Water Infrastructure Projects Designated in
EPA Appropriations: Trends and Policy
Implications
Claudia Copeland
Specialist in Resources and Environmental Policy
October 28, 2010
Congressional Research Service
7-5700
www.crs.gov
RL32201
CRS Report for Congress
P
repared for Members and Committees of Congress
Water Infrastructure Projects Designated in EPA Appropriations
Summary
Congressional action to designate funds within appropriations legislation for specified projects or
locations has been increasing in recent years as a way to help communities meet needs to build
and upgrade water infrastructure systems, whose estimated future funding needs exceed $630
billion. Such legislative action has often been popularly referred to as earmarking. This report
discusses appropriations for water infrastructure programs of the Environmental Protection
Agency (EPA), focusing on such designations in the account that funds these programs.
Information on the programmatic history of EPA involvement in assisting wastewater treatment
and drinking water projects is provided in two appendixes.
Congressional appropriators began the practice of supplementing appropriations for the primary
Clean Water Act (CWA) and Safe Drinking Water Act (SDWA) assistance programs with grants
for individually designated projects in FY1989. These designated project grants are often referred
to as earmarks or as STAG grants. Since 1989, of the $56.8 billion appropriated to EPA for water
infrastructure assistance, more than 13% ($7.4 billion) has gone to designated project grants.
Notably since FY2000, appropriators have awarded such grants to a larger total number of
projects, resulting in more communities receiving such assistance, but at the same time receiving
smaller amounts of funds, on average.
Members of Congress may intervene to provide funding for a specific community for a number of
reasons. In some cases the community may have been unsuccessful in getting state approval to
fund the project under other programs. Some, especially small and rural communities, seek a
grant because the cost of a project financed through a state loan which must be fully repaid is
deemed unacceptably high (loans are the primary assistance under the CWA and SDWA).
However, this congressional practice has been criticized by state water program managers and
administrators of infrastructure financing programs because designated projects are receiving
more favorable treatment (55% federal grants, rather than loans) and because the practice
sidesteps the standard process of states’ determining the priority by which projects will receive
funding. Projects so funded through appropriations acts also have generally not been reviewed by
congressional authorizing committees.
Attention is often drawn to the relatively few projects that have received large special project
grants (more than $100 million), especially over multiple years. The majority of designated
projects, however, receive comparatively small amounts. More than 75% of the projects
designated in the EPA appropriations legislation have received total awards (either in a single
year or over multiple years) of $2 million or less. While some Members of Congress, interest
groups, and Administration officials are critical of these types of congressional actions, it is likely
that communities will continue to seek this type of assistance, and there is little indication that the
practice will cease.
Congressional Research Service
Water Infrastructure Projects Designated in EPA Appropriations
Contents
Introduction ................................................................................................................................ 1
Defining Special Purpose Project Grants ..................................................................................... 2
Trends in Congressionally Designated Project Grants............................................................ 2
Project Grants for Specific Cities .......................................................................................... 5
No Special Project Grants in FY2007 .................................................................................... 6
Policy Implications ............................................................................................................... 7
Final Thoughts ............................................................................................................................ 8
Tables
Table 1. Water Infrastructure Grants Designated in EPA Appropriations Acts............................... 3
Appendixes
Appendix A. Background: Federal Involvement in Wastewater Treatment ................................... 9
Appendix B. Background: Federal Involvement in Drinking Water............................................ 11
Contacts
Author Contact Information ...................................................................................................... 12
Congressional Research Service
Water Infrastructure Projects Designated in EPA Appropriations
Introduction
Congressional action to designate funds within appropriations legislation for specified projects or
locations has been increasing in recent years as a way to provide funding for designated
communities to build and upgrade water infrastructure systems. In the past, such legislative action
has often been popularly referred to as earmarking. The future needs for projects to treat
municipal wastewater or treat and deliver public drinking water supplies in the United States are
large—$298 billion for wastewater treatment and $335 billion for public water systems,
according to the most recent estimates reported by states and the Environmental Protection
Agency (EPA).1
Federal funding to assist communities in meeting the goals and requirements of environmental
laws has been provided first through programs in the Clean Water Act and also, more recently,
through a program in the Safe Drinking Water Act. Under the core assistance programs in these
acts, Congress annually appropriates block amounts which are allocated among states according
to specified allotment formulas. States, then, make assistance awards to individual communities.
