[Federal Register Volume 83, Number 71 (Thursday, April 12, 2018)]
[Notices]
[Pages 15828-15833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-07513]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL 9976-67-OW]


Notice of Funding Availability (NOFA) for Applications for Credit 
Assistance Under the Water Infrastructure Finance and Innovation Act 
(WIFIA) Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of funding availability.

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SUMMARY: In the Consolidated Appropriations Act, 2018, signed by the 
President on March 23, 2018, Congress provided at least $55 million in 
budget authority for the Water Infrastructure Finance and Innovation 
Act of 2014 (WIFIA) program to cover the subsidy required to provide a 
much larger amount of credit assistance. The Environmental Protection 
Agency (EPA) estimates that this budget authority may provide 
approximately $5.5 billion in credit assistance and may finance 
approximately $11 billion in water infrastructure investment, while 
covering increased costs associated with implementing a larger program. 
The purpose of this notice of funding availability (NOFA) is to solicit 
letters of interest (LOIs) from prospective borrowers seeking credit 
assistance from EPA.

[[Page 15829]]


DATES: The LOI submittal period will begin on April 12, 2018 and end at 
12 p.m. (noon) EDT on July 6, 2018.

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 12:00 p.m. (noon) EDT on July 3, 2018.
    EPA will notify prospective borrowers that their letter of interest 
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: EPA will evaluate and select proposed 
projects described in the LOIs using the selection criteria established 
in statute and regulation, and further described in this NOFA as well 
as the WIFIA program handbook. This NOFA establishes relative weights 
that will be used in the current LOI submittal period for the selection 
criteria and outlines the process that prospective borrowers should 
follow to be considered for WIFIA 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.
    For a project to be considered during a selection round, EPA should 
receive a LOI, preferably 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. 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 should fill out the WIFIA 
Letter of Interest form and follow the guidelines contained on the 
WIFIA program website: https://www.epa.gov/wifia/wifia-application-materials-and-resources. Prospective borrowers should provide the LOI 
and any attachments as Microsoft Word documents or searchable PDF 
files, whenever possible, to facilitate EPA's review. Additionally, 
prospective borrowers should ensure that financial information, 
including the pro forma financial statement, is in a formula-based 
Microsoft Excel document. Section V of this NOFA provides additional 
details on the contents of the LOIs.
    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 series of webinars to provide further information 
about submitting a LOI. The webinar schedule and registration 
directions can be found on the WIFIA program website: www.epa.gov/wifia.
    Prospective borrowers with questions about the program or interest 
in meeting with WIFIA program staff may send a request to 
[email protected]. EPA will meet with all prospective borrowers interested 
in discussing the program, but only prior to submission of a LOI.

Table of Contents

I. Background
II. Program Funding
III. Eligibility Requirements
IV. Types of Credit Assistance
V. Letters of Interest and Applications
VI. Fees
VII. 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.
    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 at least $55 million in funding to cover the 
subsidy cost of providing WIFIA 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 WIFIA-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 $5.5 
billion \1\ in long-term, low-cost financing to water and wastewater 
projects and accelerate approximately $11 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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    Recognizing the need that exists in both small and large 
communities to invest in infrastructure, Congress stipulated in statute 
that EPA set aside 15% of the budget authority appropriated each year 
for small communities, defined as systems that serve a population of 
less than 25,000. Of the funds set aside, any amount not obligated by 
June 1 of the fiscal year for which budget authority is set aside may 
be used for any size community. Regardless of whether EPA obligates 
these funds by June 1 of the fiscal year for which budget authority is 
set aside, EPA will endeavor to use 15% of its budget authority for 
small communities.
    In addition to assisting both large and small projects and 
communities, WIFIA may be an attractive borrowing mechanism for a 
variety of different borrower and credit types. EPA anticipates that 
municipalities, private entities, project financings, and State 
Revolving Fund programs will benefit from the low cost and debt 
structuring flexibilities that WIFIA loans can offer.

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 one of the following in order to be 
eligible for WIFIA credit assistance:
    (i) A corporation;
    (ii) A partnership;
    (iii) A joint venture;
    (iv) A trust;
    (v) A Federal, State, or local governmental entity, agency, or 
instrumentality;
    (vi) A tribal government or a consortium of tribal governments; or
    (vii) A State infrastructure financing authority.

