Notice2024-20221
Notice of Funding Availability for Credit Assistance Under the State Infrastructure Financing Authority Water Infrastructure Finance and Innovation Act Program
Primary source
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Published
September 9, 2024
Issuing agencies
Environmental Protection Agency
Abstract
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 the U.S. Environmental Protection Agency (EPA) under the State Infrastructure Financing Authority Water Infrastructure Finance and Innovation Act (SWIFIA) program. EPA estimates that it may lend approximately $1 billion to help finance approximately $2 billion in water infrastructure investment.
Full Text
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<title>Federal Register, Volume 89 Issue 174 (Monday, September 9, 2024)</title>
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[Federal Register Volume 89, Number 174 (Monday, September 9, 2024)]
[Notices]
[Pages 73080-73083]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-20221]
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ENVIRONMENTAL PROTECTION AGENCY
[FRL 12140-01-OW]
Notice of Funding Availability for Credit Assistance Under the
State Infrastructure Financing Authority Water Infrastructure Finance
and Innovation Act Program
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of funding availability.
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SUMMARY: 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 the U.S. Environmental Protection Agency (EPA) under the State
Infrastructure Financing Authority Water Infrastructure Finance and
Innovation Act (SWIFIA) program. EPA estimates that it may lend
approximately $1 billion to help finance approximately $2 billion in
water infrastructure investment.
DATES: LOIs submitted on or after October 1, 2024, will be reviewed
using the scoring criteria outlined in this NOFA.
ADDRESSES: Prospective borrowers should submit all LOIs electronically
via EPA's SharePoint site. To be granted access to the SharePoint site,
prospective borrowers should contact <a href="/cdn-cgi/l/email-protection#1d6a747b747c5d786d7c337a726b"><span class="__cf_email__" data-cfemail="cabda3aca3ab8aafbaabe4ada5bc">[email protected]</span></a> and request a link
to the SharePoint site, where they can securely upload their LOIs and
then email <a href="/cdn-cgi/l/email-protection#ed9a848b848cad889d8cc38a829b"><span class="__cf_email__" data-cfemail="b8cfd1ded1d9f8ddc8d996dfd7ce">[email protected]</span></a> once the complete LOI package has been
uploaded to the SharePoint site. 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: <a href="https://www.epa.gov/wifia">https://www.epa.gov/wifia</a>.
FOR FURTHER INFORMATION CONTACT: Amelia Letnes, Office of Water,
Environmental Protection Agency; telephone number: (202) 564-5627; or
email: <a href="/cdn-cgi/l/email-protection#335f56475d56401d525e565f5a52735643521d545c45"><span class="__cf_email__" data-cfemail="345851405a51471a555951585d55745144551a535b42">[email protected]</span></a> (preferred).
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Program Funding
III. Eligibility Requirements
IV. Budgetary Scoring Determination for Non-Federal Projects
V. Types and Amount of Credit Assistance
VI. Letters of Interest and Applications
VII. Fees
VIII. Selection Criteria
IX. Federal Requirements
I. Background
Congress enacted the Water Infrastructure Finance and Innovation
Act (WIFIA) as part of the Water Resources Reform and Development Act
of 2014 (WRRDA). Codified at 33 U.S.C. 3901-3915, 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, wastewater, and stormwater infrastructure by providing
long-term, low-cost, supplemental credit assistance under customized
terms to creditworthy water infrastructure projects of national and
regional significance. Additionally, the WIFIA program is implementing
five key Administration priorities in this 2024 NOFA:
A. Increasing Investment in Economically Stressed Communities
EPA encourages the submission of projects that address the ever-
increasing needs of economically stressed and disadvantaged communities
to ensure they benefit from investments in water infrastructure, and
therefore improve the public health and livability of these
communities.
B. Making Rapid Progress on Lead Service Line Replacement
Many drinking water systems still have lead service lines. EPA
encourages the submission of drinking water infrastructure projects
that will help make rapid progress on replacing lead service lines to
reduce exposure to lead and improve public health. There is no safe
level of lead in drinking water. Full
[[Page 73081]]
lead service line replacement can be an effective method to reduce
drinking water lead levels. Because of this, WIFIA-funded projects
involving lead service line replacement should include a plan to
conduct full lead service line replacement.
C. Addressing PFAS and Emerging Contaminants
EPA encourages the submission of projects that focus on reducing
exposure to perfluoroalkyl and polyfluoroalkyl substances (PFAS) and
other emerging contaminants through drinking water and/or projects that
help address discharges of emerging contaminants from wastewater and/or
stormwater systems.
D. Strengthening Climate Resilience in the Water Sector
EPA supports long-term strategies to create a more resilient water
infrastructure to address the increasing impacts of extreme weather.
This includes projects that protect against drought through conserving
water, promoting water efficiency and reuse, and protecting and
diversifying communities' sources of water. Additionally, this includes
projects that address areas seeing sustained or intermittent increases
in water flow, such as projects that address flood risks due to
stormwater, projects that address the impacts of combined sewer
overflows, and septic to sewer efforts where septic systems are
undermined by rising groundwater. Taken together, these efforts can
help communities address water quantity and quality concerns.
E. Supporting One Water Innovation and Resilience
One of the defining features of WIFIA is the broad range of
eligible projects that EPA can fund to flexibly support priority needs.
