[Federal Register Volume 88, Number 184 (Monday, September 25, 2023)]
[Notices]
[Pages 65668-65671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-19687]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL 11257-01-OW]


Notice of Funding Availability for Credit Assistance Under the 
State Infrastructure Financing Authority Water Infrastructure Finance 
and Innovation Act Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of funding availability.

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SUMMARY: The purpose of this notice of funding availability (NOFA) is 
to solicit letters of interest (LOIs) from prospective state 
infrastructure financing authority borrowers seeking credit assistance 
from the U.S. Environmental Protection Agency (EPA) under the State 
Infrastructure Financing Authority Water Infrastructure Finance and 
Innovation Act (SWIFIA) program. EPA estimates that it may lend 
approximately $1 billion to help finance approximately $2 billion in 
water infrastructure investment.

DATES: LOIs submitted after October 25, 2023 will be reviewed using the 
scoring criteria outlined in this NOFA.

ADDRESSES: Prospective borrowers should submit all LOIs electronically 
via EPA's SharePoint site. To be granted access to the SharePoint site, 
prospective borrowers should contact <a href="/cdn-cgi/l/email-protection#2f584649464e6f4a5f4e01484059"><span class="__cf_email__" data-cfemail="abdcc2cdc2caebcedbca85ccc4dd">[email protected]</span></a> and request a link 
to the SharePoint site, where they can securely upload their LOIs and 
then email <a href="/cdn-cgi/l/email-protection#0c7b656a656d4c697c6d226b637a"><span class="__cf_email__" data-cfemail="2c5b454a454d6c495c4d024b435a">[email protected]</span></a> once the complete LOI package has been 
uploaded to the SharePoint site.
    EPA will notify prospective borrowers that their LOI has been 
received via a confirmation email.
    Prospective borrowers can access additional information, including 
the WIFIA program handbook and application materials, on the WIFIA 
website: https://www.epa.gov/wifia.

FOR FURTHER INFORMATION CONTACT: Dallas Shattuck, Office of Water, 
Environmental Protection Agency; telephone number: (202) 564-0972; or 
email: <a href="/cdn-cgi/l/email-protection#d7a4bfb6a3a3a2b4bcf9b3b6bbbbb6a497b2a7b6f9b0b8a1"><span class="__cf_email__" data-cfemail="cdbea5acb9b9b8aea6e3a9aca1a1acbe8da8bdace3aaa2bb">[email protected]</span></a> (preferred).

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background
II. Program Funding
III. Eligibility Requirements
IV. Budgetary Scoring Determination for Non-Federal Projects
V. Types and Amount of Credit Assistance
VI. Letters of Interest and Applications
VII. Fees
VIII. Selection Criteria
IX. Federal Requirements

I. Background

    Congress enacted WIFIA as part of the Water Resources Reform and 
Development Act of 2014 (WRRDA). Codified at 33 U.S.C. 3901-3915, WIFIA 
authorizes a Federal credit program for water infrastructure projects 
to be administered by EPA. WIFIA authorizes EPA to provide Federal 
credit assistance in the form of secured (direct) loans or loan 
guarantees for eligible water infrastructure projects.
    Congress amended WIFIA in America's Water Infrastructure Act of 
2018 (AWIA) to authorize Federal credit assistance exclusively for 
state

[[Page 65669]]

infrastructure financing authority borrowers.
    The WIFIA program's mission is to accelerate investment in our 
nation's water, wastewater, and stormwater infrastructure by providing 
long-term, low-cost, supplemental credit assistance under customized 
terms to creditworthy water infrastructure projects of national and 
regional significance. Additionally, the WIFIA program is implementing 
five key Administration priorities in this 2023 NOFA:

A. Increasing Investment in Economically Stressed Communities

    EPA encourages the submission of projects that address the ever-
increasing needs of economically stressed and disadvantaged communities 
to ensure they benefit from investments in water infrastructure, and 
therefore improve the public health and livability of these 
communities.

B. Making Rapid Progress on Lead Service Line Replacement

    Many drinking water systems still have lead service lines. EPA 
encourages the submission of drinking water infrastructure projects 
that will help make rapid progress on replacing lead service lines to 
reduce exposure to lead and improve public health. There is no safe 
level of lead in drinking water. Full lead service line replacement can 
be an effective method to reduce drinking water lead levels. Because of 
this, WIFIA-funded projects involving lead service line replacement 
should include a plan, strategy, and/or approach to comply with EPA 
policy on lead service line replacement.

C. Addressing PFAS and Emerging Contaminants

    EPA encourages the submission of projects that focus on reducing 
exposure to perfluoroalkyl and polyfluoroalkyl substances (PFAS) and 
other emerging contaminants through drinking water and/or projects that 
help address discharges of emerging contaminants from wastewater and/or 
stormwater systems.

