[Federal Register Volume 85, Number 138 (Friday, July 17, 2020)]
[Rules and Regulations]
[Pages 43457-43461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15469]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL 10012-15-OW]

40 CFR Part 35


Notice of Funding Availability for Applications for Credit 
Assistance Under the State Infrastructure Finance Authority Water 
Infrastructure Finance and Innovation Act (SWIFIA) Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of funding availability.

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SUMMARY: In the Further Consolidated Appropriations Act, 2020, signed 
by the President on December 20, 2019, Congress provided $5 million in 
budget authority solely for the cost of direct loans or guaranteed 
loans to State infrastructure financing authority borrowers for 
projects described in section 5026(9) of the Water Infrastructure 
Finance and Innovation Act of 2014 (WIFIA). The State infrastructure 
financing authority WIFIA (SWIFIA) program will use this amount to 
cover the subsidy required to provide a much larger amount of credit 
assistance. Environmental Protection Agency (EPA or the Agency) 
estimates that this budget authority may provide approximately $1 
billion in credit assistance and may finance approximately $2 billion 
in water infrastructure investment. The purpose of this notice of 
funding availability (NOFA) is to solicit letters of interest (LOIs) 
from prospective State Infrastructure Financing Authority borrowers 
seeking credit assistance from EPA under the SWIFIA program.
    EPA will evaluate and select proposed projects described in the 
LOIs using the selection criteria established in the statute, and 
further described in this NOFA as well as the WIFIA program handbook. 
This NOFA introduces new budgetary scoring factors to determine 
budgetary scoring compliance and outlines the process that prospective 
borrowers should follow to be considered for SWIFIA credit assistance.
    In addition, EPA reserves the right to make additional awards under 
this announcement, consistent with Agency policy and guidance, if 
additional funding is available after the original selections are made.

DATES: The LOI submittal period will begin on July 17, 2020 and end at 
11:59 p.m. EDT on September 15, 2020.

ADDRESSES: Prospective borrowers should submit all LOIs electronically 
via email at: [email protected] or via EPA's SharePoint site. To be granted 
access to the SharePoint site, prospective borrowers should contact 
[email protected] and request a link to the SharePoint site, where they can 
securely upload their LOIs. Requests to upload documents should be made 
no later than 5:00 p.m. EDT on September 11, 2020.
    EPA will notify prospective borrowers that their LOI has been 
received via a confirmation email.
    Prospective borrowers can access additional information, including 
the WIFIA program handbook and application materials, on the WIFIA 
website: https://www.epa.gov/wifia/.

SUPPLEMENTARY INFORMATION: 
    For a project to be considered during a selection round, EPA must 
receive a

[[Page 43458]]

LOI, via email or SharePoint, before the corresponding deadline listed 
above. EPA is only able to accept emails of 25 MB or smaller with 
unzipped attachments (EPA cannot accept zipped files). If necessary due 
to size restrictions, prospective borrowers may submit attachments 
separately, as long as they are received by the deadline.
    When writing a LOI, prospective borrowers are encouraged to fill 
out the SWIFIA LOI form and follow the guidelines contained on the 
WIFIA program website: https://www.epa.gov/wifia/wifia-application-materials. Prospective borrowers should provide the LOI and any 
attachments as Microsoft Word documents or searchable PDF files, 
whenever possible, to facilitate EPA's review. Section VI of this NOFA 
provides additional details on the LOI's content.
    EPA will invite each prospective borrower whose project proposal is 
selected for continuation in the process to submit a final application. 
Final applications should be received by EPA within 365 days of the 
invitation to apply.
    EPA will host a webinar to provide State infrastructure finance 
authority prospective borrowers further information about the SWIFIA 
loans and how to submit a LOI. The webinar date and registration 
directions can be found on the WIFIA program website: https://www.epa.gov/wifia/wifia-webinars.
    Prospective borrowers with questions about the program or interest 
in meeting with the WIFIA program staff may send a request to 
[email protected]. EPA will meet with all prospective borrowers interested 
in discussing the program prior to submission of a LOI.

Table of Contents

I. Background
II. Program Funding
III. Eligibility Requirements
IV. Fiscal Year 2020 Office of Management and Budget Budgetary 
Scoring Determination
V. Types of Credit Assistance
VI. Letters of Interest and Applications
VII. Fees
VIII. Selection Criteria

I. Background

    Congress enacted WIFIA as part of the Water Resources Reform and 
Development Act of 2014 (WRRDA). Codified at 33 U.S.C. 3901-3914, WIFIA 
authorizes a federal credit program for water infrastructure projects 
to be administered by EPA. WIFIA authorizes EPA to provide federal 
credit assistance in the form of secured (direct) loans or loan 
guarantees for eligible water infrastructure projects.
    Congress amended WIFIA in America's Water Infrastructure Act of 
2018 (AWIA) to authorize federal credit assistance exclusively for 
State infrastructure financing authority borrowers.
    The WIFIA program's mission is to accelerate investment in our 
nation's water and wastewater infrastructure by providing long-term, 
low-cost, supplemental credit assistance under customized terms to 
creditworthy drinking water and wastewater infrastructure projects of 
national and regional significance.

