Sec. 2. Innovative financing for State loan funds

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The Water Infrastructure Finance and Innovation Act of 2014 ( 33 U.S.C. 3901 et seq.) is amended by adding at the end the following: In this section, the term State loan funds means— State drinking water treatment revolving loan funds established under section 1452 of the Safe Drinking Water Act ( 42 U.S.C. 300j–12 ); and State water pollution control revolving funds established under title VI of the Federal Water Pollution Control Act ( 33 U.S.C. 1381 et seq.). The Administrator may provide financial assistance under this section to State infrastructure financing authorities for State loan funds to carry out water and wastewater infrastructure projects in accordance with this section.

The following activities may be carried out by a State infrastructure financing authority with financial assistance made available under this section: One or more activities that are included in the intended use plan under section 606(c) of the Federal Water Pollution Control Act ( 33 U.S.C. 1386(c) ). One or more activities that are included in the project priority list of the intended use plan under section 1452(b) of the Safe Drinking Water Act ( 42 U.S.C. 300j–12(b) ). Financial assistance provided under this section may be used to pay the reasonable costs of administration related to that financial assistance.

Section 5029(b)(7) shall not apply to financial assistance made available under this section. In determining whether to provide financial assistance under this section, the Administrator shall consider a project to be all of the activities included in an intended use plan described in subparagraph

(A)or

(B)of paragraph (1). A State infrastructure financing authority that receives financial assistance under this section may use the assistance for any activity included in an intended use plan described in subparagraph

(A)or

(B)of paragraph (1). Except as otherwise provided in this section, the requirements and procedures under this subtitle shall apply to a project under this section. Except as provided in subparagraph (B), the interest rate on a secured loan provided under this section shall be equal to the yield on United States Treasury securities of a similar maturity to the maturity of the secured loan on the date of execution of the loan agreement. In the case of a State described in clause (ii)— the interest rate on a secured loan provided under this section shall be 80 percent of the interest rate under subparagraph (A); but if there is not sufficient demand for loans under this subparagraph (as determined by the Administrator), the Administrator may provide a secured loan at an interest rate that is not less than 50 percent and not more than 80 percent of the interest rate under subparagraph (A), as determined by the Administrator with respect to each loan. A State referred to in clause

(i)is a State— that received less than 2 percent of the total amount of funds made available to States for the State loan funds for the most recent fiscal year for which data is available; or for which the President has declared a major disaster in accordance with section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5170 ) during the period beginning on January 1, 2017, and ending on the date of enactment of this section, if the secured loan is for a project related to wastewater or drinking water infrastructure damaged by the major disaster. Except as provided in clause (ii), of the total amount of funds made available to provide secured loans under this section— 50 percent shall be provided for secured loans at the interest rate described in subparagraph (A); and 50 percent shall be provided for secured loans at the interest rate described in subparagraph (B)(i) to States described in subparagraph (B)(ii). For any fiscal year, if amounts for loans described in clause (i)(II) remain available, the Administrator may reallocate the amounts to be used for loans described in clause (i)(I) to meet applicant demand. A project under this section shall comply with any applicable State environmental or engineering review requirements pursuant to, as applicable— title VI of the Federal Water Pollution Control Act ( 33 U.S.C. 1381 et seq.); section 1452 of the Safe Drinking Water Act ( 42 U.S.C. 300j–12 ); section 35.3140 of title 40, Code of Federal Regulations (or successor regulations); and section 35.3580 of title 40, Code of Federal Regulations (or successor regulations). Nothing in this section requires any additional or new environmental or engineering review for a project under this section other than any requirement otherwise applicable to the project. Notwithstanding section 5029(b)(9), financial assistance for a project under this section may be used to pay up to 100 percent of the costs of the project. Financial assistance under this section shall be used to support loans in an amount not to exceed $7,000,000,000 per State for the period of fiscal years 2019 through 2023. Not later than 180 days after the date on which the Administrator receives a complete application for a project under this section, the Administrator shall, through a written notice to the State infrastructure financing authority— approve the application; or deny the application and provide an explanation as to why the application was denied. There is authorized to be appropriated to the Administrator to carry out this section $200,000,000 for each of fiscal years 2019 through 2023, to remain available until expended. It is the sense of Congress that the amounts authorized to be appropriated to carry out this section will support, for each fiscal year— $10,000,000,000 in secured loans at the interest rate described in subsection (d)(2)(A); and $850,000,000 in secured loans at the interest rate described in subsection (d)(2)(B)(i). Of the funds made available to carry out this section, the Administrator may use for the administration of this section, including for the provision of technical assistance to aid State infrastructure financing authorities in obtaining the necessary approvals for eligible activities, not more than $5,000,000 for each of fiscal years 2019 through 2023. Of the funds made available to carry out this section, the Administrator may use for costs related to processing and reviewing applications, including underwriting, such amounts as are necessary for each of fiscal years 2019 through 2023, to remain available until expended. The funds under clause

(i)shall be used in lieu of fees collected under section 5030(b). No funds shall be made available to carry out this section if— the total amount made available for a fiscal year for the State loan funds is less than the total amount made available for those funds for fiscal year 2018; or the amount made available for a fiscal year for assistance under this subtitle (other than this section) is less than the amount made available for that assistance for fiscal year 2018. In determining the distribution of funds between the State loan funds, the Administrator shall— provide financial assistance based on need; and give equal consideration to drinking water projects and wastewater projects. Notwithstanding section 5028(b), in providing financial assistance under this section, the Administrator shall select projects based on need, as determined by the Administrator. The authority to provide assistance under this section shall terminate on September 30, 2023. . Section 5033 of the Water Infrastructure Finance and Innovation Act of 2014 ( 33 U.S.C. 3912 ) is amended by inserting (other than section 5036) after this subtitle each place it appears. Subtitle C of title V of the Water Resources Reform and Development Act of 2014 ( 33 U.S.C. 3901 et seq.) is amended by striking the subtitle designation and heading and inserting the following: . Section 5023 of the Water Infrastructure Finance and Innovation Act of 2014 ( 33 U.S.C. 3902 ) is amended by striking pilot each place it appears. Section 5034 of the Water Infrastructure Finance and Innovation Act of 2014 ( 33 U.S.C. 3913 ) is amended by striking the section designation and heading and inserting the following: . The table of contents for the Water Resources Reform and Development Act of 2014 ( Public Law 113–121 ; 128 Stat. 1195) is amended— by striking the item relating to subtitle C of title V and inserting the following: Subtitle C—Innovative Financing Projects ; by striking the item relating to section 5034 and inserting the following: Sec. 5034. Reports on program implementation. ; and by inserting after the item relating to section 5035 the following: Sec. 5036. Innovative financing for State loan funds. .

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