42 USC 300j-12 - State revolving loan funds

U.S Code last checked for updates: May 19, 2024

§ 300j–12.

State revolving loan funds

(a)

General authority

(1)

Grants to States to establish State loan funds

(A)

In general

(B)

Establishment of fund

(C)

Extended period

(D)

Allotment formula

Except as otherwise provided in this section, funds made available to carry out this section shall be allotted to States that have entered into an agreement pursuant to this section (other than the District of Columbia) in accordance with—

(i)

for each of fiscal years 1995 through 1997, a formula that is the same as the formula used to distribute public water system supervision grant funds under section 300j–2 of this title in fiscal year 1995, except that the minimum proportionate share established in the formula shall be 1 percent of available funds and the formula shall be adjusted to include a minimum proportionate share for the State of Wyoming and the District of Columbia; and

(ii)

for fiscal year 1998 and each subsequent fiscal year, a formula that allocates to each State the proportional share of the State needs identified in the most recent survey conducted pursuant to subsection (h), except that the minimum proportionate share provided to each State shall be the same as the minimum proportionate share provided under clause (i).

(E)

Reallotment

(F)

Nonprimacy States

(G)

Other programs

(i)

New system capacity

(ii)

Operator certification

(2)

Use of funds

(A)

In general

(B)

Limitation

(C)

Sale of bonds

(D)

Water treatment loans

(E)

Acquisition of real property

(F)

Loan assistance

(G)

Emerging contaminants

(i)

In general

(ii)

Requirements

(I)

Small and disadvantaged communities

Not less than 25 percent of the amounts described in clause (i) shall be used to provide grants to—

(aa)

disadvantaged communities (as defined in subsection (d)(3)); or

(bb)

public water systems serving fewer than 25,000 persons.

(II)

Priorities

(iii)

No increased bonding authority

(3)

Limitation

(A)

In general

Except as provided in subparagraph (B), no assistance under this section shall be provided to a public water system that—

(i)

does not have the technical, managerial, and financial capability to ensure compliance with the requirements of this subchapter; or

(ii)

is in significant noncompliance with any requirement of a national primary drinking water regulation or variance.

(B)

Restructuring

A public water system described in subparagraph (A) may receive assistance under this section if—

(i)

the use of the assistance will ensure compliance; and

(ii)

if subparagraph (A)(i) applies to the system, the owner or operator of the system agrees to undertake feasible and appropriate changes in operations (including ownership, management, accounting, rates, maintenance, consolidation, alternative water supply, or other procedures) if the State determines that the measures are necessary to ensure that the system has the technical, managerial, and financial capability to comply with the requirements of this subchapter over the long term.

(C)

Review

(4)

American iron and steel products

(A)

In general

(B)

Definition of iron and steel products

In this paragraph, the term “iron and steel products” means the following products made primarily of iron or steel:

(i)

Lined or unlined pipes and fittings.

(ii)

Manhole covers and other municipal castings.

(iii)

Hydrants.

(iv)

Tanks.

(v)

Flanges.

(vi)

Pipe clamps and restraints.

(vii)

Valves.

(viii)

Structural steel.

(ix)

Reinforced precast concrete.

(x)

Construction materials.

(C)

Application

Subparagraph (A) shall be waived in any case or category of cases in which the Administrator finds that—

(i)

applying subparagraph (A) would be inconsistent with the public interest;

(ii)

iron and steel products are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or

(iii)

inclusion of iron and steel products produced in the United States will increase the cost of the overall project by more than 25 percent.

(D)

Waiver

(E)

International agreements

(F)

Management and oversight

(G)

Effective date

(5)

Prevailing wages

(b)

Intended use plans

(1)

In general

(2)

Contents

An intended use plan shall include—

(A)

a list of the projects to be assisted in the first fiscal year that begins after the date of the plan, including a description of the project, the expected terms of financial assistance, and the size of the community served;

(B)

the criteria and methods established for the distribution of funds; and

(C)

a description of the financial status of the State loan fund and the short-term and long-term goals of the State loan fund.

