HB 5210 — Comprehesive reform of the state’s water infrastructure systems.

(11) (10) "Set-aside accounts" means those accounts that shall be set up for activities required by the federal Safe Drinking Water Act.

The moneys for these accounts may be taken from the federal capitalization grant for these non-project activities before the capitalization grant Intr HB 2026R3759H 2026R3758S is deposited into the fund.

(12) (11) "Small system" means a public water system serving 10,000 or fewer persons.

§22-36-3.

West Virginia Drinking Water Treatment Revolving Fund;

duties of Department of Environmental Protection and Water Development Authority;

set-aside accounts.

(a) There is continued in the office of the State Treasurer a permanent and perpetual special fund to be known as the West Virginia Drinking Water Treatment Revolving Fund.

The fund shall be administered and managed in accordance with the provisions of the federal Safe Drinking Water Act by the Department of Environmental Protection.

The Department of Environmental Protection may draw all or a portion of those moneys available under capitalization agreements, and with the capitalization grant awards from the United States Environmental Protection Agency under the federal Safe Drinking Water Act, and deposit such moneys into the fund and the set- aside accounts.

(b) The fund, less the set-aside account moneys, shall be administered and managed by the Water Development Authority under the direction of the Department of Environmental Protection.

The fund shall be comprised of moneys appropriated to the fund by the Legislature, moneys allocated to the state by the federal government expressly for the purpose of establishing and maintaining a drinking water treatment revolving fund and set-aside accounts, all receipts from loans made from the fund, all income from the investment of moneys held in the fund, and all other sums designated for deposits to the fund from any source, public or private.

Moneys in the fund shall be used solely to make loans or provide other allowable financial assistance to eligible projects for public water systems, as described in the federal Safe Drinking Water Act.

(c) In order to carry out the administration and management of the fund, the authority and the Department of Environmental Protection are is authorized to employ officers, employees, agents, advisors, and consultants, including attorneys, financial advisors, engineers, other technical advisors, and public accountants, and notwithstanding any provisions of this code to the contrary, to determine their duties and compensation without the approval of any other agency or Intr HB 2026R3759H 2026R3758S instrumentality.

(d) The authority Department of Environmental Protection shall propose legislative rules for promulgation in accordance with the provisions of §29A-3-1 et seq.

of this code to govern the pledge of loans to secure bonds of the authority Department of Environmental Protection.

(e) Disbursements from the fund shall be authorized for payment by the director of the authority or the director's designee.

Moneys in the fund shall not be commingled with other money of the authority Department of Environmental Protection.

If not needed for immediate use or disbursement, moneys in the fund may be invested or reinvested by the authority Department of Environmental Protection in obligations or securities which are considered lawful investments for public funds under this code.

(f) Pursuant to the provisions of the federal Safe Drinking Water Act, set-aside accounts shall be set up in accounts separate from the West Virginia Drinking Water Treatment Revolving Fund.

These set-aside accounts shall include, but not be limited to, administration costs, source water protection, operator training and certification, technical assistance to systems, local assistance, and other state activities permitted by the federal Safe Drinking Water Act.

The Department of Environmental Protection shall establish and administer the set-aside accounts as permitted by the federal Safe Drinking Water Act.

An application fee may be charged and deposited into the administrative account to defray the cost of administering the program.

§22-36-4.

Management of funds.

The authority Department of Environmental Protection shall manage the funds received pursuant to the provisions of this article for accounting purposes.

The authority Department of Environmental Protection shall cause an audit of its books and accounts to be made at least once each fiscal year and the costs thereof may be defrayed as administrative expenses under the provisions of this article.

The audit shall be conducted by a certified public accountant and provide an auditor's opinion on the fund’s financial statements, a report on the internal controls, and a report prepared in compliance with the provisions of the West Virginia Drinking Water Treatment Intr HB 2026R3759H 2026R3758S Revolving Fund.

§22-36-5.

Remedies to enforce payment.

(a) In order to ensure the timely payment of all sums due and owing to the fund under a revolving fund loan agreement made between the state and a local entity, and notwithstanding any provisions of this code to the contrary, the authority Department of Environmental Protection has and may, at its option, exercise the following rights and remedies in the event of any default by a local entity under a loan agreement:

(1) The authority Department of Environmental Protection may directly impose, in its own name and for its own benefit, service charges upon all users of a project funded by a loan distributed to a local entity pursuant to this article, and may proceed directly to enforce and collect the service charges, together with all necessary costs of the enforcement and collection.

(2) The authority Department of Environmental Protection may exercise, in its own name or in the name of, and as the agent for, a particular local entity, all of the rights, powers, and remedies of the local entity with respect to the project or which may be conferred upon the local entity by statute, rule, regulation, or judicial decision, including all rights and remedies with respect to users of the project funded by the loan distributed to that local entity pursuant to this article.

(3) The authority Department of Environmental Protection may, by civil action, mandamus, or other judicial or administrative proceeding, compel performance by a local entity of all the terms and conditions of the loan agreement between the state and that local entity including:

(A) The adjustment of service charges as required to repay the loan or otherwise satisfy the terms of the loan agreement;

(B) The enforcement and collection of service charges;

and (C) The enforcement by the local entity of all rights and remedies conferred by statute, rule, regulation, or judicial decision.

(b) The rights and remedies enumerated in this article are in addition to rights and remedies conferred upon the authority Department of Environmental Protection by law or pursuant Intr HB 2026R3759H 2026R3758S to the loan agreement.

CHAPTER 22C.

(1) "Authority" means the Water Development Authority provided for in §22C-1-4 of this code section four of this article, the duties, powers, responsibilities and functions of which are specified in this article.

(3) "Board" means the Water Development Authority Board provided for in §22C-1-4 of this code section four of this article, which shall manage and control the Water Development Authority.

(5) (4) "Construction" includes reconstruction, enlargement, improvement and providing furnishings or equipment.

(6) (5) "Cost" means, as applied to water development projects, the cost of their acquisition and construction;

the cost of demolishing or removing any buildings or structures on land so acquired, including the cost CS for HB 5210 2026R3759H 2026R3758S of acquiring any lands to which such buildings or structures may be moved;

the cost of acquiring or Intr HB 2026R3759H 2026R3758S constructing and equipping a principal office and suboffices of the authority;

(6) "Council" means the West Virginia Water Development and Infrastructure Council created in §31-15A-3 of this code.

(8) "Governmental agency" means the state government or any agency, department, Intr HB 2026R3759H 2026R3758S division or unit thereof;

soil CS for HB 5210 2026R3759H 2026R3758S conservation districts;

group of persons or individuals acting individually or as a group or any Intr HB 2026R3759H 2026R3758S other legal entity whatever.

CS for HB 5210 2026R3759H 2026R3758S (13) "Pollution" means:

(14) "Project" or "water development project" means any public water facility, stormwater system or wastewater facility, the acquisition or construction of which is authorized, in whole or in part, by the Water Development Authority or the acquisition or construction of which is financed, in whole or in part, from funds made available by grant or loan by, or through, the authority as provided in this article, including facilities, the acquisition or construction of which is authorized, in whole or in part, by the Water Development Authority or the acquisition or construction of which is financed, in whole or in part, from funds made available by grant or loan by, or through, the authority as provided in this article, including all buildings and facilities which the authority deems necessary for the operation of the project, together with all property, rights, easements and interest Intr HB 2026R3759H 2026R3758S which may be required for the operation of the project, but excluding all buildings and facilities CS for HB 5210 2026R3759H 2026R3758S used to produce electricity other than electricity for consumption by the authority in the operation and maintenance of the project.

(15) "Private utility" means any water facility, stormwater system or wastewater facility that is owned by a privately owned entity that operates for-profit.for-profit, or is an association, and is also registered to do business in the state of West Virginia This definition shall not include any homeowners or property owners association, condominium unit owners association, or other common interest community, solely on the basis that such entity owns, or manages, a retention basin, detention basin, stormwater pond, or similar passive stormwater feature, for the benefit of its members.

