Water Infrastructure Funding in the American
Recovery and Reinvestment Act of 2009

Claudia Copeland
Specialist in Resources and Environmental Policy
Nicole T. Carter
Specialist in Natural Resources Policy
March 12, 2009
Congressional Research Service
7-5700
www.crs.gov
R40216
CRS Report for Congress
P
repared for Members and Committees of Congress

Water Infrastructure Funding in the American Recovery and Reinvestment Act of 2009

Summary
On January 28, 2009, the House passed H.R. 1, the American Recovery and Reinvestment Act of
2009. On February 10, the Senate passed an amended version of H.R. 1 (S.Amdt. 570). On
February 13, the House and Senate adopted a conference report (H.Rept. 111-16) that reconciled
differences between the two bills. The President signed the bill into law on February 17 (P.L. 111-
5). This report identifies funding for water infrastructure programs and projects contained in the
legislation, including amounts in the House- and Senate-passed versions that preceded the
conference agreement. Among the purposes identified in the legislation are preservation and
creation of jobs and promotion of U.S. economic recovery, and investment in transportation,
environmental protection, and other infrastructure that will provide long-term economic benefits.
Under the legislation, additional appropriations are directed to a number of existing federal
programs that either directly invest in water infrastructure projects or provide assistance to states
and localities for such activities. Water infrastructure funding in the bill, which would be
available for obligation for the remainder of FY2009 and through September 30, 2010, is
provided to five federal agencies and one commission would total $13.5 billion.
The bill provides funding for locally built wastewater and drinking water treatment projects
through assistance programs administered by the Environmental Protection Agency (EPA) and the
U.S. Department of Agriculture (USDA). For the EPA wastewater program, the enacted bill
provides $4.0 billion. For the EPA drinking water program, P.L. 111-5 provides $2.0 billion in
additional funds. These funds will be allocated to states according to established formulas, and
states will award actual assistance to projects and communities. For the USDA programs that
benefit rural communities, the enacted legislation provides $1.38 billion in grants and loans.
Additional funding in the bill for these programs would be three to four times more than the level
of current appropriations.
The enacted legislation provides funding for water resources development and management
projects administered by four agencies. It provides $4.6 billion for the U.S. Army Corps of
Engineers (Corps) and $1.0 billion for the Bureau of Reclamation (Reclamation). The legislation
also provides $340 million for USDA’s Natural Resources Conservation Service (NRCS) small
watershed program, and $220 million for the Department of State’s International Boundary and
Water Commission (IBWC) levee and dam upgrades. Little is publicly known about how most of
these funds will be distributed among individual projects, because water resources programs
generally do not distribute based on pre-defined formulas. Which projects and how much each
state will receive largely will be determined by the Administration within the eligibility and
prioritization direction provided in the legislation and its accompanying conference report.
Even after enactment, implementation of the additional water infrastructure funding in the
American Recovery and Reinvestment Act is likely to raise a number of issues, including how the
additional funds included in this legislation will influence decisions on regular appropriations
bills beyond FY2009. Another issue concerns matching fund requirements. Unless project
assistance is provided entirely as grants, communities and project sponsors will need to come up
with matching funds, which could be very challenging in the current fiscal environment.

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Water Infrastructure Funding in the American Recovery and Reinvestment Act of 2009

Contents
Introduction ................................................................................................................................ 1
Wastewater and Drinking Water .................................................................................................. 2
EPA State Revolving Fund (SRF) Programs .......................................................................... 2
Other Federal Programs ........................................................................................................ 4
Discussion ............................................................................................................................ 5
Water Resources ......................................................................................................................... 6
Corps of Engineers Projects .................................................................................................. 7
Bureau of Reclamation Projects and Programs ...................................................................... 7
Agricultural Watershed Programs .......................................................................................... 8
International Boundary and Water Commission Projects........................................................ 8
Discussion ............................................................................................................................ 9
Concluding Thoughts .................................................................................................................. 9

Tables
Table 1. Water Infrastructure Funding in the American Recovery and Reinvestment Act
of 2009 (P.L. 111-5) ................................................................................................................. 1
Table A-1. State Allocation of EPA Wastewater and Drinking Water Funds in the
American Recovery and Reinvestment Act of 2009 (P.L. 111-5) ............................................. 11

Appendixes
Appendix. ................................................................................................................................. 11

Contacts
Author Contact Information ...................................................................................................... 13
Acknowledgments .................................................................................................................... 13

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Water Infrastructure Funding in the American Recovery and Reinvestment Act of 2009

