I 
115TH CONGRESS 
1ST SESSION 
H. R. 434 
To authorize a pilot project for an innovative water project financing program, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 11, 2017 
Mr. DENHAM (for himself, Mr. LAMALFA, Mr. NEWHOUSE, Mr. CALVERT, 
Mr. COSTA, and Mr. GARAMENDI) introduced the following bill; which 
was referred to the Committee on Natural Resources 
A BILL 
To authorize a pilot project for an innovative water project 
financing program, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘New Water Available To Every Reclamation State Act’’ 
or the ‘‘New WATER Act’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Purposes. 
Sec. 3. Authority to provide assistance. 
Sec. 4. Applications. 
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Sec. 5. Eligibility for assistance. 
Sec. 6. Selection criteria. 
Sec. 7. Federal requirements. 
Sec. 8. Secured loans. 
Sec. 9. Program administration. 
Sec. 10. State, tribal, and local permits. 
Sec. 11. Regulations. 
Sec. 12. Funding. 
Sec. 13. Report to Congress on pilot project implementation. 
Sec. 14. Definitions. 
SEC. 2. PURPOSES. 
The purposes of this Act are— 
(1) to promote increased development of critical 
water resources infrastructure by establishing addi-
tional opportunities for financing water resources 
projects; 
(2) to attract new investment capital to infra-
structure projects that are capable of generating rev-
enue streams through user fees or other dedicated 
funding sources; and 
(3) to leverage private investment in water re-
sources infrastructure. 
SEC. 3. AUTHORITY TO PROVIDE ASSISTANCE. 
(a) IN GENERAL.—For 15 years after the date of the 
enactment of this Act, the Secretary may provide financial 
assistance under this Act to carry eligible projects with-
in— 
(1) any Reclamation State; 
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(2) any other State in which the Bureau of 
Reclamation is authorized to provide project assist-
ance; and 
(3) the States of Alaska and Hawaii. 
(b) SELECTION.—In selecting projects to receive fi-
nancial assistance under subsection (a), the Secretary 
shall ensure diversity with respect to— 
(1) project types; and 
(2) geographical locations. 
SEC. 4. APPLICATIONS. 
To be eligible to receive assistance under this Act, 
an eligible entity shall submit to the Secretary an applica-
tion at such time, in such manner, and containing such 
information as the Secretary may require. 
SEC. 5. ELIGIBILITY FOR ASSISTANCE. 
(a) ELIGIBLE PROJECTS.—The following projects 
may be carried out using assistance made available under 
this Act: 
(1) Any non-Federal water infrastructure 
project that— 
(A) the Secretary determines, through the 
completion of an appraisal investigation and 
feasibility study, would contribute to a safe, 
adequate water supply for domestic, agricul-
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tural, environmental, or municipal and indus-
trial use; and 
(B) is otherwise eligible for assistance 
under this Act. 
(2) A project for enhanced energy efficiency in 
the operation of a water system. 
(3) A project for accelerated repair and replace-
ment of an aging water distribution facility. 
(4) A brackish or sea water desalination 
project. 
(5) Acquisition of real property or an interest 
in real property for water storage, reclaimed or recy-
cled water, or wastewater, if the acquisition is inte-
gral to a project described in paragraphs (1) 
through (5). 
(6) A combination of projects, each of which is 
eligible under paragraphs (1) through (6), for which 
an eligible entity or group of eligible entities submits 
a single application. 
(b) ELIGIBLE COSTS.—Assistance made available 
under this Act (as paid by or for the account of an obligor) 
may be used to cover the following costs with respect to 
an eligible project: 
(1) 
Development-phase 
activities, 
including 
planning, feasibility analysis, revenue forecasting, 
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environmental review, permitting, preliminary engi-
neering and design work, and other preconstruction 
activities. 
(2) Construction, reconstruction, rehabilitation, 
and replacement activities. 
