(1) take into consideration whether potential 
funding mechanisms and revenue sources— 
(A) are broad based; 
(B) are equitably allocated; and 
(C) can be efficiently collected; 
(2) review and, to the extent practicable, utilize 
existing studies and reports on potential sources of 
revenue for a clean water trust fund, including— 
(A) the report of the Government Account-
ability Office entitled ‘‘Clean Water Infrastruc-
ture: A Variety of Issues Need to Be Consid-
ered When Designing a Clean Water Trust 
Fund’’ (GAO–09–037, May 2009); and 
(B) the report of the Environmental Pro-
tection Agency entitled ‘‘Alternative Funding 
Study: Water Quality Fees and Debt Financing 
Issues’’ (EPA 832–R–96–001, June 1996); 
(3) consult with Federal, State, tribal, and local 
agencies, representatives of business and industry, 
representatives of entities operating publicly owned 
treatment works, representatives of conservation and 
environmental organizations, representatives of rate-
payer organizations, and other interested persons; 
and 
(4) provide the opportunity for public hearings. 
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(c) REPORT TO CONGRESS.—Not later than 1 year 
after the date of enactment of this Act, the Director shall 
submit a report on the results of the study to— 
(1) the Committee on Transportation and In-
frastructure, the Committee on Ways and Means, 
and the Committee on the Budget of the House of 
Representatives; and 
(2) the Committee on Environment and Public 
Works, the Committee on Finance, and the Com-
mittee on the Budget of the Senate. 
TITLE V—WATER POLLUTION 
CONTROL INVESTMENT 
SEC. 5001. SHORT TITLE. 
This title may be cited as the ‘‘Water Pollution Con-
trol Investment Act’’. 
SEC. 5002. DEFINITIONS. 
In this title, the following definitions apply: 
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Environ-
mental Protection Agency. 
(2) BORROWER.—The term ‘‘borrower’’ means 
a person who owes payments of interest or principal 
on an obligation guaranteed under this title. 
(3) COST OF A DIRECT LOAN.—The term ‘‘cost 
of a direct loan’’ means the ‘‘cost of a direct loan’’ 
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as that term is used in section 502(5) of the Federal 
Credit Reform Act of 1990 (2 U.S.C. 661a(5)). 
(4) COST OF A GUARANTEE.—The term ‘‘cost 
of a guarantee’’ means the ‘‘cost of a loan guar-
antee’’ as that term is used in section 502(5) of the 
Federal Credit Reform Act of 1990 (2 U.S.C. 
661a(5)). 
(5) DIRECT LOAN.—The term ‘‘direct loan’’ has 
the meaning given that term in section 502 of the 
Federal Credit Reform Act of 1990 (2 U.S.C. 661a). 
(6) GUARANTEE.— 
(A) IN GENERAL.—The term ‘‘guarantee’’ 
has the meaning given the term ‘‘loan guar-
antee’’ in section 502 of the Federal Credit Re-
form Act of 1990 (2 U.S.C. 661a). 
(B) INCLUSION.—The term ‘‘guarantee’’ 
includes a loan guarantee commitment (as that 
term is defined in section 502 of the Federal 
Credit Reform Act of 1990 (2 U.S.C. 661a)). 
(7) 
LARGE
WATER
INFRASTRUCTURE 
PROJECT.— 
(A) IN GENERAL.—The term ‘‘large water 
infrastructure project’’ means a project for con-
struction of a publicly owned treatment works 
that qualifies for assistance under section 
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603(c) of the Federal Water Pollution Control 
Act (33 U.S.C. 1383(c)), but because of its sig-
nificant scope and cost is not likely to receive 
assistance under that Act, as determined by the 
Administrator. 
(B) 
GUIDELINES.—The 
Administrator 
shall issue guidelines for determining whether a 
project qualifies as a large water infrastructure 
project. 
(8) 
OBLIGATION.—The 
term 
‘‘obligation’’ 
means a loan or other debt obligation. 
(9) STATE
INFRASTRUCTURE
FINANCING
AU-
THORITY.—The term ‘‘State infrastructure financing 
authority’’ means the State entity established or des-
ignated by the Governor of a State to receive a cap-
italization 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.). 
SEC. 5003. DIRECT LOANS. 
