Definitions
Administrative Expenses - Costs incurred in managing and operating the
SRF program. A State may use up to 4% of its allotment for program administration
expenses.
Annual Review - EPA's assessment of the success of a State DWSRF
program.
Appropriations - Statutory authority that, after apportionment by OMB,
allows Federal agencies to obligate funds and make payments from the Treasury for
specified purposes.
Assurances - Certifications or pledges by the State that it will meet the
requirements of the SDWA and other requirements of the program.
Automated Clearing House - A Federal payment mechanism that
transfers cash to States and other recipients of Federal assistance using electronic
transfers from the Treasury through the Federal Reserve System.
Biennial Report - The State's SRF Report to EPA which contains
information on how the State has met the goals and objectives of the previous two fiscal
years as stated in the Intended Use Plan and grant agreement.
Bank/Banking - Crediting amounts (contributed by the State to SRF
eligible projects or activities) to the SRF in excess of amounts required towards
meeting certain requirements of future capitalization grants.
Binding Commitment - A legal obligation by the State to a local recipient
that defines the terms and the timing for assistance under the SRF.
Capitalization Grant - The assistance agreement by which EPA obligates
to award funds allotted to a State for purposes of capitalizing that State's revolving fund
and funds for other purposes authorized in section 1452.
Capitalization Grant Application - An application for Federal assistance
submitted by a State, which in addition to the application form includes an Intended
Use Plan, proposed payment schedule, and operating agreement or other documents
describing how the State intends to operate its SRF.
Certification/Certify - Documentation signed by the responsible party that
specific requirements or standards have been or will be met.
Community Water System - A public water system that: (a) serves at
least 15 service connections used by year-round residents of the area served by the
system; or (b) regularly serves at least 25 year-round residents.
Cross-cutting Authorities - Federal laws and authorities that apply by
their own terms to projects or activities receiving Federal assistance.
Debt Obligation - A legal obligation or liability to pay something to
someone else.
Default - Failure to meet a financial obligation such as a loan payment.
Disadvantaged Community - The service area of a public water system
that meets affordability criteria established after public review and comment by the
State in which the public water system is located.
Disbursement - The transfer of cash from the SRF to the assistance
recipient.
Disbursement Schedule - A quarterly schedule of estimated
disbursements from the SRF.
Eligible System - Community water systems, both privately or publicly
owned, and nonprofit noncommunity water systems.
Environmental Review - An environmental review process conducted by
States that complies with 40 CFR Part 6, Subpart E or an alternative "NEPA-like" State
environmental review.
Equivalency Projects - Projects that must total the amount equal to the
Federal capitalization grants and must comply with environmental review requirements
and Federal cross-cutting authorities.
Financial Health/Integrity - The ability of the DWSRF to address SDWA
needs and to be continually available to meet future needs.
Guarantee - A promise to provide municipal bondholders with full and
timely payment of principal and interest on the municipal debt obligation to the limit of
the guarantee, in the event of default by the municipality.
Intended Use Plan - A document prepared each year by the State, which
identifies the intended uses of the funds in the SRF and describes how those uses
support the goals of the SRF.
Leveraging - The use of the capitalization grant as the security for the
sale of State bonds. Leveraging does not include State financing arrangements in
which repayment streams, rather than capitalization grant or ACH are used as the
primary security for the bond issue.
Loan - An agreement between the DWSRF and the local recipient through
which the SRF provides funds for eligible assistance and the recipient promises to
repay the principle sum back to the SRF over a period not to exceed 20 years, except
for disadvantaged communities that may receive a loan for up to 30 years (that does
not exceed the life of the project), at an interest rate established at or below market
interest rates (may be interest free).
Net Bond Proceeds - The funds raised from the sale of the bonds minus
issuance costs (e.g., the underwriting discount, underwriter's legal counsel fees, bond
counsel fee, financial advisor fee, rating agency fees, printing of disclosure
documents/bond certificates, trustee banks' fees, various forms of credit enhancement
and other costs that may be incurred by a State agency incidental to the bond
issuance).
Noncommunity Water System - A public water system that is not a
community system.
Noncompliance - Failure to satisfy the terms of the capitalization grant
agreement, including unmet assurances, invalid certifications, or failure to manage the
DWSRF in a financially sound manner.
Nonprimacy States - States that do not exercise primary enforcement
responsibility for public water systems.
Operating Agreement - An optional document in which the State may
establish the basic framework and procedures of the DWSRF that are not expected to
change annually.
Payment/Payment Schedule - A payment is an action by EPA to increase
the amount of funds available for cash draw in the Automated Clearing House. A
payment is not a transfer of cash to the State, but only an authorization making funds
available for transfer to the State when a cash draw request is submitted. A payment
schedule, indicating the timing and size of the payments to be made, will be agreed
upon by EPA and the State based on the State's projection of binding commitments.
Refinancing - Purchase of a previously executed debt obligation where
initial debt was incurred and construction initiated after July 1, 1993.
Set-Aside - Use of allotted State funds for a range of specific SDWA
related activities identified in Section 1452, to encourage source water protection and
other State drinking water program activities.
State Match - Funds equaling at least 20% of the amount of the
capitalization grants which the State must deposit into the Fund. The State must also
provide a 10% match if the State uses the 1452(g)(2) set-aside.
