H. R. 3080—140 
(3) a private entity with the consent of the local government 
in which the project is located or that is otherwise affected 
by the project. 
Subtitle C—Innovative Financing Pilot 
Projects 
SEC. 5021. SHORT TITLE. 
This subtitle may be cited as the ‘‘Water Infrastructure Finance 
and Innovation Act of 2014’’. 
SEC. 5022. DEFINITIONS. 
In this subtitle: 
(1) ADMINISTRATOR.—The term ‘‘Administrator’’ means the 
Administrator of the Environmental Protection Agency. 
(2) COMMUNITY
WATER
SYSTEM.—The term ‘‘community 
water system’’ has the meaning given the term in section 1401 
of the Safe Drinking Water Act (42 U.S.C. 300f). 
(3) FEDERAL
CREDIT
INSTRUMENT.—The term ‘‘Federal 
credit instrument’’ means a secured loan or loan guarantee 
authorized to be made available under this subtitle with respect 
to a project. 
(4) INVESTMENT-GRADE
RATING.—The term ‘‘investment- 
grade rating’’ means a rating of BBB minus, Baa3, bbb minus, 
BBB (low), or higher assigned by a rating agency to project 
obligations. 
(5) LENDER.— 
(A) IN GENERAL.—The term ‘‘lender’’ means any non- 
Federal qualified institutional buyer (as defined in section 
230.144A(a) of title 17, Code of Federal Regulations (or 
a successor regulation), known as Rule 144A(a) of the Secu-
rities and Exchange Commission and issued under the 
Securities Act of 1933 (15 U.S.C. 77a et seq.)). 
(B) INCLUSIONS.—The term ‘‘lender’’ includes— 
(i) a qualified retirement plan (as defined in section 
4974(c) of the Internal Revenue Code of 1986) that 
is a qualified institutional buyer; and 
(ii) a governmental plan (as defined in section 
414(d) of the Internal Revenue Code of 1986) that 
is a qualified institutional buyer. 
(6) LOAN GUARANTEE.—The term ‘‘loan guarantee’’ means 
any guarantee or other pledge by the Secretary or the Adminis-
trator to pay all or part of the principal of, and interest on, 
a loan or other debt obligation issued by an obligor and funded 
by a lender. 
(7) OBLIGOR.—The term ‘‘obligor’’ means an eligible entity 
that is primarily liable for payment of the principal of, or 
interest on, a Federal credit instrument. 
(8) PROJECT OBLIGATION.— 
(A) IN GENERAL.—The term ‘‘project obligation’’ means 
any note, bond, debenture, or other debt obligation issued 
by an obligor in connection with the financing of a project. 
(B) EXCLUSION.—The term ‘‘project obligation’’ does not 
include a Federal credit instrument. 
(9) RATING AGENCY.—The term ‘‘rating agency’’ means a 
credit rating agency registered with the Securities and
H. R. 3080—141 
Exchange Commission as a nationally recognized statistical 
rating organization (as defined in section 3(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a))). 
(10) SECURED LOAN.—The term ‘‘secured loan’’ means a 
direct loan or other debt obligation issued by an obligor and 
funded by the Secretary or Administrator, as applicable, in 
connection with the financing of a project under section 5029. 
(11) STATE.—The term ‘‘State’’ means— 
(A) a State; 
(B) the District of Columbia; 
(C) the Commonwealth of Puerto Rico; and 
(D) any other territory or possession of the United 
States. 
(12) STATE INFRASTRUCTURE FINANCING AUTHORITY.—The 
term ‘‘State infrastructure financing authority’’ means 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). 
(13) SUBSIDY AMOUNT.—The term ‘‘subsidy amount’’ means 
the amount of budget authority sufficient 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.). 
(14) SUBSTANTIAL
COMPLETION.—The term ‘‘substantial 
completion’’, with respect to a project, means the earliest date 
on which a project is considered to perform the functions for 
which the project is designed. 
(15) TREATMENT WORKS.—The term ‘‘treatment works’’ has 
the meaning given the term in section 212 of the Federal 
Water Pollution Control Act (33 U.S.C. 1292). 
SEC. 5023. AUTHORITY TO PROVIDE ASSISTANCE. 
(a) IN GENERAL.—The Secretary and the Administrator may 
provide financial assistance under this subtitle to carry out pilot 
projects, which shall be selected to ensure a diversity of project 
types and geographical locations. 
(b) RESPONSIBILITY.— 
(1) SECRETARY.—The Secretary shall carry out all pilot 
projects under this subtitle that are eligible projects under 
section 5026(1). 
(2) ADMINISTRATOR.—The Administrator shall carry out all 
pilot projects under this subtitle that are eligible projects under 
paragraphs (2), (3), (4), (5), (6), and (8) of section 5026. 
(3) OTHER PROJECTS.—The Secretary or the Administrator, 
as applicable, may carry out eligible projects under paragraph 
(7) or (9) of section 5026. 
SEC. 5024. APPLICATIONS. 
(a) IN GENERAL.—To receive assistance under this subtitle, 
an eligible entity shall submit to the Secretary or the Administrator, 
as applicable, an application at such time, in such manner, and 
containing such information as the Secretary or the Administrator 
may require.
