Both the House and the Senate have passed legislation that would increase the amount of low-interest loans available to communities for water infrastructure projects from $88 million per year to $138 million.

The bills contain language that would create a sliding-scale interest rate of between zero and 2 percent on the loans, with additional subsidies that may include principal forgiveness based on certain criteria.

The Senate bill (S. 2021) would authorize cities and towns to collect reasonable fees to help offset environmental impacts caused by developments requiring new or increased water and sewer system needs, a program known as “water banking.” The bill would allow for separate fees for residential and commercial usage. The water banking provision was not included in the House bill (H. 4212).

Both bills include language, modeled after the Community Preservation Act, which would allow communities, at local option, to establish a local-option water surcharge of up to 3 percent that would be deposited into a water infrastructure fund to repair aging infrastructure.

Both bills also contain a provision calling for the state to reimburse the Massachusetts Water Resources Authority for grants and loans they provide to communities to reduce “infiltration and inflow” of stormwater by repairing or replacing aging pipes connected to MWRA treatment facilities. The Senate bill would also allow non-MWRA communities to also be eligible for state reimburse for similar repairs, though the House did not include such language.

The House bill would re-establish the Water Infrastructure Finance Commission to continue to review the state’s progress in improving water infrastructure. In 2012, the original commission found the overall financial need for water infrastructure projects across the state to be $20.4 billion over the next 20 years.

House and Senate members are currently in discussion to work out the differences between the two bills, and the Legislature is expected to finalize the legislation before the end of the formal legislative session on July 31.

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