Sec. 4. Reclamation Infrastructure Finance and Innovation Pilot Program

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This section may be cited as the Reclamation Infrastructure Finance and Innovation Act . The Secretary of the Interior (referred to in this section as the Secretary ) shall establish and carry out a pilot program under which the Secretary shall provide to eligible entities described in section 5025 of the Water Resources Reform and Development Act of 2014 ( 33 U.S.C. 3904 ) financial assistance in accordance with this section to carry out eligible projects described in subsection (c).

A project eligible to receive assistance under the pilot program under this section is a water supply project that, as determined by the Secretary— is located in— the State of Alaska; the State of Hawaii; or a Reclamation State (as defined in section 4014 of the Water Infrastructure Improvements for the Nation Act ( 43 U.S.C. 390b note; Public Law 114–322 )); would contribute directly or indirectly (including through ground water recharge) to a safe, adequate water supply for domestic, agricultural, environmental, municipal, or industrial use; and is otherwise eligible for assistance under this section.

For projects eligible for assistance under this section and section 5028(a)(2)(B) of the Water Resources Reform and Development Act of 2014 ( 33 U.S.C. 3907(a)(2)(B) ), the Secretary may assist applicants in combining 1 or more projects into a single application in order to meet the minimum project cost of $5,000,000 required under that section. The following entities are eligible to receive assistance under this section: An entity described in section 5025 of the Water Resources Reform and Development Act of 2014 ( 33 U.S.C. 3904 ).

A conservancy district, reclamation district, or irrigation district. A canal company or mutual water company. A water users’ association. An agency established by an interstate compact. Any other individual or entity that has the capacity to contract with the United States under the reclamation laws. In selecting eligible projects to receive assistance under the pilot program under this section, the Secretary shall ensure diversity with respect to— project type; and geographical location within the States referred to in subsection (c)(1).

The following shall apply to the pilot program under this section: Sections 5022, 5024, 5027, 5028, 5029, 5030, 5031, 5032, and 5034(a) of the Water Resources Reform and Development Act of 2014 ( 33 U.S.C. 3903 , 3906, 3907, 3908, 3909, 3910, 3911), except that— any reference contained in those sections to the Secretary of the Army shall be considered to be a reference to the Secretary of the Interior; any reference contained in those sections to an eligible project shall be considered to be a reference to an eligible project described in subsection (b); paragraphs (1)(E) and (6)(B) of subsection (a), and subsection (b)(3), of section 5028 of that Act ( 33 U.S.C. 3907 ) shall not apply with respect to this section; and subsections

(e)and

(f)of section 5030 of that Act ( 33 U.S.C. 3909 ) shall not apply with respect to this section. The agreement between the Administrator of the Environmental Protection Agency and the Commissioner of Reclamation required under section 4301 of the America’s Water Infrastructure Act of 2018 ( Public Law 115–270 ). Other applicable environmental laws, including the National Environmental Policy Act of 1969 ( 42 U.S.C. 4321 et seq.). There is authorized to be appropriated to the Secretary to carry out the pilot program under this section $150,000,000 for fiscal years 2021 through 2025, to remain available until expended. Of the funds made available under paragraph (1), the Secretary may use for administrative costs of carrying out the pilot program under this section (including for the provision of technical assistance to project sponsors pursuant to paragraph

(3)and in obtaining necessary approvals and transfer to the Administrator of the Environmental Protection Agency to provide assistance in administering and servicing Federal credit instruments under the pilot program) not more than $5,000,000 for each applicable fiscal year. Subject to subparagraph (B), the Commissioner may use the funds made available under paragraph

(2)to provide assistance, including assistance to pay the costs of acquiring the rating opinion letters under section 5028(a)(1)(D) of the Water Resources Reform and Development Act of 2014 ( 33 U.S.C. 3907(a)(1)(D) ), to assist project sponsors in obtaining the necessary approval for small community projects that are eligible for assistance under section 5028(a)(2)(B) of the Water Resources Reform and Development Act of 2014 ( 33 U.S.C. 3907(a)(1)(D) ) or subsection (b)(3). Assistance provided to a project sponsor under subparagraph

(A)may not exceed an amount equal to 75 percent of the total administrative costs incurred by the project sponsor in securing financial assistance under this section. No project that receives financial assistance under this section may be financed (directly or indirectly), in whole or in part, with proceeds of any obligation the interest on which is exempt from the tax imposed under chapter 1 of the Internal Revenue Code of 1986. The following projects may be carried out using assistance made available under this section: A project for the reclamation and reuse of municipal, industrial, domestic, and agricultural wastewater, and naturally impaired ground water, which the Secretary, acting through the Commissioner of Reclamation, is authorized to undertake. Any water infrastructure project not specifically authorized by law that— the Secretary determines, through the completion of an appraisal investigation and feasibility study, would contribute to a safe, adequate water supply for domestic, agricultural, environmental, or municipal and industrial use; and is otherwise eligible for assistance under this section. A new water infrastructure facility project, including a water conduit, pipeline, canal, pumping, power, and associated facilities. A project for enhanced energy efficiency in the operation of a water system. A project for accelerated repair and replacement of all or a portion of an aging water distribution facility. A brackish or sea water desalination project. Acquisition of real property or an interest in real property for water storage, reclaimed or recycled water, or wastewater, if the acquisition is integral to a project described in subparagraphs

(A)through (F). A project to deliver water to wildlife refuges. A combination of projects, each of which is eligible under subparagraphs

(A)through (H), for which an eligible entity submits a single application. For the purposes of this section, an eligible activity with respect to an eligible project under subsection

(a)includes the cost of— development-phase activities, including planning, feasibility analysis, revenue forecasting, environmental review, permitting, transaction costs, preliminary engineering and design work, and other preconstruction activities; construction, reconstruction, rehabilitation, and replacement activities; the acquisition of real property (including water rights, land relating to the project, and improvements to land), environmental mitigation, construction contingencies, and acquisition of equipment; capitalized interest necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses, and other carrying costs during construction; refinancing interim construction funding, long-term project obligations, or a secured loan, loan guarantee, or other credit enhancement made under this section; refinancing long-term project obligations or Federal credit instruments, if that refinancing provides additional funding capacity for the completion, enhancement, or expansion of any project selected for assistance under this Act; reimbursement or success payments to any public or private entity that achieves predetermined outcomes on a pay-for-performance or pay-for-success basis; and grants, loans, or credit enhancement for community development financial institutions, green banks, and other financial intermediaries providing ongoing finance for projects that meet the purposes of this section.

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