Fees for Water Infrastructure Project Applications Under WIFIA, 29242-29246 [2017-13438]
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ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 35
[EPA–HQ–OW–2016–0568; FRL–9964–19–
OW]
RIN 2040–AF64
Fees for Water Infrastructure Project
Applications Under WIFIA
Environmental Protection
Agency (EPA).
ACTION: Final rule.
AGENCY:
With this rule EPA establishes
fees related to the provision of federal
credit assistance under Subtitle C of the
Water Resources Reform and
Development Act of 2014 (WRRDA),
which is referred to as the Water
Infrastructure Finance and Innovation
Act of 2014 (WIFIA). WIFIA authorizes
EPA to provide secured (direct) loans
and loan guarantees to eligible water
infrastructure projects and to charge fees
to recover all or a portion of the
Agency’s cost of providing credit
assistance and the costs of retaining
expert firms, including financial,
engineering, and legal services, in the
field of municipal and project finance to
assist in the underwriting and servicing
of Federal credit instruments.
DATES: Effective date: June 28, 2017.
FOR FURTHER INFORMATION CONTACT:
Jordan Dorfman, Water Infrastructure
Division, Office of Wastewater
Management, Mail Code 4201C,
Environmental Protection Agency, 1200
Pennsylvania Avenue NW., Washington,
DC 20460; telephone number: (202)564–
0614; email address: dorfman.jordan@
epa.gov.
SUMMARY:
SUPPLEMENTARY INFORMATION:
I. Background
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A. Does this action apply to me?
This action only applies to entities
seeking credit assistance under the
WIFIA program for the development
and construction of a water
infrastructure project. EPA has
published an interim final rule to
implement this new credit assistance
program. A list of eligible entities and
eligible projects can be found in the
Interim Final Rule entitled, ‘‘Credit
Assistance for Water Infrastructure
Projects.’’ This interim final rule is
available at Docket ID No. EPA–HQ–
OW–2016–0569, at https://
www.regulations.gov.
B. What action is the Agency taking?
EPA is establishing fees associated
with the provision of federal credit
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assistance under the WIFIA program.
WIFIA authorizes EPA to provide
secured (direct) loans and loan
guarantees to eligible water
infrastructure projects. EPA has
published an Interim Final Rule
entitled, ‘‘Credit Assistance for Water
Infrastructure Projects’’ to establish
procedures for the implementation of
the WIFIA Program. As specified under
33 U.S.C. 3908(b)(7), 3909(b), and
3909(c)(3), Congress in WIFIA
authorizes EPA to charge fees to recover
all or a portion of the Agency’s cost of
providing credit assistance and the costs
of retaining expert firms, including
financial, engineering, and legal
services, in the field of municipal and
project finance to assist in the
underwriting and servicing of Federal
credit instruments. EPA is establishing
an application fee, credit processing fee,
servicing fee, optional supplemental fee,
and fee for extraordinary expenses to
cover these costs to the extent not
covered by congressional
appropriations.
C. What is the Agency’s authority for
taking this action?
This final rule is issued under the
authority of 33 U.S.C. 3908(b)(7),
3909(b), 3909(c)(3), and 3911.
D. What fees are being established?
In the Interim Final Rule entitled,
‘‘Credit Assistance for Water
Infrastructure Projects,’’ EPA
established an application process for
WIFIA credit assistance that is divided
into two steps. The first step requires
the submission of a letter of interest. No
fees are established for the letter of
interest step. Projects selected to
continue in the application process will
then be invited to submit an application
at which time the application fee must
be paid. For this second step, EPA will
only select those projects that it expects
might reasonably proceed to closing. For
more information on this process, please
refer to the WIFIA Implementation Rule
at 40 CFR part 35 subpart Q or in Docket
ID No. EPA–HQ–OW–2016–0569, at
https://www.regulations.gov.
Consequently, EPA anticipates that the
fees established in this rule will apply
only to projects EPA expects are likely
to proceed to closing. Detailed
application information is contained in
a program guide developed by EPA and
posted on the WIFIA Web site at: https://
www.epa.gov/wifia. This two-step
process limits the time, cost, and effort
required to be expended by prospective
borrowers prior to having a reasonable
expectation of funding by WIFIA.
As described in greater detail below,
the types of fees EPA is establishing are
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consistent with other Federal Credit
programs. In particular, the WIFIA
program was designed by Congress to
resemble the Transportation
Infrastructure Finance and Innovation
Act program, commonly known as
TIFIA. Accordingly, to the extent
practicable, the WIFIA program has
been crafted by EPA to be implemented
in a similar manner as the Department
of Transportation implements the TIFIA
program. The rationale for establishing
these fees is to cover EPA’s costs of
administering the program to the extent
these costs are not covered by
congressional appropriations. To
effectively administer the program, EPA
will incur both internal administrative
costs (staffing, program support
contracts, and other costs) as well as the
costs of retaining expert firms, including
legal, engineering, and financial
services, in the field of municipal and
project finance, to assist in the
underwriting of the Federal credit
instrument.
The Water Infrastructure
Improvements for the Nation Act of
2016, Pub. L. 114–332, in section
5008(c), amended WIFIA to allow, at the
request of an applicant, the financing of
fees as part of the loan. While not
reflected in this rule, the ability to
finance fees as part of a WIFIA loan is
an option available to applicants. EPA
will publish additional information or
guidance, as necessary, on its Web site
at: https://www.epa.gov/wifia.
Application Fee
EPA will require a non-refundable
application fee for each project that is
invited to submit an application (second
step following submission of letter of
interest) for credit assistance under
WIFIA. The application fee will be due
upon submission of the application. For
fiscal year 2017, the application fee is
$25,000 for applications for projects
serving small communities (population
of not more than 25,000 people). For all
other project applications, the
application fee is $100,000. These
application fees represent an amount
equal to 0.5 percent of the minimum
threshold project cost ($5 million for
small communities and $20 million for
larger communities, 33 U.S.C.
3907(a)(2)), which EPA considers to be
sufficient to begin the financial,
engineering, and legal analysis of the
project while providing assurance that
the applicant intends to proceed to
closing, and therefore costs incurred by
EPA may be recovered. EPA will
undertake significant costs to evaluate
applications and hire expert firms for
underwriting and considers an
application fee essential for applicants
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to show good faith in applying for
assistance, to help cover the agency’s
administrative costs in processing
applications, and to ensure effective
administration of the program. These
fees will be required at the time of
submission of the application, and the
application will not be reviewed
without fee payment. Because EPA will
only invite projects to submit an
application and application fee if the
project is reasonably expected to
proceed to closing, no applicant would
pay a fee without a reasonable
expectation that the project could
receive funding.
