§2075.4. Community sewerage system infrastructure accountability

            A. This Section shall be known and may be cited as the "Community Sewerage System Infrastructure Sustainability Act" which has been enacted by the legislature to provide:

            (1) For the development and implementation of a community sewerage system accountability process which supports sewerage system infrastructure sustainability for the residents of Louisiana.

            (2) Assurance to the residents that the quality of sewage treatment is monitored and maintained at levels essential for health, safety, welfare, and long-term sustainability.

            (3) Accountability of local government authorities and other entities operating community sewerage systems.

            (4) Consequences for community sewerage systems that do not achieve state and federal standards.

            (5) Transparent regulatory compliance and fiscal accountability information presented to the State Bond Commission, the division of administration for the capital outlay program, and rate setting authorities for consideration in approving additional debt, capital outlay, or a rate increase.

            B.(1) "Community sewerage system" means any treatment works, whether publicly or privately owned, which serves multiple connections and consists of a collection or pumping and transport system and a treatment facility. For the purposes of this Section, "community sewerage system" includes any local governing authority which operates a community sewerage system.

            (2) "Community water system" has the same meaning as provided for in R.S. 40:5.8.

            C.(1)(a) Except as provided in Subparagraph (b) of this Paragraph, any community sewerage system that seeks approval from the State Bond Commission to incur any additional debt for anything not directly related to the improvement and sustainability of the community sewerage system or a related community water system shall submit with the application to the commission a compliance status verification from the Department of Environmental Quality, a compliance status verification from the Louisiana Department of Health, and a fiscal status verification from the legislative auditor in accordance with Subsection F of this Section.

            (b) The provisions of this Subsection shall not apply to any application to the State Bond Commission seeking approval for financing involving:

            (i) Cash flow loans.

            (ii) Dedicated tax or bond revenue streams.

            (iii) Emergency financing as determined by the State Bond Commission.

            (iv) Refinancing of existing debt.

            (2) After consideration of the information provided pursuant to Paragraph (1) of this Subsection, the State Bond Commission may prohibit the community sewerage system from incurring any additional debt for anything not directly related to the improvement and sustainability of the community sewerage system or a related community water system.

            (3) Notwithstanding any provision of law to the contrary, the community sewerage system shall not be precluded from obtaining funding for the improvement and sustainability of the community sewerage system or a related community water system based upon the information provided pursuant to Paragraph (1) of this Subsection or R.S. 40:5.9.1.

            D.(1) Any community sewerage system that receives notification of a capital outlay appropriation from the division of administration, office of facility planning and control shall submit to the division of administration a compliance status verification from the Department of Environmental Quality, a compliance status verification from the Louisiana Department of Health, and a fiscal status verification from the legislative auditor in accordance with Subsection F of this Section.

            (2) After consideration of the information provided pursuant to Paragraph (1) of this Subsection, the division of administration may prohibit the community sewerage system from participating in the capital outlay program for anything not directly related to the improvement and sustainability of the community sewerage system or a related community water system.

            (3) The provisions of this Subsection notwithstanding, the community sewerage system shall not be precluded from obtaining funding for the improvement and sustainability of the community sewerage system or a related community water system based upon the information provided pursuant to Paragraph (1) of this Subsection.

            E.(1) Any community sewerage system that seeks approval for a rate adjustment from the appropriate rate setting authority not directly related to the improvement and sustainability of the community sewerage system or a related community water system shall submit with the application to the rate setting authority a compliance status verification from the Department of Environmental Quality, a compliance status verification from the Louisiana Department of Health, and a fiscal status verification from the legislative auditor in accordance with Subsection F of this Section.

            (2) After consideration of the information provided pursuant to Paragraph (1) of this Subsection, the rate setting authority may prohibit the community sewerage system from adjusting rates for anything not directly related to the improvement and sustainability of the community sewerage system or a related community water system.

            (3) The provisions of this Subsection notwithstanding, the community sewerage system shall not be precluded from receiving approval for a rate adjustment for the improvement and sustainability of the community sewerage system or a related community water system based upon the information provided pursuant to Paragraph (1) of this Subsection.

            F.(1)(a) Not later than twenty calendar days after receiving a request from a community sewerage system, the Department of Environmental Quality shall review the department's records and provide a compliance status verification based upon criteria determined by the department, including but not limited to the following:

            (i) Federal water quality significant violation history.

