HB 94
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
House Bill 94 (Delegate Stein)
Environment and Transportation Education, Health, and Environmental Affairs
Environment - Water Quality Revolving Loan Fund - Uses of Fund
This bill expands the authorized uses of the guarantee authority under the Maryland Water
Quality Revolving Loan Fund (WQRLF) by repealing the restriction that WQRLF be used
only to guarantee, or purchase insurance for, bonds, notes, or other evidences of obligation
issued by a local government for the purpose of financing all or a portion of the cost of a
wastewater facility, if such action would improve credit market access or reduce interest
rates. The bill also authorizes WQRLF to be used (1) to provide loan guarantees for similar
revolving funds established by municipalities or intermunicipal agencies and (2) to serve
as guarantee for long-term pay for success contracts, green bonds, or environmental impact
bonds by any public, private, or nonprofit entity for the purchase of outcomes that provide
a water quality benefit. The bill takes effect July 1, 2021.
Fiscal Summary
State Effect: There is no material impact on State finances. The Maryland Department of
the Environment (MDE) can implement the bill’s changes with existing resources. MDE
notes that it has not historically used WQRLF to provide guarantees for local obligations
to improve credit market access or reduce interest rates.
Local Effect: Potential meaningful benefit to the extent that local governments are able
to obtain a WQRLF guarantee for a wider array of projects and are able to obtain better
interest rates for water quality projects. This could make projects more affordable.
Small Business Effect: Minimal.
 Analysis
Current Law: WQRLF, which is administered by MDE’s Water Quality Financing
Administration, was created in 1988 to provide low-interest loans to public entities for
wastewater and other water quality capital projects. Other assistance is provided through
purchasing, guaranteeing, or refinancing debt. Authorized uses of the fund include grants,
negative interest loans, forgiveness of principal, subsidized interest rates, and other forms
of assistance as authorized or required by specified federal statute.
Among other things, WQRLF can be used to guarantee or purchase insurance for bonds,
notes, or other evidences of obligation issued by a local government for the purpose of
financing all or a portion of the cost of a wastewater facility, if such action would improve
credit market access or reduce interest rates.
The federal Water Pollution and Control Act (33 U.S.C.A. § 1383) authorizes, unless
otherwise limited by state law, for a state’s water pollution control revolving fund to be
used to guarantee, or purchase insurance for, local obligations where such action would
improve credit market access or reduce interest rates.
Local Fiscal Effect: Local governments are among the primary recipients of assistance
from WQRLF and could benefit from the bill to the extent that a local government is able
to access MDE’s guarantee authority for a wider variety of projects. For a local government
that obtains this benefit, the likely result would be lower interest rates and overall costs for
qualifying projects. However, MDE notes that it anticipates that most local governments
will continue to apply for traditional loan funding and will not utilize the guarantee
authority affected by the bill.
Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Baltimore City; Caroline, Montgomery, and Prince George’s
counties; cities of Annapolis and Bowie; Maryland Department of the Environment;
Department of Legislative Services
HB 94/ Page 2
Fiscal Note History: First Reader - January 17, 2021
rh/lgc Third Reader - March 16, 2021
Revised - Amendment(s) - March 16, 2021
Analysis by: Kathleen P. Kennedy Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 94/ Page 3


Statutes affected:
Text - First - Environment - Water Quality Revolving Loan Fund - Use of Fund: 91-605 Environment
Text - Third - Environment - Water Quality Revolving Loan Fund - Uses of Fund: 91-605 Environment