(a) IN GENERAL.— 
(1) USE OF LOANS.—The Administrator may 
make a direct loan to a State infrastructure financ-
ing authority for use in the same manner, and sub-
ject to the same terms and conditions (unless other-
wise specified in this section), as a capitalization 
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grant made under section 601 of the Federal Water 
Pollution Control Act (33 U.S.C. 1831). 
(2) TERMS
AND
CONDITIONS.—The Adminis-
trator may make a loan under this section on such 
terms and conditions (including requirements for au-
dits) as the Administrator determines appropriate. 
(b) LOAN REQUIREMENTS.— 
(1) MAXIMUM AMOUNT.—The amount of a loan 
made under this section to a State infrastructure fi-
nancing authority shall not exceed the applicable 
percentage for the State establishing such authority 
of the total amount available under this title for dis-
bursement, based on the allotment for the State in 
accordance with section 604 of the Federal Water 
Pollution Control Act (33 U.S.C. 1384). 
(2) TERM OF LOAN.—The final maturity date 
of a loan made under this section shall not be later 
than 35 years after the date on which funds are dis-
bursed to a State infrastructure financing authority. 
(3) INTEREST RATE.—The Administrator may 
make a loan under this section only if the Adminis-
trator determines that the interest rate on the loan 
is appropriate, taking into account the prevailing 
rate of interest in the private sector for similar 
loans. 
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(4) SECURITY.—The Administrator shall re-
quire a State infrastructure financing authority re-
ceiving a loan under this section to use a rate cov-
enant, coverage requirement, or similar security fea-
ture adequate to ensure loan repayment. 
(5) REPAYMENT.— 
(A) SCHEDULE.—The Administrator shall 
set a repayment schedule for each loan made 
under this section based on the projected cash 
flow to the State infrastructure financing au-
thority, including consideration of the effect on 
such cash flow of the security features de-
scribed in paragraph (4). 
(B) COMMENCEMENT.—Scheduled loan re-
payments of principal or interest on a loan 
made under this section shall commence not 
later than 5 years after the date on which the 
loan is made. 
(C) DEFERRAL OF PAYMENTS.— 
(i) IN
GENERAL.—If the Adminis-
trator determines that a State infrastruc-
ture financing authority lacks the re-
sources to make scheduled payments on a 
loan made under this section based on cir-
cumstances not foreseeable at the time the 
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loan is made, the Administrator may allow 
for the deferral of such payments. 
(ii) INTEREST.—Any payment de-
ferred under clause (i) shall— 
(I) continue to accrue interest 
until fully repaid; and 
(II) be amortized over the re-
maining term of the loan. 
(D) PREPAYMENT.—Payments on the loan 
may be made in advance with no penalty. 
(c) SALE OF LOANS.—After notifying the State infra-
structure financing authority, the Administrator, in con-
sultation with the Secretary of the Treasury, may sell a 
loan made under this section, if the Administrator deter-
mines that the sale can be made on favorable terms. 
(d) CONFORMING
REQUIREMENTS.—The require-
ments of sections 211, 511(c)(1), and 513 of the Federal 
Water Pollution Control Act (33 U.S.C. 1291, 1371(c)(2), 
and 1372) apply to the construction of a project carried 
out in whole or in part with assistance made available 
through a loan under this section in the same manner as 
treatment works for which grants are made available 
under the Federal Water Pollution Control Act. 
(e) FEES.—The Administrator shall charge and col-
lect fees from State infrastructure financing authorities 
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receiving loans under this section in amounts the Adminis-
trator determines are sufficient to cover the administrative 
expenses associated with carrying out this section and, as 
provided in advance in appropriations Acts, use such 
amounts to cover such expenses. 
(f) RECORDS; AUDITS.— 
(1) IN
GENERAL.—A State infrastructure fi-
nancing authority receiving a loan under this section 
shall keep such records and other pertinent docu-
ments as the Administrator shall prescribe by regu-
lation, including such records as the Administrator 
may require to facilitate an effective audit of loans 
made under this section. 
(2) ACCESS.—The Administrator and the 
Comptroller General of the United States, or their 
duly authorized representatives, shall have access, 
for the purpose of audits, to records and other perti-
nent documents kept under paragraph (1). 
SEC. 5004. GUARANTEES. 
(a) IN GENERAL.— 
(1) USE OF GUARANTEES.—The Administrator 
may make a guarantee under this title for an obliga-
tion for construction of a large water infrastructure 
project in accordance with the requirements of this 
section. 