From 1972 through FY2010, Congress has provided $96.8 billion for these core programs. Under
both laws, federal funds capitalize state revolving funds (SRFs), which states then use to make
loans to communities for water infrastructure capital projects. Local communities, in turn, repay
loans to the state revolving fund, not the federal government.
In FY1989, congressional appropriators began the practice of supplementing appropriations for
the SRF programs with designated project grants in the EPA appropriations account that funds
Clean Water Act and Safe Drinking Water Act assistance. Unlike loans under the two SRF
programs, these grants generally are provided on the basis of 55%-45% federal-local cost sharing,
with no requirement to repay the federal share. Since 1989, Congress has awarded $7.4 billion for
these grants, which have increased as a portion of appropriated water infrastructure funds in that
account. Notably since FY2000, appropriators have awarded grants to a larger total number of
specified projects (e.g., 46 in FY1995, compared with 319 in FY2010), resulting in more
communities receiving such assistance, but at the same time most of them receiving smaller
amounts of funds, on average (e.g., $18.1 million in FY1995, compared with $585,508 in
FY2010).
This report discusses appropriations for EPA water infrastructure programs, focusing on
congressional special project designations in the account that funds these programs. While some
Members of Congress, interest groups, and Administration officials are critical of these types of
congressional actions, there is little indication that the practice will cease. Information on the
programmatic history of EPA involvement in assisting wastewater treatment and drinking water
projects also is provided in two appendixes.2
1 U.S. Environmental Protection Agency, Clean Watersheds Needs Survey 2008, Report to Congress, Washington DC,
June 2010, 1 vol., EPA-832-R-10-002; Drinking Water Infrastructure Needs Survey, Fourth Report to Congress,
February 2009, EPA-816-R-09-001.
2 For additional background, see CRS Report RL31116, Water Infrastructure Needs and Investment: Review and
Analysis of Key Issues, by Claudia Copeland and Mary Tiemann.
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Defining Special Purpose Project Grants
In appropriations legislation, funding for EPA clean water and drinking water programs is
contained in the measure providing funds for the Department of the Interior, Environment, and
Related Agencies.3 Within the portion of that bill which funds EPA, wastewater treatment and
drinking water assistance are specified in an account called State and Tribal Assistance Grants
(STAG). This appropriations account includes all water infrastructure funds, as well as
management grants that assist states in implementing air quality, water quality, and other media-
specific environmental programs.4
Today, the STAG account includes appropriations both for the primary Clean Water Act and Safe
Drinking Water Act assistance programs (see Appendixes A and B for background) and for
congressionally designated special purpose project grants, which many persons have popularly
referred to as earmarks, or often as STAG grants. There is no single definition of the term
“earmark” that is accepted by all practitioners and observers of the congressional appropriations
process, nor has there been a standard practice across all 13 appropriations bills. While definitions
of this practice vary, an earmark generally is considered to be an allocation of resources to
specifically targeted beneficiaries. They may be proposed by the President or may be originated
by Congress. In the 110th Congress, a number of budget process reform proposals were debated,
including changes to House and Senate rules affecting earmarking, as this practice has been
controversial.5 The focus of this report is funds set aside within the EPA STAG account to fund
individual water infrastructure projects, locations, or organizations, detailed either in the
appropriations act or the joint explanatory statement of its accompanying conference report, and
not distinguishing those requested by the Executive from those designated by Congress.
Trends in Congressionally Designated Project Grants
Pressure to provide designated special project grant funding has been evident in the
appropriations process where, in recent years, Congress has reserved as much as 30% of funds in
the account that provides clean water and drinking water assistance for specified communities.
The practice of designating a portion of the construction grants/SRF account for specific
wastewater treatment and other water quality projects began in the FY1989 EPA appropriations
legislation. Since then it has increased as a portion of appropriated funds in the STAG account
(3% of the total water infrastructure appropriations in FY1990, for example, increasing to 31% in
FY1994, but somewhat less in recent years: 11% in FY2009 and 12% in FY2010).
