HB 276-FN-A - AS INTRODUCED
2023 SESSION
23-0176
08/04
HOUSE BILL 276-FN-A
AN ACT establishing the cyanobacteria mitigation loan fund.
SPONSORS: Rep. Rung, Hills. 12; Rep. N. Murphy, Hills. 12; Rep. Darby, Hills. 11; Rep. Coker, Belk. 2; Rep. J. MacDonald, Carr. 6; Rep. Crawford, Carr. 3
COMMITTEE: Resources, Recreation and Development
-----------------------------------------------------------------
ANALYSIS
This bill establishes the cyanobacteria mitigation loan program and the cyanobacteria mitigation fund.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
23-0176
08/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Three
AN ACT establishing the cyanobacteria mitigation loan fund.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Purpose Statement. The general court finds that people and animals accessing lakes and rivers across the state have been impacted by cyanobacteria blooms, which pose a threat of acute and chronic illnesses from the toxins they release. Many of these blooms have been triggered by phosphorus loading from direct run-off, poor culvert design, inefficient or failed septic systems, internal loading of phosphorus, among other causes. The cost of designing, installing and repairing mitigation systems or projects for many communities, watershed management associations, and lake associations, would result in dramatically higher property taxes or would take many years of fundraising and delay projects exacerbating the problem. The mitigation of contributors to cyanobacteria blooms requires a strategy to protect, preserve, and enhance the water that New Hampshire citizens and environment rely upon for household supply and recreation.
2 New Subdivision; Cyanobacteria Mitigation Loan Program. Amend RSA 485-A by inserting after section 57 the following new subdivision:
Cyanobacteria Mitigation Loan Program
485-A:58 Establishment and Implementation of Cyanobacteria Mitigation Loan Program.
I. There is established in the department of environmental services the cyanobacteria mitigation loan program. The program shall provide low interest loans to:
(a) Community water systems and non-profit lake and river watershed associations whose testing shows confirmed and chronic exceedances of the state health advisory for cyanobacteria, for remediation efforts begun after September 30, 2024.
(b) Publicly-owned and non-profit lake or river watershed associations that have a watershed management plan which specifies sources of phosphorus loading approved by the department of environmental services.
II. Projects shall only be financed after the applicant’s proposed mitigation plan or watershed management plan demonstrates that the such plan is the most cost-effective solution, as reviewed and approved by the department of environmental services. The applicant shall provide evidence in the application for funding that there are no no-cost or low-cost efforts that would result in a substantial decrease in external phosphorus loading. The applicant shall also show that there is no responsible party identified by department of environmental services or that the responsible party, potentially including the applicant, has provided their appropriate share of the funding for the proposed project.
III. Loans may be made for up to the total cost of the project, after any responsible party’s contribution, addressing the contamination.
IV. The cyanobacteria mitigation program shall forgive up to 10 percent of the loan principal to community water systems, publicly owned and non-profit lake or river watershed associations using the same qualifying standards for forgiveness used in the drinking water state revolving loan program established under RSA 486:14.
V. Total loan forgiveness under this section shall not exceed $1 million in a fiscal year.
485-A:59 Duties.
The department of environmental services shall:
(a) Administer the cyanobacteria mitigation loan program to assist municipalities; community and non-profit, lake and river watershed association; with the cost of reducing the number of chronic and extended cyanobacteria bloom that the department considers to be a threat to long term health of a reservoir, lake or river.
(b) Administer a loan forgiveness program to assist disadvantaged communities with loan repayment.
(c) Award loan funds to projects that meet the following criteria:
(1) The project is or was necessary to reduce phosphorus loading identified in an accepted watershed management plan and the applicant for funding is a municipality, a community water system, or a non-profit, lake or river watershed association.
(2) The applicant has demonstrated, to the satisfaction of the department, that low or no-cost solutions are neither viable nor effective.
(d) Award reimbursements to projects from the fund in a manner consistent with this chapter.
II. Every year beginning December 1, 2024, the department of environmental services shall prepare and file a report with the general court evaluating the progress made relative to mitigating cyanobacteria blooms, the efficiency of the program established under this chapter, and whether it continues to provide the maximum benefit to New Hampshire citizens, and providing any recommendations on potential additional tasks for which the fund could be used to address cyanobacteria blooms.
485-A:60 Rules. The department of environmental services shall adopt rules, under RSA 541-A, relative to administering cyanobacteria loan programs for eligible projects.
485-A:61 Cyanobacteria Mitigation Loan Fund Established. There is hereby established in the department of environmental services the cyanobacteria mitigation loan fund which shall be maintained by the state treasurer in distinct and separate custody from all other funds. The state treasurer may invest the fund in accordance with RSA 6:8. Any earnings on fund moneys shall be added to the fund. All moneys in the fund shall be nonlapsing and continually appropriated to the department of environmental services. The cyanobacteria mitigation loan fund shall be used to fund loans and reimbursements in accordance with this subdivision. Funds from any bond proceeds, grants, loan repayments, legislative appropriations, donations, and other funds shall be credited to this fund.
3 New Subparagraph; Cyanobacteria Mitigation Loan Fund. Amend RSA 6:12, I(b) by inserting after subparagraph (387) the following new subparagraph:
(388) Moneys deposited in the cyanobacteria mitigation loan fund established in RSA 485-A:61.
