In this subtitle the following words have the meanings indicated. “Annual operating costs” include the cost of: the production, treatment, pumping, storage, transmission, and distribution of water and the maintenance and repair of equipment associated with these functions; the collection, pumping, transmission, and treatment of wastewater, and the maintenance and repair of equipment associated with these functions; administrative overhead; debt service; depreciation; and servicing customer accounts. “Lateral system construction costs” include: any cost necessary to plan, design, acquire, construct, inspect, test, and put into operation the lateral system to serve a State facility; and any indirect cost incurred by the local jurisdiction that is necessary to construct water and sewer lines.

The State shall pay its share of: the annual operating costs of furnishing water and sewer service to any State facility; and the lateral system construction costs associated with the installation of any water or sewer line that directly serves the State facility. The State shall pay the cost of expanding a water or sewage treatment facility if the expansion is necessitated by the use of the facility by the State. However, the amount the State pays may not exceed the cost of the capacity required by the State.

The State shall pay any assessment, charge, or fee that is: levied by the local jurisdiction in which the State facility is located; and designated as the State’s share of annual operating costs or lateral system construction costs.

If the State has agreed to pay the costs set out in § 2-402 of this subtitle and any additional construction costs associated with the connection, the State may connect a State facility, regardless of its location, to a publicly owned utility system. If an existing publicly owned utility system is inadequate to handle proposed State utility needs, the State shall pay all costs that are: associated with the expansion of the publicly owned utility system to meet the needs of the State; and in excess of available federal funds. Before connecting to any publicly owned utility system, the State shall: coordinate with the owner of the publicly owned utility system; and consider any existing master plan in establishing the fiscal obligation of the State under this section. After determining the need of the State for water or sewerage capacity, the State shall provide the information to the appropriate local jurisdictions. The local jurisdictions shall include State facility needs in developing their master plans for water and sewerage systems.