1. Short title This Act may be cited as the Assistance for Rural Water Systems Act of 2023 . 2. Additional assistance for rural water systems Subtitle A of the Consolidated Farm and Rural Development Act is amended by inserting after section 306A ( 7 U.S.C. 1926a ) the following: 306B. Additional assistance for rural water systems (a) Definition of eligible entity In this section, the term eligible entity means a rural water, wastewater, or waste disposal facility with respect to which assistance may be provided under a water, wastewater, or waste disposal program under section 306(a), 306A, 306C, or 306D. (b) Additional assistance (1) Grants and loans The Secretary may provide a grant, a zero percent interest loan, or a 1 percent interest loan to an eligible entity. (2) Existing loans The Secretary may— (A) forgive principal or interest or modify any term or condition of an outstanding loan made to an eligible entity; or (B) refinance part or all of any other loan (if the purpose of the loan is an eligible purpose under section 306(a)(1) or 306C) made to an eligible entity. (3) Limitation The Secretary may not provide assistance under paragraph (2) with respect to a loan made under paragraph (1). (c) Eligible purposes The Secretary may provide assistance to an eligible entity under subsection (b) as the Secretary determines is necessary— (1) to ensure that the eligible entity has the necessary resources to maintain public health, safety, or order; or (2) to address financial hardships of the eligible entity, if the eligible entity is located in a disadvantaged or economically distressed area, as determined under subsection (d). (d) Determination To determine whether an eligible entity may receive assistance pursuant to subsection (c)(2), the Secretary shall establish— (1) a residential indicator of affordable water services in each State or local or geographic area, calculated using the cost per household as a percentage of median household income