The number of projects receiving these designated funds also has increased: from four in FY1989
to 319 in FY2010. Since FY2000, the larger total number of projects has resulted in more
communities receiving such grants, but at the same time receiving smaller amounts of funds.
3 Prior to the 109th Congress, EPA appropriations were included in legislation funding the Department of Veterans
Affairs, Department of Housing and Urban Development, and Independent Agencies (VA/HUD). In January 2005,
House and Senate Appropriations Committees reorganized, and jurisdiction over funding for EPA and several other
entities was moved to the appropriations subcommittees covering Interior and Related Agencies.
4 For additional discussion, see CRS Report 96-647, Water Infrastructure Financing: History of EPA Appropriations,
by Claudia Copeland.
5 See CRS Report RL33818, Federal Budget Process Reform in the 110th Congress: A Brief Overview, by Robert
Keith.
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Thus, while a few communities have received individual awards of $2 million or more in recent
years, the average size of grants has shrunk: $18.1 million in FY1995, $4.9 million in FY1999,
$1.08 million in FY2006, and $585,508 in FY2010. See Table 1 for additional detail. (FY2007, a
special case, is discussed separately below.) Conference reports on the individual appropriations
bills provide some description of projects funded in this manner, but the text is typically very
brief.
The effective result of using substantial amounts for congressionally designated project grants has
been to reduce the amount of funds provided to states to capitalize their revolving loan programs.
Of the $56.8 billion appropriated to EPA for water infrastructure programs since 1989 (both for
wastewater, under the Clean Water Act, and drinking water projects, under the Safe Drinking
Water Act), $7.4 billion, or 13%, has gone to specified project grants.
Unlike loans under the two SRF programs, these grants generally are provided on the basis of
55%-45% federal-local cost sharing, or the maximum dollar amount specified in the
appropriations act, whichever is less, with no requirement to repay the federal share. The
matching requirements are spelled out in statutory and/or report language.6
From FY1989 to FY1995, the Boston Harbor project, discussed below, received the largest single
project grant each year ($25 million in FY1989, $100 million in FY1994). In all years except
FY2008, since FY1996, the largest single grant in each year’s appropriations act has been
designated for “architectural, engineering, planning, design, construction and related activities in
connection with the construction of high priority water and wastewater facilities in the area of the
United States-Mexico Border” (P.L. 109-54). Appropriations for these U.S.-Mexico Border
projects have totaled $780 million.
From FY1989-FY1994, designated project grants were used only to assist wastewater treatment
projects. The first two such grants for drinking water projects were provided in FY1995
appropriations legislation, two more were awarded in FY1997, and 12 (out of 42 total) were
designated in FY1998. Since then, the number of designations for individual drinking water
projects has increased, and since FY2005, project grants have been divided approximately equally
between wastewater treatment projects and projects involving drinking water or water supply.
Further, for several years recently, more than one-third of the individual grants are repeats, that is,
grants awarded to projects that have previously received one or more.
Table 1. Water Infrastructure Grants Designated in EPA Appropriations Acts
Fiscal Year
# of Projects
Total Grants
Average Grant
Range of Grant Awards
1989 4
$68,000,000
$17,000,000
$3 million-$25 million
1990 4
$53,000,000
$13,250,000
$6.8 million-$20 million
1991 2
$35,700,000
$17,850,000 $15.7
million-$20 million
1992 8
$435,000,000
$54,375,000 $35
million-$100 million
1993 13
$556,000,000
$42,769,231
$7 million-$100 million
1994 9
$558,000,000
$62,000,000 $10
million-$150 million
6 See, for example, Interior Department and Further Continuing Appropriations, Fiscal Year 2010, P.L. 111-88, 123
Stat. 2936.
