DRAFT

DRAFT Supplemental Funds. The SRF Program will provide additional application materials through the DNR 1 and SRF websites 2 , as applicable. The base CWSRF PPL is attached to the base CWSRF IUP as a separate document. See CWSRF IUP Attachment 1 – CWSRF PPL. I. BIL General Supplemental Fund Program Overview All CWSRF-eligible activities may be funded from the General Supplemental Fund appropriation under BIL. U.S. EPA granted states the flexibility to determine BIL priorities and select projects to receive this funding. The Iowa SRF Program will consider all eligible projects for funding under BIL General Supplemental Fund. The SRF Program has selected Section 212 priority projects that are eligible to receive additional subsidization in the form of principal forgiveness. The BIL mandates that 49% of the BIL funds provided to the state through the CWSRF General Supplemental Fund must be provided as additional subsidization to the following recipients or project types: 1. Municipalities that meet the state’s affordability criteria. 2. Municipalities that do not meet the state’s affordability criteria but seek additional subsidization to benefit individual ratepayers in the residential user rate class. 3. Entities that implement a process, material, technique, or technology that addresses water or energy efficiency goals; mitigates stormwater runoff; or encourages sustainable project planning, design, and construction. For FFY 2022, the Iowa SRF Program will prioritize additional subsidization to eligible projects from municipalities that meet the state’s affordability criteria . The Iowa SRF Program will consider prioritizing additional subsidization to other eligible recipients and project types in future appropriation years. Affordability Criteria A key priority of BIL is to ensure that disadvantaged communities benefit equitably from this investment in water infrastructure. The CWSRF Program has historically focused on metrics such as income, population, unemployment and project costs to identify borrowers that would experience a significant hardship raising the revenue necessary to finance a project. In an effort to develop a more comprehensive definition of what it means to be a disadvantaged community, the Iowa SRF Program is broadening the range of metrics by which each community is evaluated to include other social, economic, and demographic information that may indicate a lack of access to affordable clean water and safe drinking water. These metrics are discussed in the “Socioeconomic Assessment Score” section, below, and they define the affordability criteria that will be used to evaluate the disadvantaged status of a borrower. Loan Forgiveness Iowa applies additional subsidization in the form of principal forgiveness of a loan. Loan forgiveness will be awarded for up to 90% of the loan amount, or $1 million, whichever is less. Individual projects will be capped at $1 million dollars to allow more eligible borrowers to receive subsidization. The CWSRF Program may withdraw the individual project cap if additional funding becomes available. The total amount of loan forgiveness available for a project will be determined by adding together the loan forgiveness percentages for the priority project, the socioeconomic assessment score and the household burden indicator. The priority project and socioeconomic assessment score information will be available at the time of application. The percent of loan forgiveness for the household burden indicator can be projected using the engineers estimate. The final household burden indicator will be determined after the project has gone to bid, the actual project costs are known, and all other funding sources have been accounted for. Projects will be funded from the top socioeconomic score down and in priority project ranking order with consideration given to readiness to proceed.

1 https://www.iowadnr.gov/Environmental-Protection/Water-Quality/Wastewater-Construction/Construction-Permits 2 https://www.iowasrf.com/program/clean_water_loan_program/clean-water-srf-intended-use-plan-information/