section or subsection (b)(3). (B) Limitation Assistance provided to a project sponsor under subparagraph (A) may not exceed an amount equal to 75 percent of the total administrative costs incurred by the project sponsor in securing financial assistance under this section. (f) Limitation No eligible project that receives assistance under this section may be financed (directly or indirectly), in whole or in part, with proceeds of any obligation the interest on which is exempt from the tax imposed under chapter 1 of the Internal Revenue Code of 1986. (g) Effect Nothing in this section affects the authority of a State or a political subdivision of a State to apply and enforce any environmental laws (including regulations) with respect to an eligible project provided assistance under this section. 303. Water recycling and reuse projects (a) Competitive grant program for the funding of water recycling and reuse projects Section 1602(f) of the Reclamation Wastewater and Groundwater Study and Facilities Act ( 43 U.S.C. 390h(f) ) is amended by striking paragraphs (2) and (3) and inserting the following: (2) Priority In providing grants under paragraph (1), the Secretary shall give priority to projects that— (A) are likely to provide a more-reliable water supply for a unit of State, local, or Tribal government