# COMAR Title 26 — Department of the Environment

## Subtitle 03 — Water Supply, Sewerage, Solid Waste, and Pollution Control Planning and Funding

### Chapter 07 — Water Pollution Control Fund Construction Financial Assistance Regulations (Industrial User Section)

**Authority:** Environment Article, §§9-345—9-349, Annotated Code of Maryland

**Administrative History:** Effective date: April 21, 1986 (13:8 Md. R. 900)

**Administrative History:** Chapter recodified from COMAR 10.50.06 to COMAR 26.03.07

#### Regulation .01 Scope.

*COMAR 26.03.07.01*

The laws of Maryland have been amended by Laws of Maryland 1984, Chapter 795, codified at Environment Article, §§9-345—9-349, Annotated Code of Maryland, to allow financial assistance to industrial users for loans or loan guarantees for projects that provide pretreatment of pollutants that are discharged directly or indirectly into publicly owned treatment works or into any conveyance leading to a publicly owned treatment works.

#### Regulation .02 Definitions.

*COMAR 26.03.07.02*

A. The following terms have the meanings indicated.

B. Terms Defined.

  (1) “Board” means the Water Science Advisory Board.

  (2) “Department” means the Department of the Environment.

  (3) “Discharge permit” means a permit issued by the Department for the discharge of any pollutant or combination of pollutants into the waters of this State.

  (4) “Federal Clean Water Act” means the United States statute codified at 33 U.S.C. §§1251 et seq., as amended, and such regulations, policies, and guidelines as published from time to time pertaining to the Act.

  (5) “Includes or including” means includes by way of example and not by limitation.

  (6) “Sewage” means any human or animal excretion, domestic waste, or industrial waste. Industrial waste, for the purpose of this regulation, means all water-carried solid, liquid, or gaseous wastes resulting from any process of industry, manufacturing, or trade, or from the development or recovery of any natural resource.

  (7) “Sewerage system”:

    (a) Means the channels used or intended to be used to collect or dispose of sewage;

    (b) Means structure and appurtenance used or intended to be used to collect or prepare sewage for discharge into the waters of the State;

    (c) Includes a sewer of any size; but

    (d) Does not include the plumbing system inside a building served by the sewerage system.

#### Regulation .03 General Provisions.

*COMAR 26.03.07.03*

A. The Department of the Environment and the Department of Housing and Community Development, in accordance with these regulations, may jointly award loans to industrial users for projects that provide for pretreatment of pollutants that are discharged directly or indirectly into publicly owned treatment works or into a conveyance leading to a publicly owned treatment works.

B. An applicant for a loan shall:

  (1) Obtain applicable federal, State, and local permits, including construction, discharge, highway, waterway, and wetland permits;

  (2) Comply with other applicable federal and State laws before application to the Board of Public Works for the loan;

  (3) Maintain in force applicable permits as required by law; and

  (4) Comply with applicable federal and State laws throughout the life of the loan.

#### Regulation .04 Priority System.

*COMAR 26.03.07.04*

The State priority system for the award of loans shall be developed by the Department of the Environment, may be subjected to public hearings, and will result in a priority list which shall be used to award the financial assistance. The priority system shall take into account, as appropriate:

A. The EPA National Pretreatment Standards, 40 CFR §403.6, which are incorporated by reference;

B. The water quality or public health impacts of the existing circumstances;

C. The problem prevention aspects of the proposed project;

D. Previous efforts expended to correct an existing problem;

E. The financial capacity of the applicant to repay the loan;

F. Cost effectiveness of the proposed project;

G. Planning requirements;

H. Applicant's plans for monitoring and report; and

I. Measures to assure accountability for loans.

#### Regulation .05 Application Requirements.

*COMAR 26.03.07.05*

A. Preapplication to Establish Eligibility and Ranking. Anyone interested in applying for a loan shall submit to the Department of Housing and Community Development sufficient information, as indicated on the preapplication form, for the Department of Housing and Community Development and the Department of the Environment to determine tentative project eligibility, ranking, and cost and applicant financial capability.

B. Application After Eligibility and Ranking Determined. After the eligibility and ranking of potential applicants has been tentatively determined, a person tentatively determined to be eligible may apply to the Department of the Environment for a loan by submitting, in the number of copies directed by the Department of the Environment, the following:

  (1) An application on the form furnished by the Department of the Environment;

  (2) A detailed narrative description of the project;

  (3) Plans and specifications for the project;

  (4) Schedule for construction of the project;

  (5) Description of the applicant's:

    (a) Management system for construction and operation of the project, and

    (b) Bookkeeping and accounting system for accounting for expenditures for construction of the project and repayment of the loan; and

  (6) A certification that the applicant for the loan is unable to obtain, on reasonable terms, sufficient credit to finance the applicant's actual needs without the loan.

#### Regulation .06 Project Eligibility.

*COMAR 26.03.07.06*

A. A loan may not be awarded that will cause a project to be funded at a level exceeding 100 percent of the total project costs.

B. Loans may be awarded up to 100 percent of the eligible costs of the project.

C. Loans may be made to refinance existing financing that has been already obtained at terms that are found to be not reasonable.

D. Eligible Costs. Costs eligible for a loan are actual construction costs. In addition, at the discretion of the Department of the Environment, loans may be awarded to include some or all of the following supplementary project costs:

  (1) Reports;

  (2) Plans;

  (3) Specifications;

  (4) Rehabilitation and improvement of process facilities which will reduce the discharge of pollutants more effectively than the installation of additional pretreatment equipment.

#### Regulation .07 Award of a Loan.

*COMAR 26.03.07.07*

The Department of the Environment may only approve a loan to industrial users for projects that provide pretreatment of pollutants that are discharged directly or indirectly into publicly owned treatment works if:

A. The Secretary of Housing and Community Development determines that there is a reasonable assurance of repayment of the loan;

B. The Secretary of Housing and Community Development determines that the applicant for a loan is unable to obtain, on reasonable term sufficient credit to finance the applicant's actual needs without the loan;

C. The Department of the Environment determines that the project meets applicable technical standards and that cost estimates are reasonable and represent eligible cost;

D. When the applicant does not own the property where the pretreatment project will be constructed, the landowner consents to the terms and conditions of the agreement;

E. The Secretary of the Department of the Environment determines that the project will cost-effectively reduce the discharge of pollutants and improve water quality; and

F. The loan:

  (1) Bears at least the same rate of interest as the most recent State general obligation bond sale preceding the date of approval by the Board of Public Works;

  (2) Shall be repaid within 30 years; and

  (3) Does not exceed, as an aggregate principal amount to a single applicant in a calendar year, $500,000, unless the Board of Public Works determines that extraordinary circumstances exist.

#### Regulation .08 Conditions of Loan Agreements.

*COMAR 26.03.07.08*

Loan agreements shall include:

A. Specification of the purpose, amount, manner of repayment, and other conditions required by the Board of Public Works;

B. The obligation of the applicant to:

  (1) Construct, install, and operate the pretreatment project in a manner which ensures compliance with pretreatment requirements and technical specifications;

  (2) Maintain the project for its expected life span;

  (3) Bind a successor in interest;

C. On loans over $2,500, a granting to the State of a security interest specified by the Department of the Environment in equipment, structures, or property purchased in whole or part with State monies.