DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT
WATER QUALITY CONTROL COMMISSION
5 CCR 1002-52
REGULATION NO. 52 
DRINKING WATER REVOLVING FUND RULES
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52.6	PRIORITY SYSTEM
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(4)	Eligible Project Criteria
Categories were developed to emphasize the most immediate public health and compliance issues. Projects on the Project Eligibility List will be classified by category 1, 2, 3, 4, 5 or 6 below, with “1” being the highest priority. Once a planning document is received, projects within each category will be further prioritized by the assignment of points from the priority point listings under each category. No consideration will be given to governmental agencies that have violations caused by poor operation and maintenance procedures or are under an administrative order for violating reporting requirements. 
	All loan projects shall submit applications by deadlines established in the annual IUP.  If it is determined that the DWRF lacks sufficient funds to cover loans for all eligible projects that are ready to proceed within the funding year, Category 1 projects will be funded prior to Category 2 projects, which will be funded prior to Category 3 projects, which will be funded prior to Category 4 projects, which will be funded prior to Category 5 projects, which will be funded prior to Category 6 projects - until all funds are obligated.  Within each category, the following criteria will be used to further prioritize the projects:
(5)	Categories By Priority Ranking
(a)	1 - Acute Health Hazard. The Division has identified continuous violation of an acute maximum contaminant level (MCL) or a surface water treatment rule (SWTR) treatment technique requirement. 
(b)	2 - Chronic (long term) Health Hazard. The Division has identified a continuous violation of an MCL or an SWTR treatment technique requirement for a chronic contaminant. 
(c)	3 - Potential Acute Health Hazard. The PWS has periodically exceeded an acute MCL, has levels greater than 50 percent of an acute MCL on a regular basis, or has short term problems meeting an SWTR treatment technique requirement that can be controlled temporarily by operational means. 
(d)	4 - Potential Chronic Health Hazard. The PWS has periodically exceeded a chronic MCL, has levels greater than 50 percent of a chronic MCL on a regular basis, or has short term problems meeting other treatment technique requirements. 
(e)	5 - Other Future Needs. The PWS is beyond the useful/design life and is in need of equipment replacement, rehabilitation or repair, in order to maintain compliance or further the public health protection goals of the SDWA. 
(f)	6 – Economic Stimulus: Projects that seek funding only under the American Recovery and Reinvestment Act of 2009 and that were not already on the Project Eligibility List as of January 1, 2009.  Categories 1-5 will be given consideration prior to funding of Category 6 projects.
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52.12	FINDINGS IN SUPPORT OF EMERGENCY REVISIONS TO REGULATION #52, DRINKING WATER REVOLVING FUND RULES [5 CCR 1002-52] (MARCH 9, 2009)
The Commission conducted this rulemaking hearing to add a sixth category of projects for inclusion on the Drinking Water Revolving Fund Project Eligibility List.   The addition of this category will ensure that Colorado will be able to use all funds that may become available under the American Recovery and Reinvestment Act of 2009 (ARRA).  Projects added to the existing 2009 Project Eligibility list will receive funding only if necessary to fully utilize existing loan capacity and new federal funding that may become available in 2009.  Consistent with the existing structure for prioritization, Category 6 projects will only be considered for funding after all other projects designated under Categories 1-5 have been given an opportunity to proceed.  Category 6 projects will be subject to the eligibility requirements and intra-category ranking system outlined in Section 52.6 of this regulation.
The Commission intends that terms and conditions specific to the administration of grant monies received under the ARRA will be memorialized in an addendum to the 2009 Drinking Water Revolving Fund and State Drinking Water Grant Fund Intended Use Plan (IUP).  Such terms and conditions may include additional criteria for funding eligibility and priority ranking to comply with the requirements of the ARRA and to maintain consistency with EPA’s final ARRA guidance document.  Interim deadlines or milestones to ensure that projects are proceeding expeditiously to meet the 12-month deadline in the ARRA may also be included in the IUP Addendum.  To the extent that any of the terms and conditions in the IUP Addendum may differ from the original 2009 IUP or these Regulations, the Commission intends that the provisions of the IUP Addendum will govern with respect to the details of administering ARRA funds among the six funding categories.  The Commission will utilize its administrative action hearing process, including opportunity for public review and comment, for approval of any IUP Addendum(s) as developed by the Water Quality Control Division, the Division of Local Affairs, and the Colorado Water Resources and Power Development Authority, consistent with Section 300j-12(b)of the federal Safe Drinking Water Act.
