Capitalization grants agreements

(a)

Requirements for construction of treatment works

Section 602(b)(6) of the Federal Water Pollution Control Act (33 U.S.C. 1382(b)(6)) is amended— (1)by striking before fiscal year 1995; and (2)by striking 201(b) and all that follows through 218, and inserting 211,. (b)

Guidance for small systems

Section 602 of the Federal Water Pollution Control Act (33 U.S.C. 1382) is amended by adding at the end the following:

(c)

Guidance for small systems

(1)

Simplified procedures

Not later than 1 year after the date of enactment of this subsection, the Administrator shall assist the States in establishing simplified procedures for small systems to obtain assistance under this title. (2)

Publication of manual

Not later than 1 year after the date of enactment of this subsection, after providing notice and opportunity for public comment, the Administrator shall publish— (A)a manual to assist small systems in obtaining assistance under this title; and (B)in the Federal Register, notice of the availability of the manual. (3)

Definition of small system

In this title, the term small system means a system for which a municipality or intermunicipal, interstate, or State agency seeks assistance under this title and that serves a population of 20,000 or fewer inhabitants.

Water pollution control revolving funds

(a)

Activities eligible for assistance

Section 603 of the Federal Water Pollution Control Act (33 U.S.C. 1383) is amended by striking subsection (c) and inserting the following:

(c)

Activities eligible for assistance

(1)

In general

The water pollution control revolving fund of a State shall be used only for providing financial assistance for activities that have, as a principal benefit, the improvement or protection of the water quality of navigable waters to a municipality, intermunicipal, interstate, or State agency, or other person, including activities such as— (A)construction of a publicly owned treatment works; (B)implementation of lake protection programs and projects under section 314; (C)implementation of a nonpoint source management program under section 319; (D)implementation of an estuary conservation and management plan under section 320; (E)restoration or protection of publicly or privately owned riparian areas, including acquisition of property rights; (F)implementation of measures to improve the efficiency of public water use; (G)development and implementation of plans by a public recipient to prevent water pollution; and (H)acquisition of land necessary to meet any mitigation requirements related to construction of a publicly owned treatment works. (2)

Fund amounts

(A)

Repayments

The water pollution control revolving fund of a State shall be established, maintained, and credited with repayments. (B)

Availability

The balance in the fund shall be available in perpetuity for providing financial assistance described in paragraph (1). (C)

Fees

Fees charged by a State to recipients of the assistance may be deposited in the fund and may be used only to pay the cost of administering this title.

(b)

Extended repayment period for financially distressed communities

Section 603(d)(1) of the Federal Water Pollution Control Act (33 U.S.C. 1383(d)(1)) is amended— (1)in subparagraph (A), by inserting after 20 years the following: or, in the case of a financially distressed community, the lesser of 40 years or the expected life of the project to be financed with the proceeds of the loan; and (2)in subparagraph (B), by striking not later than 20 years after project completion and inserting on the expiration of the term of the loan. (c)

Loan guarantees

Section 603(d) of the Federal Water Pollution Control Act (33 U.S.C. 1383(d)) is amended by striking paragraph (5) and inserting the following:

(5)to provide loan guarantees for— (A)similar revolving funds established by municipalities or intermunicipal agencies; and (B)developing and implementing innovative technologies;

(d)

Administrative expenses

Section 603(d)(7) of the Federal Water Pollution Control Act (33 U.S.C. 1383(d)(7)) is amended by inserting before the period at the end the following: or the greater of $400,000 per year or an amount equal to 1/2 percent per year of the current valuation of the fund, plus the amount of any fees collected by the State under subsection (c)(2)(C). (e)

Technical and planning assistance for small systems

Section 603(d) of the Federal Water Pollution Control Act (33 U.S.C. 1383(d)) is amended— (1)in paragraph (6), by striking and at the end; (2)in paragraph (7), by striking the period at the end and inserting ; and; and (3)by adding at the end the following:

(8)to provide to small systems technical and planning assistance and assistance in financial management, user fee analysis, budgeting, capital improvement planning, facility operation and maintenance, repair schedules, and other activities to improve wastewater treatment plant operations, except that the amounts used under this paragraph for a fiscal year shall not exceed 2 percent of all grants provided to the fund for the fiscal year under this title.

(f)

Consistency with planning requirements

Section 603(f) of the Federal Water Pollution Control Act (33 U.S.C. 1383(f)) is amended by striking is consistent and inserting is not inconsistent. (g)

Construction assistance

Section 603 of the Federal Water Pollution Control Act (33 U.S.C. 1383) is amended by striking subsection (g) and inserting the following:

(g)

Construction assistance

(1)

Priority list requirement

The State may provide financial assistance from the water pollution control revolving fund of the State for a project for construction of a publicly owned treatment works only if the project is on the priority list of the State under section 216, without regard to the rank of the project on the list. (2)

Eligibility of certain treatment works

A treatment works shall be treated as a publicly owned treatment works for purposes of subsection (c) if the treatment works, without regard to ownership, would be considered a publicly owned treatment works and is principally treating municipal waste water or domestic sewage.

(h)

Principal subsidization

Section 603 of the Federal Water Pollution Control Act (33 U.S.C. 1383) is amended by adding at the end the following:

(i)

Principal subsidization

(1)

In general

Subject to paragraph (2), in a case in which a State makes a loan under subsection (d)(1) to a financially distressed community, the State may provide additional subsidization to the loan recipient (including forgiveness of principal). (2)

Limitation

For each fiscal year, the total amount of loan subsidies made by a State under this subsection shall not exceed 30 percent of the amount of the capitalization grant received by the State for that fiscal year. (j)

Information to assist States

The Administrator may publish information to assist States in establishing the affordability criteria referred to in subsection (l). (k)

Priority

In making a loan under this section, a State may give priority to a financially distressed community. (l)

Definition of financially distressed community

In this section, the term financially distressed community means any community that meets affordability criteria that are— (1)established by the State in which the community is located; and (2)developed after public review and comment.