Federally Supported Projects and Programs for Wastewater, Drinking Water, and Water Supply Infrastructure

Changes from August 24, 2021 to August 2, 2022

This page shows textual changes in the document between the two versions indicated in the dates above. Textual matter removed in the later version is indicated with ~~red strikethrough~~ and textual matter added in the later version is indicated with blue.

Federally Supported Projects and Programs for August August ~~24, 2021~~2, 2022
Wastewater, Drinking Water, and Water
Jonathan L. Ramseur,
Supply Infrastructure
Coordinator
Specialist in Environmental Specialist in Environmental
For decades, Congress has authorized and modified federal programs to help communities For decades, Congress has authorized and modified federal programs to help communities
Policy Policy
address water supply and water infrastructure needs, including both wastewater and drinking address water supply and water infrastructure needs, including both wastewater and drinking

water. Departments and agencies that administer this assistance include the Bureau of water. Departments and agencies that administer this assistance include the Bureau of
Reclamation (Reclamation), the U.S. Army Corps of Engineers (USACE), the Department of Reclamation (Reclamation), the U.S. Army Corps of Engineers (USACE), the Department of

Agriculture (USDA), the U.S. Environmental Protection Agency (EPA), the Department of Agriculture (USDA), the U.S. Environmental Protection Agency (EPA), the Department of
Housing and Urban Development (HUD), and the Department of Commerce’s Economic Development Administration Housing and Urban Development (HUD), and the Department of Commerce’s Economic Development Administration
(EDA). (EDA).
These agencies administer these programs in multiple ways. In terms of funding mechanisms, These agencies administer these programs in multiple ways. In terms of funding mechanisms, some projects developed or assisted projects developed or assisted
by Reclamation and USACE are by Reclamation and USACE are ~~often~~ funded through direct, individual project authorizations from Congress. funded through direct, individual project authorizations from Congress. ~~In contrast, the~~
~~other~~ Other agencies administer programs with standing authorizations that establish eligibility criteria rather than identify specific agencies administer programs with standing authorizations that establish eligibility criteria rather than identify specific
projects. projects. (Reclamation and USACE also administer some programs.) A key practical difference is that with A key practical difference is that with ~~the~~ individual project authorizations, there is no predictable assistance or even individual project authorizations, there is no predictable assistance or even
guarantee of funding after a project is authorized, because funding must be secured each year in the congressional guarantee of funding after a project is authorized, because funding must be secured each year in the congressional
appropriations process. The programs, on the other hand, have generally received some level of annual appropriations and appropriations process. The programs, on the other hand, have generally received some level of annual appropriations and
have set program criteria and processes by which eligible parties can seek funding. have set program criteria and processes by which eligible parties can seek funding.
In terms of scope and mission, the primary responsibilities of the federal agencies discussed in this report cover a wide range. In terms of scope and mission, the primary responsibilities of the federal agencies discussed in this report cover a wide range.
For example, EPA’s authorities relate to protecting public health and the environment. The EDA and HUD focus on For example, EPA’s authorities relate to protecting public health and the environment. The EDA and HUD focus on
community and economic development. Likewise, the specific programs differ in several respects. Some are national in scope community and economic development. Likewise, the specific programs differ in several respects. Some are national in scope
((~~those of USDA, EPA, and EDA, for example~~e.g., USDA and EPA), while others are regionally focused (), while others are regionally focused (e.g., Reclamation’s programs and projectsReclamation’s programs and projects).
~~Some focus primarily on urban areas (HUD) and some on rural areas (USDA), and others do not distinguish based on~~
~~community location or size (e.g., EPA, USACE, EDA).~~
, which are limited to the 17 arid and semiarid “reclamation states” in the West). Some focus primarily on urban areas (HUD), whereas others concentrate mainly on rural areas (USDA). Federal funding for these programs and projects varies greatly. Congressional funding for the water supply and wastewater Federal funding for these programs and projects varies greatly. Congressional funding for the water supply and wastewater
and drinking water programs and drinking water programs ~~continue~~continues to compete with many other programs that are supported by discretionary spending. to compete with many other programs that are supported by discretionary spending.
Some of these programs have received supplemental appropriations, such as provided in the 2021 Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58). Stakeholders and others continue to call for increased appropriations for these programs. Stakeholders and others continue to call for increased appropriations for these programs. ~~FY2021~~FY2022 appropriations highlights appropriations highlights
include the following: include the following:
 $  $~~1.126 billion~~728.3 million for capitalization grants to states under EPA’s State Revolving Fund (SRF) loan program for capitalization grants to states under EPA’s State Revolving Fund (SRF) loan program ~~for~~
for drinking water systems and $1.drinking water systems and $1.~~639~~195 billion for EPA’s SRF program for wastewater projects; billion for EPA’s SRF program for wastewater projects;
~~ $59~~ IIJA provided an additional $1.902 billion and $1.902 billion for each program, respectively; $397.8 million for drinking water infrastructure and $443.6 million for wastewater infrastructure provided by “community project funding/congressionally directed spending,” which some refer to as “earmarks”;  $3 billion (provided by IIJA) for EPA’s drinking water SRF program for lead service line replacement and related activities;  $63.5 million for subsidy costs for the EPA-administered Water Infrastructure Finance and Innovation Act .5 million for subsidy costs for the EPA-administered Water Infrastructure Finance and Innovation Act
(WIFIA) program, allowing the agency to provide credit assistance for drinking water and wastewater (WIFIA) program, allowing the agency to provide credit assistance for drinking water and wastewater
infrastructure projects, not to exceed $12.5 billion; infrastructure projects, not to exceed $12.5 billion;
 $  $~~463.4~~490 million for grants, million for grants, ~~approximately~~ $1.4 billion in direct loan authority, and $50 million for $1.4 billion in direct loan authority, and $50 million for
guaranteed loan authority guaranteed loan authority for USDA’s rural water and waste disposal program; for USDA’s rural water and waste disposal program;
 $3.  $3.453 billion for HUD’s Community Development Block Grant (CDBG) program (water and wastewater billion for HUD’s Community Development Block Grant (CDBG) program (water and wastewater
projects are among many eligible uses); projects are among many eligible uses);
 $  $~~157~~158 million for EDA’s Public Works and Economic Adjustment Assistance programs (water and million for EDA’s Public Works and Economic Adjustment Assistance programs (water and
wastewater projects are among many eligible uses); wastewater projects are among many eligible uses);
Congressional Research Service Federally Supported Water Projects and Programs  $292~~ $100~~ million for USACE environmental infrastructure projects million for USACE environmental infrastructure projects~~; and~~
~~ $64~~, of which $200 million was from the IIJA and $92 million was from community project funding or congressionally directed spending requests;  $327 million for Reclamation water storage projects, of which $210 million was from the IIJA and $117 million was from annual appropriations;  $420 million for Reclamation rural water construction projects from the IIJA and $15 million from annual appropriations; and  $298 million for Reclamation’s Title XVI reclamation/recycling projects million for Reclamation’s Title XVI reclamation/recycling projects, of which $245 million was from the IIJA and $53 million was annual appropriations. .

Congressional Research Service Congressional Research Service

link to page link to page 5359 Federally Supported Water Projects and Programs

Contacts
Author Information ........................................................................................................................ 4954

Congressional Research Service Congressional Research Service

link to page 15 Federally Supported Water Projects and Programs

Introduction
This report provides background and funding information on water infrastructure projects, This report provides background and funding information on water infrastructure projects,
including wastewater and drinking water, and water supply projects traditionally funded by the including wastewater and drinking water, and water supply projects traditionally funded by the
federal government. The report also discusses federal funding programs that provide assistance to federal government. The report also discusses federal funding programs that provide assistance to
communities to support these types of projects and related, eligible activities. communities to support these types of projects and related, eligible activities.
For decades, Congress has authorized and modified federal programs to help communities For decades, Congress has authorized and modified federal programs to help communities
address water supply and water infrastructure needs. The agencies that administer these programs address water supply and water infrastructure needs. The agencies that administer these programs
differ in multiple ways. For example, the funding mechanisms illustrate a key practical differ in multiple ways. For example, the funding mechanisms illustrate a key practical
difference: Projects difference: Projects ~~developed~~constructed or assisted by the or assisted by the Department of the Interior (DOI) Bureau of Reclamation (Reclamation) and the Bureau of Reclamation (Reclamation) and the
U.S. Army Corps of Engineers (USACE) often require direct, individual project authorizations U.S. Army Corps of Engineers (USACE) often require direct, individual project authorizations
from Congressfrom Congress. prior to being eligible to receive appropriations.1 Under this funding mechanism, there is no predictable assistance or guarantee of Under this funding mechanism, there is no predictable assistance or guarantee of
funding after Congress authorizes a project, because funding must be secured each year in the funding after Congress authorizes a project, because funding must be secured each year in the
congressional appropriations process. congressional appropriations process.
In contrast, programs with standing In contrast, programs with standing programmatic authorizations generally have specific funding criteria and authorizations generally have specific funding criteria and
provide a process under which eligible applicants seek funding. Agencies administering such provide a process under which eligible applicants seek funding. Agencies administering such
programs covered in this report include programs covered in this report include
 the Department of Agriculture (USDA),  the Department of Agriculture (USDA),
 the Environmental Protection Agency (EPA),  the Environmental Protection Agency (EPA),
 the Department of Housing and Urban Development (HUD), and  the Department of Housing and Urban Development (HUD), and
 the Department of Commerce’s Economic Development Administration (EDA).  the Department of Commerce’s Economic Development Administration (EDA).
In terms of scope and mission, the primary responsibilities of the federal agencies discussed in In terms of scope and mission, the primary responsibilities of the federal agencies discussed in
this report cover a wide range. For example, EPA’s statutory requirements generally focus on this report cover a wide range. For example, EPA’s statutory requirements generally focus on
protecting public health and the environment. The EDA and HUD focus on community and protecting public health and the environment. The EDA and HUD focus on community and
economic development. Likewise, the specific programs discussed in this report—while all economic development. Likewise, the specific programs discussed in this report—while all
address either water supply or wastewater and drinking water infrastructure to some degree—address either water supply or wastewater and drinking water infrastructure to some degree—
differ in important respects. Some are national in scope (differ in important respects. Some are national in scope (~~those of USDA, EPA, and EDA, for~~
~~example~~e.g., USDA and EPA), while others are regionally focused (), while others are regionally focused (e.g., Reclamation’s programs and projects). Some Reclamation’s programs and projects). Some
focus primarily on urban areas (HUD), focus primarily on urban areas (HUD), ~~some~~whereas others concentrate mainly on rural areas (USDA). on rural areas (USDA).
For each of the projects and programs discussed, this report describes purposes, financing For each of the projects and programs discussed, this report describes purposes, financing
mechanisms, eligibility requirements, recent funding, and statutory/regulatory authority. The mechanisms, eligibility requirements, recent funding, and statutory/regulatory authority. The
report does not address special projects and programs aimed specifically at assisting Indian tribes, report does not address special projects and programs aimed specifically at assisting Indian tribes,
Alaska Native Villages, and Alaska Native Villages, and ~~colonias~~1colonias2 or other regional programs or other regional programs, such as those associated such as those associated
exclusively with the Appalachian region or U.S. territories. exclusively with the Appalachian region or U.S. territories.
This report focuses on programs that support drinking water and wastewater infrastructure This report focuses on programs that support drinking water and wastewater infrastructure
projects and also municipal and industrial (M&I) water supply projects and activities. This report projects and also municipal and industrial (M&I) water supply projects and activities. This report
generally does not address water projects and programs for irrigation, flood control, generally does not address water projects and programs for irrigation, flood control,
hydroelectricity, and recreation. However, in some cases (noted below), a federal program or hydroelectricity, and recreation. However, in some cases (noted below), a federal program or
~~agency (e.g., Reclamation and USDA) may primarily support one or more of these other~~
~~objectives while providing some support for M&I activities, even if only incidentally.~~

1 1 For Reclamation, this also includes some projects that must be submitted to, and approved by, Congress prior to funding (but no direct authorization is required). For more information, see below section, “Bureau of Reclamation.” 2 Colonias are typically rural, unincorporated communities or housing developments near the U.S.-Mexico border that are typically rural, unincorporated communities or housing developments near the U.S.-Mexico border that
lack some or all basic infrastructure, including plumbing and public water and sewer. lack some or all basic infrastructure, including plumbing and public water and sewer.
Congressional Research Service Congressional Research Service

1 1

link to page link to page 78 link to page link to page 3743 link to page link to page 3743 Federally Supported Water Projects and Programs

agency (e.g., Reclamation and USDA) may primarily support one or more of these other objectives while providing some support for M&I activities, even if only incidentally. Other federal authorities (e.g., those of Reclamation and USACE) may be available to assist with Other federal authorities (e.g., those of Reclamation and USACE) may be available to assist with
the provision of emergency water and wastewater needs, such as improving access to water the provision of emergency water and wastewater needs, such as improving access to water
supplies during a drought. Such authorities are generally not discussed in this report.supplies during a drought. Such authorities are generally not discussed in this report.23
Table 1 summarizes financial and other key elements of the projects and program activities summarizes financial and other key elements of the projects and program activities
discussed in this report. As indicated in the table, federal funding for the programs and projects discussed in this report. As indicated in the table, federal funding for the programs and projects
discussed in this report varies greatly. Congressional funding for the water programs discussed in discussed in this report varies greatly. Congressional funding for the water programs discussed in
this report this report ~~continue~~continues to compete with many other federal programs supported by discretionary to compete with many other federal programs supported by discretionary
spending. Stakeholders and others continue to call for increased funding for these programs. spending. Stakeholders and others continue to call for increased funding for these programs.
While Congress has maintained or increased federal support in recent years for some traditional While Congress has maintained or increased federal support in recent years for some traditional
financing tools—project grants, formula grants, capitalization grants, direct and guaranteed financing tools—project grants, formula grants, capitalization grants, direct and guaranteed
loans—policymakers have also considered alternative financing approaches and options to loans—policymakers have also considered alternative financing approaches and options to
encourage privateencourage private -sector investments and public-private partnerships (e.g., thsector investments and public-private partnerships (e.g., the Water
Infrastructure Finance and Innovation Act Program). . Some supporters of these approaches see Some supporters of these approaches see
them as options to supplement or complement, but not replace, traditional financing tools. In them as options to supplement or complement, but not replace, traditional financing tools. In
addition, in recent years, Congress has revised some existing programs and authorized new grant addition, in recent years, Congress has revised some existing programs and authorized new grant
programs in an effort to target water infrastructure needs of small and disadvantaged programs in an effort to target water infrastructure needs of small and disadvantaged
communities. communities.

~~2 These programs are~~ 3 These programs are not discussed further in this report except for the Emergency Community Water Assistance Grants administered by the U.S. Department of Agriculture. The emergency programs are summarized in CRS Report R43408, summarized in CRS Report R43408, Emergency Water Assistance During Drought: Federal
Non-Agricultural Programs, by Nicole T. Carter, Tadlock Cowan, and Joanna Barrett. , by Nicole T. Carter, Tadlock Cowan, and Joanna Barrett.
Congressional Research Service Congressional Research Service

2 2

link to page link to page 1213 link to page link to page 1213 link to page link to page 1213 link to page link to page 1213 link to page link to page 1213
Table 1. Wastewater, Drinking Water, and Water Supply Infrastructure:
Federal Funding for Projects and Programs
Agency and
~~Type of~~
~~Federal/~~
~~Average~~
~~FY2022~~
~~Project/~~
~~FY2021~~Project/ Type of Federal/ Average
Projects or
Program

Financial

Nonfederal Cost

Amount of

FY2022 Enacted FY2023 President Funding
Program Purposes
~~Fundinga~~
~~Program~~Assistance Share
Assistance
~~Share~~
~~Assistance~~Fundinga
Request
USDOI Bureau of

Multipurpose Multipurpose
De facto 40-50 De facto 40-50
0%/100%, with 0%/100%, with
Not applicable Not applicable
Not readily Not readily available
Not readily Not readily available of Reclamation
~~Reclamation~~b
projects, which may projects, which may
year loan year loan
interest for M&I interest for M&I ~~uses~~
~~available~~
~~available~~
~~include some M&I~~
~~(Total agency~~
~~(Total agency~~
~~activities~~
~~approps. are~~
~~approps. request~~
~~$1.67 billion in~~
~~is nearly $1.38~~
~~current gross~~
~~billion)~~
~~discretionary~~
~~authority)~~
~~USDOI Bureau of~~

~~Wastewater~~
~~De facto grant~~
~~Up to 25%/75%; dollar Not readily~~
~~$64.0 million~~
~~$5.0 million~~
~~Reclamation (Title~~
~~reclamation and~~
~~limits may apply~~
Total agency approps. are Total agency approps. request include some M&I uses $1.9 bil ion in current gross is $1.41 bil ion activities discretionary authority USDOI Bureau Multipurpose Direct funding for 50%/50% for federal Not applicable P.L. 117-103: $117 mil ion Request: $0 of Reclamation projects, which may the federal share projects; 25%/75% P.L. 117-58: $210 mil ion FY2023 Enacted (P.L. 117-58): Water include some M&I of costs, with the for nonfederal Infrastructure activities reimbursable projects $95 mil ion Improvements share of these for the Nation costs subject to (WIIN) Act repayment (i.e., Water Storage de facto loans) Projects USDOI Bureau Wastewater De facto grant Up to 25%/75%; Not readily P.L. 117-103: $53 mil ion Request: $4.0 mil ion of Reclamation reclamation and dol ar limits may available available
~~XVI, P.L. 102-~~
~~reuse~~P.L. 117-58: $245 mil ion FY2023 Enacted (P.L. 117-58): (Title XVI, P.L. reuse,c which may which may
apply 102-575)b
include some M&I include some M&I
$150 mil ion activities activities
USDOI Bureau of

Indian and non-Indian and non-~~Indian~~
De facto grant, De facto grant,
Non-Indian Non-Indian ~~projects:~~
Not applicable Not applicable
~~$145.0 million~~
~~$92.9 million~~
~~Reclamation Rural~~
~~rural water supply~~
~~plus loan~~
~~range from 75%/25%~~
~~(see report text~~
Water Supplyb
~~to 80%/20%; Indian~~
~~for detail)~~
~~projects: average of~~
~~100%/0%~~
~~CRS-3~~

~~link to page 12 link to page 12~~
~~Agency and~~
~~Type of~~
~~Federal/~~
~~Average~~
~~FY2022~~
~~Project/~~
~~FY2021~~
~~Projects or~~

~~Financial~~

~~Nonfederal Cost~~

~~Amount of~~

~~Funding~~
~~Program Purposes~~
~~Fundinga~~
~~Program~~
~~Assistance~~
~~Share~~
~~Assistance~~
~~Request~~
~~USACE~~

~~Reservoirs may~~
~~Upfront federal~~
~~0%/100%, with~~
~~Not applicable~~
~~$7.0 million for~~
~~$5.0 million for~~
~~Multipurpose~~
~~provide M&I water~~
~~financing of~~
~~interest~~
~~USACE to~~
~~USACE to~~
~~Reservoirs with~~
~~storage through~~
~~reservoirs; M&I~~
~~administer water~~
~~administer water~~
~~Storage for M&I~~
~~permanent or~~
~~storage is repaid~~
~~supply storage~~
~~supply storage~~
Waterb
~~temporary storage~~
~~through fees~~
~~activities~~
~~activities~~
~~agreements~~
~~collected~~P.L. 117-103: $130.2 mil ion Request: $63.0 mil ion of Reclamation Indian rural water plus loan projects: range (see report text P.L. 117-58: $420.0 mil ion FY2023 Enacted (P.L. 117-58): Rural Water supply from 75%/25% to for detail) Supplyb 80%/20%; Indian $248.0 mil ion projects: 100%/0% USDOI Bureau Brackish and Grant Up to 25%/75%; Not readily P.L. 117-103: $10.5 mil ion Request: $0 of Reclamation seawater dol ar limits may available P.L. 117-58: $15 mil ion FY2023 Enacted (P.L. 117-58): Desalination desalination, which apply Project may include some $20 mil ion Construction M&I activities CRS-3 link to page 13 link to page 13 Agency and Project/ Type of Federal/ Average FY2023 President Funding Projects or Program Financial Nonfederal Cost Amount of FY2022 Enacted Fundinga Request Program Purposes Assistance Share Assistance USACE Reservoirs may Upfront federal 0%/100%, with Not applicable P.L. 117-103: $6 mil ion $5 mil ion Multipurpose provide M&I water financing of interest Reservoirs with storage through reservoirs; M&I Storage for M&I permanent or storage is repaid Waterb temporary storage through fees agreements col ected from from
nonfederal entities nonfederal entities
USACE

Assistance is typicallyAssistance is typically
~~Technical/planning~~
Technical/planning 75%/25% generally; 75%/25% generally;
Varies (see Varies (see
~~$100.0 million~~P.L. 117-103: $86.5 mil ion
None None
Environmental
for public drinking for public drinking
and design and design ~~services~~
some authorities some authorities ~~are~~
report text for report text for from Community Project Infrastructure water and services or are 65%/35% detail) Funding/Congressionally Assistance wastewater grants; design and Directed Spending infrastructure and construction (CPF/CDS) and $13.0 mil ion source water services or grants in additional funding protection and P.L. 117-58: $200.0 mil ion development USDA Rural
~~Infrastructure~~
~~water and wastewater~~
~~or grants; design~~
~~65%/35%~~
~~detail)~~
~~Assistance~~
~~infrastructure and~~
~~and construction~~
~~source water~~
~~services or grants~~
~~protection and~~
~~development~~
~~USDA Rural~~

Municipal water Municipal water
Loans and grants Loans and grants
Up to 75%/25% for Up to 75%/25% for
Grants Grants

~~Grants:~~ Grants: $490 mil ion Grants: $511.9 mil ion
Utilities Service,
supply and supply and ~~treatment,~~
to eligible entities to eligible entities
grants grants
(FY2019): $1.3 (FY2019): $1.3
~~$463.0 million~~
~~Water and Waste~~
~~wastewater facilities~~Direct loans: Direct loans: $1.54 bil ion loan Water and treatment, 0%/100% for loans mil ion $1.4 bil ion loan authority; authority; $26.499 mil ion loan Waste Disposal wastewater facilities, Direct loans: $0 loan subsidy subsidy Program and waste disposal $2.3 mil ion Guaranteed loans: $50,
~~0%/100% for loans~~
~~million~~
~~Direct loans:~~
~~Disposal Program~~
~~and waste disposal~~
~~Direct loans:~~
~~$1.27 billion loan~~
~~$2.3 million~~
~~authority; $0~~
~~Guaranteed~~
~~subsidy~~
~~loans: $1.4~~
~~Guaranteed~~
~~million~~
~~loans: $58.0~~
~~million loan~~
~~authority; $0~~
~~subsidy~~
~~USDA Rural~~

Guaranteed loans: $50 mil ion loan Guaranteed mil ion loan authority; authority; $0 loan subsidy loans: $1.4 $45,000 loan subsidy mil ion USDA Rural Construction, Construction,
Grants to private Grants to private
100%/0% 100%/0%
Loans and Loans and

~~$5 million~~ $5 mil ion $5 mil ion
Utilities Service,
refurbishing, and refurbishing, and
nonprofit nonprofit
subgrants are subgrants are
Rural
servicing of individual servicing of individual
organizations for organizations for
limited to limited to
Decentralized
household water household water ~~well~~
the purpose of the purpose of
$15,000 per well $15,000 per well
Water Systems
well systems and systems and
providing loans providing loans ~~and~~
or wastewater or wastewater
Program
decentralized decentralized
and subgrants to subgrants to
system system
wastewater systems wastewater systems
eligible individuals eligible individuals
CRS-4 CRS-4

link to page link to page 1213 link to page link to page 1314 link to page link to page 1314 link to page link to page 1314
Agency and
Project/ Type of
Federal/
Average
~~FY2022~~
~~Project/~~
~~FY2021~~FY2023 President Funding
Projects or

Program Financial

Nonfederal Cost

Amount of
FY2022 Enacted Fundinga Request Program Purposes
~~Funding~~
~~Program Purposes~~
~~Fundinga~~
~~Program~~
Assistance
Share
Assistance
~~Request~~
USDA Rural

For water treatment,For water treatment,
Grants for public Grants for public
100%/0% 100%/0%
Maximum grant Maximum grant

~~$17.6 million~~ $15 mil ion $15 mil ion
Utilities Service,
storage, or storage, or
or private or private
award is award is
Emergency
distribution projects distribution projects
nonprofit entities nonprofit entities
$1,000,000 $1,000,000
Community
to secure adequate to secure adequate
Water ~~Assistance~~
quantities of safe quantities of safe
~~Grants~~Assistance
water water
~~USDA Watershed~~

Grants USDA Multiple activities butMultiple activities but
Project grants andProject grants and
100%/0% 100%/0%
Not applicable Not applicable
$ $~~225 million~~
~~$50 million ($175~~
~~and Flood~~
~~must generally include~~
650 mil ion ($100 mil ion $175 mil ion ($125 mil ion Watershed and must generally technical advisory technical advisory
Varies according to Varies according to
~~($175 million~~
~~discretionary,~~
~~Prevention~~
discretionary, $50 mil ion discretionary, $50 mil ion Flood Prevention include flood control flood control
services services
purpose of purpose of
~~discretionary,~~
~~$150 million~~mandatory, and $500 mil ion mandatory)
Operations
measures measures
improvement improvement ~~activity~~
~~$50 million~~
~~mandatory~~ from IIJA) )
Program
~~mandatory)~~activity
USDA Small

Dam rehabilitation Dam rehabilitation
Project grants and Project grants and
100%/0% 100%/0%
Not applicable Not applicable
$ $~~10 million~~
~~$10 million~~119 mil ion ($1 mil ion $10 mil ion
Watershed
technical advisory technical advisory
Varies according to Varies according to discretionary, $118 mil ion
Rehabilitation
services services
purpose of purpose of
from P.L. 117-58) Program
improvement activity improvement activity
EPA, Clean ~~Water~~
~~Municipal wastewater~~ Municipal
Grants to states Grants to states to 80%/20% for grants 80%/20% for grants to Average P.L. 117-103: Request: Capitalization grants Water State wastewater to capitalize loan to states to capitalization  ~~Average~~
~~Capitalization~~
~~Capitalization~~
~~State Revolving~~
~~treatment and other~~
~~capitalize loan~~
~~states to capitalize~~
~~capitalization~~
~~grants: $1.639~~
~~grants: $1.871~~
~~Fund (SRF) Loan~~
~~eligible projects and~~
~~funds~~
$1.639 bil ion Capitalization grants: Revolving Fund treatment, funds capitalize SRFs grant to state: $1.195 bil ion (SRF) Loan stormwater SRF loans made~~SRFs~~
~~grant to state:~~
~~billion~~
~~billion~~
~~Program~~
~~activities~~
~~SRF loans made by~~
0%/ 0%/100%d (project (project
$ $~~31 million~~
58 mil ion Program infrastructure, and  CPF/CDS items: $443.6 FY2023 Enacted (P.L. 117-58): by states to local states to local
loans are repaid loans are repaid ~~100%~~
~~(FY2021)e~~
(FY2022)e other eligible mil ion project sponsors project sponsors
100% to states) to states)
Average Average
~~assistance from~~
~~SRF: $5.7 million~~
~~(FY2020)f~~
~~CRS-5~~

~~link to page 12 link to page 13 link to page 13 link to page 13~~
~~Agency and~~
~~Type of~~
~~Federal/~~
~~Average~~
~~FY2022~~
~~Project/~~
~~FY2021~~
~~Projects or~~

~~Financial~~

~~Nonfederal Cost~~

~~Amount of~~

~~Funding~~
~~Program Purposes~~
~~Fundinga~~
~~Program~~
~~Assistance~~
~~Share~~
~~Assistance~~
~~Request~~
~~EPA, Drinking~~

~~Public water supply~~
~~Grants to states to 80%/20% for grants to Average~~
~~Capitalization~~
~~Capitalization~~
~~Water State~~
~~projects needed to~~
~~capitalize loan~~
~~states to capitalize~~
~~capitalization~~
~~grants: $1.126~~
~~grants: $1.358~~
~~Revolving Fund~~
~~meet federal drinking~~
~~funds~~
~~SRFs~~
~~grant to state:~~
~~billion~~
~~billion~~
~~(SRF) Loan~~
~~water standards and~~
~~SRF loans made by~~
~~0%/100%d (project~~
~~$20.93 million~~
~~Program~~
~~to address serious~~
~~states to local~~
~~loans are repaid 100%~~
~~(through~~
~~health risks~~
~~project sponsors~~
~~to states)~~
~~FY2020)~~
~~Average~~
~~assistance from~~
~~SRF: $2.75~~
~~million (FY2020)~~
~~EPA, Water~~

~~Wastewater and~~
~~Loans or loan~~
~~In general, WIFIA~~
~~$202 million~~
~~$59.5 million~~
~~$72.1 million~~
~~Infrastructure~~
~~drinking water~~
~~guarantees~~
~~funding cannot exceed~~
~~(average of 52~~
~~approps. to~~
~~approps. to cover~~
~~Finance and~~
~~projects with costs of~~
~~49% of project costs~~
~~closed loans)g~~
~~cover subsidy~~
~~subsidy costs;~~
~~Innovation Act~~
~~$20 million or larger~~
~~costs; authorized~~
~~authorized to~~
~~(WIFIA) Program~~
~~(or $5 million for~~
~~to provide no~~
~~provide no more~~
~~rural areas)~~
~~more than $12.5~~
~~than $12.5 billion~~
~~billion in credit~~
~~in credit~~
~~assistance~~
~~assistance~~
~~EPA, Sewer~~

~~Sewer overflow or~~
~~Grants to states,~~
~~55%/45%~~
~~No assistance~~
~~$40 million~~
~~$60 million~~
~~Overflow and~~
~~stormwater~~
~~which make grants~~
~~provided to~~
~~Stormwater Grant~~
~~infrastructure~~
~~to municipalities~~
~~dateh~~
 Capitalization grants: $2.202 projects and assistance from bil ion activities States required to provide a SRF: $4.8 mil ion P.L. 117-58:  Grants for emerging minimum level of (FY2021)f  contaminant projects: $225.0 Capitalization grants: additional $1.902 bil ion mil ion subsidization (e.g.,  Grants for emerging principal contaminant projects: forgiveness) and $100.0 mil ion authorized to provide further subsidization CRS-5 link to page 13 link to page 14 link to page 14 link to page 14 link to page 14 Agency and Project/ Type of Federal/ Average FY2023 President Funding Projects or Program Financial Nonfederal Cost Amount of FY2022 Enacted Fundinga Request Program Purposes Assistance Share Assistance EPA, Drinking Public water supply Grants to states 80%/20% for grants Average P.L. 117-103: Request: Capitalization grants Water State projects needed to to capitalize loan to states to capitalization  $1.126 bil ion Capitalization grants: Revolving Fund meet federal drinking funds capitalize SRFs grant to state: $728.3 mil ion (SRF) Loan water standards and SRF loans made 0%/100%d (project $45.1 mil ion Program to address serious  FY2023 Enacted (P.L. 117-58): by states to local loans are repaid (through CPF/CDS items: health risks $397.8 mil ion project sponsors 100% to states) FY2022)g  Capitalization grants: $2.202 bil ion States required to Average provide a assistance from P.L. 117-58:  Capitalization grants for lead minimum level of SRF: $2.79  service line replacement Capitalization grants: additional mil ion (FY2021) $1.902 bil ion projects: $3.0 bil ion subsidization (e.g.,   Capitalization grants for Grants for emerging principal lead service line contaminant projects: $800.0 forgiveness) and replacement projects: mil ion authorized to $3.0 bil ion provide further subsidization  Grants for emerging contaminant projects: $800.0 mil ion EPA, Water Wastewater and Loans or loan In general, WIFIA $174 mil ion $63.5 mil ion to cover $72 mil ion to cover subsidy costs; Infrastructure drinking water guarantees funding cannot (average of 88 subsidy costs; authorized to authorized to provide no more than Finance and projects with costs exceed 49% of closed loans)h provide no more than $12.5 $8 bil ion in credit assistance Innovation Act of $20 mil ion or project costs bil ion in credit assistance (WIFIA) larger (or $5 mil ion Program for rural areas) EPA, Sewer Sewer overflow or Grants to states, 55%/45% No assistance $43 mil ion $280 mil ion Overflow and stormwater which make provided to datei Stormwater infrastructure grants to Grant Program projects, with municipalities ~~Program~~
~~projects, with~~ priority priority
for financially for financially
distressed distressed
communities communities
CRS-6 CRS-6

link to page link to page 1213 link to page link to page 1314 link to page link to page 1314 link to page link to page 1314
Agency and
Project/ Type of
Federal/
Average
~~FY2022~~
~~Project/~~
~~FY2021~~FY2023 President Funding
Projects or
Program

Financial

Nonfederal Cost

Amount of
FY2022 Enacted Fundinga Request Program Purposes
~~Funding~~
~~Program Purposes~~
~~Fundinga~~
~~Program~~
Assistance
Share
Assistance
~~Request~~
EPA, Technical

Assist rural, small, Assist rural, small, ~~and~~ Grants to Grants to ~~qualified~~
100%/0% 100%/0%
~~No assistance~~
~~$18 million~~
~~$18 million~~EPA awarded $4 $20 mil ion $18 mil ion
Assistance for
and tribal publicly tribal publicly ~~owned~~
~~nonprofits to~~
~~provided~~ qualified mil ion grants to to
Rural, Small, and
~~treatment~~ owned treatment nonprofits to three entities in Tribal works and works and
provide technical provide technical
~~datei~~
~~Tribal~~2021j Wastewater
decentralized decentralized
assistance assistance
~~Wastewater~~Systems
wastewater treatment wastewater treatment
~~Systems~~
systems to comply systems to comply
with the Clean Water with the Clean Water
Act and apply for Act and apply for
financing from the financing from the
clean water SRF clean water SRF
EPA, Technical

Assist public water Assist public water
Grants to Grants to ~~qualified~~
100%/0% 100%/0%
~~FY2020 funds~~
~~$19 million~~
$0
FY2021 awards $22 mil ion $0 Assistance for
systems and systems and
~~nonprofits to~~qualified
were were ~~allocated~~made to
Rural, Small, and
particularly small particularly small
~~provide technical~~
~~to three~~nonprofits to two entities, entities,
Tribal Drinking
systems (serving 25- systems (serving 25-
~~assistance~~provide technical
average grant average grant
Water Systems
10,000 customers) 10,000 customers)
~~amount was $5.9~~assistance amount was
with SDWA with SDWA
~~millio~~nj$10.3 mil ionk
compliance compliance
EPA, Small and

Drinking water Drinking water
Grants to states Grants to states
55%/45% for grants 55%/45% for grants
~~No assistance~~
~~$26.4 million~~
~~$41.4 million~~Appropriations P.L. 117-103: Request: $80.0 mil ion
Disadvantaged
projects needed to projects needed to
on behalf of an on behalf of an
(EPA may waive (EPA may waive
~~provided to~~distributed $27.2 mil ion FY2023 Enacted (P.L. 117-58):
Communities
meet federal drinking meet federal drinking
underserved underserved
match under certain match under certain
d~~atek~~noncompetitively
Drinking Water
water standards, water standards,
community, public community, public
circumstances) circumstances)
~~Grant Program~~
~~household water~~
~~water systems,~~
~~quality testing,~~
~~tribal water~~
~~assistance that~~
~~systems~~to states. State P.L. 117-58: $1.0 bil ion for grants to address Grant Program household water water systems, amount averaged $1.0 bil ion for grants to emerging contaminants quality testing, tribal water $612,000 address emerging assistance that systems through FY2021l contaminants
benefits a community benefits a community
on a per-household on a per-household
basis basis
CRS-7 CRS-7

link to page link to page 1213 link to page 14 link to page link to page 1314 link to page link to page 1314 link to page 14 link to page link to page 1314
Agency and
Project/ Type of
Federal/
Average
~~FY2022~~
~~Project/~~
~~FY2021~~FY2023 President Funding
Projects or
Program

