Assistance for Rural Water Systems Act of 2025
The Assistance for Rural Water Systems Act of 2025 would expand federal support for rural water, wastewater, and waste disposal facilities by adding a new program section (306B) to the Consolidated Farm and Rural Development Act. The new provision authorizes the Secretary to provide additional financial assistance to eligible entities—defined as rural water, wastewater, or waste disposal facilities that participate in existing water-related programs (sections 306(a), 306A, 306C, or 306D). Eligible assistance includes grants, zero-percent interest loans, and 1-percent interest loans. The bill also allows the Secretary to forgive principal or interest, modify loan terms, or refinance other loans, but prohibits using forgiveness/modification/refinancing on a loan that was itself issued as a grant or subsidized loan. Assistance under 306B can be used to address two broad purposes: (1) ensuring resources to maintain public health, safety, or order, and (2) helping eligible entities facing financial hardship in disadvantaged or economically distressed areas. To target assistance, the Secretary must establish an affordability indicator (a residential indicator of affordable water services based on the ratio of cost per household to median household income) and consider factors related to disadvantaged or economically distressed areas. In short, the bill creates a new, targeted financing tool to improve rural water systems and to support systems serving economically stressed communities.
Key Points
- 1Establishes new 306B section: Additional Assistance for Rural Water Systems, authorizing targeted financial support to eligible rural water/wastewater/waste disposal facilities that participate in existing USDA rural development programs.
- 2Financing options: grants, zero-percent interest loans, or 1-percent interest loans to eligible entities.
- 3Loan relief for existing debt: Secretary may forgive principal or interest, modify loan terms, or refinance other loans (for eligible purposes), but may not apply these reliefs to a loan already made under the grant/low-interest loan (prevents double benefits on the same loan).
- 4Eligible purposes: assistance may be used to maintain public health, safety, or order, or to address financial hardship in disadvantaged or economically distressed areas.
- 5Targeting mechanism: requires the Secretary to create a residential affordability indicator (cost per household as a share of median income) and to consider other factors related to disadvantaged/economically distressed areas to determine eligibility for assistance under hardship provisions.