(a) In general

The Secretary shall provide grants in accordance with this section to assist the residents of rural areas and small communities to secure adequate quantities of safe water—

(1) after a significant decline in the quantity or quality of water available from the water supplies of such rural areas and small communities, or when such a decline is imminent; or

(2) when repairs, partial replacement, or significant maintenance efforts on established water systems would remedy—

(A) an acute, or imminent, shortage of quality water; or

(B) a significant decline, or imminent decline, in the quantity or quality of water that is available.

(b) Priority

In carrying out subsection (a), the Secretary shall—

(1) give priority to projects described in subsection (a)(1), particularly to projects to address contamination that—

(A) poses a threat to human health or the environment; and

(B) was caused by circumstances beyond the control of the applicant for a grant, including circumstances that occurred over a period of time; and

(2) provide at least 70 percent of all such grants to such projects.

(c) Eligibility

To be eligible to obtain a grant under this section, an applicant shall—

(1) be a public or private nonprofit entity; and

(2) in the case of a grant made under subsection (a)(1), demonstrate to the Secretary that the decline referred to in such subsection occurred, or will occur, within 2 years of the date the application was filed for such grant.

(d) Uses

(1) In general

Grants made under this section may be used—

(A) for waterline extensions from existing systems, laying of new waterlines, repairs, significant maintenance, digging of new wells, equipment replacement, and hook and tap fees;

(B) for any other appropriate purpose associated with developing sources of, treating, storing, or distributing water;

(C) to assist communities in complying with the requirements of the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.) or the Safe Drinking Water Act (42 U.S.C. 300f et seq.); and

(D) to provide potable water to communities through other means, other than those covered above for not to exceed 120 days when a more permanent solution is not feasible in a shorter time frame. Where drinking water supplies are inadequate due to an event, as determined by the Secretary, including drought, severe weather, or contamination, the Secretary may provide potable water for an additional period of time not to exceed an additional 120 days in order to protect public health.

(2) Joint proposals

Nothing in this section shall preclude rural communities from submitting joint proposals for emergency water assistance, subject to the restrictions contained in subsection (e). Such restrictions should be considered in the aggregate, depending on the number of communities involved.

(e) Restrictions

(1) Maximum population and income

No grant provided under this section shall be used to assist any rural area or community that—

(A) includes any area in any city or town with a population in excess of 10,000 inhabitants according to the most recent decennial census of the United States; or

(B) has a median household income in excess of the State nonmetropolitan median household income.

(2) Set-aside for smaller communities

Not less than 50 percent of the funds allocated under this section shall be allocated to rural communities with populations that do not exceed 3,000 inhabitants.

(f) Maximum grants

Grants made under this section may not exceed—

(1) in the case of each grant made under subsection (a)(1), $1,000,000; and

(2) in the case of each grant made under subsection (a)(2), $150,000.

(g) Full funding

Subject to subsection (e), grants under this section shall be made in an amount equal to 100 percent of the costs of the projects conducted under this section.

(h) Application

(1) Nationally competitive application process

The Secretary shall develop a nationally competitive application process to award grants under this section. The process shall include criteria for evaluating applications, including population, median household income, and the severity of the decline, or imminent decline, in quantity or quality of water.

(2) Timing of review of applications

(A) Simplified application

The application process developed by the Secretary under paragraph (1) shall include a simplified application form that will permit expedited consideration of an application for a grant filed under this section.

(B) Priority review

In processing applications for any water or waste grant or loan authorized under this chapter, the Secretary shall afford priority processing to an application for a grant under this section to the extent funds will be available for an award on the application at the conclusion of priority processing.

(C) Timing

The Secretary shall, to the maximum extent practicable, review and act on an application under this section within 60 days after the date on which the application is submitted to the Secretary.

(i) Funding

(1) Reservation

(A) In general

For each fiscal year, not less than 5 percent and not more than 7 percent of the total amount made available to carry out section 1926(a)(2) of this title for the fiscal year shall be reserved for grants under this section.

(B) Release

(i) In general

Funds reserved under subparagraph (A) for a fiscal year shall be reserved only until July 1 of the fiscal year.

(ii) Exception

Notwithstanding clause (i), in response to an eligible community where the drinking water supplies are inadequate, as determined by the Secretary, due to an event, including drought, severe weather, or contamination, the Secretary may use funds described in subparagraph (A) from July 1 through September 30 each fiscal year to provide potable water under this section in order to protect public health.

(2) Authorization of appropriations

In addition to funds made available under paragraph (1), there is authorized to be appropriated to carry out this section $50,000,000 for each of fiscal years 2019 through 2023.