II. Program Funding

    Congress appropriated $5 million in funding to cover the subsidy 
cost of providing SWIFIA credit assistance. The subsidy cost covers the 
Federal government's risk that the loan may not be paid back. EPA 
anticipates that the average subsidy cost for SWIFIA-funded projects 
will be relatively low; therefore, this funding can be leveraged into a 
much larger amount of credit assistance. EPA estimates that this 
appropriation will allow the Agency to provide approximately $1 billion 
\1\ in long-term, low-cost financing to water and wastewater 
infrastructure projects and accelerate approximately $2 billion in 
infrastructure investment around the country.
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    \1\ This estimated loan volume is provided for reference only. 
Consistent with the Federal Credit Reform Act of 1990 and the 
requirements of the Office of Management and Budget, the actual 
subsidy cost of providing credit assistance is based on individual 
project characteristics and calculated on a project-by-project 
basis. Thus, actual lending capacity may vary.
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III. Eligibility Requirements

    The WIFIA statute and implementing rules set forth eligibility 
requirements for prospective borrowers, projects, and project costs. 
The requirements outlined below are described in greater detail in the 
WIFIA program handbook.

A. Eligible Applicants

    Prospective borrowers must be a State infrastructure financing 
authority to be eligible for SWIFIA credit assistance. EPA defines 
State infrastructure financing authority as 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).

B. Eligible Projects

    To be eligible for SWIFIA credit assistance, the SWIFIA project 
must be a combination of projects, each of which is eligible for 
assistance under section 603(c) of the Federal Water Pollution Control 
Act (33 U.S.C. 1383(c)) or section 1452(a)(2) of the Safe Drinking 
Water Act (42 U.S.C. 300j-12(a)(2)), for which a State infrastructure 
financing authority submits to the Administrator a single application.

C. Eligible Costs

    As defined under 33 U.S.C. 3906 and described in the WIFIA program 
handbook, eligible project costs are costs associated with the 
following activities:
    (i) Development-phase activities, including planning, feasibility 
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;
    (ii) Construction, reconstruction, rehabilitation, and replacement 
activities;
    (iii) 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 33 U.S.C. 3905(8)), construction contingencies, and 
acquisition of equipment; and
    (iv) Capitalized interest necessary to meet market requirements, 
reasonably required reserve funds, capital issuance expenses, and other 
carrying costs during construction. Capitalized interest on WIFIA 
credit assistance may not be included as an eligible project cost.

D. Threshold Requirements

    For a project to be considered for SWIFIA credit assistance, a 
SWIFIA project or a group of projects consolidated by the State 
Infrastructure Financing Authority must meet the following four 
criteria:
    (i) The project and obligor shall be creditworthy;
    (ii) A project shall have eligible project costs that are 
reasonably anticipated to equal or exceed $20 million;
    (iii) Project financing shall be repayable, 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 project; 
shall include a rate covenant, coverage requirement, or similar 
security feature supporting the project obligations; and may have a 
lien on revenues subject to any lien securing project obligations;

[[Page 43459]]

    (iv) The project shall have an operations and maintenance plan that 
identifies adequate revenues to operate, maintain, and repair the 
project during its useful life.

