Authority: Title 10.1, Chapters 11.1, 14, 21.1, and 25 and Title 62.1, Chapters 3.1, 22, 23.2, and 24, Code of Virginia.

A. Out of the amounts provided for the Virginia Water Facilities Revolving Fund, the Department of Environmental Quality may transfer $12,500 the first year and $10,000 the second year to the Town of Tangier for a comprehensive plan to clean up waste and ash piles found on the island and implement systems to assure compliance with state environmental protection requirements.

B.1.Out of the amounts for Environmental Financial Assistance, $200,000,000 the first year from the general fund shall be deposited in four equal quarterly installments to the Virginia Water Quality Improvement Fund established in Title 10.1, Chapter 21.1, Code of Virginia.  Any unexpended balances on June 30, 2007 and June 30, 2008 from the amount appropriated in this subparagraph shall not revert to the general fund but shall be carried forward and reappropriated.

2.a. The amount appropriated in subparagraph B.1. shall be used solely to finance the costs of design and installation of biological nutrient removal facilities or other nutrient removal technology at publicly owned treatment works designated as significant dischargers for compliance with the effluent limitations for total nitrogen and total phosphorus, as required by the tributary strategy plans or applicable regulatory requirements.  The Director of the Department of Environmental Quality is also authorized to make grants from the Virginia Water Quality Improvement Fund to private sewage treatment plants that are licensed by the State Corporation Commission as a public service corporation and that serve residential areas in the Shenandoah-Potomac River Basin with a design capacity greater than 4.0 million gallons per day.  The following table lists the 92 eligible treatment works with assigned maximum nutrient discharge amounts, with maximum nutrient discharge amounts shown for information reference only:

b. As previous recipients of Virginia Water Quality Improvement Fund grants, Dale Service Corp. #1 and Dale Service Corp #8 are eligible to receive additional grants.

c. The maximum nitrogen and phosphorus discharge amounts shown in this Item and adopted by the State Water Control Board in 9 VAC 25-720 shall not alter or override the authority of the Board to revise these amounts in the future.

3. In order to receive a grant under subparagraph B.1., a facility must enter into a grant agreement with the Director of the Department of Environmental Quality that includes a schedule for the design and installation of biological nutrient removal facilities or other nutrient removal technology along with relevant performance criteria that require quantifiable reductions in nutrients.

4. The grant percentage provided for financing the costs of the design and installation of biological nutrient removal facilities and other nutrient removal technology at publicly owned treatment works shall be based upon the financial need of the community as determined by comparing the annual sewer charges expended within the service area to the reasonable sewer cost established for the community.  As provided for in § 10.1-2131, Code of Virginia, grants shall be awarded in the following manner:

a. In communities for which the ratio of annual sewer charges to reasonable sewer cost is less than 0.30, the Director of the Department of Environmental Quality shall authorize grants in the amount of 35 percent of the costs of the design and installation of biological nutrient removal facilities or other nutrient removal technology;

b. In communities for which the ratio of annual sewer charges to reasonable sewer cost is equal to or greater than 0.30 and less than 0.50, the Director shall authorize grants in the amount of 45 percent of the costs of the design and installation of biological nutrient removal facilities or other nutrient removal technology;

c. In communities for which the ratio of annual sewer charges to reasonable sewer cost is equal to or greater than 0.50 and less than 0.80, the Director shall authorize grants in the amount of 60 percent of the costs of design and installation of biological nutrient removal facilities or other nutrient removal technology; and

d. In communities for which the ratio of annual sewer charges to reasonable sewer cost is equal to or greater than 0.80, the Director shall authorize grants in the amount of 75 percent of the costs of the design and installation of biological nutrient removal facilities or other nutrient removal technology.

5. Grant payments under subparagraph B.1. shall be made on a reimbursement basis.  If the moneys in the Fund are less than the amount of grants for which approved applicants are eligible, the moneys in the Fund shall be apportioned pro rata among eligible applicants, based upon the amount of the grant for which an approved applicant is eligible and the amount of money in the Fund available for reimbursement.  If a grant recipient is reimbursed less than the full amount of a grant to which it is eligible in any year, the unpaid portion of the grant for which it was eligible shall be carried forward by the Department of Environmental Quality to the following year, during which it shall be considered to be a priority.

6. Grant recipients shall report on the progress of their nutrient reduction efforts annually to the Director of the Department of Environmental Quality and shall include in such reports: (1) annual projections of the nutrient reductions from the grant project from the time of project completion to either the year the facility will reach design capacity, or ten years, whichever is longer, and (2) the impact the project will have on nutrient reduction goals for any associated tributary strategy.  The Department of Environmental Quality shall include such information in annual reports to the Governor and the General Assembly on the Virginia Water Quality Improvement Fund.

C. Out of the amounts for Environmental Financial Assistance, $25,000,000 the first year from the general fund shall be provided as grants to local governments that are located outside the Chesapeake Bay watershed for:  1) the design and construction of mandated water quality improvement facilities at publicly owned treatment works for projects that would otherwise result in a financial hardship for the residential users of the facilities, based on the reasonable sewer cost guidelines established by the State Water Control Board for the Virginia Water Facilities Revolving Fund; 2) the correction of onsite sewage disposal problems; and 3) the development of comprehensive local and regional wastewater treatment plans, preliminary engineering, and environmental reviews.  The Department of Environmental Quality shall work with the Department of Housing and Community Development to develop appropriate criteria and guidelines for the use of this funding.  Any unexpended balances on June 30, 2007 and June 30, 2008 from the amount appropriated in this paragraph shall not revert to the general fund but shall be carried forward and reappropriated.

D. Out of the amounts for Environmental Financial Assistance, $7,500,000 the first year from the general fund shall be deposited to the Combined Sewer Overflow Matching Fund pursuant to § 62.1-241.12, Code of Virginia.  From this Fund, the City of Richmond shall receive $3,750,000 in the first year and the City of Lynchburg shall receive $3,750,000 in the first year.

E.  Out of the amounts appropriated for Environmental Financial Assistance, the Department of Environmental Quality shall provide $20,000 the first year and $20,000 the second year from the general fund to the Tri-County Lake Administrative Commission for water quality monitoring and analysis at Smith Mountain Lake.