The Commission adopted these revisions on an emergency basis, with the intent that such revisions become effective immediately.  The Commission found that immediate adoption of these revisions to Regulation #52 is imperatively necessary to preserve public health and welfare and that compliance with the requirements of section 24-4103, C.R.S., would be contrary to the public interest.  
The Commission found that immediate effectiveness of these regulatory revisions was necessary to ensure timely addition of new projects to the Project Eligibility list contained within the 2009 IUP.  To that end, the Commission conducted an administrative action hearing immediately after the Regulation #52 rulemaking hearing for the purpose of considering appropriate additions to the IUP (in the form of an addendum) and addition of specific projects to the Project Eligibility List contained in the IUP. The Commission determined that the projects added to the Project Eligibility List are emergency projects needed to prevent or address threats to public health or the environment.  The Commission intends that the revised Project Eligibility List be submitted to the General Assembly for action by the April 1, 2009 statutory approval deadline.
52.13	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY AND PURPOSE (MARCH 9, 2009 RULEMAKING; EFFECTIVE DATE APRIL 30, 2009)
Sections 25-8-202(1)(g) and (o); and Section 37-95-107.8(4), C.R.S. provide the specific statutory authority for adoption of the attached regulatory amendments.  The Commission also adopted, in compliance with section 24-4-103(4) C.R.S. the following statement of basis and purpose. 
BASIS AND PURPOSE
The Commission conducted this rulemaking hearing to add a sixth category of projects for inclusion on the Drinking Water Revolving Fund Project Eligibility List.   The addition of this category will ensure that Colorado will be able to use all funds that may become available under the American Recovery and Reinvestment Act of 2009 (ARRA).  Projects added to the existing 2009 Project Eligibility list will receive funding only if necessary to fully utilize existing loan capacity and new federal funding that may become available in 2009.  Consistent with the existing structure for prioritization, Category 6 projects will only be considered for funding after all other projects designated under Categories 1-5 have been given an opportunity to proceed.  Category 6 projects will be subject to the eligibility requirements and intra-category ranking system outlined in Section 52.6 of this regulation.
The Commission intends that terms and conditions specific to the administration of grant monies received under the ARRA will be memorialized in an addendum to the 2009 Drinking Water Revolving Fund and State Drinking Water Grant Fund Intended Use Plan (IUP).  Such terms and conditions may include additional criteria for funding eligibility and priority ranking to comply with the requirements of the ARRA and to maintain consistency with EPA’s final ARRA guidance document.  Interim deadlines or milestones to ensure that projects are proceeding expeditiously to meet the 12-month deadline in the ARRA may also be included in the IUP Addendum.  To the extent that any of the terms and conditions in the IUP Addendum may differ from the original 2009 IUP or these Regulations, the Commission intends that the provisions of the IUP Addendum will govern with respect to the details of administering ARRA funds among the six funding categories.  The Commission will utilize its administrative action hearing process, including opportunity for public review and comment, for approval of any IUP Addendum(s) as developed by the Water Quality Control Division, the Division of Local Affairs, and the Colorado Water Resources and Power Development Authority, consistent with Section 300j-12(b) of the federal Safe Drinking Water Act.
The Commission adopted these revisions on both an emergency and permanent basis, with the intent that the permanent amendments become effective April 30, 2009.  
PARTIES TO THE RULEMAKING
1.	Denver Water
2.	City of Aurora
3.	Colorado Contractors Association
4.	Northwest Colorado Council of Governments