For fiscal years 2018 and beyond, EPA
may need to adjust the amount of the
application fee based on early program
implementation experience. A change in
the application fee will not change the
total fees charged, only the initial fee
which is credited to the final fee at
closing, or in the event that the project
does not proceed to closing, at
withdrawal or denial of the application.
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Credit Processing Fee
EPA will require a credit processing
fee at the time of closing, or in the event
that the project does not proceed to
closing, e.g., if the application is
withdrawn or denied, for projects
selected to submit an application. The
proceeds of any such fees will be used
to pay the remaining portion of EPA’s
cost of providing credit assistance and
the costs of retaining expert firms,
including legal, engineering, and
financial services, in the field of
municipal and project finance to assist
in the underwriting of the Federal credit
instrument. The initial application fee
described above will be credited to the
credit processing fee. For example, if the
total credit processing fee is $400,000
and the applicant pays $100,000 with
the application, $300,000 will be due at
closing, or in the event that the project
does not proceed to closing, e.g., if the
application is withdrawn or denied. The
total credit processing fee for each
project will be set based on the costs
incurred by EPA for that specific
project. Due to the nature of credit
processing, the amount is expected to
vary among applicants. This variation is
a reflection of the amount of time taken
to process a loan, which may not
directly correlate with the size of the
loan. More complicated transactions
with lengthy negotiations will have
higher costs. EPA estimates these costs
could be in the range of approximately
$350,000–$700,000 per project, broken
down as follows:
• Financial advisor: $100,000 to
$250,000 per project;
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• Law firm: $200,000 to $350,000 per
project; and
• Engineering firm: $50,000 to
$100,000 per project.
EPA may waive a portion of the fee
charged to an applicant in the event that
Congress appropriates resources
adequate to pay for EPA’s cost of
administering the WIFIA program as
well as additional funding to pay for
loan processing. WIFIA currently
provides that EPA may retain $2.2
million annually from funds
appropriated to the program to pay for
the administration of the program,
including internal administrative costs
of staffing, program support contracts
(separate from the expert services
described previously), and other
internal administrative needs.
To the extent Congress appropriates
administrative funds in excess of those
needed for EPA’s internal
administrative costs, EPA may use the
remaining available administrative
allowance (less any amount needed for
future years’ administration) to reduce
fees. EPA will allocate additional
administrative funds by reducing fees
by an equal amount per loan for those
projects that serve a population with a
median household income that is 80
percent or less of the state median
household income. If additional
administrative funds remain, EPA will
reduce fees by an equal amount per loan
for those projects serving a population
of not more than 25,000. If additional
administrative funds still remain, EPA
will reduce fees by an equal amount for
each remaining loan.
Servicing Fee
EPA will charge an annual servicing
fee during repayment of the loan. The
fee will be dependent on the costs of
servicing the credit instrument (e.g.
collecting and processing loan principal
and interest payments) as determined by
the Administrator. Such fees will be set
at a level to enable the Agency to
recover all or a portion of the costs to
the Federal Government of servicing
WIFIA credit instruments and will be
determined at the time of closing. EPA
expects such fees to range from $12,000
to $15,000 annually per loan.
Optional Supplemental Fee
EPA may charge a fee, with agreement
of the applicant, to reduce the budget
authority required to fund the credit
instrument. Although EPA considers it
unlikely that a scenario will arise under
which it would assess such a fee, the
Agency sees benefit in establishing the
flexibility to allow an applicant to ‘‘buy
down’’ the budget authority required for
the credit instrument. This could allow
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an applicant to proceed to closing in the
event that sufficient budget authority
would not otherwise be available. Such
a fee will only be charged upon
agreement by an applicant.
Extraordinary Expenses Fee
EPA may charge a fee to cover
extraordinary expenses in the event that
a borrower experiences difficulty
relating to technical, financial, or legal
matters or other events (e.g., engineering
failure or financial workouts) that
require EPA to incur time or expenses
beyond standard monitoring. EPA will
be entitled to payment in full from the
borrower of additional fees in an
amount determined by EPA and of
related fees and expenses of its
independent consultants and outside
counsel, that are incurred directly by
EPA and not paid directly by the
borrower.
III. Summary of Public Comments and
EPA Responses
The Agency received comments from
eight commenters on the proposed rule.
The comments, including the Agency’s
responses, are included in the docket for
this rulemaking. Responses to the most
significant comments are included in
this section. This section addresses
comments regarding the rationale used
to establish the application fee amount
and the method by which EPA will
reduce fees in the event additional
sufficient resources are available for
such a purpose.
A. Rationale for Establishing
Application Fee
With respect to the establishment of
the application fee, and the lower fee
level set for projects serving small
communities of under 25,000, one
commenter suggested that EPA establish
more than two levels for the application
fee. The commenter stated that as
proposed, the application fee for a
community of 50,000 would be the same
as for a large metropolitan area. The
commenter also suggested an alternative
to setting fee levels by population by
basing the fee levels on project size.
EPA appreciates the commenters
suggestions but will not adopt the
suggestions. The application fee was
established at $100,000 in order to allow
the Agency to begin the financial and
legal analysis of the project while
providing assurance that the applicant
intends to proceed to closing, and
therefore costs incurred by the Agency
may be recovered. The reduced fee was
established based on the statutory
allowance for project serving
communities of under 25,000 to apply
for loans where total eligible costs are at
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least $5 million, as opposed to the
minimum of $20 million required of all
other applicants. The reduced
application fee allows small
communities with fewer resources to
begin the application process. Creating
a reduced application fee for such
communities logically follows the
statutory allowance for reduced project
size for such communities. Setting
application fee levels by project size
does not correlate to the ability of an
applicant to pay the application fee.
Small communities with large projects
would struggle to pay a much higher
application fee, while large
metropolitan areas that can easily pay
the application fee might see a reduced
fee.
Another commenter stated that in
order to not discourage applications for
projects serving low-income
communities, WIFIA application fees
should be waivable or greatly reduced
for those projects that serve a
population with a median household
income that is at least 80 percent or less
of the state median household income.
The commenter proposes that
economically stressed communities
regardless of size be eligible for
application fee waivers or substantial
application fee reduction.
