§3907 Determination of Eligibility and Project Selection

Summary

Sets rules for which projects can get federal money and how to pick them. To get help, a project and its borrower must be creditworthy. The agency will look at the loan terms, the dedicated revenues that will pay the debt, the project’s financial plans, and the borrower’s financial history. Loans must have proper protections like a rate covenant. Applicants must give a preliminary rating letter from at least one rating agency when they apply saying the project’s senior debt could reach an investment-grade rating, and a final rating letter from at least one agency before final approval showing an investment-grade rating. For certain combined projects the Administrator may require one or two final rating letters. Most projects must have expected costs of at least $20,000,000, but small community water projects that serve 25,000 people or fewer only need to be at least $5,000,000. The federal loan must be repaid, in whole or part, from dedicated revenue sources that also secure the project. If a non‑government group runs the project, the project must be publicly sponsored, meaning the applicant consulted and got support from the affected State, local, or tribal government. The Administrator must tell the State infrastructure financing authority within 30 days of a complete application. If that State authority says within 60 days it will fund the project as much as the federal request, the federal agency cannot step in unless the State fails to sign an agreement within 180 days or the State’s terms are worse. Applicants must show a plan and funds for long‑term operation, maintenance, and repairs; projects listed under section 3905(1) that Congress did not specifically approve cannot get federal O&M money. The Secretary or Administrator must set selection rules for eligible projects. They will score things like national or regional benefits (for example, flood risk reduction, water quality and supply, drinking water protection, or support for international commerce), other public or private financing, whether federal help speeds the project up, use of new ideas, how much budget authority is needed, protection from extreme weather and environmental benefits, service to energy or water‑stressed regions, alignment with local priorities, readiness to start construction contracting within 90 days after the federal credit is made, and whether federal aid is reduced. For projects under section 3905(9), only the financing and readiness criteria (items B–K) are used. These rules do not override other federal laws.