CS for HB 5210 2026R3759H 2026R3758S (17) (19) "Revenue" means any money or thing of value collected by, or paid to, the Water Development Authority as rent, use or service fee or charge for use of, or in connection with, any water development project, or as principal of or interest, charges or other fees on loans, or any other collections on loans made by the Water Development Authority to governmental agencies to Intr HB 2026R3759H 2026R3758S finance, in whole or in part, the acquisition or construction of any water development project or projects or other money or property which is received and may be expended for or pledged as revenues pursuant to this article.

Inlets, conduits, corals,corrals, outlets, channels, ponds, drainage ways, easements, water quality facilities, catch basins, ditches, streams, gulches, flumes, culverts, siphons, retention or detention basins, dams, floodwalls, pipes, flood control systems, levies and pumping stations.

The term "stormwater management program" does not include those activities associated with the management, operation, maintenance and control of CS for HB 5210 2026R3759H 2026R3758S highways, road and drainage easements or stormwater facilities constructed, owned or operated by the West Virginia Division of Highways without the express agreement of the Commissioner of the Division of Highways.

(21) (23) "Water resources", "water" or "waters" means any and all water on or beneath the Intr HB 2026R3759H 2026R3758S surface of the ground, whether percolating, standing, diffused or flowing, wholly or partially within this state, or bordering this state and within its jurisdiction, and includes, without limiting the generality of the foregoing, natural or artificial lakes, rivers, streams, creeks, branches, brooks, ponds (except farm ponds, industrial settling basins and ponds and water treatment facilities), impounding reservoirs, springs, wells and watercourses.

organization of CS for HB 5210 2026R3759H 2026R3758S authority and board;

The exercise by the authority of the powers Intr HB 2026R3759H 2026R3758S conferred by this article and the carrying out of its purposes and duties are essential governmental functions and for a public purpose.

Appointed board members may be reappointed to serve additional termsterms. the West Virginia Water Development and Infrastructure Council created in §31-15A-3 of this code.

All references in this code to the Water Development Board shall be construed as reference to the West Virginia Water Development and Infrastructure Council.

A vacancy in the membership of the board does not impair the rights of a quorum by such vote to exercise all the rights and perform all the CS for HB 5210 2026R3759H 2026R3758S duties of the board and the authority.

The person appointed as secretary-treasurer, including a Intr HB 2026R3759H 2026R3758S board member if so appointed, shall give bond in the sum of $50,000 in the manner provided in article two, chapter six of this code.

Each appointed member receives an annual salary of $12,000, payable at least twice per month.month is entitled to receive compensation for attending official meetings or engaging in official duties not to exceed the amount paid to members of the Legislature for their interim duties as recommended by the Citizens Legislative Compensation Commission and authorized by law.

Each of the seven board members is reimbursed entitled to reimbursement for all reasonable and necessary expenses actually incurred in the performance of duties as a member of the board in a manner consistent with guidelines of the Travel Management Office of the Department of Administration.

The compensation of the director is fixed annually by the boardboard. council.

§22C-1-5.

Authority may construct, finance, maintain, etc., water development projects;

loans to governmental agencies are subject to terms of loan agreements.

(a) To accomplish the public policies and purposes and to meet the responsibility of the state as set forth in this article, the water development authority may initiate, acquire, construct, maintain, repair and operate water development projects or cause the same to be operated pursuant to a lease, sublease or agreement with any person or governmental agency;

may make loans and grants to governmental agencies for the acquisition or construction of water development projects by governmental agencies, which loans.

(b) Loans made pursuant to this section may include amounts to refinance debt issued for Intr HB 2026R3759H 2026R3758S existing water development projects of the governmental agency when the refinancing is in conjunction with the financing for a new water development project regardless of the source of the financing for the new project.

Provided, That.

However, the amount of the refinancing may not exceed 50% of the aggregate amount of the refinancing of an existing project and the financing of a new project;

and may issue water development revenue bonds of this state, payable solely from revenues, to pay the cost of projects, or finance projects, in whole or in part, by loans to governmental agencies.

(c) A water development project may not be undertaken unless it has been determined by the authority to be consistent with any applicable comprehensive plan of water management approved by the Secretary of the Department of Environmental Protection or in the process of preparation by the secretary and to be consistent with the standards set by the state environmental quality board, for the waters of the state affected thereby.

Any resolution of the authority providing for acquiring or constructing projects or for making a loan or grant for projects shall include a finding by the authority that the determinations have been made.

(d) A loan agreement shall be entered into between the authority and each governmental agency to which a loan is made for the acquisition or construction of a water development project, which loan agreement shall include, without limitation, the following provisions:

(1) The cost of the project, the amount of the loan, the terms of repayment of the loan and the security therefor, which may include, in addition to the pledge of all revenues from the project after a reasonable allowance for operation and maintenance expenses, a deed of trust or other appropriate security instrument creating a lien on the project;

(2) The specific purposes for which the proceeds of the loan shall be expended including the refinancing of existing water development project debt as provided above, the procedures as to the disbursement of loan proceeds and the duties and obligations imposed upon the governmental agency in regard to the construction or acquisition of the project, including engineering fees and other administrative costs relating to development of the project;

Intr HB 2026R3759H 2026R3758S (3) The agreement of the governmental agency to impose, collect, and, if required to repay the obligations of the governmental agency under the loan agreement, increase service charges from persons using the project, which service charges shall be pledged for the repayment of the loan together with all interest, fees and charges thereon and all other financial obligations of the governmental agency under the loan agreement;

(4) The agreement of the governmental agency to comply with all applicable laws, rules and regulations issued by the authority or other state, federal and local bodies in regard to the construction, operation, maintenance and use of the project;

(5) The number of proposed customers and their physical locations within the project, and providing as a condition of the agreement, that no proposed customers listed in the project application agreement may be removed from inclusion in the project without prior authorization of the board council;

and (6) The agreement of the governmental agency to perform an annual maintenance audit which maintenance audit shall be submitted to the board council and the Public Service Commission of West Virginia.

(a) To accomplish the public policies and purposes and to meet the responsibility of the state as set forth in this article, the water development authority may make loans to the water facilities, stormwater systems, or wastewater facilities for the acquisition or construction of private CS for HB 5210 2026R3759H 2026R3758S water development projects by governmental agencies, which loans may be made to private utilities.utilities which have been compelled to assume any part of the responsibilities of the acquisition, operation, or construction of a failing utility, including relevant water development projects, under the provisions of §24-2H-1, et.

Loansseq. to private utilities may be offered at an interest rate that is lower than the market rate.

of this CodLoans to private utilities, from nonbond proceeds, may be offered at an interest rate that is equal to or greater than the market rate.

However, if a private utility acquires a public utility, whether voluntarily or involuntarily, then the private utility may seek refinancing for any loan previously Intr HB 2026R3759H 2026R3758S obtained by the public utility pursuant to §22C-1-5 of this code.

(c) A private water development project may not be undertaken unless it has been determined by the authority to be consistent with any applicable comprehensive plan of water management approved by the Secretary of the Department of Environmental Protection or in the process of preparation by the secretary and to be consistent with the standards set by the stateDepartment environmentalof qualityEnvironmental board,Protection, for the waters of the state affected thereby.

(2) The specific purposes for which the proceeds of the loan shall be expended, the procedures as to the disbursement of loan proceeds and the duties and obligations imposed upon the private utility in regard to the construction or acquisition of the project, including engineering CS for HB 5210 2026R3759H 2026R3758S fees and other administrative costs relating to development of the project;

(4) The agreement of the private utility to comply with all applicable laws, rules and regulations issued by the authority or other state, federal and local bodies in regard to the Intr HB 2026R3759H 2026R3758S construction, operation, maintenance and use of the project;

(5) The number of proposed customers and their physical locations within the project, and providing as a condition of the agreement, that no proposed customers listed in the project application agreement may be removed from inclusion in the project without prior authorization of the council;board;

(e) Nothing in this section shall be construed as requiring the water development authority to issuemake a loan to a qualifying private utility.