Introduction
On January 28, 2009, the House passed H.R. 1, the American Recovery and Reinvestment Act of
2009. On February 10, the Senate passed an amended version of H.R. 1 (S.Amdt. 570). On
February 13, the House and Senate adopted a conference report (H.Rept. 111-16) that President
Obama signed on February 17 (P.L. 111-5). This report identifies funding for water infrastructure
programs and projects included in the bill. Among the purposes identified in the legislation are
preservation and creation of jobs and promotion of U.S. economic recovery, and investment in
transportation, environmental, and other infrastructure that will provide long-term economic
benefits. Under the legislation, additional appropriations are directed to a number of existing
federal programs that either directly invest in water infrastructure projects or provide assistance to
states and localities for such activities. Water infrastructure funding, available for obligation for
the remainder of FY2009 and through September 30, 2010, is summarized in Table 1.
Table 1. Water Infrastructure Funding in the American Recovery
and Reinvestment Act of 2009 (P.L. 111-5)
H.R. 1 as
Senate
Enacted
Passed by the
Amdt. to
Version of
Agency Program House
H.R. 1
H.R. 1
EPA Clean
Water
State
$6.0 billion
$4.0 billion
$4.0 billion
Revolving Fund
capitalization grants
EPA Drinking
Water
State
$2.0 billion
$2.0 billion
$2.0 billion
Revolving Fund
capitalization grants
RUS/USDA
Rural water and waste
$1.5 billion
$1.375 billion
$1.38 billion
disposal grants and loans
District of
D.C. Water and Sewer
—- $125
million
—-
Columbia
Authority
Reclamation/DOI Water and Related
$500 million
$1.4 billion
1.0 billion
Resources
Corps/DODa
Army Corps of Engineers
$4.5 billion
$4.6 billion
$4.6 billion
Civil Works Program
NRCS/USDA
Small Watershed Program
$400 million
$340 million
$340 million
IBWC/State
International Boundary and $224 million
$224 million
$220 million
Dept.
Water Commission
Total
$15.1 billion
$14.1 billion
$13.5 billion
Source: Compiled by CRS.
Note: Table does not include funds for the Economic Development Administration’s Public Works and
Economic Development program or the Department of Housing and Urban Development’s Community
Development Block Grant program, both of which could be used for water infrastructure and other projects,
See discussion on page 5.
a. Amounts include the $25 million for the Corps regulatory program that appeared in the House, Senate, and
final versions of the legislation, and $100 million in the S.Amdt. 570 to H.R. 1 and the final bill for the
Formerly Utilized Sites Remedial Action Program (FUSRAP).
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The infrastructure activities discussed here comprise one of many broad categories of
infrastructure that would receive additional funding under the legislation, for construction, repair,
and modernization of a range of infrastructure categories both traditional (e.g., highways,
airports, passenger rail, and schools) and less traditional (e.g., broadband and the electric power
transmission grid). These provisions of the legislation reflect a concept that has drawn much
attention by policymakers as one option for addressing the nation’s faltering economic conditions:
the concept of countering the effect of the current recession with increased government spending
on public works in order to create jobs while also promoting long-term economic growth.1
Proponents have argued that states and localities have hundreds of infrastructure projects that are
“ready to go” to construction in 90 or 120 days, except for funding, and thus could contribute
quickly to job creation and economic stimulus,2 especially in the construction sector that has been
particularly hard hit by the recession. During House and Senate debate, both supporters and
critics of the legislation favored more infrastructure spending, with critics urging changes to
increase short-term, stimulative provisions of the bill, including more targeted infrastructure
spending, and less spending on activities with less certain quick stimulative effect. Nevertheless,
in the floor debates concerning the overall size and composition of the legislation, only one
specific proposal to increase infrastructure funds in the bill was adopted.3 The enacted legislation
includes some additional funds for high-speed rail projects that were not included in the House or
Senate versions of H.R. 1.4
Wastewater and Drinking Water
EPA State Revolving Fund (SRF) Programs
The federal Clean Water Act (CWA) and Safe Drinking Water Act (SDWA) impose regulatory
requirements regarding wastewater treatment and drinking water quality in the United States. For
wastewater treatment, the CWA prescribes performance levels to be attained by municipal sewage
treatment plants in order to prevent the discharge of harmful wastes into the Nation’s lakes,
rivers, and other surface waters. For drinking water quality, public water systems are subject to
federal regulations under the SDWA which limit levels of contaminants in treated water and
require, for example, system monitoring, treatment to remove certain contaminants, and
reporting. Both of these laws authorize financial assistance so that communities can construct
treatment facilities in compliance with these requirements.5 Under both laws, Congress