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(2) SELECTION CRITERIA.— 
(A) ESTABLISHMENT.—The Administrator 
shall establish criteria for selecting among large 
water infrastructure projects in making guaran-
tees under this title. 
(B) CRITERIA.—In establishing selection 
criteria under this paragraph, the Adminis-
trator shall include consideration of the fol-
lowing: 
(i) The extent to which the project is 
nationally or regionally significant. 
(ii) 
The 
creditworthiness 
of 
the 
project, including a determination by the 
Administrator that any financing has ap-
propriate features to ensure repayment. 
(iii) The extent to which the project 
uses new technologies that enhance the en-
vironmental benefits of the project. 
(iv) The cost of a guarantee under 
this title. 
(v) The extent to which the project 
helps restore, maintain, or protect the en-
vironment. 
(3) FISCAL YEAR LIMITATION.—The Adminis-
trator may not utilize more than 10 percent of the 
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funds made available under this title for a fiscal 
year to make guarantees under this section during 
that fiscal year. 
(4) TERMS
AND
CONDITIONS.—The Adminis-
trator may make a guarantee for a large water in-
frastructure project under this title on such terms 
and conditions (including requirements for audits) 
as the Administrator determines appropriate. 
(5) SECURITY.—The Administrator shall re-
quire a borrower to use a rate covenant, coverage re-
quirement, or similar security feature adequate to 
ensure repayment of the obligation. 
(b) GUARANTEE REQUIREMENTS.— 
(1) PROBABILITY
OF
REPAYMENT.—The Ad-
ministrator may make a guarantee under this title 
only if the Administrator determines that there is a 
high probability of repayment by the borrower of the 
principal and interest on the obligation. 
(2) AMOUNT.— 
(A) PERCENTAGE OF TOTAL COST.—The 
Administrator may make a guarantee under 
this title only if the amount of the obligation 
does not exceed 75 percent of the total cost of 
the large water infrastructure project, as esti-
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mated at the time at which the guarantee is 
issued. 
(B) 
SUFFICIENCY.—The 
Administrator 
may make a guarantee under this title only if 
the Administrator determines that the amount 
of the obligation, when combined with amounts 
available from other sources, will be sufficient 
to carry out the project. 
(3) NONSUBORDINATION.—The Administrator 
may make a guarantee under this title only if the 
guarantee is not subordinate to other financing. 
(4) INTEREST RATE.—The Administrator may 
make a guarantee under this title only if the Admin-
istrator determines that the interest rate on the obli-
gation is appropriate, taking into account the pre-
vailing rate of interest in the private sector for simi-
lar obligations. 
(5) TERM.—The Administrator may make a 
guarantee under this title only if— 
(A) repayment of the obligation is required 
over a period not to exceed the lesser of— 
(i) 35 years; or 
(ii) 90 percent of the projected useful 
life of the large water infrastructure 
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project to be financed by the obligation (as 
determined by the Administrator); and 
(B) payments on the obligation are sched-
uled to commence not later than 5 years after 
the date of substantial completion of the large 
water infrastructure project. 
(c) CONFORMING REQUIREMENTS.— 
(1) FISCAL
SUSTAINABILITY
PLAN.—The Ad-
ministrator may make a guarantee for a large water 
infrastructure project under this title only if the 
owner or operator of such project commits to de-
velop and implement a fiscal sustainability plan that 
meets the requirements of section 603(d)(1)(E) of 
the Federal Water Pollution Control Act, as added 
by this Act. 
(2) PRIORITY
LIST.—The Administrator may 
make a guarantee for a large water infrastructure 
project under this title only if such project is on a 
State priority list under section 603(g) of the Fed-
eral Water Pollution Control Act (33 U.S.C. 
1383(g)), as amended by this Act. 
(3) ADDITIONAL REQUIREMENTS.—The require-
ments of sections 211, 511(c)(1), and 513 of the 
Federal Water Pollution Control Act (33 U.S.C. 
1291, 1371(c)(2), and 1372) apply to the construc-
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tion of a large water infrastructure project carried 
out in whole or in part with financing made available 
through an obligation guaranteed under this title in 
the same manner as treatment works for which 
grants are made available under the Federal Water 
Pollution Control Act. 