(3)

Use of funds

(A)

In general

An intended use plan shall provide, to the maximum extent practicable, that priority for the use of funds be given to projects that—

(i)

address the most serious risk to human health;

(ii)

are necessary to ensure compliance with the requirements of this subchapter (including requirements for filtration); and

(iii)

assist systems most in need on a per household basis according to State affordability criteria.

(B)

List of projects

(c)

Fund management

(d)

Assistance for disadvantaged communities

(1)

Loan subsidy

(A)

In general

(B)

Exclusion

(2)

Total amount of subsidies

For each fiscal year, of the amount of the capitalization grant received by the State for the year, the total amount of loan subsidies made by a State pursuant to paragraph (1)—

(A)

may not exceed 35 percent; and

(B)

to the extent that there are sufficient applications for loans to communities described in paragraph (1), may not be less than 12 percent.

(3)

“Disadvantaged community” defined

(e)

State contribution

(f)

Types of assistance

Except as otherwise limited by State law, the amounts deposited into a State loan fund under this section may be used only—

(1)

to make loans, on the condition that—

(A)

the interest rate for each loan is less than or equal to the market interest rate, including an interest free loan;

(B)

principal and interest payments on each loan will commence not later than 18 months after completion of the project for which the loan was made;

(C)

each loan will be fully amortized not later than 30 years after the completion of the project, except that in the case of a disadvantaged community (as defined in subsection (d)(3)) a State may provide an extended term for a loan, if the extended term—

(i)

terminates not later than the date that is 40 years after the date of project completion; and

(ii)

does not exceed the expected design life of the project;

(D)

the recipient of each loan will establish a dedicated source of revenue (or, in the case of a privately owned system, demonstrate that there is adequate security) for the repayment of the loan; and

(E)

the State loan fund will be credited with all payments of principal and interest on each loan;

(2)

to buy or refinance the debt obligation of a municipality or an intermunicipal or interstate agency within the State at an interest rate that is less than or equal to the market interest rate in any case in which a debt obligation is incurred after July 1, 1993;

(3)

to guarantee, or purchase insurance for, a local obligation (all of the proceeds of which finance a project eligible for assistance under this section) if the guarantee or purchase would improve credit market access or reduce the interest rate applicable to the obligation;

(4)

as a source of revenue or security for the payment of principal and interest on revenue or general obligation bonds issued by the State if the proceeds of the sale of the bonds will be deposited into the State loan fund; and

(5)

to earn interest on the amounts deposited into the State loan fund.

(g)

Administration of State loan funds

(1)

Combined financial administration

Notwithstanding subsection (c), a State may (as a convenience and to avoid unnecessary administrative costs) combine, in accordance with State law, the financial administration of a State loan fund established under this section with the financial administration of any other revolving fund established by the State if otherwise not prohibited by the law under which the State loan fund was established and if the Administrator determines that—

(A)

the grants under this section, together with loan repayments and interest, will be separately accounted for and used solely for the purposes specified in subsection (a); and

(B)

the authority to establish assistance priorities and carry out oversight and related activities (other than financial administration) with respect to assistance remains with the State agency having primary responsibility for administration of the State program under section 300g–2 of this title, after consultation with other appropriate State agencies (as determined by the State): Provided, That in nonprimacy States eligible to receive assistance under this section, the Governor shall determine which State agency will have authority to establish priorities for financial assistance from the State loan fund.

(2)

Cost of administering fund

(A)

Authorization

(i)

In general

For each fiscal year, a State may use the amount described in clause (ii)—

(I)

to cover the reasonable costs of administration of the programs under this section, including the recovery of reasonable costs expended to establish a State loan fund that are incurred after August 6, 1996; and

(II)

to provide technical assistance to public water systems within the State.