(3) Acquisition of real property (including water 
rights, land relating to the project, and improve-
ments to land), environmental mitigation, construc-
tion contingencies, and acquisition of equipment. 
(4) Capitalized interest necessary to meet mar-
ket requirements, reasonably required reserve funds, 
capital issuance expenses, and other carrying costs 
during construction. 
(5) Refinancing interim construction funding, 
existing long-term project obligations, or a secured 
loan or loan guarantee made under this Act. 
(c) ADDITIONAL ELIGIBILITY REQUIREMENTS.—To 
be eligible to receive financial assistance under this Act, 
a project shall meet the following criteria, as determined 
by the Secretary: 
(1) CREDITWORTHINESS.— 
(A) IN
GENERAL.—Subject to subpara-
graph (B), the project shall be creditworthy, as 
determined by the Secretary, who shall ensure 
that any financing for the project has appro-
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priate security features, such as a rate cov-
enant, if applicable, and adequate coverage re-
quirements, to ensure repayment. 
(B) OPINION LETTER.— 
(i) PRELIMINARY
RATING
OPINION 
LETTER.—The Secretary shall require each 
applicant to provide a preliminary rating 
opinion letter from at least one rating 
agency indicating that the senior obliga-
tions of the project (which may be the 
Federal credit instrument) have the poten-
tial to achieve an investment-grade rating. 
(ii) FINAL
RATING
OPINION
LET-
TERS.—The Secretary or the Adminis-
trator, as applicable, shall require each 
project applicant to provide, prior to final 
acceptance and financing of the project, 
final rating opinion letters from at least 
one rating agency indicating that the sen-
ior obligations of the project have an in-
vestment-grade rating. 
(2) ELIGIBLE
PROJECT
COSTS.—The eligible 
project costs of a project shall be reasonably antici-
pated to be not less than $20,000,000. 
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(3) DEDICATED REVENUE SOURCES.—The Fed-
eral credit instrument for the project shall be repay-
able, in whole or in part, from dedicated revenue 
sources that also secure or fund the project obliga-
tions. 
(4) PUBLIC SPONSORSHIP OF PRIVATE ENTI-
TIES.—In the case of a project carried out by an en-
tity that is not a State or local government or an 
agency or instrumentality of a State or local govern-
ment, the project shall be publicly sponsored as dem-
onstrated by certification of the same by an agency 
of the relevant State, inclusion in the relevant 
State’s official improvement plan or by other means 
acceptable to the Secretary. 
(d) RECEIPT OF OTHER FEDERAL FUNDING.—Re-
ceipt of a Federal grant or contract or other Federal fund-
ing to support an eligible project shall not preclude the 
project from being eligible for assistance under this Act. 
SEC. 6. SELECTION CRITERIA. 
(a) ESTABLISHMENT.—The Secretary shall establish 
criteria for the selection of one or more projects that meet 
the eligibility requirements section 5 in accordance with 
paragraph (2). The Secretary may enter into a master 
credit agreement for a projects secured by a common secu-
rity pledge on terms acceptable to the Secretary. 
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(b) CRITERIA.—The selection criteria shall include 
the following: 
(1) The extent to which the project is nationally 
or regionally significant. 
(2) The extent to which assistance under this 
section would foster innovative public-private part-
nerships and attract private debt or equity invest-
ment. 
(3) The likelihood that assistance under this 
section would enable the project to proceed at an 
earlier date than the project would otherwise be able 
to proceed. 
(4) The extent to which the project uses new or 
innovative approaches. 
(5) The amount of budget authority required to 
fund the Federal credit instrument made available 
under this Act. 
(6) The extent to which the project helps main-
tain or protect the environment. 
SEC. 7. FEDERAL REQUIREMENTS. 
(a) EFFECT OF SECTION.—Nothing in this section 
supersedes the applicability of other requirements of Fed-
eral law (including regulations). 
(b) NEPA.—A Federal action carried out regarding 
a loan or loan guarantee provided under this Act shall not 
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be considered to be a Federal action for purposes of the 
National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.). 