B. Eligible Projects

    The WIFIA statute authorizes EPA to provide credit assistance for a 
wide

[[Page 15830]]

variety of projects. Projects must be one of the following in order to 
be eligible for WIFIA credit assistance:
    (i) One or more activities that are eligible for assistance under 
section 603(c) of the Federal Water Pollution Control Act (33 U.S.C. 
1383(c)), notwithstanding the public ownership requirement under 
paragraph (1) of that subsection;
    (ii) One or more activities described in section 1452(a)(2) of the 
Safe Drinking Water Act (42 U.S.C. 300j-12(a)(2));
    (iii) A project for enhanced energy efficiency in the operation of 
a public water system or a publicly owned treatment works;
    (iv) A project for repair, rehabilitation, or replacement of a 
treatment works, community water system, or aging water distribution or 
waste collection facility (including a facility that serves a 
population or community of an Indian reservation);
    (v) A brackish or sea water desalination project, including 
chloride control, a managed aquifer recharge project, a water recycling 
project, or a project to provide alternative water supplies to reduce 
aquifer depletion;
    (vi) A project to prevent, reduce, or mitigate the effects of 
drought, including projects that enhance the resilience of drought-
stricken watersheds;
    (vii) Acquisition of real property or an interest in real 
property--
    (a) If the acquisition is integral to a project described in 
paragraphs (i) through (v); or
    (b) Pursuant to an existing plan that, in the judgment of the 
Administrator, would mitigate the environmental impacts of water 
resources infrastructure projects otherwise eligible for assistance 
under this section;
    (viii) A combination of projects, each of which is eligible under 
paragraph (i) or (ii), for which a State infrastructure financing 
authority submits to the Administrator a single application; or
    (ix) A combination of projects secured by a common security pledge, 
each of which is eligible under paragraph (i), (ii), (iii), (iv), (v), 
(vi), or (vii), for which an eligible entity, or a combination of 
eligible entities, submits 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 WIFIA credit assistance, a 
project must meet the following five 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, or for a project 
eligible under paragraphs (2) or (3) of 33 U.S.C. 3905 serving a 
community of not more than 25,000 individuals, project costs that are 
reasonably anticipated to equal or exceed $5 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;
    (iv) In the case of a project that is undertaken by an entity that 
is not a State or local government or an agency or instrumentality of a 
State or local government, or a tribal government or consortium of 
tribal governments, the project that the entity is undertaking shall be 
publicly sponsored; and
    (v) The applicant shall have developed 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 WIFIA 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;

[[Page 15831]]

    (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, 
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, http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning;
    (xxi) Drug-Free Workplace Act, 41 U.S.C. 8101 et seq., https://webapps.dol.gov/elaws/asp/drugfree/screen4.htm;
    (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 Environmental Protection Agency (EPA) Financial 
Assistance Agreements, 73 FR 15904, 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. Types of Credit Assistance

    Under WIFIA, EPA is permitted to provide credit assistance in the 
form of secured (direct) loans or loan guarantees. The maximum amount 
of WIFIA credit assistance to a project is 49 percent of eligible 
project costs. Each prospective borrower should list the estimated 
total capital costs of the project, broken down by activity type and 
differentiating between eligible project costs and ineligible project 
costs in the LOI and application.

V. 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

    Prospective borrowers seeking a WIFIA loan must submit a LOI 
describing the project fundamentals and addressing the WIFIA selection 
criteria.
    The primary purpose of the LOI is to provide adequate information 
to EPA to: (i) Validate the eligibility of the prospective borrower and 
the prospective project, (ii) perform a preliminary creditworthiness 
assessment, (iii) perform a preliminary engineering feasibility 
assessment, and (iv) evaluate the project against the 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 project 
is deemed ineligible as described in Section III of this NOFA.
    Below is guidance on what should be included in the LOI.
    A. Prospective Borrower Information. In this section, the 
prospective borrower describes the entity seeking WIFIA assistance, 
including its legal name, address, website, Dun and Bradstreet Data 
Universal Number System (DUNS) number, and employer/taxpayer 
identification number numbers. In addition, the prospective borrower 
provides information on the project's organizational structure, 
experience, and readiness to proceed.
    In the case of a project that is undertaken by an entity that is 
not a State or local government or an agency or instrumentality of a 
State or local government, or a tribal government or consortium of 
tribal governments, the project that the entity is undertaking must be 
publicly sponsored. Public sponsorship means that the recipient can 
demonstrate, to the satisfaction of the EPA, that the prospective 
borrower has consulted with the affected State, local, or tribal 
government in which the project is located, or is otherwise affected by 
the project and that such government supports the proposed project. A 
prospective borrower can show support by including a certified letter 
signed by the approving State, tribal, or municipal department or 
similar agency; governor, mayor or other similar designated authority; 
statute or local ordinance, or any other means by which government 
approval can be evidenced.
    B. Project Plan. In this section, the prospective borrower provides 
a general description of the project, including its location, 
population served, permit number(s), purpose, design features, and 
development schedule. The prospective borrower describes how the 
project can be categorized as one of the project types eligible for 
WIFIA assistance as described in the program handbook. The prospective 
borrower includes other relevant information that could affect the 
development of the project, such as community support, pending 
legislation, or litigation. In this section, the prospective borrower 
summarizes the status of the project's environmental review, 
engineering report, and other approvals or analyses that are integral 
to the project's development.
    C. Project Operations and Maintenance Plan. In this section, the 
prospective borrower describes its plan for operating, maintaining, and 
repairing the project post-completion, discusses the sources of revenue 
used to finance these activities, and provides an estimate of the 
useful life of the project.
    D. Financing Plan. In this section, the prospective borrower 
indicates the requested type and amount WIFIA credit assistance. In 
addition, it details the proposed sources and uses of funds for the 
project. The discussion of proposed financing should identify the 
source(s) of revenue or other security that would be pledged to the 
WIFIA