EPA appreciates the commenters
proposal, but will not adopt the
proposal. As previously stated, the
application fee was established at
$100,000 in order to allow the Agency
to begin the financial and legal analysis
of the project while providing assurance
that the applicant intends to proceed to
closing, and therefore costs incurred by
the Agency may be recovered. A
reduction or waiver of the application
fee would remove the incentive for
communities to proceed to closing by
eliminating the risk of losing the
application fee. EPA expects fewer
small community applicants entitled to
the reduced fee than applicants that can
show economic stress. If a significant
number of applicants receive an
application fee waiver or reduction,
EPA will be unable to begin the
financial and legal analysis required for
each project applicant due to limited
resources. As previously stated, if
sufficient resources exist for EPA to
reduce fees, such resources will be used
to reduce the fees of applicants that
serve a population with a median
household income that is at least 80
percent or less of the state median
household income.
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B. Methodology To Reduce Fees in the
Event Additional Sufficient Resources
Are Available
In paragraph (f) of the final rule
language, EPA has the authority to
reduce the credit processing fee
established under paragraph (c), to the
extent that Congress appropriates funds
in any given year beyond those
sufficient to cover internal
administrative costs. In the proposed
rule, EPA proposed three alternative
methods by which the Agency could
allocate additional administrative funds
to reduce fees:
• By reducing fees by an equal
amount per loan in the relevant year;
• By reducing fees by an equal
amount per loan for those projects
serving a population of not more than
25,000; or
• By reducing fees by an equal
amount per loan for those projects that
serve a population with a median
household income that is 80 percent or
less of the state median household
income.
Alternatively, EPA could allocate
such fee reductions through a
combination of these three methods.
EPA requested comment on each of
these potential options or other
potential approaches. EPA received
three comments related to this request.
The first commenter suggested that a
combination of the three methods
should be used and that EPA should
first reduce or eliminate credit
processing fees charged to applicants for
projects that primarily serve a
population with a median household
income of 80 percent or less of the state
median household income. The
commenter’s rationale is that this
approach will target fee relief toward
communities that are likely facing some
of the most significant water
affordability challenges, and whose
residents could most benefit from both
low-cost financing and fee relief. The
commenter suggested that any
remaining funding available after
eliminating credit processing fees in
these low-income communities should
be used to reduce the credit processing
fees for all of that year’s remaining
applicants by a pro-rata percentage of
the total credit processing fees paid by
the applicant. Any forgiveness of credit
processing fees should be calculated on
the balance of these fees after the credit
for payment of an application fee has
been applied.
The second commenter suggested that
EPA should first reduce the credit
processing fee for communities for
whom the fees would impose the
greatest financial hardship. The
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commenter stated that EPA should
reduce applicant fees by an equal
amount per loan for those projects that
serve a population with a median
household income that is 80 percent or
less of the state median household
income. Once fees have been reduced
for hardship communities, any
remaining funds should be used to
reduce credit processing fees by an
equal amount per loan for projects
serving communities with populations
of under 25,000.
The third commenter suggested that
EPA reduce fees on a pro-rata share
based on loan size.
EPA appreciates the comments
received on this important issue and
agrees with the first and second
commenters that a combination of
methods should be used to reduce the
credit processing fees of applicants to
the extent that Congress appropriates
funds in any given year beyond those
sufficient to cover internal
administrative costs. The Agency agrees
that the most important use of these
additional funds is to reduce the impact
of the fees on the neediest applicants. In
order to reduce the impact of fees on
those applicants most in need, EPA will
reduce the credit processing fee, to the
extent possible, by an equal amount per
loan, on a dollar basis, for those projects
that serve a population with a median
household income that is 80 percent or
less of the state median household
income. If funds remain, EPA will then
reduce fees by an equal amount per
loan, on a dollar basis, for those projects
serving a population of not more than
25,000. If funds still remain, EPA will
reduce fees by an equal amount per
loan, on a dollar basis, for all remaining
loans. EPA cannot reduce fees as a
percentage of the credit processing fee
paid by an applicant because the total
credit processing fee for each loan will
not be known until loan closing.
EPA appreciates the third
commenter’s suggestion, but will not
adopt the suggestion. The credit
processing fee is not determined by loan
size. The estimated range of the credit
processing fee is based on the
complexity of the underlying
transaction and the difficulty or length
of time of negotiations. Therefore,
between two applicants, one with a
greater loan size may have a smaller fee.
Providing greater relief to applicants
charged a smaller fee, irrespective of
need, does not align with the Agency’s
desire to provide relief to the neediest
applicants.
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IV. Statutory and Executive Orders
Reviews
A. Executive Order 12866: Regulatory
Planning and Review and Executive
Order 13563: Improving Regulation and
Regulatory Review
This action is not a significant
regulatory action.
B. Paperwork Reduction Act
This action does not impose an
information collection burden under the
PRA because this rule merely
establishes fees associated with a
previously promulgated rule.
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C. Regulatory Flexibility Act
I certify that this action will not have
a significant economic impact on a
substantial number of small entities
under the RFA. In making this
determination, the impact of concern is
any significant adverse economic
impact on small entities. An agency may
certify that a rule will not have a
significant economic impact on a
substantial number of small entities if
the rule relieves regulatory burden, has
no net burden or otherwise has a
positive economic effect on the small
entities subject to the rule. Participation
in the WIFIA loan program is voluntary.
While many projects serving small
communities are potentially eligible for
WIFIA loans, we anticipate only one to
two small community applications per
year as small communities have access
to below market rate loans and other
subsidies through the Clean Water State
Revolving Fund, the Drinking Water
State Revolving Fund, and other
funding sources. A small community
will only apply and undertake a WIFIA
loan in cases where the WIFIA loan
provides positive economic benefits
relative to other potential funding
sources, based upon consideration of
relevant economic factors, including
loan rate, loan terms, fees and other
transaction costs. I have therefore
concluded that this action will have no
net regulatory burden for all directly
regulated small entities.
D. Unfunded Mandates Reform Act
(UMRA)
This action does not contain an
unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C.
1531–1538, and does not significantly or
uniquely affect small governments. The
action imposes no enforceable duty on
any state, local, or tribal governments or
the private sector.
E. Executive Order 13132: Federalism
This action does not have federalism
implications. It will not have substantial
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direct effects on the states, on the
relationship between the national
government and the states, or on the
distribution of power and
responsibilities among the various
levels of government.
F. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
This action does not have tribal
implications as specified in Executive
Order 13175. While a tribal government,
or a consortium of tribal governments
may apply for WIFIA credit assistance,
this action does not have substantial
direct effects on one or more Indian
tribes, on the relationship between the
Federal Government and Indian tribes,
or on the distribution of power and
responsibilities between the Federal
Government and Indian tribes.
