DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT 
Water Quality Control Commission
5 CCR 1002-51
REGULATION NO. 51 
WATER POLLUTION CONTROL REVOLVING FUND RULES
51.1	AUTHORITY AND PURPOSE OF THE WATER POLLUTION CONTROL REVOLVING FUND
The Water Pollution Control Revolving Fund (“WPCRF”) was authorized by Congress in Title II and Title VI of the 1987 Amendments to the Clean Water Act (“Federal Act").
Senate Bill 50 (1988) authorized the State to participate in the WPCRF by amending the Colorado Water Resources and Power Development Authority Act, Title 37 of Article 95, C.R.S. (“Authority Act”); this allows the Colorado Water Resources and Power Development Authority ("Authority") to provide funds for the State's twenty percent match required by the Federal Act.  §§ 37‑95‑103 and 37‑95‑107.6, C.R.S.
Sections 25‑8‑202 (1)(e) and (g), C.R.S., of the Colorado Water Quality Control Act ("State Act") also provides the Water Quality Control Commission (“Commission”) and the Water Quality Control Division (“Division”) with the authority to promulgate, implement, and administer this regulation.
The purpose of the WPCRF is to provide financial assistance to governmental agencies for the construction of any project as defined herein that appears on the Project Eligibility List included in the annual Intended Use Plan.
51.2	DEFINITIONS
See the State Act, the Authority Act, and the Federal Act for additional definitions.
(1)	"Beneficial Use" - The use or reuse of treatment works effluent or the use of biosolids to act as a soil conditioner or low grade fertilizer for the promotion of vegetative growth on land.  Also means a use of water, including the method of diversion, storage, transportation, treatment and application; that is reasonable and consistent with the public interest in the proper utilization of water.
(2)	"Biosolids" - The accumulated residual product resulting from processing waste materials from a wastewater and water treatment plant. 
(3)	"Collection System" - A system of sewers used to collect wastewater and convey the wastewater by gravity or pressure flow to a common point.
(4)	“Governmental Agencies” - Departments, divisions, or other units of state government, special districts, water conservation districts, metropolitan water districts, conservancy districts, irrigation districts (as approved by a district court to enter into a contract to accept funding for a wastewater related project under the WPCRF), municipal corporations, counties, cities and other political subdivisions, the United States or any agency thereof, and any agency commission or authority established pursuant to an interstate compact or agreement.
(5)	"Green Infrastructure” – Natural or engineered systems such as green roofs, rain gardens, permeable pavement, and alternative energy (e.g., solar, wind, etc.) sources that provide energy for the operation of the wastewater treatment facility.  Green infrastructure is management approaches and technologies that utilize, enhance and/or mimic the natural hydrologic cycle processes of infiltration, evapotranspiration and reuse (as defined by EPA’s “Action Strategy for Managing Wet Weather with Green Infrastructure” January 17, 2008).
(6) 	“Ground Waters" - Subsurface waters which are or can be brought to the surface of the ground or to surface waters through wells, springs, seeps, or other discharge areas.
(7)	"Interceptor Sewer" - (Intercepting sewer) - For purposes of this regulation, a sanitary sewer that receives flows from a number of collector sewers or outlets and transports such wastewater to a point for treatment or disposal.
(8)	"Management Agency" - Any public agency designated for wastewater management responsibilities in a certified area wide Water Quality Management Plan prepared under Section 208 of the Federal Act.  Such designation shall be considered final only upon the agency's acceptance of its responsibilities as outlined in the appropriate 208 plan. 
(9)	"Nonpoint Source (“NPS”)" - A diffused pollution source that is not regulated as a point source, including but not limited to sources that are often associated with agriculture, inactive or abandoned mining, silviculture, urban runoff, or runoff from construction activities.  NPS pollution does not emanate from a discernible, confined, and discrete conveyance (such as a single pipe) but generally results from land runoff, precipitation, atmospheric deposition, or percolation.
(10)	“Nontraditional Project” - A project for which the primary purpose is other than water quality, but which has an additional purpose that is clearly related to the improvement or protection of water quality (e.g. the liner portion of a new landfill is intended to protect water quality).
(11)	"NPS Project Implementation Plan" - A plan which describes proposed improvements to lessen a NPS pollution problem.  At a minimum, the plan shall describe existing conditions, proposed improvements, anticipated benefits, project costs, financial arrangements and ongoing project maintenance and monitoring.
(12)	"NPS Education Program" - A project which raises public awareness of a prevalent NPS problem and has a primary purpose including disseminating information to the public.  As a minimum, a project description shall include a plan which describes the intent, proposed information for dissemination, project cost, financial arrangements and anticipated benefits.
(13)	"Point Source" - Any discernible, confined, and discrete conveyance, including, but not limited to, any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged.  "Point source" does not include agricultural stormwater discharges and return flows from irrigated agriculture.
(14)	"Pollution" - Activities or events that degrade the physical, chemical, biological, and radiological integrity of water.
(15)	"Project" - A specific improvement to a water quality management system, phase or segment.
(16)	“Project Eligibility List" ‑ The list of projects eligible for financial assistance from the Authority through the WPCRF or its other funding capabilities, as adopted and modified in accordance with section 37‑95‑107.6(4).
(17)	"Public Health Hazard" - Any contamination of ground or surface waters, caused by inadequate treatment works or disposal of inadequately treated sludge, which potentially endangers public health through contamination of drinking water supplies or direct public exposure.  To qualify as a public health hazard, the contamination must be documented by means of a sanitary survey or engineering report submitted by a governmental agency to the Division.
