Expands the types of projects and activities eligible for assistance through SRFs to include:
(1) the implementation of lake protection projects under the Clean Lakes Program;
(2) the repair or replacement of decentralized wastewater treatment systems that treat domestic sewage;
(3) measures to manage, reduce, treat, or reuse municipal stormwater runoff;
(4) measures to reduce the demand for POTW capacity through water conservation, efficiency, or reuse;
(5) increased security measures at POTWs; and
(6) the development and implementation of watershed pilot projects.
Authorizes states to extend the repayment period for an SRF loan from the current limit of 20 years to the lesser of 30 years or the design life of the project to be financed with the proceeds.
Requires, as a condition of eligibility for a loan from the SRF, that the loan recipient develop and implement a fiscal sustainability plan for any portion of the treatment works proposed for repair, replacement, or expansion. Sets forth the elements that must be included in such a plan.
Authorizes states to use:
(1) either 4% of the capitalization grant (current law), $400,000 a year, or up to one-fifth of 1% of the total valuation of the SRF, whichever amount is greatest, for administrative expenses, plus any fees collected for such purposes;
(2) up to 2% of the capitalization grant to provide owners and operators of treatment works that serve 10,000 individuals or fewer with technical and planning assistance and assistance in financial management, user fee analysis, budgeting, capital improvement planning, facility operation and maintenance, equipment replacement, repair schedules, and other activities to improve wastewater treatment plant management and operations; and
(3) provide additional subsidization, including forgiveness of principal and negative interest loans to benefit specified municipalities or to implement an innovative or alternative process, material, technique, or technology (including low-impact technologies, nonstructural protection of surface waters, a new or improved method of waste treatment, and nutrient pollutant trading) that may result in greater environmental benefits.
Requires states to establish affordability criteria on or before September 30, 2008, to assist in identifying municipalities that would experience a significant hardship raising the revenue necessary to finance the construction of POTWs. Authorizes:
(1) states to use the criteria in previously established affordability criteria that meet specified requirements;
(2) the Administrator to publish information to assist states in establishing affordability criteria; and
(3) states to give priority to a project by local and state governments for the construction of a POTW if the recipient of the funds meets a state's affordability criteria.
Requires states to use 25% of any increases in a federal capitalization grant allotted to a state in fiscal years where the Administrator has more than $1 billion in funds available to provide additional subsidization for projects identified in the state's intended use plan. Limits the total amount of additional subsidization a state may provide to 30% of the total amount of capitalization grants received by the state.