G. Executive Order 13045: Protection of
Children From Environmental Health
Risks and Safety Risks
This action is not subject to Executive
Order 13045 because it is not
economically significant as defined in
Executive Order 12866, and because
environmental health or safety risks are
not addressed by this action.
H. Executive Order 13211: Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use
This action is not a ‘‘significant
energy action’’ because it is not likely to
have a significant adverse effect on the
supply, distribution or use of energy.
This rulemaking simply imposes fees
required to apply for credit assistance;
therefore, by itself, this rulemaking will
not have any effect on the supply,
distribution or use of energy.
I. National Technology Transfer and
Advancement Act (NTTAA)
This rulemaking does not involve
technical standards.
J. Executive Order 12898: Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations
This action is not subject to Executive
Order 12898 (59 FR 7629, February 16,
1994) because it does not establish an
environmental health or safety standard.
K. National Environmental Policy Act
Each project obtaining assistance
under this program is required to adhere
to the National Environmental Policy
Act of 1969, as amended (42 U.S.C. 4321
et seq.). This rulemaking simply
imposes fees required to apply for credit
assistance; therefore, by itself, this
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rulemaking will not have any effect on
the quality of the environment.
L. Congressional Review Act (CRA)
This action is subject to the CRA, and
the EPA will submit a rule report to
each House of the Congress and to the
Comptroller General of the United
States. This action is not a ‘‘major rule’’
as defined by 5 U.S.C. 804(2).
List of Subjects in 40 CFR Part 35
Environmental protection, Reporting
and recordkeeping requirements, and
Water finance.
Dated: June 19, 2017.
E. Scott Pruitt,
Administrator.
For the reasons set forth in the
preamble, 40 CFR part 35 is amended as
follows:
PART 35—STATE AND LOCAL
ASSISTANCE
1. The authority citation for part 35
continues to read as follows:
■
Authority: 42 U.S.C. 7401 et seq.; 33 U.S.C.
1251 et seq.; 42 U.S.C. 300f et seq.; 42 U.S.C.
6901 et seq.; 7 U.S.C. 136 et seq.; 15 U.S.C.
2601 et seq.; 42 U.S.C. 13101 et seq.; Pub. L.
104–134, 110 Stat. 1321, 1321–299 (1996);
Pub. L. 105–65, 111 Stat. 1344, 1373 (1997),
2 CFR 200.
■
2. Add § 35.10080 to read as follows:
§ 35.10080
Fees.
(a) Application fee. EPA will require
a non-refundable application fee for
each project applying for credit
assistance under the WIFIA program.
An application fee will be due upon
submission of the complete application.
For applications for projects serving
small communities (population of not
more than 25,000 people), this
application fee will be $25,000. For all
other applications, this application fee
will be $100,000. The initial application
fee will be credited to the credit
processing fee required under paragraph
(c) of this section.
(b) Adjustment of application fee. For
each application and approval cycle,
EPA may adjust the amount of the
application fee described in paragraph
(a) of this section based on program
implementation experience and cost
expectations. EPA will publish this
amount in each Federal Register
solicitation for letters of interest.
(c) Credit processing fee. Except as
otherwise provided in paragraph (f) of
this section, EPA will require an
additional credit processing fee for
projects selected to receive WIFIA
assistance upon closing, or in the event
that the project does not proceed to
closing, e.g., if the application is
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withdrawn or denied. The proceeds of
any such fees will be used to pay the
remaining portion of the Agency’s cost
of providing credit assistance and the
costs of retaining expert firms, including
financial, engineering, and legal
services, in the field of municipal and
project finance, to assist in the
underwriting of the Federal credit
instrument. All of, or a portion of, this
fee may be waived.
(d) Servicing fee. EPA will require
borrowers to pay a servicing fee for each
credit instrument approved for funding.
Separate fees may apply for each type of
credit instrument (e.g., a loan guarantee,
a secured loan with a single
disbursement, or a secured loan with
multiple disbursements), depending on
the costs of servicing the credit
instrument as determined by the
Administrator. Such fees will be set at
a level sufficient to enable the EPA to
recover all or a portion of the costs to
the Federal Government of servicing
WIFIA credit instruments.
(e) Optional supplemental fee. If, in
any given year, there is insufficient
budget authority to fund the credit
instrument for a qualified project that
has been selected to receive assistance
under WIFIA, EPA and the approved
applicant may agree upon a
supplemental fee to be paid by or on
behalf of the approved applicant at the
time of execution of the term sheet to
reduce the subsidy cost of that project.
No such fee may be included among
eligible project costs.
(f) Reduced fees. To the extent that
Congress appropriates funds in any
given year beyond those sufficient to
cover internal administrative costs, EPA
may utilize such appropriated funds to
reduce fees that would otherwise be
charged under paragraph (c) of this
section.
(g) Extraordinary expenses. EPA may
require payment in full by the borrower
of additional fees, in an amount
determined by EPA, and of related fees
and expenses of its independent
consultants and outside counsel, to the
extent that such fees and expenses are
incurred directly by EPA and to the
extent such third parties are not paid
directly by the borrower, in the event
that a borrower experiences difficulty
relating to technical, financial, or legal
matters or other events (e.g., engineering
failure or financial workouts) which
require EPA to incur time or expenses
beyond standard monitoring.
[FR Doc. 2017–13438 Filed 6–27–17; 8:45 am]
BILLING CODE 6560–50–P
VerDate Sep<11>2014
14:36 Jun 27, 2017
Jkt 241001
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR PART 81
[EPA–HQ–OAR–2017–0223; FRL–9964–37–
OAR]
Extension of Deadline for
Promulgating Designations for the
2015 Ozone National Ambient Air
Quality Standards
Environmental Protection
Agency (EPA).
ACTION: Extension of deadline for
promulgating designations.
AGENCY:
The Environmental Protection
Agency (EPA) is announcing that it is
using its authority under the Clean Air
Act (CAA) to extend by 1 year the
deadline for promulgating initial area
designations for the ozone national
ambient air quality standards (NAAQS)
that were promulgated in October 2015.
The new deadline is October 1, 2018.
DATES: The deadline for the EPA to
promulgate initial designations for the
2015 ozone NAAQS is October 1, 2018.
FOR FURTHER INFORMATION CONTACT: For
questions regarding this action, contact
Denise Scott, Air Quality Planning
Division, Office of Air Quality Planning
and Standards, Mail Code C539–04,
Environmental Protection Agency,
Research Triangle Park, North Carolina
27711; telephone number: (919) 541–
4208; email address: scott.denise@
epa.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. General Information
A. Does this action apply to me?
Entities potentially affected by this
action include state, local and tribal
governments that would participate in
the initial area designation process for
the 2015 ozone standards.