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Fiscal Year
# of Projects
Total Grants
Average Grant
Range of Grant Awards
1995 46
$834,100,000
$18,132,609
$200,000-$100 million
1996 20
$306,500,000
$15,325,000
$150,000-$100 million
1997 21
$301,000,000
$14,333,333
$50,000-$100 million
1998 42
$393,125,000 $9,360,119 $100,000-$75 million
1999 82
$401,750,000 $4,899,390 $100,000-$50 million
2000 143
$395,344,000 $2,764,643 $285,000-$50 million
2001 244
$466,370,000 $1,911,352
$50,000-$75 million
2002 339
$458,900,000 $1,353,687 $100,000-$75 million
2003 491
$413,407,272
$841,970 $19,870-$49.7 million
2004 520
$425,077,160
$817,456 $84,598-$49.7 million
2005 669
$401,685,600
$600,427 $29,760-$49.6 million
2006 259
$288,806,966
$1,084,197 $49,300-$49.3 million
2007 2
$83,749,000
$41,874,500 $34.5
mil.-$49.3 million
2008 282
$177,192,000
$628,340 $78,750-$24.6 million
2009 303
$183,500,000
$605,611 $138,000-$20.0 million
2010 319
$186,777,000 $585,508 $68,000-$17 million
Source: Compilation by CRS of water infrastructure project grants in the VA/HUD appropriations acts for
FY1989-FY2005, the Interior, Environment, and Related Agencies Appropriations Act for FY2006, the
Consolidated Appropriations Act for FY2008 (Division F), the Omnibus Appropriations Act, 2009, the Interior,
Environment and Related Agencies Appropriations Act, 2010, and accompanying conference reports for each.
In the early years of this congressional practice, special purpose grant funding originated in the
House version of the EPA appropriations bill, while the Senate, for the most part, resisted the
practice by rejecting or reducing amounts and projects included in House-passed legislation. With
this difference in legislative approach, special purpose grant funding was an issue on several
occasions during the House-Senate conference on the appropriations bill. Since FY1999,
however, both the House and Senate have proposed projects in their respective versions of the
EPA appropriations bill, with the final total number of projects and dollar amounts being
determined by conferees. In addition, as it has now been 20 years since the last major
amendments to the Clean Water Act, the desire by some Members to address special needs
wastewater problems that might be debated during reauthorization of that act has increased, thus
leading to greater pressure on House and Senate Members to use the appropriations process to
handle such concerns.7
Since the practice of designating projects began to increase in the early 1990s, the position of the
Clinton and both Bush Administrations has been to propose a limited number of such grants for
inclusion in the President’s annual budget submission (such as U.S.-Mexico Border projects), but
7 In the 104th Congress, the House passed a comprehensive CWA reauthorization bill, H.R. 961, but provisions in it that
addressed regulatory relief and similar issues were controversial, and no further action occurred. Since the 107th
Congress, House and Senate committees have considered legislation to reauthorize water infrastructure financing
programs. The House has passed reauthorization bills three times, and legislation has been reported to the Senate, but
no bill has been enacted. For information, see CRS Report R40098, Water Quality Issues in the 111th Congress:
Oversight and Implementation, by Claudia Copeland.
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generally to oppose the congressional practice of specifying a large number of projects as a
significant portion of funds in the STAG account, especially in recent years. Appropriators have
supported most but not all projects requested by the President, while modifying the funding
amounts for some of the Administration’s requests and adding many more projects not requested
by the Administration. For example, the first Administration request for a specified project was in
the FY1992 budget. The George H.W. Bush Administration sought $400 million at that time for
grants to be directed to six projects in coastal cities. Congress agreed to funding for those six,
plus two others. Likewise, in FY1993, Congress agreed to grants for six projects requested by the
Administration, plus seven others. This pattern of Administration requests and congressional
response has continued. In FY2010, the Administration requested grants for two special needs
projects; Congress funded both of them, plus 317 others.
Project Grants for Specific Cities
The four projects designated in FY1989 were projects for which funding had been authorized in
the 1987 Water Quality Act (WQA, P.L. 100-4). (These project authorizations were in Title V of
the WQA, which did not specifically amend the Clean Water Act.) The authorized projects were:
• Boston, to provide secondary treatment of wastewater and improve the
environmental quality of Boston Harbor,
• San Diego, to remedy discharges of untreated sewage from Tijuana, Mexico,
• Des Moines, a sewage treatment plant project, and
• Oakwood Beach, New York, for relocation of natural gas facilities related to two
sewage treatment facilities.