1 For background, see CRS Report R40107, The Role of Public Works Infrastructure in Economic Stimulus,
coordinated by Claudia Copeland.
2 State and local water agencies have reportedly identified from $9 to $20 billion in wastewater treatment projects and
$10 billion in drinking water projects that are “ready to go.” Inside EPA, “States Seek over $9 Billion for Clean Water
Projects in Stimulus Bill,” September 12, 2008; “AWWA members Asked to Contact Congress on Drinking Water
Infrastructure and Stimulus Bill,” http://www.awwa.org/Government/Content.cfm?ItemNumber=3821&
navItemNumber=1618.
3 While the House adopted an amendment to increase transit capital grant funding by $3 billion, the Senate rejected an
amendment offered by Senators Murray and Feinstein that would have provided $25 billion more for highway, transit,
and drinking water and wastewater projects.
4 For information, see CRS Report R40214, Transportation and Transportation Security Related Provisions of House
and Senate Stimulus Legislation (H.R. 1)
, by John W. Fischer et al.
5 For additional information, see CRS Report RL30478, Federally Supported Water Supply and Wastewater Treatment
Programs
, coordinated by Claudia Copeland.
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appropriates federal capitalization grants as seed money to support State Revolving Funds
(SRFs), and states provide matching funds equal to 20% of the federal capitalization grant. States,
in turn, provide loans from the SRFs to communities for water infrastructure projects. Over the
long term, the loan programs are intended to be sustained through repayment of loans to states,
thus creating a continuing source of state assistance for other communities.
The SRF capitalization grants are appropriated through the Environmental Protection Agency’s
(EPA’s) State and Tribal Assistance Grants account (in the Interior and Environment
Appropriations bill) and are allocated among the states according to formulas. Historically, the
federal government has had a large financial role in assisting communities to meet their
wastewater funding needs (having appropriated more than $75 billion since 1973) and also more
recently in meeting drinking water treatment needs (more than $10 billion since 1997). However,
estimates of funding needs remain very high ($203 billion for wastewater and $277 billion for
drinking water), while appropriations for EPA assistance have declined in recent years. The
economic recovery legislation provides additional FY2009 funding for the two SRF capitalization
grant programs.
The enacted version of H.R. 1 provides an additional $4.0 billion for clean water SRFs and $2.0
billion for drinking water SRFs, as proposed by the Senate. House-passed H.R. 1 would have
appropriated $6.0 billion for clean water SRFs and the same $2.0 billion for drinking water SRFs.
Total stimulus funding for the two SRF programs would be four times larger than the funding
levels for these programs in regular FY2009 appropriations. As requested by many states, the
legislation waives the current law requirement that states must provide a 20% match to the federal
capitalization grant. Under the enacted bill, states are to use not less than 20% of capitalization
grants to support green infrastructure, water efficiency, or other environmentally innovative
projects (unless there are insufficient applications for such projects).
Under the legislation, funds appropriated to states would be allocated according to existing
formulas, or methods of apportionment. Under current law, clean water SRF capitalization grant
allocation is governed by a formulation in the CWA,6 while drinking water SRF capitalization
grants are allocated according to a formula developed by EPA that reflects the proportional share
of each state’s funding needs.7 Based on those formulas, Table A-1 in the Appendix to this report
shows amounts that states would receive under the funding levels in the bill. The table reflects
that, before funds are distributed to states, 1.5% would be reserved for EPA to provide assistance
to Indian Tribes and, under the drinking water SRF, to Alaska Native Village water systems,
consistent with current law. Also, the table reflects that an additional 1.0% of the funds would be
reserved for program oversight by EPA and would remain available for the agency’s use through
September 30, 2011. States are to award SRF assistance to projects already included on their
Intended Use Plans, lists that states develop to identify which projects in which communities will
receive funding.
Under a general provision in section 1602 of P.L. 111-5, preference is to be given to activities that
can start and finish quickly, with a goal that at least 50% of the funds go to activities that can be
initiated within 120 days of enactment. EPA is directed to submit a report to the House and Senate
Appropriations Committees within 30 days of enactment containing a general plan for