B. Where can I get a copy of this
document and other related
information?
The EPA has established a docket for
designations for the 2015 ozone NAAQS
under Docket ID No. EPA–HQ–OAR–
2017–0223. All documents in the docket
are listed in the https://
www.regulations.gov index. Although
listed in the index, some information is
not publicly available, e.g., confidential
business information or other
information whose disclosure is
restricted by statute. Certain other
material, such as copyrighted material,
will be publicly available only in hard
copy. Publicly available docket
materials are available either
electronically in https://
PO 00000
Frm 00022
Fmt 4700
Sfmt 4700
www.regulations.gov or in hard copy at
the EPA Docket Center EPA/DC, EPA
West, Room 3334, 1301 Constitution
Avenue NW., Washington, DC. The
Public Reading Room is open from 8:30
a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The
telephone number for the Public
Reading Room is (202) 566–1744, and
the telephone number for the EPA
Docket Center is (202) 566–1742.
An electronic copy of this notice is
also available at https://www.epa.gov/
ozone-designations along with other
information related to designations for
the 2015 ozone NAAQS.
II. Designations Requirements
On October 1, 2015, the EPA signed
a notice of final rulemaking that revised
the 8-hour primary and secondary ozone
NAAQS (80 FR 65292; October 26,
2015). The primary standard was
lowered from 0.075 parts per million
(ppm) to a level of 0.070 ppm. The EPA
also revised the secondary standard by
making it identical in all respects to the
revised primary standard. (The previous
ozone NAAQS were set in 2008 and
remain effective.)
After the EPA establishes or revises a
NAAQS pursuant to CAA section 109,
the CAA directs the EPA and the states
to begin taking steps to ensure that those
NAAQS are met. The first step is to
identify areas of the country that do not
meet the new or revised NAAQS. This
step is known as the initial area
designations. Section 107(d)(1)(A) of the
CAA provides that, ‘‘By such date as the
Administrator may reasonably require,
but not later than 1 year after
promulgation of a new or revised
national ambient air quality standard for
any pollutant under section [109], the
Governor of each State shall * * *
submit to the Administrator a list of all
areas (or portions thereof) in the State’’
that designates those areas as
nonattainment, attainment, or
unclassifiable. The CAA defines an area
as nonattainment if it is violating the
NAAQS or if it is contributing to a
violation in a nearby area. 42 U.S.C.
7407(d)(1)(A)(i).
The CAA further provides, ‘‘Upon
promulgation or revision of a national
ambient air quality standard, the
Administrator shall promulgate the
designations of all areas (or portions
thereof) * * * as expeditiously as
practicable, but in no case later than 2
years from the date of promulgation of
the new or revised national ambient air
quality standard. Such period may be
extended for up to one year in the event
the Administrator has insufficient
information to promulgate the
E:\FR\FM\28JNR1.SGM
28JNR1
Agencies
[Federal Register Volume 82, Number 123 (Wednesday, June 28, 2017)]
[Rules and Regulations]
[Pages 29242-29246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13438]
[[Page 29242]]
=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 35
[EPA-HQ-OW-2016-0568; FRL-9964-19-OW]
RIN 2040-AF64
Fees for Water Infrastructure Project Applications Under WIFIA
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: With this rule EPA establishes fees related to the provision
of federal credit assistance under Subtitle C of the Water Resources
Reform and Development Act of 2014 (WRRDA), which is referred to as the
Water Infrastructure Finance and Innovation Act of 2014 (WIFIA). WIFIA
authorizes EPA to provide secured (direct) loans and loan guarantees to
eligible water infrastructure projects and to charge fees to recover
all or a portion of the Agency's cost of providing credit assistance
and the costs of retaining expert firms, including financial,
engineering, and legal services, in the field of municipal and project
finance to assist in the underwriting and servicing of Federal credit
instruments.
DATES: Effective date: June 28, 2017.
FOR FURTHER INFORMATION CONTACT: Jordan Dorfman, Water Infrastructure
Division, Office of Wastewater Management, Mail Code 4201C,
Environmental Protection Agency, 1200 Pennsylvania Avenue NW.,
Washington, DC 20460; telephone number: (202)564-0614; email address:
dorfman.jordan@epa.gov.
SUPPLEMENTARY INFORMATION:
I. Background
A. Does this action apply to me?
This action only applies to entities seeking credit assistance
under the WIFIA program for the development and construction of a water
infrastructure project. EPA has published an interim final rule to
implement this new credit assistance program. A list of eligible
entities and eligible projects can be found in the Interim Final Rule
entitled, ``Credit Assistance for Water Infrastructure Projects.'' This
interim final rule is available at Docket ID No. EPA-HQ-OW-2016-0569,
at https://www.regulations.gov.
B. What action is the Agency taking?
EPA is establishing fees associated with the provision of federal
credit assistance under the WIFIA program. WIFIA authorizes EPA to
provide secured (direct) loans and loan guarantees to eligible water
infrastructure projects. EPA has published an Interim Final Rule
entitled, ``Credit Assistance for Water Infrastructure Projects'' to
establish procedures for the implementation of the WIFIA Program. As
specified under 33 U.S.C. 3908(b)(7), 3909(b), and 3909(c)(3), Congress
in WIFIA authorizes EPA to charge fees to recover all or a portion of
the Agency's cost of providing credit assistance and the costs of
retaining expert firms, including financial, engineering, and legal
services, in the field of municipal and project finance to assist in
the underwriting and servicing of Federal credit instruments. EPA is
establishing an application fee, credit processing fee, servicing fee,
optional supplemental fee, and fee for extraordinary expenses to cover
these costs to the extent not covered by congressional appropriations.
C. What is the Agency's authority for taking this action?
This final rule is issued under the authority of 33 U.S.C.
3908(b)(7), 3909(b), 3909(c)(3), and 3911.
D. What fees are being established?
In the Interim Final Rule entitled, ``Credit Assistance for Water
Infrastructure Projects,'' EPA established an application process for
WIFIA credit assistance that is divided into two steps. The first step
requires the submission of a letter of interest. No fees are
established for the letter of interest step. Projects selected to
continue in the application process will then be invited to submit an
application at which time the application fee must be paid. For this
second step, EPA will only select those projects that it expects might
reasonably proceed to closing. For more information on this process,
please refer to the WIFIA Implementation Rule at 40 CFR part 35 subpart
Q or in Docket ID No. EPA-HQ-OW-2016-0569, at https://www.regulations.gov. Consequently, EPA anticipates that the fees
established in this rule will apply only to projects EPA expects are
likely to proceed to closing. Detailed application information is
contained in a program guide developed by EPA and posted on the WIFIA
Web site at: https://www.epa.gov/wifia. This two-step process limits the
time, cost, and effort required to be expended by prospective borrowers
prior to having a reasonable expectation of funding by WIFIA.