E. Federal Requirements

    All projects receiving SWIFIA assistance must comply, if 
applicable, with federal requirements and regulations, including (but 
not limited to):
    (i) American Iron and Steel Requirement, 33 U.S.C. 3914, https://www.epa.gov/cwsrf/state-revolving-fund-american-iron-and-steel-ais-requirement;
    (ii) Labor Standards, 33 U.S.C. 1372, https://www.dol.gov/whd/govcontracts/dbra.htm;
    (iii) National Environmental Policy Act of 1969, 42 U.S.C. 4321 et 
seq., https://www.epa.gov/nepa;
    (iv) Floodplain Management, Executive Order 11988, 42 FR 26951, May 
24, 1977, https://www.archives.gov/federal-register/codification/executive-order/11988.html;
    (v) Archeological and Historic Preservation Act, 16 U.S.C. 469-
469c, https://www.nps.gov/archeology/tools/laws/ahpa.htm;
    (vi) Clean Air Act, 42 U.S.C. 7401 et seq., https://www.epa.gov/clean-air-act-overview;
    (vii) Clean Water Act, 33 U.S.C. 1251 et seq., https://www.epa.gov/aboutepa/about-office-water;
    (viii) Coastal Barrier Resources Act, 16 U.S.C. 3501 et seq., 
https://www.fws.gov/ecological-services/habitat-conservation/cbra/Act/index.html;
    (ix) Coastal Zone Management Act, 16 U.S.C. 1451 et seq., https://coast.noaa.gov/czm/about/;
    (x) Endangered Species Act, 16 U.S.C. 1531 et seq., https://www.fws.gov/endangered/;
    (xi) Federal Actions to Address Environmental Justice in Minority 
Populations and Low-Income Populations, Executive Order 12898, 59 FR 
7629, February 16, 1994, https://www.archives.gov/files/federal-register/executive-orders/pdf/12898.pdf;
    (xii) Protection of Wetlands, Executive Order 11990, 42 FR 26961, 
May 25, 1977, as amended by Executive Order 12608, 52 FR 34617, 
September 14, 1987, https://www.epa.gov/cwa-404;
    (xiii) Farmland Protection Policy Act, 7 U.S.C. 4201 et seq., 
https://www.nrcs.usda.gov/wps/portal/nrcs/detail/?cid=nrcs143_008275;
    (xiv) Fish and Wildlife Coordination Act, 16 U.S.C. 661-666c, as 
amended, https://www.fws.gov/;
    (xv) Magnuson-Stevens Fishery Conservation and Management Act, 16 
U.S.C. 1801 et seq., https://www.fisheries.noaa.gov/resource/document/magnuson-stevens-fishery-conservation-and-management-act;
    (xvi) National Historic Preservation Act, 16 U.S.C. 470 et seq., 
https://www.nps.gov/archeology/tools/laws/NHPA.htm;
    (xvii) Safe Drinking Water Act, 42 U.S.C. 300f et seq., https://www.epa.gov/ground-water-and-drinking-water;
    (xviii) Wild and Scenic Rivers Act, 16 U.S.C. 1271 et seq., https://rivers.gov/;
    (xix) Debarment and Suspension, Executive Order 12549, 51 FR 6370, 
February 18, 1986, https://www.archives.gov/federal-register/codification/executive-order/12549.html;
    (xx) Demonstration Cities and Metropolitan Development Act, 42 
U.S.C. 3301 et seq., as amended, and Executive Order 12372, 47 FR 
30959, July 14, 1982, http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning;
    (xxii) New Restrictions on Lobbying, 31 U.S.C. 1352, https://www.epa.gov/grants/lobbying-and-litigation-information-federal-grants-cooperative-agreements-contracts-and-loans;
    (xxiii) Prohibitions relating to violations of the Clean Water Act 
or Clean Air Act with respect to Federal contracts, grants, or loans 
under 42 U.S.C. 7606 and 33 U.S.C. 1368, and Executive Order 11738, 38 
FR 25161, September 12, 1973, https://www.archives.gov/federal-register/codification/executive-order/11738.html;
    (xxiv) The Uniform Relocation Assistance and Real Property 
Acquisition Policies Act of 1970, 42 U.S.C. 4601 et seq., https://www.gpo.gov/fdsys/pkg/FR-2005-01-04/pdf/05-6.pdf;
    (xxv) Age Discrimination Act, 42 U.S.C. 6101 et seq., https://www.eeoc.gov/laws/statutes/adea.cfm;
    (xxvi) Equal Employment Opportunity, Executive Order 11246, 30 FR 
12319, September 28, 1965, https://www.dol.gov/ofccp/regs/compliance/ca_11246.htm;
    (xxvii) Section 13 of the Clean Water Act, Public Law 92-500, 
codified in 42 U.S.C. 1251, https://www.epa.gov/ocr/external-civil-rights-compliance-office-title-vi;
    (xxviii) Section 504 of the Rehabilitation Act, 29 U.S.C. 794, 
supplemented by Executive Orders 11914, 41 FR 17871, April 29, 1976 and 
11250, 30 FR 13003, October 13, 1965, https://www.epa.gov/ocr/external-civil-rights-compliance-office-title-vi;
    (xxix) Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d et 
seq., https://www.epa.gov/environmentaljustice/title-vi-and-environmental-justice; and
    (xxx) Participation by Disadvantaged Business Enterprises in 
Procurement under the Environmental Protection Agency Financial 
Assistance Agreements, 73 FR 15904, March 26, 2008, https://www.epa.gov/resources-small-businesses.
    Detailed information about some of these requirements is outlined 
in the WIFIA program handbook. Further information can be found at the 
links above.