Financial

Nonfederal Cost

Amount of
FY2022 Enacted Fundinga Request Program Purposes
~~Funding~~
~~Program Purposes~~
~~Fundinga~~
~~Program~~
Assistance
Share
Assistance
~~Request~~
EPA, Lead

Drinking water Drinking water
Grants to Grants to
80%/20% for grants 80%/20% for grants
Lead service line Lead service line ~~$21.5 million~~
~~$81.5 million~~ $22.0 mil ion $182.0 mil ion
Reduction
projects and projects and ~~activities~~
community water community water
(EPA may waive (EPA may waive
grants awarded grants awarded
Projects Grant
activities to reduce to reduce ~~lead in~~
systems, tribal systems, tribal
match under certain match under certain
to three entities to three entities
Program
~~drinking water;~~lead in drinking
water systems, water systems,
circumstances) circumstances)
in 2020 averaged in 2020 averaged
~~replacement of lead~~water; replacement
states, schools, states, schools, ~~and~~
$5.7 $5.7 ~~million~~mil ion; lead ; lead
of lead service lines; service lines;
and municipalities municipalities
removal grants removal grants
corrosion control corrosion control
awarded to awarded to
activities activities
seven schools seven schools
and child care and child care
centers averaged centers averaged
$3.3 $3.3 ~~millionl~~mil io nm HUD,
~~HUD, Community~~
Multipurpose Multipurpose
Formula grants, Formula grants,
100%/0% 100%/0%
Entitlement Entitlement
$3. $3.~~450 billion~~
~~$3.450 billion~~
~~Development~~300 bil ion $3.607 bil ion Community
community community
70% of which are 70% of which are
formula grants: formula grants:
~~Block Grant~~Development
development development ~~projects;~~
reserved for reserved for ~~urban~~
$2.1 $2.1 ~~million;~~
Programm
~~may include water and~~
~~areas, 30% for~~
~~average award~~
~~waste disposal~~
~~state grants~~
~~to state~~
~~programs: $20~~
~~million~~mil ion; Block Grant projects; may include urban areas, 30% average award Programn water and waste for state grants to state disposal programs: $20 mil ion (for (for
subawards to subawards to
communities) in communities) in
FY2021 FY2021
Commerce, ~~EDA,~~

Multipurpose Multipurpose
Project grants Project grants
Generally 50%/50% Generally 50%/50%
Average Public Average Public
$ $~~119.5 million~~
~~$124 million~~
~~Public Works and~~
~~economic~~
~~Works grant~~
~~allocated for the~~
~~requested for the~~
~~Economic~~
~~development projects;~~
~~$1.4 million;~~
~~Public Works~~
~~Public Works~~
~~Adjustment~~
~~may include water and~~
~~average EAA~~
~~program and~~
~~program and $48~~
Assistancen
~~sewer~~
~~grant $650,000~~
~~$37.5 million for~~
~~million for the~~
~~(FY2020)~~
~~the EAA program EAA program~~120.5 mil ion allocated for $124 mil ion requested for the EDA, Public economic Works grant the Public Works program Public Works program and $48 Works and development $1.4 mil ion; and $37.5 mil ion for the mil ion for the EAA programq Economic projects; may include average EAA EAA programp Adjustment water and sewer grant $650,000 Assistance (FY2020) (EAA)o
Source: CRS. CRS.
a. In some cases, funding amounts may address other objectives. a. In some cases, funding amounts may address other objectives.
b. These projects must generally be authorized by Congress prior to construction. Municipal water supply is not the primary purpose of these projects. b. These projects must generally be authorized by Congress prior to construction. Municipal water supply is not the primary purpose of these projects.
c. Title XVI supports what is generally considered water reuse and reclamation. Reclamation is treatment of wastewater or other impaired surface water (e.g., c. Title XVI supports what is generally considered water reuse and reclamation. Reclamation is treatment of wastewater or other impaired surface water (e.g.,
seawater) or groundwater (e.g., groundwater with high levels of contaminants, such as arsenic or salts) to make it usable or reusable for nonpotable or indirect seawater) or groundwater (e.g., groundwater with high levels of contaminants, such as arsenic or salts) to make it usable or reusable for nonpotable or indirect
CRS-8 potable use (e.g., potable use after storage and recovery, such as after groundwater recharge). Reuse connotes planned beneficial use (e.g., landscape watering, potable use (e.g., potable use after storage and recovery, such as after groundwater recharge). Reuse connotes planned beneficial use (e.g., landscape watering,
agricultural irrigation, and industrial cooling) of treated municipal wastewater. agricultural irrigation, and industrial cooling) of treated municipal wastewater.
~~CRS-8~~

d. This ratio does not account for additional subsidization. Under certain conditions, states may provide additional subsidization, including principal forgiveness, d. This ratio does not account for additional subsidization. Under certain conditions, states may provide additional subsidization, including principal forgiveness,
negative interest loans, or a combination. In addition, appropriations acts in recent years have required states to use minimum percentages of their allotted funds to negative interest loans, or a combination. In addition, appropriations acts in recent years have required states to use minimum percentages of their allotted funds to
provide additional subsidization, including grants. provide additional subsidization, including grants.
e. e. Based on FY2022 allotments to states from appropriations in P.L. 117-103 (EPA, “Annual Allotment of Federal Funds,” EPA, “Annual Allotment of Federal Funds,” ~~FY2021~~FY2022 table, https://www.epa.gov/cwsrf/ table, https://www.epa.gov/cwsrf/ clean-water-state-revolving-fund-cwsrf-allotments-federal-funds-statesclean-water-state-revolving-fund-cwsrf-allotments-federal-funds-states.
f.
~~Based on annual dollar amount of binding commitments and annual number of binding commitments~~); and FY2022 allotment to states from supplemental appropriations in P.L. 117-53 (EPA, Memorandum: Implementation of the Clean Water and Drinking Water State Revolving Fund Provisions of the Bipartisan Infrastructure Law, March 8, 2022, https://www.epa.gov/system/files/documents/2022-03/combined_srf-implementation-memo_final_03.2022.pdf). f. Based on total dol ars of annual assistance provided and total number of assistance agreements from CWSRF National Information Management System, from CWSRF National Information Management System,
National Report, https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-national-information-management-system-reports. National Report, https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-national-information-management-system-reports.
g. g. ~~EPA, “~~ “Average annual capitalization grant” includes emergency supplemental appropriations provided by the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58) directed toward specific project purposes (e.g., lead service line replacement). EPA, “Annual Allotment of Federal Funds for States, Tribes, and Territories,” https://www.epa.gov/dwsrf/annual-allotment-federal-funds-states-tribes-and-territories. h. Based on 88 closed loans, totaling $15.3 bil ion. EPA, “WIFIA Closed Loans,” https://www.epa.gov/wifia/wifia-closed-loans. WIFIA Closed Loans,” https://www.epa.gov/wifia/wifia-closed-loans.
h. i. For more information, see EPA, “Sewer Overflow and Stormwater Reuse Municipal Grants Program,” https://www.epa.gov/cwsrf/sewer-overflow-and-stormwater-For more information, see EPA, “Sewer Overflow and Stormwater Reuse Municipal Grants Program,” https://www.epa.gov/cwsrf/sewer-overflow-and-stormwater-
reuse-municipal-grants-program. reuse-municipal-grants-program.
ij. .
For more information, see EPA, Technical Assistance for Treatment Works, https://www.epa.gov/small-and-rural-wastewater-systems/technical-assistance- For more information, see EPA, Technical Assistance for Treatment Works, https://www.epa.gov/small-and-rural-wastewater-systems/technical-assistance-
treatment-works. treatment-works.
j.
~~EPA, “EPA Selects Funding Recipients to Provide Training and Technical Assistance for Small Systems,” May 12, 2021~~k. EPA, “EPA Selects Recipients for $21.7 Mil ion to Support Clean, Safe Water for Rural Communities” May 18, 2022, https://www.epa.gov/dwcapacity/training-and-, https://www.epa.gov/dwcapacity/training-and-
technical-assistance-small-systems-funding. technical-assistance-small-systems-funding.
k. l. For more information, see EPA, “WIIN Grant: Assistance for Small and Disadvantaged Communities Drinking Water Grant,” https://www.epa.gov/dwcapacity/wiin-For more information, see EPA, “WIIN Grant: Assistance for Small and Disadvantaged Communities Drinking Water Grant,” https://www.epa.gov/dwcapacity/wiin-
grant-assistance-small-and-disadvantaged-communities-drinking-water-grant. grant-assistance-small-and-disadvantaged-communities-drinking-water-grant.
l.
m. EPA, “WIIN Grant: Reduction in Lead Exposure Via Drinking Water,” https://www.epa.gov/dwcapacity/wiin-grant-reduction-lead-exposure-drinking-water. EPA, “WIIN Grant: Reduction in Lead Exposure Via Drinking Water,” https://www.epa.gov/dwcapacity/wiin-grant-reduction-lead-exposure-drinking-water.
mn. CDBG figures in this table do not include Community Development Fund set-asides. . CDBG figures in this table do not include Community Development Fund set-asides.
no. The totals for the EAA program do not include supplemental appropriations or annual appropriations directed to the Assistance to Coal Communities (ACC) and . The totals for the EAA program do not include supplemental appropriations or annual appropriations directed to the Assistance to Coal Communities (ACC) and
the Assistance to Nuclear Closure Communities (NCC) initiatives. the Assistance to Nuclear Closure Communities (NCC) initiatives.
p. Explanatory statement accompanying the Consolidated Appropriations Act, 2022 (P.L. 117-103), Congressional Record (pp. H1772-H1773), March 9, 2022, https://www.congress.gov/117/crec/2022/03/09/168/42/CREC-2022-03-09-bk3.pdf. q. EDA, FY2023 Congressional Budget Justification, pp. 25, 59, https://www.commerce.gov/sites/default/files/2022-03/FY2023-EDA-Congressional-Budget- Submission.pdf.
CRS-9 CRS-9

Federally Supported Water Projects and Programs

Department of the ~~Interior3~~Interior4
Bureau of ~~Reclamation4~~Reclamation5
The Bureau of Reclamation was established to implement the Reclamation Act of 1902, which The Bureau of Reclamation was established to implement the Reclamation Act of 1902, which
authorized the construction of water works to provide water for irrigation in arid western states.authorized the construction of water works to provide water for irrigation in arid western states.56
Reclamation owns and manages 475 dams and 337 reservoirs, which are capable of storing 245 Reclamation owns and manages 475 dams and 337 reservoirs, which are capable of storing 245
million acre-feet of water.million acre-feet of water.67 These facilities serve approximately 31 million people, delivering a These facilities serve approximately 31 million people, delivering a
total of approximately 28.5 million acre-total of approximately 28.5 million acre-~~feet7~~feet8 of water annually in nondrought years. Of this of water annually in nondrought years. Of this
amount, M&I water deliveries total approximately 2.8 million acre-feet annually and have more amount, M&I water deliveries total approximately 2.8 million acre-feet annually and have more
than doubled since 1970. than doubled since 1970.
Historically, Reclamation primarily Reclamation primarily ~~provides~~supports M&I water supplies as part of larger, multipurpose M&I water supplies as part of larger, multipurpose federal reclamation reclamation
projects serving irrigation, flood control, power supply, and recreation purposes. However, projects serving irrigation, flood control, power supply, and recreation purposes. However, ~~since~~
it has constructed few such projects in recent years. Since 1980, Congress has individually authorized construction of 1980, Congress has individually authorized construction of several “rural water supply” projects“rural water supply” projects.
~~In 1992, Congress authorized~~ that have also served these purposes. Further, since 1992 Congress has also authorized nonfederal participation in reclamation wastewater and reuse/recycling projects. These reclamation wastewater and reuse/recycling projects. These
projects, discussed below, are known as Title XVI projects because they were first authorized in projects, discussed below, are known as Title XVI projects because they were first authorized in
1992 under Title XVI of P.L. 1992 under Title XVI of P.L. 102-575. Congress has recently expanded Reclamation’s involvement in other types of nonfederal water supply projects. In the 2016 Water Infrastructure Improvements for the Nation Act (WIIN Act; P.L. 114-322), Congress added authority for Reclamation to support nonfederal construction of brackish and seawater desalination projects and added new authority for Reclamation to support water storage project construction (generally referred to here as “WIIN Act water storage projects”) on a cost-shared basis, including construction of nonfederal water storage projects. Each of these areas is discussed below~~102-575. This title also authorized Reclamation to undertake~~
~~specific and general feasibility studies for reclamation wastewater and reuse projects and to~~
~~research, construct, and operate demonstration projects. Even so, these projects remain a small~~
~~part of the overall Reclamation portfolio~~. .
Historically, Reclamation constructed projects with federal funds, then established a repayment Historically, Reclamation constructed projects with federal funds, then established a repayment
schedule based on the amount of total construction costs allocated to specific project purposes. schedule based on the amount of total construction costs allocated to specific project purposes.
Reclamation project authorizations typically require 100% repayment, with interest, for the M&I Reclamation project authorizations typically require 100% repayment, with interest, for the M&I
portion of water supply facilities, which makes Reclamation assistance a de facto long-term loan.portion of water supply facilities, which makes Reclamation assistance a de facto long-term loan.8
~~However, for M&I projects under rural water and Title XVI authorities, Congress has established~~
~~terms providing some or all federal funding for projects on a nonreimbursable basis (i.e., a de~~
~~facto grant). For example, the federal government fully funds rural water projects serving Indian~~
~~populations. For non-Indian rural water supply projects, Congress has authorized~~
~~nonreimbursable federal funding of as much as 75%-85% of project costs.9 The federal share of~~
~~costs for Title XVI projects is generally much lower than for rural water projects. It is limited to a~~9 A similar arrangement is required for the federal portion of WIIN Act water storage projects. For

34 This section was prepared by Charles V. Stern, Specialist in Natural Resources Policy, Resources, Science, and This section was prepared by Charles V. Stern, Specialist in Natural Resources Policy, Resources, Science, and
Industry Division; and Anna E. Normand, Analyst in Natural Resources Policy, Resources, Science, and Industry Industry Division; and Anna E. Normand, Analyst in Natural Resources Policy, Resources, Science, and Industry
Division. Division.
45 For more information on Bureau of Reclamation water supply authorities and activities, For more information on Bureau of Reclamation water supply authorities and activities, see CRS Report R46303, CRS Report R46303, Bureau
of Reclamation: History, Authorities, and Issues for Congress, by Charles V. Stern and Anna E. Normand. , by Charles V. Stern and Anna E. Normand.
56 Reclamation is generally authorized to construct projects only in the 17 western states (Arizona, California, Colorado, Reclamation is generally authorized to construct projects only in the 17 western states (Arizona, California, Colorado,
Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas,
Utah, Washington, and Wyoming) unless otherwise directed by Congress. For example, in 1986, Congress authorized Utah, Washington, and Wyoming) unless otherwise directed by Congress. For example, in 1986, Congress authorized
Reclamation to also work in U.S. territories (P.L. 99-396) and in 2005 to construct three water reuse facilities in Hawaii Reclamation to also work in U.S. territories (P.L. 99-396) and in 2005 to construct three water reuse facilities in Hawaii
(P.L. 109-70). (P.L. 109-70).
67 U.S. Department of the Interior, U.S. Department of the Interior, Budget Justifications and Performance Information, Fiscal Year 2016: Bureau of
Reclamation, February 2015, p. 2, http://www.usbr.gov/budget/2016/FY16_Budget_Justifications.pdf. , February 2015, p. 2, http://www.usbr.gov/budget/2016/FY16_Budget_Justifications.pdf.
78 An acre-foot is the amount of water needed to cover one acre of land one foot deep, or 325,851 gallons. An acre-foot is the amount of water needed to cover one acre of land one foot deep, or 325,851 gallons.
89 Repayment obligations are typically spread over a 40- or 50-year repayment term. In contrast to M&I repayment, Repayment obligations are typically spread over a 40- or 50-year repayment term. In contrast to M&I repayment,
Reclamation-built irrigation facilities are generally repaid without interest over similar time periods. Reclamation-built irrigation facilities are generally repaid without interest over similar time periods.
~~9 Personal correspondence between CRS and Reclamation on January 9, 2020.~~
Congressional Research Service Congressional Research Service

10 10

Federally Supported Water Projects and Programs

~~maximum of 25% of total project costs or, for projects authorized since 1996, a maximum of $20~~
~~million per project authorization.~~
~~“Traditional” Multipurpose Reclamation Projects10~~
~~Unlike many other programs described in this report, Reclamation undertakes projects largely at~~
M&I projects under rural water, Title XVI, and desalination authorities, Congress has established terms providing some or all federal funding for projects on a nonreimbursable basis. “Traditional” Multipurpose Reclamation Projects10 Reclamation undertakes “traditional” reclamation projects (i.e., projects authorized under the structure laid out in the Reclamation Act of 1902 and related laws) at the explicit direction of Congress. Local project sponsors may approach Reclamation or Congress the explicit direction of Congress. Local project sponsors may approach Reclamation or Congress
with proposals for project construction and funding. However, except where blanket feasibility with proposals for project construction and funding. However, except where blanket feasibility
study authorizations exist (e.g., certain program areas described below), specific project study authorizations exist (e.g., certain program areas described below), specific project
feasibility studies must first be authorized by Congress.11 Once a feasibility study is completed, feasibility studies must first be authorized by Congress.11 Once a feasibility study is completed,
congressional authorization is typically sought prior to a request for construction appropriations.12 congressional authorization is typically sought prior to a request for construction appropriations.12
Because there is no “program” per se, there are no general eligibility or program criteria for Because there is no “program” per se, there are no general eligibility or program criteria for
selecting large, multipurpose projects. Rather, Congress relies on information provided in selecting large, multipurpose projects. Rather, Congress relies on information provided in
feasibility studies, including cost-benefit, engineering, and environmental analyses and policy feasibility studies, including cost-benefit, engineering, and environmental analyses and policy
~~considerations.~~
~~Project Purposes~~
considerations. While Reclamation maintains almost 200 of these projects throughout the country, it has constructed few new reclamation projects in recent years. Project Purposes Individual authorization statutes establish project purposes. Generally, M&I projects are part of Individual authorization statutes establish project purposes. Generally, M&I projects are part of
larger, multipurpose projects such as those built for irrigation water supply, flood control, and larger, multipurpose projects such as those built for irrigation water supply, flood control, and
hydropower purposes.hydropower purposes. ~~Projects may be authorized under the rural water supply or Title XVI water~~
~~reuse programs described below.~~
Financing or Funding Mechanism
Projects are financed and constructed up front by the federal government, and costs for M&I Projects are financed and constructed up front by the federal government, and costs for M&I
portions of such projects are generally portions of such projects are generally considered reimbursable and are thus scheduled to be repaid scheduled to be repaid ~~100%~~in full, with interest, , with interest, ~~via~~
~~“repayment” or “water service” contracts~~over extended terms. Irrigation districts must also repay their share of project . Irrigation districts must also repay their share of project
benefits, but such payments are not subject to interest charges. benefits, but such payments are not subject to interest charges.
Other water supply costs, such as costs for fish and wildlife enhancement, are considered nonreimbursable pursuant to federal law, and repayment is not required. Eligibility Requirements ~~Eligibility Requirements~~
Generally, local governments and organizations such as irrigation, water, or conservation districts Generally, local governments and organizations such as irrigation, water, or conservation districts
may approach Reclamation and/or Congress for project support. All construction project funding may approach Reclamation and/or Congress for project support. All construction project funding
must be appropriated by Congress. As noted earlier, Reclamation must be appropriated by Congress. As noted earlier, Reclamation ~~only works on projects located~~
~~in the 17 western states (32 Stat. 388; 43 U.S.C. §391 et seq.) unless otherwise specifically~~
~~authorized.~~
works only on projects located
10 This section discusses “traditional” authority for Reclamation to construct water resources projects. Reclamation also 10 This section discusses “traditional” authority for Reclamation to construct water resources projects. Reclamation also
has a similar (but separate) authority to construct new surface water storage projects under Section 4007 of the Water has a similar (but separate) authority to construct new surface water storage projects under Section 4007 of the Water
Infrastructure Improvements for the Nation Act (P.L. 114-322). For more information about how this authority differs Infrastructure Improvements for the Nation Act (P.L. 114-322). For more information about how this authority differs
from Reclamation’s traditional construction authority, see CRS In Focus IF10626, from Reclamation’s traditional construction authority, see CRS In Focus IF10626, Reclamation Water Storage
Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act, by Charles V. Stern., by Charles V. Stern.
11 See Section 8 of the Federal Water Project Recreation Act of 1965 (P.L. 89-72, 16 U.S.C. §460 11 See Section 8 of the Federal Water Project Recreation Act of 1965 (P.L. 89-72, 16 U.S.C. §460l-19). -19).
12 Section 9(a) of the Reclamation Project Act of 1939 (53 Stat. 1193; 43 U.S.C. §485h(a)) provides that, if the 12 Section 9(a) of the Reclamation Project Act of 1939 (53 Stat. 1193; 43 U.S.C. §485h(a)) provides that, if the
Secretary of the Interior finds that the allocable benefits of the project equal or outweigh anticipated costs, then the Secretary of the Interior finds that the allocable benefits of the project equal or outweigh anticipated costs, then the
project shall be deemed authorized. Even so, the Secretary of the Interior has first sought congressional approval for project shall be deemed authorized. Even so, the Secretary of the Interior has first sought congressional approval for
large construction projects in recent decades. In any case, Congress would need to provide appropriations for any new large construction projects in recent decades. In any case, Congress would need to provide appropriations for any new
project construction. project construction.
Congressional Research Service Congressional Research Service

11 11

Federally Supported Water Projects and Programs

~~Funding~~
in the 17 western states (32 Stat. 388; 43 U.S.C. §391 et seq.) unless otherwise specifically authorized. Recent Federal Funding Funding information for the M&I portions of multipurpose Funding information for the M&I portions of multipurpose reclamation projects is not readily available. Total projects is not readily available. Total
discretionary Reclamation appropriations (gross current authority, not including permanent discretionary Reclamation appropriations (gross current authority, not including permanent
funding) for funding) for ~~FY2021~~FY2022 were $1. were $1.~~691~~90 billion. The total billion. The total ~~FY2022~~FY2023 budget request for Reclamation was budget request for Reclamation was
~~$1.38~~$1.41 billion.13 billion.13
Statutory and Regulatory Authority
~~Reclamation generally carries out its water supply activities in 17 western states as authorized by~~
~~the Reclamation Act of 1902, as amended (32 Stat. 388; 43 U.S.C. §391 et seq.), as well as~~
~~through hundreds of individual project authorization statutes.~~
~~Rural Water Supply Projects14~~
~~Similar to its traditional multipurpose projects, Reclamation has undertaken individual rural water~~
~~projects largely at the explicit direction of Congress. In most cases, Congress has prioritized~~
~~appropriation of funding~~Reclamation generally carries out its water supply activities in 17 western states as authorized by the Reclamation Act of 1902, as amended (32 Stat. 388; 43 U.S.C. §391 et seq.), as well as through hundreds of individual project authorization statutes. WIIN Act Water Storage Projects14 Congress enacted new authority for Reclamation to support surface and groundwater storage projects (i.e., authority apart from the aforementioned “traditional” project authority) under Section 4007 of the WIIN Act.15 Congress authorized $335 million in discretionary appropriations for these projects, and approved a different approach than the traditional reclamation law process of federal project study and construction with full, up-front federal funding for individual projects. Funding for water storage projects under Section 4007 is available for two primary project types. Federally owned storage projects (surface water storage projects to which the United States holds title and which were authorized to be constructed pursuant to reclamation law and regulations) may be no more than 50% federally funded. State-led storage projects (surface water or groundwater storage projects constructed, operated, and maintained by states or political subdivisions) may be no more than 25% federally funded. Prior to the WIIN Act, Congress had not authorized Reclamation to fund state-led water storage projects. Before projects can receive federal support under the WIIN Act authority, several milestones must be met. The Secretary of the Interior must find that the project is feasible and provides benefits proportionate to the federal government’s cost share, and project sponsors must agree to pay their portion of project costs up front. Appropriations under the Section 4007 authority are available to individual projects only after the Secretary transmits a list of recommended projects and funding levels to Congress, and Congress designates those projects by name in an enacted appropriations act.16 Any project that meets the aforementioned criteria is eligible for funding allocations by Reclamation. However, Congress also stipulated that in order to move forward, the Secretary must find projects feasible by January 1, 2021.17 As of June 2022, Reclamation had recommended 13 These amounts include funding requests for Rural Water and Title XVI programs, discussed below. 14 For more on this authority, see CRS In Focus IF10626, Reclamation Water Storage Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act, by Charles V. Stern. 15 43 U.S.C. §390b note. 16 For more information, see §4007(a) and (b) of P.L. 114-322. 17 P.L. 114-322, §4007(i). Congressional Research Service 12 Federally Supported Water Projects and Programs for funding for 13 projects in three states; Reclamation also recommended 8 of these projects for construction prior to the aforementioned WIIN Act deadline. Project Purposes Congress did not specify purposes for WIIN Act water storage projects, only that a project is feasible and has federal benefits “in accordance with the reclamation laws.” To date, projects receiving funding under this authority are expected to provide benefits related to agricultural irrigation and/or M&I uses, among other things. Financing or Funding Mechanism Water storage projects determined by Reclamation to be eligible under Section 4007 of the WIIN Act may receive direct, up-front federal funding in amounts recommended by Reclamation and approved by Congress, pursuant to the WIIN Act’s authorized cost shares (i.e., 50% for federal projects, 25% for nonfederal projects). Similar to the “traditional” multipurpose federal reclamation projects discussed above, the federal share for WIIN Act storage projects is subject to a cost allocation by Reclamation during the study process that determines what portions of the federal cost share are reimbursable and nonreimbursable. Reimbursable costs, which include the portions of benefits estimated to accrue to M&I agricultural water supplies, must be repaid by project sponsors over a 40-year period (with interest for M&I water supply benefits, and without interest for agricultural irrigation benefits). Nonreimbursable costs, such as water supplies for fish and wildlife purposes and flood control, are considered federal benefits and do not have to be repaid. Eligibility Requirements Eligible projects must be located in the 17 western states and territories authorized in reclamation law and may include federal projects—projects to which the United States holds title and were authorized and constructed pursuant to reclamation laws—as well as “state-led” projects—projects constructed, operated, and maintained by any state, department of a state, subdivision of a state, or public agency organized pursuant to state law. Recent Federal Funding Similar to funding for traditional reclamation projects, there is no funding breakdown available for the M&I portions of WIIN Act water storage projects. Congress enacted $117 million in FY2022 discretionary funding for WIIN Act water storage projects in P.L. 117-103. Congress also appropriated $1.05 billion for these projects over the FY2022-FY2026 time period in the IIJA (P.L. 117-58). Reclamation allocated $210 million in IIJA funding to be obligated on these projects in its FY2022 IIJA spend plan.18 The Administration requested no funding for these projects in its FY2023 budget request, but recommended allocation of another $95 million in IIJA funding for these projects in its FY2023 IIJA spend plan.19 18 Bureau of Reclamation, Implementation of the Bipartisan Infrastructure Law, FY2022 Spend Plan, https://www.usbr.gov/bil/docs/spendplan-2022/Consolidated-Reclamation-BIL-Spend-Plan-2022-With-DS-RW-AI.pdf. Hereinafter “FY2022 Reclamation Bipartisan Infrastructure Law Spend Plan.” 19 Bureau of Reclamation, Implementation of the Bipartisan Infrastructure Law, FY2023 Spend Plan, https://www.usbr.gov/bil/docs/spendplan-2023/FY-2023-Reclamation-BIL-Spend-Plan.pdf. Hereinafter “FY2023 Reclamation Bipartisan Infrastructure Law Spend Plan.” Congressional Research Service 13 Federally Supported Water Projects and Programs Statutory and Regulatory Authority Subtitle J, Section 4007 Water Infrastructure Improvements for the Nation Act (130 Stat. 1863-1866, 43 U.S.C. §390b note). Rural Water Supply Projects20 Similar to its traditional multipurpose projects, Reclamation has undertaken individual rural water projects largely at the explicit direction of Congress. In most cases, Congress has prioritized appropriations for already-authorized projects rather than fund new rural water for already-authorized projects rather than fund new rural water
construction projects. construction projects.
In lieu of the project-based approach to authorizing new rural water projects, in 2006 Congress In lieu of the project-based approach to authorizing new rural water projects, in 2006 Congress
authorized a rural water supply program (P.L. 109-451). Under the program, Reclamation was authorized a rural water supply program (P.L. 109-451). Under the program, Reclamation was
authorized to work with rural communities and Indian tribes to identify authorized to work with rural communities and Indian tribes to identify ~~municipal and industrial~~
M&I water needs and options to address such needs through appraisal investigations and, in some water needs and options to address such needs through appraisal investigations and, in some
cases, feasibility studies. In 2008, Reclamation published an interim final rule establishing future cases, feasibility studies. In 2008, Reclamation published an interim final rule establishing future
program criteria.program criteria.1521 According to Reclamation, between 2006 and 2016, it used this authority to According to Reclamation, between 2006 and 2016, it used this authority to
study approximately 22 projects to varying extents. It did not recommend any projects for study approximately 22 projects to varying extents. It did not recommend any projects for
construction, as authorized by Congress. No projects have been constructed under this authority, construction, as authorized by Congress. No projects have been constructed under this authority,
which expired at the end of FY2016 and has not been renewed. However, Congress continues to which expired at the end of FY2016 and has not been renewed. However, Congress continues to
provide funding for previously authorized rural water projectsprovide funding for previously authorized rural water projects.
~~Project Purposes~~
, and in the Clean Water for Rural Communities Act (Division FF, Title XI, §1110, of P.L. 116-260), Congress authorized another rural water project, the Musselshell-Judith Rural Water System, and the review of the Dry-Redwater Regional Water Authority System.22 Project Purposes Individual authorization statutes have established rural water project purposes. Some rural water Individual authorization statutes have established rural water project purposes. Some rural water
project authorizations meet obligations under Indian water settlements or otherwise provide project authorizations meet obligations under Indian water settlements or otherwise provide
benefits to Indian tribes. benefits to Indian tribes.
Financing or Funding Mechanism
Projects are generally costProjects are generally cost- shared between the federal government and local sponsors. The federal shared between the federal government and local sponsors. The federal
government pays up to 100% of the cost of Indian rural water supply projects, and the federal cost government pays up to 100% of the cost of Indian rural water supply projects, and the federal cost
share for current nontribal projects ranges from 75% to 80%. Reclamation requests and share for current nontribal projects ranges from 75% to 80%. Reclamation requests and
distributes funding from Congress generally based on prioritization criteria aimed to reflect both distributes funding from Congress generally based on prioritization criteria aimed to reflect both
the priorities identified in the statutes that authorized individual projects and the goals of the the priorities identified in the statutes that authorized individual projects and the goals of the
Rural Water Supply Act of 2006. Rural Water Supply Act of 2006.