InFurther, issuingthe water development authority must hold a private utility to, at least, the same financial standards for eligibility that it does public utilities, including meeting any loanmetric underor thisrequirement section,necessary to ensure that the authorityprivate shouldutility consider,is inable orderto ofrepay priority:the loan.

(1)In Immediatemaking orany emergentloan publicunder healththis andsection, safetythe large;authority should consider:

(1) Immediate or emergent public health and safety;

Privately owned, for-profit entities which do not own a water facility, stormwater system, or CS for HB 5210 2026R3759H 2026R3758S wastewater facility are not eligible for a loan from the water development authority.

§22C-1-6a.CHAPTER 24.

Additional powers of the West Virginia Water Development Authority;

Creation of Economic Enhancement Grant Fund.

(a) The Water Development Authority shall create and establish a special fund of moneys made available by appropriations, grants, contributions or other sources to be known as the West Virginia Economic Enhancement Grant Fund.

This fund shall be governed, administered and accounted for by the directors, officers and management staff of the Water Development Authority as a special program account separate and distinct from any other money, fund or funds owned and/or managed by the Water Development Authority.

The Economic Enhancement Grant Fund shall consist of subaccounts as deemed necessary by the Water Development Authority for the Intr HB 2026R3759H 2026R3758S deposit of any appropriations, grants, gifts, contributions or other moneys received by the Economic Enhancement Grant Fund from any source, public or private, and all income earned on moneys held in the Economic Enhancement Grant Fund.

Amounts in the Economic Enhancement Grant Fund shall be administered by the Water Development Authority separate and apart from its other assets and programs.

Amounts in the Economic Enhancement Grant Fund may not be transferred to any other fund or account or used for the payment of any other programs of the Water Development Authority except the Water Development Authority may use funds in the Economic Enhancement Grant Fund to reimburse itself for any administration costs incurred by it.

Pending distribution of any money in the Economic Enhancement Grant Fund the Water Development Authority shall invest and reinvest the money subject to the limitations of §22C-1-15 of this code.

(b) The Water Development Authority shall establish the Matching Grant Subaccount in the Economic Enhancement Grant Fund to be expended to provide the local or state match for any federal or other programs that require a match for projects and infrastructure projects as defined in §31-15A-2 of this code and where the commitment of the matching funds is required to be made and submitted with the application for the federal or other grant.

Upon receipt of a recommendation from the West Virginia Infrastructure and Jobs Development Water Development and Infrastructure Council and/or the West Virginia Department of Economic Development, the Water Development Authority shall review the application of a governmental agency or not-for- profit and if the governmental agency or not-for-profit is eligible for the federal or other matching grant funding, set aside moneys in the subaccount and provide a written binding commitment to the governmental agency or not-for-profit to submit with its application.

If the federal or other programs subsequently approve funding to the governmental agency or not-for-profit, the Water Development Authority shall enter into a grant agreement with the governmental agency or not- for-profit providing the grant funding if the governmental agency or not-for-profit is in compliance with §12-4-14 of this code.

The Water Development Authority shall disperse funds under the grant Intr HB 2026R3759H 2026R3758S agreement from time to time to comply with the terms of the other funding sources.

(c) The Water Development Authority shall establish the Enhancement Grant Subaccount in the Economic Enhancement Grant Fund to be expended as grants to governmental agencies or not-for-profits to cover all or a portion of the costs of projects or infrastructure projects as defined in §31-15A-2 of this code and more specifically:

(1) To cover the cost of bid overruns for projects and infrastructure projects approved by the West Virginia Infrastructure and Jobs Development Water Development and Infrastructure Council;

(2) To cover all or a portion of the costs of extending or expanding water, stormwater and/or wastewater service to enhance economic development and/or tourism when recommended by the Secretary of Commerce, the Secretary of Economic Development and/or the Secretary of Tourism;

(3) To cover the costs of facilitating the merger and/or consolidation of water or wastewater providers where all parties to the proposed merger make joint applications to the West Virginia Infrastructure and Jobs Development Water Development and Infrastructure Council;

(4) To cover the cost of water, stormwater and/or wastewater projects for governmental agencies where the combined rates for water, stormwater and wastewater exceed 1.5% of the governmental agency’s Median Household Income;

(5) To cover the startup costs for governmental utilities that are providing or extending service to unserved areas of the State;

(6) To provide a commitment to cover the difference between the cost of funded projects and the updated cost estimate, and when the project is bid, to provide a grant for the dollar difference between the committed funding and the bid results;

and (7) To cover all or a portion of the infrastructure projects to enhance economic development and/or tourism when recommended by the Secretary of Commerce, the Secretary of Economic Development and/or the Secretary of Tourism.

Intr HB 2026R3759H 2026R3758S (d) The Water Development Authority is hereby authorized to enter into grant agreements with governmental agencies and not-for-profits to evidence the grant which agreements shall include the following provisions:

(1) The estimated cost of the project or infrastructure project, the amount of the grant and the other funding sources;

(2) The specific purpose for which the grant proceeds shall be expended and the conditions and procedures for distributing the grant proceeds;

(3) The duties and obligations imposed regarding the acquisition, construction, improvement, or operation of the project or infrastructure project;

and (4) The agreement of the governmental agency or not-for-profit to comply with all applicable federal and state laws, and all rules and regulations issued or imposed by the Water Development Authority or other state, federal, or local bodies regarding the acquisition, construction, improvement, or operation of the infrastructure project or project.

(e) The Water Development Authority shall cause an annual audit to be made by an independent certified public accountant of its books, accounts and records with respect to the system and distributions and all matters relating to the financial application of the Economic Enhancement Grant Fund including all subaccounts therein.

The Water Development Authority shall provide copies of the audit report to the Legislature.

§22C-1-8.

Expenditure of funds for study and engineering of proposed projects.

With the approval and the consent of the board council, either the director of the Division of Environmental Protection or the commissioner of the bureau of public health, or both of them, shall expend, out of any funds available for the purpose, such moneys as are necessary for the study of any proposed water development project and may use its engineering and other forces, including consulting engineers and sanitary engineers, for the purpose of effecting such study.

All such expenses incurred by the director or commissioner prior to the issuance of water development revenue bonds or notes under this article shall be paid by the director or commissioner and Intr HB 2026R3759H 2026R3758S charged to the appropriate water development project and the director and commissioner shall keep proper records and accounts, showing the amounts so charged.

Upon the sale of water development revenue bonds or notes for a water development project, the funds so expended by the director or commissioner, with the approval of the authority, in connection with such project, shall be repaid to the Division of Environmental Protection or bureau of public health from the proceeds of such bonds or notes.

ARTICLE 2.

WATER POLLUTION CONTROL REVOLVING FUND ACT.

§22C-2-1.

Definitions.

Unless the context in which used clearly requires a different meaning, as used in this article:

(a) "Authority" means the Water Development Authority provided for in section four, article one of this chapter.

(b) (a) "Cost" as applied to any project financed under the provisions of this article means the total of all costs incurred by a local entity that are reasonable and necessary for carrying out all works and undertakings necessary or incident to the accomplishment of any project including:

(1) Developmental, planning and feasibility studies, surveys, plans and specifications;

(2) Architectural, engineering, financial, legal or other special services;

(3) Acquisition of land and any buildings and improvements on the land or buildings, including the discharge of any obligations of the sellers of the land, buildings or improvements;

(4) Site preparation and development, including demolition or removal of existing structures, construction and reconstruction, labor, materials, machinery and equipment;

(5) The reasonable costs of financing incurred by the local entity in the course of the development of the project, carrying charges incurred before placing the project in service, interest on funds borrowed to finance the project to a date subsequent to the estimated date the project is to be placed in service, necessary expenses incurred in connection with placing the project in service and the funding of accounts and reserves which the authority Department of Intr HB 2026R3759H 2026R3758S Environmental Protection may require;

and (6) Other items that the Department of Environmental Protection determines to be reasonable and necessary.

(c) (b) "Fund" means the state Water Pollution Control Revolving Fund provided for in this article as it may be expanded or modified, from time to time, pursuant to the Clean Water Act, 33 U.S.C.