As described in greater detail below, the types of fees EPA is
establishing are consistent with other Federal Credit programs. In
particular, the WIFIA program was designed by Congress to resemble the
Transportation Infrastructure Finance and Innovation Act program,
commonly known as TIFIA. Accordingly, to the extent practicable, the
WIFIA program has been crafted by EPA to be implemented in a similar
manner as the Department of Transportation implements the TIFIA
program. The rationale for establishing these fees is to cover EPA's
costs of administering the program to the extent these costs are not
covered by congressional appropriations. To effectively administer the
program, EPA will incur both internal administrative costs (staffing,
program support contracts, and other costs) as well as the costs of
retaining expert firms, including legal, engineering, and financial
services, in the field of municipal and project finance, to assist in
the underwriting of the Federal credit instrument.
The Water Infrastructure Improvements for the Nation Act of 2016,
Pub. L. 114-332, in section 5008(c), amended WIFIA to allow, at the
request of an applicant, the financing of fees as part of the loan.
While not reflected in this rule, the ability to finance fees as part
of a WIFIA loan is an option available to applicants. EPA will publish
additional information or guidance, as necessary, on its Web site at:
https://www.epa.gov/wifia.
Application Fee
EPA will require a non-refundable application fee for each project
that is invited to submit an application (second step following
submission of letter of interest) for credit assistance under WIFIA.
The application fee will be due upon submission of the application. For
fiscal year 2017, the application fee is $25,000 for applications for
projects serving small communities (population of not more than 25,000
people). For all other project applications, the application fee is
$100,000. These application fees represent an amount equal to 0.5
percent of the minimum threshold project cost ($5 million for small
communities and $20 million for larger communities, 33 U.S.C.
3907(a)(2)), which EPA considers to be sufficient to begin the
financial, engineering, and legal analysis of the project while
providing assurance that the applicant intends to proceed to closing,
and therefore costs incurred by EPA may be recovered. EPA will
undertake significant costs to evaluate applications and hire expert
firms for underwriting and considers an application fee essential for
applicants
[[Page 29243]]
to show good faith in applying for assistance, to help cover the
agency's administrative costs in processing applications, and to ensure
effective administration of the program. These fees will be required at
the time of submission of the application, and the application will not
be reviewed without fee payment. Because EPA will only invite projects
to submit an application and application fee if the project is
reasonably expected to proceed to closing, no applicant would pay a fee
without a reasonable expectation that the project could receive
funding.
For fiscal years 2018 and beyond, EPA may need to adjust the amount
of the application fee based on early program implementation
experience. A change in the application fee will not change the total
fees charged, only the initial fee which is credited to the final fee
at closing, or in the event that the project does not proceed to
closing, at withdrawal or denial of the application.
Credit Processing Fee
EPA will require a credit processing fee at the time of closing, or
in the event that the project does not proceed to closing, e.g., if the
application is withdrawn or denied, for projects selected to submit an
application. The proceeds of any such fees will be used to pay the
remaining portion of EPA's cost of providing credit assistance and the
costs of retaining expert firms, including legal, engineering, and
financial services, in the field of municipal and project finance to
assist in the underwriting of the Federal credit instrument. The
initial application fee described above will be credited to the credit
processing fee. For example, if the total credit processing fee is
$400,000 and the applicant pays $100,000 with the application, $300,000
will be due at closing, or in the event that the project does not
proceed to closing, e.g., if the application is withdrawn or denied.
The total credit processing fee for each project will be set based on
the costs incurred by EPA for that specific project. Due to the nature
of credit processing, the amount is expected to vary among applicants.
This variation is a reflection of the amount of time taken to process a
loan, which may not directly correlate with the size of the loan. More
complicated transactions with lengthy negotiations will have higher
costs. EPA estimates these costs could be in the range of approximately
$350,000-$700,000 per project, broken down as follows:
Financial advisor: $100,000 to $250,000 per project;
Law firm: $200,000 to $350,000 per project; and
Engineering firm: $50,000 to $100,000 per project.
EPA may waive a portion of the fee charged to an applicant in the
event that Congress appropriates resources adequate to pay for EPA's
cost of administering the WIFIA program as well as additional funding
to pay for loan processing. WIFIA currently provides that EPA may
retain $2.2 million annually from funds appropriated to the program to
pay for the administration of the program, including internal
administrative costs of staffing, program support contracts (separate
from the expert services described previously), and other internal
administrative needs.
To the extent Congress appropriates administrative funds in excess
of those needed for EPA's internal administrative costs, EPA may use
the remaining available administrative allowance (less any amount
needed for future years' administration) to reduce fees. EPA will
allocate additional administrative funds by reducing fees by an equal
amount per loan for those projects that serve a population with a
median household income that is 80 percent or less of the state median
household income. If additional administrative funds remain, EPA will
reduce fees by an equal amount per loan for those projects serving a
population of not more than 25,000. If additional administrative funds
still remain, EPA will reduce fees by an equal amount for each
remaining loan.
Servicing Fee
EPA will charge an annual servicing fee during repayment of the
loan. The fee will be dependent on the costs of servicing the credit
instrument (e.g. collecting and processing loan principal and interest
payments) as determined by the Administrator. Such fees will be set at
a level to enable the Agency to recover all or a portion of the costs
to the Federal Government of servicing WIFIA credit instruments and
will be determined at the time of closing. EPA expects such fees to
range from $12,000 to $15,000 annually per loan.
Optional Supplemental Fee
EPA may charge a fee, with agreement of the applicant, to reduce
the budget authority required to fund the credit instrument. Although
EPA considers it unlikely that a scenario will arise under which it
would assess such a fee, the Agency sees benefit in establishing the
flexibility to allow an applicant to ``buy down'' the budget authority
required for the credit instrument. This could allow an applicant to
proceed to closing in the event that sufficient budget authority would
not otherwise be available. Such a fee will only be charged upon
agreement by an applicant.
Extraordinary Expenses Fee
EPA may charge a fee to cover extraordinary expenses in the event
that a borrower experiences difficulty relating to technical,
financial, or legal matters or other events (e.g., engineering failure
or financial workouts) that require EPA to incur time or expenses
beyond standard monitoring. EPA will be entitled to payment in full
from the borrower of additional fees in an amount determined by EPA and
of related fees and expenses of its independent consultants and outside
counsel, that are incurred directly by EPA and not paid directly by the
borrower.