6 For information, see CRS Report RL31073, Allocation of Wastewater Treatment Assistance: Formula and Other
Changes
, by Claudia Copeland.
7 See http://www.epa.gov/safewater/dwsrf/allotments/funding_dwsrf_allotments_2008.html.
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expenditure of funds provided by the legislation, another report within 90 days providing detailed
project level information associated with the general plan, and bi-annual reports on
implementation, but there are no deadlines for actually awarding the funds in the bill. However,
these reports to Congress will not necessarily identify wastewater and drinking water projects that
will be funded, because states will be making those decisions, not EPA. States are to give priority
to wastewater and drinking water projects that can proceed to construction within 12 months of
enactment. Further, the funds are provided as “use it or lose it,” because EPA is directed to
redistribute any SRF capitalization grant funds that are not under contract or construction within
that time.
The enacted bill omits other general provisions in House-passed H.R. 1 concerning timing. The
House bill would have required federal agencies to award formula grants within 30 days of
enactment and competitive grants within 90 days of enactment. It also would have required that
binding commitments for 50% of the funds be made within one year of enactment, and the
remainder within two years.
Current law allows states to make low-interest or no-interest loans from the SRF. The House-
passed, Senate-passed, and enacted versions allow states to also provide additional subsidization
in the form of negative interest loans, principal forgiveness, grants, or a combination, but the
legislation sets no project-specific limits on such assistance.8 Under the final version of the
American Recovery and Reinvestment Act, states are to use 50% of the capitalization grant to
provide additional subsidization. The final bill omits provisions from the House-passed bill that
would have required that 80% of such funds go to municipalities that meet state affordability
criteria (presumably meaning economically disadvantaged), and 20% to projects involving water-
or energy-efficiency, stormwater mitigation, or other environmentally sensitive projects. The
Senate amendment to H.R. 1 did not specify a percentage of funds that must be used for
additional subsidization.
Other Federal Programs
Under the EPA SRF programs, rural and non-rural communities compete for funding; rural areas
and other small communities have no special priority. For rural areas, the U.S. Department of
Agriculture administers grant and loan programs for water and wastewater projects, with
eligibility limited to communities of 10,000 or less. These programs are administered at the
national level by the Rural Utilities Service (RUS) at USDA.9 Funding needs in rural areas are
high (at least $50 billion, according to EPA surveys), and there is heavy demand for funds. At the
end of FY2007, USDA reported a $2.4 billion backlog of requests for 928 water and wastewater
projects. The economic recovery legislation also provides additional appropriations for these
programs. The enacted version of H.R. 1 provides $1.38 billion ($968 million in grants and $412
million in direct loans). House-passed H.R. 1 would have provided $1.5 billion ($400 million in
direct loans, $1.1 billion in grants), and the Senate amendment would have provided $1.375
billion total for the RUS water and waste disposal program. Funding under the enacted bill is
more than 2.5 times larger than the funding level in FY2009. The general provision of P.L. 111-

