(1) There is created in the State Treasury a fund to be designated as the “Drinking Water Quality Analysis Fund.” The fund shall be treated as a special trust fund. Interest earned on the principal in the fund shall be credited by the Treasurer to the fund. The fund may receive monies from any available public or private source, including fees, proceeds and grants. The department shall expend or utilize monies in the fund to pay all reasonable direct and indirect costs of water quality analysis and related activities as required by the federal Safe Drinking Water Act, as amended. Monies in the fund at the end of the fiscal year shall be retained in the fund for use in the succeeding fiscal year. Except as provided in subsection (5) of this section, if the annual fees collected exceed the cost of administering the water quality analysis program in that fiscal year, the excess shall be applied to the cost of administering the program in the succeeding fiscal year. In the succeeding fiscal year, the total to be collected from fees shall be reduced by the excess retained in the fund and the assessment rates shall be adjusted proportionately.

(2) The department annually shall assess and collect fees for water quality analysis and related activities as required by the federal Safe Drinking Water Act, as amended, which shall not exceed Three Dollars ($3.00) per connection or Forty Thousand Dollars ($40,000.00) per system, whichever is less. Any increase in the fees charged by the department under this subsection shall be in accordance with the provisions of Section 41-3-65. The department annually shall adopt by rule, in accordance with the Administrative Procedures Law and following a public hearing, a fee schedule to cover all reasonable direct and indirect costs of water quality analysis and related activities as required by the federal Safe Drinking Water Act, as amended. In adopting a fee schedule, the department shall consider the recommendations of the advisory committee created in this section, if those recommendations are made in a timely manner as provided.

(3) An advisory committee is created to study the program needs and costs for the implementation of the water quality analysis program and to conduct an annual review of the needs and costs of administering that program. The annual review shall include an independent recommendation on an equitable fee schedule for the succeeding fiscal year. Each annual review report shall be due to the department by May 1. The advisory committee shall consist of one (1) member appointed by the Mississippi Rural Water Association, one (1) member appointed by the Mississippi Municipal Association, one (1) member appointed by the Mississippi Association of Supervisors and one (1) member appointed by the Mississippi Water and Pollution Control Operators Association, Inc.

(4) All suppliers of water for which water quality analysis and related activities as required by the federal Safe Drinking Water Act, as amended, are performed by the State Department of Health shall pay the water quality analysis fee within forty-five (45) days following receipt of an invoice from the department. In the discretion of the department, any supplier of water required to pay the fee shall be liable for a penalty equal to a maximum of two (2) times the amount of fees due and payable plus an amount necessary to reimburse the costs of delinquent fee collection for failure to pay the fee within ninety (90) days following the receipt of the invoice. Any person making sales to customers of water for residential, noncommercial or nonagricultural use and who recovers the fee required by this section or any portion thereof from any customer shall indicate on each statement rendered to customers that these fees are for water quality analyses required by the federal government under the Safe Drinking Water Act, as amended.

(5) There is created within the Drinking Water Quality Analysis Fund an equipment capital expenditure account, hereinafter referred to as the “account.” The department may transfer any excess fees, not exceeding ten percent (10%) of the total fees assessed under this section, to the account. The balance in the account shall not exceed Five Hundred Thousand Dollars ($500,000.00). Funds in the account shall be used by the department, as appropriated by the Legislature, to defray the costs of purchasing new equipment or repairing existing equipment for the analysis of drinking water.