[[Page 15832]]

assistance. As part of the description of its financial condition, the 
prospective borrower should include the year-end audited financial 
statements for the past three years, as available. Additionally, the 
prospective borrower describes the credit characteristics of the 
project and how the senior obligations of the project will achieve an 
investment-grade rating as well as the anticipated rating on the WIFIA 
instrument. It also includes a summary financial pro forma, presented 
in a formula-based Microsoft Excel document, as well as revenue and 
expense projections for the life of the WIFIA debt.
    E. Selection Criteria. In this section, the prospective borrower 
describes the potential policy benefits achieved using WIFIA assistance 
with respect to each of the WIFIA program selection criteria. These 
criteria and their weights are enumerated in Section VII of this NOFA 
and further explained in the WIFIA program handbook.
    F. Contact Information. In this section, the prospective borrower 
identifies the point of contact with whom the WIFIA program should 
communicate regarding the LOI. To complete its evaluation, WIFIA 
program staff may contact a prospective borrower regarding specific 
information in the LOI.
    G. Certifications. In this section, the prospective borrower 
certifies that it will abide by all applicable laws and regulations, 
including NEPA, the Federal Water Pollution Control Act, the American 
Iron and Steel requirements, and Federal labor standards, among others 
if selected to receive funding.
    H. SRF Notification. In this section, the prospective borrower 
acknowledges that EPA will notify the State infrastructure financing 
authority in the State in which the project is located that it 
submitted a LOI and provide the submitted LOI and source documents to 
that authority. The prospective borrower may opt out of having its LOI 
and source documents shared.

B. Application

    After EPA concludes its evaluation of the LOIs, a selection 
committee will invite prospective borrowers to apply based on the 
scoring of the selection criteria, while taking into consideration 
geographic and project diversity. The selection committee may choose to 
combine multiple Letters of Interests or separate projects from a 
prospective borrower based on the creditworthiness review and may offer 
less WIFIA assistance than requested in the LOI.
    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. In doing this, 
it is expected that EPA will only invite projects to apply if it 
anticipates that those projects are able to obtain WIFIA credit 
assistance.
    Applications should be submitted using the form provided on the 
WIFIA website: https://www.epa.gov/wifia/wifia-application-materials-and-resources. The purpose of the application is to provide the WIFIA 
program with the materials necessary to underwrite the loan. 
Underwriting performed by the WIFIA team will include a thorough 
evaluation of the project's plan of finance and underlying economics, 
including a detailed assessment of the project's cash flow and proposed 
credit terms. The WIFIA team will review the inputs and assumptions in 
the financing plan, the revenue and expenditures in the financing plan, 
the project's ability to meet WIFIA loan repayment obligations, and 
project risks and mitigants, among other things.
    Detailed information needs for the application are listed in the 
application form and described in the WIFIA program handbook.

VI. 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 $25,000 for projects serving communities 
of not more than 25,000 individuals or $100,000 for all other projects. 
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 the 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.