(18)	"Refinance Project" - Refinancing of debt obligations for eligible projects where the initial debt was incurred and construction began after March 7, 1985.
(19)	"Regional Project" - A water quality management system project that will combine and/or eliminate one or more existing treatment works or water quality management systems.  An intergovernmental agreement or contract shall be signed or a resolution adopted by the project participants of the regional project.
(20)	“Sewage Sludge” - Solid, semi-solid, or liquid residue generated during the treatment of domestic sewage in a treatment works.  Sewage sludge includes, but is not limited to, domestic septage; scum or solids removed in wastewater treatment processes; and any material derived from sewage sludge.  Sewage sludge does not include ash generated during the firing of sewage sludge in a sewage sludge incinerator or material generated from preliminary treatment of domestic sewage in a treatment works.
(21)	"Significant Non‑Compliance" - Violation of limits in a discharge permit, issued under section 402 of the Federal Act and/or Part 5 of the State Act to the extent that:  any 2 or more exceedances of a non‑toxic parameter which are 40% or more over the permit limit or 4 marginal violations (less than 40% over the permit limit) of the permit occur within a 6 month period.  For toxic parameters, significant non‑compliance is determined by 2 or more exceedances of a permit limit which are 20% or more over the limit or 4 marginal violations (less than 20% over the permit limit) of the permit within a 6 month period.  Significant non‑compliance is determined within the 12 month period prior to the time the Project Eligibility List is prepared.
(22)	"Small Communities" - Identified specifically for funding from the WPCRF and State Construction Grants Programs, are defined as those governmental agencies with an existing population of not more than 5,000 persons.
(23)	"State Waters" - Includes any and all surface and subsurface waters which are contained in or flow in or through this state, but does not include waters in sewage systems, waters in treatment works or disposal systems, waters in potable water distribution systems, and all water withdrawn for use until use and treatment have been completed.
(24)	“Sustainable Measures” – Implementation of a management system approach that identifies, implements, measures, and improves energy efficiency and renewable opportunities for wastewater treatment facilities (EPA’s “Energy Management Guidebook for Wastewater and Water Utilities” January 2008).
(25)	“Traditional Project” - A project for which the primary purpose is water quality protection.
(26)	"Treatment Works" - Any devices and systems used in the storage, treatment, recycling or reclamation of municipal sewage, sewage sludge, and biosolids, or industrial wastes of a liquid nature, or necessary to recycle or reuse water or biosolids, including intercepting sewers, outfall sewers, sewage collection systems, pumping, power, and other equipment; extensions, improvements, remodeling, additions, and alterations thereof; elements essential to provide a reliable recycled supply such as stand‑by treatment units and clear well facilities; and any works, including site acquisition of the land that will be an integral part of the treatment process (including land used for the storage of treated wastewater in land treatment systems prior to land application) or is used for ultimate disposal of residues resulting from such treatment.  In addition, treatment works means any other method or system for preventing, abating, reducing, storing, treating, separating, or disposing of domestic wastewater, including stormwater runoff, or industrial waste, or waste in combined stormwater and sanitary sewer systems.
(27)	"Water Conservation Project" - Any structural or nonstructural water conservation measure that achieves a reduction in wastewater flow for a publicly-owned treatment works.  Structural measures shall include but are not necessarily limited to: installation of interior low-flow plumbing fixtures which are distributed and/or installed by a governmental agency or which are funded in whole or in part by the governmental agency, and water meters which are funded and owned by the governmental agency.  Nonstructural measures shall include but are not necessarily limited to: incentives for previously installed low-flow fixtures, leaking or I/I detection programs, public awareness, public education, and incentive wastewater and water service charges and treatment works effluent reuse.
(28)	"Water Quality Management Plan" - The plan for managing the water quality, including consideration of the relationship of water quality to land and water resources and uses, on an areawide basis, for each planning area designated pursuant to sections 208(a) and 303(e) and 319 of the Federal Act.
(29)	"Water Quality Management System" - Any treatment works or any other system for disposal of sewage, biosolids, and industrial waste, or NPS pollution control, stormwater protection, ground water protection and treatment operated by a governmental agency.
(30)	"Water Quality Management System Phase or Segment" - Any portion of a water quality management system described in an approved planning document which can be identified as a contract, sub‑item or subcontract.  Completion of building of a system phase or segment may, but need not in and of itself, result in a complete system.
(31)	“Watershed” - A geographical area in which activities may significantly impact a water body (or segment of concern) or an underlying aquifer.  There are several considerations in defining the geographical scope of a watershed: hydrology, political boundaries, uses to be protected, nature of the water quality problem, manageability, available resources, and public interest.
(32)	“Watershed Protection Approach” - An integrated, holistic strategy to protect or attain the desired beneficial uses within a watershed, including protection of human health and aquatic ecosystems.
51.3	INTENDED USE PLAN
(1)	The Division, in cooperation with the Division of Local Government (DLG) and the Authority, shall submit to EPA as part of its application for a capitalization grant an annual Intended Use Plan (“IUP”), which shall include the Project Eligibility List and information about how the State will assist communities with their water quality needs.  The Division shall recommend the IUP to the Commission each year for final agency action after a public hearing, and shall also provide for public notice and an opportunity to comment in order to comply with the Federal Act.