~~13 These amounts include funding for Rural Water and Title XVI programs, discussed below.~~
1420 See also CRS Report R46308, See also CRS Report R46308, Bureau of Reclamation Rural Water Projects, by Anna E. Normand. , by Anna E. Normand.
~~15 43 C.F.R. §404.~~
~~Congressional Research Service~~

12

~~Federally Supported Water Projects and Programs~~

~~Eligibility Requirements16~~
21 43 C.F.R. §404. 22 The Clean Water for Rural Communities Act (§1110 of Title XI of Division FF of P.L. 116-260) directed the Secretary of the Interior to enter into a cooperative agreement to provide assistance at a 65% federal cost share for the planning, design, and construction of the Musselshell-Judith Rural Water System and authorized appropriations at $56.7 million subject to cost indexing for the 2014 cost estimate of the feasibility report. The act also authorized $5.0 million for reviewing the Dry-Redwater Regional Water Authority System submitted to Reclamation on September 1, 2010, and for completing any additional work to ensure the study complied with Reclamation’s feasibility standards. Congressional Research Service 14 Federally Supported Water Projects and Programs Eligibility Requirements Local governments and organizations such as water and conservation districts or associations, Local governments and organizations such as water and conservation districts or associations,
including tribes, may approach Reclamation and/or Congress for project support. Currently, all including tribes, may approach Reclamation and/or Congress for project support. Currently, all
construction project funding must be authorized at the project level and appropriated by construction project funding must be authorized at the project level and appropriated by
Congress. As noted earlier, Reclamation works only on projects located in the 17 western states Congress. As noted earlier, Reclamation works only on projects located in the 17 western states
(32 Stat. 388; 43 U.S.C. §391 et seq.) unless specifically authorized by Congress. (32 Stat. 388; 43 U.S.C. §391 et seq.) unless specifically authorized by Congress.
Reclamation previously published an interim final rule (43 C.F.R. Part 404) that established Reclamation previously published an interim final rule (43 C.F.R. Part 404) that established
criteria for developing new rural supply projects. However, the authority for the program has criteria for developing new rural supply projects. However, the authority for the program has
since expired, and Congress last authorized a project in 2009.since expired, and Congress last authorized a project in 2009.1723 The rule does not apply to The rule does not apply to
previously authorized projects. As previously stated, ongoing rural water construction activities previously authorized projects. As previously stated, ongoing rural water construction activities
are limited to ongoing, previously authorized projects. are limited to ongoing, previously authorized projects.
Recent Federal Funding
Enacted funding for rural water supply projects in Enacted funding for rural water supply projects in ~~FY2021 was $145.0 million. This amount is~~
~~$114.7 million above the Administration’s FY2021 budget request. The Administration proposed~~
~~to allocate funding at the project level by Reclamation in the subsequent work plan for FY2021.~~
~~For FY2022, the Administration’s budget proposal requested $92.9 million for six ongoing~~
~~authorized rural water projects.~~
~~Statutory and Regulatory Authority~~
FY2022 was $130.2 million from the Consolidated Appropriations Act and $420.0 million from the IIJA. This amount provided in the Consolidated Appropriations Act included funding for two projects above the President’s budget request that were requested as congressionally directed spending ($9.6 million for Eastern New Mexico Water Supply and $12.7 million for Lewis and Clark Rural Water System) and $15.0 million in additional funding for rural water that Reclamation distributed in its spend plan.24 Reclamation released a FY2022 spend plan for the IIJA funding that details the allocation among six projects.25 For FY2023, the Administration’s spend plan for IIJA funding includes $248.0 million for rural water supply projects, and the budget proposal requested $63.3 million for five ongoing authorized rural water projects.26 Statutory and Regulatory Authority The Rural Water Supply Program was authorized by the Rural Water Supply Act of 2006 (P.L. The Rural Water Supply Program was authorized by the Rural Water Supply Act of 2006 (P.L.
109-451, Title I; 120 Stat. 3345; 43 U.S.C. §§2401-2408 note). This programmatic authority 109-451, Title I; 120 Stat. 3345; 43 U.S.C. §§2401-2408 note). This programmatic authority
expired at the end of FY2016 and has not been renewed. Construction and operations and expired at the end of FY2016 and has not been renewed. Construction and operations and
maintenance are ongoing for several geographically specific projects that were maintenance are ongoing for several geographically specific projects that were ~~previously~~
authorized under various individual acts. authorized under various individual acts.
Title XVI Projects
Title XVI of the Reclamation Projects Authorization and Adjustment Act of 1992 (P.L. 102-575) Title XVI of the Reclamation Projects Authorization and Adjustment Act of 1992 (P.L. 102-575)
directs the Secretary of the Interior to develop a program to “investigate and identify” directs the Secretary of the Interior to develop a program to “investigate and identify”
23 Department of the Interior, “Reclamation Rural Water Supply Program,” 73 Federal Register 67778-67791, November 7, 2008, http://edocket.access.gpo.gov/2008/pdf/E8-26584.pdf. Under the rule, priority was given to domestic, residential, and municipal uses. Communities or groups of communities with populations under 50,000 were also eligible. The use of water for commercial irrigation purposes was not allowed. 24 See “Explanatory Statement Accompanying H.R. 2471, Consolidated Appropriations Act, 2022,” Congressional Record, vol. 168, part 42-III (March 9, 2022), pp. H2320-H2321, https://www.congress.gov/117/crec/2022/03/09/168/42/CREC-2022-03-09-bk3.pdf; and Bureau of Reclamation, FY2022 Additional Funding for Ongoing Work, https://www.usbr.gov/budget/2022/fy2022-Spendplan/FY2022DistributionofAdditionalFundsforOngoingWork.pdf. 25 Bureau of Reclamation, Bureau of Reclamation Implementation of the Bipartisan Infrastructure Law, FY 2022 Spend Plan, https://www.usbr.gov/bil/2022-spendplan.html. 26 Bureau of Reclamation, Bureau of Reclamation Implementation of the Bipartisan Infrastructure Law, FY 2023 Spend Plan, https://www.usbr.gov/bil/2022-spendplan.html. Congressional Research Service 15 Federally Supported Water Projects and Programs opportunities to reclaim and reuse wastewater and naturally impaired ground and surface water. opportunities to reclaim and reuse wastewater and naturally impaired ground and surface water.
Water reclaimed via Title XVI projects is primarily used for M&I water supply (nonpotable and Water reclaimed via Title XVI projects is primarily used for M&I water supply (nonpotable and
indirect potable purposes only). Other uses include irrigation supply, groundwater recharge, fish indirect potable purposes only). Other uses include irrigation supply, groundwater recharge, fish
and wildlife enhancement, or outdoor recreation. and wildlife enhancement, or outdoor recreation.
The original Title XVI legislation authorized construction of five reclamation wastewater projects The original Title XVI legislation authorized construction of five reclamation wastewater projects
and six wastewater and groundwater recycling/reclamation studies. The actand six wastewater and groundwater recycling/reclamation studies. The act ~~was amended in 1996~~
~~(P.L. 104-266) to authorize another 18 construction projects and an additional study and~~ has been has been
~~amended several times since~~amended on multiple occasions, resulting in a total of 53 projects individually authorized for , resulting in a total of 53 projects individually authorized for
construction.construction. ~~Most recently, amendments~~ Amendments to Title XVI enacted in the WIIN Act made changes to the program, including authorizing the Secretary of the Interior to accept and review nonfederal feasibility studies for potential planning, design, and construction projects.27 The WIIN Act also authorized a competitive grant program for construction of projects approved under this authority.28 In the IIJA, Congress further amended the Title XVI authority and created a new category of “large-scale” Title XVI projects, defined as projects with total costs in excess of $500 million.29 In contrast to “regular” Title XVI projects (which are generally limited to the lesser of $20 million or 25% federal cost share), projects under this section are entitled to a federal cost share of 25% of project costs, with no dollar cap on federal support. As a result, Reclamation currently supports three types of water reuse and recycling projects: congressionally authorized Title XVI projects; WIIN Act Title XVI projects, and large-scale water reuse/recycling projects. Project Purposes ~~to Title XVI enacted in December 2016 in the Water~~
~~Infrastructure Improvements for the Nation Act (WIIN Act, P.L. 114-322) made changes to the~~

~~16 For more information, see Reclamation’s “Frequently Asked Questions” website: http://www.usbr.gov/ruralwater/~~
~~general/faq.html.~~
~~17 Department of the Interior, “Reclamation Rural Water Supply Program,” 73 Federal Register 67778-67791,~~
~~November 7, 2008, http://edocket.access.gpo.gov/2008/pdf/E8-26584.pdf. Under the rule, priority was given to~~
~~domestic, residential, and municipal uses. Communities or groups of communities with populations under 50,000 were~~
~~also eligible. The use of water for commercial irrigation purposes was not allowed.~~
~~Congressional Research Service~~

13

~~Federally Supported Water Projects and Programs~~

~~program, including authorizing the Secretary of the Interior to accept and review nonfederal~~
~~feasibility studies for potential planning, design, and construction projects.18 As of August 2019,~~
~~54 projects had been approved under the WIIN Act authority. The WIIN Act also authorized a~~
~~competitive grant program for construction of projects approved under this authority, including an~~
~~authorization of $50 million in appropriations.19 Based on agency data, CRS estimates that as of~~
~~early 2021, the backlog of remaining federal funding needed to construct the 63 active authorized~~
~~Title XVI projects (i.e., both “traditional” and WIIN Act authorized projects) exceeded $600~~
~~million.20~~
~~Project Purposes~~
The general purpose of Title XVI projects is to provide supplemental water supplies by The general purpose of Title XVI projects is to provide supplemental water supplies by
recycling/reusing agricultural drainage water, wastewater, brackish surface and groundwater, and recycling/reusing agricultural drainage water, wastewater, brackish surface and groundwater, and
other sources of contaminated water. Projects may be permanent or for demonstration purposes. other sources of contaminated water. Projects may be permanent or for demonstration purposes.
Financing or Funding Mechanism
~~Title XVI projects are funded through partial de facto grants. The funding is part of the larger~~
~~Reclamation WaterSMART program, which also provides grants for water conservation and river~~
~~basin studies under separate authority granted in the Secure Water Act (P.L. 111-11, Subtitle B).~~
Title XVI projects are funded through grants that are available only to authorized projects (i.e., projects with individual authorizations from Congress or approved by the Administration and Congress pursuant to the WIIN Act and/or the IIJA). Title XVI project construction costs are shared by the federal government and a local project Title XVI project construction costs are shared by the federal government and a local project
sponsor or sponsors. The federal share is sponsor or sponsors. The federal share is ~~generally limited to a maximum of~~nonreimbursable, and is generally limited to the lesser of $20 million (1996 dollars) or 25% of 25% of total project costs.30 The exception is large-scale water reuse and recycling projects funded pursuant to the IIJA, which are eligible to receive up to 25% of project costs, with no comparable cost cap. 27 These guidelines were published in Bureau of Reclamation, Reclamation Manual Directive and Standard WTR 11-01, February 8, 2017, https://www.usbr.gov/recman/wtr/wtr11-01.pdf. 28 While selection criteria for WIIN Act grants have generally been the same as those for “traditional” Reclamation projects, the two groups of projects are typically allocated funding amounts separately by Congress, and Reclamation solicits grant proposals for each category separately. 29 See Title IX, §40905 of P.L. 117-58. 30 The exceptions are individually authorized projects where Congress authorized costs shares that differ from this amount, and large-scale water recycling and reuse projects receiving support under the IIJA (authorized to receive up to 25% of total costs, with no dollar cap). Congressional Research Service 16 Federally Supported Water Projects and Programs Eligibility Requirements ~~total project~~
~~costs and is nonreimbursable, resulting in a de facto grant to the local project sponsor(s). In 1996,~~
~~Congress limited the federal share of individual projects to $20 million in 1996 dollars (P.L. 104-~~
~~266).~~
~~The federal share of feasibility studies is limited to 50% of the total study cost except in cases of~~
~~“financial hardship.” However, the federal share must be reimbursed. The Secretary may also~~
~~accept in-kind services that are determined to positively contribute to the study.~~
~~Eligibility Requirements~~
Similar to other Reclamation activities, the Title XVI water reclamation and wastewater recycling Similar to other Reclamation activities, the Title XVI water reclamation and wastewater recycling
program is limited to projects and studies in the 17 western statesprogram is limited to projects and studies in the 17 western states, unless otherwise specified. unless otherwise specified.2131
Authorized recipientsAuthorized recipients ~~of program assistance~~ include “legally organized non-federal entities,” such include “legally organized non-federal entities,” such
as irrigation districts, water districts, municipalities, and Indian tribes. Prior to enactment of the as irrigation districts, water districts, municipalities, and Indian tribes. Prior to enactment of the
WIIN Act, Administration requests for construction funding had generally been limited to WIIN Act, Administration requests for construction funding had generally been limited to
projects where (1) an appraisal investigation and feasibility study projects where (1) an appraisal investigation and feasibility study ~~have~~had been completed and been completed and
approved by the Secretary, (2) the Secretary determined that the project sponsor was capable of approved by the Secretary, (2) the Secretary determined that the project sponsor was capable of
funding the nonfederal share of project costs, and (3) the local sponsor entered into a cost-share funding the nonfederal share of project costs, and (3) the local sponsor entered into a cost-share
agreement with Reclamation. The WIIN Act provided the Department of Interior with additional agreement with Reclamation. The WIIN Act provided the Department of Interior with additional
authority to accept nonfederal feasibility studies and to approve and consider these projects for authority to accept nonfederal feasibility studies and to approve and consider these projects for
construction construction funding if they meet Title XVI program criteria. These criteria require that (1) the ~~funding if they meet Title XVI program criteria. These criteria require that (1) the~~

~~18 These guidelines were published in Reclamation Manual Directive and Standard WTR 11-01, February 8, 2017,~~
~~https://www.usbr.gov/recman/wtr/wtr11-01.pdf.~~
~~19 FY2017 and FY2018 guidelines for distribution of grants under the WIIN Act authority were the same as those for~~
~~“traditional” Reclamation projects, but the two groups of projects were allocated funding amounts separately (i.e., they~~
~~do not have to compete against one another).~~
~~20 CRS analysis of Bureau of Reclamation data and reporting on Title XVI projects, February 2020.~~
~~21 For example, Congress has authorized three projects for construction in Hawaii (P.L. 109-70).~~
~~Congressional Research Service~~

14

~~Federally Supported Water Projects and Programs~~

study comply with federal laws and regulations applicable to water reuse and recycling studies, study comply with federal laws and regulations applicable to water reuse and recycling studies,
and (2) the project is technically and financially feasible and provides a federal benefit in and (2) the project is technically and financially feasible and provides a federal benefit in
accordance with Reclamation laws. The WIIN Act authority has essentially rendered unnecessary accordance with Reclamation laws. The WIIN Act authority has essentially rendered unnecessary
the prior practice of obtaining specific authorizations for individual Title XVI projects before the prior practice of obtaining specific authorizations for individual Title XVI projects before
Reclamation can Reclamation can pursue funding, although Congress may still choose to authorize individual projects where it wishes to alter the terms for federal support~~pursue funding~~. .
Over time, Reclamation has issued and revised multiple documents outlining evaluation criteria Over time, Reclamation has issued and revised multiple documents outlining evaluation criteria
for prioritizing Title XVI projects. Reclamation posted the most recent evaluation criteria for Title for prioritizing Title XVI projects. Reclamation posted the most recent evaluation criteria for Title
XVI projects in March 2018.XVI projects in March 2018.22
~~Funding~~
32 Recent Federal Funding The total regular The total regular ~~appropriation~~appropriations for the Title XVI program in for the Title XVI program in ~~FY2021~~FY2022 was $ was $~~64.0~~53 million, with $20 million, with $20
million of this funding designated as being available for WIIN Actmillion of this funding designated as being available for WIIN Act–-authorized projects. The authorized projects. The
AdministrationAdministration~~’s FY2022 request for Title XVI was $5.0 million.~~
~~Funding for projects authorized prior to 1996 ranged in size from $152 million ($38 million for~~
~~Reclamation’s share) to $690 million ($172 million for Reclamation’s share). Post-1996 project~~
~~authorizations have been smaller, ranging from $6.6 million ($1.65 million for Reclamation’s~~
~~share) to $319 million ($20 million for Reclamation’s share).~~
~~Statutory and Regulatory Authority~~
also allocated $240 million in IIJA funding for Title XVI projects in its FY2022 IIJA spend plan,33 and allocated an additional $150 million for “regular” projects and $50 million for large-scale Title XVI projects in its FY2023 IIJA spend plan.34 The Administration’s FY2023 budget request for all Title XVI projects was $5.0 million. Statutory and Regulatory Authority The original statutory authority for the Reclamation wastewater and reuse program is the The original statutory authority for the Reclamation wastewater and reuse program is the
Reclamation Wastewater and Groundwater Study and Facilities Act, Title XVI of P.L. 102-575, as Reclamation Wastewater and Groundwater Study and Facilities Act, Title XVI of P.L. 102-575, as
amended (43 U.S.C. §390h et seq.). Other statutes that authorized amended (43 U.S.C. §390h et seq.). Other statutes that authorized individual Title XVI projects include the Title XVI projects include the
Reclamation Recycling and Water Conservation Act of 1996 (P.L. 104-266); the Oregon Public Reclamation Recycling and Water Conservation Act of 1996 (P.L. 104-266); the Oregon Public
Land Transfer and Protection Act of 1998 (P.L. 105-321); the 1999 Water Resources Land Transfer and Protection Act of 1998 (P.L. 105-321); the 1999 Water Resources
Development Act (WRDADevelopment Act (WRDA,; P.L. 106-53, §595); the Consolidated Appropriations Act P.L. 106-53, §595); the Consolidated Appropriations Act ~~for FY2001~~
, 2001 (P.L. 106-554, Division B, §106); a bill amending the Reclamation Wastewater and Groundwater (P.L. 106-554, Division B, §106); a bill amending the Reclamation Wastewater and Groundwater
Study and Facilities Act (P.L. 107-344); the Consolidated Appropriations Study and Facilities Act (P.L. 107-344); the Consolidated Appropriations ~~Act for FY2003~~Resolution, 2003 (P.L. (P.L.
~~108-7, Division D, §211); the Emergency Wartime Supplemental~~ 108-7, Division D, §211); the Emergency Wartime Supplemental 31 For example, Congress has authorized three projects for construction in Hawaii (P.L. 109-70). 32 Bureau of Reclamation, Title XVI Water Reclamation and Reuse Program, Updated Evaluation Criteria for Review and Comment, March 2018, https://www.usbr.gov/watersmart/title/docs/2018/Title%20XVI-Evaluation-Criteria-Review.pdf. 33 FY2022 Reclamation Bipartisan Infrastructure Law Spend Plan. 34 FY2023 Reclamation Bipartisan Infrastructure Law Spend Plan. Congressional Research Service 17 Federally Supported Water Projects and Programs Appropriations Act of 2003 Appropriations Act of 2003
(P.L. 108-11); the Irvine Basin Surface and Groundwater Improvement Act of 2003 (P.L. 108-(P.L. 108-11); the Irvine Basin Surface and Groundwater Improvement Act of 2003 (P.L. 108-
233); the Williamson County Water Recycling Act of 2004 (P.L. 108-316); the Hawaii Water 233); the Williamson County Water Recycling Act of 2004 (P.L. 108-316); the Hawaii Water
Resources Act of 2005 (P.L. 109-70); the Consolidated Appropriations Act, 2008 (P.L. 110-161); Resources Act of 2005 (P.L. 109-70); the Consolidated Appropriations Act, 2008 (P.L. 110-161);
the Consolidated Natural Resources Act of 2009 (P.L. 110-229); the Consolidated Natural Resources Act of 2009 (P.L. 110-229); and the Omnibus Public Land the Omnibus Public Land
Management Act of 2009 (P.L. 111-11; Title IX, Subtitle Management Act of 2009 (P.L. 111-11; Title IX, Subtitle B). Programmatic authority for Reclamation to approve studies and grant funding for individual Title XVI projects was provided in~~B); and~~ the WIIN Act (P.L. 114-322, the WIIN Act (P.L. 114-322,
~~Title III, Subtitle J).~~
~~Department of Defense23~~
~~Army Corps of Engineers (Civil Works)~~
~~As part of its civil works activities, USACE operates water resource projects throughout the~~
~~country. USACE civil works projects and authorities are concentrated on three principal~~

~~22 Bureau of Reclamation,~~ ~~Title XVI Water Reclamation and Reuse Program, Updated Evaluation Criteria for Review~~
~~and Comment, March 2018, https://www.usbr.gov/watersmart/title/docs/2018/Title%20XVI-Evaluation-Criteria-~~
~~Review.pdf.~~
~~23 This section was prepared by Anna E. Normand, Analyst in Natural Resources Policy, Resources, Science, and~~
~~Congressional Research Service~~

15

~~Federally Supported Water Projects and Programs~~

Title III, Subtitle J) and the IIJA (P.L. 117-58). Desalination Projects Desalination projects develop and supplement water supplies through the treatment of ocean or brackish water. Water supplies created by desalination projects are primarily used for M&I and irrigation water supply, but may also be used for other purposes. Congress authorized the Secretary of the Interior, through Reclamation, to support nonfederal construction of ocean or brackish water desalination projects in Section 4009(a) of the WIIN Act. Similar to congressionally authorized Title XVI projects, this funding is awarded as grants to projects with a completed feasibility study that has been submitted to Reclamation and that meets all of the requirements in Reclamation’s Directive and Standard for feasibility study review of Title XVI and Desalination Projects.35 Project Purposes The general purpose of desalination construction projects is to provide supplemental water supplies by treating seawater or brackish water. Projects may be permanent or for demonstration purposes. Financing or Funding Mechanism Desalination projects are funded through grants, which are available only to projects that have submitted a feasibility study to Reclamation. Project construction costs are shared by the federal government and a local project sponsor or sponsors. The maximum federal share is 25% of total project costs; thus, nonfederal sponsors must be capable of funding 75% of project costs. These costs may be made available through cash, costs contributed by the applicant, or third-party in-kind contributions. Other federal funding may not be counted toward the required nonfederal cost share, unless the statute authorizing a program stipulates that it may be made available for matching cost-share requirements. Eligibility Requirements Like other Reclamation activities, support for nonfederal desalination projects is limited to nonfederally owned and operated projects and studies in the 17 western United States or territories identified in the Reclamation Act of 1902, as amended. Projects must meet several other requirements, including having a completed feasibility study that has been submitted to Reclamation and that meets all of the requirements in Reclamation’s Directive and Standard for feasibility study review of Title XVI and Desalination Projects.36 Projects must also be included 35 Bureau of Reclamation, Title XVI Water Reclamation and Reuse Program and Desalination Construction Program Feasibility Study Review Process, Reclamation Manual, WTR 11-01, October 18, 2019, https://www.usbr.gov/recman/wtr/wtr11-01.pdf. 36 Bureau of Reclamation, Title XVI Water Reclamation and Reuse Program and Desalination Construction Program Congressional Research Service 18 Federally Supported Water Projects and Programs in a state-approved plan or, as an alternative, be requested by the governor of the state in which it is located. Several types of projects are not eligible for funding under this authority, including projects with water reuse and recycling components (some of which may be eligible for funding from the aforementioned Title XVI program), research and/or demonstration projects, and operations, maintenance, and repair projects. The sponsor of any project in a western state that meets the aforementioned criteria may be eligible to apply for grants under this authority. Recent Federal Funding Grants for desalination project construction are funded through Reclamation’s research and development program for desalination and water purification; total FY2022 regular appropriations for that program were $20 million, of which $10.5 million was designated for grants under the WIIN Act authority. Congress also appropriated $250 million for these projects in the IIJA over the FY2022-FY2026 period; Reclamation included $15 million for desalination projects in its FY2022 IIJA spend plan, and $20 million for these projects in its FY2023 IIJA spend plan.37 The Administration did not request any funding for desalination construction projects in its FY2023 budget. Statutory and Regulatory Authority Water Desalination Act of 1996, P.L. 104-298, as amended by Section 4009(a) of Title II, Subtitle J of the WIIN Act, P.L. 114-322. Department of Defense38 U.S. Army Corps of Engineers (Civil Works) USACE Projects Storage at USACE Authorized and Constructed Reservoirs. As part of its civil works activities, USACE operates water resource projects throughout the country. USACE civil works projects and authorities are concentrated on three principal missions—navigation, flood damage reduction, and aquatic ecosystem restoration. Some USACE missions—navigation, flood damage reduction, and aquatic ecosystem restoration. Some USACE
activities may also support M&I water supply storage, hydroelectric generation, fish and wildlife, activities may also support M&I water supply storage, hydroelectric generation, fish and wildlife,
and recreation. The most common way that USACE infrastructure supports M&I water supply is and recreation. The most common way that USACE infrastructure supports M&I water supply is
through providing storage of M&I water at a USACE reservoir.through providing storage of M&I water at a USACE reservoir.2439 M&I water supply is generally M&I water supply is generally
not a USACE reservoir’s or not a USACE reservoir’s or ~~project’s primary purpose.25~~
Feasibility Study Review Process, Reclamation Manual, WTR 11-01, October 18, 2019, https://www.usbr.gov/recman/wtr/wtr11-01.pdf. 37 See FY2022 Reclamation Bipartisan Infrastructure Law Spend Plan and FY2023 Reclamation Bipartisan Infrastructure Law Spend Plan. 38 This section was prepared by Anna E. Normand, Analyst in Natural Resources Policy, Resources, Science, and Industry Division; and Nicole Carter, Specialist in Natural Resources Policy, Resources, Science, and Industry Division. 39 Prior to the enactment of the WIIN Act (P.L. 114-322), U.S. Army Corps of Engineers (USACE) participated in water conservation at its reservoirs in two ways. First, Congress had authorized specific USACE projects to have water conservation as a purpose for project operations. This allowed USACE to provide for seasonal M&I use of storage space at those USACE reservoirs. The use could be either as a direct withdrawal from the reservoir or for enhancing Congressional Research Service 19 link to page 26 link to page 26 link to page 27 Federally Supported Water Projects and Programs project’s primary purpose.40 These projects are discussed further under the heading “Storage of Municipal and Industrial Water at Multipurpose USACE Reservoirs.” Specific Projects. Congress has authorized two USACE civil works projects to have significant water supply Congress has authorized two USACE civil works projects to have significant water supply
components. Both are located in Arkansas and address groundwater overdraft: the Grand Prairie components. Both are located in Arkansas and address groundwater overdraft: the Grand Prairie
Area Demonstration Project and the Bayou Meto Basin Project. These projects received USACE Area Demonstration Project and the Bayou Meto Basin Project. These projects received USACE
funding most recently in funding most recently in ~~FY2020.~~FY2022 at $13 million and $24 million, respectively. These specific projects are not discussed further in this report. Unfunded Construction Authority. In Section 155 of the Water Resources Development Act of In Section 155 of the Water Resources Development Act of
2020 (Division AA of P.L. 116-260), Congress authorized USACE to carry out small water 2020 (Division AA of P.L. 116-260), Congress authorized USACE to carry out small water
storage projects,storage projects,2641 including for water supply; the authority has not been funded and is not including for water supply; the authority has not been funded and is not
discussed further in this report. discussed further in this report.
USACE Assistance for Nonfederal Projects Environmental Infrastructure Assistance. At the direction of Congress, USACE also provides assistance for municipal environmental At the direction of Congress, USACE also provides assistance for municipal environmental
infrastructureinfrastructure (EI), which typically consists of assistance with municipal drinking water and , which typically consists of assistance with municipal drinking water and
wastewater infrastructure projects and municipal source water protection and development.wastewater infrastructure projects and municipal source water protection and development.
These authorities are discussed further under the heading “Environmental Infrastructure Assistance.” Upcoming USACE Credit Assistance Program. The Water Infrastructure Finance and Innovation Act (WIFIA), as amended, authorizes USACE The Water Infrastructure Finance and Innovation Act (WIFIA), as amended, authorizes USACE
and EPA to provide credit assistance—secured (direct) loans or loan guarantees—for a broad and EPA to provide credit assistance—secured (direct) loans or loan guarantees—for a broad
~~range of water projects.27 Congress authorized USACE to provide WIFIA support for water~~
~~resource projects, such as flood control, hurricane and storm damage reduction, aquatic~~
~~ecosystem restoration, and navigation, and multipurpose projects that are supported by USACE~~
~~and the EPA WIFIA authorities (e.g., drinking water, wastewater, and/or stormwater system~~
~~improvements).~~range of water projects.42 In December 2021, Congress created a WIFIA account for USACE to implement In December 2021, Congress created a WIFIA account for USACE to implement
~~its WIFIA authority and provided the first funding for implementing USACE’s program―the~~
~~Civil Works Infrastructure Financing Program (CWIFP). In Division D of the Consolidated~~
~~Appropriations Act, 2021 (P.L. 116-260), Congress appropriated $14.2 million for CWIFP for~~
~~FY2021; of that, $12 million is specifically to support dam safety projects for nonfederally owned~~
~~dams (according to ownership information in the National Inventory of Dams), with the~~
~~remaining $2.2 million for USACE administrative expenses to carry out the program. USACE~~
its WIFIA authority. In FY2021 and FY2022, Congress provided USACE with a total of $81 million for credit assistance and $15.4 million for program administration. The credit assistance was limited to nonfederal dam safety projects.43 USACE has not begun providing WIFIA credit assistance; on June 10, 2022, in the Federal Register, USACE proposed a rule for the implementation of the USACE credit assistance for nonfederal dam safety projects.44 USACE’s program is known as the Civil Works Infrastructure Financing Program (CWIFP). CWIFP is not discussed further in this report. For more information on USACE’s program, see CRS Insight IN11577, U.S. Army Corps of ~~has not begun providing WIFIA credit assistance; CWIFP is not discussed further in this report.~~

~~Industry Division.~~
~~24 Prior to the enactment of the WIIN Act (P.L. 114-322), USACE participated in water conservation at its reservoirs in~~
~~two ways. Congress had authorized specific USACE projects to have water conservation as a purpose for project~~
~~operations. This allowed USACE to provide for seasonal M&I use of storage space at those USACE reservoirs. The use~~
~~could be either as a direct withdrawal from the reservoir or for enhancing~~ groundwater supplies (e.g., the USACE dam groundwater supplies (e.g., the USACE dam
would release water in a way that would benefit passive or active groundwater recharge efforts). Second, according to would release water in a way that would benefit passive or active groundwater recharge efforts). Second, according to
USACE planning guidance, “project operations may be modified to enhance ground water replenishment, to increase USACE planning guidance, “project operations may be modified to enhance ground water replenishment, to increase
downstream flows, or to otherwise enhance usage of projects for M&I purposes. Modifications must be consistent with downstream flows, or to otherwise enhance usage of projects for M&I purposes. Modifications must be consistent with
authorized project purposes and law” (USACE, authorized project purposes and law” (USACE, Planning Guidance Notebook, Engineer Regulation 1105-2-100, April , Engineer Regulation 1105-2-100, April
22, 2000, pp. 3-34). With 22, 2000, pp. 3-34). With ~~enactment of~~ WIIN Act WIIN Act (Sections 1116, 1117, and 1118Sections 1116, 1117, and 1118), Congress provided some general , Congress provided some general
authority for USACE to operate reservoirs for “water conservation,” including groundwater recharge. authority for USACE to operate reservoirs for “water conservation,” including groundwater recharge.
25 40 Congress in Section 221 of Congress in Section 221 of Division AA of P.L. 116-260 ~~P.L. 116-260 (enacted in December 2020)~~ directed that USACE provide the authorizing directed that USACE provide the authorizing
committees within 18 months of enactment a report that analyzes the benefits and consequences of including water committees within 18 months of enactment a report that analyzes the benefits and consequences of including water
supply and water conservation as a primary mission of USACE in carrying out water resources development projects. supply and water conservation as a primary mission of USACE in carrying out water resources development projects.
2641 The provision provides various criteria for the maximum size of the storage projects and other specific project and The provision provides various criteria for the maximum size of the storage projects and other specific project and
program requirements (e.g., federal project costs are limited to $65 million; M&I costs are 100% nonfederal). program requirements (e.g., federal project costs are limited to $65 million; M&I costs are 100% nonfederal).
2742 P.L. 115-270; P.L. 115-270; 33 U.S.C. §§3901-3914. 43 Congress authorized USACE’s program for a broader set of activities than have been funded. Congress authorized USACE to provide WIFIA support for water resource projects, such as flood control, hurricane and storm damage reduction, aquatic ecosystem restoration, and navigation, and multipurpose projects that are supported by USACE and the EPA WIFIA authorities (e.g., drinking water, wastewater, and/or stormwater system improvements). USACE’s WIFIA appropriations have been limited to nonfederal dam safety. 44 U.S. Army Corps of Engineers, “Credit Assistance and Related Fees for Water Resources Infrastructure Projects,” 87 Federal Register 35473-35489, 2022~~U.S.C. §§3901-3914. For more details, see CRS Report R43315,~~ ~~Water Infrastructure Financing: The~~
~~Water Infrastructure Finance and Innovation Act (WIFIA) Program, by Jonathan L. Ramseur, Mary Tiemann, and~~
~~Elena H. Humphreys~~. .
Congressional Research Service Congressional Research Service

16

20

link to page link to page 3743 link to page link to page 3743 Federally Supported Water Projects and Programs

Engineers Civil Works Infrastructure Financing Program (CWIFP): Status and Issues. (For more information on the EPA WIFIA program, see (For more information on the EPA WIFIA program, see “Water Infrastructure Finance and
Innovation Act Program” in the EPA portion of the report.)in the EPA portion of the report.)
Storage of Municipal and Industrial Water at Multipurpose USACE Reservoirs
A total of 136 USACE reservoirs have roughly 9.8 million acre-feet of storage designated for A total of 136 USACE reservoirs have roughly 9.8 million acre-feet of storage designated for
M&I water. Most of this water was allocated to M&I purposes when the projects were M&I water. Most of this water was allocated to M&I purposes when the projects were
constructed. Around 0.9 million acre-feet of this storage space has been assigned to M&I use constructed. Around 0.9 million acre-feet of this storage space has been assigned to M&I use
from existing USACE reservoirs using USACE’s general water supply authorities. The storage of from existing USACE reservoirs using USACE’s general water supply authorities. The storage of
M&I water at USACE reservoirs, as discussed below, is subject to availability of storage space, M&I water at USACE reservoirs, as discussed below, is subject to availability of storage space,
and the associated costs are 100% a local, nonfederal responsibility. For its projects, USACE and the associated costs are 100% a local, nonfederal responsibility. For its projects, USACE
policy is that the agency does not acquire water rights for either M&I or agricultural water supply policy is that the agency does not acquire water rights for either M&I or agricultural water supply
and conservation purposes. Rather, the water user is responsible for securing water rights. and conservation purposes. Rather, the water user is responsible for securing water rights.
Congress has given USACE limited general authority for M&I water supply under two different Congress has given USACE limited general authority for M&I water supply under two different
statutes: statutes:
1. The Water Supply Act of 1958 authorized USACE (and Reclamation) to The Water Supply Act of 1958 authorized USACE (and Reclamation) to
recommend economically justified M&I water supply storage space in new or recommend economically justified M&I water supply storage space in new or
existing reservoirs. existing reservoirs.
2. The Flood Control Act of 1944 authorizes USACE to provide, through temporary The Flood Control Act of 1944 authorizes USACE to provide, through temporary
agreements, surplus water from USACE reservoirs. Surplus water contracts have agreements, surplus water from USACE reservoirs. Surplus water contracts have
generally been limited to five-year terms with options to extend. generally been limited to five-year terms with options to extend.
Pursuant to these statutes, the agency can enter into agreements with nonfederal entities for water Pursuant to these statutes, the agency can enter into agreements with nonfederal entities for water
supply storage. supply storage.
While much of USACE’s water supply activities are conducted using the above general While much of USACE’s water supply activities are conducted using the above general
authorities, Congress has also at times authorized M&I water supply activities at specific USACE authorities, Congress has also at times authorized M&I water supply activities at specific USACE
projects, principally USACE reservoirs. projects, principally USACE reservoirs.
Project Purposes
As previously noted, Congress authorized USACE to allocate a portion of its multipurpose As previously noted, Congress authorized USACE to allocate a portion of its multipurpose
reservoirs for permanent M&I storage or to provide M&I water from USACE reservoirs under reservoirs for permanent M&I storage or to provide M&I water from USACE reservoirs under
temporary agreements for surplus water. Neither authority allows USACE to sell or allocate temporary agreements for surplus water. Neither authority allows USACE to sell or allocate
quantities of water. Instead, USACE M&I agreements are for space in a reservoir and provide no quantities of water. Instead, USACE M&I agreements are for space in a reservoir and provide no
guarantee of a fixed quantity of water to be delivered in a given year. Under these authorities, guarantee of a fixed quantity of water to be delivered in a given year. Under these authorities,
USACE delivers water if it is available in the storage space and if delivery does not substantially USACE delivers water if it is available in the storage space and if delivery does not substantially
affect other authorized purposes. affect other authorized purposes.
Financing or Funding Mechanism
Most agreements for new M&I water supply storage are associated with existing USACE Most agreements for new M&I water supply storage are associated with existing USACE
reservoirs and require nonfederal entities to make annual payments for M&I water storage reservoirs and require nonfederal entities to make annual payments for M&I water storage
services at USACE reservoirs. USACE construction projects are financed up front by the federal services at USACE reservoirs. USACE construction projects are financed up front by the federal
government, and costs for M&I project purposes are repaid 100%, with interest, via long-term government, and costs for M&I project purposes are repaid 100%, with interest, via long-term
(typically 30 years) agreements, unless specified otherwise in law. The fees collected from (typically 30 years) agreements, unless specified otherwise in law. The fees collected from
nonfederal entities pursuant to water supply agreements are deposited into a general account at nonfederal entities pursuant to water supply agreements are deposited into a general account at
the U.S. Treasury. the U.S. Treasury.
Congressional Research Service Congressional Research Service

17

21

Federally Supported Water Projects and Programs

Eligibility Requirements
For USACE’s water supply activities conducted using the above general authorities, nonfederal For USACE’s water supply activities conducted using the above general authorities, nonfederal
entities can contact USACE directly about pursuing water supply activities under the general entities can contact USACE directly about pursuing water supply activities under the general
authorities. Otherwise, nonfederal entities may submit a proposal to add or adjust water supply authorities. Otherwise, nonfederal entities may submit a proposal to add or adjust water supply
aspects of specific USACE projects through an annual public proposal submission process (for aspects of specific USACE projects through an annual public proposal submission process (for
more information, see CRS Insight IN11118, more information, see CRS Insight IN11118, Army Corps of Engineers: Section 7001 ~~Annual~~
Report on Future Studies and Projects, by Anna E. Normand). Congress has used submitted , by Anna E. Normand). Congress has used submitted
Section 7001 proposals in identifying activities to be authorized in USACE authorization Section 7001 proposals in identifying activities to be authorized in USACE authorization
legislation. legislation.
For new USACE projects with M&I water supply, existing law and agency policy require that (1) For new USACE projects with M&I water supply, existing law and agency policy require that (1)
water supply benefits and costs be equitably allocated among multiple purposes, (2) repayment by water supply benefits and costs be equitably allocated among multiple purposes, (2) repayment by
state or local interests be agreed to before construction, (3) the water supply allocation for state or local interests be agreed to before construction, (3) the water supply allocation for
anticipated demand at any project not exceed 30% of the total estimated cost, (4) repayment shall anticipated demand at any project not exceed 30% of the total estimated cost, (4) repayment shall
be either during construction (without interest) or over 30 years (with adjustable interest rates), be either during construction (without interest) or over 30 years (with adjustable interest rates),
and (5) users reimburse USACE annually for all associated operation and maintenance or and (5) users reimburse USACE annually for all associated operation and maintenance or
replacement costs. Congress has enacted occasional exceptions to USACE’s general authority, replacement costs. Congress has enacted occasional exceptions to USACE’s general authority,
which is generally limited to storage of water supply at existing projects that does not “seriously which is generally limited to storage of water supply at existing projects that does not “seriously
affect” other project purposes.affect” other project purposes.28
45 Recent Federal Funding
USACE primarily uses annual appropriations for administration of its water supply authorities. USACE primarily uses annual appropriations for administration of its water supply authorities.
From From ~~FY2021~~FY2022 annual appropriations, USACE planned to use $ annual appropriations, USACE planned to use $76 million for USACE’s costs for million for USACE’s costs for
implementing its implementing its reservoir-related water supply authorities.water supply authorities.46 The Administration’s The Administration’s ~~FY2022~~ FY2023 budget request included budget request included
$5 million for USACE’s implementation costs. $5 million for USACE’s implementation costs.
Statutory Authority
Statutory authority is provided in the Water Supply Act of 1958 (Title III, 72 Stat. 320, as Statutory authority is provided in the Water Supply Act of 1958 (Title III, 72 Stat. 320, as
amended; 43 U.S.C. §390b);amended; 43 U.S.C. §390b);2947 the Flood Control Act of 1944 (§6, 58 Stat. 890, as amended, 33 the Flood Control Act of 1944 (§6, 58 Stat. 890, as amended, 33
U.S.C. §708); and project-specific authorities in U.S.C. §708); and project-specific authorities in ~~WRDAs or~~ Water Resource Development Acts (WRDAs) or similar legislation. similar legislation.
Environmental Infrastructure Assistance
Project Purpose
Federal policy is generally that community water supply is a local and state responsibility. Federal policy is generally that community water supply is a local and state responsibility.
However, communities, particularly rural and small communities, have increasingly sought However, communities, particularly rural and small communities, have increasingly sought
federal water supply assistance. Since 1992, Congress has enacted more than federal water supply assistance. Since 1992, Congress has enacted more than ~~350~~250 authorizations authorizations
allowing USACE to provide designated communities, counties, and states with design and allowing USACE to provide designated communities, counties, and states with design and
construction assistance for drinking water and wastewater infrastructure (including treatment and construction assistance for drinking water and wastewater infrastructure (including treatment and
distribution/collection facilities) and source water protection and development. These activities distribution/collection facilities) and source water protection and development. These activities
are known as are known as environmental infrastructure (EI) projects or programs. The authorizations of (EI) projects or programs. The authorizations of
federal appropriations for these activities federal appropriations for these activities ~~has~~have varied widely varied widely, from $0. from $0.51 million for a water monitoring station to $585 million for a seven-state EI program. As with Reclamation’s rural ~~million to $25 million for~~
~~planning and design assistance and from $0.2 million to $585 million for construction assistance.~~
~~As with Reclamation’s rural water supply and Title XVI projects, congressional funding of these~~