SEC. 8. SECURED LOANS. 
(a) AGREEMENTS.— 
(1) IN GENERAL.—Subject to paragraphs (2) 
through (4), the Secretary may enter into agree-
ments with one or more obligors to make secured 
loans, the proceeds of which shall be used— 
(A) to finance eligible project costs of any 
project selected under section 6; 
(B) to refinance interim construction fi-
nancing of eligible project costs of any project 
selected under section 6; or 
(C) to refinance long-term project obliga-
tions or Federal credit instruments, if that refi-
nancing provides additional funding capacity for 
the completion, enhancement, or expansion of 
any project that is selected under section 6. 
(2) LIMITATION ON REFINANCING OF INTERIM 
CONSTRUCTION FINANCING.—A secured loan under 
paragraph (1) shall not be used to refinance interim 
construction financing under paragraph (1)(B)— 
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(A) if the maturity of such interim con-
struction financing is later than 1 year after 
the substantial completion of the project; and 
(B) later than 1 year after the date of sub-
stantial completion of the applicable project. 
(3) RISK
ASSESSMENT.—Before entering into 
an agreement under this subsection for a secured 
loan, the Secretary, in consultation with the Director 
of the Office of Management and Budget shall deter-
mine an appropriate capital reserve subsidy amount 
for the secured loan, taking into account each such 
preliminary rating opinion letter. 
(4) 
INVESTMENT-GRADE
RATING
REQUIRE-
MENT.—The execution of a secured loan under this 
section shall be contingent on receipt by the senior 
obligations of the project secured by the same rev-
enue pledge of an investment-grade rating from at 
least one rating agency. 
(b) TERMS AND LIMITATIONS.— 
(1) IN GENERAL.—A secured loan provided for 
a project under this section shall be subject to such 
terms and conditions, and contain such covenants, 
representations, warranties, and requirements (in-
cluding requirements for audits), as the Secretary 
determines to be appropriate. 
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(2) MAXIMUM AMOUNT.—The amount of a se-
cured loan under this section shall not exceed the 
lesser of— 
(A) an amount equal to 49 percent of the 
reasonably anticipated eligible project costs; and 
(B) if the secured loan does not receive an 
investment-grade rating, the amount of the sen-
ior project obligations of the project. 
(3) PAYMENT.—A secured loan under this sec-
tion— 
(A) shall be payable, in whole or in part, 
from State or local taxes, user fees, or other 
dedicated revenue sources that also secure the 
senior project obligations of the relevant 
project; 
(B) shall include a rate covenant, coverage 
requirement, or similar security feature sup-
porting the project obligations; and 
(C) may have a lien on revenues described 
in subparagraph (A), subject to any lien secur-
ing project obligations. 
(4) INTEREST RATE.—The interest rate on a 
secured loan under this section shall not be less than 
a rate equal to the yield on United States Treasury 
securities of a similar maturity to the maturity of 
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(O) Utah; 
(P) Washington; and 
(Q) Wyoming. 
(12) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of the Interior. 
(13) SECURED
LOAN.—The term ‘‘secured 
loan’’ means a direct loan or other debt obligation 
issued by an obligor and funded by the Secretary in 
connection with the financing of a project under this 
Act. 
(14) SUBSIDY
AMOUNT.—The term ‘‘subsidy 
amount’’ means the amount of budget authority suf-
ficient to cover the estimated long-term cost to the 
Federal Government of a Federal credit instrument, 
as calculated on a net present value basis, excluding 
administrative costs and any incidental effects on 
governmental receipts or outlays in accordance with 
the Federal Credit Reform Act of 1990 (2 U.S.C. 
661 et seq.). 
(15) SUBSTANTIAL
COMPLETION.—The term 
‘‘substantial completion’’, with respect to a project, 
means— 
(A) the initial operation of a project (after 
completion of any startup tests), resulting in 
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