            (ii) State enforcement action history.

            (b) The compliance status verification provided by the Department of Environmental Quality shall clearly state whether the community sewerage system is "NOT IN COMPLIANCE – Found on a federal significant noncompliance list or is under state enforcement action" or "IN COMPLIANCE – Not found on a federal significant noncompliance list or is under state enforcement action" as appropriate.

            (2)(a) Not later than twenty calendar days after receiving a request from a community sewerage system, the Louisiana Department of Health shall review the department's records and provide a compliance status verification based upon criteria determined by the department, including but not limited to the following:

            (i) State violation history.

            (ii) Operation and maintenance performance history.

            (iii) Infrastructure violations.

            (b) The compliance status verification provided by the Louisiana Department of Health shall clearly state the community sewerage system's compliance status using the phrase "IN COMPLIANCE" or "NOT IN COMPLIANCE" as appropriate.

            (3) Not later than twenty calendar days after receiving a request from a community sewerage system, the legislative auditor shall review its records and provide a fiscal status verification regarding the community sewerage system's financial sustainability based upon criteria determined by the auditor. The fiscal status verification shall clearly state in plain language the community sewerage system's level of financial sustainability.

            (4)(a) A compliance status verification provided by the Department of Environmental Quality or the Louisiana Department of Health pursuant to this Section shall be either of the following:

            (i) On an official certification form supplied by the department.

            (ii) On the department's official letterhead and signed by a member of the department's staff who is qualified to verify the compliance status of the community sewerage system.

            (b) A fiscal status verification provided pursuant to this Section shall be on the legislative auditor's official letterhead and signed by a member of the auditor's staff who is qualified to verify the fiscal status of the community sewerage system.

            G.(1) Notwithstanding any provision of law to the contrary, a local governing authority that operates a community sewerage system shall not expend any money raised through payments made by customers for sewerage services or from any other sewerage system revenue for any item, debt payment, or public purpose other than the improvement and sustainability of the community sewerage system. For purposes of this Subsection, "sustainability" means the ability to be maintained at the required rate or level necessary to comply with applicable state and federal regulations. Sustainability may include but not be limited to the purchase and maintenance of equipment and employment of personnel whose primary functions are related to ensuring compliance with state and federal laws, rules, and regulations governing the effective operation of a sewer system.

            (2) The provisions of this Subsection shall not be construed to prohibit the payment of bonded indebtedness secured by the sewerage system's revenue prior to August 1, 2024.

            H.(1) Any community sewerage system that is not in compliance with the Department of Environmental Quality or the Louisiana Department of Health, is not financially sustainable based on the standards of the legislative auditor, or is in violation of the expenditure prohibitions of Subsection G of this Section shall, in addition to the provisions of Subsection C of this Section, be subject to either or both of the following, as appropriate:

            (a) An oversight and accountability hearing before the Legislative Audit Advisory Council.

            (b) A hearing before the Fiscal Review Committee for potential initiation of an action for a court-appointed fiscal administrator filed in accordance with R.S. 39:1351 et seq.

            (2) Any community sewerage system that is not in compliance with the Department of Environmental Quality or the Louisiana Department of Health, is not financially sustainable based on the standards of the legislative auditor, or is in violation of the expenditure prohibitions of Subsection G of this Section may, in addition to the provisions of Subsection C of this Section, be subject to either or both of the following, as appropriate:

            (a) A civil action for court-appointed receivership filed in accordance with R.S. 30:2075.3 or R.S. 33:42.

(b) A criminal action for malfeasance in office pursuant to R.S. 14:134.

            (3) If the condition or operations of any community sewerage system that is not in compliance with the Department of Environmental Quality or the Louisiana Department of Health, is not financially sustainable based on the standards of the legislative auditor, or is in violation of the expenditure prohibitions of Subsection G of this Section necessitates the expenditure of state funds to address or mitigate an emergency related to that community sewerage system, the circumstances shall be grounds for a civil action for court-appointed receivership in accordance with R.S. 30:2075.3 or R.S. 33:42, or to the appointment of a fiscal administrator in accordance with R.S. 39:1351 et seq.

            Acts 2024, No. 144, §1, eff. May 22, 2024.