§1383 — Title 33 Navigation and Navigable Waters | U.S. Code

Summary

States must set up and run a special Water Pollution Control Revolving Fund before they can get federal capitalization grants. The fund must be run by a state agency or entity that has the powers needed to operate it under the law. The money in the fund can only be used to give financial help for a range of water projects, including construction or repair of public sewage treatment plants, management and conservation plans, decentralized household systems, stormwater and drainage projects, water reuse and recycling, energy- and security-improvements, watershed projects, and certain help provided by qualified nonprofit groups for small and medium treatment plants or for low-income households. The fund can mainly make loans that are at or below market interest rates (including interest-free), with terms no longer than 30 years or the project’s useful life, and payments must start within 1 year after a project is finished. Loan recipients must have a dedicated revenue source to repay loans, and the fund must get all loan payments. For treatment works loans, recipients must make a fiscal sustainability plan or certify they already have one; the plan must list critical assets, evaluate their condition, include water and energy conservation actions, and show how repairs and replacements will be funded. The fund may also refinance eligible debt (after March 7, 1985), buy insurance or guarantees, back state bonds, earn interest, and pay reasonable admin costs up to 4 percent of grants, $400,000 per year, or 0.2 percent of the fund’s value (whichever is greatest), plus fees. If loan money paid for planning and the recipient later gets a federal construction grant and an allowance for those planning costs, the loan must be repaid to the extent of that allowance. States may give extra subsidies (forgiveness, grants, negative-interest loans, etc.) to needy communities or for water- and energy-saving, stormwater, or sustainable projects, but they must set affordability rules by September 30, 2015, follow limits tied to total federal grants (must exceed $1,000,000,000 nationwide), and may not make extra subsidies above 30 percent (and generally at least 10 percent if enough applicants) of their yearly capitalization grant. “Eligible individual” means a household with income at or below 50 percent of the state’s nonmetro median household income (per the most recent decennial census). A State may also use an extra 2 percent of its annual awards to help nonprofits or public entities give technical aid to rural, small, and tribal treatment works.

Title 33, §1383

Navigation and Navigable Waters — Source: USLM XML via OLRC

(a)Before a State may receive a capitalization grant with funds made available under this subchapter and section 1285(m) of this title, the State shall first establish a water pollution control revolving fund which complies with the requirements of this section.

(b)Each State water pollution control revolving fund shall be administered by an instrumentality of the State with such powers and limitations as may be required to operate such fund in accordance with the requirements and objectives of this chapter.

(c)The amounts of funds available to each State water pollution control revolving fund shall be used only for providing financial assistance—

(1)to any municipality or intermunicipal, interstate, or State agency for construction of publicly owned treatment works (as defined in section 1292 of this title);

(2)for the implementation of a management program established under section 1329 of this title;

(3)for development and implementation of a conservation and management plan under section 1330 of this title;

(4)for the construction, repair, or replacement of decentralized wastewater treatment systems that treat municipal wastewater or domestic sewage;

(5)for measures to manage, reduce, treat, or recapture stormwater or subsurface drainage water;

(6)to any municipality or intermunicipal, interstate, or State agency for measures to reduce the demand for publicly owned treatment works capacity through water conservation, efficiency, or reuse;

(7)for the development and implementation of watershed projects meeting the criteria set forth in section 1274 of this title;

(8)to any municipality or intermunicipal, interstate, or State agency for measures to reduce the energy consumption needs for publicly owned treatment works;

(9)for reusing or recycling wastewater, stormwater, or subsurface drainage water;

(10)for measures to increase the security of publicly owned treatment works;

(11)to any qualified nonprofit entity, as determined by the Administrator, to provide assistance to owners and operators of small and medium publicly owned treatment works—

(A)to plan, develop, and obtain financing for eligible projects under this subsection, including planning, design, and associated preconstruction activities; and

(B)to assist such treatment works in achieving compliance with this chapter; and

(12)to any qualified nonprofit entity, as determined by the Administrator, to provide assistance to an eligible individual (as defined in subsection (j))—

(A)for the repair or replacement of existing individual household decentralized wastewater treatment systems; or

(B)in a case in which an eligible individual resides in a household that could be cost-effectively connected to an available publicly owned treatment works, for the connection of the applicable household to such treatment works.