(ii)

Description of amount

The amount referred to in clause (i) is an amount equal to the sum of—

(I)

the amount of any fees collected by the State for use in accordance with clause (i)(I), regardless of the source; and

(II)

the greatest of—

(aa)

$400,000;

(bb)

⅕ percent of the current valuation of the fund; and

(cc)

an amount equal to 4 percent of all grant awards to the fund under this section for the fiscal year.

(B)

Additional use of funds

For fiscal year 1995 and each fiscal year thereafter, each State may use up to an additional 10 percent of the funds allotted to the State under this section—

(i)

for public water system supervision programs under section 300j–2(a) of this title;

(ii)

to administer or provide technical assistance through source water protection programs;

(iii)

to develop and implement a capacity development strategy under section 300g–9(c) of this title; and

(iv)

for an operator certification program for purposes of meeting the requirements of section 300g–8 of this title.

(C)

Technical assistance

(D)

Enforcement actions

(3)

Guidance and regulations

The Administrator shall publish guidance and promulgate regulations as may be necessary to carry out the provisions of this section, including—

(A)

provisions to ensure that each State commits and expends funds allotted to the State under this section as efficiently as possible in accordance with this subchapter and applicable State laws;

(B)

guidance to prevent waste, fraud, and abuse; and

(C)

guidance to avoid the use of funds made available under this section to finance the expansion of any public water system in anticipation of future population growth.

The guidance and regulations shall also ensure that the States, and public water systems receiving assistance under this section, use accounting, audit, and fiscal procedures that conform to generally accepted accounting standards.

(4)

State report

(h)

Needs survey

(1)

The Administrator shall conduct an assessment of water system capital improvement needs of all eligible public water systems in the United States and submit a report to the Congress containing the results of the assessment within 180 days after August 6, 1996, and every 4 years thereafter.

(2)

Any assessment conducted under paragraph (1) after October 23, 2018, shall include an assessment of costs to replace all lead service lines (as defined in section 300j–19b(a)(4) of this title) of all eligible public water systems in the United States, and such assessment shall describe separately the costs associated with replacing the portions of such lead service lines that are owned by an eligible public water system and the costs associated with replacing any remaining portions of such lead service lines, to the extent practicable.

(i)

Indian Tribes

(1)

In general

(2)

Use of funds

(3)

Alaska Native villages

(4)

Needs assessment

(5)

Training and operator certification

(A)

In general

(B)

Eligible tribal organizations

Intertribal consortia or tribal organizations eligible for a grant under subparagraph (A) are intertribal consortia or tribal organizations that—

(i)

as determined by the Administrator, are the most qualified and experienced to provide training and technical assistance to Indian Tribes; and

(ii)

the Indian Tribes find to be the most beneficial and effective.

(j)

Other areas

(k)

Other authorized activities

(1)

In general

Notwithstanding subsection (a)(2), a State may take each of the following actions:

(A)

Provide assistance, only in the form of a loan, to one or more of the following:

(i)

Any public water system described in subsection (a)(2) to acquire land or a conservation easement from a willing seller or grantor, if the purpose of the acquisition is to protect the source water of the system from contamination and to ensure compliance with national primary drinking water regulations.

(ii)

Any community water system to implement local, voluntary source water protection measures to protect source water in areas delineated pursuant to section 300j–13 of this title, in order to facilitate compliance with national primary drinking water regulations applicable to the system under section 300g–1 of this title or otherwise significantly further the health protection objectives of this subchapter. Funds authorized under this clause may be used to fund only voluntary, incentive-based mechanisms.

(iii)

Any community water system to provide funding in accordance with section 300j–14(a)(1)(B)(i) of this title.

(B)

Provide assistance, including technical and financial assistance, to any public water system as part of a capacity development strategy developed and implemented in accordance with section 300g–9(c) of this title.

(C)

Make expenditures from the capitalization grant of the State to delineate, assess, and update assessments for source water protection areas in accordance with section 300j–13 of this title, except that funds set aside for such expenditure shall be obligated within 4 fiscal years.