For the next two years, appropriators continued to designate only WQA-authorized projects, with
one exception. Two of these authorized projects (Boston Harbor and San Diego/Tijuana)
continued to receive some funding through FY1999, but most designations since FY1992 have
been for projects not specifically authorized in federal law.
From FY1989 to FY1999, Congress appropriated a total of $740 million for the Boston Harbor
project—the largest total amount received by a single community under provisions in the EPA
appropriations act. A few other communities have received large total amounts of such grants
over multiple years. For example, the WQA-authorized San Diego project received $235 million
over seven years, and another San Diego project for a wastewater reclamation facility received a
total of $135 million in the early 1990s. Los Angeles was awarded a total of $160 million from
FY1992-1994 for unspecified projects. New York City received $210 million in grants over that
same time period, also for unspecified infrastructure projects. Detroit has received grants totaling
$352 million since FY1992 for a project called the Rouge River Wet Weather Demonstration
Project. Designated funding in the EPA appropriations act for projects along the U.S.-Mexico
border (distributed to multiple communities) have totaled $780 million since FY1996. Projects in
Alaska Native and rural villages (also distributed to multiple locations) have been awarded $452
million since FY1995.8 The large awards for these projects tend to mask the average value of
8 Some water infrastructure projects funded in the EPA bill also have received designated funding in other
appropriations acts. For example, Alaska Native and rural village projects received $217 million in Agriculture
Appropriations acts from FY1997 to FY2006. Additionally, a small number of those with grants designated in EPA
appropriations has received funding through Energy and Water Development Appropriations acts, which fund water
(continued...)
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water infrastructure designated project grants. For example, in FY2010, the average of all 319
awards was $585,508, but discounting the $30 million for Alaska Native and rural village projects
and U.S.-Mexico border projects, the average for other individual grants was $494,565.
No Special Project Grants in FY2007
For FY2007, Congress was unable to enact all appropriations bills before the start of the fiscal
year, on October 1, 2006. Final action on appropriations for EPA, as well as for other domestic
agencies and departments funded under 11 of 13 appropriations acts, was delayed until mid-
February 2007—after the FY2008 budget request had been submitted. In February, Congress
passed a continuing appropriations resolution providing full-year funding through the end of
FY2007 (P.L. 110-5). In order to complete the unfinished business in a timely manner, House and
Senate leaders decided to include no congressional special purpose grants in the resolution,
explaining the decision in a press release.9
There will be no Congressional earmarks in the joint funding resolution that we will pass.
We will place a moratorium on all earmarks until a reformed process is put in place.
Earmarks included in this year’s House and Senate bills will be eligible for consideration in
the 2008 process, subject to new standards for transparency and accountability. We will
work to restore an accountable, above-board, transparent process for funding decisions and
put an end to the abuses that have harmed the credibility of Congress.
Under the FY2007 appropriations bill for EPA that had been under congressional consideration
during 2006 (H.R. 5386), the House would have provided $200 million for 146 special project
grants. The Senate would have provided $210 million for 195 projects. As a result of the process
adopted in P.L. 110-5, none received funding. The congressional moratorium did not apply to
special project grants requested by the Administration in the President’s FY2007 budget request;
it had sought $14.9 million for Alaska Native and rural villages, $24.8 million for U.S.-Mexico
Border projects, and $990,000 for a single project in Puerto Rico. The final result in P.L. 110-5
(see Table 1), however, provided funding for Administration priorities at the same levels that
were enacted for FY2006: $34.5 million for Alaska Native and rural villages, $49.3 million for
U.S.-Mexico Border projects, and no funding for the Puerto Rico project.
After this single year, Congress resumed including special purpose grants in EPA’s FY2008,
FY2009, and FY2010 appropriations (see Table 1).