(d)Except as otherwise limited by State law and provided in subsection (k), a water pollution control revolving fund of a State under this section may be used only—

(1)to make loans, on the condition that—

(A)such loans are made at or below market interest rates, including interest free loans, at terms not to exceed the lesser of 30 years and the projected useful life (as determined by the State) of the project to be financed with the proceeds of the loan;

(B)annual principal and interest payments will commence not later than 1 year after completion of any project and all loans will be fully amortized upon the expiration of the term of the loan;

(C)the recipient of a loan will establish a dedicated source of revenue for repayment of loans;

(D)the fund will be credited with all payments of principal and interest on all loans; and

(E)for a treatment works proposed for repair, replacement, or expansion, and eligible for assistance under subsection (c)(1), the recipient of a loan shall—

(i)develop and implement a fiscal sustainability plan that includes—

(I)an inventory of critical assets that are a part of the treatment works;

(II)an evaluation of the condition and performance of inventoried assets or asset groupings;

(III)a certification that the recipient has evaluated and will be implementing water and energy conservation efforts as part of the plan; and

(IV)a plan for maintaining, repairing, and, as necessary, replacing the treatment works and a plan for funding such activities; or

(ii)certify that the recipient has developed and implemented a plan that meets the requirements under clause (i);

(2)to buy or refinance the debt obligation of municipalities and intermunicipal and interstate agencies within the State at or below market rates, where such debt obligations were incurred after March 7, 1985;

(3)to guarantee, or purchase insurance for, local obligations where such action would improve credit market access or reduce interest rates;

(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 such bonds will be deposited in the fund;

(5)to provide loan guarantees for similar revolving funds established by municipalities or intermunicipal agencies;

(6)to earn interest on fund accounts; and

(7)for the reasonable costs of administering the fund and conducting activities under this subchapter, except that such amounts shall not exceed 4 percent of all grant awards to such fund under this subchapter, $400,000 per year, or ⅕ percent per year of the current valuation of the fund, whichever amount is greatest, plus the amount of any fees collected by the State for such purpose regardless of the source.

(e)If a State makes, from its water pollution revolving fund, a loan which will finance the cost of facility planning and the preparation of plans, specifications, and estimates for construction of publicly owned treatment works, the State shall ensure that if the recipient of such loan receives a grant under section 1281(g) of this title for construction of such treatment works and an allowance under section 1281(l)(1) of this title for non-Federal funds expended for such planning and preparation, such recipient will promptly repay such loan to the extent of such allowance.

(f)A State may provide financial assistance from its water pollution control revolving fund only with respect to a project which is consistent with plans, if any, developed under section 1285(j), 1288, 1313(e), 1329, and 1330 of this title.

(g)The State may provide financial assistance from its water pollution control revolving fund only with respect to a project for construction of a treatment works described in subsection (c)(1) if such project is on the State’s priority list under section 1296 of this title. Such assistance may be provided regardless of the rank of such project on such list.

(h)A State water pollution control revolving fund may provide assistance (other than under subsection (d)(1) of this section) to a municipality or intermunicipal or interstate agency with respect to the non-Federal share of the costs of a treatment works project for which such municipality or agency is receiving assistance from the Administrator under any other authority only if such assistance is necessary to allow such project to proceed.

(i)(1)In any case in which a State provides assistance to an eligible recipient under subsection (d), the State may provide additional subsidization (including forgiveness of principal, grants, negative interest loans, other loan forgiveness, and through buying, refinancing, or restructuring debt)—

(A)in assistance to a municipality or intermunicipal, interstate, or State agency to benefit a municipality that—

(i)meets the affordability criteria of the State established under paragraph (2); or

(ii)does not meet the affordability criteria of the State if the recipient—

(I)seeks additional subsidization to benefit individual ratepayers in the residential user rate class;

(II)demonstrates to the State that such ratepayers will experience a significant hardship from the increase in rates necessary to finance the project or activity for which assistance is sought; and

(III)ensures, as part of an assistance agreement between the State and the recipient, that the additional subsidization provided under this paragraph is directed through a user charge rate system (or other appropriate method) to such ratepayers; or

(B)to implement a process, material, technique, or technology—

(i)to address water-efficiency goals;

(ii)to address energy-efficiency goals;

(iii)to mitigate stormwater runoff; or

(iv)to encourage sustainable project planning, design, and construction.

(2)(A)(i)Not later than September 30, 2015, and after providing notice and an opportunity for public comment, a State shall establish affordability criteria to assist in identifying municipalities that would experience a significant hardship raising the revenue necessary to finance a project or activity eligible for assistance under subsection (c)(1) if additional subsidization is not provided.

(ii)The criteria under clause (i) shall be based on income and unemployment data, population trends, and other data determined relevant by the State, including whether the project or activity is to be carried out in an economically distressed area, as described in section 3161 of title 42.

(B)If a State has previously established, after providing notice and an opportunity for public comment, affordability criteria that meet the requirements of subparagraph (A)—

(i)the State may use the criteria for the purposes of this subsection; and

(ii)those criteria shall be treated as affordability criteria established under this paragraph.

(C)The Administrator may publish information to assist States in establishing affordability criteria under subparagraph (A).