III. Summary of Public Comments and EPA Responses
The Agency received comments from eight commenters on the proposed
rule. The comments, including the Agency's responses, are included in
the docket for this rulemaking. Responses to the most significant
comments are included in this section. This section addresses comments
regarding the rationale used to establish the application fee amount
and the method by which EPA will reduce fees in the event additional
sufficient resources are available for such a purpose.
A. Rationale for Establishing Application Fee
With respect to the establishment of the application fee, and the
lower fee level set for projects serving small communities of under
25,000, one commenter suggested that EPA establish more than two levels
for the application fee. The commenter stated that as proposed, the
application fee for a community of 50,000 would be the same as for a
large metropolitan area. The commenter also suggested an alternative to
setting fee levels by population by basing the fee levels on project
size.
EPA appreciates the commenters suggestions but will not adopt the
suggestions. The application fee was established at $100,000 in order
to allow the Agency to begin the financial and legal analysis of the
project while providing assurance that the applicant intends to proceed
to closing, and therefore costs incurred by the Agency may be
recovered. The reduced fee was established based on the statutory
allowance for project serving communities of under 25,000 to apply for
loans where total eligible costs are at
[[Page 29244]]
least $5 million, as opposed to the minimum of $20 million required of
all other applicants. The reduced application fee allows small
communities with fewer resources to begin the application process.
Creating a reduced application fee for such communities logically
follows the statutory allowance for reduced project size for such
communities. Setting application fee levels by project size does not
correlate to the ability of an applicant to pay the application fee.
Small communities with large projects would struggle to pay a much
higher application fee, while large metropolitan areas that can easily
pay the application fee might see a reduced fee.
Another commenter stated that in order to not discourage
applications for projects serving low-income communities, WIFIA
application fees should be waivable or greatly reduced for those
projects that serve a population with a median household income that is
at least 80 percent or less of the state median household income. The
commenter proposes that economically stressed communities regardless of
size be eligible for application fee waivers or substantial application
fee reduction.
EPA appreciates the commenters proposal, but will not adopt the
proposal. As previously stated, the application fee was established at
$100,000 in order to allow the Agency to begin the financial and legal
analysis of the project while providing assurance that the applicant
intends to proceed to closing, and therefore costs incurred by the
Agency may be recovered. A reduction or waiver of the application fee
would remove the incentive for communities to proceed to closing by
eliminating the risk of losing the application fee. EPA expects fewer
small community applicants entitled to the reduced fee than applicants
that can show economic stress. If a significant number of applicants
receive an application fee waiver or reduction, EPA will be unable to
begin the financial and legal analysis required for each project
applicant due to limited resources. As previously stated, if sufficient
resources exist for EPA to reduce fees, such resources will be used to
reduce the fees of applicants that serve a population with a median
household income that is at least 80 percent or less of the state
median household income.
B. Methodology To Reduce Fees in the Event Additional Sufficient
Resources Are Available
In paragraph (f) of the final rule language, EPA has the authority
to reduce the credit processing fee established under paragraph (c), to
the extent that Congress appropriates funds in any given year beyond
those sufficient to cover internal administrative costs. In the
proposed rule, EPA proposed three alternative methods by which the
Agency could allocate additional administrative funds to reduce fees:
By reducing fees by an equal amount per loan in the
relevant year;
By reducing fees by an equal amount per loan for those
projects serving a population of not more than 25,000; or
By reducing fees by an equal amount per loan for those
projects that serve a population with a median household income that is
80 percent or less of the state median household income.
Alternatively, EPA could allocate such fee reductions through a
combination of these three methods. EPA requested comment on each of
these potential options or other potential approaches. EPA received
three comments related to this request.
The first commenter suggested that a combination of the three
methods should be used and that EPA should first reduce or eliminate
credit processing fees charged to applicants for projects that
primarily serve a population with a median household income of 80
percent or less of the state median household income. The commenter's
rationale is that this approach will target fee relief toward
communities that are likely facing some of the most significant water
affordability challenges, and whose residents could most benefit from
both low-cost financing and fee relief. The commenter suggested that
any remaining funding available after eliminating credit processing
fees in these low-income communities should be used to reduce the
credit processing fees for all of that year's remaining applicants by a
pro-rata percentage of the total credit processing fees paid by the
applicant. Any forgiveness of credit processing fees should be
calculated on the balance of these fees after the credit for payment of
an application fee has been applied.
The second commenter suggested that EPA should first reduce the
credit processing fee for communities for whom the fees would impose
the greatest financial hardship. The commenter stated that EPA should
reduce applicant fees by an equal amount per loan for those projects
that serve a population with a median household income that is 80
percent or less of the state median household income. Once fees have
been reduced for hardship communities, any remaining funds should be
used to reduce credit processing fees by an equal amount per loan for
projects serving communities with populations of under 25,000.
The third commenter suggested that EPA reduce fees on a pro-rata
share based on loan size.
EPA appreciates the comments received on this important issue and
agrees with the first and second commenters that a combination of
methods should be used to reduce the credit processing fees of
applicants to the extent that Congress appropriates funds in any given
year beyond those sufficient to cover internal administrative costs.
The Agency agrees that the most important use of these additional funds
is to reduce the impact of the fees on the neediest applicants. In
order to reduce the impact of fees on those applicants most in need,
EPA will reduce the credit processing fee, to the extent possible, by
an equal amount per loan, on a dollar basis, for those projects that
serve a population with a median household income that is 80 percent or
less of the state median household income. If funds remain, EPA will
then reduce fees by an equal amount per loan, on a dollar basis, for
those projects serving a population of not more than 25,000. If funds
still remain, EPA will reduce fees by an equal amount per loan, on a
dollar basis, for all remaining loans. EPA cannot reduce fees as a
percentage of the credit processing fee paid by an applicant because
the total credit processing fee for each loan will not be known until
loan closing.
EPA appreciates the third commenter's suggestion, but will not
adopt the suggestion. The credit processing fee is not determined by
loan size. The estimated range of the credit processing fee is based on
the complexity of the underlying transaction and the difficulty or
length of time of negotiations. Therefore, between two applicants, one
with a greater loan size may have a smaller fee. Providing greater
relief to applicants charged a smaller fee, irrespective of need, does
not align with the Agency's desire to provide relief to the neediest
applicants.
[[Page 29245]]
IV. Statutory and Executive Orders Reviews
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is not a significant regulatory action.