H. R. 3080—142 
(b) COMBINED PROJECTS.—In the case of an eligible project 
described in paragraph (8) or (9) of section 5026, the Secretary 
or the Administrator, as applicable, shall require the eligible entity 
to submit a single application for the combined group of projects. 
SEC. 5025. ELIGIBLE ENTITIES. 
The following entities are eligible to receive assistance under 
this subtitle: 
(1) A corporation. 
(2) A partnership. 
(3) A joint venture. 
(4) A trust. 
(5) A Federal, State, or local governmental entity, agency, 
or instrumentality. 
(6) A tribal government or consortium of tribal govern-
ments. 
(7) A State infrastructure financing authority. 
SEC. 5026. PROJECTS ELIGIBLE FOR ASSISTANCE. 
The following projects may be carried out with amounts made 
available under this subtitle: 
(1) Any project for flood damage reduction, hurricane and 
storm damage reduction, environmental restoration, coastal or 
inland harbor navigation improvement, or inland and intra-
coastal waterways navigation improvement that the Secretary 
determines is technically sound, economically justified, and 
environmentally acceptable, including— 
(A) a project to reduce flood damage; 
(B) a project to restore aquatic ecosystems; 
(C) a project to improve the inland and intracoastal 
waterways navigation system of the United States; and 
(D) a project to improve navigation of a coastal or 
inland harbor of the United States, including channel deep-
ening and construction of associated general navigation 
features. 
(2) 1 or more activities that are eligible for assistance 
under section 603(c) of the Federal Water Pollution Control 
Act (33 U.S.C. 1383(c)), notwithstanding the public ownership 
requirement under paragraph (1) of that subsection. 
(3) 1 or more activities described in section 1452(a)(2) of 
the Safe Drinking Water Act (42 U.S.C. 300j–12(a)(2)). 
(4) A project for enhanced energy efficiency in the operation 
of a public water system or a publicly owned treatment works. 
(5) A project for repair, rehabilitation, or replacement of 
a treatment works, community water system, or aging water 
distribution or waste collection facility (including a facility that 
serves a population or community of an Indian reservation). 
(6) A brackish or sea water desalination project, a managed 
aquifer recharge project, or a water recycling project. 
(7) Acquisition of real property or an interest in real prop-
erty— 
(A) if the acquisition is integral to a project described 
in paragraphs (1) through (6); or 
(B) pursuant to an existing plan that, in the judgment 
of the Administrator or the Secretary, as applicable, would 
mitigate the environmental impacts of water resources 
infrastructure projects otherwise eligible for assistance 
under this section.
H. R. 3080—143 
(8) A combination of projects, each of which is eligible 
under paragraph (2) or (3), for which a State infrastructure 
financing authority submits to the Administrator a single 
application. 
(9) A combination of projects secured by a common security 
pledge, each of which is eligible under paragraph (1), (2), (3), 
(4), (5), (6), or (7), for which an eligible entity, or a combination 
of eligible entities, submits a single application. 
SEC. 5027. ACTIVITIES ELIGIBLE FOR ASSISTANCE. 
For purposes of this subtitle, an eligible activity with respect 
to an eligible project includes the cost of— 
(1) development-phase activities, including planning, feasi-
bility 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; 
(2) construction, reconstruction, rehabilitation, and replace-
ment activities; 
(3) the acquisition of real property or an interest in real 
property (including water rights, land relating to the project, 
and 
improvements 
to 
land), 
environmental 
mitigation 
(including acquisitions pursuant to section 5026(7)), construc-
tion contingencies, and acquisition of equipment; and 
(4) capitalized interest necessary to meet market require-
ments, reasonably required reserve funds, capital issuance 
expenses, and other carrying costs during construction. 
SEC. 5028. DETERMINATION OF ELIGIBILITY AND PROJECT SELEC-
TION. 
(a) ELIGIBILITY REQUIREMENTS.—To be eligible to receive finan-
cial assistance under this subtitle, a project shall meet the following 
criteria, as determined by the Secretary or Administrator, as 
applicable: 
(1) CREDITWORTHINESS.— 
(A) IN
GENERAL.—The project and obligor shall be 
creditworthy, which shall be determined by the Secretary 
or the Administrator, as applicable. 
(B) CONSIDERATIONS.—In determining the credit-
worthiness of a project and obligor, the Secretary or the 
Administrator, as applicable, shall take into consideration 
relevant factors, including— 
(i) the terms, conditions, financial structure, and 
security features of the proposed financing; 
(ii) the dedicated revenue sources that will secure 
or fund the project obligations; 
(iii) the financial assumptions upon which the 
project is based; and 
(iv) the financial soundness and credit history of 
the obligor. 
(C) 
SECURITY
FEATURES.—The 
Secretary 
or 
the 
Administrator, as applicable, shall ensure that any 
financing for the project has appropriate security features, 
such as a rate covenant, supporting the project obligations 
to ensure repayment. 
(D) RATING OPINION LETTERS.— 
(i) PRELIMINARY
RATING
OPINION
LETTER.—The 
Secretary or the Administrator, as applicable, shall