NY S08254

Authorizes towns in the Peconic Bay region (East Hampton, Riverhead, Shelter Island, Southampton, and Southold) to establish septic system replacement loan programs using water quality improvement funds from the community preservation fund.

Defines eligible septic system projects as replacements of cesspools with septic systems, installations, replacements, upgrades of septic systems, or installation of advanced nitrogen removal systems that significantly reduce environmental and public health impacts.

Sets loan limits of 10 percent of appraised property value or actual project cost (whichever is less) for individual property owners, with repayment terms not exceeding 10 years at fixed interest rates not exceeding 2.5 percent.

Requires loan recipients to be located within town-established priority areas identified for maximum water quality and public health benefits, and prohibits borrowers from receiving another loan within a five-year period.

Creates liens on benefitted properties for loan repayment, allows towns to collect loan payments through property tax bills, and directs all repayment revenues back to the community preservation fund.