2845 43 U.S.C. §390b(e). 43 U.S.C. §390b(e).
2946 P.L. 117-58 did not specifically provide for water supply funding. 47 For information on USACE’s civil works program, see For information on USACE’s civil works program, see ~~http~~https://www.usace.army.mil/://www.usace.army.mil/~~Services/Pages/Services.aspx~~Missions/Civil-Works/. .
Congressional Research Service Congressional Research Service

18

22

Federally Supported Water Projects and Programs

~~authorizations has enlarged the scope of USACE’s activities. Like many USACE activities,~~
~~congressional support for specific EI assistance authorizations and appropriations is complicated~~
~~by the authorities’ geographic specificity, which is problematic under congressional earmark bans~~
~~and moratoria.~~
~~Financing Mechanism~~
water supply and Title XVI projects, congressional funding of these authorizations has enlarged the scope of USACE’s activities. Financing or Funding Mechanism Under most USACE EI assistance authorizations, federal assistance typically requires a 75% Under most USACE EI assistance authorizations, federal assistance typically requires a 75%
federal and 25% nonfederal costfederal and 25% nonfederal cost- share (some authorities are 65% federal and 35% nonfederal). share (some authorities are 65% federal and 35% nonfederal).
Congress typically provides the federal portion in annual Energy and Water Development Congress typically provides the federal portion in annual Energy and Water Development
Appropriations acts. How USACE and nonfederal financing is managed varies according to the Appropriations acts. How USACE and nonfederal financing is managed varies according to the
specifics of the authorization. USACE may perform the authorized design or construction work specifics of the authorization. USACE may perform the authorized design or construction work
andand ~~can often~~, for some authorities, use appropriated funds to reimburse nonfederal sponsors for work the sponsors use appropriated funds to reimburse nonfederal sponsors for work the sponsors
perform, subject to the availability of appropriations. perform, subject to the availability of appropriations.
Eligibility Requirements
Because EI assistance activities are not part of a national USACE program per se, there are no Because EI assistance activities are not part of a national USACE program per se, there are no
general eligibility criteria. Most USACE EI authorities specify a specific geographic location general eligibility criteria. Most USACE EI authorities specify a specific geographic location
(e.g., a city, county, or state) and (e.g., a city, county, or state) and ~~types of projects~~a type of project (e.g., municipal drinking water) as the principal (e.g., municipal drinking water) as the principal
eligibility requirements. Consequently, USACE evaluates an activity’s eligibility by identifying eligibility requirements. Consequently, USACE evaluates an activity’s eligibility by identifying
whether there is an authorization for the geographic area of the activity and whether the type of whether there is an authorization for the geographic area of the activity and whether the type of
activity is eligible under that authorization. Based on a review of enacted legislation likely to activity is eligible under that authorization. Based on a review of enacted legislation likely to
include EI assistance authorities, CRS identified authorized EI assistance in at least include EI assistance authorities, CRS identified authorized EI assistance in at least 4442 states, the states, the
District of Columbia, Puerto Rico, the U.S. Virgin Islands, and the Northern Mariana Islands. District of Columbia, Puerto Rico, the U.S. Virgin Islands, and the Northern Mariana Islands.
CRS did not identify authorities for EI assistance in Delaware, Hawaii, Iowa, Maine, CRS did not identify authorities for EI assistance in Delaware, Hawaii, Iowa, Maine, Massachusetts, Nebraska, Nebraska,
Washington, and other U.S. territories. Because this assistance is not associated with Washington, and other U.S. territories. Because this assistance is not associated with a traditional traditional
USACE water resources projects, it is not subject to USACE planning requirements (e.g., a USACE water resources projects, it is not subject to USACE planning requirements (e.g., a
benefit-cost analysis is not performed). benefit-cost analysis is not performed).
Recent Federal Funding
Only a subset of Only a subset of the $6.2 billion in authorized USACE EI activities has received appropriations.authorized USACE EI activities has received appropriations. ~~Since 1992,~~48
Congress Congress ~~has provided USACE roughly $2 billion in funds for EI assistance. Congress provided~~
~~USACE~~ provided USACE with $100 million for EI assistance activities in with $100 million for EI assistance activities in ~~FY2020 and FY2021. These funds are~~
FY2021 as part of the “additional funding” provided by Congress in appropriations acts.part of the “additional funding” provided by Congress in appropriations acts. ~~The Administration~~
~~follows guidance provided in the appropriations acts and accompanying reports to guide its use of~~
~~these funds for authorized EI assistance activities. USACE identifies selected EI assistance~~
~~activities in the agency’s Work Plan for the fiscal year, which is typically available within two~~
~~months after enactment of appropriations.30 Funds are generally used to continue ongoing EI~~
~~assistance, but in FY2020, one authority received funding for the first time since FY2010.31~~

3049 USACE allocated the funding to 21 authorities in its FY2021 work plan. In FY2022, Congress provided $86.5 million to 26 community project funding/congressionally directed spending (CPF/CDS) EI requests and $13 million for USACE to distribute to EI authorities in its FY2022 work plan.50 In FY2022, Congress also provided $200 million for EI authorities in the IIJA, which USACE allocated to EI 48 For more information, see CRS In Focus IF11184, Army Corps of Engineers: Environmental Infrastructure (EI) Assistance, by Anna E. Normand. 49 EI assistance is funded through the agency’s Construction account in Energy and Water Appropriations acts. USACE EI assistance is funded through the agency’s Construction account in Energy and Water Appropriations acts. USACE
Work Plans for recent fiscal years are published at Work Plans for recent fiscal years are published at ~~this USACE website~~ USACE, “Civil Works Budget and Performance,” http://www.usace.army.mil/Missions/Civil-http://www.usace.army.mil/Missions/Civil-
Works/Budget/. For more information on USACE appropriations, see CRS Report R46320, Works/Budget/. For more information on USACE appropriations, see CRS Report R46320, U.S. Army Corps of
Engineers: Annual Appropriations Process and Issues for Congress, by Anna E. Normand and Nicole T. Carter. , by Anna E. Normand and Nicole T. Carter.
~~31 For more information, see CRS In Focus IF11184,~~ ~~Army Corps of Engineers: Environmental Infrastructure~~
~~Assistance, by Anna E. Normand.~~
~~Congressional Research Service~~

19

50 See “Explanatory Statement Accompanying H.R. 2471, Consolidated Appropriations Act, 2022,” Congressional Record, vol. 168, part 42-III (March 9, 2022), pp. H2192-H2197 and pp. H2302-2308, https://www.congress.gov/117/crec/2022/03/09/168/42/CREC-2022-03-09-bk3.pdf. Congressional Research Service 23 Federally Supported Water Projects and Programs authorities in its FY2022 IIJA spend plan.51 Similar to previous requests, the Biden Administration requested no funding for these activities in its FY2023 request. Statutory Authority

~~Federally Supported Water Projects and Programs~~

~~The Biden Administration requested no funding for these activities in its FY2022 request. Since~~
~~the first authorization for EI assistance in 1992, no Administration has asked for funding for~~
~~USACE EI assistance.~~
~~Statutory Authority~~
Prior to 1992, USACE was generally not widely involved with municipal drinking water Prior to 1992, USACE was generally not widely involved with municipal drinking water
treatment and distribution and wastewater collection and treatment. The agency is now authorized treatment and distribution and wastewater collection and treatment. The agency is now authorized
to contribute to more than to contribute to more than ~~350~~280 EI projects and programs. A WRDA or similar legislation is the EI projects and programs. A WRDA or similar legislation is the
typical legislative vehicle for USACE authorizations.typical legislative vehicle for USACE authorizations.32 Beginning with Beginning with ~~Sections 219 and 313 of~~
WRDA 1992 (P.L. 102-580), Congress has authorized USACE to assist local interests with WRDA 1992 (P.L. 102-580), Congress has authorized USACE to assist local interests with
planning, design, and construction assistance for EI projects. Subsequent USACE authorization planning, design, and construction assistance for EI projects. Subsequent USACE authorization
bills included new EI assistance activities and raised the authorized funding ceilings for bills included new EI assistance activities and raised the authorized funding ceilings for
previously authorized projects. Policies limiting congressionally directed spending previously authorized projects. Policies limiting congressionally directed spending ~~have limited~~
~~recent~~ in the 112th through 116th Congresses limited congressional authorizing activity of EI assistancecongressional authorizing activity of EI assistance during that period. In WRDA 2016 and WRDA 2018, . In WRDA 2016 and WRDA 2018,
Congress expanded the Section 7001 process for nonfederal entities to propose modifications to Congress expanded the Section 7001 process for nonfederal entities to propose modifications to
existing authorities for EI assistance. For those proposals that meet the criteria established by existing authorities for EI assistance. For those proposals that meet the criteria established by
Congress, the Administration transmits those proposals to Congress for its consideration as part Congress, the Administration transmits those proposals to Congress for its consideration as part
of deliberations regarding USACE authorization legislation.of deliberations regarding USACE authorization legislation.33
52 Congress has amended EI authorities including in these Section 7001 reports in WRDA 2018 and WRDA 2020. Department of Agriculture
Rural Utilities Service (Water and Waste Disposal Programs)3453
USDA administers a variety of water and waste USDA administers a variety of water and waste ~~disposal35~~disposal54 programs that provide loans and grants programs that provide loans and grants
for drinking water, sanitary sewer, and storm drainage facilities in rural communities. Eligibility for drinking water, sanitary sewer, and storm drainage facilities in rural communities. Eligibility
is limited to rural communities of 10,000 population or fewer for grants and direct loans and is limited to rural communities of 10,000 population or fewer for grants and direct loans and
50,000 or fewer for guaranteed loans. These programs are administered at the national level by 50,000 or fewer for guaranteed loans. These programs are administered at the national level by
the Rural Utilities Service (RUS) at USDA. RUS allocates program funds to the USDA State the Rural Utilities Service (RUS) at USDA. RUS allocates program funds to the USDA State
Rural Development offices through an allocation formula based on rural population, poverty, and Rural Development offices through an allocation formula based on rural population, poverty, and
unemployment. Loans originate at the USDA’s State Rural Development offices. unemployment. Loans originate at the USDA’s State Rural Development offices.
~~Between 2009 and 2016, RUS funded $13.9 billion for nearly 5,825 projects for water and~~
~~wastewater facilities.36 According to an RUS FY2016 annual report (most recent available), 46%~~
~~of $1.8 billion in investments in that year were for water systems, 49% were for wastewater~~

~~32 For more on this public proposal process, see CRS Insight IN11118,~~ ~~Army Corps of Engineers: Section 7001 Annual~~
~~Report on Future Studies and Projects, by Anna E. Normand; and this USACE website: http~~From FY2012 to FY2021, RUS obligated $11.1 billion to 5,568 direct loans for water and waste disposal projects.55 During that time, RUS obligated $137 million for 89 guaranteed loans and $5.9 billion for over 7,400 grants for water and waste disposal projects.56 51 See USACE, Army Civil Works Program Infrastructure Investment and Jobs Act, 2022 Construction Spend Plan - Addendum, https://www.usace.army.mil/://www.usace.army.mil/
Missions/Civil-Works/Missions/Civil-Works/~~Project-Planning/WRRDA-7001-Proposals~~Budget/. /.
3352 For more on this public proposal process, see CRS Insight IN11118, For more on this public proposal process, see CRS Insight IN11118, Army Corps of Engineers: Section 7001 ~~Annual~~
Report on Future Studies and Projects, by Anna E. Normand; and , by Anna E. Normand; and ~~this USACE website:~~ USACE, “WRRDA 7001 Proposals,” http://www.usace.army.mil/http://www.usace.army.mil/
Missions/Civil-Works/Project-Planning/WRRDA-7001-Proposals/. Missions/Civil-Works/Project-Planning/WRRDA-7001-Proposals/.
3453 This section was prepared by This section was prepared by ~~Tadlock Cowan, Analyst in Natural Resources and Rural Development~~Lisa Benson, Analyst in Agricultural Policy, Policy,
Resources, Science, and Industry Division. Resources, Science, and Industry Division.
3554 The programs’ official titles contain “Waste Disposal,” but The programs’ official titles contain “Waste Disposal,” but ~~note that~~ the vast majority of the waste disposal projects the vast majority of the waste disposal projects
are for wastewater infrastructure. A very small amount of funding, typically less than 1%, goes to technical assistance are for wastewater infrastructure. A very small amount of funding, typically less than 1%, goes to technical assistance
related to solid waste management, although Congress authorizes annual appropriations for solid waste management related to solid waste management, although Congress authorizes annual appropriations for solid waste management
grants. grants.
~~36 USDA, “Water and Environmental Program: FY2016 Progress Report,” https://www.rd.usda.gov/files/WEP-~~
~~AnnualProgressReport2016Final.pdf.~~
~~Congressional Research Service~~

20

55 USDA, Office of Budget and Program Analysis, “2023 USDA Explanatory Notes – Rural Utilities Service,” https://www.usda.gov/sites/default/files/documents/34-2023-RUS.pdf. 56 USDA, Office of Budget and Program Analysis, “2023 USDA Explanatory Notes – Rural Utilities Service,” https://www.usda.gov/sites/default/files/documents/34-2023-RUS.pdf. Congressional Research Service 24 Federally Supported Water Projects and Programs

~~Federally Supported Water Projects and Programs~~

~~systems, and the remaining 5% were for combined projects. There is heavy demand for water and~~
~~wastewater disposal funds for small rural communities. At the end of FY2018, USDA reported a~~
~~$2.5 billion backlog of requests for water and wastewater projects.37~~
Water and Wastewater Loans and Grants
Program Purpose
The purpose of these programs is to provide basic human amenities, alleviate health hazards, and The purpose of these programs is to provide basic human amenities, alleviate health hazards, and
promote the orderly growth of the nation’s rural areas by meeting the need for new and improved promote the orderly growth of the nation’s rural areas by meeting the need for new and improved
rural water and waste disposal facilities. Eligible projects can include drinking water facilities, rural water and waste disposal facilities. Eligible projects can include drinking water facilities,
sanitary sewers, and stormwater drainage and disposal facilities. Funds may be used for sanitary sewers, and stormwater drainage and disposal facilities. Funds may be used for
installation, repair, improvement, or expansion of rural water facilities, including costs of installation, repair, improvement, or expansion of rural water facilities, including costs of
distribution lines and well-pumping facilities. distribution lines and well-pumping facilities.
USDA is required to use a portion of the water and waste grants appropriation to make grants to USDA is required to use a portion of the water and waste grants appropriation to make grants to
qualified nonprofits to provide technical assistance and training to help communities identify qualified nonprofits to provide technical assistance and training to help communities identify
solutions to water and waste problems, prepare applications for grants and loans, and improve solutions to water and waste problems, prepare applications for grants and loans, and improve
operation and maintenance of existing water and waste disposal facilities in rural areas.operation and maintenance of existing water and waste disposal facilities in rural areas.3857 The The
2018 farm bill (P.L. 115-334) directed the Secretary to reserve 3%-5% of total water and waste 2018 farm bill (P.L. 115-334) directed the Secretary to reserve 3%-5% of total water and waste
grant funding for this technical assistance and training. This activity has received $grant funding for this technical assistance and training. This activity has received $1830 million to million to
$$2035 million annually in recent years. million annually in recent years.58 For For ~~FY2020~~FY2021, Congress specified that funding for technical , Congress specified that funding for technical
assistance for water and waste disposal facilities may not exceed $assistance for water and waste disposal facilities may not exceed $3035 million. million.3959 In addition, the In addition, the
similar Circuit Rider technical assistance program has an appropriation of $similar Circuit Rider technical assistance program has an appropriation of $~~19.6~~20.157 million for million for
~~FY2020.40~~FY2021.60 The 2018 farm bill authorized appropriations for this program at $25 million annually The 2018 farm bill authorized appropriations for this program at $25 million annually
for FY2019-FY2023. for FY2019-FY2023.
Financing or Funding Mechanism
Direct loans, guaranteed loans, and grants provide USDA support for water and waste disposal Direct loans, guaranteed loans, and grants provide USDA support for water and waste disposal
projects. USDA prefers making direct loans. Grants are made only when necessary to reduce projects. USDA prefers making direct loans. Grants are made only when necessary to reduce
average annual user charges to a reasonable level, particularly for lower-income communities. average annual user charges to a reasonable level, particularly for lower-income communities.
The split between loans and grants distributed from the regular infrastructure program, which is The split between loans and grants distributed from the regular infrastructure program, which is
the large majority of spending, was about 75the large majority of spending, was about 75%-25-25% in 2015 and 2016. in 2015 and 2016.4161 There is no statutory There is no statutory
distribution formula. USDA allocates funds to states based upon rural population, number of distribution formula. USDA allocates funds to states based upon rural population, number of
households in poverty, and unemployment. There are no matching requirements for states. households in poverty, and unemployment. There are no matching requirements for states.
Water and Waste Disposal Loans
The Rural Development Act of 1972 authorized establishment of the Rural Development The Rural Development Act of 1972 authorized establishment of the Rural Development
Insurance Fund under the Consolidated Farm and Rural Development Act. Among other Insurance Fund under the Consolidated Farm and Rural Development Act. Among other
activities, this fund is used for loans (direct and guaranteed) for projects for the development, activities, this fund is used for loans (direct and guaranteed) for projects for the development,
storage, treatment, purification, or distribution of water or the collection, treatment, or disposal of storage, treatment, purification, or distribution of water or the collection, treatment, or disposal of
waste in low-income rural areas. Loans are repayable in not more than 40 years or the useful life waste in low-income rural areas. Loans are repayable in not more than 40 years or the useful life

~~37 Personal communication with RUS staff.~~
~~38 7 U.S.C. §1926(a)(14), Rural Water and Wastewater Technical Assistance Training Programs.~~
~~39 P.L. 116-94, Further Consolidated Appropriations Act, 2020.~~
~~40 7 U.S.C. §1926(a)(22). Congress has authorized similar rural water technical assistance programs under the Safe~~
~~Drinking Act, Section 1442(e), and the Federal Water Pollution Control Act, Section 104(b)(8), as discussed below.~~
~~41 USDA, “Water and Environmental Program.”~~
~~Congressional Research Service~~

21

~~Federally Supported Water Projects and Programs~~

~~of the facilities, whichever is less. USDA makes either direct loans to applicants or guarantees up~~
~~to 90% of loans made by third-party lenders such as banks and savings and loan associations.~~
of the facilities, whichever is less. USDA makes either direct loans to applicants or guarantees up to 90% of loans made by third-party lenders such as banks and savings and loan associations. 57 7 U.S.C. §1926(a)(14), Rural Water and Wastewater Technical Assistance Training Programs. 58 As per the USDA, Office of Budget and Program Analysis’s “FY2022 USDA Explanatory Notes – Rural Utilities Service,” appropriations for the technical assistance grants for rural waste systems for FY2019 was $30 million, for FY2020 was $30 million, and for FY2021 was $35 million. 59 Consolidated Appropriations Act, 2021 (P.L. 116-260). 60 Consolidated Appropriations Act, 2021 (P.L. 116-260). 61 USDA, “Water and Environmental Program,” https://www.rd.usda.gov/programs-services/water-environmental-programs. Congressional Research Service 25 Federally Supported Water Projects and Programs Loan interest rates are based on the community’s economic capacity and health environment. Loan interest rates are based on the community’s economic capacity and health environment.
Interest rates are designated poverty, market, or intermediate. Poverty interestInterest rates are designated poverty, market, or intermediate. Poverty interest -rate loans are made rate loans are made
in areas where the median household income (MHI) falls below 80% of the statewide nonurban in areas where the median household income (MHI) falls below 80% of the statewide nonurban
MHI or the poverty level, whichever is higher, and where the project is needed to meet health or MHI or the poverty level, whichever is higher, and where the project is needed to meet health or
sanitary standards. By law, this rate is set at 60% of the market rate. The market rate is adjusted sanitary standards. By law, this rate is set at 60% of the market rate. The market rate is adjusted
quarterly and is set using the average of a specified 11-bond index. It applies to loans to quarterly and is set using the average of a specified 11-bond index. It applies to loans to
applicants where the MHI of the service area exceeds the statewide nonurban MHI. The applicants where the MHI of the service area exceeds the statewide nonurban MHI. The
intermediate rate applies to loans that do not meet the criteria for the poverty rate and do not have intermediate rate applies to loans that do not meet the criteria for the poverty rate and do not have
to pay the market rate. By law, this rate is set at 80% of the market rate.to pay the market rate. By law, this rate is set at 80% of the market rate.4262 Interest rates on Interest rates on
guaranteed loans are negotiated between the borrower and the lender. The 2014 farm bill (P.L. guaranteed loans are negotiated between the borrower and the lender. The 2014 farm bill (P.L.
113-79) amended (1) the water and waste disposal direct and guaranteed loan programs to 113-79) amended (1) the water and waste disposal direct and guaranteed loan programs to
encourage financing by private or cooperative lenders to the maximum extent possible; (2) use of encourage financing by private or cooperative lenders to the maximum extent possible; (2) use of
loan guarantees where the population exceeds 5,500; and (3) use of direct loans where the impact loan guarantees where the population exceeds 5,500; and (3) use of direct loans where the impact
of a guaranteed loan on rate payers would be significant.of a guaranteed loan on rate payers would be significant. ~~The average direct loan amount for~~
~~FY2019 was $2.3 million. The average guaranteed loan amount was $1.4 million.~~
Water and Waste Disposal Grants
Grants for water and waste disposal projects in rural areas are also authorized under the Grants for water and waste disposal projects in rural areas are also authorized under the
Consolidated Farm and Rural Development Act. Only communities with poverty and Consolidated Farm and Rural Development Act. Only communities with poverty and
intermediate-rate incomes qualify for USDA grants. An eligible project must serve a rural area intermediate-rate incomes qualify for USDA grants. An eligible project must serve a rural area
that is not likely to decline in population below the level for which the project was designed and that is not likely to decline in population below the level for which the project was designed and
constructed so that adequate capacity will or can be made available to serve the reasonably constructed so that adequate capacity will or can be made available to serve the reasonably
foreseeable growth needs of the area. The 2018 farm bill (P.L. 115-334) authorized appropriations foreseeable growth needs of the area. The 2018 farm bill (P.L. 115-334) authorized appropriations
at $15 million annually for FY2019-FY2023 for these grants. at $15 million annually for FY2019-FY2023 for these grants. ~~The appropriation for water and~~
~~wastewater grants for FY2020 is $443 million. The average grant award in FY2019 was $1.3~~
~~million.~~
Grant funds may be available for up to 75% of the cost of a project and should be used only to Grant funds may be available for up to 75% of the cost of a project and should be used only to
reduce user costs to a reasonable level. Grants are made only after RUS determines the maximum reduce user costs to a reasonable level. Grants are made only after RUS determines the maximum
amount of loan that a community can afford and still have reasonable user rates. Grants, which amount of loan that a community can afford and still have reasonable user rates. Grants, which
typically provide 35%-45% of project costs, may be used to supplement other funds borrowed or typically provide 35%-45% of project costs, may be used to supplement other funds borrowed or
furnished by applicants for project costs and may be combined with USDA loans when the furnished by applicants for project costs and may be combined with USDA loans when the
applicant is able to repay part, but not all, of the project costs. Priority is given to projects serving applicant is able to repay part, but not all, of the project costs. Priority is given to projects serving
populations of less than 5,500. populations of less than 5,500.
Eligibility Requirements
Eligible entities are municipalities, counties, and other political subdivisions of a state; Eligible entities are municipalities, counties, and other political subdivisions of a state;
associations, cooperatives,associations, cooperatives,4363 and organizations operated on a not-for-profit basis; Indian tribes on and organizations operated on a not-for-profit basis; Indian tribes on
federal and state reservations; and other federally recognized tribes. USDA’s loan and grant federal and state reservations; and other federally recognized tribes. USDA’s loan and grant
programs are limited to community service areas (including areas in cities or towns) with programs are limited to community service areas (including areas in cities or towns) with
population of 10,000 or fewer for grants and direct loans and 50,000 or fewer for guaranteed population of 10,000 or fewer for grants and direct loans and 50,000 or fewer for guaranteed
loans. To be eligible for assistance, communities must be unable to get reasonable credit through loans. To be eligible for assistance, communities must be unable to get reasonable credit through

~~42 For current interest rates, see~~normal commercial channels. Also, communities must be below certain income levels. Loans and grants are made for projects needed to meet health or sanitary standards, including Clean Water Act and Safe Drinking Water Act standards and requirements. 62 For current interest rates, see USDA, “Water & Waste Disposal Loan & Grant Program,” http://www.rd.usda.gov/programs-services/water-waste-disposal-loan-grant-program. http://www.rd.usda.gov/programs-services/water-waste-disposal-loan-grant-program.
43 63 Rural electric cooperatives (coops) are private entities that build and manage rural utility systems. The 1990 farm bill Rural electric cooperatives (coops) are private entities that build and manage rural utility systems. The 1990 farm bill
(P.L. 101-624) authorized rural coops to expand from their traditional electricity and telephone services. An estimated (P.L. 101-624) authorized rural coops to expand from their traditional electricity and telephone services. An estimated
80-90 rural electric coops (fewer than 10% of the total number of coops nationwide) are currently involved in some 80-90 rural electric coops (fewer than 10% of the total number of coops nationwide) are currently involved in some
aspect of drinking water or wastewater management, with the majority dealing with drinking water management. aspect of drinking water or wastewater management, with the majority dealing with drinking water management.
Congressional Research Service Congressional Research Service

22

26

Federally Supported Water Projects and Programs

~~normal commercial channels. Also, communities must be below certain income levels. Loans and~~
~~grants are made for projects needed to meet health or sanitary standards, including Clean Water~~
~~Act and Safe Drinking Water Act standards and requirements.~~
~~Funding~~
~~FY2020~~ Statutory and Regulatory Authority Statutory authority for the water and waste disposal loan and grant programs, water technical assistance, and other rural water assistance programs is the Consolidated Farm and Rural Development Act, as amended (§306, 7 U.S.C. §1926). Regulations for these programs are codified at Title 7, Parts 1779-1780, of the Code of Federal Regulations.64 Recent Federal Funding FY2022 appropriations for USDA’s water and waste disposal programs and related programs appropriations for USDA’s water and waste disposal programs and related programs
were included in the were included in the ~~Further~~ Consolidated Appropriations Act, Consolidated Appropriations Act, ~~2020 (P.L. 116-94). Title III of~~
~~Division B provided $659.5 million in total for FY2020, including $443.0 million in grants, $63.8~~
~~million in direct loan subsidies ($1.40 billion in loan authority), and $70,000 in subsidy to~~
~~support guaranteed loans ($50.0 million in loan authority). Out of the total FY2020 funds, USDA~~
~~has appropriations of $1.0 million for grants to capitalize revolving loans~~2022 (P.L. 117-103). Division A, Title III provided $653.3 million in total for FY2022.65 The appropriations included $490 million in water and waste disposal grants; $1 million to capitalize revolving funds for water and waste disposal projects; and $70 million for water and waste disposal grants for colonias, Alaskan Native and rural villages, and Native American tribes. Congress provided $1.4 billion in loan authority for water and waste disposal direct loans (no loan subsidy was needed to support the loan authority), and $50 million for water and waste for water and waste
~~disposal systems and $68.0 million to support~~disposal loan guarantees (a loan subsidy of $45,000 was provided to support the loan authority). Congress also included $37.5 million for water and waste water and waste disposal technical assistance grants and $20.762 million for the Circuit Rider Program. For FY2023~~disposal projects in the colonias,~~
~~Alaska Native communities, and Hawaiian Native communities. For FY2021~~, the Administration , the Administration
~~is requesting $1.27 billion in direct loan authority, $58.0 million for guaranteed loans, and $463~~
~~million for water and waste disposal grants. No appropriation for supporting loan subsidies was~~
~~requested.~~
~~Statutory and Regulatory Authority~~
~~Statutory~~is requesting $716.5 million for USDA’s water and waste disposal and related programs.66 The request includes $511.9 million in water and waste disposal grants; $1 million to capitalize revolving funds for water and waste disposal projects; and $93 million for water and waste disposal grants for colonias, Alaskan Native and rural villages, Native American tribes, and Hawaiian home lands. The request provides $1.54 billion in loan authority for authority for ~~the water and waste disposal loan and grant programs, water technical~~
~~assistance, and other rural water assistance programs is the Consolidated Farm and Rural~~
~~Development Act, as amended, (§306, 7 U.S.C. §1926). Regulations for these programs are~~
codified at Title 7, Parts 1779-1780, of the Code of Federal Regulations~~.44~~water and waste disposal direct loans (with a loan subsidy of $26.499 million to support the loan authority), and $50 million for water and waste disposal loan guarantees (no loan subsidy is needed to support the loan authority). The request includes $40 million for water and waste disposal technical assistance grants, and $20.157 million for the Circuit Rider Program, which also provides technical assistance.
Emergency Community Water Assistance Grants
RUS is also authorized to help eligible communities prepare for or recover from an emergency RUS is also authorized to help eligible communities prepare for or recover from an emergency
that threatens the availability of safe, reliable drinking water.that threatens the availability of safe, reliable drinking water.4567 Grants Grants, ranging from $10,000 to a ranging from $10,000 to a
maximum of $1 million are provided for projects to serve a rural area with a population of 10,000 maximum of $1 million are provided for projects to serve a rural area with a population of 10,000
or fewer that has an MHI not in excess of the statewide nonmetropolitan MHI. Grants for repairs, or fewer that has an MHI not in excess of the statewide nonmetropolitan MHI. Grants for repairs,
partial replacement, or significant maintenance of an established system cannot exceed $150,000. partial replacement, or significant maintenance of an established system cannot exceed $150,000.
Communities use the funds for new systems, waterline extensions, construction of water source Communities use the funds for new systems, waterline extensions, construction of water source
and treatment facilities, and repairs or renovation of existing systemsand treatment facilities, and repairs or renovation of existing systems, and may be awarded for and may be awarded for
100% of project cost. Applicants compete on a national basis for available funding. Funding for 100% of project cost. Applicants compete on a national basis for available funding. Funding for
this program is provided primarily through a reservation of 5%-7% of appropriated water and this program is provided primarily through a reservation of 5%-7% of appropriated water and
waste disposal grant funds. The 2018 farm bill (P.L. 115-334) also authorized waste disposal grant funds. The 2018 farm bill (P.L. 115-334) also authorized ~~the appropriation~~appropriations of of
an an additional $50 million per year through FY2023 for this program. 64 For additional information on RUS water and environmental programs, see USDA, “Water & Waste Disposal Loan & Grant Program,” http://www.rd.usda.gov/programs-services/water-waste-disposal-loan-grant-program. 65 Congressional Record, vol. 168, no. 42, Book III (March 9, 2022). 66 USDA, Office of Budget and Program Analysis, “2023 USDA Explanatory Notes – Rural Utilities Service,” https://www.usda.gov/sites/default/files/documents/34-2023-RUS.pdf. 67 7 U.S.C. §1926a. Congressional Research Service 27 Federally Supported Water Projects and Programs Statutory authority for the emergency community water assistance grant program is the Consolidated Farm and Rural Development Act, as amended, Section 306A (7 U.S.C. §1926a). Regulations for this program are codified at Title 7, Part 1778, of the Code of Federal Regulations. Congress provided $15 million for the Emergency Community Water Assistance Grant Program for FY2022. The FY2023 Administration request also includes $15 million for the program.~~additional $50 million per year through FY2023 for this program. Amounts provided through~~
~~this program have been quite variable over time, depending on need. In FY2014, $14.7 million~~
~~was distributed in 14 states. In FY2015, $2.5 million was distributed in 14 states. Congress~~
~~appropriated $15 million for the program for both FY2019 and FY2020.~~
~~Statutory authority for the emergency community water assistance grant program is the~~
~~Consolidated Farm and Rural Development Act, as amended, Section 306A (7 U.S.C. §1926a).~~
~~Regulations for this program are codified at Title 7, Part 1778, of the~~ ~~Code of Federal~~
~~Regulations~~.