(2)	The IUP shall include as a minimum:
(a)	A list of projects for construction of publicly owned treatment works and projects/activities eligible for assistance under sections 319 and 320 of the Federal Act.  This list must include the name of the community, permit number or other applicable enforceable requirement (if available), the type of financial assistance, and the projected amount of eligible assistance.  (Permit numbers and other applicable enforceable requirements will be made available upon request);
(b)	A description of the short and long‑term goals of the State's WPCRF;
(c)	Information on the types of activities, as opposed to project level details, to be supported by the WPCRF including the eligible cost categories, types of assistance to be provided (e.g., loans, guarantees, insurance, etc.), terms of financial assistance, types of communities to be served by the fund, and administrative costs;
(d)	Assurances and specific proposals on how the State intends to meet the requirements of the Federal Act; and
(e)	The criteria and method established for the distribution of funds. 
51.4	GENERAL POLICIES
 (1)	The Commission will consider protection of public health and water quality when determining the Water Quality Management System projects eligible for WPCRF participation.
(2)	The Commission will maintain and improve water quality in the State by providing accessibility to the WPCRF.
(3)	The Commission will support traditional and nontraditional approaches to meet water quality needs.
(4)	The Commission will encourage regionalization of Water Quality Management Systems where practicable.  It is the policy of the Commission to encourage good local planning within the concept of an Areawide Water Quality Management Plan.  Projects shall conform to a state-approved plan, (for example, Water Quality Management Plan, NPS Management Plan, etc.) as updated from time to time, or they may not be considered for assistance through the WPCRF.
(5)	The Commission and the State Board of Health will promote biosolids disposal methods for beneficial use as opposed to other sludge disposal methods.  The Commission will also promote water conservation and reuse measures.
(6)	The Commission intends to identify projects for the Project Eligibility List that will address the long term water quality needs in Colorado. 
51.5	PROCEDURES FOR IDENTIFYING PROJECTS ESTABLISHING THE PROJECT ELIGIBILITY LIST, AND DISTRIBUTING FUNDS
(1)	Each year the Division shall (after consultation with interested persons and entities, including but not limited to the DLG, the Authority, designated regional water quality planning organizations, watershed planning organizations and Nonpoint Source Management interests) review, update, and compile a Project Eligibility List that contains a project description that will improve or benefit water quality which may include, but are not limited to, the following examples: Impact on public health; Impact on fish and wildlife; Impact on the ecosystem; Improving water quality to meet applicable standards for streams, lakes, and ground water; Protection of classified uses. 
This Project Eligibility List shall be included in the IUP as Appendix A and, after a public notice and comment period, shall be presented to the Commission for final agency action after a public hearing.
(2)	The Project Eligibility List shall be comprised of five categories:
(a)	Category 1 includes those projects that improve or benefit public health or that will remediate a public health hazard as defined in this regulation.
(b)	Category 2 includes those projects that enable an entity to achieve permit compliance. 
(c)	Category 3 includes those projects that contribute to the prevention of a public health hazard; enable an entity to maintain permit compliance; or enables an entity to address a possible future effluent limit or emerging issue.
(d)	Category 4 includes those projects that implement a watershed/nonpoint source management plan.
(e)	Category 5 includes those projects that implement a source water protection plan.
Note:  Eligibility List Categories are determined based on information provided by the applicant during the Annual Eligibility List Survey process.  Based upon receipt and review of the Preliminary Engineering Report and a loan application, the assigned Eligibility List Category may be revised during the prioritization process to more accurately reflect the proposed project.
(3)	All leveraged loan projects shall submit applications by deadlines established in the annual IUP.  If it is determined that the WPCRF lacks sufficient funds to cover loans for all eligible projects that are ready to proceed within the funding year, Category 1 projects will be funded prior to Category 2 projects, which will be funded prior to Category 3 projects, which will be funded prior to Category 4 projects, which will be funded prior to Category 5 projects - until all funds are obligated.  Within each category, the following criteria will be used to further prioritize the projects:
(a)	Projects serving a small community.  Population priority points will be assigned based on the following schedule:	
Up to 1000 Population		20 Points
1,001 to 5,000 Population	15 Points
5,001 to 10,000 Population	10 Points
Over 10,000 Population		  5 Points
(b)	Entities that have a greater financial need as outlined in the following procedures.  Financial need is determined using a priority point system that ranks projects based on estimated monthly user charges as a percentage of median household income (Ability to Pay) and project cost per tap (Local Burden).  The financial data used are from the most recently audited financial statements available to and interpreted by the DLG.  Points are assigned based on the following criteria:
(i)	Ability to pay (total annual sewer cost per single family equivalent as a % of median household income)
Over 3%			20 Points
Over 2% up to 3%		15 Points
Over 1% up to 2%		10 Points
1% and under			  5 Points
(ii)	Local burden (total project cost per equivalent residential tap)
Over $5,000		20 Points
Over $3,500		15 Points
Over $2,000		10 Points
$2,000 and under	  5 Points
(c)	Projects of any governmental agency that is under an enforcement action and/or compliance schedule relating to water quality standards, as long as the enforcement action does not relate to administrative requirements of the program, will be assigned 10 points.
(d)	Projects of any governmental agency that will result in a reduction in the discharge of pollutant(s) to a segment impaired for the relevant pollutant(s) will receive 10 points.
(e)	Projects that implement the “Green Infrastructure/Sustainable Measures” will be assigned 5 points.