B. Paperwork Reduction Act
This action does not impose an information collection burden under
the PRA because this rule merely establishes fees associated with a
previously promulgated rule.
C. Regulatory Flexibility Act
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. In
making this determination, the impact of concern is any significant
adverse economic impact on small entities. An agency may certify that a
rule will not have a significant economic impact on a substantial
number of small entities if the rule relieves regulatory burden, has no
net burden or otherwise has a positive economic effect on the small
entities subject to the rule. Participation in the WIFIA loan program
is voluntary. While many projects serving small communities are
potentially eligible for WIFIA loans, we anticipate only one to two
small community applications per year as small communities have access
to below market rate loans and other subsidies through the Clean Water
State Revolving Fund, the Drinking Water State Revolving Fund, and
other funding sources. A small community will only apply and undertake
a WIFIA loan in cases where the WIFIA loan provides positive economic
benefits relative to other potential funding sources, based upon
consideration of relevant economic factors, including loan rate, loan
terms, fees and other transaction costs. I have therefore concluded
that this action will have no net regulatory burden for all directly
regulated small entities.
D. Unfunded Mandates Reform Act (UMRA)
This action does not contain an unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments. The action imposes
no enforceable duty on any state, local, or tribal governments or the
private sector.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications as specified in
Executive Order 13175. While a tribal government, or a consortium of
tribal governments may apply for WIFIA credit assistance, this action
does not have substantial direct effects on one or more Indian tribes,
on the relationship between the Federal Government and Indian tribes,
or on the distribution of power and responsibilities between the
Federal Government and Indian tribes.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
This action is not subject to Executive Order 13045 because it is
not economically significant as defined in Executive Order 12866, and
because environmental health or safety risks are not addressed by this
action.
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution or use of energy. This rulemaking simply imposes fees
required to apply for credit assistance; therefore, by itself, this
rulemaking will not have any effect on the supply, distribution or use
of energy.
I. National Technology Transfer and Advancement Act (NTTAA)
This rulemaking does not involve technical standards.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
This action is not subject to Executive Order 12898 (59 FR 7629,
February 16, 1994) because it does not establish an environmental
health or safety standard.
K. National Environmental Policy Act
Each project obtaining assistance under this program is required to
adhere to the National Environmental Policy Act of 1969, as amended (42
U.S.C. 4321 et seq.). This rulemaking simply imposes fees required to
apply for credit assistance; therefore, by itself, this rulemaking will
not have any effect on the quality of the environment.
L. Congressional Review Act (CRA)
This action is subject to the CRA, and the EPA will submit a rule
report to each House of the Congress and to the Comptroller General of
the United States. This action is not a ``major rule'' as defined by 5
U.S.C. 804(2).
List of Subjects in 40 CFR Part 35
Environmental protection, Reporting and recordkeeping requirements,
and Water finance.
Dated: June 19, 2017.
E. Scott Pruitt,
Administrator.
For the reasons set forth in the preamble, 40 CFR part 35 is
amended as follows:
PART 35--STATE AND LOCAL ASSISTANCE
0
1. The authority citation for part 35 continues to read as follows:
Authority: 42 U.S.C. 7401 et seq.; 33 U.S.C. 1251 et seq.; 42
U.S.C. 300f et seq.; 42 U.S.C. 6901 et seq.; 7 U.S.C. 136 et seq.;
15 U.S.C. 2601 et seq.; 42 U.S.C. 13101 et seq.; Pub. L. 104-134,
110 Stat. 1321, 1321-299 (1996); Pub. L. 105-65, 111 Stat. 1344,
1373 (1997), 2 CFR 200.
0
2. Add Sec. 35.10080 to read as follows:
Sec. 35.10080 Fees.
(a) Application fee. EPA will require a non-refundable application
fee for each project applying for credit assistance under the WIFIA
program. An application fee will be due upon submission of the complete
application. For applications for projects serving small communities
(population of not more than 25,000 people), this application fee will
be $25,000. For all other applications, this application fee will be
$100,000. The initial application fee will be credited to the credit
processing fee required under paragraph (c) of this section.
(b) Adjustment of application fee. For each application and
approval cycle, EPA may adjust the amount of the application fee
described in paragraph (a) of this section based on program
implementation experience and cost expectations. EPA will publish this
amount in each Federal Register solicitation for letters of interest.
(c) Credit processing fee. Except as otherwise provided in
paragraph (f) of this section, EPA will require an additional credit
processing fee for projects selected to receive WIFIA assistance upon
closing, or in the event that the project does not proceed to closing,
e.g., if the application is
[[Page 29246]]
withdrawn or denied. The proceeds of any such fees will be used to pay
the remaining portion of the Agency's cost of providing credit
assistance and the costs of retaining expert firms, including
financial, engineering, and legal services, in the field of municipal
and project finance, to assist in the underwriting of the Federal
credit instrument. All of, or a portion of, this fee may be waived.
(d) Servicing fee. EPA will require borrowers to pay a servicing
fee for each credit instrument approved for funding. Separate fees may
apply for each type of credit instrument (e.g., a loan guarantee, a
secured loan with a single disbursement, or a secured loan with
multiple disbursements), depending on the costs of servicing the credit
instrument as determined by the Administrator. Such fees will be set at
a level sufficient to enable the EPA to recover all or a portion of the
costs to the Federal Government of servicing WIFIA credit instruments.
(e) Optional supplemental fee. If, in any given year, there is
insufficient budget authority to fund the credit instrument for a
qualified project that has been selected to receive assistance under
WIFIA, EPA and the approved applicant may agree upon a supplemental fee
to be paid by or on behalf of the approved applicant at the time of
execution of the term sheet to reduce the subsidy cost of that project.
No such fee may be included among eligible project costs.
(f) Reduced fees. To the extent that Congress appropriates funds in
any given year beyond those sufficient to cover internal administrative
costs, EPA may utilize such appropriated funds to reduce fees that
would otherwise be charged under paragraph (c) of this section.
(g) Extraordinary expenses. EPA may require payment in full by the
borrower of additional fees, in an amount determined by EPA, and of
related fees and expenses of its independent consultants and outside
counsel, to the extent that such fees and expenses are incurred
directly by EPA and to the extent such third parties are not paid
directly by the borrower, in the event that a borrower experiences
difficulty relating to technical, financial, or legal matters or other
events (e.g., engineering failure or financial workouts) which require
EPA to incur time or expenses beyond standard monitoring.
[FR Doc. 2017-13438 Filed 6-27-17; 8:45 am]
BILLING CODE 6560-50-P