(...continued)
projects and programs of the U.S. Army Corps of Engineers and Bureau of Reclamation. Examples of water
infrastructure projects funded in this dual manner include combined sewer overflow projects in Lynchburg and
Richmond, Virginia, and Nashua, New Hampshire; construction of alternative water supply in Jackson County,
Mississippi; and projects to support an environmental restoration plan in Onondaga Lake, New York. In general,
projects so designated in the Energy and Water appropriations bill have previously been authorized in legislation such
as Water Resources Development acts (WRDA) before receiving appropriations. Since the 1992 WRDA (P.L. 102-
580), Congress has authorized more than 100 Corps environmental infrastructure projects and programs in that act and
subsequent amendments to it and has provided Energy and Water appropriations to about one-half of them.
9 “Byrd-Obey Announce FY 2007 Plan,” press release, December 11, 2006. Text available at
http://appropriations.house.gov/pr_121106.shtml.
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Policy Implications
Groups representing state water program managers and administrators of infrastructure financing
programs have criticized the congressional practice of awarding grants to designated
communities. They contend that it undermines the intended purpose of the state funds, which is to
promote environmental improvements nationwide. Many state officials would prefer that funds be
allocated more equitably, not based on what they view largely as political considerations, and
they would prefer that state environmental and financing officials retain responsibility to set
actual spending priorities. Further, they say, because directed funding to special projects
diminishes the level of seed funding for loans under state revolving funds, it delays the time when
states will become financially self-sufficient—and may actually prolong the period when states
seek continued federal support.
The practice has been criticized because designated projects are receiving more favorable
treatment than other communities’ projects: they generally are eligible for 55% federal grants
(and will not be required to repay 100% of the funded project cost, which they must do in the case
of a loan through an SRF), and the practice sidesteps the standard process of states’ determining
the priority by which projects will receive funding. It also means that the projects have generally
not been reviewed by the congressional authorizing committees. This is especially true since
FY1992, when special purpose grant funding has been designated for projects not authorized in
the Clean Water Act or amendments to it or in the Safe Drinking Water Act.
Members of Congress may intervene to provide funding for a specific community for a number of
reasons. In some cases, the community may have been unsuccessful in getting state approval to
fund the project under an SRF loan or other program. For some, especially small and rural
communities, the cost of a project financed through a state loan, which the community must repay
in full, is deemed unacceptably high, because repaying the loan can result in increased user fees
that ratepayers feel are unduly burdensome. The community then seeks a grant to avoid this
costly financial scenario. A number of the special purpose grants have been made to projects
characterized as “needy cities,” based on local economic conditions. Since FY1993, report
language accompanying the appropriations bills (and specifically legislative language since
FY2004) has directed that grants awarded in this manner shall require that 45% of a project’s cost
be the responsibility of the local community. EPA is allowed to be flexible in applying the local
cost-share, based on the community’s financial capability, but the agency has rarely modified the
general requirement.
Technically, the CWA Title II grants program ended when authorizations for it expired after
FY1990. One result of awarding special purpose grants in appropriations bills has been to
perpetuate grants as a method of funding wastewater treatment construction long after FY1990.
At the same time, it also results in grants which had not previously existed for drinking water
system projects.
Following enactment of an appropriations act, project grants designated by Congress are not
provided automatically to the designated recipient communities or organizations. Since the funds
are awarded as EPA grants, recipients must first meet all applicable EPA requirements in
regulations and guidelines that apply to other grant programs, including applying for the grant
and complying with other federal laws and requirements, and must continue to comply with
program- and project-specific rules as long as the grant remains active. Consequently, there are
administrative costs associated with special purpose grants both for the local communities and for
EPA, which administers several hundred more of these grants every year.
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Final Thoughts
Attention is often drawn to the relatively few projects that have received large grant awards by
Congress, especially over multiple years. However, the other side of that story is the large number
of projects that receive relatively small amounts—especially as a percentage of the total cost of
water infrastructure projects, which can be very large. Even with the large awards described here
for some communities, more than 75% of the projects designated in the EPA appropriations
legislation have received total awards (either in a single year or over multiple years) of $2 million
or less. The trend of appropriators to provide smaller awards is reflected in the fact that only a
small number of projects have received awards of $1 million or more: 27 in FY2008 (9.6% of
total earmarks), 27 again in FY2009 (9% of total), and 22 in FY2010 (6.9% of total).
