Sec. 7. Grants to coastal States for establishment of revolving funds
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The Secretary, acting through the Administrator, shall award capitalization grants to each coastal State for the purpose of establishing a community resilience revolving fund under subsection
(b)to carry out the activities described in paragraph
(3)of that subsection. The Administrator shall pay to the coastal State the amount of each grant to be made to the coastal State under paragraph
(1)in quarterly installments. To receive a capitalization grant under paragraph (1), a coastal State shall enter into an agreement with the Administrator that— the coastal State will accept grant payments with funds to be made available under paragraph
(1)and will deposit all such payments in the community resilience revolving fund established by the coastal State under subsection (b); the coastal State will deposit in the fund from State moneys an amount equal to at least 20 percent of the total amount of all capitalization grants which will be made to the coastal State with funds to be made available under this section on or before the date on which each quarterly grant payment will be made to the coastal State under this paragraph
(2)of this subsection; the coastal State will enter into binding commitments to provide assistance in accordance with the requirements of this section in an amount equal to 120 percent of the amount of each such grant payment not later than 1 year after the date of receipt of such grant payment; all funds in the community resilience revolving fund established by the coastal State will be expended in an expeditious and timely manner; in addition to complying with the requirements of this section, the coastal State will commit or expend each quarterly grant payment which it will receive under this subsection in accordance with laws and procedures applicable to the commitment or expenditure of revenues of the coastal State; the coastal State will use accounting, audit, and fiscal procedures conforming to generally accepted government accounting standards; the coastal State will require as a condition of making a loan or providing other assistance from the community resilience revolving fund established by the coastal State that the recipient of such assistance will maintain project accounts in accordance with generally accepted government accounting standards, including standards relating to the reporting of infrastructure assets; the coastal State will make annual reports to the Administrator on the actual use of funds; the coastal State will establish, maintain, invest, and credit the community resilience revolving fund established by the coastal State with repayments, such that the fund balance will be available in perpetuity for activities under this section; any fees charged by the coastal State to recipients of assistance that are considered program income will be used for the purpose of financing the cost of administering the community resilience revolving fund established by the coastal State or financing projects or activities eligible for assistance from the community resilience revolving fund; the coastal State will require as a condition of providing assistance to a municipality or intermunicipal, interstate, or State agency that the recipient of such assistance certify, in a manner determined by the Governor of the coastal State, that the recipient has studied and evaluated the sustainability of the processes, materials, techniques, and technologies for carrying out the proposed project or activity for which assistance is sought under this section; and a contract to be carried out using funds directly made available by a capitalization grant under this section for program management, construction management, feasibility studies, preliminary engineering, design, engineering, surveying, mapping, or architectural related services shall be negotiated in the same manner as a contract for architectural and engineering services is negotiated under chapter 11 of title 40, United States Code, or an equivalent State qualifications-based requirement (as determined by the Governor of the coastal State). Before a coastal State may receive a capitalization grant with funds made available under subsection (a)(1), the coastal State shall first establish a community resilience revolving fund which complies with the requirements of this section. Each coastal State community resilience revolving fund shall be administered by an instrumentality of the coastal State with such powers and limitations as may be required to operate such fund in accordance with the requirements and objectives of this section. The amounts of funds available to each coastal State community resilience revolving fund shall be used only for providing financial assistance to any municipality or intermunicipal, interstate, or State agency— for the completion of a vulnerability assessment; for the protection of natural flood risk mitigation features, including land acquisition from willing sellers; for the construction of natural features or nature-based features, including beach nourishment and dune restoration; for the implementation of a regional sediment management program; for the development and implementation of a shoreline conservation and management plan; for the restoration, repair, or replacement of wetlands and living shorelines; for other measures to prevent, manage, mitigate, or adapt to shoreline erosion, saltwater intrusion, nuisance flooding, sea level rise, and other coastal hazards related to climate change; to carry out nonstructural measures to mitigate flood risk; and to plan, develop, and obtain financing for eligible projects under this subsection, including planning, design, and associated preconstruction activities. Except as otherwise limited by State law, a community resilience revolving fund of a coastal State under this section may be used only— to make loans, on the condition that— such loans are made at or below market interest rates, including interest free loans, at terms not to exceed the lesser of 30 years and the projected useful life (as determined by the coastal State) of the project to be financed with the proceeds of the loan; annual principal and interest payments will commence not later than 1 year after the date of completion of any project and all loans will be fully amortized upon the expiration of the term of the loan; the recipient of a loan will establish a dedicated source of revenue for repayment of loans; and the fund will be credited with all payments of principal and interest on all loans; to buy or refinance the debt obligation of municipalities and intermunicipal and interstate agencies within the coastal State at or below market rates, where such debt obligations were incurred after January 1, 2013; to guarantee, or purchase insurance for, local obligations where such action would improve credit market access or reduce interest rates; as a source of revenue or security for the payment of principal and