[Federal Register Volume 86, Number 81 (Thursday, April 29, 2021)]
[Rules and Regulations]
[Pages 22612-22617]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08867]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 35

[FRL 10022-77-OW]


Notification of Funding for Credit Assistance Under the Water 
Infrastructure Finance and Innovation Act (WIFIA) Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notification of funding availability (NOFA).

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SUMMARY: In the Further Consolidated Appropriations Act, 2021, signed 
by the President on December 27, 2020, Congress provided $54.5 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 or Agency) estimates that this budget authority may provide 
approximately $5.5 billion in credit assistance and may finance 
approximately $11 billion in water infrastructure investment. The 
purpose of this NOFA is to solicit letters of interest (LOIs) from 
prospective borrowers seeking credit assistance from EPA. 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, explains budgetary scoring 
factors to determine budgetary scoring compliance, 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 using FY 2021 appropriated funding or available 
carry-over resources, consistent with Agency policy and guidance, if 
additional funding is available after the original selections are made. 
This could include holding a subsequent selection round.

DATES: The LOI submittal period will begin on April 30, 2021, and end 
at 11:59 p.m. EDT on July 23, 2021.

ADDRESSES: Prospective borrowers should submit all LOIs electronically 
via email at: wifia@epa.gov or via EPA's SharePoint site. To be granted 
access to the SharePoint site, prospective borrowers should contact 
wifia@epa.gov 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 July 21, 2021.
    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 an 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 an LOI, prospective borrowers should fill out the 
WIFIA 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. Additionally, prospective borrowers should 
ensure that financial information, including the pro forma financial 
statement, is in a formula-based Microsoft Excel document. 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, but EPA may extend the deadline on a case-by-case 
basis if the LOI schedule signals additional time may be needed.
    EPA will host a series of webinars to provide further information 
about submitting an LOI. The webinar schedule and registration 
instructions can be found on the WIFIA program website: www.epa.gov/wifia.
    Prospective borrowers with questions about the program or interest 
in meeting with the WIFIA program staff may send a request to 
wifia@epa.gov. EPA will meet with all prospective borrowers interested 
in discussing the program, but only prior to submission of an LOI.

Table of Contents

I. Background
II. Program Funding
III. Eligibility Requirements
IV. Fiscal Year 2021 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

[[Page 22613]]

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 water infrastructure projects of national and regional 
significance.

II. Program Funding

    Congress appropriated $54.5 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 the Agency to provide approximately $5.5 
billion \1\ in long-term, low-cost financing to water infrastructure 
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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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 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 variety of projects. Projects must be one of the following 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 paragraphs (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 paragraph (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):

[[Page 22614]]

    (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 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 2021 Office of Management and Budget Budgetary Scoring 
Determination

    To comply with Public Law 116-260, a project selected for WIFIA 
financing using funding appropriated in FY 2021 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 WIFIA, EPA is permitted to provide credit assistance in the 
form of secured (direct) loans or loan guarantees. 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.

A. Maximum Amount of WIFIA Credit Assistance

    The maximum amount of WIFIA credit assistance to a project is 49 
percent of eligible project costs in almost all instances.

B. Exception for Small Communities

    Recognizing the need that exists in both small and large 
communities to invest in infrastructure, Congress stipulated in statute 
that EPA set aside 15 percent of the budget authority appropriated each 
year for small communities, defined as systems that serve a population 
of 25,000 or less. Of the funds set aside, any amount not

[[Page 22615]]

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 percent of its 
budget authority for small communities.
    EPA knows that small communities can face extraordinary challenges 
paying for needed water infrastructure projects. Therefore, EPA is 
offering small community prospective borrowers the opportunity to 
request credit assistance up to 80 percent of the eligible project 
costs in addition to a lower threshold for project costs (as explained 
in Section III.D(ii) of this NOFA) and the small community set aside. 
Small community needs represent a disproportionate amount of the 
overall water infrastructure needs nationwide. By offering credit 
assistance up to 80 percent, EPA is making a project's financing 
simpler and more accessible and reducing transaction costs for small 
communities, enabling them to finance and implement needed upgrades and 
improvements to their infrastructure.

