HB942.DOC

SECTION 1. The legislature finds that the quality of the environment and the economy of the State are both of utmost importance to the welfare of the people of Hawaii. The legislature, in concert with the United States Environmental Protection Agency (EPA) and the United States Congress, finds that there is increasing demand for the replacement of aging drinking water and wastewater system infrastructure in the State of Hawaii, the delay of which could pose both a short-term and long-term health hazard for consumers statewide. Moreover, the legislature finds that the inability of the drinking water treatment revolving loan fund, established under section 340E-35, Hawaii Revised Statutes, and the water pollution control revolving fund, established under section 342D-83, Hawaii Revised Statutes, as administered by the department of health, to flexibly manage their yearly capitalization grants received from the EPA to the maximum extent allowed under current federal law, also known as the Safe Drinking Water Act, prevents the optimal utilization of these funds for the construction of health-protective infrastructure projects in Hawaii, which also infuses federal funds into the economy and creates jobs.

The legislature finds that the incorporation of capitalization grant transfer authority between the drinking water treatment revolving loan fund and the water pollution control revolving fund programs, as currently allowed under title 40 Code of Federal Regulations section 35.3530(c), can greatly assist the two programs with proper planning, priority setting, and the maximizing of their two infrastructure funding programs by directing these federal funds where they are most needed in Hawaii. As a side benefit, such authority better ensures that all of the federal capitalization grant moneys awarded every year to these two programs will be disbursed as quickly as possible.

SECTION 2. Chapter 340E, Hawaii Revised Statutes, is amended by adding a new section to read as follows:

"§340E- Drinking water treatment revolving loan fund; transfers. The director may transfer a dollar amount up to thirty-three per cent of a fiscal year's drinking water treatment revolving loan fund capitalization grant to the water pollution control revolving fund established under section 342D-83, or an equivalent dollar amount from the water pollution control revolving fund to the drinking water treatment revolving loan fund, established under section 340E-35. The following conditions apply:

(1) Each year in which the director transfers funds pursuant to this section:

(A) The State's attorney general, or attorney general's designee, shall certify in writing for the drinking water treatment revolving loan fund and the water pollution control revolving fund that state law permits the director to transfer funds; and

(B) The director shall amend the operating agreements or other parts of the capitalization grant agreements for the drinking water treatment revolving loan fund and the water pollution control revolving fund to document the method used to transfer funds;

(2) The director may not use the transfer provision to acquire state match for either fund or use transferred funds to secure or repay state match bonds;

(3) The director may reserve fund amounts for transfer in future years pursuant to requirements under federal law; and

(4) Funds may be transferred on a net basis between the drinking water treatment revolving loan fund and the water pollution control revolving fund, provided that the thirty-three per cent transfer allowance associated with drinking water treatment revolving loan fund capitalization grants received is not exceeded."

SECTION 3. Chapter 342D, Hawaii Revised Statutes, is amended by adding to part V a new section to read as follows:

"§342D- Water pollution control revolving fund; transfers. The director may transfer a dollar amount up to thirty-three per cent of a fiscal year's water pollution control revolving fund capitalization grant to the drinking water treatment revolving loan fund established under section 340E-35, or an equivalent dollar amount from the drinking water treatment revolving loan fund to the water pollution control revolving fund, established under section 342D-83. The following conditions apply:

(1) Each year in which the director transfers funds pursuant to this section:

(B) The director shall amend the operating agreements or other parts of the capitalization grant agreements for the drinking water treatment revolving loan fund and water pollution control revolving fund to document the method used to transfer funds;

(2) The director may not use the transfer provision to acquire state match for either fund or use transferred funds to secure or repay state match bonds;

(3) The director may reserve fund amounts for transfer in future years pursuant to requirements under federal law; and

(4) Fund amounts may be transmitted on a net basis between the water pollution control revolving fund and the drinking water treatment revolving loan fund, provided that the thirty-three per cent transfer allowance associated with water pollution control revolving fund capitalization grants received is not exceeded."

SECTION 4. New statutory material is underscored.

SECTION 5. This Act, upon its approval, shall take effect on July 1, 2015.

INTRODUCED BY:

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BY REQUEST

HOUSE OF REPRESENTATIVES	H.B. NO.	942
TWENTY-EIGHTH LEGISLATURE, 2015
STATE OF HAWAII