IV. Fiscal Year 2020 Office of Management and Budget Budgetary Scoring 
Determination

    In order to comply with Public Law 116-94, a project selected for 
WIFIA financing using funding appropriated in FY 2020 will be assessed 
using two initial screening questions and sixteen scoring factors. 
These questions will help the Office of Management and Budget (OMB) 
determine compliance with budgetary scoring rules, a process that will 
be conducted in parallel to EPA's LOI evaluation process outlined in 
this NOFA. The questions may be found in Federal Register publication: 
Water Infrastructure Finance and Innovation Act Program (WIFIA) 
Criteria Pursuant to Public Law 116-94 [85 FR 39189, June 30, 2020]. 
These questions are also published in the WIFIA program handbook and 
further information about the scoring process may be referenced 
therein. EPA encourages project applicants to review the scoring 
criteria and provide sufficient information in the LOI or as an 
attachment to the LOI to facilitate EPA and OMB review of the 
prospective project in light of the scoring criteria. EPA may contact 
prospective borrowers after the LOI is submitted if clarification is 
needed to answer the budgetary scoring determination questions.

V. Types of Credit Assistance

    Under SWIFIA, EPA is offering senior, parity loans. The maximum 
amount of SWIFIA credit assistance to a State infrastructure financing 
authority is 49 percent of estimated eligible total costs of the SRF 
loans that are included in the SWIFIA project. Prospective SWIFIA 
borrowers may request one the following loan structures:
    (i) EPA accepts the State infrastructure financing authority's 
existing indenture; or
    (ii) The State infrastructure financing authority accepts EPA's 
standard terms.

[[Page 43460]]

More information on EPA's standard terms is available at www.epa.gov/wifia.
    SWIFIA credit assistance is available for SRF projects which are 
ready to proceed. EPA considers an SRF project ready to proceed if its 
construction will commence no later than 18 months after the LOI 
deadline.

VI. Letters of Interest and Applications

    Each prospective borrower will be required to submit a LOI and, if 
invited, an application to EPA in order to be considered for approval. 
This section describes the LOI submission and application submission.

A. Letter of Interest (LOI)

    Prospective borrowers seeking a SWIFIA loan must submit a LOI 
describing the project fundamentals and addressing the SWIFIA selection 
criteria.
    The primary purpose of the LOI is to provide adequate information 
to EPA to validate the eligibility and creditworthiness of the 
prospective borrower and the prospective project and determine the 
extent to which the SWIFIA project meets the statutory selection 
criteria. Based on its review of the information provided in the LOI, 
EPA will invite prospective borrowers to submit applications for their 
projects.
    Prospective borrowers are encouraged to utilize the LOI form on the 
WIFIA website and ensure that sufficient detail about the project is 
provided for EPA's review. EPA will notify a prospective borrower if 
its project is deemed ineligible as described in Section III of this 
NOFA.
    Below is guidance on what EPA recommends be included in the LOI.
    A. Loan Information: The prospective borrower provides information 
about its legal name, business address, program website, employer/
taxpayer identification number, Dun and Bradstreet Data Universal 
Number System number, requested SWIFIA loan amount and SWIFIA project 
amount, type of SRF loans (clean water, drinking water, or both), and 
requested loan structure.
    B. Supporting Documents: The prospective borrower provides the most 
recent version of the following documents: Intended Use Plan (IUP), SRF 
Operating Agreements with EPA Regional Office, documentation of the 
priority setting system, and bond indenture (if applicable).
    C. Contact Information: The prospective borrower identifies the 
points of contact with whom the WIFIA program should communicate 
regarding the LOI. To complete EPA's evaluation, the WIFIA program 
staff may contact a prospective borrower regarding specific information 
in the LOI.
    D. Certifications. The prospective borrower certifies that it will 
abide by all applicable laws and regulations, if selected to receive 
funding.