(d) DEFAULTS.— 
(1) PAYMENT BY ADMINISTRATOR.— 
(A) IN GENERAL.—If a borrower defaults 
on an obligation guaranteed under this title (as 
defined in regulations promulgated by the Ad-
ministrator and specified in the guarantee con-
tract), the holder of the guarantee shall have 
the right to demand payment of the unpaid 
amount from the Administrator. 
(B) PAYMENT
REQUIRED.—Within such 
period as may be specified in the guarantee or 
related agreements, the Administrator shall pay 
to the holder of a guarantee the unpaid interest 
on, and unpaid principal of, the obligation guar-
anteed under this title as to which the borrower 
has defaulted, unless the Administrator finds 
that there was no default by the borrower in 
the payment of interest or principal or that the 
default has been remedied. 
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(C) FORBEARANCE.—Nothing in this sub-
section precludes any forbearance by the holder 
of a guarantee for the benefit of the borrower 
which may be agreed upon by the parties to the 
obligation and approved by the Administrator. 
(2) SUBROGATION.— 
(A) IN
GENERAL.—If the Administrator 
makes a payment under paragraph (1), the Ad-
ministrator shall be subrogated to the rights of 
the holder of the guarantee as specified in the 
guarantee or related agreements. 
(B) SUPERIORITY OF RIGHTS.—The rights 
of the Administrator, with respect to any prop-
erty acquired pursuant to a guarantee or re-
lated agreements, shall be superior to the rights 
of any other person with respect to the prop-
erty. 
(e) PAYMENT OF PRINCIPAL AND INTEREST BY AD-
MINISTRATOR.— 
(1) IN GENERAL.—With respect to any obliga-
tion guaranteed under this title, the Administrator 
may enter into a contract to pay, and pay, a holder 
of the guarantee, for and on behalf of the borrower, 
from funds appropriated for that purpose, the prin-
cipal and interest payments which become due and 
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payable on the unpaid balance of the obligation if 
the Administrator finds that— 
(A) the borrower is unable to meet the 
payments and is not in default; 
(B) it is in the public interest to permit 
the borrower to continue to pursue the purposes 
of the project; 
(C) the probable net benefit to the Federal 
Government in paying the principal and interest 
will be greater than that which would result in 
the event of a default; and 
(D) the State or region in which the 
project is located is experiencing a period of 
local or regional economic hardship that has af-
fected the borrower’s ability to meet the pay-
ments. 
(2) AMOUNT.—The amount of the payment 
that the Administrator is authorized to pay under 
this subsection shall be no greater than the amount 
of principal and interest that the borrower is obli-
gated to pay under the obligation. 
(3) REIMBURSEMENT.—A payment may be 
made under this subsection only if the borrower 
agrees to reimburse the Administrator for the pay-
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ment (including interest) on terms and conditions 
that are satisfactory to the Administrator. 
(f) FEES.—The Administrator shall charge and col-
lect fees from borrowers for guarantees made under this 
title in amounts the Administrator determines are suffi-
cient to cover the administrative expenses associated with 
carrying out this title and, as provided in advance in ap-
propriations Acts, use such amounts to cover such ex-
penses. 
(g) RECORDS; AUDITS.— 
(1) IN GENERAL.—A borrower shall keep such 
records and other pertinent documents as the Ad-
ministrator shall prescribe by regulation, including 
such records as the Administrator may require to fa-
cilitate an effective audit of guarantees made under 
this title. 
(2) ACCESS.—The Administrator and the 
Comptroller General of the United States, or their 
duly authorized representatives, shall have access, 
for the purpose of audits, to records and other perti-
nent documents kept under paragraph (1). 
(h) FULL FAITH AND CREDIT.—The full faith and 
credit of the United States is pledged to the payment of 
all guarantees made under this title. 
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SEC. 5005. FUNDING. 
(a) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to provide direct loans and the costs of guarantees 
under this title. 
(b) ALTERNATE FUNDING MECHANISM.—With re-
spect to a guarantee for a large water infrastructure 
project under this title, in lieu of funding such guarantee 
through a separate appropriation, the borrower of the obli-
gation to be guaranteed may pay a one-time guarantee 
fee to the Administrator equal to the cost of the guar-
antee, and the Administrator may use such fee, as pro-
vided in advance in appropriations Acts, to make such 
guarantee. 
Æ 
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