~~44 For additional information on RUS water and environmental programs, see http://www.rd.usda.gov/programs-~~
~~services/water-waste-disposal-loan-grant-program.~~
~~45 7 U.S.C. §1926a.~~
~~Congressional Research Service~~

23

~~Federally Supported Water Projects and Programs~~

Rural Decentralized Water Systems Grants
USDA is also authorized to make grants to private nonprofit organizations for the purpose of USDA is also authorized to make grants to private nonprofit organizations for the purpose of
providing loans and subgrants to eligible individuals for construction, refurbishing, and servicing providing loans and subgrants to eligible individuals for construction, refurbishing, and servicing
of “individual household water well systems and individually owned decentralized wastewater of “individual household water well systems and individually owned decentralized wastewater
systems.”systems.”4668 Loans and subgrants are limited to $15,000 per water well or decentralized system. Loans and subgrants are limited to $15,000 per water well or decentralized system.
The 2018 farm bill (P.L. 115-334) authorized $20The 2018 farm bill (P.L. 115-334) authorized $20.0 million for the program through FY2023. million for the program through FY2023.
~~Appropriations for the program for FY2020 are $5.0 million and for FY2019 were $1.5 million.~~
Statutory authority for the rural decentralized water systems grant program is the Consolidated Statutory authority for the rural decentralized water systems grant program is the Consolidated
Farm and Rural Development Act, as amended, Section 306E (7 U.S.C. §1926e). Regulations for Farm and Rural Development Act, as amended, Section 306E (7 U.S.C. §1926e). Regulations for
this program are codified at Title 7, Part 1776, of the this program are codified at Title 7, Part 1776, of the Code of Federal Regulations. .
Congress provided $5 million for the Rural Decentralized Water Systems Grant Program for FY2022. The FY2023 Administration request also includes $5 million for the program. Natural Resources Conservation Service69~~Natural Resources Conservation Service47~~
The USDA provides assistance for watershed activities under four closely related authorities that The USDA provides assistance for watershed activities under four closely related authorities that
are administered by the Natural Resources Conservation Service (NRCS). The Watershed and are administered by the Natural Resources Conservation Service (NRCS). The Watershed and
Flood Prevention Operations Program (WFPO) consists of two authorities—P.L. 83-566 and P.L. Flood Prevention Operations Program (WFPO) consists of two authorities—P.L. 83-566 and P.L.
78-534. Projects funded under these authorities are referred to as P.L. 566 and P.L. 534 projects, 78-534. Projects funded under these authorities are referred to as P.L. 566 and P.L. 534 projects,
respectively. These authorize NRCS to provide technical and financial assistance to state and respectively. These authorize NRCS to provide technical and financial assistance to state and
local organizations to plan and install measures to prevent erosion, sedimentation, and flood local organizations to plan and install measures to prevent erosion, sedimentation, and flood
damage and to conserve, develop, and utilize land and water resources. Dams constructed under damage and to conserve, develop, and utilize land and water resources. Dams constructed under
the WFPO program may also be eligible to receive assistance under the Small Watershed the WFPO program may also be eligible to receive assistance under the Small Watershed
Rehabilitation Program, authorized by Congress in 2000. The fourth watershed authority is an Rehabilitation Program, authorized by Congress in 2000. The fourth watershed authority is an
emergency program that is not discussed in this report.emergency program that is not discussed in this report.4870
Watershed and Flood Prevention Operations
The WFPO program consists of projects built under two authorities—the Watershed Protection The WFPO program consists of projects built under two authorities—the Watershed Protection
and Flood Prevention Act of 1954 (P.L. 83-566) and the Flood Control Act of 1944 (P.L. 78-534). and Flood Prevention Act of 1954 (P.L. 83-566) and the Flood Control Act of 1944 (P.L. 78-534).
The vast majority of the projects (referred to as P.L. 566 projects) have been built pursuant to the The vast majority of the projects (referred to as P.L. 566 projects) have been built pursuant to the
authority of P.L. 83-566, which authorizes the chief of the NRCS to approve construction of authority of P.L. 83-566, which authorizes the chief of the NRCS to approve construction of
68 7 U.S.C. §1926e. 69 This section was prepared by Megan Stubbs, Specialist in Agricultural Conservation and Natural Resources Policy, Resources, Science, and Industry Division. 70 The Emergency Watershed Protection (EWP) program is used to restore the natural functions of a watershed after a natural disaster has occurred and to minimize the risks to property and life posed by floods by purchasing easements on flood plains. For more information on the EWP program, see CRS Report R42854, Emergency Assistance for Agricultural Land Rehabilitation, by Megan Stubbs. Congressional Research Service 28 Federally Supported Water Projects and Programs smaller projects (discussed below). Larger projects must be approved by Congress. In smaller projects (discussed below). Larger projects must be approved by Congress. In ~~FY2020~~FY2021, ,
NRCS funded NRCS funded 4149 new projects and new projects and 1819 backlog projects. backlog projects.4971
Eleven specific projects were authorized under P.L. 78-534 (referred to as P.L. 534 projects). Eleven specific projects were authorized under P.L. 78-534 (referred to as P.L. 534 projects).
They are much larger and more expensive than P.L. 566 projects. In total, the P.L. 534 projects They are much larger and more expensive than P.L. 566 projects. In total, the P.L. 534 projects
encompass almost 37.9 million acres and are divided into component projects in subwatersheds. encompass almost 37.9 million acres and are divided into component projects in subwatersheds.
Approximately 90% of the work on the P.L. 534 projects is complete. With the exception of the Approximately 90% of the work on the P.L. 534 projects is complete. With the exception of the
two smallest projects, the estimated federal costs for each of these projects range from $40 two smallest projects, the estimated federal costs for each of these projects range from $40
million to more than $275 million. Three of the projects have been completed, and work on the million to more than $275 million. Three of the projects have been completed, and work on the
remainder continues in one or more subwatersheds. remainder continues in one or more subwatersheds.

~~46 7 U.S.C. §1926e.~~
~~47 This section was prepared by Megan Stubbs, Specialist in Agricultural Conservation and Natural Resources Policy,~~
~~Resources, Science, and Industry Division.~~
~~48 The Emergency Watershed Protection (EWP) program is used to restore the natural functions of a watershed after a~~
~~natural disaster has occurred and to minimize the risks to property and life posed by floods by purchasing easements on~~
~~flood plains. For more information on the EWP program, see CRS Report R42854,~~ ~~Emergency Assistance for~~
~~Agricultural Land Rehabilitation, by Megan Stubbs.~~
~~49 USDA, FY2022 USDA Budget Congressional Justification, “2022 USDA Explanatory Notes—Natural Resources~~
~~Conservation Service,” https://www.obpa.usda.gov/explan_notes.html.~~
~~Congressional Research Service~~

24

~~Federally Supported Water Projects and Programs~~

~~The FY2021~~ In FY2022, the IIJA (P.L. 117-58, Division J, Title I) provided $500 million for WFPO that is available until expended. The FY2022 Consolidated Appropriations Act (P.L. Consolidated Appropriations Act (P.L. ~~116-260~~117-103, Division A) appropriated $, Division A) appropriated $~~175~~
~~million in FY2021~~100 million, of which $23.3 million (23%) was identified as congressionally directed spending. Amendments in the 2018 farm bill (P.L. 115-334) permanently authorized an . Amendments in the 2018 farm bill (P.L. 115-334) permanently authorized an
additional $50 million annually from mandatory sources to the WFPO program. additional $50 million annually from mandatory sources to the WFPO program.
Program Purpose
The purpose of the WFPO program is to provide technical and financial assistance to states and The purpose of the WFPO program is to provide technical and financial assistance to states and
local organizations to plan and install watershed projects. Both P.L. 566 and P.L. 534 projects local organizations to plan and install watershed projects. Both P.L. 566 and P.L. 534 projects
have similar objectives and are implemented following similar procedures. Both project types have similar objectives and are implemented following similar procedures. Both project types
fund land treatment and nonstructural and structural facilities for flood prevention, erosion fund land treatment and nonstructural and structural facilities for flood prevention, erosion
reduction, agricultural water management, public recreation development, fish and wildlife reduction, agricultural water management, public recreation development, fish and wildlife
habitat development, and municipal or industrial water supplies. Structural measures can include habitat development, and municipal or industrial water supplies. Structural measures can include
dams, levees, canals, and pumping stations. Local sponsors agree to operate and maintain dams, levees, canals, and pumping stations. Local sponsors agree to operate and maintain
completed projects. completed projects.
Financing or Funding Mechanism
USDA provides partial project grants plus technical advisory services. Financing for water USDA provides partial project grants plus technical advisory services. Financing for water
projects under the WFPO program varies depending on project purposes. The federal government projects under the WFPO program varies depending on project purposes. The federal government
pays all costs related to construction for flood control purposes only. Costs for nonagricultural pays all costs related to construction for flood control purposes only. Costs for nonagricultural
water supply must be repaid by local organizations. However, up to 50% of costs for land, water supply must be repaid by local organizations. However, up to 50% of costs for land,
easements, and rights-of-way allocated to public fish and wildlife and recreational developments easements, and rights-of-way allocated to public fish and wildlife and recreational developments
may be paid with program funds. Additionally, sponsors may apply for RUS Water and Waste may be paid with program funds. Additionally, sponsors may apply for RUS Water and Waste
Program loans to finance the local share of project costs. Participating state and local Program loans to finance the local share of project costs. Participating state and local
organizations pay all operation and maintenance costs. organizations pay all operation and maintenance costs.
Eligibility Requirements
P.L. 566 has been called the P.L. 566 has been called the “small watershed programsmall watershed program” because no project may exceed 250,000 because no project may exceed 250,000
acres, and no structure may exceed more than 12,500 acre-feet of floodwater detention capacity acres, and no structure may exceed more than 12,500 acre-feet of floodwater detention capacity
or 25,000 acre-feet of total capacity.or 25,000 acre-feet of total capacity.5072 The Senate and House Agriculture Committees must The Senate and House Agriculture Committees must
approve projects that need an estimated federal contribution of more than $25 million for approve projects that need an estimated federal contribution of more than $25 million for
construction or include a storage structure with a capacity in excess of 2,500 acre feet. If the construction or include a storage structure with a capacity in excess of 2,500 acre feet. If the
71 USDA, FY2023 USDA Budget Congressional Justification, “2023 USDA Explanatory Notes—Natural Resources Conservation Service,” https://www.obpa.usda.gov/explan_notes.html. 72 The enacted FY2022 appropriation included a policy provision that waives the 250,000-acre project limit when the project’s primary purpose is something other than flood prevention. This provision did not amend the WFPO authorization. Therefore, it is effective only for the funds provided through the FY2022 annual appropriation. Congressional Research Service 29 Federally Supported Water Projects and Programs storage structure will have a capacity in excess of 4,000 acre feet, approval is also required from storage structure will have a capacity in excess of 4,000 acre feet, approval is also required from
the Senate Environment and Public Works Committee and the House Transportation and the Senate Environment and Public Works Committee and the House Transportation and
Infrastructure Committee. There are no population or community income-level limits on Infrastructure Committee. There are no population or community income-level limits on
applications for P.L. 566 projects, but at least 20% of the total benefits of the project must directly applications for P.L. 566 projects, but at least 20% of the total benefits of the project must directly
relate to agriculture (including rural communities). relate to agriculture (including rural communities).
Recent Federal Funding
The enacted The enacted ~~FY2021 appropriation~~FY2022 appropriations provided WFPO with $ provided WFPO with $~~175~~100 million. Of the $ million. Of the $~~175~~100 million, million, ~~$65~~
$23.3 million is directed to earmarks, and $10 million is required to be allocated to projects and activities that (1) can “commence promptlymillion is required to be allocated to projects and activities that (1) can “commence promptly;”
”; (2) address regional priorities for flood prevention, agricultural water management, inefficient (2) address regional priorities for flood prevention, agricultural water management, inefficient
irrigation systems, fish and wildlife habitat, or irrigation systems, fish and wildlife habitat, or watershed protection; or (3) address ongoing P.L. 534 projects.73 IIJA provided $500 million for WFPO in FY2022 that is available until expended.74 The FY2022 joint explanatory statement notes the IIJA additions for WFPO in reference to the reductions in the FY2022 annual appropriated levels.75 The FY2023 Administration’s request proposes $125~~watershed protection; or (3) address ongoing P.L.~~

~~50 The enacted FY2021 appropriation included a policy provision that waives the 250,000-acre project limit when the~~
~~project’s primary purpose is something other than flood prevention. This provision did not amend the WFPO~~
~~authorization. Therefore, it is effective only for the funds provided during the FY2021 appropriation year.~~
~~Congressional Research Service~~

25

~~Federally Supported Water Projects and Programs~~

~~534 projects. The FY2022 Administration’s request proposes $175~~ million in discretionary million in discretionary
~~funding for the WFPO program.~~
~~Beginning in FY2014, Congress has annually directed a portion of the appropriation for the~~
~~Conservation Operations account to fund WFPO projects.51 The Conservation Operations account~~
~~funds general conservation technical assistance offered by NRCS. This congressionally directed~~
~~amount is in addition to the funds made available for the program as a whole~~funding for the WFPO program. .
In addition to discretionary funding through appropriations, the 2018 farm bill permanently In addition to discretionary funding through appropriations, the 2018 farm bill permanently
authorizes $50 million annually from mandatory sources.authorizes $50 million annually from mandatory sources.5276 This mandatory funding will be This mandatory funding will be
available unless otherwise amended by Congress. Mandatory funds are authorized for P.L. 566 available unless otherwise amended by Congress. Mandatory funds are authorized for P.L. 566
projects as well as rehabilitation work under the Small Watershed Rehabilitation Program.projects as well as rehabilitation work under the Small Watershed Rehabilitation Program. ~~The~~
~~FY2022 Administration’s request proposes a $100 million increase in annual mandatory funding~~
~~for the WFPO program as part of the American Jobs Plan.~~
Statutory and Regulatory Authorities
The WFPO program consists of two authorities: the Flood Control Act of 1944, P.L. 78-534, as The WFPO program consists of two authorities: the Flood Control Act of 1944, P.L. 78-534, as
amended, 58 Stat. 905 (33 U.S.C. §701b-1); and the Watershed Protection and Flood Prevention amended, 58 Stat. 905 (33 U.S.C. §701b-1); and the Watershed Protection and Flood Prevention
Act of 1954, P.L. 83-566, as amended, 68 Stat. 666 (16 U.S.C. §§1001-1008). Regulations are Act of 1954, P.L. 83-566, as amended, 68 Stat. 666 (16 U.S.C. §§1001-1008). Regulations are
codified at Title 7, Part 622, of the codified at Title 7, Part 622, of the Code of Federal Regulations..5377
Small Watershed Loans
As part of its lending responsibilities, RUS makes loans to local organizations to finance the local As part of its lending responsibilities, RUS makes loans to local organizations to finance the local
share of the cost of installing, repairing, or improving facilities, purchasing sites and easements, share of the cost of installing, repairing, or improving facilities, purchasing sites and easements,
and related costs for P.L. 566 and P.L. 534 projects (see discussion above). Loans are limited to and related costs for P.L. 566 and P.L. 534 projects (see discussion above). Loans are limited to
$10 million, they must be repaid within 50 years, and the cost-share assistance may not exceed $10 million, they must be repaid within 50 years, and the cost-share assistance may not exceed
the rate of assistance for similar projects under other USDA conservation programs. NRCS and the rate of assistance for similar projects under other USDA conservation programs. NRCS and
~~the local organization must also agree on a plan of work before a loan is obligated. Over the life~~
~~of the program, 495 RUS loans have been made at a value of almost $176 million.~~
~~Small Watershed Rehabilitation~~
~~Some of the oldest P.L. 566 projects that have exceeded their design life (dams were constructed~~
~~starting in 1948) need rehabilitation work to continue to protect public health and safety by~~
~~reducing any possibility of dam failure and to meet changing resource needs. By December 2021,~~
~~approximately 5,948 watershed dams will have reached the end of their originally designed life~~
~~spans. By the end of 2025, 6,793 watershed dams will have reached the end of their designed life~~
~~spans. In response to this concern, Congress created a dam rehabilitation program, known as the~~
~~Small Watershed Rehabilitation Program, in Section 313 of the Grain Standards and Warehouse~~
~~Improvement Act of 2000 (P.L. 106-472), which revised the WFPO program. From 2000 to 2020,~~

~~51 Congressionally directed amounts of Conservation Operations funding for WFPO projects include $3 million in~~
~~FY2014, $5.6 million in FY2015, $10.6 million in FY2016, $5.6 million annually in FY2017-FY2020, and $10 million~~
~~in FY2021.~~
52 73 For additional information on FY2022 WFPO earmarks, see CRS Report R46971, Agricultural Conservation: FY2022 Appropriations, by Megan Stubbs. 74 For additional information, see CRS In Focus IF11990, Infrastructure Investment and Jobs Act (IIJA): Funding for USDA Broadband, Watershed, and Bioproduct Programs, by Lisa S. Benson, Megan Stubbs, and Kelsi Bracmort. 75 WFPO has received an average of $160 million annually through appropriations between FY2017 and FY2022. See FY2022 “Explanatory Statement Submitted by Ms. DeLauro, Chair of the House Committee on Appropriations, Regarding the House Amendment to H.R. 2471, Consolidated Appropriations Act, 2022,” Congressional Record, vol. 168, part 42-Book III (March 9, 2022), p. H1713. 76 The 2018 farm bill authorizes mandatory funding from the Commodity Credit Corporation, a government-owned The 2018 farm bill authorizes mandatory funding from the Commodity Credit Corporation, a government-owned
entity that finances programs supporting U.S. agriculture. For more information, see CRS Report R44606, entity that finances programs supporting U.S. agriculture. For more information, see CRS Report R44606, The
Commodity Credit Corporation (CCC), by Megan Stubbs. , by Megan Stubbs.
5377 For information on the program, see NRCS, “Watershed and Flood Prevention Operations Program,” For information on the program, see NRCS, “Watershed and Flood Prevention Operations Program,”
https://www.nrcs.usda.gov/wps/portal/nrcs/main/national/programs/landscape/wfpo/. https://www.nrcs.usda.gov/wps/portal/nrcs/main/national/programs/landscape/wfpo/.
Congressional Research Service Congressional Research Service

26

30

Federally Supported Water Projects and Programs

~~the program authorized the rehabilitation of 254 dams in 25 states. Of this total, 166~~ the local organization must also agree on a plan of work before a loan is obligated. Over the life of the program, 495 RUS loans have been made at a value of almost $176 million. Small Watershed Rehabilitation Some of the oldest P.L. 566 projects that have exceeded their design life (dams were constructed starting in 1948) need rehabilitation work to continue to protect public health and safety by reducing any possibility of dam failure and to meet changing resource needs. By the end of 2025, 6,782 watershed dams will have reached the end of their designed life spans. In response to this concern, Congress created a dam rehabilitation program, known as the Small Watershed Rehabilitation Program, in Section 313 of the Grain Standards and Warehouse Improvement Act of 2000 (P.L. 106-472), which revised the WFPO program. From 2000 to 2021, the program authorized the rehabilitation of 263 dams in 26 states. Of this total, 171 projects are projects are
complete, complete, 67 57 are in progress, and the remaining projects are waiting for funding. are in progress, and the remaining projects are waiting for funding.
Program Purpose
The purpose of rehabilitation is to extend the service life of the dams and bring them into The purpose of rehabilitation is to extend the service life of the dams and bring them into
compliance with applicable safety and performance standards or to decommission the dams so compliance with applicable safety and performance standards or to decommission the dams so
they no longer pose a threat to life and property. they no longer pose a threat to life and property.
Financing or Funding Mechanism
Partial project grants, plus provision of technical advisory services, are provided. NRCS may Partial project grants, plus provision of technical advisory services, are provided. NRCS may
provide 65% of the total rehabilitation costs but no more than 100% of the actual construction provide 65% of the total rehabilitation costs but no more than 100% of the actual construction
cost and is prohibited from funding operation and maintenance expense. Rehabilitation projects cost and is prohibited from funding operation and maintenance expense. Rehabilitation projects
also provide an opportunity to modify projects to provide additional benefits, including municipal also provide an opportunity to modify projects to provide additional benefits, including municipal
water supplies. Local watershed project sponsors provide 35% of the cost of a rehabilitation water supplies. Local watershed project sponsors provide 35% of the cost of a rehabilitation
project and obtain needed land rights and permits. The source of these funds varies from state to project and obtain needed land rights and permits. The source of these funds varies from state to
state and may include bonds, local taxing authority, state appropriations, or in-kind technical state and may include bonds, local taxing authority, state appropriations, or in-kind technical
services. services.
Eligibility Requirements
Only dams constructed under the P.L. 83-566 authority, the Resource Conservation and Only dams constructed under the P.L. 83-566 authority, the Resource Conservation and
Development program, and pilot watershed projects authorized in the Agriculture Appropriations Development program, and pilot watershed projects authorized in the Agriculture Appropriations
Act of 1953 are eligible for assistance under the Small Watershed Rehabilitation Program. Act of 1953 are eligible for assistance under the Small Watershed Rehabilitation Program.
Recent Federal Funding
Since FY2000, Congress has appropriated more than $Since FY2000, Congress has appropriated more than $~~700~~820 million for rehabilitation projects. The million for rehabilitation projects. The
Small Watershed Rehabilitation Program has discretionary funding authority of up to $85 million Small Watershed Rehabilitation Program has discretionary funding authority of up to $85 million
annually. The program has received an average annual appropriation of $annually. The program has received an average annual appropriation of $~~10.4~~8.2 million over the last million over the last
five years, including $five years, including $~~10 million in FY2021. The FY2022 Administration’s request proposes $10~~
~~million in discretionary funding~~ 1 million in the enacted FY2022 appropriations. The IIJA provided $118 million for the Small Watershed Rehabilitation Program in FY2022 that is available until expended. Similar to WFPO, the FY2022 joint explanatory statement notes the IIJA additions for the program in reference to the reductions in the FY2022 annual appropriated levels. The FY2023 Administration’s request proposes $10 million in discretionary funding for the Small Watershed Rehabilitation Program. In the past, the program was authorized through omnibus farm bills to receive mandatory funding to remain available until expended. This funding was frequently restricted through annual Congressional Research Service 31 Federally Supported Water Projects and Programs appropriations and used to offset other discretionary spending.78 The 2018 farm bill reauthorized discretionary funding authority of $85 million annually for the program. Mandatory funds authorized for WFPO through the 2018 farm bill may also be used for rehabilitation work under the Small Watershed Rehabilitation Program.79 Statutory and Regulatory Authorities ~~for the Small Watershed Rehabilitation program. This is the first~~
~~request for funding since the FY2011. Previous budget proposals cite the position that the~~
~~maintenance, repair, and operation of these dams are the responsibility of local project sponsors.~~
~~In the past, the program was authorized through omnibus farm bills to receive mandatory funding~~
~~to remain available until expended. This funding was frequently restricted through annual~~
~~appropriations and used to offset other discretionary spending.54 The FY2018 appropriations act~~
~~(P.L. 115-141) was the first to not restrict the remaining mandatory carryover, thereby making~~
~~approximately $55 million available for obligation. According to the FY2022 Administration’s~~
~~request, this carryover is expected to be fully utilized in FY2021. The 2018 farm bill reauthorized~~
~~discretionary funding authority of $85 million annually for the program, but no additional~~
~~mandatory funding authority was provided.55~~

~~54 For additional information on past reductions to mandatory programs, see CRS In Focus IF10041,~~ ~~Reductions to~~
~~Mandatory Agricultural Conservation Programs in Appropriations Law, by Megan Stubbs.~~
~~55 For additional information, see CRS Report R45698, Agricultural Conservation in the 2018 Farm Bill, by Megan~~
~~Stubbs.~~
~~Congressional Research Service~~

27

~~Federally Supported Water Projects and Programs~~

~~Statutory and Regulatory Authorities~~
The Small Watershed Rehabilitation Program is authorized by the Watershed Protection and The Small Watershed Rehabilitation Program is authorized by the Watershed Protection and
Flood Prevention Act of 1954, P.L. 83-566, as amended by Section 313 of the Grain Standards Flood Prevention Act of 1954, P.L. 83-566, as amended by Section 313 of the Grain Standards
and Warehouse Improvement Act of 2000, P.L. 106-472, 114 Stat. 2077 (16 U.S.C. §1012). and Warehouse Improvement Act of 2000, P.L. 106-472, 114 Stat. 2077 (16 U.S.C. §1012).
Regulations are codified at Title 7, Part 622, of the Regulations are codified at Title 7, Part 622, of the Code of Federal Regulations..5680
Environmental Protection Agency
Clean Water State Revolving Fund Loan ~~Program57~~Program81
In 1987, Congress amended the Clean Water Act (CWA)In 1987, Congress amended the Clean Water Act (CWA)5882 to establish the Clean Water State to establish the Clean Water State
Revolving Fund (CWSRF) program.Revolving Fund (CWSRF) program.5983 All 50 states, plus Puerto Rico, participate in the CWSRF All 50 states, plus Puerto Rico, participate in the CWSRF
program.program.6084 EPA receives annual appropriations to support the CWSRF program and distributes EPA receives annual appropriations to support the CWSRF program and distributes
grants to the states based on a CWA statutory formula.grants to the states based on a CWA statutory formula.6185 States provide matching funds equal to States provide matching funds equal to
20% of the federal grant to capitalize 20% of the federal grant to capitalize ~~the CWSRF~~their revolving loan funds and use their funds primarily to provide loans and use their funds primarily to provide loans
to cities and other eligible recipients. Over the long term, the loan programs are intended to be to cities and other eligible recipients. Over the long term, the loan programs are intended to be
sustained through repayment of loans to states, thus creating a continuing source of assistance for sustained through repayment of loans to states, thus creating a continuing source of assistance for
other communities. According to the most recent formal estimate by EPA and states (prepared in other communities. According to the most recent formal estimate by EPA and states (prepared in
2016), an additional $271 billion nationwide is needed over the next 20 years for all types of 2016), an additional $271 billion nationwide is needed over the next 20 years for all types of
projects eligible for funding through the CWSRF program.projects eligible for funding through the CWSRF program.6286
EPA data indicate that since 1988, 68% of all awarded loans and other assistance have gone to EPA data indicate that since 1988, 68% of all awarded loans and other assistance have gone to
assist communities with 10,000 people or fewer. These loans and assistance have accounted for assist communities with 10,000 people or fewer. These loans and assistance have accounted for
23% of total CWSRF funding.23% of total CWSRF funding.63
~~Program Purpose~~
~~The CWSRF program provides assistance in constructing and upgrading publicly owned~~
~~municipal wastewater treatment plants and related equipment (including stormwater~~
~~infrastructure), implementing nonpoint pollution management programs, developing and~~
~~implementing management plans under the National Estuary Program, and supporting a range of~~
~~other eligible activities that were added to the program in 2014.~~

5687 78 For additional information on past reductions to mandatory programs, see CRS In Focus IF10041, Reductions to Mandatory Agricultural Conservation Programs in Appropriations Law, by Megan Stubbs. 79 For additional information, see CRS Report R45698, Agricultural Conservation in the 2018 Farm Bill, by Megan Stubbs. 80 For information on the program, see NRCS, “Watershed Rehabilitation Program,” http://www.nrcs.usda.gov/wps/ For information on the program, see NRCS, “Watershed Rehabilitation Program,” http://www.nrcs.usda.gov/wps/
portal/nrcs/main/national/programs/landscape/wr/. portal/nrcs/main/national/programs/landscape/wr/.
5781 This section was prepared by Jonathan Ramseur, Specialist in Resources and Environmental Policy, Resources, This section was prepared by Jonathan Ramseur, Specialist in Resources and Environmental Policy, Resources,
Science, and Industry Division. Science, and Industry Division.
5882 The official statutory name is the Federal Water Pollution Control Act (P.L. 92-500), as amended, codified at Title The official statutory name is the Federal Water Pollution Control Act (P.L. 92-500), as amended, codified at Title
33, 33, ~~Section~~ §1251 et seq, of the 1251 et seq, of the U.S. Code. .
5983 Prior to 1989 (when the CWSRF program became effective), EPA states used their annual allotment to make grants Prior to 1989 (when the CWSRF program became effective), EPA states used their annual allotment to make grants
to cities and other eligible recipients. to cities and other eligible recipients.
6084 U.S. territories, Indian tribes, and the District of Columbia receive grants from EPA under separate CWA authorities. U.S. territories, Indian tribes, and the District of Columbia receive grants from EPA under separate CWA authorities.
6185 For more information, see CRS Report RL31073, For more information, see CRS Report RL31073, Allocation of Wastewater Treatment Assistance: Formula and
Other Changes, by Jonathan L. Ramseur. , by Jonathan L. Ramseur.
6286 EPA, EPA, Clean Watersheds Needs Survey 2012, 2016, https://www.epa.gov/cwns. , 2016, https://www.epa.gov/cwns.
6387 EPA, “Did You Know,” https://www.epa.gov/cwsrf (accessed EPA, “Did You Know,” https://www.epa.gov/cwsrf (accessed ~~August 10, 2021~~June 30, 2022). ).
Congressional Research Service Congressional Research Service

28

32 Federally Supported Water Projects and Programs Program Purpose The CWSRF program provides assistance in constructing and upgrading publicly owned municipal wastewater treatment plants and related equipment (including stormwater infrastructure), implementing nonpoint pollution management programs, developing and implementing management plans under the National Estuary Program, and supporting a range of other eligible activities that were added to the program in 2014. Financing or Funding Mechanism

~~Federally Supported Water Projects and Programs~~

~~Financing Mechanism~~
EPA grants (from appropriated funds) and state matching funds help capitalize state CWSRF EPA grants (from appropriated funds) and state matching funds help capitalize state CWSRF
programs. These programs may provide seven general types of financial assistance: making programs. These programs may provide seven general types of financial assistance: making
loans; buying or refinancing existing local debt obligations; guaranteeing or purchasing insurance loans; buying or refinancing existing local debt obligations; guaranteeing or purchasing insurance
for local debt obligations; guaranteeing CWSRF debt obligations (i.e., to be used as security for for local debt obligations; guaranteeing CWSRF debt obligations (i.e., to be used as security for
leveraging the assets in the CWSRF); providing loan guarantees for local government revolving leveraging the assets in the CWSRF); providing loan guarantees for local government revolving
funds; earning interest on fund accounts; and supporting reasonable costs of administering the funds; earning interest on fund accounts; and supporting reasonable costs of administering the
CWSRF. Loans are made at or below market interest rates, including zero interest loans, as CWSRF. Loans are made at or below market interest rates, including zero interest loans, as
determined by the state in negotiation with the applicant. determined by the state in negotiation with the applicant.
Although the CWSRF program is generally a loan program, states may (under certain conditions) Although the CWSRF program is generally a loan program, states may (under certain conditions)
provide “additional subsidization”—such as principal forgiveness, negative interest loans, or a provide “additional subsidization”—such as principal forgiveness, negative interest loans, or a
combination—to eligible entities that meet the state’s affordability criteria and for particular combination—to eligible entities that meet the state’s affordability criteria and for particular
projects, such as those that implement water or energy efficiency goals or mitigate stormwater projects, such as those that implement water or energy efficiency goals or mitigate stormwater
runoff. runoff. ~~In addition~~IIJA (P.L. 117-58) amended the CWSRF statutory provisions to direct states to use at least 10% of their capitalization grants for additional subsidization under certain conditions.88 Prior to the enactment of IIJA, appropriations acts in recent years have required states to use minimum , appropriations acts in recent years have required states to use minimum
percentages of their allotted funds to provide additional subsidization. This trend began with the percentages of their allotted funds to provide additional subsidization. This trend began with the
American Recovery and Reinvestment Act of 2009 (P.L. 111-5), which required states to use at American Recovery and Reinvestment Act of 2009 (P.L. 111-5), which required states to use at
least 50% of their funds for this purpose. Recent appropriations acts included an identical least 50% of their funds for this purpose. Recent appropriations acts included an identical
condition, requiring 10% of the CWSRF grants be used “to provide additional subsidy to eligible condition, requiring 10% of the CWSRF grants be used “to provide additional subsidy to eligible
recipients in the form of forgiveness of principal, negative interest loans, or grants (or any recipients in the form of forgiveness of principal, negative interest loans, or grants (or any
combination of these).” combination of these).”
All principal and interest payments on loans must be credited directly to the SRF, and loans are to All principal and interest payments on loans must be credited directly to the SRF, and loans are to
be repaid within 30 years of a project’s completion, not to exceed the project’s useful life. States be repaid within 30 years of a project’s completion, not to exceed the project’s useful life. States
are required to ensure that CWSRF-funded projects use American iron and steel products and are required to ensure that CWSRF-funded projects use American iron and steel products and
apply the prevailing wage requirements of the Davis-Bacon Act.apply the prevailing wage requirements of the Davis-Bacon Act.6489
Eligibility Requirements
In general, eligible loan recipients for CWSRF assistance are any municipal, intermunicipal, In general, eligible loan recipients for CWSRF assistance are any municipal, intermunicipal,
interstate, or state agency. Private utilities are not eligible to receive funds for construction of interstate, or state agency. Private utilities are not eligible to receive funds for construction of
wastewater treatment works and most other eligible activities, but in some cases, privately owned wastewater treatment works and most other eligible activities, but in some cases, privately owned
projects are eligible for certain types of activities (e.g., decentralized wastewater treatment projects are eligible for certain types of activities (e.g., decentralized wastewater treatment
88 For more information, see CRS Report R46892, Infrastructure Investment and Jobs Act (IIJA): Drinking Water and Wastewater Infrastructure, by Elena H. Humphreys and Jonathan L. Ramseur. 89 For more information, see U.S. Department of Labor, “Davis-Bacon and Related Acts,” https://www.dol.gov/whd/govcontracts/dbra.htm. Congressional Research Service 33 Federally Supported Water Projects and Programs projects; projects to manage, reduce, or treat stormwater; or development of watershed projects; projects to manage, reduce, or treat stormwater; or development of watershed
management projects). management projects).
Projects or activities eligible for funding were initially those needed for constructing or upgrading Projects or activities eligible for funding were initially those needed for constructing or upgrading
(and planning and designing) publicly owned municipal wastewater treatment plans. As defined (and planning and designing) publicly owned municipal wastewater treatment plans. As defined
in Clean Water Act Section 212,in Clean Water Act Section 212,6590 devices and systems used in the storage, treatment, recycling, devices and systems used in the storage, treatment, recycling,
and reclamation of municipal sewage are eligible. These include construction or upgrading of and reclamation of municipal sewage are eligible. These include construction or upgrading of
secondary or advanced treatment plants; construction of new collector sewers, interceptor sewers, secondary or advanced treatment plants; construction of new collector sewers, interceptor sewers,
or storm sewers; and projects to correct existing problems of sewer system rehabilitation, or storm sewers; and projects to correct existing problems of sewer system rehabilitation,
infiltration/inflow of sewer lines, and combined sewer overflows. Operation and maintenance are infiltration/inflow of sewer lines, and combined sewer overflows. Operation and maintenance are
not eligible activities. All funds in the CWSRF resulting from federal capitalization grants are not eligible activities. All funds in the CWSRF resulting from federal capitalization grants are
first to be used to assure compliance with enforceable deadlines, goals, and requirements of the first to be used to assure compliance with enforceable deadlines, goals, and requirements of the
act, including municipal compliance.act, including municipal compliance.6691 After satisfying the “first use” requirement, funds may be After satisfying the “first use” requirement, funds may be

~~64 For more information, see the Department of Labor website at https://www.dol.gov/whd/govcontracts/dbra.htm.~~
~~65 33 U.S.C. §1292.~~
~~66 33 U.S.C. §1382(b)(5).~~
~~Congressional Research Service~~

29

~~Federally Supported Water Projects and Programs~~

~~used to implement other eligible uses, which~~used to implement other eligible uses. The statutory list of eligible activities initially included nonpoint source management initially included nonpoint source management
programs and estuary activities in approved State Nonpoint Management Programs and estuarine programs and estuary activities in approved State Nonpoint Management Programs and estuarine
Comprehensive Conservation and Management Plans, respectively.Comprehensive Conservation and Management Plans, respectively.67
92 In 2014, the Water Resources Reform and Development Act of 2014 (WRRDA; P.L. 113-121) In 2014, the Water Resources Reform and Development Act of 2014 (WRRDA; P.L. 113-121)
amended the list of eligible projects by adding several projects and activities, including amended the list of eligible projects by adding several projects and activities, including
 replacement of decentralized treatment systems (e.g., septic tanks);  replacement of decentralized treatment systems (e.g., septic tanks);
 energy-efficiency improvements at treatment works;  energy-efficiency improvements at treatment works;
 reuse and recycling of wastewater or stormwater; and  reuse and recycling of wastewater or stormwater; and
 security improvements at treatment works.  security improvements at treatment works.
In 2018, the America’s Water Infrastructure Act of 2018 (AWIA; P.L. 115-270) amended the list In 2018, the America’s Water Infrastructure Act of 2018 (AWIA; P.L. 115-270) amended the list
of eligible activities to allow qualified nonprofits to provide assistance to certain individuals for of eligible activities to allow qualified nonprofits to provide assistance to certain individuals for
the repair or replacement of existing decentralized wastewater treatment systems or for the the repair or replacement of existing decentralized wastewater treatment systems or for the
connection of an individual household to a centralized publicly owned treatment works. connection of an individual household to a centralized publicly owned treatment works.
Recent Federal Funding
Since the first appropriations for the CWSRF program in FY1989, Congress has provided more Since the first appropriations for the CWSRF program in FY1989, Congress has provided more
than $49 billion in grants to states and Puerto Rico to capitalize their CWSRFs. According to than $49 billion in grants to states and Puerto Rico to capitalize their CWSRFs. According to
EPA’s national CWSRF funding data report, federal funds—together with state matching EPA’s national CWSRF funding data report, federal funds—together with state matching
contributions, repaid loans, and other funds—have provided $contributions, repaid loans, and other funds—have provided $~~149~~153 billion in SRF assistance to billion in SRF assistance to
support more than support more than 4244,000 SRF loans and debt refinance agreements.,000 SRF loans and debt refinance agreements.6893
For For ~~both FY2016 and FY2017~~FY2020 and FY2021, Congress , Congress ~~provided $1.394 billion for the CWSRF program. For~~
~~each of FY2018 and FY2019, Congress increased the appropriation to the CWSRF program,~~
~~providing $1.694 billion. For FY2020 and FY2021, Congress appropriated $1.639 billion (P.L.~~
~~116-94 and P.L. 116-260). For FY2022, the President requested $1.871~~appropriated $1.639 billion (P.L. 116-94 and P.L. 116-260) for the CWSRF program. The FY2022 CWSRF appropriations include both supplemental appropriations from IIJA of $1.902 billion and regular appropriations (P.L. 117-103) of $1.639 billion, a portion of which did not go directly to the CWSRF program. P.L. 117-103 includes “community project funding/congressionally directed spending” (CPF/CDS) items, which some 90 33 U.S.C. §1292. 91 33 U.S.C. §1382(b)(5). 92 For a detailed breakdown of SRF funding by category, see EPA, Clean Water SRF Program Information, National Summary, updated annually, https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-national-information-management-system-reports. 93 EPA, Clean Water SRF Program Information, National Summary, February 2022, https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-national-information-management-system-reports. Congressional Research Service 34 Federally Supported Water Projects and Programs have referred to as “earmarks.” The act sets aside 27% ($443.6 million) of the FY2022 CWSRF appropriations ($1.639 billion) to CPF/CDS. Such funds are to be distributed directly to recipients, instead of to states’ SRF programs. Thus, the reservation of funds effectively decreases the total amount available for allotment as state capitalization grants to $1.195 billion.94 Thus, the combined FY2022 appropriations for the CWSRF program are $3.097 billion. For FY2023, the President requested $1.639 billion for the CWSRF billion for the CWSRF
~~program.~~
program. This would be in addition to the FY2023 supplemental appropriations of $2.202 billion provided by IIJA. Through a separate process, EPA provides direct grants for the District of Columbia, the U.S. Through a separate process, EPA provides direct grants for the District of Columbia, the U.S.
Virgin Islands, American Samoa, Guam, and the Commonwealth of Virgin Islands, American Samoa, Guam, and the Commonwealth of the Northern Northern ~~Marianas.69~~Mariana Islands.95 EPA EPA
also provides direct grants to Indian tribes.also provides direct grants to Indian tribes.7096 The funding for the District of Columbia, U.S. The funding for the District of Columbia, U.S.
territories, and Indian tribes is part of the SRF territories, and Indian tribes is part of the SRF ~~appropriation~~appropriations to EPA. to EPA.
Statutory and Regulatory Authority
Statutory authority for the clean water SRF program is the Clean Water Act, as amended, Sections Statutory authority for the clean water SRF program is the Clean Water Act, as amended, Sections
601-607 (33 U.S.C. §§1381-1387). Regulations are codified at Title 40, Section 35.3100, of the 601-607 (33 U.S.C. §§1381-1387). Regulations are codified at Title 40, Section 35.3100, of the
Code of Federal Regulations. .