§1251, et seq., as amended, the Federal Safe Drinking Water Act 42 U.S.C.

§300f 0through §300j-26, inclusive, as amended, or by the executive order of the Governor issued to comply with federal laws relating to the acts.

(d) (c) "Instrumentality" means the Department of Environmental Protection or the agency designated by an order of the Governor as having the primary responsibility for administering the fund pursuant to the Clean Water Act, 33 U.S.C.

§1251, et seq., as amended, and the Federal Safe Drinking Water Act 42 U.S.C.

§300f through §300j-26, inclusive, as amended, or other federal laws.

(e) (d) "Local entity" means any county, city, town, municipal corporation, authority, district, public service district, commission, banking institution, political subdivision, regional governmental authority, state government agency, interstate agency or not-for-profit association or corporation in West Virginia.

(f) (e) "Project" means any water or wastewater treatment facility located or to be located in or outside this state by a local entity and includes:

(1) Sewage and wastewater collection, treatment and disposal facilities;

(2) Public water transportation, treatment and distribution facilities;

(3) Drainage facilities and projects;

(4) Administrative, maintenance, storage and laboratory facilities related to the facilities delineated in subdivisions (1), (2) and (3) of this subsection;

(5) Interests in land related to the facilities delineated in subdivisions (1), (2), (3) and (4) of this subsection;

and Intr HB 2026R3759H 2026R3758S (6) Other projects allowable under federal law.

§22C-2-3.

West Virginia water pollution control revolving fund;

disbursement of fund moneys;

administration of the fund.

(a) Under the direction of the Division of Environmental Protection, the water development authority The Department of Environmental Protection shall establish, administer and manage a permanent and perpetual fund, to be known as the "West Virginia Water Pollution Control Revolving Fund." The fund shall be comprised of moneys appropriated to the fund by the Legislature, moneys allocated to the state by the federal government expressly for the purposes of establishing and maintaining a state water pollution control revolving fund, all receipts from loans made from the fund to local entities, all income from the investment of moneys held in the fund, and all other sums designated for deposits to the fund from any source, public or private.

Moneys in the fund shall be used solely to make loans to local entities to finance or refinance the costs of a project:

Provided, That moneys in the fund shall be utilized to defray the costs incurred by the authority and the Division of Environmental Protection in administering the provisions of this article:

Provided, however, That moneys in the fund shall be used to make grants for projects to the extent allowed or authorized by federal law.

(b) The director of the Division Secretary of the Department of Environmental Protection, in consultation with the authority, shall promulgate legislative rules in accordance with the provisions of article three, chapter twenty-nine-a §29A-3-1 et seq.

of this code, to:

(1) Govern the disbursement of moneys from the fund;

and (2) Establish a state water pollution control revolving fund program to direct the distribution of grants or loans from the fund to particular local entities and establish the interest rates and repayment terms of the loans.

(c) In order to carry out the administration and management of the fund, the authority Department of Environmental Protection is authorized to employ officers, employees, agents, advisers and consultants, including attorneys, financial advisers, engineers, other technical Intr HB 2026R3759H 2026R3758S advisers and public accountants and, notwithstanding any provisions of this code to the contrary, to determine their duties and compensation without the approval of any other agency or instrumentality.

(d) The authority Department of Environmental Protection shall promulgate legislative rules in accordance with the provisions of article three, chapter twenty-nine-a §29A-3-1 et seq.

of this code to govern the pledge of loans to secure bonds of the authority.

(e) All moneys belonging to the fund shall be kept in appropriate depositories and secured in conformance with this code.

Disbursements from the fund shall be authorized for payment by the director of the authority or the director's Secretary of the Department of Environmental Protection or the secretary’s designee.

Any depository or officer of the depository to which moneys of the fund are paid shall act as trustee of the moneys and shall hold and apply them solely for the purposes for which the moneys are provided under this article.

Moneys in the fund shall not be commingled with other money of the authority Department of Environmental Protection.

If not needed for immediate use or disbursement, moneys in the fund may be invested or reinvested by the authority Department of Environmental Protection in obligations or securities which are considered lawful investments for public funds under this code.

§22C-2-4.

Annual audit.

The authority Department of Environmental Protection shall cause an audit of its books and accounts to be made at least once each fiscal year by certified public accountants, and the cost thereof may be defrayed as a part of the cost of construction of a project or as an administrative expense under the provisions of subsection (a), section three §22C-2-3(a) of this article.

§22C-2-5.

Collection of money due to the fund.

(a) In order to ensure the timely payment of all sums due and owing to the fund under a revolving fund loan agreement between the state and a local entity, and notwithstanding any provisions of this code to the contrary, the authority Department of Environmental Protection has Intr HB 2026R3759H 2026R3758S and may, at its option, exercise the following rights and remedies in the event of any default by a local entity under a loan agreement:

(1) The authority Department of Environmental Protection may directly impose, in its own name and for its own benefit, service charges upon all users of a project funded by a loan distributed to a local entity pursuant to this article and may proceed directly to enforce and collect the service charges, together with all necessary costs of the enforcement and collection.

(2) The authority Department of Environmental Protection may exercise, in its own name or in the name of and as the agent for a particular local entity, all of the rights, powers and remedies of the local entity with respect to the project or which may be conferred upon the local entity by statute, rule, regulation or judicial decision, including all rights and remedies with respect to users of the project funded by the loan distributed to that local entity pursuant to this article.

(3) The authority Department of Environmental Protection may, by civil action, mandamus or other judicial or administrative proceeding, compel performance by a local entity of all of the terms and conditions of the loan agreement between the state and that local entity including:

(A) The adjustment of service charges as required to repay the loan or otherwise satisfy the terms of the loan agreement;

(B) The enforcement and collection of service charges;

and (b) The enforcement by the local entity of all rights and remedies conferred by statute, rule, regulation or judicial decision.

The rights and remedies enumerated in this section are in addition to rights and remedies conferred upon the authority by law or pursuant to the loan agreement.

(c) For loans made for projects defined in subdivision (6), subsection (f), section one of this article, at the direction of the Department of Environmental Protection, the authority §22C-2- 1(e)(6) of this code, the Department of Environmental Protection shall take a security or other interest in real or personal property with the right to foreclose upon a default to secure loans made from the fund.

Intr HB 2026R3759H 2026R3758S CHAPTER 24.

ARTICLE 2.

POWERS AND DUTIES OF PUBLIC SERVICE COMMISSION.

§24-2-4i.

Inflation-based rate adjustment for publicly owned water and sewer utilities.

"Public Utility Stability Act".

(a) The Legislature finds a need to provide a mechanism for water and sewer utilities that are political subdivisions of the state to implement annual rate increases based upon the United States Department of Labor Statistics Water and Sewerage Maintenance Index, and therefore establishes this section, to be known as the "Public Utility Stability Act".

(b) Urban Consumer Water and Sewerage Maintenance Index rate change – Effective July 1, 2026, and subject to §24-2-4i(g) of this code, a publicly owned water and/or sewer utility shall be permitted to increase rates for the treatment and distribution of water and collecting and treatment of wastewater once on or after January 1 of each year, without, as applicable:

(1) The filing of an application for approval by the commission;

or (2) Seeking passage of a municipal ordinance pursuant to Chapter 8 of this code;

or (3) The approval of a county commission pursuant to Chapter 16 of this code.

(c) An increase as described in §24-2-4i(b) of this code shall be considered just and reasonable and not unfairly discriminatory, prejudicial, or preferential if:

(1) The percentage increase over the prior rate is equal to or less than the percentage increase in the United States Department of Labor Bureau of Labor Statistics Urban Consumer Water and Sewerage Maintenance Index (the "Index") between September of the year preceding the effective date of the requested rate increase and September of the year prior to the year preceding the effective date of the requested rate increase (the "relevant time period");

(2) The utility files a revised tariff in compliance with the commission’s rules and regulations;

and CS for HB 5210 2026R3759H 2026R3758S (3) Notice is provided as directed by the commission.

