Sec. 302. Reclamation infrastructure finance and innovation pilot program

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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 subsection

(c)financial assistance in accordance with this section to carry out eligible projects described in subsection (b). A project eligible to receive assistance under the pilot program under this section is a water supply project described in paragraph

(2)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 groundwater recharge) to a safe, adequate water supply for domestic, agricultural, environmental, municipal, or industrial use; complies with all applicable State and Federal laws; would provide net ecosystem benefits in excess of required environmental mitigation measures or compliance obligations pursuant to State and Federal law, as described in paragraph (6); uses natural infrastructure and nature-based solutions where practicable; is economically feasible; and is otherwise eligible for assistance under this section. A water supply project referred to in paragraph

(1)is— 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, municipal, or 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 any associated facility; 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 or conveyance facility; a brackish desalination project; a project for the 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 stormwater capture project; or a combination of projects, each of which is eligible under subparagraphs

(A)through (I), for which an eligible entity submits a single application. An eligible project cost that is eligible for assistance under this section— shall be limited to a nonreimbursable cost for elements of a project that would achieve public benefits under the reclamation laws; and 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 eligible 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 eligible project selected for assistance under this section; 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 eligible projects that meet the purposes of 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 one or more projects into a single application in order to meet the minimum project cost of $5,000,000 required under that section. The Federal share of the eligible costs of a water supply project under this section shall be not more than 25 percent. A water supply project that receives assistance under this section may use not more than 5 percent of amounts made available under this section to carry out activities to demonstrate progress toward the goals of the water supply project. Using the best available scientific information and data, the Director of the United States Fish and Wildlife Service shall prepare a draft report that evaluates the ecosystem impacts and benefits of each proposed water supply project being considered for financial assistance under this section. A draft report required under clause

(i)shall be prepared in coordination with the head of the State agency with jurisdiction over the fish and wildlife resources of the State in which the water supply project is proposed to be carried out. A draft report prepared under clause

(i)shall— meet the requirements of section 2(b) of the Fish and Wildlife Coordination Act ( 16 U.S.C. 662(b) ); quantify and estimate the ecosystem benefits and adverse impacts to native fish and wildlife from the proposed water supply project; and evaluate whether the ecosystem benefits of the proposed water supply project are likely to exceed the ecosystem impacts of the proposed water supply project. The Director of the United States Fish and Wildlife Service shall ensure that a draft report prepared under clause

(i)is— reviewed by independent scientists; and made available for a public review and comment period of not less than 30 days. The Director of the United States Fish and Wildlife Service shall prepare a final report based on the applicable draft report prepared under subparagraph (A)(i), after considering the results of the independent scientific peer review and public comment processes under subparagraph (A)(iv). A final report prepared under clause

(i)shall be— transmitted to— the project applicant; the relevant State agency; and relevant congressional committees; and made available to the public. If a final report prepared under clause

(i)determines that the water supply project provides net ecosystem benefits, the proposed water supply project shall be eligible for financial assistance under this section. If a final report determines that the proposed water supply project fails to provide a net ecosystem improvement, the final report may identify potential recommendations to reduce adverse environmental impacts and improve environmental benefits of the proposed water supply project. A final report prepared under clause

(i)shall be considered to be a final agency action for purposes of section 704 of title 5, United States Code. A final report prepared under clause

(i)shall be subject to review in the Federal district court of the State in which the project is proposed to be constructed if a petition for review is filed with the court not later than 180 days after the date on which the final report is transmitted under clause (ii). 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 (b)(1)(A). In selecting eligible projects to receive assistance under this section, the Secretary shall prioritize projects that— would benefit— low-income communities; or communities particularly at-risk to climate change; and environmentally at-risk communities; to the maximum extent practicable, incorporate green and natural infrastructure components; and achieve multiple public benefits. The following provisions of law 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. 3901 , 3903, 3906, 3907, 3908, 3909, 3910, 3911, and 3913(a)), except that— any reference contained in those sections to the Secretary of the Army shall be considered to be a reference to the Secretary; 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 each of fiscal years 2020 through 2024, 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), to obtain any necessary approval, and for 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 paragraph (1)(D) of section 5028(a) of the Water Resources Reform and Development Act of 2014 ( 33 U.S.C. 3907(a) ), to assist project sponsors in obtaining the necessary approvals for small community projects that are eligible for assistance under paragraph (2)(B) of that section 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 eligible project that receives 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. Nothing in this section affects the authority of a State or a political subdivision of a State to apply and enforce any environmental laws (including regulations) with respect to an eligible project provided assistance under this section.

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