(4)	The rationale for funding projects in an order other than that shown shall be due to one or more of the following three reasons:
(a)	Certain governmental agencies do not wish to participate in the WPCRF;
(b)	Certain governmental agencies are not ready to proceed with the project; or
(c)	Certain governmental agencies do not have the financial capability to repay a loan.
(5)	To be eligible to receive assistance from the WPCRF, governmental agencies must complete a planning document, identifying a specific project that is cost‑effective, environmentally acceptable, and consistent with applicable local, state and federal regulations and guidelines.  The Division will review those projects that environmental assessments and public participation requirements apply in accordance with the EPA-approved State Environmental Review Policy.
(6)	Eligible projects include: publicly owned treatment works, nonpoint source and stormwater control projects, water conservation projects, reuse and biosolids projects.  However, funding for nontraditional projects shall be limited to that portion of the project that is related to water quality (e.g. the liner for a new landfill).
(7)	The Project Eligibility List will identify the governmental agency that will enter into the loan agreement and repay the loan.  Before receiving WPCRF funding, the governmental agency must develop and/or maintain a user charge and fee system or other financial mechanism to ensure operation, maintenance and replacement needs are met and to ensure repayment of any WPCRF loan and existing debt.  The WPCRF criteria for the financial capability review of applicants are included in the State/EPA Operating Agreement, which is available from the Division for review.
(8)	Each year, after a public notice and comment period, the Commission will schedule a public hearing for approval of the IUP.  Each governmental agency on the proposed Project Eligibility List will receive notification of the hearing.  After considering all pertinent comments, the Commission shall approve the IUP and adopt additions and modifications to the Project Eligibility List no later than December 31 of each year.  The Division will establish a date each year for finalization of its proposal to the Commission for the IUP and Project Eligibility List.  After that date, any requests for changes must be transmitted directly to the Commission.
(9)	The Commission may amend the Project Eligibility List at any time throughout the year to include wastewater treatment system projects that it determines and declares to be emergency projects needed to prevent or address threats to public health or environment.  In cases where the Commission determines the amendments will result in substantial changes to the Project Eligibility List, public notice and opportunity for comment on the proposed inclusion shall be provided.
51.6	DISADVANTAGED COMMUNITIES PROCEDURES
Under the Federal Act, states are authorized to provide “loans at or below market interest rates, including interest free loans, at terms not to exceed 20 years.”  The following procedures describe the approval and amendment process for Colorado’s annual IUP as it relates to the administration of its Disadvantaged Communities Program. The Division, Authority and the DLG may recommend Program changes based on actual program implementation and the results of periodic reviews conducted hereunder. The Division shall recommend the IUP to the Commission each year for final agency action after a public hearing, and shall also provide for public notice and an opportunity to comment in order to comply with the Federal Act.
(1)	The WPCRF may provide additional loan subsidies for governmental entities that are determined to be “disadvantaged.” The definition/criteria of a disadvantaged community and the nature of the loan subsidies to be made available thereto shall be recommended for inclusion in the IUP by the Division and the Authority in consultation with the DLG.
(2)	While compiling projects on the Priority / Fundable List (utilizing the procedures listed in Section 51.5 above), the Division will identify the community projects that qualify for assistance under the Disadvantaged Communities Program in accordance with program definition/criteria. 
(3)	The Division, the Authority and the DLG will conduct periodic reviews, as appropriate, of the Disadvantaged Communities Program. The reviews may result in recommended program changes relative to the nature of available subsidies to be incorporated into the IUP. In conducting such reviews and preparing recommendations, the following factors may be examined:
(a)	The overall financial condition of the communities participating in the program, including but not limited to: 
(i)	The total utility system fee and tax burden upon rate payers;
(ii)	Post project utility charges;
(iii)	Utility indebtedness; 
(iv)	Median household income.
(b)	The impact of the subsidy upon the continued financial viability of the WPCRF.
(c)	The merit of utilizing all financial assistance options allowed under the Federal Act to finance water quality projects that protect public health and the environment.
51.7 - 51.19 	RESERVED
51.20	STATEMENT OF BASIS AND PURPOSE
In accordance with the requirements of Sections 25‑8‑202(1)(e) and (g), 25‑8‑308(1)(d), and 25‑8‑703, C.R.S., the Commission adopts this Statement of Basis and Purpose.
These regulations will be used concurrently with the Construction Grant regulations, 5 CCR 1002‑15, and will eventually replace them once the Grant Program has ended.  The purpose of these new regulations is to bring the State into conformity with Title VI of the 1987 Clean Water Act Amendments.  Title VI allows the State to establish a permanent Water Pollution Control Revolving Fund (WPCRF) to provide continuing sources of financing (except grants) needed to maintain water quality.
Since this is a water quality program, the priority list will still be developed by awarding points to governmental agencies discharging to "threatened" or "impaired" waters and severity of pollution as defined in the regulations.  In addition, a subcategory has been included to promote regionalization and a new category has been developed for assigning points to projects based on financial need.
This program will allow the State to fund out of priority order and, once all enforceable requirements of the Act are met, the State will be allowed to fund nonpoint source and ground water projects as well.
Fiscal Impact Statement
The shift in the program from grants to loans will create more of a financial burden on local governments.  The individual user charges and fee structures will have to be sufficient to operate and maintain their wastewater management systems as well as to repay any WPCRF loan, and existing debt.
The Authority through the WPCRF will provide loans below market interest rates which will benefit small communities.  In some cases where a Governmental Agency would have to bond its share of a grant project, a low interest loan from the WPCRF for up to the entire amount of the eligible project would be less costly than the grant and bond combined.