(c) The fact that a utility has already raised its rates in a given year pursuant to §24-2-4i(b) of this code shall not preclude a utility from applying for and receiving from the commission or its governing body a rate increase pursuant to the provisions delineated in this section.:

Provided, That the commission or applicable governing body shall take into account the prior rate increase taken pursuant to this section when considering the utility’s application to increase rates.

(d) After September 30 of each year, the commission shall issue a general order stating the percentage increase in the Index and the inflation factor to apply to the rates currently in effect to calculate the maximum rate increase authorized by §24-2-4i(b) of this code.

Any rate increase that a utility believes is at or below the aforementioned increase in the Index shall be identified as such when filed with the commission.

(e)(1) A rate adjustment pursuant to §24-2-4i(b) of this code shall be subject to challenge by the commission only if:

(A) The utility is not a municipal utility and is a utility with fewer than 4,500 customers and annual gross combined revenues of less than $3 million;

and (B) The commission determines that the increase is in fact in excess of the amount of the increase in the Index for the relevant time period.

If the commission determines that such rate increase is in excess of the increase in the Index for the relevant time period, it may enter an order suspending the rate increase.

If such an order is entered, the utility shall be entitled to a hearing as authorized in §24-2-3 or §24-2-4a of this code or it may correct its requested rates, in which case the suspension will be lifted and the rates may go into effect as of the original requested effective date or the date that the utility corrects its rates, whichever comes later.

(2) A county commission may request that the commission review a rate increase implemented by a utility with at least 4,500 customers and annual gross combined revenues of $3 million or more under §24-2-4i(b) of this code to determine whether such increase is in excess of the amount of the increase in the Index for the relevant time period.

CS for HB 5210 2026R3759H 2026R3758S (3) A city council may request that the commission review a rate increase implemented by a municipally owned utility under §24-2-4i(b) of this code to determine whether such increase is in excess of the amount of the increase in the Index for the relevant time period.

(f) (1) A publicly owned water and/or sewer utility that is not a municipal utility and that has fewer than 4,500 customers and annual gross combined revenues of less than $3 million, may implement up to three annual indexed rate increases under §24-2-4i(b) of this code before filing for a rate increase under the other applicable provisions of Chapter 24 of this code:

Provided, That any rate approved by the commission shall not be applied retroactively.

(2) A municipally owned water and/or sewer utility may implement up to three annual indexed rate increases under §24-2-4i(b) of this code before seeking passage of an ordinance pursuant to the provisions of Chapter 8 of this code.

(3) A publicly owned water and/or sewer utility that is not a municipal utility and that has 4,500 or more customers and annual gross combined revenues of $3 million or more, may implement up to three annual indexed rate increases under §24-2-4i(b) of this code before filing for approval of rates pursuant to the provisions of Chapter 16 of this code.

(g) The commission shall prescribe such rules and regulations as to the giving of notice of a change in rates pursuant to this section as are deemed reasonable and proper, and in the public interest.

CS for HB 5210 2026R3759H 2026R3758S (a) "Consolidation Committee" means the established committee within the council, as created in §31-15A-3a of this code.

or (3)(4) Fails to timely pay some or all of its financial obligations, including, but not limited to, its federal and state tax obligations and its bond payments to the West Virginia Water Intr HB 2026R3759H 2026R3758S Development Authority, the United States Department of Agriculture, or other bondholders;

(A)(A 1) Has not, after a reasonable time period, been stabilized and improved by corrective measures put in place under §24-2H-4a or §24-2H-7 of this code;

or (B)(B 2) Has had the requirements of §24-2H-7 of this code suspended for good cause shown by an order of the commission.

CS for HB 5210 2026R3759H 2026R3758S (c)(d) "Capable proximate water or wastewater utility" means a public or private utility which regularly provides adequate, safe, and reasonable service of the same type as the distressed utility and is situated close enough to the facilities of a distressed utility that operational management is reasonable, financially viable, and nonadverse to the interests of the current customers of the nondistressed utility.

A "capable proximate water or wastewater utility" may also be referred to as an "acquiring utility." (e) "Public utility"utility," for purposes of this article, means any person or persons, or association of persons, however associated, whether incorporated or not, including municipalities, which is, or shall hereafter be held to be, a public service.

(f) "Wastewater utility"utility," for purposes of this article, means a public utility that treats, neutralizes, disposes of, stabilizes, cools, segregates or holds wastewater, including, for the treatment and disposal of sewage, industrial wastes or other wastes, waste water and the residue thereof;

and provides sanitary sewers or other collection systems, whether on the surface or underground, designed to transport wastewater together with the equipment and furnishings thereof and their appurtenances and systems, whether on the surface or underground, including force mains and pumping facilities Intr HB 2026R3759H 2026R3758S therefor.

(g) "Water utility"utility," for purposes of this article, means a public utility that collects water, both surface and underground, transports water, treats water, and distributes water all for the purpose of providing potable, sanitary water suitable for human consumption and use.

CS for HB 5210 2026R3759H 2026R3758S (2) Any water and/or wastewater utility which operates under the supervision of a county commission must provide that county commission with annual operational and financial reports.

(4) Reports required by this subsection shall be contemporaneously submitted electronically to the Public Service Commission.

– Any person who is a member of a municipal governing bodybody, county commission, or countya commissionboard member of a public service district that is operating or has oversight of a waterworkswater and/or wastewater utility system shall complete at least six hours of initial training within six months of taking office, and shall require all board members and senior managers of the municipal or county waterworks system to complete at least six hours of initial training within six months of taking office or employment.

Each waterworkswater or wastewater utility system shall submit a verified certificate to the Public Service Commission at the end of each calendar year, confirming Intr HB 2026R3759H 2026R3758S that it is in compliance.

(c) The requirementsPublic ofService thisCommission sectionmay onlyprovide applytraining toin thoseCS waterworksfor systemsHB which5210 are2026R3759H regulated2026R3758S pursuantexcess toof §8-19-1the etamount seq.required by this subsection.

The Public Service Commission may allow any officer, manager, or employee of a public water or wastewater utility to attend the training, even if this subsection does not require that person to attend the training, and the Public Service Commission may allow any officer, manager, or employee of a private water or wastewater utility that operates through a homeowners’ association to attend the training.

(4) At least one hour of initial training and at least half an hour of renewed training must include information relating to state and federal funding options for infrastructure projects, and the standard process for obtaining said funding, including the role of regional councils and the various state agencies that may provide assistance.

Training on this topic must include written handouts which advises those receiving the training on available state and federal grants and loans, information relevant to obtaining applications or more information for said funding, and the contact information for at least one person within state government who the trainee may contact for more information.

The written handouts must also be made publicly available on the websites of the Public Service Commission and the Water Development Authority.

(c) The requirements of this section only apply to those water or wastewater utility systems which are regulated pursuant to §8-19-1 et seq.

The Public Service Commission should consider any unique circumstances of the CS for HB 5210 2026R3759H 2026R3758S utilities, and should attempt to include, within each region, utilities with disparate strengths and challenges, such that the utilities in each region may be best positioned to complement one another.

Intr HB 2026R3759H 2026R3758S (1) Must be in writing;

(3) Must be filed with and approved by the Public Service Commission;

However, a facility that is aboth hybrida water and wastewater utility may join the Regional Cooperative Agreement of either water or wastewater facilities, upon approval by the Public Service Commission.

(2) The utilities must provide courtesy copies of the agreement to the Department of Environmental Protection, the Bureau of Public Health, or both, depending on whether the utility is water, wastewater, or aboth, hybrid, prior to entering into the agreement.

(3) A utility which is joining an executed agreement must notify its customers and its CS for HB 5210 2026R3759H 2026R3758S regulatory agency before the modification is executed.

– (1) Any legal requirement, under state code or by legislative rules, which necessitates each utility have its own specialized personnel may be preempted by this section, and thereby permit more than one utility to share such personnelSpecifically,personnel. the public water and/or wastewater utilities that have entered into a Regional Cooperative Agreement may share personnel, as set forth in Series 4 and 5 of Title 64 of the West Virginia Code of State Rules, so long as the shared personnel is otherwise qualified.