This congressional practice has raised two significant policy issues. The first is that it alters the
process of who decides which water infrastructure projects will receive funding, from state
program officials to Members of Congress (for those projects not also requested by the
Executive), and how the merits of particular projects may be evaluated. The second issue, noted
above, is that it reduces the amount of funds provided to capitalize state revolving loan programs,
thus arguably delaying the time when states will become financially self-sufficient in
administering capital programs and potentially prolonging the time when states and communities
seek continued federal aid.
Some Members of Congress, interest groups, and Administration officials are critical of including
special project grants in this and other appropriations acts. Other Members and many local
officials view it as an appropriate way to assist communities that would not be served by the
legislated programs. Based on the recent trends, there is little indication that the practice will
cease. Despite the moratorium for FY2007, the practice resumed and has continued since
FY2008, although new rules do provide greater transparency by requiring that the sponsors of
earmarks be identified in committee reports. Still, as individual award amounts have gotten
smaller, it is not unreasonable to question whether some communities may conclude that the cost
of receiving such funding—both in terms of political capital spent to seek it and actual resources
spent subsequently to secure the grant from EPA—exceeds the benefits.
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Appendix A. Background: Federal Involvement in
Wastewater Treatment
The Water Pollution Control Act of 1948 (P.L. 80-845) was the first comprehensive statement of
federal interest in clean water programs. While it contained no federally required goals, limits, or
even guidelines, it started the trickle of federal aid to municipal wastewater treatment authorities
that grew in subsequent years. It established a grant program to assist localities with planning and
design work and authorized loans for treatment plant construction. With each of the four
successive amending statutes in the 1950s and 1960s, federal assistance to municipal treatment
agencies increased. A construction grant program replaced the loan program; the amount of
authorized funding went up; the percentage of total costs covered by federal funds was raised;
and the types of project costs deemed grant-eligible expanded.
In the Federal Water Pollution Control Act Amendments of 1972 (P.L. 92-500, popularly known
as the Clean Water Act (CWA)), Congress revised the existing federal clean water law, including
provisions related to wastewater systems. In the 1972 law, Congress strengthened the federal role
in clean water and established the first national standards for sewage treatment. A number of new
conditions were attached to projects constructed with grants (such as comprehensive planning
requirements). In order to assist communities in meeting the ambitious water quality
improvement goals of the new law, federal funds increased dramatically, and the federal share
was raised from 55% to 75%.
The grant program was reauthorized in 1977 (P.L. 95-217) and again in 1981 (P.L. 97-117).
Efforts began focusing on use of federal funds for projects with clear environmental benefits, out
of concern that the program’s wide scope was not well focused on key goals. Especially reflected
in the 1981 amendments were budgetary pressures and a desire to reduce federal spending.
Annual authorizations were reduced from $5 billion to $2.4 billion, the federal share was again
set at 55%, and project eligibilities were limited.
The most recent CWA amendments were enacted in 1987 (P.L. 100-4). That legislation authorized
$18 billion over nine years for wastewater treatment plant construction, through a combination of
the traditional grant program and a new State Water Pollution Control Revolving Funds (SRF)
program. Under the new program, federal capitalization grants are provided as seed money for
state-administered loans to build sewage treatment plants and other water quality projects. Local
communities, in turn, repay loans to the state, a process intended by Congress to enable a
phaseout of federal involvement after states build up a source of capital for future investments.
Under the amendments, the SRF program was phased in beginning in FY1989 and entirely
replaced the previous grant program in FY1991. The intention was that states would have greater
flexibility to set priorities and administer funding, while federal aid would end after FY1994. As a
general matter, states and cities supported the program changes and the shift to a loan program
that was intended to provide long-term funding for water quality and wastewater construction
activities. However, the change means that local communities now are responsible for 100% of
project costs financed under the SRF program, rather than 45% under the previous grant program.