The conversion from a grant program to a revolving fund program is mandated by Title VI of the Federal Act.
51.21	STATEMENT OF BASIS AND PURPOSE
In accordance with the requirements of Sections 25‑8‑202(1)(e) and (g), 25‑8‑308(1)(d), and 25‑8‑703, C.R.S., the Commission adopts this Statement of Basis and Purpose.
These regulations have been amended to meet the needs of the Water Pollution Control Revolving Fund (WPCRF) as it evolves.  The majority of the changes are being recommended since significant issues surfaced during the first attempt at developing the WPCRF Priority List.  These changes included: 1) Improvements to the water quality priority points, 2) revisions and clarification to the financial need points, 3) clarification to the eligibility list procedures, and 4) inclusion of the nonpoint source priority list procedures.
Because of the Involvement of the Division of Local Government (DLG) in performing the financial analyses of the Governmental Agencies as authorized by Senate Bill 50, the DLG will assist in the preparation of the point source priority list by assessing the points for financial need.  DLG will use the most current monthly user charge information and the most recent data on median household income and persons per household.  DLG will access information regarding total existing debt from the Governmental Agencies' annual audit.  Additional documents and information referenced by DLG includes:  construction cost estimates from the Division, the Colorado Municipal League “Water and Sewer Utility Charges in Colorado", and census data from the State Demographer's Office.
The nonpoint source revisions to the regulations allows funding of nonpoint source management programs, as defined by Section 319 of the Federal Clean Water Act, through the WPCRF.
Section 5.2.5 has been revised to create procedures and a priority system for nonpoint sources.  The procedures (5.2.5.3) set forth the requirements for nonpoint source projects to be considered for funding and the methods for assigning priority points to projects interested in funding.  The priority system (5.2.5.4) delineates ranking criteria and rating factors for comparing the relative priority of nonpoint source projects.  The point system is based upon impacts to beneficial uses caused by nonpoint sources, potential for restoration of beneficial uses and reduction of severity of nonpoint sources.  This system then emphasizes the severity of nonpoint source impacts and the ability of proposed improvements to restore water quality.  The system also allows education programs to be considered for funding.  These educational programs may be funded by the Commission if they present an opportunity to raise public awareness of a prevalent nonpoint source problem area and these programs are weighted against the need for demonstration projects to advance the state of knowledge of best management practices.
The Colorado Nonpoint Source Task Force, an organization recognized in Colorado's nonpoint source management program, is identified as a review agency of the Division's yearly submittal of the Nonpoint Source Project Priority List.  The Colorado Nonpoint Source Task Force is comprised of a broad spectrum of Governmental agencies and interest groups involved in and affected by nonpoint source decision making.
51.22	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY, AND PURPOSE (1989 REVISIONS)
The provisions of Sections 25‑8‑202(1)(e), and (g); 25‑8‑308(1)(d); and 37‑95‑107.6(4) C.R.S., provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with Sections 24‑4‑103(4) C.R.S., the following Statement of Basis and Purpose.
BASIS AND PURPOSE
Section 5.2.2(4) is the definition for the use of the term “Equivalent Residential Taps (ERT'S)."  The equation used to determine ERT'S has been revised to correctly state "Average Daily Organic Loading."
Section 5.2.4(7) of the regulation has been revised to clarify that point source wastewater treatment projects must complete facility planning requirements.  The term "environmentally acceptable" relates to the Federal requirements of the national environmental policy act "NEPA", which requires that federally funded or assisted projects must be shown to have no adverse environmental impacts or that such impacts will be mitigated.  An environmental review must be conducted for each wastewater treatment facility plan in order to meet Federal regulations.
Section 5.2.5.2(1)(B) has been revised to delete reference to tap restrictions as a condition for receiving severity of pollution points.  The intent of the Commission is that any municipal wastewater treatment facility that is at or in excess of 95% of plant capacity be given priority points so that they can be considered for loan assistance.  Tap restrictions are rarely imposed by a municipality or the Division and are not relevant to the assignment of priority points; therefore, the phrase "and is under a tap restriction" has been deleted.  The terms "hydraulic" and organic capacity have been added to clarify that if a facility reaches 95% of either type of treatment capacity, the 20 points shall be assigned.
51.23	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY, AND PURPOSE (1990 REVISIONS)
The provisions of sections 25‑8‑202(1)(e), and (g); 25‑8‑308(1)(d); and 37‑95‑107.6(4) C.R.S., provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with sections 24‑4‑103(4) C.R.S., the following statement of basis and purpose.
BASIS AND PURPOSE
Section 5.2.5.1(2) and 5.2.6(2) of the regulation has been revised to allow the division and the commission the flexibility to compile and adopt the priority and eligibility lists at anytime during the year with final action being completed by December 31.  Currently, the process is initiated in April with approval by the commission at the August hearing.  The eligibility list then goes to the legislature in January for joint resolution by April; therefore, the funding of projects is delayed by an entire year.  This change will allow the process to be compatible with the legislation and reduce delays by 2‑3 months.
Section 5.2.5.2(1)(b) has been changed from 95% of capacity to 80%.  Since state law requires a community to start facilities planning when capacity is at 80%, this revision will allow those communities to receive priority points for financial assistance during the planning process.
Other changes in this regulation were due to typographical errors.