~~67 For a detailed breakdown of SRF funding by category, see EPA, Clean Water SRF Program Information, National~~
~~Summary, (updated annually), https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-national-~~
~~information-management-system-reports.~~
~~68 EPA, Clean Water SRF Program Information, National Summary, data February 2021 (accessed August 10, 2021),~~
~~https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-national-information-management-system-reports.~~
~~69 See 33 U.S.C. §1384 note.~~
~~70 See 33 U.S.C. §1377.~~
~~Congressional Research Service~~

30

~~Federally Supported Water Projects and Programs~~

~~Drinking Water State Revolving Fund Loan Program71~~ Drinking Water State Revolving Fund Loan Program97
The Safe Drinking Water Act (SDWA) requires public water systems to comply with federal The Safe Drinking Water Act (SDWA) requires public water systems to comply with federal
drinking water regulations promulgated by EPA.drinking water regulations promulgated by EPA.7298 Through these regulations, EPA has set Through these regulations, EPA has set
standards to control the levels of more than 90 contaminants in drinking water, and more standards to control the levels of more than 90 contaminants in drinking water, and more
regulations are under development. To help communities meet these federal mandates and to meet regulations are under development. To help communities meet these federal mandates and to meet
the act’s public health objectives, Congress amended the act’s public health objectives, Congress amended ~~the~~ SDWA in 1996 to establish a drinking SDWA in 1996 to establish a drinking
water state revolving fund (DWSRF) loan program. The program is patterned closely after the water state revolving fund (DWSRF) loan program. The program is patterned closely after the
CWSRF and authorizes EPA to make grants to states to capitalize drinking water state revolving CWSRF and authorizes EPA to make grants to states to capitalize drinking water state revolving
loan funds. States use their DWSRFs to provide assistance to public water systems for loan funds. States use their DWSRFs to provide assistance to public water systems for
infrastructure and other drinking water projects.infrastructure and other drinking water projects.7399 States may use a portion of their annual grants States may use a portion of their annual grants
to administer the DWSRF program and to implement other SDWA requirements. States must to administer the DWSRF program and to implement other SDWA requirements. States must
match 20% of the federal capitalization grant. match 20% of the federal capitalization grant.
Each year, states are required to develop an “intended use plan” that includes a list of projects the Each year, states are required to develop an “intended use plan” that includes a list of projects the
state intends to fund through the DWSRF. The law generally directs states to give funding priority state intends to fund through the DWSRF. The law generally directs states to give funding priority
to projects that (1) address the most serious health risks; (2) are needed to ensure compliance with to projects that (1) address the most serious health risks; (2) are needed to ensure compliance with
SDWA regulations; and (3) assist systems most in need on a per household basis, according to SDWA regulations; and (3) assist systems most in need on a per household basis, according to
state affordability criteria. The law also directs states to make available at least 15% of their state affordability criteria. The law also directs states to make available at least 15% of their
annual allotment to public water systems that serve 10,000 or fewer persons (to the extent the annual allotment to public water systems that serve 10,000 or fewer persons (to the extent the
funds can be obligated to eligible projects). Over the life of the program, roughly 71% of DWSRF funds can be obligated to eligible projects). Over the life of the program, roughly 71% of DWSRF
94 For more information, see CRS In Focus IF12103, U.S. Environmental Protection Agency (EPA) Water Infrastructure Programs and FY2022 Appropriations, by Elena H. Humphreys and Jonathan L. Ramseur. 95 See 33 U.S.C. §1384 note. 96 See 33 U.S.C. §1377. 97 This section was prepared by Elena Humphreys, Analyst in Environmental Policy, Resources, Science, and Industry Division. 98 See CRS Report RL31243, Safe Drinking Water Act (SDWA): A Summary of the Act and Its Major Requirements, by Mary Tiemann. 99 Private, residential wells are not regulated under the SDWA and are not eligible for assistance through this program. Congressional Research Service 35 Federally Supported Water Projects and Programs assistance agreements and 38% of funds have gone to these smaller systems. Capitalization grants assistance agreements and 38% of funds have gone to these smaller systems. Capitalization grants
are allotted among the states according to the results of the most recent quadrennial survey of the are allotted among the states according to the results of the most recent quadrennial survey of the
capital improvements needs of eligible water systems. Needs surveys are prepared by EPA and capital improvements needs of eligible water systems. Needs surveys are prepared by EPA and
the states, and the most recent survey the states, and the most recent survey (2018) indicates that public water systems need to invest at least indicates that public water systems need to invest at least
$472.6 billion $472.6 billion onin infrastructure improvements over 20 years ($23.63 billion annually) to ensure infrastructure improvements over 20 years ($23.63 billion annually) to ensure
the provision of safe drinking water and compliance with federal standards.the provision of safe drinking water and compliance with federal standards.74100
Program Purpose
This state-administered program provides assistance for infrastructure projects and other This state-administered program provides assistance for infrastructure projects and other
expenditures that facilitate compliance with federal drinking water regulations or that promote expenditures that facilitate compliance with federal drinking water regulations or that promote
public health protection. The SDWA directs states to give funding priority to infrastructure public health protection. The SDWA directs states to give funding priority to infrastructure
projects that are needed to achieve or maintain compliance with SDWA requirements, protect projects that are needed to achieve or maintain compliance with SDWA requirements, protect
public health, and assist systems with economic need. Further, states may use a portion of the public health, and assist systems with economic need. Further, states may use a portion of the
capitalization grant for specified purposes, including programs for protecting sources of drinking capitalization grant for specified purposes, including programs for protecting sources of drinking
water and improving the managerial and technical capacity of water systems. water and improving the managerial and technical capacity of water systems.
Financing or Funding Mechanism
States may use the DWSRF to make low- or zero-interest loans to public water systems, and loan States may use the DWSRF to make low- or zero-interest loans to public water systems, and loan
recipients must generally repay the entire loan plus any interest to the state. DWSRFs may also be recipients must generally repay the entire loan plus any interest to the state. DWSRFs may also be

~~71 This section was prepared by Elena Humphreys, Analyst in Environmental Policy, Resources, Science, and Industry~~
~~Division.~~
~~72 See CRS Report RL31243, Safe Drinking Water Act (SDWA): A Summary of the Act and Its Major Requirements, by~~
~~Mary Tiemann.~~
~~73 Private, residential wells are not regulated under the SDWA and are not eligible for assistance through this program.~~
~~74 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Sixth Report to Congress, March 2018,~~
~~https://www.epa.gov/sites/production/files/2018-10/documents/~~
~~corrected_sixth_drinking_water_infrastructure_needs_survey_and_assessment.pdf.~~
~~Congressional Research Service~~

31

~~Federally Supported Water Projects and Programs~~

used to buy or refinance local debt obligations, guarantee or purchase insurance for a local used to buy or refinance local debt obligations, guarantee or purchase insurance for a local
obligation, provide revenue or security for payment of principal and interest on state revenue or obligation, provide revenue or security for payment of principal and interest on state revenue or
general obligation bonds if the proceeds of bond sale are deposited into the DWSRF, and earn general obligation bonds if the proceeds of bond sale are deposited into the DWSRF, and earn
interest on DWSRF accounts. interest on DWSRF accounts.
The statute authorizes states to use up to 35% of their annual DWSRF grants to provide additional The statute authorizes states to use up to 35% of their annual DWSRF grants to provide additional
subsidies (e.g., principal forgiveness and negative interest rate loans) to help economically subsidies (e.g., principal forgiveness and negative interest rate loans) to help economically
disadvantaged communities of any size.disadvantaged communities of any size.75101 (A disadvantaged community is one in which the (A disadvantaged community is one in which the
service area of a public water system meets state-established affordability criteria.) The service area of a public water system meets state-established affordability criteria.) The
Consolidated Appropriations Act, Consolidated Appropriations Act, ~~2021~~2022 (P.L. (P.L. ~~116-260~~117-103), requires states to use 14% of their ), requires states to use 14% of their
DWSRF capitalization grants “to provide additional subsidy to eligible recipientsDWSRF capitalization grants “to provide additional subsidy to eligible recipients ~~in the form of~~
~~forgiveness of principal, negative interest loans, or grants (or any combination of these)~~.” .”
Eligibility Requirements
Drinking water systems that are eligible to receive DWSRF assistance include community water Drinking water systems that are eligible to receive DWSRF assistance include community water
systems, whether publicly or privately owned, and not-for-profit noncommunity water systems. systems, whether publicly or privately owned, and not-for-profit noncommunity water systems.
Federally owned systems are not eligible to receive assistance from this program. Federally owned systems are not eligible to receive assistance from this program.
Projects eligible for DWSRF assistance include (1) capital investments to rehabilitate or replace Projects eligible for DWSRF assistance include (1) capital investments to rehabilitate or replace
infrastructure in order to continue providing the public with safe drinking water (e.g., storage infrastructure in order to continue providing the public with safe drinking water (e.g., storage
facilities and transmission and distribution pipes); (2) projects needed to address violations of facilities and transmission and distribution pipes); (2) projects needed to address violations of
SDWA regulations (e.g., treatment facilities); and (3) project design and planning and associated SDWA regulations (e.g., treatment facilities); and (3) project design and planning and associated
preconstruction activities. Assistance may also be available for construction of new wells to preconstruction activities. Assistance may also be available for construction of new wells to
replace contaminated wells, source water protection, land acquisition, security measures replace contaminated wells, source water protection, land acquisition, security measures
(including infrastructure improvements), and consolidation of water supplies (e.g., in cases where (including infrastructure improvements), and consolidation of water supplies (e.g., in cases where
100 This estimate is not adjusted for inflation. EPA, Drinking Water Infrastructure Needs Survey and Assessment: Sixth Report to Congress, March 2018, https://www.epa.gov/sites/production/files/2018-10/documents/corrected_sixth_drinking_water_infrastructure_needs_survey_and_assessment.pdf. 101 SDWA Section 1452(d)(2)(B) (42 U.S.C. §300j-12(d)(2)(B)) conditionally requires states to use at least 12% of their capitalization grants to further subsidize DWSRF loans. Congressional Research Service 36 Federally Supported Water Projects and Programs individual homes or public water systems have a water supply that is contaminated or a system is individual homes or public water systems have a water supply that is contaminated or a system is
unable to maintain compliance for financial or managerial reasons). unable to maintain compliance for financial or managerial reasons).
Projects and activities not eligible for funding include projects primarily intended to serve future Projects and activities not eligible for funding include projects primarily intended to serve future
growth or to provide fire protection, construction of dams or reservoirs (except reservoirs for growth or to provide fire protection, construction of dams or reservoirs (except reservoirs for
treated water), monitoring, and operation and maintenance. Ineligible systems include those that treated water), monitoring, and operation and maintenance. Ineligible systems include those that
lack the financial, technicallack the financial, technical, or managerial capacity to maintain SDWA compliance and systems in or managerial capacity to maintain SDWA compliance and systems in
significant noncompliance with any SDWA regulation (unless the project is likely to ensure significant noncompliance with any SDWA regulation (unless the project is likely to ensure
compliance). compliance).
Recent Federal Funding
~~For FY2020~~For FY2021, the President requested $863.2 million, the President requested $863.2 million ~~for the DWSRF program~~, and Congress , and Congress
again provided $1,126.1 provided $1,126.1 million in P.L. 116-260.102 The President’s FY2022 Budget Request included $1,357.9 million for the DWSRF program. For FY2022, two acts provided appropriations for the DWSRF program. IIJA (P.L. 117-58) provides three appropriations for FY2022 of 1. $1,902.0 million for the DWSRF program, 2. $3,000.0 million through the DWSRF for lead service line replacement projects and related activities, and 3. $800.0 million through the DWSRF for grants to support projects to address emerging contaminants with a focus on per- and polyfluoroalkyl substances. The Consolidated Appropriations Act, 2022 (P.L. 117-103) provided $1,126.1 million for the DWSRF. Of this total appropriation, the act dedicates $397.8 million to “community project funding/congressionally directed spending” items, which some have called “earmarks.” Accordingly, the act provides $728.3 million for the DWSRF program. For FY2023, the President requested $1,126.1 million for the DWSRF program. In recent years, the estimated average state capitalization grant has been roughly $20.77 million per fiscal year. The estimated average grant to territories was $4.14 million per fiscal year.103 From FY1997 through FY2021, cumulative appropriations for the DWSRF program reached $25.12 billion. Adjusted for set-asides, cumulative net federal contributions totaled $24.39 billion. When combined with the 20% state match ($4.46 billion), bond proceeds, loan principal repayments, and other funds, the total DWSRF investment through FY2021 had reached $50.71 billion, and the program had provided more than $48.54 billion in assistance. Over the same period, more than 17,779 projects had received assistance, and 12,752 had been completed.104 102 In 2018, AWIA reauthorized DWSRF appropriations for FY2019-FY2021. The authorized appropriations are $1.174 billion in FY2019, $1.300 billion in FY2020, and $1.950 billion in FY2021. SDWA §1452(m); 42 U.S.C. §300j-12(m). 103 Code of Federal Domestic Assistance, Capitalization Grants for Drinking Water State Revolving Funds, No. 66.468, https://beta.sam.gov/fal/569f9cce42834328941b19aea8b9e2e6/view. 104 Detailed national and state program data are available at EPA, “Drinking Water State Revolving Fund National Information Management System Reports,” https://www.epa.gov/drinkingwatersrf/drinking-water-state-revolving-fund-national-information-management-system-reports. Congressional Research Service 37 Federally Supported Water Projects and Programs Statutory and Regulatory Authority The statutory authority for the DWSRF program is the Safe Drinking Water Act Amendments of 1996 (P.L. 104-182, §~~million in P.L. 116-94. For FY2021, the President again requested $863.2~~
~~million, and Congress again provided $1,126.1 million in P.L. 116-260.76 For FY2022, the~~
~~President requested $1,357.9 million for the DWSRF program. In recent years, the estimated~~
~~average state capitalization grant has been roughly $20.77 million per fiscal year. The estimated~~
~~average grant to territories was $4.14 million per fiscal year.77~~

~~75 SDWA Section 1452(d)(2)(B) (42 U.S.C. §300j-12(d)(2)(B)) conditionally requires states to use at least 6% of their~~
~~capitalization grants to further subsidize DWSRF loans.~~
~~76 In 2018, AWIA reauthorized DWSRF appropriations for FY2019-FY2021. The authorized appropriations are $1.174~~
~~billion in FY2019, $1.300 billion in FY2020, and $1.950 billion in FY2021. SDWA §1452(m); 42 U.S.C. §300j-12(m).~~
~~77 Code of Federal Domestic Assistance, Capitalization Grants for Drinking Water State Revolving Funds, No. 66.468,~~
~~https://beta.sam.gov/fal/569f9cce42834328941b19aea8b9e2e6/view.~~
~~Congressional Research Service~~

32

~~Federally Supported Water Projects and Programs~~

~~From FY1997 through FY2020, cumulative appropriations for the DWSRF program reached~~
~~$24.36 billion. Adjusted for set-asides, cumulative net federal contributions totaled $23.09 billion.~~
~~When combined with the 20% state match ($4.33 billion), bond proceeds, loan principal~~
~~repayments, and other funds, the total DWSRF investment through FY2019 had reached $46.73~~
~~billion, and the program had provided more than $44.74 billion in assistance. Over the same~~
~~period, more than 16,686 projects had received assistance, and 11,760 had been completed.78~~
~~Statutory and Regulatory Authority~~
~~The statutory authority for the DWSRF program is the Safe Drinking Water Act Amendments of~~
~~1996 (P.L. 104-182, Section~~ 1452, 42 U.S.C. §300j-12). Regulations are codified at Title 40, 1452, 42 U.S.C. §300j-12). Regulations are codified at Title 40,
Section 35.3500, of the Section 35.3500, of the Code of Federal Regulations..79105
Water Infrastructure Finance and Innovation Act ~~Program80~~Program106
Localities are primarily responsible for providing water infrastructure services, which include Localities are primarily responsible for providing water infrastructure services, which include
both drinking water and wastewater infrastructure. According to the most recent estimates by both drinking water and wastewater infrastructure. According to the most recent estimates by
states and EPA, funding needs for projects eligible for CWSRF or DWSRF funding—described in states and EPA, funding needs for projects eligible for CWSRF or DWSRF funding—described in
the sections above (i.e., projects needed to address water quality and public health-related the sections above (i.e., projects needed to address water quality and public health-related
problems or regulations)—total over $840 billion over a 20-year period.problems or regulations)—total over $840 billion over a 20-year period.81107 However, many water However, many water
infrastructure capital needs are ineligible for assistance through the SRF programs or are too large infrastructure capital needs are ineligible for assistance through the SRF programs or are too large
or otherwise not suited for those programs. or otherwise not suited for those programs.
The Water Infrastructure Finance and Innovation Act (WIFIA) authorizes EPA to provide credit The Water Infrastructure Finance and Innovation Act (WIFIA) authorizes EPA to provide credit
assistance—secured (direct) loans or loan guarantees—for a broad range of drinking water and assistance—secured (direct) loans or loan guarantees—for a broad range of drinking water and
wastewater projects.wastewater projects.82108 In contrast to SRF programs, EPA provides credit assistance directly to In contrast to SRF programs, EPA provides credit assistance directly to
eligible recipients. Thus far, EPA has provided credit assistance in the form of secured loans, and eligible recipients. Thus far, EPA has provided credit assistance in the form of secured loans, and
the agency does not expect much demand for loan guarantees.the agency does not expect much demand for loan guarantees.83109
Section 4201 of AWIA (P.L. 115-270) amended WIFIA to authorize EPA to enter into agreements Section 4201 of AWIA (P.L. 115-270) amended WIFIA to authorize EPA to enter into agreements
with relevant federal agencies to administer and service loans that such agencies are authorized to with relevant federal agencies to administer and service loans that such agencies are authorized to
make. Section 4301 of AWIA directs EPA and Reclamation to enter into such an agreement. In make. Section 4301 of AWIA directs EPA and Reclamation to enter into such an agreement. In
October 2019, EPA and Reclamation entered into a memorandum of understanding for October 2019, EPA and Reclamation entered into a memorandum of understanding for
administering and servicing credit instruments. Under this agreement, EPA is responsible for administering and servicing credit instruments. Under this agreement, EPA is responsible for
providing support in administering and servicing Reclamation federal credit instruments, providing support in administering and servicing Reclamation federal credit instruments,
including determining project creditworthiness and loan terms, among other responsibilities.including determining project creditworthiness and loan terms, among other responsibilities.84

~~78 Detailed national and state program data are available at https://www.epa.gov/drinkingwatersrf/drinking-water-state-~~
~~revolving-fund-national-information-management-system-reports.~~
79110 Program Purpose WIFIA provides an additional source of financing for water infrastructure projects, including projects eligible for CWSRF and DWSRF assistance. Some stakeholders have argued that the clean water and drinking water SRF programs are structured in a way that makes them useful primarily for smaller communities and smaller projects. The WIFIA program can provide credit assistance to large water infrastructure projects that otherwise have difficulty obtaining financing. Moreover, SRF funding is generally limited to projects that promote CWA or SDWA compliance 105 DWSRF program information, regulations, facts, and statistics are available at DWSRF program information, regulations, facts, and statistics are available at ~~http~~https://www.epa.gov/://www.epa.gov/~~safewater/~~
~~dwsrf.html.~~
80dwsrf. 106 This section was prepared by Jonathan Ramseur, Specialist in Environmental Policy, Resources, Science, and This section was prepared by Jonathan Ramseur, Specialist in Environmental Policy, Resources, Science, and
Industry Division. Industry Division.
81107 EPA published its most recent estimate of capital needs for EPA published its most recent estimate of capital needs for wastewater infrastructure in 2016. See EPA, infrastructure in 2016. See EPA, Clean
Watersheds Needs Survey 2012, Report to Congress, 2016. EPA issued the most recent EPA needs estimate for , Report to Congress, 2016. EPA issued the most recent EPA needs estimate for
drinking water infrastructure in 2018. See EPA, infrastructure in 2018. See EPA, Drinking Water Infrastructure Needs Survey and Assessment, 2018. , 2018.
82These estimates are not adjusted for inflation. 108 In 2014, WRRDA established a five-year WIFIA pilot program. In 2018, AWIA (P.L. 115-270) amended the WIFIA In 2014, WRRDA established a five-year WIFIA pilot program. In 2018, AWIA (P.L. 115-270) amended the WIFIA
provisions to remove the pilot designation from the program. For more details, see CRS Report R43315, provisions to remove the pilot designation from the program. For more details, see CRS Report R43315, Water
Infrastructure Financing: The Water Infrastructure Finance and Innovation Act (WIFIA) Program, by Jonathan L. , by Jonathan L.
Ramseur, Mary Tiemann, and Elena H. Humphreys. Ramseur, Mary Tiemann, and Elena H. Humphreys.
83109 See EPA, See EPA, WIFIA Program Handbook, 2019, footnote 24. , 2019, footnote 24.
84110 See EPA’s WIFIA website, https://www.epa.gov/wifia/mou-administering-and-servicing-federal-credit-instruments. See EPA’s WIFIA website, https://www.epa.gov/wifia/mou-administering-and-servicing-federal-credit-instruments.
Congressional Research Service Congressional Research Service

33

38

Federally Supported Water Projects and Programs

~~Program Purpose~~
~~WIFIA provides an additional source of funding for water infrastructure projects, including~~
~~projects eligible for CWSRF and DWSRF assistance. Some stakeholders have argued that the~~
~~clean water and drinking water SRF programs are structured in a way that makes them useful~~
~~primarily for smaller communities and smaller projects. The WIFIA program can provide credit~~
~~assistance to large water infrastructure projects that otherwise have difficulty obtaining financing.~~
~~Moreover, SRF funding is generally limited to projects that promote CWA or SDWA compliance~~
~~and other statutory objectives. WIFIA can provide capital at a low cost to the borrower, because~~
~~even though the interest on 30-year Treasury securities is taxable, Treasury rates can be less~~
~~expensive than rates on traditional tax-exempt municipal debt.~~
~~Financing Mechanism~~
and other statutory objectives. WIFIA can provide capital at a low cost to the borrower, because Treasury rates are typically lower than traditional municipal bonds. Financing or Funding Mechanism In federal budgetary terms, WIFIA assistance has much less of an impact on federal spending In federal budgetary terms, WIFIA assistance has much less of an impact on federal spending
than a grant, which is not repaid to the U.S. Treasury. The volume of loans and other types of than a grant, which is not repaid to the U.S. Treasury. The volume of loans and other types of
credit assistance that the programs can provide is determined by the size of congressional credit assistance that the programs can provide is determined by the size of congressional
appropriations and calculation of the subsidy amount. WIFIA defines the appropriations and calculation of the subsidy amount. WIFIA defines the subsidy amount as as
follows: follows:
The amount of budget authority sufficient to cover the estimated long-term cost to the The amount of budget authority sufficient to cover the estimated long-term cost to the
Federal Government of a Federal credit instrument, as calculated on a net presentFederal Government of a Federal credit instrument, as calculated on a net present value value
basis, excluding administrative costs and any incidental effects on governmental receipts basis, excluding administrative costs and any incidental effects on governmental receipts
or outlays in accordance with the Federal Credit Reformor outlays in accordance with the Federal Credit Reform Act of 1990 (2 U.S.C. §661 Act of 1990 (2 U.S.C. §661 et
seq.).).85111
Although subsidy rates are project-specific, in the Biden Administration’s Although subsidy rates are project-specific, in the Biden Administration’s ~~FY2022~~FY2023 budget budget
proposal, OMB estimated a 1.07% subsidy rate for WIFIA in FY2022.proposal, OMB estimated a 1.07% subsidy rate for WIFIA in FY2022.~~86 This equates to a 1:107~~
~~ratio.~~112 At this subsidy rate, At this subsidy rate, a $10 million $10 million ~~appropriation~~in appropriations could support direct loans totaling $ could support direct loans totaling $~~1.1~~
~~billion.~~930 million.113 Thus, one advantage of the WIFIA program is that it can provide a large amount of credit Thus, one advantage of the WIFIA program is that it can provide a large amount of credit
assistance relative to the amount of budget authority provided. assistance relative to the amount of budget authority provided.
Eligibility Requirements
WIFIA credit assistance is available to state infrastructure financing authorities for a group of WIFIA credit assistance is available to state infrastructure financing authorities for a group of
projects and individual project sponsors, which may include projects and individual project sponsors, which may include
 a corporation;  a corporation;
 a partnership;  a partnership;
 a joint venture;  a joint venture;
 a trust; or  a trust; or
 a federal, state, local, or tribal government (or consortium of tribal governments).  a federal, state, local, or tribal government (or consortium of tribal governments).
Categories eligible for assistance by EPA include Categories eligible for assistance by EPA include
 wastewater treatment and community drinking water facilities;  wastewater treatment and community drinking water facilities;
 enhanced energy efficiency of a public water system or wastewater treatment  enhanced energy efficiency of a public water system or wastewater treatment
works; works;
 repair or rehabilitation of aging wastewater and drinking water systems;  desalination, water recycling, aquifer recharge, or development of alternative water supplies to reduce aquifer depletion;
85111 33 U.S.C. §3901(13). 33 U.S.C. §3901(13).
86112 OMB, OMB, Budget of the United States Government, ~~FY2022~~FY2023, Federal Credit Supplement, Table 1, , Federal Credit Supplement, Table 1,
https://www.govinfo.gov/app/collection/budget/https://www.govinfo.gov/app/collection/budget/~~2022~~2023/BUDGET-/BUDGET-~~2022-FCS.~~
~~Congressional Research Service~~

34

~~Federally Supported Water Projects and Programs~~

~~ repair or rehabilitation of aging wastewater and drinking water systems;~~
~~ desalination, water recycling, aquifer recharge, or development of alternative~~
~~water supplies to reduce aquifer depletion;~~2023-FCS. 113 The subsidy rate, which is often expressed in percentage terms or as a ratio, largely determines the amount of credit assistance that can be made available to project sponsors. For example, if a project’s subsidy rate is 10% and is the only charge against available budget authority, a $20 million budgetary allocation could theoretically support a $200 million loan. A lower subsidy rate would support a larger loan amount. Congressional Research Service 39 Federally Supported Water Projects and Programs
 prevention, reduction, or mitigation of the effects of drought;  prevention, reduction, or mitigation of the effects of drought;87114 or or
 a combination of eligible projects.  a combination of eligible projects.
The act authorizes EPA to provide credit assistance for a range of wastewater and drinking water The act authorizes EPA to provide credit assistance for a range of wastewater and drinking water
projects. Generally, project costs must be $20 million or larger to be eligible for credit assistance. projects. Generally, project costs must be $20 million or larger to be eligible for credit assistance.
For projects in less populous communities (defined by WIFIA as populations of 25,000 or fewer), For projects in less populous communities (defined by WIFIA as populations of 25,000 or fewer),
project costs must be $5 million or more. project costs must be $5 million or more.
Recent Federal Funding
For FY2019, the Consolidated Appropriations Act, 2019 (P.L. 116-6)For FY2019, the Consolidated Appropriations Act, 2019 (P.L. 116-6), provided $68 million for provided $68 million for
the WIFIA program (including $5 million for administrative costs). For FY2020, the Further the WIFIA program (including $5 million for administrative costs). For FY2020, the Further
Consolidated Appropriations Act, 2020 (P.L. 116-94) provided $60 million for this program Consolidated Appropriations Act, 2020 (P.L. 116-94) provided $60 million for this program
(including $5 million for administrative costs). For FY2021, the Consolidated Appropriations (including $5 million for administrative costs). For FY2021, the Consolidated Appropriations
Act, 2021 (P.L. 116-260) provided $65 million for the program (including $5.5 million for Act, 2021 (P.L. 116-260) provided $65 million for the program (including $5.5 million for
administrative costs)administrative costs) ~~for WIFIA. For FY2022, the President requested $80.1~~. For FY2022, the Consolidated Appropriations Act (P.L. 117-103) provided $69.5 million for WIFIA (including $6.0 million for administrative costs). For FY2023, the President requested $80.3 million for the million for the
program (including $8program (including $8.2 million for administrative costs). million for administrative costs).
To receive funding, a prospective borrower submits a letter of interest to EPA. The letter must To receive funding, a prospective borrower submits a letter of interest to EPA. The letter must
document project eligibility, financial creditworthiness, engineering feasibility, and alignment document project eligibility, financial creditworthiness, engineering feasibility, and alignment
with EPA’s policy priorities. From these submittals, the agency selects projects for funding.with EPA’s policy priorities. From these submittals, the agency selects projects for funding.~~88 On~~
~~April 29, 2021~~115 On June 17, 2022, EPA announced a , EPA announced a ~~fifth~~sixth round of WIFIA funding. EPA estimated that its round of WIFIA funding. EPA estimated that its ~~FY2021~~FY2022
budget authority would provide approximately $5.5 billion in credit assistance.budget authority would provide approximately $5.5 billion in credit assistance.89116
Statutory and Regulatory Authority
The statutory authority for the WIFIA program is WRRDA (P.L. 113-121, Title V, codified at 33 The statutory authority for the WIFIA program is WRRDA (P.L. 113-121, Title V, codified at 33
U.S.C. §§3901-3914). The Fixing America’s Surface Transportation Act (FAST ActU.S.C. §§3901-3914). The Fixing America’s Surface Transportation Act (FAST Act,; P.L. 114-94) P.L. 114-94)
and AWIA amended WIFIA provisions in 2015 and 2018, respectively. EPA promulgated an and AWIA amended WIFIA provisions in 2015 and 2018, respectively. EPA promulgated an
interim final rule for the program on December 19, 2016 (81 interim final rule for the program on December 19, 2016 (81 Federal Register 91822). 91822).
Regulations are codified at Title 40, Section 35.10000, of the Regulations are codified at Title 40, Section 35.10000, of the Code of Federal Regulations. .
Other EPA Water Infrastructure Funding ~~Programs90~~Programs117
In recent WRDAs, Congress has authorized several new drinking water and wastewater In recent WRDAs, Congress has authorized several new drinking water and wastewater
infrastructure funding programs. These programs are discussed below.infrastructure funding programs. These programs are discussed below.91118

87114 The WIIN Act (P.L. 114-322) expanded WIFIA eligibility to include projects involving aquifer recharge; The WIIN Act (P.L. 114-322) expanded WIFIA eligibility to include projects involving aquifer recharge;
development of alternative water supplies to reduce aquifer depletion; and prevention, reduction, or mitigation of the development of alternative water supplies to reduce aquifer depletion; and prevention, reduction, or mitigation of the
effects of drought. effects of drought.
88115 For more up-to-date details of project selection, see EPA’s WIFIA website at https://www.epa.gov/wifia. For more up-to-date details of project selection, see EPA’s WIFIA website at https://www.epa.gov/wifia.
89116 EPA, EPA, ~~FY2021~~ “Notice of Funding AvailabilityNotice of Funding Availability for Credit Assistance Under WIFIA Program,” 87 Federal Register 36489, June 17, 2022, https://www.epa.gov/wifia/fy-, https://www.epa.gov/wifia/fy-~~2021~~2022-notice-funding-availability. -notice-funding-availability.
90 117 This section was prepared by Elena Humphreys, Analyst in Environmental Policy, Resources, Science, and Industry This section was prepared by Elena Humphreys, Analyst in Environmental Policy, Resources, Science, and Industry
Division; and Jonathan Ramseur, Specialist in Environmental Policy, Resources, Science, and Industry Division. Division; and Jonathan Ramseur, Specialist in Environmental Policy, Resources, Science, and Industry Division.
91118 Other drinking water grant programs include the Voluntary Lead Testing in Drinking Water at Schools and Child Other drinking water grant programs include the Voluntary Lead Testing in Drinking Water at Schools and Child
Care Program Grant Program (authorized in SDWA Section 1464(d), added by P.L. 114-322 Section 2107) and the Care Program Grant Program (authorized in SDWA Section 1464(d), added by P.L. 114-322 Section 2107) and the
Drinking Water Fountain Replacement for Schools Grant Program (authorized in SDWA Section 1465, added by P.L. Drinking Water Fountain Replacement for Schools Grant Program (authorized in SDWA Section 1465, added by P.L.
115-270, Section 2006(b)). 115-270, Section 2006(b)).
Congressional Research Service Congressional Research Service

35

40

Federally Supported Water Projects and Programs

Sewer Overflow and Stormwater Grant Program
In 2000, the Consolidated Appropriations Act, 2001, authorized EPA to establish a new grant In 2000, the Consolidated Appropriations Act, 2001, authorized EPA to establish a new grant
program in the CWA to address overflows from municipal combined sewer systems and from program in the CWA to address overflows from municipal combined sewer systems and from
municipal separate sanitary sewers (“wet weather” projects). At that time, Congress authorized municipal separate sanitary sewers (“wet weather” projects). At that time, Congress authorized
annual appropriations of $750 million for FY2002 and FY2003, but the program never received annual appropriations of $750 million for FY2002 and FY2003, but the program never received
appropriations. appropriations.
In 2018, AWIA Section 4106 amended the grant program by modifying the eligibility provisions In 2018, AWIA Section 4106 amended the grant program by modifying the eligibility provisions
to include stormwater infrastructure, among other changes. In addition, AWIA reauthorized to include stormwater infrastructure, among other changes. In addition, AWIA reauthorized
appropriations for the grant program for $225 million for FY2019 and FY2020.appropriations for the grant program for $225 million for FY2019 and FY2020.
IIJA reauthorized appropriations for $280 million annually for FY2022 through FY2026. Under this program, EPA will provide grants to states, which will provide sub-awards to eligible Under this program, EPA will provide grants to states, which will provide sub-awards to eligible
entities. The grants to states will be allocated based on a formula prepared by EPA.entities. The grants to states will be allocated based on a formula prepared by EPA.92119 As of the As of the
date of this report, EPA has not issued any grants for this program.date of this report, EPA has not issued any grants for this program.93
~~Funding~~
120 Recent Federal Funding For FY2020, the Further Consolidated Appropriations Act, 2020 (P.L. 116-94)For FY2020, the Further Consolidated Appropriations Act, 2020 (P.L. 116-94), provided $28 provided $28
million, the first appropriation for this program. For FY2021, the Consolidated Appropriations million, the first appropriation for this program. For FY2021, the Consolidated Appropriations
Act, 2021 (P.L. 116-260) provided $40 million. For FY2022, the Act, 2021 (P.L. 116-260) provided $40 million. For FY2022, the Consolidated Appropriations Act, 2022 (P.L. 117-103) provided $43 million for this program. For FY2023, the President requested $President requested $60280 million million
for this program.for this program.
Statutory Authority
The statutory authority for this program is CWA Section 221 (codified at 33 U.S.C. §1301). The The statutory authority for this program is CWA Section 221 (codified at 33 U.S.C. §1301). The
Consolidated Appropriations Act, 2001 (P.L. 106-554)Consolidated Appropriations Act, 2001 (P.L. 106-554), amended the CWA in 2000 to provide this amended the CWA in 2000 to provide this
authority. CWA Section 221 was subsequently amended in 2018 by AWIA (P.L. 115-270). authority. CWA Section 221 was subsequently amended in 2018 by AWIA (P.L. 115-270).
Technical Assistance for Rural, Small, and Tribal Wastewater Systems
In 2018, AWIA amended the CWA In 2018, AWIA amended the CWA (adding Section 104(b)(8)) to authorize EPA to make grants to qualified nonprofits to to authorize EPA to make grants to qualified nonprofits to
provide technical assistance to help rural, small, and tribal publicly owned treatment works and provide technical assistance to help rural, small, and tribal publicly owned treatment works and
decentralized wastewater treatment systems to comply with the CWA and apply for financing decentralized wastewater treatment systems to comply with the CWA and apply for financing
from the CWSRF.from the CWSRF.121 For this purpose, AWIA authorized appropriations of $25 For this purpose, AWIA authorized appropriations of $25 million per year for FY2019 through FY2023. IIJA reauthorized appropriations of $75 million per year for FY2022 through FY2026 to carry out grant programs in Section 104(b)(8), as well as Section 104(b)(3) and Section 104(g). These latter two programs have not received appropriations in recent years.~~million per year for~~
~~FY2019-FY2023.~~
~~Funding~~
~~For FY2020, the Further Consolidated Appropriations Act, 2020 (P.L. 116-94), enacted December~~
~~20, 2019, provided $12 million for this program. For FY2021, the Consolidated Appropriations~~
~~Act, 2021 (P.L. 116-260) provided $18 million for this program. For FY2022, the President~~
~~requested $18 million for this program.94~~

92119 EPA, “State Formula Allocations for Sewer Overflow and Stormwater Reuse Grants,” 86 EPA, “State Formula Allocations for Sewer Overflow and Stormwater Reuse Grants,” 86 Federal Register 11287, 11287,
February 24, 2021, https://www.federalregister.gov/documents/2021/02/24/2021-03756/state-formula-allocations-for-February 24, 2021, https://www.federalregister.gov/documents/2021/02/24/2021-03756/state-formula-allocations-for-
sewer-overflow-and-stormwater-reuse-grants. sewer-overflow-and-stormwater-reuse-grants.
93120 For more up-to-date information, see EPA’s Sewer Overflow and Stormwater Reuse Municipal Grants Program For more up-to-date information, see EPA’s Sewer Overflow and Stormwater Reuse Municipal Grants Program
website, https://www.epa.gov/cwsrf/sewer-overflow-and-stormwater-reuse-municipal-grants-program. website, https://www.epa.gov/cwsrf/sewer-overflow-and-stormwater-reuse-municipal-grants-program.
94121 For more information, see EPA For more information, see EPA~~’s website for this program,~~, “Technical Assistance for Treatment Works,” https://www.epa.gov/small-and-rural-wastewater- https://www.epa.gov/small-and-rural-wastewater-
systems/technical-assistance-treatment-works. systems/technical-assistance-treatment-works.
Congressional Research Service Congressional Research Service

36

41 Federally Supported Water Projects and Programs Recent Federal Funding For FY2020, the Further Consolidated Appropriations Act, 2020 (P.L. 116-94), enacted December 20, 2019, provided $12 million for the Section 104(b)(8) grant program. For FY2021, the Consolidated Appropriations Act, 2021 (P.L. 116-260) provided $18 million for this program. For FY2022, the Consolidated Appropriations Act, 2022 (P.L. 117-103) provided $20 million for this program. For FY2023, the President requested $18 million for this program. In addition, the President requested $75 million to carry out this grant program and grant programs in Section 104(b)(3) and Section 104(g).