8 The SDWA already allows principal forgiveness for assistance provided to economically disadvantaged communities.
9 For information, see CRS Report 98-64, Rural Water Supply and Sewer Systems: Background Information, by
Claudia Copeland.
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5concerning preference for projects that can start quickly, described on page 3, would also apply
to these USDA funds.
Funding for a specific wastewater infrastructure project was included in the Senate amendment to
H.R. 1, but was omitted from the final bill. The Senate amendment included $125 million for the
District of Columbia Water and Sewer Authority to continue its program to remediate sewerage
overflow problems. The District is implementing a long-term sewerage overflow remediation
program that is estimated to cost more than $2 billion. Under the bill, the District of Columbia
would have been required to provide a 100% match for the federal payment.
The economic recovery legislation also includes funding for other federal programs that are not
targeted to water infrastructure (or even to infrastructure exclusively), but could potentially be
used for such purposes. One is the Public Works and Economic Development program of the
Economic Development Administration (EDA, Department of Commerce). EDA is authorized to
provide economic development grants to areas experiencing substantial economic distress in
order to directly encourage business expansion, diversify local economies, and general or retain
long-term jobs in the private sector. Economic development grants may be used for a wide range
of purposes. The enacted version of H.R. 1 provides $150 million for EDA grants(as proposed by
the Senate; the House bill would have appropriated $250 million). FY2009 funding is $133
million.
The enacted bill also includes $1.0 billion for the Community Development Block Grant (CDBG)
program administered by the Department of Housing and Urban Development, as proposed by the
House (the Senate bill included no CDBG funding). CDBG funds are used by localities for a
broad range of activities intended to result in decent housing in a suitable living environment.
Program policy requires that at least 70% of funds must benefit low- and moderate-income
persons. FY2009 funding for the CDBG is $3.6 billion.
Discussion
For wastewater and drinking water programs, the House-passed and Senate-passed bills were
quite similar, the main differences relating to funding levels (e.g., $6.0 billion in House-passed
H.R. 1, compared with $4.0 billion in the Senate amendment, for clean water SRF capitalization
grants) to provide additional funding for existing infrastructure programs. The bills also contained
some differences concerning specified timing or procedures for awarding or obligating funds (see
page 3). The Senate amendment included funds for a specific wastewater project in the District of
Columbia that was not addressed in the House-passed bill and which was omitted from P.L. 111-
5.
As noted, in the EPA SRF provisions, the legislation allows states to provide subsidization in the
form of principal forgiveness, negative interest loans, grants, or a combination. Traditionally, SRF
assistance to communities is provided as loans that eventually are repaid to states. The concept of
allowing principal forgiveness or negative interest loans means that communities will have less of
a repayment burden. There is, however, a tension in how states will use this authority. As much as
state budgets are under pressure from the current recession, so, too, are cities’ budgets, and
recipients of SRF assistance would rather receive a grant or partial grant than a loan that must be
fully repaid. If states are generous in the amounts of subsidization that they provide (for example,
requiring only small amounts of assistance or even none to be repaid), a few communities will
benefit greatly. But if states are more restrictive (for example, providing only a small amount of
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additional subsidization), it may be possible to assist more communities in the state, yet those
communities will have a larger repayment responsibility.
More broadly, the infrastructure funding provisions of the legislation raise some general issues.
Funding infrastructure is a long-term investment, not quick-fix spending, that should lead to
something durable, useful, and financially productive. The long-term nature of such investments
can be at odds with the stimulus goal of quickly injecting money into the economy. Thus, one
question in debating infrastructure spending as part of economic recovery is, what is truly
stimulative? Critics contend that the haste to fund “ready to go” projects is likely to result in
spending on many projects with marginal value, such as projects with plans that have been
backlogged for some time because they lack sufficient merit, but for which now there is an
opportunity to get funding. One issue of interest is, will states and communities be able to
effectively manage the large increase in project spending provided by the legislation. The
legislation includes oversight measures,10 but these appear to be focused on the important issues
of identifying waste, fraud, and abuse, and ensuring compliance with applicable standards and
competition requirements in contracts and grants, but not necessarily on evaluating or ensuring
the quality of funded projects. That type of accountability will reside with state and local officials
who will be responsible for determining priorities and making the majority of actual funding
decisions for wastewater and drinking water investments.
Water Resources
The federal government has a long history of involvement in water resource development and
management projects, such as dams, levees, coastal protection, and navigation works, to facilitate
navigation, expand irrigated agriculture, reduce flood losses, and, more recently, restore aquatic
ecosystems. At the federal level, these activities are principally the responsibility of two agencies.
Under its civil works program, the U.S. Army Corps of Engineers (Corps, Department of
Defense) constructs and operates primarily navigation, flood, coastal protection, and aquatic
restoration throughout the country. The Bureau of Reclamation (Reclamation, Department of the
Interior) is authorized to construct and manage multi-purpose projects serving irrigation,
municipal and industrial water supply, flood control, power production, and recreation purposes
in the 17 western states.11 Congress provides appropriations to support these activities through
annual Energy and Water Development appropriations bills.
The economic recovery legislation provides supplemental funding above regular appropriations
for the Corps, Reclamation, and other water resources activities at the Department of
Agriculture’s Natural Resources Conservation Service (NRCS) and Department of State’s
International Boundary and Water Commission (IBWC). A general provision in section 1602 of
the conference bill, which applies to all these water resources activities, states that preference
should be given to activities that can start and finish quickly, with a goal that at least 50% of the
funds go to activities initiated within 120 days of enactment.