B. Application

    After EPA concludes its evaluation of the LOIs, a selection 
committee will invite prospective borrowers to apply. EPA expects that 
all eligible State infrastructure financing authority prospective 
borrowers will be invited to apply for a SWIFIA loan. If the amount 
requested by prospective borrowers exceeds the amount available from 
EPA, each eligible State infrastructure financing authority prospective 
borrowers will be invited for a pro rata share, based on the financing 
request outlined in their LOIs. If a prospective borrower declines 
EPA's invitation, EPA would re-allocate to other eligible prospective 
borrowers to the extent practicable or carry the funding forward to a 
future round.
    An invitation to apply for WIFIA credit assistance does not 
guarantee EPA's approval, which remains subject to a project's 
continued eligibility, including creditworthiness, the successful 
negotiation of terms acceptable to the Agency, and the availability of 
funds at the time at which all necessary recommendations and 
evaluations have been completed. However, the purpose of EPA's LOI 
review is to pre-screen prospective borrowers to the extent 
practicable. It is expected that EPA will only invite prospective 
borrowers to apply if it anticipates that those prospective borrowers 
are able to obtain WIFIA credit assistance. Detailed information needs 
for the application are listed in the application form and described in 
the WIFIA program handbook.

VII. Fees

    There is no fee to submit a LOI. The final fee rule, Fees for Water 
Infrastructure Project Applications under WIFIA, 40 CFR 35.10080, was 
signed by EPA on June 19, 2017, and establishes the fees related to the 
provision of federal credit assistance under WIFIA. Each invited 
applicant must submit, concurrent with its application, a non-
refundable Application Fee of $100,000. Applications will not be 
evaluated until the Application Fee is paid. For successful applicants, 
this fee will be credited toward final payment of a Credit Processing 
Fee, assessed following financial close, to reimburse EPA for actual 
engineering, financial, and legal costs. In the event a final credit 
agreement is not executed, the borrower is still required to reimburse 
EPA for the costs incurred. Borrowers may finance these fees with WIFIA 
credit assistance.

VIII. Selection Criteria

    This section specifies the criteria and process that EPA will use 
to evaluate LOIs and award applications for SWIFIA assistance.
    The selection criteria described are the statutory selection 
criteria for State infrastructure finance authority borrowers. EPA has 
also identified readiness to proceed as a priority for this LOI 
submittal period. In order to ensure the efficient use of limited 
federal resources for infrastructure finance, the readiness of the SRF 
loans included in the SWIFIA project to proceed toward development, 
including loan closing and the commencement of construction, is an 
Agency priority.
    Following its eligibility determination, EPA will determine the 
extent to which the SWIFIA project meets the statutory selection 
criteria. They are as follows:
    (i) The extent to which the project financing plan includes public 
or private financing in addition to assistance under [WIFIA]. 33 U.S.C. 
3907(b)(2)(B); 40 CFR 35.10055(a)(10).
    (ii) The likelihood that assistance under [WIFIA] would enable the 
project to proceed at an earlier date than the project would otherwise 
be able to proceed. 33 U.S.C. 3907(b)(2)(C); 40 CFR 35.10055(a)(2).
    (iii) The extent to which the project uses new or innovative 
approaches. 33 U.S.C. 3907(b)(2)(D); 40 CFR 35.10055(a)(3).
    (iv) The amount of budget authority required to fund the Federal 
credit instrument made available under [WIFIA]. 33 U.S.C. 
3907(b)(2)(E).
    (v) The extent to which the project (1) protects against extreme 
weather events, such as floods or hurricanes; or (2) helps maintain or 
protect the environment. 33 U.S.C. 3907(b)(2)(F); 40 CFR 
35.10055(a)(4); 40 CFR 35.10055(a)(5).
    (vi) The extent to which the project serves regions with 
significant energy exploration, development, or production areas. 33 
U.S.C. 3907(b)(2)(G); 40 CFR 35.10055(a)(6).
    (vii) The extent to which a project serves regions with significant 
water resource challenges, including the need to address: (1) Water 
quality concerns in areas of regional, national, or international 
significance; (2) water quantity concerns related to groundwater, 
surface water, or other water sources; (3) significant flood risk; (4) 
water resource challenges identified

[[Page 43461]]

in existing regional, state, or multistate agreements; or (5) water 
resources with exceptional recreational value or ecological importance. 
33 U.S.C. 3907(b)(2)(H); 40 CFR 35.10055(a)(7).
    (viii) The extent to which the project addresses identified 
municipal, state, or regional priorities. 33 U.S.C. 3907(b)(2)(I); 40 
CFR 35.10055(a)(8).
    (ix) 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 [WIFIA]. 
33 U.S.C. 3907(b)(2)(J); 40 CFR 35.10055(a)(9).
    (x) The extent to which assistance under [WIFIA] reduces the 
contribution of Federal assistance to the project. 33 U.S.C. 
3907(b)(2)(K); 40 CFR 35.10055(a)(11).

    Authority: 33 U.S.C. 3901-3914; 40 CFR part 35.

Andrew Wheeler,
Administrator.
[FR Doc. 2020-15469 Filed 7-16-20; 8:45 am]
BILLING CODE 6560-50-P