D. Mitigating the Impacts of Drought

    EPA supports long-term strategies to conserve water, promote water 
efficiency and reuse, and protect and diversify communities' sources of 
water. Taken together, these efforts can help communities address water 
quantity concerns and reduce their reliance on single sources for 
drinking water. Due to the WIFIA program's broad range of eligible 
projects, EPA can finance projects such as aquifer storage and 
recovery, water reuse, green infrastructure, stormwater diversion and 
storage, water loss audits, meter replacement, groundwater 
replenishment, and nature-based solutions.

E. Supporting One Water Innovation and Resilience

    One of the defining features of WIFIA is the broad range of 
eligible projects that EPA can fund to flexibly support priority needs. 
EPA encourages borrowers to submit applications for water 
infrastructure projects that are new and innovative in regards to 
energy efficiency, addressing drought, or reducing water pollution and 
contaminants. In addition, EPA encourages the submission of water 
infrastructure projects that are more resilient to all threats--whether 
it is natural disasters, climate change, or threats such as 
bioterrorism and cyber-attacks.

II. Program Funding

A. WIFIA Program Appropriation

    Congress appropriated $5 million in funding to cover the subsidy 
cost of providing SWIFIA credit assistance. The subsidy cost covers the 
Federal government's risk that the loan may not be paid back. EPA 
anticipates that the average subsidy cost for SWIFIA-funded projects 
will be relatively low; therefore, this funding can be leveraged into a 
much larger amount of credit assistance. EPA estimates that this 
appropriation will allow it to provide approximately $1 billion \1\ in 
long-term, low-cost financing to water infrastructure projects and 
accelerate approximately $2 billion in infrastructure investment around 
the country.
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    \1\ This estimated loan volume is provided for reference only. 
Consistent with the Federal Credit Reform Act of 1990 and the 
requirements of the Office of Management and Budget, the actual 
subsidy cost of providing credit assistance is based on individual 
project characteristics and calculated on a project-by-project 
basis. Thus, actual lending capacity may vary.
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B. Funding Availability Period

    LOIs may be submitted by prospective borrowers and will be received 
by EPA on a rolling basis. LOIs shall be submitted using the SWIFIA LOI 
form found at https://www.epa.gov/wifia. Under the rolling process, 
LOIs will continually be reviewed and selected based on available 
funds. LOIs received after October 25, 2023 will be evaluated as 
described in section VIII of this document. The publication of this 
NOFA does not impact LOIs previously submitted to EPA, which continue 
to be reviewed based on the applicable requirements at the time of 
submission. Any funding authority not obligated in the fiscal year for 
which it is authorized remains available for obligation in subsequent 
years.
    LOIs submitted after October 25, 2023 will be reviewed using the 
scoring criteria outlined in this NOFA. This NOFA provides guidance on 
all SWIFIA funding authority available including funding from previous 
years.

III. Eligibility Requirements

    The WIFIA statute and implementing rules set forth eligibility 
requirements for prospective borrowers, projects, and project costs. 
The requirements outlined below are described in greater detail in the 
WIFIA program handbook.

A. Eligible Applicants

    Prospective borrowers must be a state infrastructure financing 
authority to be eligible for SWIFIA credit assistance. EPA defines 
state infrastructure financing authority as the state entity 
established or designated by the Governor of a state to receive a 
capitalization grant provided by, or otherwise carry out the 
requirements of, title VI of the Federal Water Pollution Control Act 
(33 U.S.C. 1381 et. seq.) or section 1452 of the Safe Drinking Water 
Act (42 U.S.C. 300j-12).

B. Eligible Projects

    To be eligible for SWIFIA credit assistance, the SWIFIA project 
must be a combination of projects, each of which is eligible for 
assistance under section 603(c) of the Federal Water Pollution Control 
Act (33 U.S.C. 1383(c)) or section 1452(a)(2) of the Safe Drinking 
Water Act (42 U.S.C. 300j-12(a)(2)), for which a state infrastructure 
financing authority submits to the Administrator a single application.

C. Eligible Costs

    As defined under 33 U.S.C. 3906 and described in the WIFIA program 
handbook, eligible project costs are costs for the SWIFIA project 
associated with the following activities:
    (i) Development-phase activities, including planning, feasibility 
analysis (including any related analysis necessary to carry out an 
eligible project), revenue forecasting, environmental review, 
permitting, preliminary engineering and design work, and other 
preconstruction activities;
    (ii) Construction, reconstruction, rehabilitation, and replacement 
activities;
    (iii) The acquisition of real property or an interest in real 
property (including water rights, land relating to the project, and 
improvements to land),

[[Page 65670]]

environmental mitigation (including acquisitions pursuant to 33 U.S.C. 
3905(8)), construction contingencies, and acquisition of equipment; and
    (iv) Capitalized interest necessary to meet market requirements, 
reasonably required reserve funds, capital issuance expenses, and other 
carrying costs during construction. Capitalized interest on WIFIA 
credit assistance may not be included as an eligible project cost.