10 The legislation provides oversight funds for agency Inspectors General and for the Government Accountability
Office. It also establishes a Recovery Accountability and Transparency Board to coordinate and conduct oversight and
to report quarterly to the President and Congress.
11 For more information, see CRS Report R40180, Water Resources Issues in the 111th Congress, coordinated by Betsy
A. Cody.
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Corps of Engineers Projects
P.L. 111-5 provides a total of $4.6 billion for the Corps. This is equal to the amount in the Senate
amendment to H.R. 1, but the funds are distributed differently across some of the Corps accounts.
The enacted bill represents a slight increase above the $4.5 billion in the House-passed version of
H.R. 1. All of the funds would go toward Corps civil works activities, however, some of the funds
are directed toward activities other than federal water resources projects. All three bills included
$25 million for the Corps regulatory program; S.Amdt. 570 to H.R. 1 and P.L. 111-5 include $25
million for the Formerly Utilized Sites Remedial Action Program (FUSRAP), a program to
investigate and clean up or control sites that were part of the early atomic energy and weapons
program.
The enacted bill directs that these funds be used for either entire projects, programs, or activities,
or elements of those. It states that funds are to be directed to activities that can be completed with
the stimulus funds, and that do not create future budgetary obligations. It also states that funds
provided shall only be used for programs, projects, or activities that “heretofore or hereafter”
receive funds provided in Energy and Water Development appropriations acts. This statutory
language may indicate that not only may projects previously funded be eligible for stimulus
funds, but also activities funded in subsequent legislation, such as regular FY2009 appropriations
legislation, which Congress enacted in March 2009 (P.L. 111-8), after enactment of the ARRA.
P.L. 111-5 authorizes unlimited reprogramming authority for Corps funds provided under the
legislation, as proposed by the Senate. It requires quarterly reports to the House and Senate
Appropriations Committees on the allocation, obligation, and expenditure of the funds, as
proposed by the House.
The enacted bill reserves $200 million, as proposed by the Senate, for water-related
environmental infrastructure projects, which are projects more similar to the municipal water and
wastewater systems previously discussed, than the Corps’ primary flood, navigation, and aquatic
restoration missions.12 The enacted bill omits language that had been in the Senate bill that
specifically directed that $90 million be used for the national levee database, inventory, and
related-inspections.
Bureau of Reclamation Projects and Programs
Additional funding for Reclamation in P.L. 111-5 totals $1.0 billion, rather than $500 million
under the House bill and $1.4 billion under the Senate amendment. The enacted bill directs that
the funds be used for projects, programs, or activities that can be completed with these funding
amounts, and that do not create future budgetary obligations. It also authorizes unlimited
reprogramming authority for Reclamation funds provided under the legislation. The previous
House and Senate versions of the bill restricted funds to projects, programs, or activities
previously funded or that are funded in subsequent Energy and Water Resources Development
appropriations acts.
Of the total funds in the enacted bill, Reclamation is provided with $126 million for water
reclamation and reuse projects (Title XVI projects, which typically treat municipal wastewater for

12 For information on Corps environmental infrastructure projects, see CRS Report RL30478, Federally Supported
Water Supply and Wastewater Treatment Programs
, coordinated by Claudia Copeland.
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reuse rather than discharge or desalinate brackish groundwater or seawater), as proposed by the
House. The law also provides $50 million for projects under the Central Utah Project Completion
Act, $50 million for projects under the California Bay-Delta, $60 million for rural water projects,
and $10 million for inspection of canals in urbanized areas, amounts that were proposed by the
Senate.
The enacted bill also authorizes Reclamation to extend up to 50 years, with interest, the
timeframe for water supply customers to repay the U.S. government for maintenance and
rehabilitation. Short repayment times for major maintenance and rehabilitation projects have been
of great concern to Reclamation water users in recent years, and are a growing concern as
existing infrastructure ages. In the earlier House and Senate versions of the bill, Reclamation
would have been authorized to extend repayment up to 25 years without interest.
Agricultural Watershed Programs
NRCS administers several authorities often referred to as the Small Watershed Program. Under
the program, NRCS provides technical advisory services and financial assistance (partial grants)
to state and local organizations to plan and install measures to prevent erosion, sedimentation, and
flood damage and to conserve, develop, and utilize land and water resources. The program funds
land treatment, and nonstructural and structural facilities for flood prevention, erosion reduction,
agricultural water management, public recreation development, fish and wildlife habitat
development, and municipal or industrial water supplies. Structural measures can include dams,
levees, canals, pumping plants, and other facilities.13
The economic recovery legislation provides additional funding for two portions of the Small
Watershed Program. One is Watershed and Flood Prevention Operations, used to design and build
flood prevention, water quality improvement, and similar projects. The enacted legislation
provides $290 million, of which $145 million is to be used to purchase and restore floodplain
easements. The second portion is Watershed Rehabilitation, which rehabilitates dam projects that
have reached the end of their engineering design life. The final bill provides $50 million for these
activities. This amount is equal to 4.5 times the appropriations for these NRCS activities in
FY2009.
The enacted legislation requires that funds be used to fully fund projects that can be completed
and allocated to projects that can be commenced promptly. The conference report, H.Rept. 111-
16, provides further direction on how to prioritize the use of the funds.
International Boundary and Water Commission Projects
The legislation includes $220 million for the International Boundary and Water Commission for
its water quantity program, rather than $224 million as proposed by the House and Senate. The
bill directs that IBWC use the funds for immediate repair and rehabilitation requirements. The
four projects along the U.S.-Mexico border specified to receive the funds (Rio Grande Flood
Control System, Safety of Dams, Colorado Boundary; and Capacity Preservation) are for flood
damage reduction infrastructure upgrades (i.e., levee improvements and dam safety measures).

