(1) There is hereby created in the authority the water pollution control revolving fund, which shall be maintained and administered by the authority and be available in perpetuity for the purposes stated in this section. The authority is authorized to establish such procedures as may be required to administer the water pollution control revolving fund in accordance with the clean water act and state law. The authority may create separate accounts in the water pollution control revolving fund, which accounts may be pledged and assigned as security for the payment of the bonds of the authority. (2) (a) Subject to the provisions of the clean water act and agreements with the holders of bonds of the authority, the authority shall deposit in the water pollution control revolving fund grants from the federal government or its agencies allocated to the state for deposit in said fund; state matching funds where required; loan principal, interest, and penalty payments; and other moneys determined by the authority to be deposited therein. (b) Moneys in the water pollution control revolving fund shall be expended in a manner consistent with terms and conditions of the clean water act and may be used to provide assistance to governmental agencies for the construction of publicly owned wastewater treatment plants that appear on the priority list under section 216 of the clean water act and as are defined in section 212 of the clean water act; for implementation of a nonpoint source pollution management program under section 319 of the clean water act; and for any other purposes permitted by the clean water act. (c) Moneys on deposit in the water pollution control revolving fund may be used by the authority for wastewater treatment facilities through the making of loans to governmental agencies; purchasing or refinancing debt obligations of governmental agencies where the debt obligations were incurred after March 7, 1985; purchasing insurance for debt obligations of governmental agencies; securing or providing revenues for payment of the principal and interest on bonds of the authority; providing for the costs of administering the water pollution control revolving fund, including the administrative costs of state agencies; and providing for any other expenditure consistent with the clean water act and state law. Money not currently needed for the operation of the water pollution control revolving fund may be invested, and all interest earned on such investments shall be credited to the specific account, if any, in the water pollution control revolving fund. (3) (a) The authority may make and contract to make loans to governmental agencies in accordance with and subject to the provisions of this section to finance the cost of wastewater treatment system projects that are on the water pollution control project eligibility list established pursuant to subsection (4) of this section and any other projects authorized under the clean water act and that the governmental agencies may lawfully undertake or acquire under state law, including applicable provisions of the "Colorado Water Quality Control Act", article 8 of title 25, and for which the governmental agencies are authorized by law to borrow money. The loans may be made subject to such terms and conditions as the authority shall determine to be consistent with the purposes of the loans. Each loan by the authority and the terms and conditions of the loan is subject to financial analysis by the division of local government of the department of local affairs. The financial analysis must include an analysis of the capacity to repay a loan and the need for financial assistance. Each loan to a local governmental agency must be evidenced by notes, bonds, or other obligations issued by the local governmental agency to the authority. In the case of each governmental agency, notes and bonds to be issued to the authority by the local governmental agency shall be authorized and issued as provided by law for the issuance of notes and bonds by the governmental agency, may be sold at private sale to the authority at any price, whether or not less than par value, and must be subject to redemption prior to maturity at such times and at such prices as the authority and governmental agency may agree. Each loan to a local governmental agency and the notes, bonds, or other obligations thereby issued must bear interest at a rate or rates per annum at or below the market interest rate and must be for terms that are agreed upon by the authority and the governmental agency and are in compliance with the clean water act. (b) The authority is authorized, from moneys in the water pollution control revolving fund, to purchase or refinance or purchase insurance for the payment of all or any portion of the principal and interest on bonds, notes, or other obligations issued by a governmental agency to finance the cost of any wastewater treatment system project which the governmental agency may lawfully undertake or acquire under state law, including, but not limited to, applicable provisions of the "Colorado Water Quality Control Act", article 8 of title 25, C.R.S., and for which the governmental agency is authorized by law to borrow money. Each purchase or refinancing or purchase of insurance by the authority shall be subject to financial analysis by the division of local government in the department of local affairs. Such financial analysis shall include an analysis of the capacity to repay a loan and the need for financial assistance. (c) The authority may charge to and collect from governmental agencies fees and charges in connection with the authority's loans or other services, including, but not limited to, fees and charges sufficient to reimburse the authority for all reasonable costs necessarily incurred by it in connection with its financing and the establishment and maintenance of reserves or other funds, as the authority may determine to be reasonable. (4) (a) The initial water pollution control project eligibility list shall consist of those projects ranked one through thirty on the construction grant project priority list for federal funds adopted by the water quality control commission effective January 30, 1988. (b) Additions or modifications to the water pollution control project eligibility list that have been developed by the water quality control commission shall be submitted to the general assembly on or before January 15 of each year. The additions and modifications shall be in conformance with applicable provisions of the clean water act and state law. On or before April 1 of each year, the additions or modifications shall be approved by a joint resolution presented to the governor in accordance with section 39 of article V of the state constitution. (c) No funds may be expended from the water pollution control revolving fund or bonds issued by the authority pursuant to subsection (6) of this section for any wastewater treatment system project unless the wastewater treatment system project is on the water pollution control project eligibility list approved by the general assembly or is an emergency project in accordance with paragraph (d) of this subsection (4). Financial assistance for a project pursuant to this section may be provided regardless of the rank of such project on the eligibility list. (d) The Colorado water quality control commission may amend the water pollution control project eligibility list at any time, in accordance with its regular procedures, to include wastewater treatment system projects that it determines and declares to be emergency projects needed to prevent or address threats to the public health or environment. No later than January 15 of each year, the authority shall provide to the general assembly a listing of all emergency projects for which moneys from the water pollution control revolving fund have been expended in the preceding calendar year. (5) The division of local government in the department of local affairs, the division of administration in the department of health, and the authority shall develop an intended use plan in compliance with the clean water act. (6) In order to finance the cost of making loans to governmental agencies and provide reserves therefor pursuant to paragraph (a) of subsection (3) of this section, the authority is authorized to issue bonds pursuant to the provisions of this article. (7) The authority, on behalf of the state, with the written approval of the department of health, is authorized to enter into such agreements with the United States as may be necessary to comply with the provisions of the federal "Water Quality Act of 1987" (Pub.L. 100-4) and as otherwise may be required to provide for the capitalization of the water pollution control revolving fund from federal grant moneys. (8) The provisions of sections 37-95-107 and 37-95-107.5 shall not be applicable to any wastewater treatment system project on the project eligibility list approved by the general assembly pursuant to subsection (4) of this section. (9) Notwithstanding anything to the contrary in any other provision of this article, moneys on deposit in the water pollution control revolving fund may, if permitted by applicable federal law and the terms of any agreement between the state and the United States relating to the water pollution control revolving fund, be deposited by the authority, in its discretion, into one or more funds or accounts created or pledged to secure the payments of bonds issued by the authority in connection with the drinking water revolving fund created and administered under section 37-95-107.8. Any moneys transferred under this subsection (9) from the water pollution control revolving fund into or for the benefit of the drinking water revolving fund shall be repaid into the water pollution control revolving fund as soon as practicable. (10) The authority may, acting in its discretion and with the approval of the governor, transfer moneys from the water pollution control revolving fund to the drinking water revolving fund created and administered pursuant to section 37-95-107.8, if the transfer of such moneys is permitted by applicable federal law and the terms of any agreement between the state and the United States relating to the water pollution control revolving fund.
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