IV. Budgetary Scoring Determination for Non-Federal Projects

    To comply with Public Law 116-260, a project selected for WIFIA 
financing using funding appropriated in FY2023 will be assessed using 
two initial screening questions and sixteen scoring factors. These 
questions will help the Office of Management and Budget (OMB) determine 
compliance with budgetary scoring rules, a process that will be 
conducted in parallel to EPA's LOI evaluation process outlined in this 
NOFA. The questions may be found in the Federal Register publication: 
Water Infrastructure Finance and Innovation Act Program (WIFIA) 
Criteria Pursuant to the Further Consolidated Appropriations Act, 2020 
(85 FR 39189, June 30, 2020). These questions are also published in the 
WIFIA program handbook and further information about the scoring 
process may be referenced therein. EPA encourages project applicants to 
review the scoring criteria and provide sufficient information in the 
LOI or as an attachment to the LOI to facilitate EPA and OMB review of 
the prospective project considering the scoring criteria.

V. Types and Amount of Credit Assistance

    Under SWIFIA, EPA is offering senior loans, on parity with a state 
infrastructure financing authority's other senior capital market debt 
of the same credit quality, to help the state infrastructure financing 
authority lend to multiple projects throughout the state.

A. Minimum Project Costs

    A SWIFIA project must have eligible project costs that are 
reasonably anticipated to equal or exceed $20 million.

B. Maximum Amount of SWIFIA Credit Assistance

    The maximum amount of SWIFIA credit assistance to a state 
infrastructure financing authority is 49 percent of estimated eligible 
total costs of the eligible projects that are included in the SWIFIA 
project.

C. SWIFIA Loan Structures

    Prospective SWIFIA borrowers may request one the following loan 
structures:
    (i) EPA accepts the state infrastructure financing authority's 
existing capital market debt indenture (to the extent the terms are 
permissible under Federal law and regulation and WIFIA program 
policies); or
    (ii) The state infrastructure financing authority accepts EPA's 
standard terms. More information on EPA's standard terms is available 
at www.epa.gov/wifia.

VI. Letters of Interest and Applications

    Each prospective borrower will be required to submit an LOI and, if 
invited, an application to EPA to be considered for approval. This 
section describes the LOI submission and application submission.

A. Letter of Interest (LOI)

    Prospective borrowers seeking a SWIFIA loan must submit an LOI 
describing the SWIFIA project fundamentals and addressing the SWIFIA 
selection criteria.
    The primary purpose of the LOI is to provide adequate information 
to EPA to validate the eligibility and creditworthiness of the 
prospective borrower and the prospective SWIFIA project and determine 
the extent to which the SWIFIA project meets the statutory selection 
criteria. Based on its review of the information provided in the LOI, 
EPA will invite prospective borrowers to submit applications for their 
projects. Prospective borrowers are encouraged to review the WIFIA 
program handbook to help create the best justification possible for the 
project and a cohesive and comprehensive LOI submittal.
    Prospective borrowers should utilize the LOI form on the WIFIA 
website and ensure that sufficient detail about the project is provided 
for EPA's review. EPA will notify a prospective borrower if its SWIFIA 
project is deemed ineligible as described in section IV of this 
document.
    Below is guidance on what EPA recommends be included in the LOI.
    1. Loan Information: The prospective borrower provides information 
about its legal name, business address, program website, employer/
taxpayer identification number, Unique Entity ID from SAM.gov, 
requested SWIFIA loan amount and SWIFIA project cost amount, type of 
SRF loans (clean water, drinking water, or both), and requested loan 
structure.
    2. Supporting Documents: The prospective borrower provides the most 
recent version of the following documents: Intended Use Plan (IUP), SRF 
Operating Agreements with EPA Regional Office, documentation of the 
priority setting system, and bond indenture (if applicable).
    3. Contact Information: The prospective borrower identifies the 
points of contact with whom the WIFIA program should communicate 
regarding the LOI. To complete EPA's evaluation, the WIFIA program 
staff may contact a prospective borrower regarding specific information 
in the LOI.
    4. Certifications. The prospective borrower certifies that it will 
abide by all applicable laws and regulations, if selected to receive 
funding.

