‘‘(ii) EXCEPTIONS.—A State shall not 
impose a penalty under clause (i) on an eli-
gible recipient that receives a preloan for 
an eligible project, if the State determines 
that the eligible recipient did not comply 
with the 3-year deadline established by 
clause (i) due to— 
‘‘(I) a delay in environmental re-
views conducted by a Federal or State 
agency; or 
‘‘(II) insufficient funds in the 
State’s water pollution control revolv-
ing fund established under this title 
for the State to make a primary loan 
for the project. 
‘‘(7) DEFINITIONS.—In this subsection, the fol-
lowing definitions apply: 
‘‘(A) ELIGIBLE PROJECT.—The term ‘eligi-
ble project’ means a project eligible for assist-
ance under section 603(c)(1) for construction of 
a public owned treatment works that will regu-
larly serve 50,000 or fewer persons. 
‘‘(B) ELIGIBLE RECIPIENT.—The term ‘el-
igible recipient’ means a municipality or inter-
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municipal, interstate, or State agency seeking 
assistance for an eligible project. 
‘‘(C) 
PRELOAN.—The 
term 
‘preloan’ 
means financial assistance provided by a State 
from the State’s water pollution control revolv-
ing loan fund established under this title for an 
eligible project before approval of a primary 
loan for the project. 
‘‘(D) PRIMARY LOAN.—The term ‘primary 
loan’ means a loan made by a State from the 
State’s water pollution control revolving loan 
fund under this title for an eligible project after 
a preloan is made for that project. 
‘‘(c) ADDITIONAL ASSISTANCE FOR DISADVANTAGED 
COMMUNITIES.— 
‘‘(1) CRITERIA
FOR
DESIGNATION
OF
DIS-
ADVANTAGED
COMMUNITIES.—The Governor of a 
State, after providing an opportunity for public re-
view and comment, may establish criteria to des-
ignate disadvantaged communities that— 
‘‘(A) have a population of 50,000 persons 
or fewer; and 
‘‘(B) would experience a significant hard-
ship raising the revenue necessary to finance a 
project eligible for assistance under section 
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603(c)(1) if assistance is not provided under 
this subsection. 
‘‘(2) ADDITIONAL ASSISTANCE.— 
‘‘(A) IN GENERAL.—In any case in which 
a State provides loan assistance to a munici-
pality or intermunicipal, interstate, or State 
agency for a project under section 603(d), the 
State may provide additional assistance in con-
nection with the loan if the project is to benefit 
a disadvantaged community identified by the 
State using the criteria developed under para-
graph (1). 
‘‘(B) TYPES
OF
ADDITIONAL
ASSIST-
ANCE.—Additional assistance under subpara-
graph (A) shall consist of— 
‘‘(i) forgiveness of all or a portion of 
the principal of the loan; 
‘‘(ii) not requiring or reducing interest 
to be paid in connection with the loan; 
‘‘(iii) extending the loan repayment 
period to not to exceed 30 years; or 
‘‘(iv) any combination thereof.’’. 
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SEC. 3. APPLICATION PROCESS REFORM. 
(a) IN GENERAL.—Not later than 3 years after the 
date of enactment of this Act, the Administrator of the 
Environmental Protection Agency shall— 
(1) consult with States, utilities, nonprofit orga-
nizations, and other Federal agencies providing fi-
nance assistance to identify ways to expedite and im-
prove the application and review process for obtain-
ing financing from a State water pollution control 
revolving loan fund under title VI of the Federal 
Water Pollution Control Act (33 U.S.C. 1381 et 
seq.); and 
(2) take such administrative actions as the Ad-
ministrator determines appropriate to expedite and 
improve the process. 
(b) REPORT TO CONGRESS.—Not later than 3 years 
after the date of enactment of this Act, the Administrator 
shall submit to Congress a report that contains rec-
ommendations to further expedite and improve the appli-
cation and review process referred to in subsection (a)(1), 
including recommendations for any legislative actions that 
may be needed. 
Æ 
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