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 WIFIA loan must submit an 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 EPA recommends be included in the LOI.
    A. Key Loan Information. In this section, the prospective borrower 
provides a general description of the project, purpose, loan amount, 
total eligible project costs, application submission date, loan close 
date, and population information. The prospective borrower also 
includes information such as its legal name, address, website, Dun and 
Bradstreet Data Universal Number System (DUNS) number, and employer/
taxpayer identification number.
    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 prospective 
borrower can demonstrate, to the satisfaction of EPA, that it 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. Engineering and Credit. In this section, the prospective 
borrower provides any technical reports or written information relevant 
to evaluating the project and a high-level schedule of dates for the 
project or projects included in the LOI. To evaluate creditworthiness, 
the prospective borrower provides a credit rating letter that is less 
than a year old or is actively maintained. If the prospective borrower 
does not have a current rating letter, the borrower describes how the 
senior obligations of the project will achieve an investment-grade 
rating and includes a pro-forma and three years of audited financial 
statements.
    C. 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 VIII of this NOFA 
and further explained in the WIFIA program handbook.
    D. 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 EPA's evaluation, the WIFIA 
program staff may contact a prospective borrower regarding specific 
information in the LOI.
    E. Certifications. In this section, the prospective borrower 
certifies that it will abide by all applicable laws and regulations, if 
selected to receive funding.
    F. 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 an 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 invites 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 LOIs or separate projects from a prospective borrower based on 
the creditworthiness review and may offer an alternative amount of 
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. It is expected 
that EPA will only invite projects to apply if it anticipates that 
those projects 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

[[Page 22616]]

LOIs and award applications for WIFIA assistance.
    The selection criteria described below incorporate statutory 
eligibility requirements, supplemented by the WIFIA regulations at 40 
CFR 35.10055. EPA has also identified the following strategic 
objectives as priorities for this LOI submittal period:
    (i) Economically stressed communities: To support EPA's goal of 
considering equity and environmental justice in various aspects of our 
work, EPA is committed to increasing access to financing for water and 
wastewater infrastructure projects for communities experiencing 
economic hardship. EPA is prioritizing projects that support improved 
water infrastructure in economically stressed communities. Communities 
that meet national benchmarks will receive additional points.
    (ii) Protection against extreme weather events: As extreme weather 
events become increasingly common and continue to damage critical 
infrastructure that provide water and wastewater services to 
communities across the nation, EPA is prioritizing financing for 
projects that protect the nation's water infrastructure from the 
impacts of climate change.
    (iii) Repair, rehabilitate, and replace aging infrastructure and 
conveyance systems: Many communities face formidable challenges in 
providing adequate and reliable water and wastewater services. Existing 
water and wastewater infrastructure is aging, and investment is not 
always keeping up with the needs. EPA is prioritizing projects that 
will help meet these needs for the nation's aging infrastructure.
    (iv) Lead and emerging contaminants: 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. To reflect 
this priority, EPA will give greater consideration to projects that 
reduce exposure to lead and address emerging contaminants including 
per- and polyfluoroalkyl substances (PFAS).
    (v) New or innovative approaches: To promote the incorporation of 
new and innovative approaches into projects, EPA is prioritizing 
projects that incorporate innovative approaches such as but not limited 
to the following: Cybersecurity; the use of energy efficient parts and 
systems; the use of renewable or alternative sources of energy; green 
infrastructure; and the development of alternative sources of drinking 
water through, for example, desalination, aquifer recharge or water 
recycling, and resource recovery.
    EPA's priorities reflect water sector challenges that require 
innovative tools to assist local governments 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: 
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 and Borrower Creditworthiness categories, criteria scores are 
supplemented by points awarded from the preliminary engineering 
feasibility analysis and preliminary creditworthiness assessment, 
respectively, described in the WIFIA program handbook. The criteria are 
as follows:
    Project Impact:
    (i) 5 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) 20 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); 40 CFR 35.10055(a)(5).
    (iii) 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).
    (iv) 5 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; 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).
    (v) 5 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).
    (vi) 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).
    (vii) 20 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).
    (viii) 20 points: The extent to which the project reduces exposure 
to lead in the nation's drinking water systems or addresses emergent 
contaminants. 40 CFR 35.10055(b).
    Project Readiness:
    (i) 40 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) 40 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).
    (iii) 20 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).
    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).

[[Page 22617]]

    (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); 40 CFR 
35.10045(a)(4); 40 CFR 35.10045(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 the WIFIA program staff, a final score is 
calculated for each project. Projects will be selected in order of 
score, subject to the requirement to ensure a diversity of project 
types and geographical locations. To ensure diversity, EPA will 
establish a ceiling for each project type and geographical location. 
EPA will select projects in rank order up until the point that the 
ceiling is reached. Thereafter, the next highest project that adds 
diversity will be selected.
    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.

Michael S. Regan,
Administrator.
[FR Doc. 2021-08867 Filed 4-28-21; 8:45 am]
BILLING CODE 6560-50-P