While municipalities have made substantial progress toward meeting the goals and requirements
of the act, state water quality reports continue to indicate that discharges from wastewater
treatment plants are a significant source of water quality impairments nationwide. The original
authorizations expired in FY1994, but pressure to extend federal funding by reauthorizing the
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Title VI SRF program and by providing appropriations both for SRF capitalization grants and
earmarked project grants, has continued, in part because estimated funding needs remain large.
Thus, Congress has continued to appropriate funds, and the anticipated shift to full state
responsibility has not yet occurred. Authorizations since 1972, for both the previous Title II grant
program and now for the Title VI SRF program, totaled $66 billion, while appropriations have
totaled $85.1 billion through FY2010. For the first 10 years following enactment of the 1987
amendments, appropriations for wastewater treatment assistance (Title II and Title VI grants)
averaged $1.57 billion per year. From FY1998 to FY2004, Title VI appropriations averaged
$1.35 billion per year. FY2005 appropriations totaled $1.09 billion, FY2006 appropriations
totaled $887 million, FY2007 appropriations totaled $1.08 billion, and appropriations totaled
$689 million in FY2008 and the same amount in FY2009. In the American Recovery and
Reinvestment Act (P.L. 111-5), enacted in February 2009, Congress appropriated an additional
$4.0 billion in supplemental FY2009 funds, to be available through FY2010. FY2010
appropriations (in P.L. 111-88) were $2.1 billion, bringing total CWA appropriations since the
1987 amendments to $34.9 billion.
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Appendix B. Background: Federal Involvement in
Drinking Water
In contrast to the 40-plus years of federal support for financing municipal wastewater treatment
facilities, Congress only recently—in 1996—established a program under the Safe Drinking
Water Act (SDWA) to help communities with financing of projects needed to comply with federal
drinking water regulations. Funding support for drinking water only occurred more recently for
several reasons. First, until the 1980s, the number of drinking water regulations was fairly small,
and public water systems often did not need to make large investments in treatment technologies
to meet those regulations. Second and relatedly, good quality drinking water traditionally has
been available to many communities at relatively low cost. By comparison, essentially all
communities have had to construct or upgrade sewage treatment facilities to meet the
requirements of the CWA.
Over time, drinking water circumstances have changed, as communities have grown, and
commercial, industrial, agricultural, and residential land-uses have become more concentrated,
thus resulting in more contaminants reaching drinking water sources. Moreover, as the number of
federal drinking water standards has increased, many communities have found that their water
may not be as good as once thought and that additional treatment technologies are required to
meet the new standards and protect public health. Between 1986 and 1996, for example, the
number of regulated drinking water contaminants grew from 23 to 83, and EPA and the states
expressed concern that many of the nation’s 52,000 small community water systems were likely
to lack the financial capacity to meet the rising costs of complying with the Safe Drinking Water
Act.
Congress responded to these concerns by enacting the 1996 SDWA Amendments (P.L. 104-182)
which authorized a drinking water state revolving loan fund (DWSRF) program to help systems
finance projects needed to comply with SDWA regulations and to protect public health. (For
additional background, see CRS Report RS22037, Drinking Water State Revolving Fund
(DWSRF): Program Overview and Issues, by Mary Tiemann.) This program, fashioned after the
Clean Water Act SRF, authorizes EPA to make grants to states to capitalize DWSRFs which states
then use to make loans to public water systems. Appropriations for the program were authorized
at $599 million for FY1994 and $1 billion annually for FY1995 through FY2003. Actual
appropriations, first provided in FY1997, totaled $11.1 billion and averaged $857 million per year
through FY2009. In addition, in the American Recovery and Reinvestment Act (P.L. 111-5),
enacted in February 2009, Congress appropriated an $2.0 billion in supplemental FY2009 funds,
to be available through FY2010. FY2010 appropriations (P.L. 111-88) were $1.387 billion,
bringing the total since FY1997 to $14.5 billion and increasing the annual average to $1.0 billion.
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Author Contact Information
Claudia Copeland
Specialist in Resources and Environmental Policy
ccopeland@crs.loc.gov, 7-7227
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