~~Federally Supported Water Projects and Programs~~

Statutory Authority
The statutory authority for this technical assistance is CWA Section 104(b)(8) (codified at 33 The statutory authority for this technical assistance is CWA Section 104(b)(8) (codified at 33
U.S.C. §1254(b)(8)). This provision was added to the CWA in 2018 by AWIA (P.L. 115-270, U.S.C. §1254(b)(8)). This provision was added to the CWA in 2018 by AWIA (P.L. 115-270,
§4106). §4106).
Technical Assistance for Small, Rural, and Tribal Drinking Water Systems
Added in 1996, SDWA Section 1442(e) authorizes EPA and states to provide compliance Added in 1996, SDWA Section 1442(e) authorizes EPA and states to provide compliance
assistance to public water systems and particularly to small systems (serving 25-10,000 assistance to public water systems and particularly to small systems (serving 25-10,000
customers). Accounting for 92% of community water systems, these small systems frequently customers). Accounting for 92% of community water systems, these small systems frequently
lack both economies of scale and the financial, managerial, and technical capacity to meet lack both economies of scale and the financial, managerial, and technical capacity to meet
statutory requirements. statutory requirements.
The technical assistance is intended to enable small systems to achieve and maintain compliance The technical assistance is intended to enable small systems to achieve and maintain compliance
with drinking water regulations and may include circuit-rider and with drinking water regulations and may include circuit-rider and ~~multi-state~~multistate regional technical regional technical
assistance programs, training, and assistance in implementing regulations, source water protection assistance programs, training, and assistance in implementing regulations, source water protection
plans, monitoring plans, water security enhancements, etc. The WIIN Act (P.L. 114-322) amended plans, monitoring plans, water security enhancements, etc. The WIIN Act (P.L. 114-322) amended
Section 1442 to specify that technical assistance grants to tribes may be used for operator training Section 1442 to specify that technical assistance grants to tribes may be used for operator training
and certification. and certification.
Recent Federal Funding
For FY2020, the Further Consolidated Appropriations Act, 2020 (P.L. 116-94), enacted December For FY2020, the Further Consolidated Appropriations Act, 2020 (P.L. 116-94), enacted December
20, 2019, provided $15 million for this program. For FY2021, the Consolidated Appropriations 20, 2019, provided $15 million for this program. For FY2021, the Consolidated Appropriations
Act, 2021 (P.L. 116-260) provided $19 million for this program. For FY2022, the Act, 2021 (P.L. 116-260) provided $19 million for this program. For FY2022, the Consolidated Appropriations Act, 2022 (P.L. 117-103) provided $22 million for this program. For FY2023, the President did President did
not request funds for this program. not request funds for this program.
Statutory Authority
The statutory authority for this technical assistance is SDWA Section 1442(e) (codified at 42 The statutory authority for this technical assistance is SDWA Section 1442(e) (codified at 42
U.S.C. §300j-1(e)). U.S.C. §300j-1(e)).
Small and Disadvantaged Communities Drinking Water Grant Program
In 2016, Congress amended SDWA to add a drinking water grant program to help assist In 2016, Congress amended SDWA to add a drinking water grant program to help assist
disadvantaged or small communities afford projects needed to comply with SDWA regulations. disadvantaged or small communities afford projects needed to comply with SDWA regulations.
Eligible projects include investments needed for SDWA compliance, household water quality Eligible projects include investments needed for SDWA compliance, household water quality
testing, and assistance that benefits a community on a per-household basis. Eligible grant testing, and assistance that benefits a community on a per-household basis. Eligible grant
recipients include public water systems or tribal water systems that serve a disadvantaged recipients include public water systems or tribal water systems that serve a disadvantaged
community or a community of 10,000 or fewer individuals or a state on behalf of an underserved community or a community of 10,000 or fewer individuals or a state on behalf of an underserved
Congressional Research Service 42 Federally Supported Water Projects and Programs community. For the purposes of this grant program, community. For the purposes of this grant program, underserved community is defined to mean “a is defined to mean “a
political subdivision of a State that, as determined by the Administrator, has an inadequate system political subdivision of a State that, as determined by the Administrator, has an inadequate system
for obtaining drinking water.”for obtaining drinking water.”95122 This grant program requires a cost share of This grant program requires a cost share of 45no less than 10% of total project % of total project
costs in the form of monetary funding, services, materials, supplies, or other in‐kind services. costs in the form of monetary funding, services, materials, supplies, or other in‐kind services.
EPA may waive this matching requirement if the grant recipient would experience significant EPA may waive this matching requirement if the grant recipient would experience significant
financial hardship from providing the nonfederal share. financial hardship from providing the nonfederal share.

~~95 42 U.S.C. §300j-19a(a)(1).~~
~~Congressional Research Service~~

37

~~Federally Supported Water Projects and Programs~~

In April 2019, EPA announced the distribution of FY2018 and FY2019 funding for these grants In April 2019, EPA announced the distribution of FY2018 and FY2019 funding for these grants
among the states and territories, using a formula similar to the DWSRF allotment formula, with a among the states and territories, using a formula similar to the DWSRF allotment formula, with a
2% allotment for tribes.2% allotment for tribes.96123 EPA reports that states will need to develop a list of fundable projects EPA reports that states will need to develop a list of fundable projects
that meet the grant program’s eligibility criteria to receive their allotment of funding.that meet the grant program’s eligibility criteria to receive their allotment of funding.97
~~Funding~~
124 In November 2020, EPA announced that the agency would provide $20 million for public water systems serving tribal communities.125 For FY2021 funding, EPA allotted $23.2 million among the states by using “an algorithmic formula that includes factors for population below poverty, small water systems, and underserved communities,” after reserving 10% of available funds for projects serving Indian tribes and Alaska Native villages.126 Recent Federal Funding Beginning in FY2018, Congress has appropriated funds to support this grant program for small Beginning in FY2018, Congress has appropriated funds to support this grant program for small
and disadvantaged communities. For FY2018, Congress provided $20.0 million to support these and disadvantaged communities. For FY2018, Congress provided $20.0 million to support these
grants (P.L. 115-141). For FY2019, the Consolidated Appropriations Act, 2019 (P.L. 116-6) grants (P.L. 115-141). For FY2019, the Consolidated Appropriations Act, 2019 (P.L. 116-6)
provided $25.0 million for this grant program. For FY2020, the Further Consolidated provided $25.0 million for this grant program. For FY2020, the Further Consolidated
Appropriations Act, 2020 (P.L. 116-94) provided $25.4 million. For FY2021, the Consolidated Appropriations Act, 2020 (P.L. 116-94) provided $25.4 million. For FY2021, the Consolidated
Appropriations Act, 2021 (P.L. 116-260) provided $26.4 million for this grant program. For Appropriations Act, 2021 (P.L. 116-260) provided $26.4 million for this grant program. For
FY2022, FY2022, two acts provided appropriations for this grant program. IIJA (P.L. 117-58) provided appropriations for FY2022 of $1.0 billion for this grant program for projects to address emerging contaminants. The Consolidated Appropriations Act, 2021 (P.L. 117-103) provided $27.2 million for this grant program. For FY2023, the President requested $80.0~~the President requested $41.41~~ million for this grant program. million for this grant program.
Statutory Authority
The statutory authority for the Assistance for Small and Disadvantaged Communities Drinking The statutory authority for the Assistance for Small and Disadvantaged Communities Drinking
Water Grant program is SDWA Section 1459A (codified at 42 U.S.C. §300j-19a, added by the Water Grant program is SDWA Section 1459A (codified at 42 U.S.C. §300j-19a, added by the
WIIN Act, P.L. 114-322, §2104). WIIN Act, P.L. 114-322, §2104).
122 42 U.S.C. §300j-19a(a)(1). 123 EPA, “Final Allotments of FY2018 and FY2019 Appropriations for the Assistance to Small and Disadvantaged Communities Grants, Authorized under Section 2104 of the Water Infrastructure Improvements for the Nation Act,” April 29, 2019, https://www.epa.gov/sites/production/files/2019-04/documents/wiin_2104_allotment_memo_april_2019.pdf. 124 EPA, Assistance for Small and Disadvantaged Communities Drinking Water Grant Program: Grant Implementation Document, August 2019, https://www.epa.gov/sites/production/files/2019-08/documents/assistance_for_small_and_disadvantaged_communities_grant_implementation_document_08_27_19.pdf. 125 See EPA website “WIIN Act Section 2104: Assistance for Small and Disadvantaged Communities Tribal Grant Program,” https://www.epa.gov/tribaldrinkingwater/wiin-act-section-2104-assistance-small-and-disadvantaged-communities-tribal. 126 EPA, “Final Allotments of FY2021 Appropriations for the Assistance to Small and Disadvantaged Communities Grants, Authorized under Section 2104 of the Water Infrastructure Improvements for the Nation Act,” July, 27, 2021, https://www.epa.gov/system/files/documents/2021-08/fy2021-initial-state-allotment-memo.pdf. Congressional Research Service 43 Federally Supported Water Projects and Programs Lead Reduction Projects Grant Program
In 2016, Congress amended SDWA to direct EPA to establish a grant program for projects and In 2016, Congress amended SDWA to direct EPA to establish a grant program for projects and
activities that reduce lead in drinking water. Grants may be used to replace a publicly owned lead activities that reduce lead in drinking water. Grants may be used to replace a publicly owned lead
service line; to test, plan, or perform other relevant activities to control lead in drinking water; service line; to test, plan, or perform other relevant activities to control lead in drinking water;
and to provide assistance to low-income homeowners to replace their portions of lead service and to provide assistance to low-income homeowners to replace their portions of lead service
lines. Eligible grant recipients include public water systems; tribal water systems; qualified lines. Eligible grant recipients include public water systems; tribal water systems; qualified
nonprofits nonprofits ~~serving water systems~~with experience in lead reduction; and local, state, or municipal governments. This grant program ; and local, state, or municipal governments. This grant program
generally requires recipients to provide a 20% match. EPA may waive this matching requirement generally requires recipients to provide a 20% match. EPA may waive this matching requirement
for reasons of affordability. for reasons of affordability.
In October 2020, EPA provided the first funding for this grant program. In October 2020, EPA provided the first funding for this grant program.98
127 Recent Federal Funding
Congress first appropriated funds for this grant program in FY2018. In FY2018, the Consolidated Congress first appropriated funds for this grant program in FY2018. In FY2018, the Consolidated
Appropriations Act, 2018 (P.L. 115-141)Appropriations Act, 2018 (P.L. 115-141), provided $10.0 million to support these grants. In provided $10.0 million to support these grants. In
FY2019, the Consolidated Appropriations Act, 2019 (P.L. 116-6)FY2019, the Consolidated Appropriations Act, 2019 (P.L. 116-6), provided $15.0 million for this provided $15.0 million for this
grant program. In FY2020, the Further Consolidated Appropriations Act, 2020 (P.L. 116-94)grant program. In FY2020, the Further Consolidated Appropriations Act, 2020 (P.L. 116-94),
~~provided $19.5 million to support this grant program. For FY2021, the Consolidated~~

~~96 EPA, Final Allotments of FY2018 and FY2019 Appropriations for the Assistance to Small and Disadvantaged~~
~~Communities Grants, Authorized under Section 2104 of the Water Infrastructure Improvements for the Nation Act,~~
~~April 29, 2019, https://www.epa.gov/sites/production/files/2019-04/documents/~~
~~wiin_2104_allotment_memo_april_2019.pdf.~~
~~97 EPA,~~ ~~Assistance for Small and Disadvantaged Communities Drinking Water Grant Program: Grant Implementation~~
~~Document, August 2019, https://www.epa.gov/sites/production/files/2019-08/documents/~~
~~assistance_for_small_and_disadvantaged_communities_grant_implementation_document_08_27_19.pdf.~~
~~98 See EPA, “WIIN Grant: Reduction in Lead Exposure Via Drinking Water,” https://www.epa.gov/dwcapacity/wiin-~~
~~grant-reduction-lead-exposure-drinking-water.~~
~~Congressional Research Service~~

38

~~Federally Supported Water Projects and Programs~~

~~Appropriations Act, 2021 (P.L. 116-260) provided $21.5 million for this grant program. For~~
~~FY2022, the President requested $81.51 million.~~
~~Statutory Authority~~
provided $19.5 million to support this grant program. For FY2021, the Consolidated Appropriations Act, 2021 (P.L. 116-260) provided $21.5 million for this grant program. The Consolidated Appropriations Act, 2021 (P.L. 117-103) provided $22.0 million for this grant program for FY2022. For FY2023, the President requested $182.0 million. Statutory Authority The statutory authority for the Reducing Lead in Drinking Water grant program is SDWA Section The statutory authority for the Reducing Lead in Drinking Water grant program is SDWA Section
1459B (codified at 42 U.S.C. §300j-19b, added by the WIIN Act, P.L. 114-322, §2105). 1459B (codified at 42 U.S.C. §300j-19b, added by the WIIN Act, P.L. 114-322, §2105).
Department of Housing and Urban ~~Development99~~Development128
Community Development Block Grants
HUD administers assistance in support of state and local government neighborhood revitalization, HUD administers assistance in support of state and local government neighborhood revitalization,
including infrastructure improvements, primarily under the Community Development Block including infrastructure improvements, primarily under the Community Development Block
Grant (CDBG) program. The program’s primary objective is to develop viable communities by Grant (CDBG) program. The program’s primary objective is to develop viable communities by
providing decent housing and a suitable living environment and by expanding economic providing decent housing and a suitable living environment and by expanding economic
opportunities, principally for persons of low and moderate income. State and local governments opportunities, principally for persons of low and moderate income. State and local governments
use CDBG funds for a broad range of neighborhood revitalization and community and economic use CDBG funds for a broad range of neighborhood revitalization and community and economic
development activities intended to meet one of three national objectives. Specifically, eligible development activities intended to meet one of three national objectives. Specifically, eligible
activities must activities must
1. principally benefit low- or moderate-income persons, 1. principally benefit low- or moderate-income persons,
2. aid in preventing or eliminating slums and blight, or 2. aid in preventing or eliminating slums and blight, or
3. address an imminent threat to the health and safety of residents. 3. address an imminent threat to the health and safety of residents.
~~Program policy requires that at least 70% of~~ 127 See EPA, “WIIN Grant: Reduction in Lead Exposure Via Drinking Water,” https://www.epa.gov/dwcapacity/wiin-grant-reduction-lead-exposure-drinking-water. 128 This section was prepared by Joe Jaroscak, Analyst in Economic Development Policy, Government and Finance Division. Congressional Research Service 44 Federally Supported Water Projects and Programs Program regulations require that at least 70% of a grantee’s funds must benefit low- and moderate-income funds must benefit low- and moderate-income
persons. persons.
The block grant nature of the CDBG program provides local government discretion in selecting The block grant nature of the CDBG program provides local government discretion in selecting
the eligible activities to be undertaken in pursuit of national objectives. Water and waste disposal the eligible activities to be undertaken in pursuit of national objectives. Water and waste disposal
needs compete with many other eligible activities for this assistance, including historical needs compete with many other eligible activities for this assistance, including historical
preservation, energy conservation, economic development, lead-based paint abatement, public preservation, energy conservation, economic development, lead-based paint abatement, public
facilities, and public service activities. Since it was enacted in 1974, the CDBG program has facilities, and public service activities. Since it was enacted in 1974, the CDBG program has
invested over $150 billion in communities nationwide. invested over $150 billion in communities nationwide.
Congress has also used the program to provide supplemental appropriations to assist communities Congress has also used the program to provide supplemental appropriations to assist communities
and states in response to natural disasters, the mortgage foreclosure crisis of 2008, economic and states in response to natural disasters, the mortgage foreclosure crisis of 2008, economic
recessions, terrorist attacks, and the recessions, terrorist attacks, and the Coronavirus Disease 2019 (COVID-19)~~COVID-19~~ pandemic. Since 1992, Congress has appropriated pandemic. Since 1992, Congress has appropriated
approximately $89.8 billion in supplemental CDBG funding to assist targeted states and local approximately $89.8 billion in supplemental CDBG funding to assist targeted states and local
governments in their recovery efforts, referred to as CDBG-Disaster Recovery (CDBG-DR) governments in their recovery efforts, referred to as CDBG-Disaster Recovery (CDBG-DR)
funding.funding.~~100~~129
After subtracting any amounts specified in appropriations acts, 70% of CDBG funds (the After subtracting any amounts specified in appropriations acts, 70% of CDBG funds (the
entitlement program) are allocated by formula to entitlement communities.entitlement program) are allocated by formula to entitlement communities.~~101~~130 Entitlement Entitlement
communities are defined as central cities of metropolitan areas; metropolitan cities with communities are defined as central cities of metropolitan areas; metropolitan cities with
populations of 50,000 or more; and statutorily defined urban counties. These funds are not populations of 50,000 or more; and statutorily defined urban counties. These funds are not

~~99 This section was prepared by Joe Jaroscak, Analyst in Economic Development Policy, Government and Finance~~
~~Division.~~
~~100 HUD, CDBG Grant History Report (as of April 2021), https://www.hudexchange.info/programs/cdbg-dr/reports/.~~
~~101 HUD, Awards and Allocations, https://www.hudexchange.info/grantees/allocations-awards/.~~
~~Congressional Research Service~~

39

~~Federally Supported Water Projects and Programs~~

available for projects in rural communities. The remaining 30% of CDBG funding (the state available for projects in rural communities. The remaining 30% of CDBG funding (the state
program) is allocated by formula to the states for distribution to nonentitlement communities for program) is allocated by formula to the states for distribution to nonentitlement communities for
use in areas that are not part of a CDBG entitlement community allocation. These funds, which use in areas that are not part of a CDBG entitlement community allocation. These funds, which
are administered by each state, may be available for rural community water projects, among other are administered by each state, may be available for rural community water projects, among other
eligible activities.eligible activities.~~102~~131
Funds from both the state and the entitlement CDBG programs are disbursed across several broad Funds from both the state and the entitlement CDBG programs are disbursed across several broad
categories, including the acquisition and demolition of real property, planning and administrative categories, including the acquisition and demolition of real property, planning and administrative
activities, housing, public services, and public improvements such as water and wastewater activities, housing, public services, and public improvements such as water and wastewater
treatment facilities. From FY2016 to FY2020, water and sewer improvements accounted for an treatment facilities. From FY2016 to FY2020, water and sewer improvements accounted for an
average of 12% of total CDBG expenditures. CDBG expenditures for public improvements average of 12% of total CDBG expenditures. CDBG expenditures for public improvements
overall—including water, sewer, and related improvements—accounted for approximately 36% overall—including water, sewer, and related improvements—accounted for approximately 36%
of all CDBG funds expended during the same five-year span.of all CDBG funds expended during the same five-year span.~~103~~132
Program Purpose
As noted, the primary goal of the CDBG program is the development of viable communities by As noted, the primary goal of the CDBG program is the development of viable communities by
providing decent housing, a suitable living environment, and expanding economic opportunities, providing decent housing, a suitable living environment, and expanding economic opportunities,
principally for low- and moderate-income persons. Funds may also be used to aid in preventing or principally for low- and moderate-income persons. Funds may also be used to aid in preventing or
eliminating slums and blight or to address an imminent threat to residents of the impacted area. eliminating slums and blight or to address an imminent threat to residents of the impacted area.
129 HUD, CDBG Grant History Report (as of April 2021), https://www.hudexchange.info/programs/cdbg-dr/reports/. 130 HUD, Awards and Allocations, https://www.hudexchange.info/grantees/allocations-awards/. 131 HUD, CDBG Expenditure Reports, National Expenditure Reports (FY2001-FY2020), All CDBG Disbursements, https://www.hudexchange.info/programs/cdbg/cdbg-expenditure-reports/. 132 Between FY2016 and FY2020, disbursements by CDBG recipients for water and sewer improvements have averaged $388.4 million per year. See HUD, CDBG Expenditure Reports, National Expenditure Reports (FY2001-FY2020), All CDBG Disbursements, https://www.hudexchange.info/programs/cdbg/cdbg-expenditure-reports/. Congressional Research Service 45 Federally Supported Water Projects and Programs Financing or Funding ~~Financing~~ Mechanism
The CDBG funding allocation process is outlined in the program’s statute. After amounts The CDBG funding allocation process is outlined in the program’s statute. After amounts
specified in an appropriations act are allocated, 70% of the remaining funds are allocated by specified in an appropriations act are allocated, 70% of the remaining funds are allocated by
formula to entitlement communities and 30% to the states for distribution to nonentitlement formula to entitlement communities and 30% to the states for distribution to nonentitlement
communities. Funds are awarded to entitlement communities based on the higher yield from one communities. Funds are awarded to entitlement communities based on the higher yield from one
of two weighted formulas. The first formula uses population, overcrowded housing, and poverty of two weighted formulas. The first formula uses population, overcrowded housing, and poverty
data, while the second formula allocates funds based on an entitlement community’s relative data, while the second formula allocates funds based on an entitlement community’s relative
share of poverty, housing built before 1940, and the lag in population growth rate relative to the share of poverty, housing built before 1940, and the lag in population growth rate relative to the
total for all entitlement communities. Similar formulas are used to allocate nonentitlement funds total for all entitlement communities. Similar formulas are used to allocate nonentitlement funds
to states. to states.
In order to receive CDBG funds, eligible grantees are required to participate in HUD’s In order to receive CDBG funds, eligible grantees are required to participate in HUD’s
Consolidated Plan process, in which grantees assess conditions and needs related to community Consolidated Plan process, in which grantees assess conditions and needs related to community
development and housing to inform the selection of program activities. Under this process, development and housing to inform the selection of program activities. Under this process,
grantees submit three- to five-year consolidated plans as well as annual strategic plans that must grantees submit three- to five-year consolidated plans as well as annual strategic plans that must
be developed with community input and conform to HUD specifications. Grantees also report be developed with community input and conform to HUD specifications. Grantees also report
annually on performance against their stated goals for the previous year through a Comprehensive annually on performance against their stated goals for the previous year through a Comprehensive
Annual Performance Evaluation Report (CAPER).Annual Performance Evaluation Report (CAPER).~~104~~133
States do not undertake eligible CDBG activities directly. Instead, states act as fiscal agents States do not undertake eligible CDBG activities directly. Instead, states act as fiscal agents
charged with three distinct responsibilities: (1) determining the method or methods to be used to charged with three distinct responsibilities: (1) determining the method or methods to be used to
distribute funds to nonentitlement communities, including seeking the input of affected local distribute funds to nonentitlement communities, including seeking the input of affected local

~~102 HUD, CDBG Expenditure Reports, National Expenditure Reports (FY2001-FY2020), All CDBG Disbursements,~~
~~https://www.hudexchange.info/programs/cdbg/cdbg-expenditure-reports/.~~
~~103 Between FY2016 and FY2020, disbursements by CDBG recipients for water and sewer improvements have~~
~~averaged $388.4 million per year. See HUD, CDBG Expenditure Reports, National Expenditure Reports (FY2001-~~
~~FY2020), All CDBG Disbursements, https://www.hudexchange.info/programs/cdbg/cdbg-expenditure-reports/.~~
~~104 U.S. Department of Housing and Urban Development,~~ ~~Consolidated Plan Process, Grant Programs, and Related~~
~~HUD Programs, https://www.hudexchange.info/programs/consolidated-plan/consolidated-plan-process-grant-~~
~~programs-and-related-hud-programs/.~~
~~Congressional Research Service~~

40

~~link to page 7~~ ~~Federally Supported Water Projects and Programs~~

governments; (2) selecting local governments that will receive funds; and (3) monitoring local governments; (2) selecting local governments that will receive funds; and (3) monitoring local
government grant recipients and project implementation to ensure compliance with rules government grant recipients and project implementation to ensure compliance with rules
governing the program. governing the program.
Eligibility Requirements
There are three categories of recipients eligible for direct allocations of CDBG program funds: There are three categories of recipients eligible for direct allocations of CDBG program funds:
entitlement communities, states (for distribution to nonentitlement communities), and insular entitlement communities, states (for distribution to nonentitlement communities), and insular
areas (U.S. territories). Before funds are allocated to states and entitlement communities, a areas (U.S. territories). Before funds are allocated to states and entitlement communities, a
~~specific amount established by Congress~~statutory amount of $7 million is set aside annually for the U.S. territories or insular is set aside annually for the U.S. territories or insular
areas of Guam, the Virgin Islands, American Samoa, and the Commonwealth of the Northern areas of Guam, the Virgin Islands, American Samoa, and the Commonwealth of the Northern
Mariana Islands. These funds are awarded annually based on each insular area’s relative share of Mariana Islands. These funds are awarded annually based on each insular area’s relative share of
aggregate population for all insular areas. aggregate population for all insular areas.
Eligible activities include a wide range of projects such as public facilities and improvements, Eligible activities include a wide range of projects such as public facilities and improvements,
housing, public services, economic development, and brownfields redevelopment. housing, public services, economic development, and brownfields redevelopment. ~~State grantees~~
Grantees must ensure that each activity meets one of the program’s three national objectives: must ensure that each activity meets one of the program’s three national objectives: ~~benefitting~~
benefiting low- and moderate-income persons (the primary objective), aiding in the prevention or low- and moderate-income persons (the primary objective), aiding in the prevention or
elimination of slums or blight, or assisting other community development needs that present a elimination of slums or blight, or assisting other community development needs that present a
serious and immediate threat to the health or welfare of the community. Under the state program serious and immediate threat to the health or welfare of the community. Under the state program
that assists smaller communities, states develop their own program and funding priorities and that assists smaller communities, states develop their own program and funding priorities and
have considerable latitude to define community eligibility and criteria, within general criteria in have considerable latitude to define community eligibility and criteria, within general criteria in
law law and regulations. 133 U.S. Department of Housing and Urban Development, Consolidated Plan Process, Grant Programs, and Related HUD Programs, https://www.hudexchange.info/programs/consolidated-plan/consolidated-plan-process-grant-programs-and-related-hud-programs/. Congressional Research Service 46 link to page 8 link to page 8 Federally Supported Water Projects and Programs Recent Federal Funding The Consolidated Appropriations Act, 2022 (P.L. 117-103) appropriated $4.841~~and regulations.~~
~~Funding~~
~~The Consolidated Appropriations Act, 2020 (P.L. 116-94) appropriated $3.425 billion for the~~
~~Community Development Fund,105 including $3.400 billion in CDBG entitlement,~~
~~nonentitlement, and insular area funds. The Consolidated Appropriations Act, 2021 (P.L. 116-260)~~
~~appropriated $3.475~~ billion for the Community Development Fund billion for the Community Development Fund, (CDF),134 including $3. including $3.~~450~~307 billion in billion in
CDBG entitlement, nonentitlement, and insular area funds (CDBG entitlement, nonentitlement, and insular area funds (~~see Table 1). As in FY2020, the~~
~~Consolidated Appropriations Act, 2021~~see Table 1). The act included $1.516 billion in the CDF for Economic Development Initiative funding, for congressionally directed community project spending.135 As in FY2021, the Consolidated Appropriations Act, 2022 appropriated $25 million of the $ appropriated $25 million of the $~~3.475~~4.841 billion for billion for
activities authorized under the Substance Use-Disorder Prevention that Promotes Opioid activities authorized under the Substance Use-Disorder Prevention that Promotes Opioid
Recovery and Treatment for Patients and Communities Act (the SUPPORT for Patients and Recovery and Treatment for Patients and Communities Act (the SUPPORT for Patients and
Communities ActCommunities Act,; P.L. 115-271). Of the amount appropriated for CDBG grants in P.L. 115-271). Of the amount appropriated for CDBG grants in ~~FY2021,~~
~~$2.410~~FY2022, $2.305 billion was allocated to entitlement communities, $ billion was allocated to entitlement communities, $~~1.033 billion~~987.9 million to states for distribution to states for distribution
to nonentitlement communities, and $7 million to insular areas.to nonentitlement communities, and $7 million to insular areas.~~106 The Trump Administration did~~
~~not request funds for CDBG in the Administration’s budget requests for FY2017 through~~
~~FY2021. In proposing termination of the program in FY2021, as in the previous four fiscal years,~~
~~the Trump Administration cited its intent to redefine the proper role of the federal government in~~
~~support of community and economic development by devolving responsibility to state and local~~
~~governments.107~~136 The Biden Administration’s The Biden Administration’s ~~FY2022~~FY2023 budget budget ~~has requested $3.770 for the~~

~~105 The CDBG program is funded in an account called the Community Development Fund.~~
~~106 HUD’s Office of Community Planning and Development (CPD) administers the CDBG program. CPD’s~~
~~Appropriations Budget/Allocations table provides the FY2021 amount of funding allocated for entitlement (called~~
~~“local governments” in the table) and state CDBG programs. See https://www.hud.gov/program_offices/~~
~~comm_planning/appropriations_budget_allocations.~~
~~107 OMB,~~ ~~A Budget for America’s Future: Budget of the U.S. Government for Fiscal Year 2021: Analytical~~
~~Perspectives, p. 582, https://www.whitehouse.gov/wp-content/uploads/2020/02/appendix_fy21.pdf.~~
~~Congressional Research Service~~

41

~~link to page 7~~ ~~Federally Supported Water Projects and Programs~~

~~Community Development Fund, including $3.450 for the conventional CDBG program (see~~
Table 1).~~108~~requested $3.77 billion for the CDF, of which $3.607 billion was requested for the CDBG program (see Table 1).137
Statutory and Regulatory Authority
Statutory authority for the CDBG program is Title I of the Housing and Community Development Statutory authority for the CDBG program is Title I of the Housing and Community Development
Act of 1974, as amended (42 U.S.C. §5301 et seq.). Regulations are codified at Title 24, Part 570, Act of 1974, as amended (42 U.S.C. §5301 et seq.). Regulations are codified at Title 24, Part 570,
of the of the Code of Federal Regulations. Regulations covering the CDBG state program for . Regulations covering the CDBG state program for
nonentitlement communities are codified at Title 24, Part 570, Subpart I (§570.480).nonentitlement communities are codified at Title 24, Part 570, Subpart I (§570.480).~~109~~138 CDBG has CDBG has
operated under an expired authorization since 1994. operated under an expired authorization since 1994.
CDBG Section 108 Loan Guarantees
Authorized under the same title (Title I of the Housing and Community Development Act of Authorized under the same title (Title I of the Housing and Community Development Act of
1974) as the formula-based CDBG program, Section 108 provides loan guarantees 1974) as the formula-based CDBG program, Section 108 provides loan guarantees ~~that allow an~~
~~entitlement community or a state~~to CDBG grantees. The program allows entitlement communities and states, on behalf of a nonentitlement community, to leverage its annual , on behalf of a nonentitlement community, to leverage its annual
CDBG allocation in support of large-scale economic development and housing rehabilitation CDBG allocation in support of large-scale economic development and housing rehabilitation
projects and the construction, reconstruction, or installation of public facilities. projects and the construction, reconstruction, or installation of public facilities.
Program Purpose
Consistent with the goals and objectives of the CDBG program, Section 108 loan guarantees are Consistent with the goals and objectives of the CDBG program, Section 108 loan guarantees are
intended to supplement CDBG program activities. The program allows entitlement communities intended to supplement CDBG program activities. The program allows entitlement communities
and states to extend the reach of the formula-based CDBG program, giving them access to and states to extend the reach of the formula-based CDBG program, giving them access to
134 The CDBG program is funded in an account called the Community Development Fund. 135 U.S. Department of Housing and Urban Development, Economic Development Initiative—Community Project Funding Grants, May 2022, https://www.hud.gov/program_offices/comm_planning/economic_development_initiative_community_project_funding_grants. 136 HUD’s Office of Community Planning and Development (CPD) administers the CDBG program. CPD’s Appropriations Budget/Allocations table provides the FY2022 amount of funding allocated for entitlement (called “local governments” in the table) and state CDBG programs. See U.S. Department of Housing and Urban Development, “CPD Appropriations Budget/Allocations,” https://www.hud.gov/program_offices/comm_planning/appropriations_budget_allocations. 137 OMB, Budget of the U.S. Government, FY2023, Appendix, p. 571, https://www.whitehouse.gov/wp-content/uploads/2022/03/appendix_fy2023.pdf. 138 For more program information on CDBG entitlements grants, see https://www.hudexchange.info/programs/cdbg-entitlement/cdbg-entitlement-program-eligibility-requirements/. For information on the CDBG state program, see https://www.hudexchange.info/programs/cdbg-state/. Congressional Research Service 47 Federally Supported Water Projects and Programs additional financial resources to undertake large-scale, transformative neighborhood revitalization additional financial resources to undertake large-scale, transformative neighborhood revitalization
efforts. efforts.
Eligible activities include acquiring and rehabilitating publicly owned real property; housing Eligible activities include acquiring and rehabilitating publicly owned real property; housing
rehabilitation; economic development activities, including those carried out by for-profit and rehabilitation; economic development activities, including those carried out by for-profit and
nonprofit entities; debt service reserves; payment of interest on the guaranteed loan; issuance cost nonprofit entities; debt service reserves; payment of interest on the guaranteed loan; issuance cost
of the public offering; and the acquisition, construction, reconstruction, and installation of public of the public offering; and the acquisition, construction, reconstruction, and installation of public
facilities, including water and sewer improvements. facilities, including water and sewer improvements.
Financing or Funding Mechanism
Section 108 loan guarantees are financed through public offerings. Under the program, states and Section 108 loan guarantees are financed through public offerings. Under the program, states and
communities are allowed to float bonds, notes, or debentures worth up to five times their annual communities are allowed to float bonds, notes, or debentures worth up to five times their annual
CDBG allocation, minus any existing Section 108 commitments or outstanding principal CDBG allocation, minus any existing Section 108 commitments or outstanding principal
balances, with a repayment period of up to 20 years. States and entitlement communities must balances, with a repayment period of up to 20 years. States and entitlement communities must
pledge their current and future CDBG allocations as security against default of the bonds or notes. pledge their current and future CDBG allocations as security against default of the bonds or notes.
Section 108 funds are made available on an ongoing basis, allowing communities to apply for Section 108 funds are made available on an ongoing basis, allowing communities to apply for
funds any time during the year. Section 108 loan funds are made available to eligible public funds any time during the year. Section 108 loan funds are made available to eligible public
entities that may entities that may ~~re-loan~~reloan the funds to private participants in a redevelopment project. Applicants the funds to private participants in a redevelopment project. Applicants
are encouraged to meet with HUD staff prior to submitting a formal application. are encouraged to meet with HUD staff prior to submitting a formal application.

