Environmental and Land Use Law

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Massachusetts Senate Passes Water Infrastructure Finance Bill

Paying for water infrastructure should be about to get easier.

Massachusetts municipalities may be about to get much-needed financing options for water/wastewater and stormwater infrastructure, if the state House of Representatives approves a bill now pending.

Water ReportIn February 2012, Massachusetts learned that it faces an estimated $21.4 billion shortfall in water/wastewater infrastructure financing over the next 20 years and an $18 billion shortfall for stormwater infrastructure, according to this report by the legislature’s Water Infrastructure Finance Commission.

Last month, the Senate responded by passing legislation intended to help municipalities and other public entities meet their water, wastewater and stormwater infrastructure financing needs. Senate Bill 2021, “An Act improving water and wastewater infrastructure,” is now pending before the House Ways and Means Committee.

As currently drafted, the legislation gives municipalities and water/sewer districts a variety of options for funding improvements to water and wastewater infrastructure:

  • It raises the annual spending cap for the Massachusetts Water Pollution Abatement Trust (renamed the Massachusetts Clean Water Trust), which administers revolving loan funds under the federal Clean Water Act and Safe Drinking Water Act.  The bill increases the cap from $88 million to $138 million and authorizes the Trust to provide low-interest (0-2%) loans and a limited amount of principal forgiveness.
  • It allows municipalities, water districts, and wastewater districts to charge impact fees for new or increased water withdrawals, wastewater discharges or stormwater discharges, which they can use to mitigate the impacts.  A number of municipalities already use this practice, often referred to as “water (or sewer) banking.”  In Denver St. LLC v. Town of Saugus, 462 Mass. 651 (2012), the SJC upheld Saugus’ sewer bank, but raised questions about the authority of a municipality not subject to a sewer discharge moratorium to impose such a fee.  This legislation gives all municipalities and water/sewer districts that authority.
  • It allows municipalities to impose a property tax surcharge (up to 3%) for water infrastructure (similar to the Community Preservation Act surcharge).
  • It authorizes DEP to administer a matching grant program (subject to appropriation) to help pay the entry fee for communities wishing to join the MWRA or other regional system.

Municipalities interested in these financing options may wish to contact their state representatives to urge passage of the bill by the House.

Posted In: Municipal Law, Water

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