Specifically, the water and/or wastewater utilities that have entered into a Regional Cooperative Agreement may share personnel, as set forth in Series 4 and 5 of Title 64 of the West Virginia Code of State Rules, so long as the shared personnel is otherwise qualified.

Intr HB 2026R3759H 2026R3758S (2) By the Regional Cooperative Agreement, the utilities may agree to jointly submit reports required by any regulatory agency of the executive branch of state government.

CS for HB 5210 2026R3759H 2026R3758S (4) May negatively impact the ability of a participating utility to receive state or federal funding for infrastructure projects;

– The Public Service Commission will select at least three,six, but no Intr HB 2026R3759H 2026R3758S more than fiveten public water utilities,and/or and at least three, but no more than five, public wastewater utilities,utilities to participate in the Early Intervention Pilot Program.

Of the utilities, the Public Service Commission may select one or more hybrid public water and wastewater utilities, so long as the total number of utilities initially selected does not exceed 10.

(3) The Public Service Commission shouldshall also consult with the West Virginia Rural Water Association, the West Virginia Municipal Water Quality Association, and the West Virginia chapter of the National Association of Water Companies in determining the initial participants for the Early Intervention Pilot Program.

CS for HB 5210 2026R3759H 2026R3758S (4) While the Public Service Commission, in conformity with this subsection, may select which utilities are allowed to enter the Early Intervention Pilot Program, no utility is required to enter into the Early Intervention Pilot Program.

(1) The individualized course of action shallmay be designed by the Public Service Commission, the Department of Environmental Protection, the Bureau of Public Health, the Water Development Authority, the West Virginia Rural Water Association, the West Virginia Municipal Water Quality Association, and the West Virginia chapter of the National Association of Water Intr HB 2026R3759H 2026R3758S Companies, which entities shall collectively be referred to as the "stakeholders." The stakeholders may rely on and accept any other knowledgeable or interested party who can provide insight or guidance, including, but not limited, to other state agencies, political subdivisions, and utilities in the region.

If the utility and the stakeholder agree that the goals have CS for HB 5210 2026R3759H 2026R3758S been met, the utility may be deemed to have successfully completed the Early Intervention Pilot Program, and be released.

No utility may participate in the program for longer than twenty-four consecutive months.months:

Provided, That the Public Service Commission may extend a utility’s participation for additional periods of up to twelve months each, upon a finding that the extension is necessary for the successful completion of an ongoing project or course of action.

However, while the Intr HB 2026R3759H 2026R3758S stakeholders are encouraged to act collaboratively, decisions required under this section may be made without consensus, so long as at least two state agencies determine that the action is in the best interest of the utility.

However, the Public Service Commission may CS for HB 5210 2026R3759H 2026R3758S not add more than 10 public water, wastewater, or hybrid water andand/or wastewater utilities in a calendar year.

Commission staff shall contact each utility placed on the list and provide advice and assistance in resolving any financial instability or The Public Service Commission may consider managerial or operational issues that are contributing to the utility’s financial instability.

The Public Service Commission shall also include water and wastewater utilities that are in continual violation of statutory or regulatory standards of the Bureau Intr HB 2026R3759H 2026R3758S for Public Health, the Department of Environmental Protection, or the Public Service Commission, when those violations affect or have the potential to affect the water quality, safety, adequacy, efficiency, or reasonableness of the services provided by the utility.

– If there is an imminent need, the Public Service Commission may CS for HB 5210 2026R3759H 2026R3758S amend the watch list after November 1.1, which may be amended without seeking the approval of the Bureau for Public Health, the Department of Environmental Protection, or the Water Development Authority, if prior consultation is not feasible.

The Public Service Commission, after consultation with the other stakeholders described in §24-2H-3c of this codecode, will establish an individualized improvement plan for each utility.

The Public Service Commission may further mandate that a utility on an improvement period enter into a Regional Cooperative Agreement, as Intr HB 2026R3759H 2026R3758S set forth in §24-2H-3b of this code, provided that the other participating utilities are willing to consent to that utility’s inclusion.

CS for HB 5210 2026R3759H 2026R3758S (3) Whether an improvement period shall be extended or ended upon the agreement of two state agencies who are stakeholders.

(4) The date of the improvement period shall begin on the date the improvement plan is provided to the utility, in writing, or by January 1 of the calendar year following the date the watch list is published, whichever date comes first.later.

(a) The Public Service Commission has the authority to declare that a utility to be a "distressed utility," a "failing utility," or a "capable proximate utility." Intr HB 2026R3759H 2026R3758S (b) In determining whether a utility is distressed or failing, the commission shall consider the following factors:

(3) The opinion and advice, if any, of the Department of Environmental Protection and the Bureau for Public Health as to steps that may be necessary to assure compliance with applicable statutory or regulatory standards concerning the adequacy, efficiency, safety, or reasonableness CS for HB 5210 2026R3759H 2026R3758S of utility service;

and Intr HB 2026R3759H 2026R3758S (5) Any other relevant matter.

The commission shall include, as additional parties, any capable proximate public and private utilities CS for HB 5210 2026R3759H 2026R3758S that may be able to assist or acquire the utility.

(c)(4) The publicutility hearing shall begive conductednotice to receiveeach publicregistered comments,owner including,of butany notbonds, limitednotes to,or commentsother regardingdebt possibleobligations optionsof available to bring the distressedutility. or failing utility Intr HB 2026R3759H 2026R3758S into compliance with appropriate statutory and regulatory standards concerning actual or imminent public health problems or unreasonable quality and reliability service standards.

(c) The public hearing shall be conducted to receive public comments, including, but not limited to, comments regarding possible options available to bring the distressed or failing utility into compliance with appropriate statutory and regulatory standards concerning actual or imminent public health problems or unreasonable quality and reliability service standards.

list of distressed and failing CS for HB 5210 2026R3759H 2026R3758S utilities to Legislature.

(2) Operation of the distressed utility by another public utility or management or service Intr HB 2026R3759H 2026R3758S company under a mutually agreed arms-length contract;

CS for HB 5210 2026R3759H 2026R3758S (c) The commission shall provide a list of utilities designated by a final order of the commission as a distressed or failing utility to the Legislature as part of its annual Management Summary Report beginning in the 2021 reporting period and annually thereafter.

(f) Within 10 business days of the entry of a final order that orders the acquisition of a failing utility, the commission shall notify the registered owners of all outstanding bonds, notes, or other debt obligations of the failing utility.

– If a political subdivision of the state is Intr HB 2026R3759H 2026R3758S otherwise exempt from acquiring a distressed or failing utility pursuant to §24-2H-7(d) of this code, the Public Service Commission may require the exempt utility to enter into a memorandum of understanding with the distressed or failing utility.

In the memorandum of understanding, the utility exempt from forced acquisition will be identified as the "controlling utility." CS for HB 5210 2026R3759H 2026R3758S (b) Terms and Conditions.

Any remaining monthly income to the distressed or failing utility shall be paid to reimburse the controlling utility for actual Intr HB 2026R3759H 2026R3758S costs.

The Public Service Commission and the distressed or failing utility shall have ten business days upon receipt of notice to object to the monthly invoice of actual costs.

Upon an objection, the Public Service Commission,Commission the controlling utility, and distressed or failing utility shall negotiate,arbitrate inthe gooddispute faith,between the appropriatecontrolling amountutility toand be paid, with the Publicdistressed Serviceor Commissionfailing servingutility. as the final arbiter.

– During the course of the memorandum of understanding, CS for HB 5210 2026R3759H 2026R3758S the distressed or failing utility will maintain its own legal identity separate and apart from the controlling utility.