VII. Selection Criteria

    This section specifies the criteria and process that EPA will use 
to evaluate and award applications for WIFIA assistance.
    The selection criteria described below incorporate statutory 
eligibility requirements, supplemented by WIFIA regulations at 40 CFR 
35.10055. EPA has also identified the following strategic objectives as 
priorities for this LOI submittal period:
    (i) Provide for clean and safe drinking water: EPA is working to 
strengthen its implementation of the Safe Drinking Water Act to ensure 
we protect and build upon the enormous public health benefits achieved 
through the provision of safe drinking water throughout the country. 
The Agency's highest priorities include reducing exposure to lead in 
the nation's drinking water systems, ensuring continuous compliance 
with contaminant limits, responding quickly to emerging concerns, and 
improving the nation's aging and insufficient drinking water 
infrastructure.
    (ii) Repair, rehabilitate, and replace aging infrastructure and 
conveyance systems: Many communities face formidable challenges in 
providing adequate and reliable water and wastewater infrastructure 
services. Existing water and wastewater infrastructure in some of these 
communities is aging, and investment is not always keeping up with the 
needs. EPA estimates the national funding need for capital improvements 
for such facilities totals approximately $740 billion over the next 20 
years. In many cases, meeting these needs will require significant 
increases in capital investment.
    EPA's priorities reflect water sector challenges that require 
innovative tools to assist municipalities in managing and adapting to 
our most pressing public health and environmental challenges. These 
priorities are reflected in the scoring methodology of the selection 
criteria below, described in greater detail in the WIFIA program 
handbook.
    The WIFIA selection criteria are divided into three categories that 
represent critical considerations for selecting projects: Project 
Impact, Project Readiness, and Borrower Creditworthiness. Each 
criterion within a category can provide a range of points with the 
maximum number of points indicated. Each category can provide up to 100 
points out of a total of 300 available points, and the category-
specific and overall scores will help inform the selection committee's 
deliberations within the overall WIFIA framework. For the Project 
Readiness

[[Page 15833]]

and Borrower Creditworthiness categories, criteria scores are 
supplemented by points awarded from the preliminary engineering 
feasibility analysis and preliminary creditworthiness assessment, 
described in the WIFIA program handbook. In order to reflect priorities 
and give greater consideration to a class of projects to reduce 
exposure to lead in the nation's drinking water systems or ensure 
continuous compliance with contaminant limits, EPA has added a 
criterion (ix) to the Project Impact category of criteria in accordance 
with 40 CFR 35.10055(b). The criteria are as follows:

Project Impact

    (i) 15 points: The extent to which the project is nationally or 
regionally significant, with respect to the generation of economic and 
public benefits, such as (1) the reduction of flood risk; (2) the 
improvement of water quality and quantity, including aquifer recharge; 
(3) the protection of drinking water, including source water 
protection; and (4) the support of international commerce. 33 U.S.C. 
3907(b)(2)(A); 40 CFR 35.10055(a)(1).
    (ii) 5 points: 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).
    (iii) 5 points: 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) and (5).
    (iv) 5 points: 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).
    (v) 10 points: 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; and (5) water resources with 
exceptional recreational value or ecological importance. 33 U.S.C. 
3907(b)(2)(H); 40 CFR 35.10055(a)(7).
    (vi) 10 points: 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).
    (vii) 20 points: The extent to which the project addresses needs 
for repair, rehabilitation or replacement of a treatment works, 
community water system, or aging water distribution or wastewater 
collection system. 40 CFR 35.10055(a)(12).
    (viii) 10 points: The extent to which the project serves 
economically stressed communities, or pockets of economically stressed 
rate payers within otherwise non-economically stressed communities. 40 
CFR 35.10055(a)(13).
    (ix) 20 points: The extent to which the project reduces exposure to 
lead in the nation's drinking water systems or ensures continuous 
compliance with contaminant limits. 40 CFR 35.10055(b).

Project Readiness

    (i) 50 points: 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).
    (ii) 50 points: Preliminary engineering feasibility analysis score. 
33 U.S.C. 3907(a)(2); 33 U.S.C. 3907(a)(6); 40 CFR 35.10015(c); 40 CFR 
35.10045(a).

Borrower Creditworthiness

    (i) 10 points: 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).
    (ii) 10 points: 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).
    (iii) 10 points: 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).
    (iv) 10 points: 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) 60 points: Preliminary creditworthiness assessment score. 33 
U.S.C. 3907(a)(1); 40 CFR 35.10015(c); 40 CFR 35.10045(a)(1) and (4) 
and (b).
    In addition to the selection criteria score, EPA is required by 33 
U.S.C. 3902(a) to ``ensure a diversity of project types and 
geographical locations.''
    Following analysis by WIFIA program staff, a final score is 
calculated for each project. Projects will be selected in order of 
score, subject, however, to the requirement to ensure a diversity of 
project types and geographical locations.
    The scoring scales and guidance used to evaluate each project 
against the selection criteria are available in the WIFIA program 
handbook. Prospective borrowers considering WIFIA should review the 
WIFIA program handbook and discuss how the project addresses each of 
the selection criteria in the LOI submission.

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

    Dated: April 4, 2018.
E. Scott Pruitt,
Administrator.
[FR Doc. 2018-07513 Filed 4-11-18; 8:45 am]
 BILLING CODE 6560-50-P


