SECTION 1. Chapter 40 of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by inserting after section 39M the following new section:-

Section 39N. (a) Notwithstanding any general or special law to the contrary, a city, town, water district, wastewater district, stormwater utility or statutory authority created to operate a water distribution or wastewater collection system or stormwater system which accepts this section may collect a reasonable fee to be used exclusively for measures to remedy and offset the impacts on the natural environment of new and/or increased water withdrawals, sewering, wastewater discharges, stormwater discharges or impairment of recharge of groundwater through depletion of ground or surface waters, and to sustain the quantity, quality and ecological health, of waters of the commonwealth. Such measures to remedy and offset these impacts include without limitation, local recharge of stormwater and wastewater; redundant water sources; reductions in loss from drinking water systems, treatment of drinking water or interconnections with other systems for the purposes of optimizing water supply sources for environmental benefit; expansion of stormwater treatment and wastewater treatment systems; reuse of water; removal of sewer infiltration and inflow; water conservation; retrofits of existing buildings and parking lots with low impact development methods; removal of dams; improvements to aquatic habitat; development of integrated water resources management plans, studies and planning to mitigate environmental impacts; and, land acquisition for the protection of public water supply sources, siting of decentralized wastewater facilities, stormwater recharge sites or for riparian habitat. The fee, which may be based on retaining within the basin or saving at least one gallon, but no more than ten gallons, for every gallon of increased water or sewer demand, or net impairment of recharge shall be assessed in a fair and equitable manner and separate fees may be established for different types of uses, such as residential and commercial uses.

(b) When adopting this section, the city, town, district or statutory authority shall designate the board, commission, or official responsible for assessing, collecting, and expending such fee. Fees assessed pursuant to this section shall be deposited by the designated board, commission, or official in separate accounts classified as "Sustainable Water Resource Funds" for drinking water, wastewater or stormwater. The principal and interest thereon shall be expended at the direction of the designated board, commission, or official without further appropriation. These Funds shall not be used for any purpose not provided in this section. These Funds may also receive monies from public and private sources as gifts, grants, and donations to further water conservation, water return or water loss prevention; from the federal government as reimbursements, grants-in-aid or other receipts on account of water infrastructure improvements; or fines, penalties or supplemental environmental projects. Any interest earned from whatever source shall be credited to and become part of said Fund.

(c) A city, town, district, or authority that has accepted this section may in the same manner revoke its acceptance. Monies remaining in the fund shall be expended in a manner consistent with this section.