51.24	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY, AND PURPOSE (1991 REVISIONS)
The provisions of Sections 25‑8‑202(1)(e), and (g); 25‑8‑308 (1)(d); and 37‑95‑107.6(4) C.R.S. provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with Sections 24‑4‑103(4) C.R.S., the following statement of basis and purpose.
BASIS AND PURPOSE
Many changes were incorporated into the point source priority system (5.2.5.2) to allow additional projects that are eligible under this program to receive funding.  Categories were added for potential health hazards, facilities that are beyond the design life and in need of repair and sludge disposal.  Categories for potential health hazards and facilities beyond the design life and in need of repair were added to assist communities in pollution prevention to limit initiation of compliance and enforcement measures. The sludge disposal category was added to assist communities with meeting State/EPA sludge management regulations.     
The order of these categories was also changed to utilize one priority system for all state priority lists.  This system will accommodate the State grant program, the Sewer Needs List for Division of Local Government Funding and any future federal grant program.  New definitions were added to 5.2.2 for beneficial use, sludge, sludge disposal as a health hazard, potential health hazard, and refinance project.  The point source priority system procedures (5.2.5.1) were revised to include a system for awarding points to projects requesting refinancing.  Minor changes were also made to the nonpoint source priority point system (5.2.5.4) by replacing the word beneficial with the word classified.  This change will provide more accuracy when describing Commission actions.  The changes were made throughout the document with regards to nonpoint source information and will assist in differentiating between beneficial uses for sludge disposal and the new classified use for nonpoint source.
51.25	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY, AND PURPOSE (1992) REVISIONS
The provisions of Sections 25-8-202(1)(e), and (g); 25-8-308 (1)(d); and 37-95-107.6(4) C.R.S. provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with Sections 24-4-103(4) C.R.S., the following statement of basis and purpose. 
BASIS AND PURPOSE 
Proactive changes are incorporated into the WPCRF Rules which will allow (1) small communities to be eligible for funding without going through an extensive 201 facility planning process; and, (2) water conservation measures are being promoted by the State.  A definition of water conservation projects is included in section 5.2.2, as well as a point system category in section 5.2.5.2.  The change allowing feasibility studies for small communities is located in 5.2.6 "Eligibility List Procedures."
Assignment of points for interceptor projects is changed to the governmental agency responsible for the interceptor since repair work is now eligible and the receiving plant may not have a severity of pollution problem.  This will also direct the financial capability and loan agreement to the appropriate agency.
51.26	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY, AND PURPOSE (1993) REVISIONS 
The provisions of Sections 25-8-202(1)(e), and (g); 25-8-308 (1)(d); and 37-95-107.6(4) C.R.S. provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with Sections 24-4-103(4) C.R.S., the following statement of basis and purpose. 
BASIS AND PURPOSE
The WPCRF rules that were adopted in October, 1992 are revised to correct three typographical errors on page 1, 11 and 22.
The definition of "small communities" 5.2.2 (28) has been expanded to clarify that for all intents and purposes a small community is under 10,000 existing population.  The exception is funds from the State Grant or Feasibility Studies Programs are only awarded to small communities under 5,000 existing population.
5.2.4(8) was reworded for clarification.
5.2.6(3) was rewritten for simplification but did not change the content.
51.27	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY, AND PURPOSE (1997 REVISIONS)
The provisions of sections 25-8-202(1)(e), and (g); 25-8-308 (1)(d); and 37-95-107.6(4) C.R.S. provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with section 24-4-103(4) C.R.S., the following statement of basis and purpose.       
BASIS AND PURPOSE
The Federal Clean Water Act and the Environmental Protection Agency have authorized flexibility to state revolving fund programs by encouraging states to fund expandable uses and integrate other water quality eligibilities into their priority systems and plans for distributing funds.  The Water Quality Control Commission authorized a critical review team to review and propose revisions to the existing Water Pollution Control Revolving Fund (WPCRF) Rules 5.2.0 (5 CCR 1002-21) to assist communities that are proactive with compliance issues and encourage pollution prevention.  With these broad directions in place, the Interim WPCRF Rules with expanded eligibilities were proposed.
The existing WPCRF Rules have separate priority ranking systems for point source (wastewater projects defined by Section 212 of the Federal Act) and nonpoint source projects.  The nonpoint source priority system has not been utilized since 1992.  The point source priority system required points to be compiled for each project; first for severity of pollution problems, then for quality of receiving waters, financial need, regionalization, water conservation and beneficial use.
The Interim WPCRF Rules provide for a list of all projects that improve or benefit water quality with emphasis on public health, and proactive and long range planning of water quality approaches and/or pollution prevention methods.  A more detailed prioritization will be assembled if there is a shortage of funds available.
This interim rule provides two major benefits:
Even though traditional wastewater projects are still a priority and will be identified as such, this rule will allow communities to receive low interest loans for other water quality concerns in their area, such as: stormwater, biosolids, water reuse, landfills, etc.
The effort of compiling the project list will be more strategic with planning and watershed efforts, more accurate with addressing actual water quality needs, less subjective and less resource intensive as far as collecting data to prioritize each project (which would be very difficult with such diverse types of projects).
In subsection (a) of section 5.2.9(6), Procedures for Identifying Projects and Establishing the Project Eligibility List, the Commission has included broader language regarding consultation than appears in the existing rule.  The purpose of this language is to further strengthen the WPCRF program by broadening community involvement.  The Commission is hopeful that this will result in more timely and accurate needs assessment information, improved coordination between different funding sources, and ongoing feedback on the WPCRF program.