13 For information, see CRS Report RL30478, Federally Supported Water Supply and Wastewater Treatment
Programs
, coordinated by Claudia Copeland.
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Discussion
Unlike some of the other water infrastructure activities funded in the legislation (including the
EPA wastewater and drinking water programs discussed previously), little is publicly known
about how most of the water resources funds will be distributed. These programs generally do not
use formulas to distribute funds. Instead, Congress typically, in either the text or report language
of appropriations bills, distributes most of the appropriated funds across individual Corps and
Bureau projects or programs or the distribution is delegated to the agency. Unlike most
appropriations bills in which water resources activities receiving funds generally are specified,
P.L. 111-5 and the conference report (H.Rept. 111-16) list broad prioritization criteria and
identified several broad categories in which it expects the agencies to allocate funds. It will
remain largely unknown which projects and how much each state will receive from water
resources stimulus spending until the Administration notifies Congress on how it chooses to
distribute the funds. Which projects are funded may influence how stakeholders view the
appropriateness of the stimulus spending; for example, environmental groups may criticize water
resources spending if some controversial projects are supported by stimulus funds.
In recent years, demand for federal assistance for water resources projects has exceeded available
funding; this has contributed to agencies having a backlog of authorized, but unfunded or
partially funded, projects. The growing backlogs have led to a range of responses, from calls to
increase spending to support for culling out the less competitive projects. How projects are
selected to receive stimulus funding would determine whether the focus is on completing entire
projects or whether project elements of larger projects are funded; different funding approaches
may have different effects on reducing the size of the backlog.
Implementation issues that may arise include concern about the local cost share that is required
by many water resources projects; the amount of the local cost share depends on the project
purpose. For example for a multi-purpose Corps project, project costs associated with municipal
water supply are 100% a local sponsor responsibility, while construction of flood damage
reduction projects requires 35% local cost share. Some local sponsors, particularly those hardest
hit by the current economic conditions, may have difficulty covering these costs.
Water resources projects are often complicated planning and construction efforts that span
multiple years; whether federal water resources agencies, and their contracting officers in
particular, will be able to obligate and expend stimulus funds in a timely, yet transparent and
efficient, manner depends on many factors. The amounts in P.L. 111-5 represent roughly 80% of
the typical annual Corps appropriations,14 80% of the typical Reclamation appropriations, and 4.5
times current annual small watershed funding.
Concluding Thoughts
The American Recovery and Reinvestment Act of 2009 provides emergency supplemental
appropriations for FY2009 and FY2010 for a number of existing federal programs.15 The

14 For the Corps, contracting for the civil works stimulus would be occurring concurrently with significant contracting
for its domestic and international military operations, including contracts related to defense base closures.
15 By designating the appropriations as emergency spending, the discretionary spending in the bill is not subject to the
constraints of the congressional budget resolution (S.Con.Res. 21, 110th Congress) under provisions of the
(continued...)
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legislation is unusual in many respects, including the fact that the FY2009 supplemental funds in
this legislation were enacted before resolution of the regular FY2009 appropriations for most
agencies. As the start of the fiscal year was approaching (October 1, 2008), regular full-year
appropriations bills had not been enacted for any of the 12 regular appropriations bills. On
September 28, the President signed the Consolidated Security, Disaster Assistance, and
Continuing Appropriations Act, 2009 (FY2009 CR, P.L. 110-329), generally providing full-year
funding for three regular appropriations bills and partial-year funding for nine regular
appropriations bills at amounts provided in the FY2008 appropriations laws. Among other
programs; the nine part-year bills covered the water infrastructure activities described in this
report. P.L. 110-329 provided appropriations from October 1, 2008, through March 6, 2009, and a
second short-term CR was enacted on March 6 (P.L. 111-6) while Congress was finishing
consideration of a full-year omnibus appropriations bill that the President signed on March 11
(P.L. 111-8). The regular FY2009 appropriations provided in that legislation for water
infrastructure programs are about the same as in FY2008.
How the additional funds included in the American Recovery and Reinvestment Act will
influence appropriations for FY2010 is largely unknown for now. President Obama presented a
budget outline for FY2010 on February 26. It contains few details for water infrastructure
programs, except to indicate the Administration’s intent to fund the EPA State Revolving Fund
programs at a $3.9 billion total, or 2.5 times higher than the combined FY2009 regular
appropriations for those programs.16 Details of the FY2010budget are expected in April.
As described in this report, some of the water infrastructure funds included in the economic
stimulus legislation represent a significant increase above current program funding levels—for
some, from three to four times higher than the FY2009 amount. Many infrastructure stakeholder
groups are likely to urge Congress to sustain similar high levels in regular appropriations in
FY2010 and beyond, because infrastructure projects typically involve outlays over multiple years.
They are likely to argue that individual project planning and implementation will be disrupted if
federal assistance is uneven or unpredictable, very large one year and much lower the next year.
But because the infrastructure funds in P.L. 111-5 are to be available for obligation through
FY2010 and will be spent out over several years,17 some policymakers may argue that it will not
be necessary to appropriate increased levels for these programs in FY2010. While most analysts
believe that it will be very difficult for Congress to continue the high spending levels for all
programs included in P.L. 111-5 beyond enactment of that legislation, there likely will be calls for
Congress to do that very thing.