4 Capital Appropriation; Department of Environmental Services. The sum of $25,000,000 is hereby appropriated to the department of environmental services for capital expenditures for the mitigation in the state’s drinking water sources or recreational waters, which expenditures may include loans to public or private entities on such terms and conditions as the department of environmental services shall determine. To provide funds for the appropriation made in this section, the state treasurer is hereby authorized to borrow upon the credit of the state not exceeding the sum of $25,000,000 and for said purpose may issue bonds and notes in the name of and on behalf of the state of New Hampshire in accordance with RSA 6-13-f. Notwithstanding the provisions of RSA 9:18, the appropriation made in this section shall not lapse.
5 New Section; Authority to Issue Bonds; General Fund. Amend RSA 6 by inserting after section 13-e the following new section:
6:13-f Authority to Borrow; Certain Environmental Projects.
I. The state treasurer, as may be requested from time to time by the commissioner of the department of environmental services, is hereby authorized to borrow upon the credit of the state such sums as may be authorized by law from time to time to be borrowed under this section and may issue general obligation bonds in the name and on behalf of the state of New Hampshire for such authorized purposes and amounts in accordance with the provisions of RSA 6-A. The state treasurer is hereby further authorized to borrow all or any portion of amounts authorized to be borrowed under this section either as a loan from banks or other financial institutions, within or without the state, selected by the state treasurer or under the federal program established under the Water Infrastructure Finance and Innovation Act, 33 U.S.C. chapter 52, as amended, and to enter into agreements containing appropriate covenants and conditions as the state treasurer determines to be necessary or desirable to secure favorable credit terms from said banks or other financial institutions or under said program.
II. Notwithstanding the provisions of RSA 6-A:2, the maturity date of bonds issued pursuant to this section shall be not later than 30 years from the date of issue, as determined by the state treasurer; provided, that in determining the amount of bonds maturing later than 20 years from the date of issue, the state treasurer shall take into account the expected useful life of the projects being financed, as identified by the commissioner of the department of environmental services.
III. To the extent any borrowing under paragraph I cannot be immediately redeemed or prepaid when such funds are received by the state, the funds shall be held in a nonlapsing reserve to be established by the state treasurer for the future payment of the borrowing in accordance with its redemption or prepayment provisions.
6 Effective Date. This act shall take effect upon its passage.
23-0176
12/14/22
HB 276-FN-A- FISCAL NOTE
AS INTRODUCED
AN ACT establishing the cyanobacteria mitigation loan fund.
FISCAL IMPACT: [ X ] State [ ] County [ X ] Local [ ] None
|
| |||
| Estimated Increase / (Decrease) | |||
STATE: | FY 2023 | FY 2024 | FY 2025 | FY 2026 |
Appropriation | $0 | $25,000,000 | $0 | $0 |
Revenue | $0 | $0 | $0 | Indeterminable Increase |
Expenditures | $0 | In excess of $812,500 | In excess of $1,905,575 | In excess of $1,904,140 |
Funding Source: | [ X ] General [ ] Education [ ] Highway [ X ] Other - Cyanobacteria Mitigation Loan Fund | |||
|
|
|
|
|
LOCAL: |
|
|
|
|
Revenue | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
Expenditures | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
METHODOLOGY:
This bill establishes the cyanobacteria mitigation loan program and non lapsing cyanobacteria mitigation fund. The bill provides a capital appropriation of $25,000,000 to the Department of Environmental Services for capital expenditures for mitigation in the state’s drinking water sources or recreational waters, which may include loans to public or private entities. The State Treasurer is authorized to borrow upon the credit of the state not exceeding the sum of $25,000,000 and may issue bonds and notes in the name of and on behalf of the state to be repaid from the general fund.
The Department of Environmental Services indicates projects funded will have completed watershed management or mitigation plans, which specify the sources of phosphorus loading and that are approved by the Department. Projects would be financed if they are shown to be the most cost-effective solution and no other no-cost or low-cost external phosphorus loading reductions are possible. Loan funds would be available to community water systems and non-profit lake and river watershed associations. Administration of the program would require development of administrative rules to define the specifics of the program, consideration of applications, and requirements for loan awards. Administrative costs would begin to be incurred in FY 2024. The bill also requires preparation of an annual report by the Department on the progress of mitigating cyanobacteria blooms.
The Department is not able to determine specific fiscal impacts at this point as it is unknown how many requests for loans would be submitted for consideration or the amount of such loans. The Department assumes additionally staffing will be needed to implement the program required, but at this point, the total number cannot be determined. At a minimum, the Department estimates three additional staff positions would be required at a cost in the range of $300,000 to $400,000 range annually. However, at this time without additional details, total additional staffing needs and associated program costs cannot be made. Additional contracts to financial oversight institutions will likely be needed to review qualifications of loan applicants but these costs cannot be estimated in advance. The Department expects loan repayment revenue to the cyanobacteria mitigation fund would start in FY 2026 based on project proposals occurring in FY 2025.
The State Treasury indicates debt services expenditures in the Treasury's Budget would increase by $812,500 in FY 2024, $1,905,575 in FY 2025 and $1,904,140 in FY 2026 and the total interest cost over the life of the bond (30 years) would be $32.4 million. The maturity date of bonds issued shall not be later than 30 years from the date of issue, provided that in determining the amount of bonds maturing later than 20 years, the Treasurer would take into account the expected useful life of the projects being financed, as identified by the Commissioner of the Department of Environmental Services. Since bond proceeds would fund loans for third-party associations, taxable bonds would be issued with an assumed rate of 6.5%.
It is assumed that any fiscal impact would occur after FY 2023.
AGENCIES CONTACTED:
Department of Environmental Services and State Treasury