The critical review team recommended that the Commission adopt an interim rule to assess the outcome of such a radical change in prioritizing water quality projects in Colorado before permanently changing this regulation.  Therefore, this rulemaking has not repealed the existing regulatory provisions, but rather provides that the new Interim Rules will apply for purposes of developing a FY98 Intended Use Plan.  It is anticipated that this Interim WPCRF Rule will be reviewed in an informational hearing in November, 1997, to receive input on the operation of the Interim Rules and whether they should be modified, repealed, or made permanent.
51.28	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY AND PURPOSE; JULY, 1997 RULEMAKING
The provisions of sections 25-8-202 and 25-8-401, C.R.S., provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with section 24-4-103(4) C.R.S., the following statement of basis and purpose.
BASIS AND PURPOSE
The Commission has adopted a revised numbering system for this regulation, as a part of an overall renumbering of all Water Quality Control Commission rules and regulations.  The goals of the renumbering are:  (1) to achieve a more logical organization and numbering of the regulations, with a system that provides flexibility for future modifications, and (2) to make the Commissions internal numbering system and that of the Colorado Code of Regulations (CCR) consistent.  The CCR references for the regulations will also be revised as a result of this hearing.
51.29	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY AND PURPOSE; APRIL, 1998 RULEMAKING
The provisions of Sections 25-8-202(1)(e), and (g); 25-8-308 (1)(d); and 37-95-107.6(4) C.R.S. provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with Sections 24-4-103(4) C.R.S., the following statement of basis and purpose. 
BASIS AND PURPOSE
The Commission has determined the Interim Rules For FY98 Intended Use Plan (51.11) shall be extended to the FY99 Intended Use Plan (IUP).  The Critical Review Team and the Water Quality Control Division has not yet been able to assess the benefit of the new system for identifying water quality projects; it would therefore be premature to adopt permanent revisions to the prioritization system at this time.  The watershed efforts now being implemented by the Division as part of the process for identifying projects should be better utilized in the FY99 IUP.
It is anticipated that the Interim WPCRF Rules will be reviewed and the system for identifying eligible projects be assessed by the Critical Review Team prior to August, 1998.  The Commission may then decide to schedule a Rulemaking Hearing in January, 1999 to determine whether the Rules should be modified, repealed or made permanent.
51.30	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY AND PURPOSE; February, 1999 RULEMAKING
The provisions of Sections 25-8-202(1)(e), and (g); 25-8-308 (1)(d); and 37-95-107.6(4) C.R.S. provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with Sections 24-4-103(4) C.R.S., the following statement of basis and purpose.
BASIS AND PURPOSE
The Federal Clean Water Act and the Environmental Protection Agency have authorized flexibility to state revolving fund programs by encouraging states to fund expandable uses and integrate other water quality eligibilities into the Intended Use Plans.  The Water Quality Control Commission authorized a critical review team to review and propose revisions to the existing Water Pollution Control Revolving Fund (WPCRF) Rules, No. 51  (5 CCR 1002-51) to assist communities that are proactive with compliance issues and encourage pollution prevention.  The Interim WPCRF Rules with expanded eligibilities were adopted as a pilot to be tested on the 1998 and 1999 Intended Use Plan (IUP), project and eligibility lists.
The previous WPCRF Rules have been deleted and the Interim WPCRF Rules are now final with a few changes.  Definitions for Traditional and Nontraditional projects have been added as recommended by EPA; a new policy has been added to encourage nontraditional projects as well as traditional projects to meet water quality needs; a description of eligible projects was included; a deadline for the Division to finalize the IUP will be publicized early in the process and any subsequent changes from communities will have to be requested directly to the Commission; the project categories and the subcriteria for further prioritization in case there is a lack of funds have all been grouped together in one area of the rules; and the priority for small communities has been deleted since it is already considered by the Division of Local Government when determining financial need. 
The WPCRF Rules provide for a list of all projects that improve or benefit water quality with emphasis on public health, and proactive and long range planning of water quality approaches and/or pollution prevention methods. 
This rule provides two major benefits:
1.	Even though traditional wastewater projects are still a priority and will be identified as such, this rule will allow communities to receive low interest loans for other water quality concerns in their area, such as projects relating to: stormwater, biosolids, water reuse, ground water quality, etc.
2.	The effort of compiling the project list will be more strategic with planning and watershed efforts, more accurate with addressing actual water quality needs, less subjective and less resource intensive as far as collecting data to prioritize each project (which would be very difficult with such diverse types of projects).
A representative from the Denver Regional Council of Governments requested that the Commission broaden the definition of “governmental agencies” to include unincorporated associations and other entities recognized in water quality management plans.  The Commission chose to conform the definition in this regulation to the terminology in the Colorado Water Resources and Power Development Authority Act, Title 37, Article 95, C.R.S., since that statute determines which entities qualify for funding under this program.  To change which entities can receive funding would require a statutory change by the Colorado General Assembly.  In the absence of any such change, the Commission notes that creative options are available under the current definition to the extent that multiple entities that qualify as “government agencies” choose to work cooperatively on a project.
51.31	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY AND PURPOSE; May, 2000 RULEMAKING
The provisions of Sections 25-8-202(1)(e) and (g); 25-8-308 (1)(d); and 37-95-107.6(4) C.R.S. provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with Section 24-4-103(4) C.R.S., the following statement of basis and purpose.
