H. R. 3080—144 
require each project applicant to provide, at the time 
of application, a preliminary rating opinion letter from 
at least 1 rating agency indicating that the senior 
obligations of the project (which may be the Federal 
credit instrument) have the potential to achieve an 
investment-grade rating. 
(ii) FINAL RATING OPINION LETTERS.—The Secretary 
or the Administrator, 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 2 rating agencies indicating that the 
senior obligations of the project have an investment- 
grade rating. 
(E) SPECIAL RULE FOR CERTAIN COMBINED PROJECTS.— 
The Administrator shall develop a credit evaluation process 
for a Federal credit instrument provided to a State infra-
structure financing authority for a project under section 
5026(8) or an entity for a project under section 5026(9), 
which may include requiring the provision of a final rating 
opinion letter from at least 2 rating agencies. 
(2) ELIGIBLE PROJECT COSTS.— 
(A) IN
GENERAL.—Subject to subparagraph (B), the 
eligible project costs of a project shall be reasonably antici-
pated to be not less than $20,000,000. 
(B) 
SMALL
COMMUNITY
WATER
INFRASTRUCTURE 
PROJECTS.—For a project described in paragraph (2) or 
(3) of section 5026 that serves a community of not more 
than 25,000 individuals, the eligible project costs of a 
project shall be reasonably anticipated to be not less than 
$5,000,000. 
(3) DEDICATED
REVENUE
SOURCES.—The Federal credit 
instrument for the project shall be repayable, in whole or in 
part, from dedicated revenue sources that also secure the 
project obligations. 
(4) PUBLIC SPONSORSHIP OF PRIVATE ENTITIES.— 
(A) IN GENERAL.—If an eligible project is carried out 
by an entity that is not a State or local government or 
an agency or instrumentality of a State or local government 
or a tribal government or consortium of tribal governments, 
the project shall be publicly sponsored. 
(B) PUBLIC SPONSORSHIP.—For purposes of this sub-
title, a project shall be considered to be publicly sponsored 
if the obligor can demonstrate, to the satisfaction of the 
Secretary or the Administrator, as appropriate, that the 
project applicant has consulted with the affected State, 
local, or tribal government in which the project is located, 
or is otherwise affected by the project, and that such 
government supports the proposed project. 
(5) LIMITATION.—No project receiving Federal credit assist-
ance under this subtitle may be financed (directly or indirectly), 
in whole or in part, with proceeds of any obligation— 
(A) the interest on which is exempt from the tax 
imposed under chapter 1 of the Internal Revenue Code 
of 1986; or 
(B) with respect to which credit is allowable under 
subpart I or J of part IV of subchapter A of chapter 1 
of such Code.
H. R. 3080—145 
(6) USE OF EXISTING FINANCING MECHANISMS.— 
(A) NOTIFICATION.—For each eligible project for which 
the Administrator has authority under paragraph (2) or 
(3) of section 5023(b) and for which the Administrator 
has received an application for financial assistance under 
this subtitle, the Administrator shall notify, not later than 
30 days after the date on which the Administrator receives 
a complete application, the applicable State infrastructure 
financing authority of the State in which the project is 
located that such application has been submitted. 
(B) DETERMINATION.—If, not later than 60 days after 
the date of receipt of a notification under subparagraph 
(A), a State infrastructure financing authority notifies the 
Administrator that the State infrastructure financing 
authority intends to commit funds to the project in an 
amount that is equal to or greater than the amount 
requested under the application, the Administrator may 
not provide any financial assistance for that project under 
this subtitle unless— 
(i) by the date that is 180 days after the date 
of receipt of a notification under subparagraph (A), 
the State infrastructure financing authority fails to 
enter into an assistance agreement to provide funds 
for the project; or 
(ii) the financial assistance to be provided by the 
State infrastructure financing authority will be at rates 
and terms that are less favorable than the rates and 
terms for financial assistance provided under this sub-
title. 
(7) OPERATION AND MAINTENANCE PLAN.— 
(A) IN GENERAL.—The Secretary or the Administrator, 
as applicable, shall determine whether an applicant for 
assistance under this subtitle has developed, and identified 
adequate revenues to implement, a plan for operating, 
maintaining, and repairing the project over the useful life 
of the project. 
(B) SPECIAL
RULE.—An eligible project described in 
section 5026(1) that has not been specifically authorized 
by Congress shall not be eligible for Federal assistance 
for operations and maintenance. 
(b) SELECTION CRITERIA.— 
(1) ESTABLISHMENT.—The Secretary or the Administrator, 
as applicable, shall establish criteria for the selection of projects 
that meet the eligibility requirements of subsection (a), in 
accordance with paragraph (2). 