(3)(A)A State may provide additional subsidization in a fiscal year under this subsection only if the total amount appropriated for making capitalization grants to all States under this subchapter for the fiscal year exceeds $1,000,000,000.

(B)(i)For each fiscal year, of the amount of the capitalization grant received by the State under this subchapter, the total amount of additional subsidization made available by a State under paragraph (1)—

(I)may not exceed 30 percent; and

(II)to the extent that there are sufficient applications for assistance to communities described in that paragraph, may not be less than 10 percent.

(ii)A loan from the water pollution control revolving fund of a State with an interest rate equal to or greater than 0 percent shall not be considered additional subsidization for purposes of this subparagraph.

(C)The authority of a State to provide additional subsidization under this subsection shall apply to amounts received by the State in capitalization grants under this subchapter for fiscal years beginning after September 30, 2014.

(D)If the State provides additional subsidization to a municipality or intermunicipal, interstate, or State agency under this subsection that meets the criteria under paragraph (1)(A), the State shall take the criteria set forth in section 1382(b)(5) of this title into consideration.

(j)In subsection (c)(12), the term “eligible individual” means a member of a household, the members of which have a combined income (for the most recent 12-month period for which information is available) equal to not more than 50 percent of the median nonmetropolitan household income for the State in which the household is located, according to the most recent decennial census.

(k)A State may use an additional 2 percent of the funds annually awarded to each State under this subchapter for nonprofit organizations (as defined in section 1254(w) of this title) or State, regional, interstate, or municipal entities to provide technical assistance to rural, small, and tribal publicly owned treatment works (within the meaning of section 1254(b)(8)(B) of this title) in the State.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2021—Subsec. (d). Pub. L. 117–58, § 50210(a)(1)(A), inserted “and provided in subsection (k)” after “State law” in introductory provisions. Subsec. (i)(1). Pub. L. 117–58, § 50210(a)(1)(B)(i), substituted “(including forgiveness of principal, grants, negative interest loans, other loan forgiveness, and through buying, refinancing, or restructuring debt)” for “, including forgiveness of principal and negative interest loans” in introductory provisions. Subsec. (i)(3)(B). Pub. L. 117–58, § 50210(a)(1)(B)(ii), added subpar. (B) and struck out former subpar. (B) which made an additional limitation on additional subsidization under subsec. (i). Subsec. (k). Pub. L. 117–58, § 50210(a)(1)(C), added subsec. (k). 2018—Subsec. (c)(12). Pub. L. 115–270, § 4107(a)(1), added par. (12). Subsec. (j). Pub. L. 115–270, § 4107(a)(2), added subsec. (j). 2016—Subsec. (i)(1). Pub. L. 114–322, § 5012(1), substituted “to an eligible recipient” for “to a municipality or intermunicipal, interstate, or State agency” in introductory provisions. Subsec. (i)(1)(A). Pub. L. 114–322, § 5012(2), inserted “in assistance to a municipality or intermunicipal, interstate, or State agency” before “to benefit” in introductory provisions. 2014—Subsec. (c). Pub. L. 113–121, § 5003(1), added subsec. (c) and struck out former subsec. (c). Prior to amendment, text read as follows: “The amounts of funds available to each State water pollution control revolving fund shall be used only for providing financial assistance (1) to any municipality, intermunicipal, interstate, or State agency for

Construction

of publicly owned treatment works (as defined in section 1292 of this title), (2) for the implementation of a management program established under section 1329 of this title, and (3) for development and implementation of a conservation and management plan under section 1330 of this title. The fund shall be established, maintained, and credited with repayments, and the fund balance shall be available in perpetuity for providing such financial assistance.” Subsec. (d)(1)(A). Pub. L. 113–121, § 5003(2)(A)(i), substituted “the lesser of 30 years and the projected useful life (as determined by the State) of the project to be financed with the proceeds of the loan” for “20 years”. Subsec. (d)(1)(B). Pub. L. 113–121, § 5003(2)(A)(ii), substituted “upon the expiration of the term of the loan” for “not later than 20 years after project completion”. Subsec. (d)(1)(E). Pub. L. 113–121, § 5003(2)(A)(iii)–(v), added subpar. (E). Subsec. (d)(7). Pub. L. 113–121, § 5003(2)(B), inserted “, $400,000 per year, or ⅕ percent per year of the current valuation of the fund, whichever amount is greatest, plus the amount of any fees collected by the State for such purpose regardless of the source” before period at end. Subsec. (i). Pub. L. 113–121, § 5003(3), added subsec. (i).

Statutory Notes and Related Subsidiaries

Effective Date

of 2014 AmendmentAmendment by Pub. L. 113–121 effective Oct. 1, 2014, see section 5006 of Pub. L. 113–121, set out as a note under section 1381 of this title.

§1383 Water pollution control revolving loan funds