BASIS AND PURPOSE
These regulations were amended to simplify the Water Pollution Control Revolving Fund (WPCRF) Intended Use Plan process along with some minor editing.  The Intended Use Plan previously contained two lists.  The Project List identified all projects including long term needs.  The Project Eligibility List contained projects extracted from the Project List that had prepared or anticipated preparing a facility plan during the funding year.  Based on recommendations from stakeholders, the two lists were combined into one Project Eligibility List.  Additions and modifications to this list will be submitted to the legislature each year for approval.
The Drinking Water Revolving Fund (DWRF) Intended Use Plan also contains a comprehensive Project Eligibility List that identifies all projects, including long term needs.  Additions and modifications to the Project Eligibility List are submitted to the legislature each year; this approach has been very successful.
The Water Quality Control Division requested the change to the WPCRF process to be consistent with the DWRF.  This simplified approach will alleviate several problems.  Having a similar format for both the WPCRF and DWRF Intended Use Plans will make the processes easier for program personnel and communities to understand.  Compressing the process to one list will also alleviate the possibility of potential data transfer errors.  Finally, by submitting a comprehensive list of projects for legislative approval, projects that were not ready to proceed during the funding year, but later become ready for funding, will not have to wait until the next legislative session.
51.32	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY, AND PURPOSE (MAY 2004 RULEMAKING)
Sections 25-8-202(1)(e) and (g); 25-8-308 (1)(d); and 37-95-107.6(4), C.R.S. provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with section 24-4-103(4), C.R.S., the following statement of basis and purpose.
BASIS AND PURPOSE
Recent statutory amendments necessitated changes to the Water Pollution Control Revolving Fund (WPCRF) Rules, Regulation No. 51.  The Division and the Attorney General's Office took this rulemaking opportunity to reexamine the regulation for consistency with federal requirements.  The Attorney General's Office, along with the Division and a stakeholders group, also discussed options to simplify the process for the Commission’s annual approval of the "Intended Use Plan."
In order to accomplish these objectives, the Commission made the following changes to Regulation No. 51:
Section 51.3 - This section was amended to specifically include the federal requirements for developing the annual Intended Use Plan.  The section (along with section 51.5(8)) was also amended to make the process for annual changes to the Intended Use Plan more flexible by authorizing the Commission to approve of the Plan in a public forum after a public notice and comment period, while deleting the requirement for a rulemaking process.
Section 51.5(2) - Category 1 and 2 were explained further to assist staff in categorizing projects on the Project Eligibility List.
Section 51.5(3) - Language was added to specify that applications for leveraged loan projects must be submitted by a deadline established in the Intended Use Plan.  This process allows staff to prioritize projects when the WPCRF lacks sufficient funds to provide loans to all eligible applicants ready to proceed. 
Section 51.5(9) - This provision was included to reflect recent amendments to the Colorado Water Resources and Power Development Authority Act that allow emergency projects to be added to the Project Eligibility List for funding throughout the year with approval by the Commission.
51.33	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY, AND PURPOSE (OCTOBER  2005 RULEMAKING, EFFECTIVE NOVEMBER 30, 2005)
Sections 25-8-202(1)(e) and (g); 25-8-308 (1)(d); and 37-95-107.6(4), C.R.S. provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with section 24-4-103(4), C.R.S., the following statement of basis and purpose.
BASIS AND PURPOSE
Under the Clean Water Act, States are authorized to provide “loans at or below market interest rates, including interest free loans, at terms not to exceed 20 years.”  These regulations have been amended to include Section 51.6 that allows for a Disadvantage Community Loan program.  The section also outlines the procedures that will be used during the approval and amendment process of Colorado’s annual IUP as it relates to the administration of its Disadvantaged Communities Program.  The Division, Authority and the Division of Local Government worked with a stakeholders group to identify eligibility criteria that is outlined in the annual IUP.  This program is being implemented in response to the growing needs of small community systems faced with implementing water quality infrastructure projects. 
51.34	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY, AND PURPOSE (JULY 2008 RULEMAKING, EFFECTIVE JANUARY 1, 2009)
Sections 25-8-202(1)(e) and (g); 25-8-308 (1)(d); and 37-95-107.6(4), C.R.S. provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with section 24-4-103(4), C.R.S., the following statement of basis and purpose.
BASIS AND PURPOSE
Federal funding for Water Pollution Control Revolving Loan Fund has been significantly reduced over the last 5 years.  This reduction in federal funds has resulted in limited loan capacity available for Colorado’s wastewater treatment projects.  In order to assure that the limited loan funds are directed to projects that have the most environmental and public health benefits, this rule has been revised to replace the current three-category system.
This proposed categorization system is anticipated to provide greater discrimination among the projects than the existing categorization system.  In addition, the Rules have been revised to include changes to the prioritization point system that will be used to rank projects within each category.  The categories will still dictate what types of projects will be funded before others.  However, the revisions to the Rules expand the prioritization point scheme to encompass more projects with a potential environmental benefit.  Points will be provided to communities based on their population and financial need, whether the facility is currently under an enforcement action, whether the project will reduce the discharge of pollutant(s) to a segment impaired for the relevant pollutant(s), and/or whether the project will implement green infrastructure/sustainable measures technology and/or practices.
The Division has sought input from an internal stakeholders’ group comprised of Division staff from the permitting (surface water, ground water, stormwater), enforcement, non-point source, source water protection, and total maximum daily load programs.  Input was also sought from the DLG, the Authority and the Wastewater Utility Council.