If the controlling utility and the distressed or failing utility agree that the collaborative nature of the memorandum of understanding is mutually beneficial, then the Intr HB 2026R3759H 2026R3758S commission may allow the two utilities to enter into a new memorandum of understanding, outside of the control of the commission.

rates for CS for HB 5210 2026R3759H 2026R3758S distressed and failing utilities;

(c) As part of the proceeding, the acquiring utility may propose to the commission that it be permitted for a reasonable period of time after the date of acquisition, to charge and collect rates from the customers of the failing utility pursuant to a separate tariff, which may be higher or lower Intr HB 2026R3759H 2026R3758S than the existing tariff of the distressed or failing utility, or may allow a surcharge on both the acquired and existing customers.

(d) As part of this proceeding, the acquiring utility shall submit to the commission for approval a plan, including a timetable for bringing the failing utility into compliance with applicable CS for HB 5210 2026R3759H 2026R3758S statutory and regulatory standards, including, but not limited to, plans for regionalization.

If the distressed or failing utility is a municipal corporation, then the commission shall make a recommendation to the Intr HB 2026R3759H 2026R3758S respective municipal council with regard to the acquisition of distressed or failing utilities as provided in §8-12-17 of this code.

It(1) shallNotwithstanding notany beother necessaryprovision forof thethis boardcode, ofa county commission may remove the failingboard ormembers distressedof utilitya topublic approveservice thedistrict salefound ofto thebe failing or distressed utilitywithout topetitioning a capablecircuit proximatecourt utility,for ifremoval of board members and the distressedcounty orcommission failingmay utilityappoint isits amembers publicas serviceboard district,members andof the salefailed isor approveddistressed bypublic service district for the countypurpose commission,of orimplementing ifCS thefor distressedHB or5210 failing2026R3759H utility2026R3758S isan aacquisition municipalor utility,alternative andto thean saleacquisition, isas approvedordered by the municipalcommission. council.

(2) No sale shall occur without prior notice to and written consent of the registered owners of the utility’s outstanding bonds, notes or other obligations:

Provided, that unless otherwise contradicted by bond covenants, such consent shall not be unreasonably withheld:

Provided, however, that such consent shall not be withheld if at, or before, closing of the transaction, the bond, note, or other obligation is satisfied..

ARTICLE 2J.

STRUGGLING UTILITIES IMPROVEMENT PILOT PROGRAM.

§24-2J-1.

Legislative Findings and Intent.

The Legislature finds that safe, reliable, and effective water and wastewater utilities are essential to both public health and economic growth.

Yet, many small water and wastewater utilities in West Virginia face significant challenges in maintaining adequate services due to limited resources, aging infrastructure, and difficulty attracting qualified personnel.

The Legislature further finds that some utilities may benefit from more robust state engagement.

It is the intent of the Legislature to create the Struggling Utilities Improvement Pilot Program to allow the state to provide direct, targeted support for one or more struggling utilities in order to remediate significant challenges to the operational, financial, and structural viability of the utility.

§24-2J-2.

Definitions.

As used in this article:

(1) “Director” shall mean the director of the Water Development Authority, as established in §22C-1-4(f) of the code.

(2) “Economic Enhancement Grant Fund” shall mean the fund established in §22C-1-6a of this code.

CS for HB 5210 2026R3759H 2026R3758S (3) “Participating utility” shall mean any utility that participates, whether voluntarily or pursuant to order, in the pilot program.

(4) “Pilot program” or “program” means the Struggling Utilities Improvement Pilot Program, as established in §24-2J-3 of this code.

(5) “Struggling utility” means any utility that meet two or more of the criteria considered by the Struggling Utilities Support Team in selecting program participants, as set forth in §24-2J-6 of this code.

(6) “Support team” shall mean the Struggling Utilities Support Team, as created in §24-2J- 5 of this code.

It may refer to the team as a whole, or a member of the team.

(7) “Utility" means a water and/or wastewater utility which is operated by a municipality, a public service district, or any political subdivision, but is not operated by a political subdivision that has at least 4,500 customers and annual combined gross revenues of $3 million or more, as described in §24-2-1(b) of this code.

(8) "Wastewater utility," for purposes of this article, means a public utility that treats, neutralizes, disposes of, stabilizes, cools, segregates or holds wastewater, including, for the treatment and disposal of sewage, industrial wastes or other wastes, waste water and the residue thereof;

allows for the temporary or permanent impoundment of wastewater, both surface and underground;

and provides sanitary sewers or other collection systems, whether on the surface or underground, designed to transport wastewater together with the equipment and furnishings thereof and their appurtenances and systems, whether on the surface or underground, including force mains and pumping facilities therefor.

(9) "Water utility," for purposes of this article, means a public utility that collects water, both surface and underground, transports water, treats water, and distributes water all for the purpose of providing potable, sanitary water suitable for human consumption and use.

§24-2J-3.

Struggling Utilities Improvement Pilot Program.

CS for HB 5210 The Struggling Utilities Improvement Pilot Program is hereby created.

The Struggling Utilities Support Team shall develop and implement the pilot program concerning the concentrated improvement of participating utilities in the manner as set forth in this article.

The pilot program shall terminate on July 1, 2031.

§24-2J-4.

Struggling Utilities Subaccount.

The Water Development Authority shall establish a Struggling Utilities Subaccount in the Economic Enhancement Grant Fund, as created in §22C-1-6a of this code, to be expended to implement the Struggling Utilities Improvement Pilot Program, including, but not limited to, salaries, benefits, consultants, office supplies, travel, and other administrative or operational costs.

The Director of the Water Development Authority shall transfer $1 million from the Economic Enhancement Grant Fund into the Struggling Utilities Subaccount within 30 days of the effective date of this articleThe subaccount shall also include any payments remitted in accordance with §24-2J-12 of this code.

§24-2J-5.

Struggling Utilities Support Team.

(a) Establishment.

– There is hereby created within the Water Development Authority the Struggling Utilities Support Team, which shall administer the Struggling Utilities Improvement Pilot Program, as set forth in this article.

(b) Composition.

– The support team shall consist of three members employed, at will, by the Water Development Authority, who shall possess, in the aggregate, expertise in water and wastewater engineering, utility finance and accounting, utility operations and management, and regulatory compliance.

Of the three members of the support team, the Water Development Authority shall designate a team leader to oversee the direction and actions of the support team, and to manage the daily operations thereof.

(c) Available Resources.

– As its budget allows, the support team may hire support staff, and may contract with qualified consultants, engineering firms, financial advisors, utility management companies, and other experts, as necessary to fulfill its duties under this article.

CS for HB 5210 2026R3759H 2026R3758S (d) Powers and Duties.

– The support team shall have the following powers and duties:

(1) Select utilities to participate in the pilot program;

(2) Create and implement improvement plans for participating utilities;

(3) Help participating utilities take measures necessary to improve;

(4) Assess whether each participating utility successfully completes the program;

(5) File complaints to compel participation, when warranted;

and (6) Take all other actions which are necessary or reasonable under this article.

(e) Rulemaking Authority.

–Pursuant to §29A-3-3 of this code, the Director of the Water Development Authority may adopt procedural rules governing the formal and informal procedures of the support team, together with forms and instructions.

The support team may also develop guidelines, standards, and policies for its operation.

§24-2J-6.

Selection Process for Participating Utilities.

(a) Authority.

– The support team is authorized to select participating utilities, in accordance with the provisions of this section.

No utility is entitled to be selected to the program.

(b) Recommendations.

– Within 90 days of the effective date of this article, the Department of Environmental Protection, the Bureau of Public Health, and the Public Service Commission shall each provide the support team with a list of utilities that it recommends for participation in the program.

Each shall provide the support team with information relevant to its recommendations, including, but not limited to, findings of noncompliance, financial audits, and concerns with management.

(1) The Department of Environmental Protection, the Bureau of Public Health, and the Public Service Commission shall consult with the support team.

Each shall freely answer any inquiry of the support team, and shall provide the support team with any requested information pertinent to the selection process.

(2) The support team shall consider any utility recommended by the Department of Environmental Protection, the Bureau of Public Health, or the Public Service Commission but it is CS for HB 5210 2026R3759H 2026R3758S not bound by any recommendation, and may select participating utilities that were not recommended.

(c) Nominations.

– A utility may volunteer to participate in the program.

