Gov. signs water infrastructure finance bill

Legislation signed Wednesday by Gov. Deval Patrick will increase the amount of low- and no-interest loans available to communities for water infrastructure projects.

The law creates a sliding-scale interest rate of between zero and 2 percent on the loans from the Massachusetts Clean Water Trust (formerly the Water Pollution Abatement Trust), with additional subsidies that may include principal forgiveness based on certain criteria. The law raises the capital assitance available to subsidize loans from $88 million to $138 million (subject to annual appropriation) and dictates that at least 80 percent of the subsidy should be used each year.

Under the law, the state will match a municipality’s contribution for the entry fee to join the Massachusetts Water Resource Authority or another regional water or wastewater system (subject to appropriation).

The law includes language, modeled after the Community Preservation Act, allowing communities, at local option, to establish a water surcharge of up to 3 percent that would be deposited into a water infrastructure fund to repair aging infrastructure.

Under another provision, the state will reimburse the MWRA for grants and loans it provides to cities and towns to repair or replace aging pipes connected to MWRA treatment facilities in order to reduce the “infiltration and inflow” of stormwater into sewer systems.

The law re-establishes the Water Infrastructure Finance Commission to continue to monitor the condition of the state’s water infrastructure. In 2012, the commission documented a $21.4 billion funding gap over the next 20 years for water and wastewater infrastructure needs across the state.

The water infrastructure finance bill, filed by Sen. Jamie Eldridge of Acton and Rep. Carolyn Dykema of Holliston, was enacted by the Legislature on July 31. Senate President Therese Murray had identified the issue as one of her top legislative priorities.