A. The Department of Corrections shall construct and operate a wastewater treatment facility for use by the Augusta Correctional Center and the Town of Craigsville.  Service fees collected by the Department of Corrections from the town shall be deposited to the general fund.  This project shall consist of five funding sources: (i) a transfer of $3,474,852 from the Water Quality Improvement Fund (WQIF) by the Department of Environmental Quality, in furtherance of improving the health of the Chesapeake Bay, to the Department of Corrections; (ii) an up to 20-year interest-free loan in a principal amount of up to $2,384,191 or such other amount as authorized by the State Water Control Board or its delegate to the Town of Craigsville from the Virginia Water Facilities Revolving Fund, to be repaid by the Town of Craigsville through funding received from the Department of Corrections; (iii) proceeds from a federal rural development grant to the Town of Craigsville for $1,770,000; (iv) proceeds from a federal rural development loan to the Town of Craigsville of $1,531,400; and, (v) Virginia Public Building Authority (VPBA) bonds, which are hereby authorized to be issued in a principal amount of $2,339,557, plus amounts needed to fund issuance costs, reserve funds, original issue discount, and other financing expenses with respect to VPBA bonds.

B. Prior to the Department of Corrections' construction of the wastewater treatment plant, by September 1, 2011, the Town of Craigsville shall convey sufficient suitable property for the construction of the wastewater treatment plant adjacent to the Augusta Correctional Center at no cost and shall continue to provide wastewater treatment for the Augusta Correctional Center at such costs as are currently in place until such time as the Department of Corrections has completed construction of its wastewater treatment plant.  Upon the completion of the construction of the Department of Corrections' wastewater treatment plant, the Town of Craigsville shall transfer, at no cost, the town's individual wastewater discharge permit and its coverage under the nutrient Watershed General Permit (9VAC25-820) to the Department of Corrections.

C. The Department of Corrections shall provide an annual payment to the Town of Craigsville for the debt service on the loan provided to the town by the Virginia Water Facilities Revolving Fund.