(...continued)
Congressional Budget Act of 1974. For information, see CRS Report RL34711, Consolidated Appropriations Act for
FY2009 (P.L. 110-329): An Overview
, by Robert Keith.
16 See http://www.whitehouse.gov/omb/budget/.
17 For example, the Congressional Budget Office estimated that 55% of the EPA SRF capitalization grant funds in the
legislation will be spent in Fiscal Years 2010 and 2011. Only 3% will be spent in FY2009. A total of 79% will be spent
between FY2009 and FY2012. Letter from Douglas W. Elmendorf, Director, Congressional Budget Office, to
Honorable Nancy Pelosi, Speaker, U.S. House of Representatives, February 13, 2009, http://www.cbo.gov/ftpdocs/
99xx/doc9989/hr1conference.pdf.
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Appendix.
Table A-1. State Allocation of EPA Wastewater and Drinking Water Funds in the
American Recovery and Reinvestment Act of 2009 (P.L. 111-5)
(Millions of Dollars)
CLEAN WATER
DRINKING WATER
SRF FUNDS
SRF FUNDS
STATES
($4 BILLION)
($2 BILLION)
Alabama
$44.3
$19.5
Alaska
$23.7
$19.5
Arizona
$26.7
$55.3
Arkansas
$25.9
$24.5
California
$283.1
$159.0
Colorado
$31.7
$34.4
Connecticut
$48.5 $19.5
Delaware
$19.4
$19.5
District of Columbia

$19.4
$19.5
Florida
$133.6
$88.1
Georgia
$66.9
$54.8
Hawai
$30.7
$19.5
Idaho
$19.4
$19.5
Illinois
$179.0 $79.5
Indiana
95.4
$27.2
Iowa
$53.6
$24.3
Kansas
$35.7
$19.5
Kentucky
$50.4
$20.5
Louisiana
$43.5
$27.6
Maine
$30.6
$19.5
Maryland
$95.7
$26.8
Massachusetts
$134.4 $52.2
Michigan
$170.2
$67.5
Minnesota
$72.8 $35.1
Mississippi
$35/7
$19.5
Missouri
$109.7
$37.9
Montana
$19.4
$19.5
Nebraska
$20.2
$19.5
Nevada
$19.4
$19.5
New Hampshire

$39.6
$39.5
New Jersey

$161.8
$43.2
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CLEAN WATER
DRINKING WATER
SRF FUNDS
SRF FUNDS
STATES
($4 BILLION)
($2 BILLION)
New Mexico

$19.4
$19.5
New York

$436.9
$86.8
North Carolina

$71.4
$65.6
North Dakota

$19.4
$19.5
Ohio
$222.9
$58.5
Oklahoma
$32.0 $31.5
Oregon
$44.7
$28.5
Pennsylvania
$156.8 $65.7
Rhode Island

$26.6
$19.5
South Carolina

$40.6
$19.5
South Dakota

$$19.4
$19.5
Tennessee
$57.5 $20.2
Texas
$180.9
$160.7
Utah
$20.9
$19.5
Vermont
$19.4
$19.5
Virginia
$81.0
$20.8
Washington
$68.8 $41.8
West Virginia

$61.7
$19.5
Wisconsin
$107.0 $37.8
Wyoming
$19.4
$19.5
American Samoa

$3.6
$0.5
Guam
$2.6
$2.1
Northern Mariana Islands

$1.7
$1.8
Puerto Rico

$51.6
$19.5
Virgin Islands

$2.1
$2.0
TOTAL
$3,909.0
$1,950.0
Source: EPA (http://www.epa.gov/recovery/docs/Final_SRF_eco_recovery_allotments.pdf )
Note: Individual state al ocations and totals reflect the fact that under the legislation, before funds are al ocated
to states, 1.5% was reserved for EPA to provide assistance to Indian Tribes, consistent with current law. Also, an
additional 1.0% was reserved from the combined funds for program oversight by EPA, for a total of 2.5% in
reserved funds.

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Author Contact Information

Claudia Copeland
Nicole T. Carter
Specialist in Resources and Environmental Policy
Specialist in Natural Resources Policy
ccopeland@crs.loc.gov, 7-7227
ncarter@crs.loc.gov, 7-0854


Acknowledgments
The authors thank Betsy A. Cody for assistance with this report.



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