EPA encourages borrowers to submit applications for water
infrastructure projects that are new and innovative in regard to energy
efficiency, such as onsite wind or solar energy as well as methane
digesters or similar projects that work to reduce overall greenhouse
gas emissions and may also support energy independence at the system
level. In addition, EPA encourages the submission of water
infrastructure projects that are more resilient to all threats--whether
they are natural disasters or threats such as bioterrorism and cyber-
attacks.
II. Program Funding
A. WIFIA Program Appropriation
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 it to provide approximately $1 billion \1\ in
long-term, low-cost financing to water 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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B. Funding Availability Period
LOIs may be submitted by prospective borrowers and will be received
by EPA on a rolling basis. LOIs shall be submitted using the SWIFIA LOI
form found at <a href="https://www.epa.gov/wifia">https://www.epa.gov/wifia</a>. Under the rolling process,
LOIs will continually be reviewed and selected based on available
funds. The publication of this NOFA does not impact LOIs previously
submitted to EPA, which continue to be reviewed based on the applicable
requirements at the time of submission.
LOIs received on or after October 1, 2024, will be evaluated as
described in section VIII of this document. This NOFA provides guidance
on all SWIFIA funding authority available including funding from
previous years. Any funding authority not obligated in the fiscal year
for which it is authorized remains available for obligation in
subsequent years.
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 found at <a href="https://www.epa.gov/wifia/wifia-program-handbook">https://www.epa.gov/wifia/wifia-program-handbook</a>.
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 for the SWIFIA project
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.
IV. Budgetary Scoring Determination for Non-Federal Projects
To comply with Public Law 116-260, a project selected for WIFIA
financing using funding appropriated in FY2024 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 the Federal Register publication
titled ``Water Infrastructure Finance and Innovation Act Program
(WIFIA)
[[Page 73082]]
Criteria Pursuant to the Further Consolidated Appropriations Act,
2020'' (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 considering the scoring criteria.
V. Types and Amount of Credit Assistance
Under SWIFIA, EPA is offering senior loans, on parity with a state
infrastructure financing authority's other senior capital market debt
of the same credit quality, to help the state infrastructure financing
authority lend to multiple projects throughout the state.
A. Minimum Project Costs
A SWIFIA project must have eligible project costs that are
reasonably anticipated to equal or exceed $20 million.
B. Maximum Amount of SWIFIA Credit Assistance
The maximum amount of SWIFIA credit assistance to a state
infrastructure financing authority is 49 percent of estimated eligible
total costs of the eligible projects that are included in the SWIFIA
project.
C. SWIFIA Loan Structures
Prospective SWIFIA borrowers may request one the following loan
structures:
(i) EPA accepts the state infrastructure financing authority's
existing capital market debt indenture (to the extent the terms are
permissible under Federal law and regulation and WIFIA program
policies); or
(ii) The state infrastructure financing authority accepts EPA's
standard terms. More information on EPA's standard terms is available
at <a href="http://www.epa.gov/wifia">www.epa.gov/wifia</a>.
VI. Letters of Interest and Applications
Each prospective borrower will be required to submit an LOI and, if
invited, an application to EPA 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 an LOI
describing the SWIFIA 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 SWIFIA 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 review the WIFIA
program handbook to help create the best justification possible for the
project and a cohesive and comprehensive LOI submittal.
Prospective borrowers should 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 SWIFIA
project is deemed ineligible as described in section IV of this
document.
Below is guidance on what EPA recommends be included in the LOI.
1. Loan Information: The prospective borrower provides information
about its legal name, business address, program website, employer/
taxpayer identification number, Unique Entity ID from <a href="http://SAM.gov">SAM.gov</a>,
requested SWIFIA loan amount and SWIFIA project cost amount, type of
SRF loans (clean water, drinking water, or both), and requested loan
structure.
2. 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).
3. 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.
4. 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 a complete LOI package, a
selection committee will invite the prospective borrower to apply based
on satisfaction of the eligibility requirements. So long as budget
authority remains available, EPA expects that all eligible state
infrastructure financing authority prospective borrowers will be
invited to apply for a SWIFIA loan.
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 EPA, 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 an LOI. For information about application
and post-closing costs, please refer to the WIFIA fee rule, ``Fees for
Water Infrastructure Project Applications under WIFIA'' (40 CFR
35.10080).
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 financing authority borrowers.
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).
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(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 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).
IX. Federal Requirements
All projects receiving WIFIA assistance must comply with the
applicable Federal requirements. Compliance with Federal requirements
is not required for submitting a letter of interest, being invited to
apply for a WIFIA loan, or submitting an application. The WIFIA program
will review selected projects for compliance with Federal requirements
once they have submitted an application. Additional information about
Federal compliance requirements is available in the WIFIA program
handbook and at <a href="https://www.epa.gov/wifia/wifia-federal-compliance-requirements">https://www.epa.gov/wifia/wifia-federal-compliance-requirements</a>.
Authority: 33 U.S.C. 3901-3915; 40 CFR part 35.
Michael S. Regan,
Administrator.
[FR Doc. 2024-20221 Filed 9-6-24; 8:45 am]
BILLING CODE 6560-50-P
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