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Necessary Investments <br />The statute limits investments to those that are necessary. As discussed in more detail <br />below, Treasury determined that the types of water and sewer projects that were authorized <br />under the interim final rule by reference to existing Environmental Protection Agency (EPA) <br />programs would in all cases be necessary investments given the conditions applicable to such <br />EPA programs. Similarly, the interim final rule's definition of eligible broadband projects as <br />those designed to provide a certain standard of service to those households and businesses with <br />limited existing service was based on the statutory requirement that investments in water, sewer, <br />and broadband must be "necessary." <br />As discussed further below, Treasury has expanded the scope of what is an eligible water <br />and sewer infrastructure project to include additional uses. In particular, the final rule permits use <br />of SLFRF funds for certain dam and reservoir restoration projects and certain drinking water <br />projects to support population growth. The nature of these additional uses is such that additional <br />factors must be considered in determining whether one of these additional uses is a necessary <br />project. In addition, Treasury recognizes that there may be a need for improvements to <br />broadband beyond those households and businesses with limited existing service as defined in <br />the interim final rule. Treasury has replaced this specific requirement based on an understanding <br />that broadband investments may be necessary for a broader set of reasons. <br />Given this expansion of what is considered in scope as a water, sewer, or broadband <br />infrastructure project, the final rule provides a further elaboration of Treasury's understanding of <br />the conditions under which an infrastructure project will be considered to be a necessary <br />investment. Treasury considers a necessary investment in infrastructure to be one that is (1) <br />responsive to an identified need to achieve or maintain an adequate minimum level of service, <br />261 <br />