A utility may also be nominated by a customer of the utility, or by a community leader or citizen with an interest in the continued viability of the utility.

The support team shall afford volunteering and nominating utilities the same level of consideration as a recommendation by a state agency.

(d) Review of Records.

– The support team shall review all available data, including annual financial reports, compliance data from regulatory agencies, customer complaints, infrastructure condition, management capacity indicators, and other relevant information.

Its analysis of data should be focused on utilities that can most benefit from the program.

(e) Criteria.

– The support team shall consider the following criteria:

(1) Imminent threats to public health or safety;

(2) Substantial noncompliance with a state regulatory agency;

(3) Multiple findings of noncompliance with a state regulatory agency;

(4) Ineligibility for state funding due to not meeting the debt service coverage ratio;

(5) High water loss or system inefficiencies;

(6) Failure to conduct annual audits or to adopt audit recommendations;

(7) Failure to maintain operating reserves or has operating deficits;

(8) Deferred maintenance or aging infrastructure;

(9) Absence of a certified operator or excessive turnover in personnel;

(10) Failure to hold regular public meetings;

(11) High rates of customer complaints;

or (12) Any other criteria, provided that the criteria is made publicly available.

(f) Location.

–The support team may consider management of its resources in the selection process.

The support team may choose to select participating utilities from a single geographic area, or a single county.

CS for HB 5210 2026R3759H 2026R3758S (g) Already Failing.

– The support team may not include a utility that has been declared a failing utility, pursuant to §24-2H-7 of this code, without the consent of the Public Service Commission.

(h) Timeframe.

– The support team shall select its first participating utility no later than January 1, 2027.

§24-2J-7.

Notice to Selected Utility.

(a) Written Notice.

– Upon making a selection pursuant to §24-2J-6 of this code, the support team will promptly notify the utility, in writing, that it has been selected to participate in the pilot program.

Notice will be provided to the public and manager of the utility.

If the utility is a municipality, notice will also be provided to the mayor and the chair of the city council.

If the utility is a public service district, notice will be provided to the chair of the board and the chair of the county commission.

The notice shall provide the selected utility with contact information for the support team, and request that the utility contact the support team.

(b) Meetings.

– The support team shall schedule, or attempt to schedule, a meeting with the utility to discuss the program.

The support team may also request to be placed on the agenda of the governing board of the utility to provide a public presentation regarding the pilot program is, and how participating in the program is expected to help the utility and its customers.

(c) Non-Selected Utilities.

– If a utility that volunteered to participate in the program was not selected, the support team shall provide that utility with notice that it has not been selected, which may include information regarding other resources that may be available to help the utility.

§24-2J-8.

Improvement Plan.

(a) Creating the Improvement Plan.

– The support team shall create an individualized improvement plan for each utility participating in the pilot program that may be developed based on input from the participating utility and other knowledgeable and interested parties including the Department of Environmental Protection, the Bureau of Public Health, the Public Service CS for HB 5210 2026R3759H 2026R3758S Commission, the West Virginia Rural Water Association, the West Virginia Municipal Water Quality Association, the West Virginia chapter of the National Association of Water Companies.

(b) Statement of Intent.

– The improvement plan must contain a detailed description of each deficiency, failure, or problem which the improvement plan is designed to address.

(c) Course of Action.

– An improvement plan must include an individualized course of action, which may include any one or more of the following:

(1) Rectify existing, imminent, or reasonably foreseeable threats to public health or safety;

(2) Work with state regulatory agencies to address any findings of noncompliance;

(3) Identify and develop infrastructure projects, and seek state, federal, and private funding, including taking any action necessary for the utility to be deemed eligible for state funding;

(4) Become current on the submission of all financial audits required by the state, or require additional financial audits, and to adopt any recommended findings of an audit;

(5) Intensive training for any manager, operator, employee, board member, governing body, or political subdivision working with or responsible for the utility;

(6) Improve how the utility addresses service disruptions, including how it provides notices to the public;

or (7) Take any other action necessary to rectify the circumstances that qualified the utility as a struggling utility.

(d) Required Provisions.

– Every improvement plan shall require the participating utility to:

(1) Provide the support team with full access to all records and facilities;

(2) Electronically submit progress reports to the support team on at least a monthly basis;

(3) Immediately notify the support team of any material change to personnel, finances, or the facilities;

and (4) Participate in regular meetings between the manager, board, governing body, and support team to discuss action taken to remedy deficiencies, progress made under the improvement plan, problems which remain outstanding, and/or the general operations of the utility.

CS for HB 5210 2026R3759H 2026R3758S (e) Plan Approval.

– The support team shall provide the participating utility with an improvement plan within 30 days of the utility being selected for the program.

Within 30 days of receiving the improvement plan, the governing body of the utility shall convene a public meeting to vote on the improvement plan.

(1) At the public meeting, the governing body shall, by vote:

(A) Accept the improvement plan by resolution, and commit to full implementation;

(B) Reject the improvement plan, and provide an alternative plan that meets the same objectives with specific corrective actions, timelines, and funding sources;

or (C) Reject the plan with written explanation.

(2) If the utility proposes an alternative plan, then the support team shall meet with the utility to discuss the alternative plan.

If the support team and the utility are able to agree on the terms of an improvement plan, then the governing body of the utility shall convene a meeting to vote on the acceptance of the plan.

If the support team and the utility cannot agree on the terms of an improvement plan, then the support team shall treat the alternative plan as a denial.

(3) If the utility rejects the plan without an adequate alternative plan, then the support team may initiate a complaint, pursuant to §24-2J-11 of this code.

(f) Amendments.

– The support team may amend an improvement plan at any time.

However, the support team must provide the participating utility with written notice, and afford the utility an opportunity to weigh in on the amendment.

The participating utility may, at any time, request an amendment to the improvement plan.

(g) Collaborative Improvement Plan.

– While each utility must have its own improvement plan with an individualized course of action, if the support team has two or more participating utilities that are in the same county or are in close proximity to one another, then the support team may develop a collaborative improvement plan, which addresses any similarities, differences, or overlap for the participating utilitiA collaborative improvement plan may require the participating utilities to enter into collaborative agreements with one another, which said CS for HB 5210 2026R3759H 2026R3758S collaborative agreements may contain the same provisions, and garner the same benefits, as the Regional Cooperative Agreements established in §24-2H-3b of this code.

A collaborative improvement plan may also contain any other term which the support team believes to be beneficial to the participating utilities as a collective.

§24-2J-9.

Improvement Period.

(a) Improvement Period.

– Upon adoption or order of the improvement period, the participating utility shall be afforded twelve months to complete the terms of the improvement plan.

The term of the improvement period may be extended by the support team, so long as it does not extend beyond the term of the pilot program.

(b) Responsibilities of the Utility.

– During the improvement period, the participating utility shall be responsible for completing the requirements of the improvement plan.

(c) Responsibilities of the Support Team.

– During the improvement period, the support team shall have the following responsibilities:

(1) The support team shall closely monitor the progress of the participating utility.

(2) The support team shall act in an advisory role to the participating utility.

(3) The support team should provide the participating utility with training, or the means to obtain training, if training is included in the improvement plan;

(4) The support team shall help the participating utility seek state and federal funding for projects, including taking any measures necessary to allow the utility to be eligible for state funding;

(5) The support team should take any other reasonable action that is necessary to provide meaningful assistance to the utility.

§24-2J-10.

Assessment of the Improvement Period.

(a) Measurable Goals.

– The improvement plan shall include performance metrics, milestones, progress reports, and deadlines which allow both the support team and the CS for HB 5210 2026R3759H 2026R3758S participating utility to assess whether the participating utility is improving, declining, or remaining unchanged.

Measurable goals may include:

(1) Hiring additional staff;

(2) Coming into compliance with a state regulatory agency;

(3) Seeking project approval through the Infrastructure Development and Jobs Council;

(4) Reducing the frequency of consumer complaints;

or (5) Any other metric which appropriately addresses any deficiency, failure, or problem.

(b) Progress Reports.