(2) CRITERIA.—The selection criteria shall include the fol-
lowing: 
(A) The extent to which the project is nationally or 
regionally significant, with respect to the generation of 
economic and public benefits, such as— 
(i) the reduction of flood risk; 
(ii) the improvement of water quality and quantity, 
including aquifer recharge; 
(iii) the protection of drinking water, including 
source water protection; and 
(iv) the support of international commerce.
H. R. 3080—146 
(B) The extent to which the project financing plan 
includes public or private financing in addition to assist-
ance under this subtitle. 
(C) The likelihood that assistance under this subtitle 
would enable the project to proceed at an earlier date 
than the project would otherwise be able to proceed. 
(D) The extent to which the project uses new or innova-
tive approaches. 
(E) The amount of budget authority required to fund 
the Federal credit instrument made available under this 
subtitle. 
(F) The extent to which the project— 
(i) protects against extreme weather events, such 
as floods or hurricanes; or 
(ii) helps maintain or protect the environment. 
(G) The extent to which a project serves regions with 
significant energy exploration, development, or production 
areas. 
(H) The extent to which a project serves regions with 
significant water resource challenges, including the need 
to address— 
(i) water quality concerns in areas of regional, 
national, or international significance; 
(ii) water quantity concerns related to ground-
water, surface water, or other water sources; 
(iii) significant flood risk; 
(iv) water resource challenges identified in existing 
regional, State, or multistate agreements; or 
(v) water resources with exceptional recreational 
value or ecological importance. 
(I) The extent to which the project addresses identified 
municipal, State, or regional priorities. 
(J) 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 this 
subtitle. 
(K) The extent to which assistance under this subtitle 
reduces the contribution of Federal assistance to the 
project. 
(3) SPECIAL RULE FOR CERTAIN COMBINED PROJECTS.—For 
a project described in section 5026(8), the Administrator shall 
only consider the criteria described in subparagraphs (B) 
through (K) of paragraph (2). 
(c) FEDERAL REQUIREMENTS.—Nothing in this section super-
sedes the applicability of other requirements of Federal law 
(including regulations). 
SEC. 5029. SECURED LOANS. 
(a) AGREEMENTS.— 
(1) IN GENERAL.—Subject to paragraphs (2) and (3), the 
Secretary or the Administrator, as applicable, may enter into 
agreements with 1 or more obligors to make secured loans, 
the proceeds of which shall be used to finance eligible project 
costs of any project selected under section 5028.
H. R. 3080—147 
(2) FINANCIAL RISK ASSESSMENT.—Before entering into an 
agreement under this subsection for a secured loan, the Sec-
retary or the Administrator, as applicable, in consultation with 
the Director of the Office of Management and Budget and 
each rating agency providing a rating opinion letter under 
section 5028(a)(1)(D), shall determine an appropriate capital 
reserve subsidy amount for the secured loan, taking into 
account each such rating opinion letter. 
(3) INVESTMENT-GRADE RATING REQUIREMENT.—The execu-
tion of a secured loan under this section shall be contingent 
on receipt by the senior obligations of the project of an invest-
ment-grade rating. 
(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 (including requirements for audits), as the Sec-
retary or the Administrator, as applicable, determines to be 
appropriate. 
(2) MAXIMUM
AMOUNT.—The amount of a secured 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 senior project obligations 
of the project. 
(3) PAYMENT.—A secured loan under this section— 
(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 rel-
evant project; 
(B) shall include a rate covenant, coverage require-
ment, or similar security feature supporting the project 
obligations; and 
(C) may have a lien on revenues described in subpara-
graph (A), subject to any lien securing project obligations. 
(4) INTEREST RATE.—The interest rate on a secured loan 
under this section shall be not less than the yield on United 
States Treasury securities of a similar maturity to the maturity 
of the secured loan on the date of execution of the loan agree-
ment. 
(5) MATURITY DATE.— 
(A) IN GENERAL.—The final maturity date of a secured 
loan under this section shall be the earlier of— 
(i) the date that is 35 years after the date of 
substantial completion of the relevant project (as deter-
mined by the Secretary or the Administrator, as 
applicable); and 
(ii) if the useful life of the project (as determined 
by the Secretary or Administrator, as applicable) is 
less than 35 years, the useful life the project. 
(B) 
SPECIAL
RULE
FOR
STATE
INFRASTRUCTURE 
FINANCING
AUTHORITIES.—The final maturity date of a 
secured loan to a State infrastructure financing authority 
under this section shall be not later than 35 years after 
the date on which amounts are first disbursed.