SECTION 1.  (a) For the purposes of this section, “nitrogen waste standard” shall, for a domestic septic system, mean any properly functioning identifying septic system that is approved for the intended domestic use pursuant to title 5 of the state environmental code established in 310 CMR 15.00; provided, however, that “nitrogen waste standard” for a domestic septic system located in a city or town that established a more effective nitrogen waste standard that decreases the amount of nitrogen waste shall mean any properly functioning identifying septic system that is approved for the intended domestic use pursuant to the nitrogen waste standard established by the city or town pursuant to subsection (d).

(b)  Notwithstanding chapter 29C of the General Laws or any other general or special law to the contrary, to reduce environmental impacts of nitrogen pollution in vulnerable communities, a local or regional board of health may enter into agreements with residential owners to provide for the repair, replacement or upgrade of certain septic systems pursuant to subsections (c) and (e).

(c)(1)  When an existing domestic septic system fails to properly treat for nitrogen and conform to the applicable nitrogen waste standard, a local or regional board of health may enter into an agreement with the residential owner pursuant to section 127B½ of chapter 111 of the General Laws to finance by loan the repair, replacement or upgrade of the system to meet the standard.

(2)  To qualify for such loan assistance, a domestic septic system shall be located within: (i) a watershed area of a nitrogen impaired water body as identified in the latest United States Environmental Protection Agency approved final listing of the latest state Integrated List of Waters for the commonwealth; (ii) a nitrogen sensitive area as defined in 310 CMR 15.002; or (iii) a watershed area of a water body subject to the latest state established total maximum daily load for total nitrogen pollution that is approved by the United States Environmental Protection Agency.

(3)  The repair, replacement or upgrade, including installation, of a shared domestic septic system that treats for nitrogen located in an area described in paragraph (2) may qualify for such loan assistance; provided, that the: (i) shared system replaces or services at least 2 existing domestic septic systems that otherwise would fail to properly treat for nitrogen; and (ii) the combined shared septic system, including its components, has a discharge volume of less than 10,000 gallons per day that meets the applicable nitrogen waste standard. For loan assistance pursuant to paragraph (1), each affected residential owner benefiting directly from the shared system shall enter into an agreement with the local or regional board of health in the city or town where such system is located for the repayment of the owner’s proportionate share of the costs and expenses incurred by the local or regional board of health for the repair, replacement or upgrade of any part of the shared system.

(d)  Notwithstanding any general or special law to the contrary, a city or town may establish a nitrogen waste standard for domestic septic systems by: (i) the adoption of a rule or regulation by its local or regional board of health; or (ii) a zoning by-law or ordinance approved by the governing body of the city or town; provided, however, that the nitrogen waste standard established shall meet all the minimum requirements of title 5 of the state environmental code established in 310 CMR 15.00.

(e)  Notwithstanding any general or special law to the contrary, a local or regional board of health may enter into an agreement for loan assistance with a residential owner to promote the voluntary upgrade or replacement of the owner’s functioning domestic septic system to meet the applicable nitrogen waste standard.

SECTION 2. This act shall take effect on July 1, 2022.