interest on revenue or general obligation bonds issued by the coastal State if the proceeds of the sale of such bonds will be deposited in the community resilience revolving fund; to provide loan guarantees for similar revolving funds established by municipalities or intermunicipal agencies; to earn interest on community resilience revolving fund accounts; and for the reasonable costs of administering the community resilience revolving fund and conducting activities under this section, except that such amounts shall not exceed 3 percent of all grant awards to such fund under this section, plus the amount of any fees collected by the coastal State for such purpose regardless of the source. In any case in which a coastal State provides assistance to a municipality or an intermunicipal, interstate, or State agency, the coastal State may provide additional subsidization, including forgiveness of principal and negative interest loans— to benefit a municipality or intermunicipal agency that— meets the affordability criteria of the coastal State established under subparagraph (B); or does not meet the affordability criteria of the coastal State if the recipient— seeks additional subsidization to benefit individual ratepayers in the residential user rate class; demonstrates to the coastal State that such ratepayers will experience a significant hardship from the increase in rates necessary to finance the project or activity for which assistance is sought; and ensures, as part of an assistance agreement between the coastal State and the recipient, that the additional subsidization provided under this paragraph is directed through a user charge rate system (or other appropriate method) to such ratepayers; or to implement a process, material, technique, or technology— to address resilience goals; or to encourage sustainable project planning, design, and construction. Not later than January 1, 2020, and after providing notice and an opportunity for public comment, a coastal State shall establish affordability criteria to assist in identifying municipalities that would experience a significant hardship raising the revenue necessary to finance a project or activity eligible for assistance under paragraph
(3)if additional subsidization is not provided. The criteria under clause
(i)shall be based on income and unemployment data, population trends, and other data determined relevant by the coastal State, including whether the project or activity is to be carried out in an economically distressed area, as described in section 301 of the Public Works and Economic Development Act of 1965 ( 42 U.S.C. 3161 ). A coastal State may provide additional subsidization in a fiscal year under this paragraph only if the total amount appropriated for making capitalization grants to all coastal States under this section for the fiscal year exceeds $500,000,000. Except as provided in clause (iii), a coastal State may use not more than 30 percent of the total amount received by the coastal State in capitalization grants under subsection
(b)for a fiscal year for providing additional subsidization under this paragraph. If, in a fiscal year, the amount appropriated for making capitalization grants to all coastal States under this section exceeds $500,000,000 by a percentage that is less than 30 percent, clause
(ii)shall be applied by substituting that percentage for 30 percent. If the Administrator determines that a coastal State has not complied with its agreement with the Administrator under subsection (a)(3) or any other requirement of this section, the Administrator shall notify the coastal State of such noncompliance and the necessary corrective action. If a coastal State does not take corrective action within 60 days after the date the coastal State receives notification of such action under paragraph (1), the Administrator shall withhold additional payments to the coastal State until the Administrator is satisfied that the coastal State has taken the necessary corrective action. If the Administrator is not satisfied that adequate corrective actions have been taken by the coastal State not later than 12 months after the coastal State is notified of such actions under paragraph (1), the payments withheld from the coastal State by the Administrator under paragraph
(2)shall be made available for reallotment in accordance with the most recent formula for allotment of funds under this section. Each coastal State electing to establish a community resilience revolving fund under this section shall establish fiscal controls and accounting procedures sufficient to assure proper accounting during appropriate accounting periods for— payments received by the fund; disbursements made by the fund; and fund balances at the beginning and end of the accounting period. Not less frequently than once each year, the Administrator shall conduct or require each coastal State to have independently conducted reviews and audits as may be deemed necessary or appropriate by the Administrator to carry out the objectives of this section. Audits of the use of funds deposited in the community resilience revolving fund established by such coastal State shall be conducted in accordance with the auditing procedures of the Government Accountability Office, including chapter 75 of title 31, United States Code. After providing for public comment and review, each coastal State shall annually prepare a plan identifying the intended uses of the amounts available to its community resilience revolving fund. Such intended use plan shall include— a list of those projects for construction; a description of the short- and long-term goals and objectives of its community resilience revolving fund; information on the activities to be supported, terms of financial assistance, and communities served; and the criteria and method established for the distribution of funds. Beginning the first fiscal year after the receipt of payments under this section and each fiscal year thereafter, each coastal State shall provide a report to the Administrator describing how the coastal State has met the goals and objectives for the previous fiscal year as identified in the plan prepared for the previous fiscal year pursuant to subsection (f). Not less frequently than once each year, the Administrator shall conduct an oversight review of each coastal State plan prepared under subsection (f), each coastal State report prepared under subsection (g), and other such materials as are considered necessary and appropriate in carrying out the purposes of this section. After reasonable notice by the Administrator to the coastal State or the recipient of a loan from a community resilience revolving fund, the coastal State or loan recipient shall make available to the Administrator such records as the Administrator reasonably requires to review and determine compliance with this section.
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Sec. 7
Grants to coastal States for establishment of revolving funds
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