertained to duties of the commission. Former G.S. 159G-67 pertained to commission reports.

§§ 159G-68, 156G-69.

Reserved for future codification purposes.

Article 5. State Water Infrastructure Authority.

§ 159G-70. State Water Infrastructure Authority created.

Authority Established. — The State Water Infrastructure Authority is created within the Department of Environmental Quality.
Membership. — The Authority consists of nine members as follows:
1. The Director of the Division of Water Infrastructure of the Department or the Director’s designee who is familiar with the water infrastructure financing, regulatory, and technical assistance programs of the Department.
2. The Secretary of Commerce or the Secretary’s designee who is familiar with the State programs that fund water or other infrastructure improvements for the purpose of promoting economic development.
3. The Director of the Local Government Commission or the Director’s designee who is familiar with the functions of the Commission.
4. One member who is a professional engineer in the private sector and is familiar with the development of infrastructure necessary for wastewater systems, to be appointed by the Governor to a term that expires on July 1 of even-numbered years.
5. One member who is knowledgeable about, and has experience related to, direct federal funding programs for wastewater and public water systems, to be appointed by the Governor to a term that expires on July 1 of odd-numbered years.
6. One member who is knowledgeable about, and has experience related to, urban local government wastewater systems or public water systems, to be appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate to a term that expires on July 1 of even-numbered years.
7. One member who is knowledgeable about, and has experience related to, rural local government wastewater systems or public water systems, to be appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate to a term that expires on July 1 of odd-numbered years.
8. One member who either (i) is a county commissioner of a rural county or (ii) resides in a rural county and is knowledgeable about, and has experience related to, public health services, to be appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives to a term that expires on July 1 of even-numbered years.
9. One member who is familiar with wastewater, drinking water, and stormwater issues and related State funding sources, to be appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives to a term that expires on July 1 of odd-numbered years.
Terms. — The members appointed by the Governor, the President Pro Tempore of the Senate, and the Speaker of the House of Representatives shall serve two-year terms. The other members, who are ex officio members or designees of those members, shall serve until they are no longer in office or are replaced with another designee.
Chair. — The Director of the Division of Water Infrastructure, or the Director’s designee, shall serve as Chair of the Authority. The Chair must call the first meeting. The Chair shall serve as a nonvoting member, provided, however, that the Chair shall vote to break a tie.
Meetings. — The Authority shall meet at least four times a year and may meet as often as needed. A majority of the members of the Authority constitutes a quorum for the transaction of business. The affirmative vote of a majority of the members present at a meeting of the Authority is required for action to be taken by the Authority.
Vacancies. — A vacancy in the Authority or as Chair of the Authority resulting from the resignation of a member or otherwise is filled in the same manner in which the original appointment was made. The term of an appointment to fill a vacancy is for the balance of the unexpired term.
Compensation. — Each member of the Authority shall receive no salary as a result of serving on the Authority but shall receive per diem, subsistence, and travel expenses in accordance with the provisions of G.S. 120-3.1 , 138-5, and 138-6, as applicable.

History. 2013-360, s. 14.21(b); 2013-363, s. 5.12; 2015-241, s. 14.30(u).

Editor’s Note.

Session Laws 2015-241, s. 1.1, provides: “This act shall be known as ‘The Current Operations and Capital Improvements Appropriations Act of 2015.’ ”

Session Laws 2015-241, s. 33.6, is a severability clause.

Effect of Amendments.

Session Laws 2013-363, s. 5.12, effective July 1, 2013, in subdivisions (b)(6) and (b)(7), substituted “knowledgeable about, and has experience related to” for “a representative of an” and for “a representative of a” and substituted “systems” for “system” twice.

Session Laws 2015-241, s. 14.30(u), effective July 1, 2015, substituted “Department of Environmental Quality” for “Department of Environment and Natural Resources” in subsection (a).

§ 159G-71. State Water Infrastructure Authority; powers and duties.

The Authority has the following additional duties:

After reviewing the recommendations for grants and loans submitted to it by the Division, to determine the rank of applications and to select the applications that are eligible to receive grants and loans, consistent with federal law.
To establish priorities for making loans and grants under this Chapter, consistent with federal law.
To review the criteria for making loans and grants under G.S. 159G-23 and make recommendations, if any, to the Department for additional criteria or changes to the criteria, consistent with federal law.
To develop guidelines for making loans and grants under this Chapter, consistent with federal law.
To develop a master plan to meet the State’s water infrastructure needs.
To assess and make recommendations on the role of the State in the development and funding of wastewater, drinking water, and stormwater infrastructure in the State.
To analyze the adequacy of projected funding to meet projected needs over the next five years.
To make recommendations on ways to maximize the use of current funding resources, whether federal, State, or local, and to ensure that funds are used in a coordinated manner.
To review the application of management practices in wastewater, drinking water, and stormwater utilities and to determine the best practices.
To assess the role of public-private partnerships in the future provision of utility service.
To assess the application of the river basin approach to utility planning and management.
To assess the need for a “troubled system” protocol.

History. 2013-360, s. 14.21(b).

§ 159G-72. State Water Infrastructure Authority; reports.

No later than November 1 of each year, the Authority shall submit a report of its activity and findings, including any recommendations or legislative proposals, to the Environmental Review Commission, the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, and the Fiscal Research Division with the report required by G.S. 159G-26(a) as a single report.

History. 2013-360, s. 14.21(b); 2017-10, s. 4.17(b).

Effect of Amendments.

Session Laws 2017-10, s. 4.17(b), effective May 4, 2017, substituted “Environmental Review Commission, the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, and the Fiscal Research Division with the report required by G.S. 159G-26(a) as a single report” for “Senate Appropriations Committee on Natural and Economic Resources, the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, and the Fiscal Research Division of the Legislative Services Commission” at the end of the sentence.