(D)

Make expenditures from the fund for the establishment and implementation of wellhead protection programs under section 300h–7 of this title and for the implementation of efforts (other than actions authorized under subparagraph (A)) to protect source water in areas delineated pursuant to section 300j–13 of this title.

(2)

Limitation

For each fiscal year, the total amount of assistance provided and expenditures made by a State under this subsection may not exceed 15 percent of the amount of the capitalization grant received by the State for that year and may not exceed 10 percent of that amount for any one of the following activities:

(A)

To acquire land or conservation easements pursuant to paragraph (1)(A)(i).

(B)

To provide funding to implement voluntary, incentive-based source water quality protection measures pursuant to clauses (ii) and (iii) of paragraph (1)(A).

(C)

To provide assistance through a capacity development strategy pursuant to paragraph (1)(B).

(D)

To make expenditures to delineate or assess source water protection areas pursuant to paragraph (1)(C).

(E)

To make expenditures to establish and implement wellhead protection programs, and to implement efforts to protect source water, pursuant to paragraph (1)(D).

(3)

Statutory construction

(l)

Savings

(m)

Authorization of appropriations

(1)

There are authorized to be appropriated to carry out the purposes of this section, except for subsections (a)(2)(G) and (t)—

(A)

$1,174,000,000 for fiscal year 2019;

(B)

$1,300,000,000 for fiscal year 2020;

(C)

$1,950,000,000 for fiscal year 2021;

(D)

$2,400,000,000 for fiscal year 2022;

(E)

$2,750,000,000 for fiscal year 2023;

(F)

$3,000,000,000 for fiscal year 2024; and

(G)

$3,250,000,000 for each of fiscal years 2025 and 2026.

(2)

To the extent amounts authorized to be appropriated under this subsection in any fiscal year are not appropriated in that fiscal year, such amounts are authorized to be appropriated in a subsequent fiscal year. Such sums shall remain available until expended.

(n)

Health effects studies

(o)

Monitoring for unregulated contaminants

(p)

Demonstration project for State of Virginia

(q)

Small system technical assistance

(r)

Evaluation

(s)

Best practices for State loan fund administration

The Administrator shall—

(1)

collect information from States on administration of State loan funds established pursuant to subsection (a)(1), including—

(A)

efforts to streamline the process for applying for assistance through such State loan funds;

(B)

programs in place to assist with the completion of applications for assistance through such State loan funds;

(C)

incentives provided to public water systems that partner with small public water systems to assist with the application process for assistance through such State loan funds;

(D)

practices to ensure that amounts in such State loan funds are used to provide loans, loan guarantees, or other authorized assistance in a timely fashion;

(E)

practices that support effective management of such State loan funds;

(F)

practices and tools to enhance financial management of such State loan funds; and

(G)

key financial measures for use in evaluating State loan fund operations, including—

(i)

measures of lending capacity, such as current assets and current liabilities or undisbursed loan assistance liability; and

(ii)

measures of growth or sustainability, such as return on net interest;

(2)

not later than 3 years after October 23, 2018, disseminate to the States best practices for administration of such State loan funds, based on the information collected pursuant to this subsection; and

(3)

periodically update such best practices, as appropriate.

(t)

Emerging contaminants

(1)

In general

(2)

Authorization of appropriations

(July 1, 1944, ch. 373, title XIV, § 1452, as added Pub. L. 104–182, title I, § 130, Aug. 6, 1996, 110 Stat. 1662; amended Pub. L. 114–322, title II, §§ 2102, 2103, 2110, 2112(b), 2113, Dec. 16, 2016, 130 Stat. 1717, 1729, 1730; Pub. L. 115–270, title II, §§ 2002, 2015, 2022, 2023, Oct. 23, 2018, 132 Stat. 3840, 3854, 3862; Pub. L. 116–92, div. F, title LXXIII, § 7312, Dec. 20, 2019, 133 Stat. 2277; Pub. L. 117–58, div. E, title I, § 50102, Nov. 15, 2021, 135 Stat. 1136.)

cite as: 42 USC 300j-12

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