B. Application

    After EPA concludes its evaluation of a complete LOI package, a 
selection committee will invite the prospective borrower to apply based 
on satisfaction of the eligibility requirements. So long as budget 
authority remains available, EPA expects that all eligible state 
infrastructure financing authority prospective borrowers will be 
invited to apply for a SWIFIA loan.
    An invitation to apply for WIFIA credit assistance does not 
guarantee EPA's approval, which remains subject to a project's 
continued eligibility, including creditworthiness, the successful 
negotiation of terms acceptable to EPA, and the availability of funds 
at the time at which all necessary recommendations and evaluations have 
been completed. However, the purpose of EPA's LOI review is to pre-
screen prospective borrowers to the extent practicable. It is expected 
that EPA will only invite prospective borrowers to apply if it 
anticipates that those prospective borrowers are able to obtain WIFIA 
credit assistance. Detailed information needs for the application are 
listed in the application form and described in the WIFIA program 
handbook.

VII. Fees

    There is no fee to submit an LOI. For information about application 
and post-closing costs, please refer to the WIFIA fee rule, Fees for 
Water Infrastructure Project Applications under WIFIA, 40 CFR 35.10080.

VIII. Selection Criteria

    This section specifies the criteria and process that EPA will use 
to evaluate LOIs and award applications for SWIFIA assistance.
    The selection criteria described are the statutory selection 
criteria for state infrastructure financing authority borrowers. 
Following its eligibility

[[Page 65671]]

determination, EPA will determine the extent to which the SWIFIA 
project meets the statutory selection criteria. They are as follows:
    (i) The extent to which the project financing plan includes public 
or private financing in addition to assistance under [WIFIA]. 33 U.S.C. 
3907(b)(2)(B); 40 CFR 35.10055(a)(10).
    (ii) The likelihood that assistance under [WIFIA] would enable the 
project to proceed at an earlier date than the project would otherwise 
be able to proceed. 33 U.S.C. 3907(b)(2)(C); 40 CFR 35.10055(a)(2).
    (iii) The extent to which the project uses new or innovative 
approaches. 33 U.S.C. 3907(b)(2)(D); 40 CFR 35.10055(a)(3).
    (iv) The amount of budget authority required to fund the Federal 
credit instrument made available under [WIFIA]. 33 U.S.C. 
3907(b)(2)(E).
    (v) The extent to which the project: (1) protects against extreme 
weather events, such as floods or hurricanes; or (2) helps maintain or 
protect the environment. 33 U.S.C. 3907(b)(2)(F); 40 CFR 
35.10055(a)(4); 40 CFR 35.10055(a)(5).
    (vi) The extent to which the project serves regions with 
significant energy exploration, development, or production areas. 33 
U.S.C. 3907(b)(2)(G); 40 CFR 35.10055(a)(6).
    (vii) The extent to which a project serves regions with significant 
water resource challenges, including the need to address: (1) water 
quality concerns in areas of regional, national, or international 
significance; (2) water quantity concerns related to groundwater, 
surface water, or other water sources; (3) significant flood risk; (4) 
water resource challenges identified in existing regional, state, or 
multistate agreements; or (5) water resources with exceptional 
recreational value or ecological importance. 33 U.S.C. 3907(b)(2)(H); 
40 CFR 35.10055(a)(7).
    (viii) The extent to which the project addresses identified 
municipal, state, or regional priorities. 33 U.S.C. 3907(b)(2)(I); 40 
CFR 35.10055(a)(8).
    (ix) The readiness of the project to proceed toward development, 
including a demonstration by the obligor that there is a reasonable 
expectation that the contracting process for construction of the 
project can commence by not later than 90 days after the date on which 
a Federal credit instrument is obligated for the project under [WIFIA]. 
33 U.S.C. 3907(b)(2)(J); 40 CFR 35.10055(a)(9).
    (x) The extent to which assistance under [WIFIA] reduces the 
contribution of Federal assistance to the project. 33 U.S.C. 
3907(b)(2)(K); 40 CFR 35.10055(a)(11).

IX. Federal Requirements

    All projects receiving WIFIA assistance must comply with the 
applicable Federal requirements. Compliance with Federal requirements 
is not required for submitting a letter of interest, being invited to 
apply for a WIFIA loan, or submitting an application. The WIFIA program 
will review selected projects for compliance with Federal requirements 
once they have submitted an application. Additional information about 
Federal compliance requirements is available in the WIFIA program 
handbook and at https://www.epa.gov/wifia/wifia-federal-compliance-requirements.
    Authority: 33 U.S.C.3901-3915; 40 CFR part 35.

Michael S. Regan,
Administrator.
[FR Doc. 2023-19687 Filed 9-22-23; 8:45 am]
BILLING CODE 6560-50-P


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