~~108 OMB, Budget of the U.S. Government, FY2022, Appendix, p. 583, https://www.whitehouse.gov/wp-content/uploads/~~
~~2021/05/hud_fy22.pdf.~~
~~109 For more program information on CDBG entitlements grants, see https://beta.sam.gov/fal/~~
~~4bec434fc21387e84d49f8f12a9bfa4c/view. For information on the CDBG state program, see https://beta.sam.gov/fal/~~
~~530a3538a33c41b6b1ea235d457a5553/view?keywords=14.228&sort=-relevance&index=&is_active=true&page=1.~~
~~Congressional Research Service~~

42

~~Federally Supported Water Projects and Programs~~

~~Eligibility Requirements~~
Eligibility Requirements Section 108 loan guarantees may be accessed only by CDBG entitlement communities and states Section 108 loan guarantees may be accessed only by CDBG entitlement communities and states
on behalf of a CDBG nonentitlement community. All eligible activities must meet at least one of on behalf of a CDBG nonentitlement community. All eligible activities must meet at least one of
the three national objectives of the regular CDBG program: the project must principally benefit the three national objectives of the regular CDBG program: the project must principally benefit
low- and moderate-income persons, aid in eliminating or preventing slums and blight, or address low- and moderate-income persons, aid in eliminating or preventing slums and blight, or address
an imminent threat to the health and safety of residents. The program has an open application an imminent threat to the health and safety of residents. The program has an open application
process, allowing entitlement communities and states to submit applications anytime during the process, allowing entitlement communities and states to submit applications anytime during the
year. The application process governing the Section 108 program can be grouped into several year. The application process governing the Section 108 program can be grouped into several
distinct stages: application presubmission, citizen participation, application submission, distinct stages: application presubmission, citizen participation, application submission,
application review and notification, award allocation, and reporting. application review and notification, award allocation, and reporting.
When submitting formal applications, states and entitlement communities must include a When submitting formal applications, states and entitlement communities must include a
description of activities to be carried out, financing structure, source of loan repayment, citizen description of activities to be carried out, financing structure, source of loan repayment, citizen
participation plan, participation plan, ~~anti-displacement~~antidisplacement strategy, and a pledge of the applicant’s CDBG allocation as strategy, and a pledge of the applicant’s CDBG allocation as
security for the Section 108 guaranteed loan. Recipients receiving Section 108 funds are required security for the Section 108 guaranteed loan. Recipients receiving Section 108 funds are required
to file annual performance reports with HUD detailing progress made in meeting the objectives of to file annual performance reports with HUD detailing progress made in meeting the objectives of
their community development plans, including Section 108 activities. their community development plans, including Section 108 activities. ~~Between FY2015 and~~
~~FY2019, HUD issued loan guarantee commitments totaling $364.6 million to 63 projects,~~
~~including~~
~~ $123.3 million to support 20 projects in FY2015,~~
~~ $80.7 million to support 10 projects in FY2016,~~
~~ $38.9 million to support 13 projects in FY2017,~~
~~ $58.6 million to support 12 projects in FY2018, and~~
~~ $63.1 million to support 8 projects in FY2019.110~~
Recent Federal Funding
For For ~~FY2020~~FY2022, Congress authorized a loan commitment ceiling of $300 million and directed HUD , Congress authorized a loan commitment ceiling of $300 million and directed HUD
to collect fees from borrowers that result in a credit subsidy cost of zero for guaranteeing Section to collect fees from borrowers that result in a credit subsidy cost of zero for guaranteeing Section
108 loans.108 loans.~~111~~139 Until FY2015, Congress appropriated an amount necessary to cover the estimated Until FY2015, Congress appropriated an amount necessary to cover the estimated
long-term liability to the federal government of a Section 108 loan guarantee (credit subsidy). long-term liability to the federal government of a Section 108 loan guarantee (credit subsidy).
The Department of Housing and Urban Development Appropriations Act of The Department of Housing and Urban Development Appropriations Act of ~~FY2014112~~FY2014140 changed changed
that arrangement, allowing HUD to collect a fee from the borrower to cover the cost of the credit that arrangement, allowing HUD to collect a fee from the borrower to cover the cost of the credit
~~subsidy. The amount of the fee is determined annually by HUD based on a percentage of the~~
~~principal amount of the Section 108 guaranteed loan. The Consolidated Appropriations Act, 2021~~
~~(P.L. 116-260) included $300 million in Section 108 loan guarantee authority. For FY2021, as in~~
~~FY2019 and FY2020, the Trump Administration requested no new loan guarantee authority for~~
~~the Section 108 program.113 For FY2022, the Biden Administration~~ 139 P.L. 117-103. 140 P.L. 113-76, 128 Stat. 617. Congressional Research Service 48 Federally Supported Water Projects and Programs subsidy. The amount of the fee is determined annually by HUD based on a percentage of the principal amount of the Section 108 guaranteed loan. For FY2023, the Biden Administration requested $300 million in requested $300 million in
~~Section 108 loan guarantee authority.114~~

~~110 HUD, Section 108 Loan Guarantee Program, Section 108 Project Summaries 2010-2018,~~
~~https://www.hudexchange.info/programs/section-108/.~~
~~111 P.L. 116-94.~~
~~112 P.L. 113-76, 128 Stat. 617.~~
~~113 OMB, A Budget for America’s Future, p. 586.~~
~~114 OMB “Appendix: Budget of the U.S. Government, Fiscal Year 2022” (2021), p. 585, https://www.whitehouse.gov/~~
~~wp-content/uploads/2021/05/hud_fy22.pdf.~~
~~Congressional Research Service~~

43

~~Federally Supported Water Projects and Programs~~

Section 108 loan guarantee authority.141
Statutory and Regulatory Authority
Statutory authority for the Section 108 program is Title I of the Housing and Community Statutory authority for the Section 108 program is Title I of the Housing and Community
Development Act of 1974, as amended (42 U.S.C. §5308). Regulations are codified at Title 24, Development Act of 1974, as amended (42 U.S.C. §5308). Regulations are codified at Title 24,
Part 570, Subpart M, of the Part 570, Subpart M, of the Code of Federal Regulations. .
Department of ~~Commerce115~~Commerce142
Economic Development Administration Public Works Program
The Department of Commerce’s Economic Development Administration (EDA) is authorized to The Department of Commerce’s Economic Development Administration (EDA) is authorized to
provide development assistance to areas experiencing substantial economic distress. EDA grants provide development assistance to areas experiencing substantial economic distress. EDA grants
for community water and sewer projects are available primarily through its Public Works for community water and sewer projects are available primarily through its Public Works
program. Similar assistance is also available under the agency’s Economic Adjustment Assistance program. Similar assistance is also available under the agency’s Economic Adjustment Assistance
program, which is discussed in the subsequent section. program, which is discussed in the subsequent section.
Under the Public Works program, grants are awarded competitively to eligible applicants to Under the Public Works program, grants are awarded competitively to eligible applicants to
revitalize, expand, and upgrade their physical infrastructure. These investments in public works revitalize, expand, and upgrade their physical infrastructure. These investments in public works
improvements are generally linked to projects intended to enable communities to attract new improvements are generally linked to projects intended to enable communities to attract new
industry, encourage business expansion and retention, diversify local economies, and generate or industry, encourage business expansion and retention, diversify local economies, and generate or
retain privateretain private -sector jobs in EDA-designated distressed regions. Grants may be used for a wide sector jobs in EDA-designated distressed regions. Grants may be used for a wide
range of purposes, but often have a water supply or wastewater element. range of purposes, but often have a water supply or wastewater element.
The types of projects funded include business and science parks, expansion of port and harbor The types of projects funded include business and science parks, expansion of port and harbor
facilities, business incubator facilities, skill-training facilities, telecommunications infrastructure, facilities, business incubator facilities, skill-training facilities, telecommunications infrastructure,
redevelopment of brownfields, and water and wastewater facilities primarily serving industry and redevelopment of brownfields, and water and wastewater facilities primarily serving industry and
commerce. Federal law requires that units of government retain ownership of EDA-funded commerce. Federal law requires that units of government retain ownership of EDA-funded
projects. Because EDA grants are designed to primarily support economic development, foster projects. Because EDA grants are designed to primarily support economic development, foster
job creation, and attract private investment, these grants are generally not available for rural job creation, and attract private investment, these grants are generally not available for rural
residential sewer and water supply development. sewer and water supply development.
Program Purpose
The purpose of EDA’s Public Works program is to promote long-term economic development The purpose of EDA’s Public Works program is to promote long-term economic development
and assist in the construction of public works and the development of facilities needed to initiate and assist in the construction of public works and the development of facilities needed to initiate
and support the creation or retention of permanent privateand support the creation or retention of permanent private -sector jobs in areas experiencing long-sector jobs in areas experiencing long-
term economic deterioration and distress. The program supports investments that help distressed term economic deterioration and distress. The program supports investments that help distressed
areas address their competitive disadvantages. Funded projects must be part of an EDA-certified areas address their competitive disadvantages. Funded projects must be part of an EDA-certified
Comprehensive Economic Development Strategy (CEDS) or equivalent EDA-accepted regional Comprehensive Economic Development Strategy (CEDS) or equivalent EDA-accepted regional
economic development strategy. economic development strategy.
~~Financing Mechanism~~
141 OMB, Budget of the U.S. Government, FY2023, Appendix, p. 578, https://www.whitehouse.gov/wp-content/uploads/2022/03/appendix_fy2023.pdf. 142 This section was prepared by Julie Lawhorn, Analyst in Economic Development Policy, Government and Finance Division. Congressional Research Service 49 Federally Supported Water Projects and Programs Financing or Funding Mechanism EDA competitively awards public works grants directly to approved applicants. Generally, EDA EDA competitively awards public works grants directly to approved applicants. Generally, EDA
investment assistance may not exceed 50% of the project cost. Projects may receive an additional investment assistance may not exceed 50% of the project cost. Projects may receive an additional
amount, not to exceed 30%, based on the relative needs of the region in which the project will be amount, not to exceed 30%, based on the relative needs of the region in which the project will be
located, as determined by EDA. In the case of certain Indian tribes, nonprofit organizations that located, as determined by EDA. In the case of certain Indian tribes, nonprofit organizations that
have exhausted their effective borrowing capacity, or a state or political subdivision of a state that have exhausted their effective borrowing capacity, or a state or political subdivision of a state that

~~115 This section was prepared by Julie Lawhorn, Analyst in Economic Development Policy, Government and Finance~~
~~Division.~~
~~Congressional Research Service~~

44

~~Federally Supported Water Projects and Programs~~

has exhausted its effective taxing and borrowing capacity, grants totaling 100% of a project’s cost has exhausted its effective taxing and borrowing capacity, grants totaling 100% of a project’s cost
may be awarded. Credit may be given toward the nonfederal share for in-kind contributions, may be awarded. Credit may be given toward the nonfederal share for in-kind contributions,
including contributions of space, equipment, and services. No minimum or maximum project including contributions of space, equipment, and services. No minimum or maximum project
amount is specified in law. amount is specified in law.
Eligibility Requirements
Public works grants may be made to states, cities, counties and other political subdivisions of Public works grants may be made to states, cities, counties and other political subdivisions of
states, an Indian tribe, an economic development district, institutions of higher education or a states, an Indian tribe, an economic development district, institutions of higher education or a
consortium of such institutions, and private or public not-for-profit organizations acting in consortium of such institutions, and private or public not-for-profit organizations acting in
cooperation with officials of a political subdivision of a state.cooperation with officials of a political subdivision of a state.~~116~~143 For-profit, private For-profit, private -sector entities sector entities
do not qualify. do not qualify.
Qualified projects must fill a pressing need of the area and must (1) be intended to improve the Qualified projects must fill a pressing need of the area and must (1) be intended to improve the
opportunities for the successful establishment or expansion of businesses, (2) assist in the creation opportunities for the successful establishment or expansion of businesses, (2) assist in the creation
of additional long-term privateof additional long-term private -sector employment, and (3) benefit long-term unemployed or sector employment, and (3) benefit long-term unemployed or
underemployed persons and low-income families. Projects must also be consistent with the area’s underemployed persons and low-income families. Projects must also be consistent with the area’s
CEDS and have an adequate share of nonfederal funds. In addition, eligible projects must be CEDS and have an adequate share of nonfederal funds. In addition, eligible projects must be
located in areas that meet at least one of the following criteria: low per-capita income, located in areas that meet at least one of the following criteria: low per-capita income,
unemployment above the national average, or “special need” as determined by EDA.unemployment above the national average, or “special need” as determined by EDA.~~117~~
~~Funding~~
~~The~~ 144 Recent Federal Funding The Further Consolidated Appropriations Act, Consolidated Appropriations Act, ~~2019~~2020 (P.L. 116- (P.L. 116-~~6),~~93) appropriated $ appropriated $~~265~~292.5 million for EDA million for EDA
programs, including $programs, including $~~117~~118.5 million for the Public Works grant program. The .5 million for the Public Works grant program. The ~~Further~~
~~Consolidated~~ Consolidated Appropriations Act, Appropriations Act, ~~2020~~2021 (P.L. 116- (P.L. 116-93260) appropriated $) appropriated $~~292~~305.5 million for EDA .5 million for EDA
programs, including $programs, including $~~118~~119.5 million for the Public Works program. The Consolidated .5 million for the Public Works program. The Consolidated
Appropriations Act, Appropriations Act, ~~2021~~2022 (P.L. (P.L. ~~116-260~~117-103) included $) included $~~305.5~~330 million for EDA programs and an million for EDA programs and an
additional $additional $4043.5 million for salaries and expenses. Of the amount appropriated for EDA programs .5 million for salaries and expenses. Of the amount appropriated for EDA programs
~~in FY2021~~in FY2022, Congress directed EDA to allocate $, Congress directed EDA to allocate $~~119~~120.5 million for the Public Works program. For .5 million for the Public Works program. For
~~FY2022~~FY2023, the Administration’s budget requested $124 million for the Public Works program., the Administration’s budget requested $124 million for the Public Works program.~~118~~
~~Statutory and Regulatory Authority~~
~~The statutory authority for the Public Works program is the Public Works and Economic~~
~~Development Act of 1965, as amended, P.L. 89-136 (42 U.S.C. §3121 et seq.). Regulations are~~
~~codified at Title 13, Chapter III, Parts 302, 305, 316, and 317, of the~~ ~~Code of Federal~~
~~Regulations~~.
145
~~116~~143 Under this program, the term Under this program, the term state includes the District of Columbia, the Commonwealth of Puerto Rico, the U.S. includes the District of Columbia, the Commonwealth of Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the
Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. Under this program, the term Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. Under this program, the term Indian
tribe includes any Indian tribe, band, nation, pueblo, or other organized group or community, including any Alaska includes any Indian tribe, band, nation, pueblo, or other organized group or community, including any Alaska
Native village or Regional Corporation (as defined in or established under the Alaska Native Claims Settlement Act (43 Native village or Regional Corporation (as defined in or established under the Alaska Native Claims Settlement Act (43
U.S.C. §1601 et seq.)), that is recognized as eligible for the special programs and services provided by the United U.S.C. §1601 et seq.)), that is recognized as eligible for the special programs and services provided by the United
States to Indians because of their status as Indians (42 U.S.C. States to Indians because of their status as Indians (42 U.S.C. §3122). 3122).
~~117~~144 42 U.S.C. 42 U.S.C. §3141.3141. Additionally, agency regulations describe the economic distress criteria at 13 C.F.R. Part 300, Additionally, agency regulations describe the economic distress criteria at 13 C.F.R. Part 300,
Subpart C—Economic Distress Criteria. See also EDA’s Notice of Funding Opportunity, Public Works and Economic Subpart C—Economic Distress Criteria. See also EDA’s Notice of Funding Opportunity, Public Works and Economic
Adjustment Assistance Programs, FY2020, https://www.grants.gov/web/grants/view-opportunity.html?oppId=321695.Adjustment Assistance Programs, FY2020, https://www.grants.gov/web/grants/view-opportunity.html?oppId=321695.
~~118~~145 U.S. Department of Commerce (DOC), U.S. Department of Commerce (DOC), ~~FY2022~~FY2023 EDA Congressional Budget Justification,
p. 25, https://www.commerce.gov/sites/default/files/https://www.commerce.gov/sites/default/files/~~2021-05/fy2022_eda_congressional_budget_justification~~2022-03/FY2023-EDA-Congressional-Budget-Submission.pdf. .pdf.
Congressional Research Service Congressional Research Service

45

50

Federally Supported Water Projects and Programs

Statutory and Regulatory Authority The statutory authority for the Public Works program is the Public Works and Economic Development Act of 1965, as amended, P.L. 89-136 (42 U.S.C. §3121 et seq.). Regulations are codified at Title 13, Chapter III, Parts 302, 305, 316, and 317, of the Code of Federal Regulations. Economic Development Administration Economic Adjustment
Assistance Program
EDA, through its Economic Adjustment Assistance (EAA) grant program, awards development EDA, through its Economic Adjustment Assistance (EAA) grant program, awards development
assistance to areas experiencing long-term economic deterioration and distress or sudden and assistance to areas experiencing long-term economic deterioration and distress or sudden and
substantial economic dislocation. This may include assisting communities/regions affected by substantial economic dislocation. This may include assisting communities/regions affected by
natural disasters, natural resource depletion, mass layoffs, and other severe economic shocks that natural disasters, natural resource depletion, mass layoffs, and other severe economic shocks that
communities experience in restructuring and diversifying their regional economies. Funds have communities experience in restructuring and diversifying their regional economies. Funds have
also been made available to aid communities experiencing chronic unemployment and also been made available to aid communities experiencing chronic unemployment and
underinvestment, and communities underinvestment, and communities ~~impacted~~affected by military base realignments and closures. by military base realignments and closures.
EAA funds are competitively awarded to qualified applicants to assist them in developing and EAA funds are competitively awarded to qualified applicants to assist them in developing and
implementing a five-year CEDS or for implementation grants that support the activities and implementing a five-year CEDS or for implementation grants that support the activities and
strategies identified in a CEDS. Examples of EAA activities may include strategies identified in a CEDS. Examples of EAA activities may include
 financing of physical infrastructure projects, including water and sewer facilities,  financing of physical infrastructure projects, including water and sewer facilities,
industrial parks, and business incubators; industrial parks, and business incubators;
 strategic planning activities that include short-term action plans intended to  strategic planning activities that include short-term action plans intended to
stabilize a distressed community and regionally oriented, long-term development stabilize a distressed community and regionally oriented, long-term development
strategies intended to assess and redirect the region’s economic future; strategies intended to assess and redirect the region’s economic future;
 capitalization of revolving loan funds, which would allow qualifying businesses  capitalization of revolving loan funds, which would allow qualifying businesses
and other borrowers to borrow funds at favorable interest rates; and other borrowers to borrow funds at favorable interest rates;
 market or industry research and analysis; technical assistance, including  market or industry research and analysis; technical assistance, including
feasibility studies; public services; and training. feasibility studies; public services; and training.~~119~~146
Program Purpose
The purpose of the program is to promote long-term economic development in areas experiencing The purpose of the program is to promote long-term economic development in areas experiencing
sudden economic dislocation or long-term economic distress. EDA’s EAA program supports sudden economic dislocation or long-term economic distress. EDA’s EAA program supports
investments intended to help distressed areas address their competitive disadvantages and investments intended to help distressed areas address their competitive disadvantages and
evaluate their economic futures. evaluate their economic futures.
Financing or Funding Mechanism
EDA competitively awards EAA grants directly to eligible applicants. Generally, EAA investment EDA competitively awards EAA grants directly to eligible applicants. Generally, EAA investment
assistance may not exceed 50% of the project cost. Projects may receive an additional amount, assistance may not exceed 50% of the project cost. Projects may receive an additional amount,
not to exceed 30%, based on the relative needs of the region in which the project will be located, not to exceed 30%, based on the relative needs of the region in which the project will be located,
as determined by EDA. In the case of certain Indian tribes and nonprofit organizations that have as determined by EDA. In the case of certain Indian tribes and nonprofit organizations that have
exhausted their effective borrowing capacity, or a state or political subdivision of a state that has exhausted their effective borrowing capacity, or a state or political subdivision of a state that has
exhausted its effective taxing and borrowing capacity, grants totaling 100% may be awarded. exhausted its effective taxing and borrowing capacity, grants totaling 100% may be awarded.
Credit may be given toward the nonfederal share for in-kind contributions, including Credit may be given toward the nonfederal share for in-kind contributions, including
~~contributions of space, equipment, and services. No minimum or maximum project amount is~~
~~specified in law.~~

~~119~~146 13 C.F.R. Part 307. 13 C.F.R. Part 307.
Congressional Research Service Congressional Research Service

46

51

Federally Supported Water Projects and Programs

contributions of space, equipment, and services. No minimum or maximum project amount is specified in law.
Eligibility Requirements
EAA grants may be made to states, cities, counties and other political subdivisions of states, an EAA grants may be made to states, cities, counties and other political subdivisions of states, an
Indian tribe, an economic development district, institutions of higher education or a consortium of Indian tribe, an economic development district, institutions of higher education or a consortium of
such institutions, and private or public not-for-profit organizations acting in cooperation with such institutions, and private or public not-for-profit organizations acting in cooperation with
officials of a political subdivision of a state.officials of a political subdivision of a state.~~120~~147 For-profit, private-sector entities do not qualify. For-profit, private-sector entities do not qualify.
Qualified projects must fill a pressing need of the area arising from actual or threatened severe Qualified projects must fill a pressing need of the area arising from actual or threatened severe
unemployment or economic adjustment problems resulting from severe changes in economic unemployment or economic adjustment problems resulting from severe changes in economic
conditions. Projects must also have an adequate share of local funds. With the exception of conditions. Projects must also have an adequate share of local funds. With the exception of
strategy grants, EAA projects must also be consistent with the area’s CEDS. In addition, eligible strategy grants, EAA projects must also be consistent with the area’s CEDS. In addition, eligible
projects must be located in areas that meet at least one of the following criteria: low per-capita projects must be located in areas that meet at least one of the following criteria: low per-capita
income, unemployment above the national average, or “special need” as determined by EDA.income, unemployment above the national average, or “special need” as determined by EDA.~~121~~
~~Funding~~
148 Recent Federal Funding Congress directed EDA to allocate $37 million annually to the EAA program in FY2018-FY2020 Congress directed EDA to allocate $37 million annually to the EAA program in FY2018-FY2020
and $37.5 million to the program in FY2021and $37.5 million to the program in FY2021~~.122 For FY2022~~ and FY2022.149 For FY2023, the Administration’s budget , the Administration’s budget
requested $48 million for the EAA program.requested $48 million for the EAA program.~~123~~150
Congress has approved additional funding for EDA grant programs that support economic Congress has approved additional funding for EDA grant programs that support economic
transition strategies and help affected communities build economic development capacity through transition strategies and help affected communities build economic development capacity through
Assistance to Energy Transition initiatives (e.g., the Assistance to Coal Communities the Assistance to Coal Communities ~~(ACC)~~[ACC] and the Assistance to Nuclear Closure and the Assistance to Nuclear Closure
Communities Communities ~~(NCC)~~[NCC] initiatives initiatives). Congress directed EDA to allocate $10 million in FY2015 and . Congress directed EDA to allocate $10 million in FY2015 and
$15 million in FY2016 to the ACC initiative.$15 million in FY2016 to the ACC initiative.~~124~~151 Funding for the ACC initiative remained at $30 Funding for the ACC initiative remained at $30
million each year for FY2017 through FY2020 and increased to $33.5 million in FY2021million each year for FY2017 through FY2020 and increased to $33.5 million in FY2021 and to $41.5 million in FY2022. In . In
FY2020, Congress directed EDA to allocate $15 million for the first time to the NCC initiative FY2020, Congress directed EDA to allocate $15 million for the first time to the NCC initiative
and increased the amount to $16.5 million and increased the amount to $16.5 million annually in FY2021 and FY2022. For the first time in FY2022, Congress directed EDA to provide funding ($4.5 million) through the EAA program to biomass power plant closure communities. For FY2023, the Administration’s budget requested $80.5 million for the ACC 147~~in FY2021. For FY2022, the Administration’s budget~~
~~requested $80.5 million for the ACC initiative and $10 million for the NCC initiative.125 ACC and~~

~~120~~ Under this program, the term Under this program, the term state includes the District of Columbia, the Commonwealth of Puerto Rico, the U.S. includes the District of Columbia, the Commonwealth of Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the
Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. Under this program, the term Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. Under this program, the term Indian
tribe includes any Indian tribe, band, nation, pueblo, or other organized group or community, including any Alaska includes any Indian tribe, band, nation, pueblo, or other organized group or community, including any Alaska
Native village or Regional Corporation (as defined in or established under the Alaska Native Claims Settlement Act (43 Native village or Regional Corporation (as defined in or established under the Alaska Native Claims Settlement Act (43
U.S.C. 1601 et seq.)), that is recognized as eligible for the special programs and services provided by the United States U.S.C. 1601 et seq.)), that is recognized as eligible for the special programs and services provided by the United States
to Indians because of their status as Indians (42 U.S.C. §3122). to Indians because of their status as Indians (42 U.S.C. §3122).
~~121~~148 42 U.S.C. 42 U.S.C. §3149.3149. Additionally, agency regulations describe the economic distress criteria at 13 C.F.R. Part 300, Additionally, agency regulations describe the economic distress criteria at 13 C.F.R. Part 300,
Subpart C—Economic Distress Criteria.Subpart C—Economic Distress Criteria. See also the EDA’sSee also the EDA’s Notice of Funding Opportunity, Public Works and Notice of Funding Opportunity, Public Works and
Economic Adjustment Assistance Programs, FY2020, https://www.grants.gov/web/grants/view-opportunity.html?Economic Adjustment Assistance Programs, FY2020, https://www.grants.gov/web/grants/view-opportunity.html?
oppId=321695. oppId=321695.
~~122~~149 See explanatory statements accompanying P.L. 115-141, P.L. 116-6, P.L. 116-93, See explanatory statements accompanying P.L. 115-141, P.L. 116-6, P.L. 116-93, ~~and~~ P.L. 116-260P.L. 116-260.
~~123 DOC,~~ ~~FY2022~~, and P.L. 117-103 150 U.S. Department of Commerce, FY2023 EDA Congressional Budget Justification, p. 59, https://www.commerce.gov/sites/default/files/https://www.commerce.gov/sites/default/files/~~2021-05/~~
~~fy2022_eda_congressional_budget_justification.pdf.~~
~~124~~2022-03/FY2023-EDA-Congressional-Budget-Submission.pdf. 151 In FY2015 and FY2016, the ACC initiative was administered as a component of the In FY2015 and FY2016, the ACC initiative was administered as a component of the
multiagency POWER Initiative—a coordinated federal effort to assist coal-impacted communities. For more multiagency POWER Initiative—a coordinated federal effort to assist coal-impacted communities. For more
information, see CRS Report R46015, information, see CRS Report R46015, The POWER Initiative: Energy Transition as Economic Development, by , by
~~Michael H. Cecire.~~
~~125 DOC, FY2022 EDA Congressional Budget Justification, https://www.commerce.gov/sites/default/files/2021-05/~~
~~fy2022_eda_congressional_budget_justification.pdf~~Julie M. Lawhorn. .
Congressional Research Service Congressional Research Service

47

52

Federally Supported Water Projects and Programs

initiative and $10 million for the NCC initiative.152 ACC and NCC grants are administered primarily under the authority of EDA’s EAA program and can be NCC grants are administered primarily under the authority of EDA’s EAA program and can be
used for a variety of eligible activities, including infrastructure, water, and wastewater projects.used for a variety of eligible activities, including infrastructure, water, and wastewater projects.~~126~~153
Additionally, in FY2020 and FY2021, Congress approved two rounds of supplemental funding, Additionally, in FY2020 and FY2021, Congress approved two rounds of supplemental funding,
primarily through the EAA program. Congress approved $1.5 billion of supplemental funding primarily through the EAA program. Congress approved $1.5 billion of supplemental funding
through the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) in through the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) in
FY2020. FY2020. ~~EDA administered CARES Act funding to support economic recovery planning and~~
~~preparing technical assistance strategies to address economic dislocations caused by the COVID-~~
~~19 pandemic; implementing entrepreneurial support programs to diversify economies; and related~~
~~efforts. With the impact of the COVID-19 pandemic widespread, all areas were eligible to apply~~
~~for assistance under the “Special Need” criteria of the EAA program.127~~ The American Rescue The American Rescue
Plan Act of 2021 (ARPA; P.L. 117-2) included $3 billion in supplemental funding to the EDA for Plan Act of 2021 (ARPA; P.L. 117-2) included $3 billion in supplemental funding to the EDA for
economic adjustment assistance activitieseconomic adjustment assistance activities~~, and of this amount, 25% will be for states and~~
~~communities that have been impacted by the decline in the “travel, tourism, or outdoor recreation~~
~~sectors.”~~. Congress directed EDA to use CARES Act and ARPA funding to prevent, prepare for, Congress directed EDA to use CARES Act and ARPA funding to prevent, prepare for,
and respond to COVID-19 and for responding to economic injury as a result of the COVID-19 and respond to COVID-19 and for responding to economic injury as a result of the COVID-19
pandemic, which could include infrastructure, water, and wastewater activities.pandemic, which could include infrastructure, water, and wastewater activities.~~128~~154
Statutory and Regulatory Authority
The statutory authority for the Economic Adjustment Assistance program is the Public Works and The statutory authority for the Economic Adjustment Assistance program is the Public Works and
Economic Development Act of 1965, as amended, P.L. 89-136 (42 U.S.C. §3121 et seq.). Economic Development Act of 1965, as amended, P.L. 89-136 (42 U.S.C. §3121 et seq.).
Regulations are codified at Title 13, Chapter III, Parts 302, 305, 316, and 317 of the Regulations are codified at Title 13, Chapter III, Parts 302, 305, 316, and 317 of the Code of
Federal Regulations. .

~~126 For more information, see~~ 152 U.S. Department of Commerce, FY2023 EDA Congressional Budget Justification, pp. 65-67, https://www.commerce.gov/sites/default/files/2022-03/FY2023-EDA-Congressional-Budget-Submission.pdf. 153 For more information, see “Assistance to Energy Transition Communities” in CRS Report R46991, Economic Development Administration: An Overview of Programs and Appropriations (FY2011-FY2022), by Julie M. Lawhorn; CRS Insight IN11648, CRS Insight IN11648, The Economic Development Administration’s Assistance to Coal
and Nuclear Closure Communities Initiatives for Economic Transitions, by Julie M. Lawhorn; and , by Julie M. Lawhorn; and ~~the EDA’s~~ EDA, “Notice of Notice of
Funding Opportunity, Public Works and Economic Adjustment Assistance Programs, FY2020,Funding Opportunity, Public Works and Economic Adjustment Assistance Programs, FY2020,” https://www.grants.gov/ https://www.grants.gov/
web/grants/view-web/grants/view-opportunity.html?oppId=321695. 154~~opportunity.html?oppId=321695.~~
~~127 For more information, see CRS Insight IN11402,~~ ~~The Economic Development Administration’s Economic Recovery~~
~~Assistance for COVID-19 Impacted Communities, by Julie M. Lawhorn.~~
~~128~~ In March 2021, EDA announced that the agency had awarded more than $1 billion in CARES Act grants. See EDA, In March 2021, EDA announced that the agency had awarded more than $1 billion in CARES Act grants. See EDA,
“U.S. EDA Marks Milestone $1 Billion in CARES Act Grants Awarded,” March 22, 2021, https://www.eda.gov/news/“U.S. EDA Marks Milestone $1 Billion in CARES Act Grants Awarded,” March 22, 2021, https://www.eda.gov/news/
blogs/2021/03/22/eda-marks-cares-act-milestone.htm. blogs/2021/03/22/eda-marks-cares-act-milestone.htm.
Congressional Research Service Congressional Research Service

48

53

Federally Supported Water Projects and Programs

Author Information

Jonathan L. Ramseur, Coordinator Jonathan L. Ramseur, Coordinator
Julie M. Lawhorn Julie M. Lawhorn
Specialist in Environmental Policy Specialist in Environmental Policy
Analyst in Economic Development Policy Analyst in Economic Development Policy

Lisa S. Benson Lisa S. Benson
Anna E. Normand Anna E. Normand
Analyst in Agricultural Policy Analyst in Agricultural Policy
Analyst in Natural Resources Policy Analyst in Natural Resources Policy

~~Elena H. Humphreys~~Nicole T. Carter
Charles V. Stern Charles V. Stern
~~Analyst in Environmental~~Specialist in Natural Resources Policy Policy
Specialist in Natural Resources Policy Specialist in Natural Resources Policy

~~Joseph V. Jaroscak~~Elena H. Humphreys
Megan Stubbs Megan Stubbs
Analyst in Analyst in ~~Economic Development~~Environmental Policy Policy
Specialist in Agricultural Conservation and Natural Specialist in Agricultural Conservation and Natural

Resources Policy Resources Policy

Joseph V. Jaroscak Analyst in Economic Development Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material. copy or otherwise use copyrighted material.

Congressional Research Service Congressional Research Service
R46471 R46471 · VERSION 47 · UPDATED
4954