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Water Infrastructure Financing:
History of EPA Appropriations
Claudia Copeland
Specialist in Resources and Environmental Policy
December 22, 2014
Congressional Research Service
7-5700
www.crs.gov
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Water Infrastructure Financing: History of EPA Appropriations
Summary
The principal federal program to aid municipal wastewater treatment plant construction is
authorized in the Clean Water Act (CWA). Established as a grant program in 1972, it now
capitalizes state loan programs. Authorizations since 1972 have totaled $65 billion, while
appropriations have totaled nearly $90 billion. It has represented 25%-30% of total funds
appropriated to the Environmental Protection Agency (EPA) in recent years.
In appropriations legislation, funding for EPA wastewater assistance is contained in the measure
providing funds for the Department of the Interior, Environment, and Related Agencies, which
includes EPA. Within the portion of that bill which funds EPA, wastewater treatment assistance is
specified in an account now called State and Tribal Assistance Grants (STAG). Three trends in the
funding of this account are most prominent: inclusion of non-infrastructure environmental grants
to states, beginning in FY1993; increasing number and amount of special purpose grants since
FY1989; and the addition of grant assistance for drinking water treatment projects in FY1997.
This report summarizes, in chronological order, congressional activity to fund items in this
account since 1987.
Prior to the 1987 amendments, wastewater treatment assistance was provided in the form of
grants made to municipalities. The federal share of project costs was generally 55%; state and
local governments were responsible for the remaining 45%. The 1987 amendments altered this
arrangement by replacing the traditional grant program with one that provides federal grants to
capitalize state clean water loan programs, or state revolving funds (SRFs). Appropriations for the
clean water SRF program through FY2015 have totaled more than $40 billion. As a general
matter, states and cities support the program changes made by the 1987 amendments 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, rather than 45%, because they are required to repay loans
to states. The greater financial burden of the act’s loan program on some cities has caused some to
seek continued grant funding.
This has been particularly evident in the appropriations process where, in recent years, Congress
has reserved as much as 30% of funds in the STAG account for special purpose grants directed to
specified communities. Since FY2000, appropriators have awarded earmarks to a larger total
number of projects, resulting in more communities receiving such grants, but at the same time
receiving smaller amounts of funds, on average. Most of the funded projects are not authorized in
the Clean Water Act or the Safe Drinking Water Act. State water quality officials, state
infrastructure financing officials, and EPA have objected to this practice, since it reduces the
amount of funding for state SRF programs. Since FY1997, the STAG account also has been used
to fund a drinking water SRF program established by Congress in 1996. Appropriations for the
drinking water SRF program through FY2015 have totaled $19.1 billion.
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Contents
Introduction ...................................................................................................................................... 1
Trends in Water Infrastructure Funding ..................................................................................... 4
SRF Capitalization Grants vs. Special Purpose Project Grants ........................................... 5
Local Cost Share on Special Purpose Grants ................................................................ 6
Capitalization Grants for a Drinking Water SRF................................................................. 8
Appropriations Chronology ............................................................................................................. 8
FY1986, FY1987 ....................................................................................................................... 8
FY1988 ...................................................................................................................................... 9
FY1989 ...................................................................................................................................... 9
FY1990 ...................................................................................................................................... 9
FY1991 .................................................................................................................................... 10
FY1992 .................................................................................................................................... 11
FY1993 .................................................................................................................................... 11
FY1994 .................................................................................................................................... 12
FY1995 .................................................................................................................................... 13
FY1996 .................................................................................................................................... 13
FY1997 .................................................................................................................................... 16
FY1998 .................................................................................................................................... 17
FY1999 .................................................................................................................................... 19
FY2000 .................................................................................................................................... 20
FY2001 .................................................................................................................................... 21
FY2002 .................................................................................................................................... 22
FY2003 .................................................................................................................................... 23
FY2004 .................................................................................................................................... 24
FY2005 .................................................................................................................................... 24
FY2006 .................................................................................................................................... 25
FY2007 .................................................................................................................................... 27
FY2008 .................................................................................................................................... 28
FY2009 .................................................................................................................................... 29
FY2009 Supplemental Appropriations, the American Recovery and Reinvestment
Act .................................................................................................................................. 29
FY2010 .................................................................................................................................... 30
FY2011 .................................................................................................................................... 31
FY2012 .................................................................................................................................... 31
FY2013 .................................................................................................................................... 32
FY2014 .................................................................................................................................... 33
FY2015 .................................................................................................................................... 34
Tables
Table 1. EPA Water Infrastructure Funding ..................................................................................... 3
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Contacts
Author Contact Information........................................................................................................... 34
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Introduction
The principal federal program to aid municipal wastewater treatment plant construction is
authorized in the Clean Water Act (CWA). Congress established this program, essentially in its
current form, in the Federal Water Pollution Control Act Amendments of 1972 (P.L. 92-500)
(although prior versions of the act had authorized less ambitious grants assistance since 1956).
Title II of P.L. 92-500 authorized grants to states for wastewater treatment plant construction
under a program administered by the Environmental Protection Agency (EPA). Federal funds are
provided through annual appropriations under a state-by-state allocation formula contained in the
act itself. States used their allotments to make grants to cities to build or upgrade wastewater
treatment plants and thus to achieve the overall objectives of the act: restoring and maintaining
the chemical, physical, and biological integrity of the nation’s waters. The federal share of project
costs, originally 75% under P.L. 92-500, was reduced to 55% in 1981.
By the mid-1980s, there was considerable policy debate between Congress and the
Administration over the future of the act’s construction grants program and, in particular, the
appropriate federal role. Through FY1984, Congress had appropriated nearly $41 billion under
this program, representing the largest nonmilitary public works programs since the Interstate
Highway System. The grants program was a target of the Reagan Administration’s budget cutters,
who sought to redirect budgetary priorities in part to sort out the appropriate roles of federal,
state, and local governments in a number of domestic policy areas, including water pollution
control. The Administration’s rationale included several points.
• The original intent of the program to address the backlog of sewage treatment
needs had been virtually eliminated by the mid-1980s.
• Most remaining projects (such as small, rural systems) were believed to pose
little environmental threat and were not appropriate federal responsibilities.
• State and local governments, in the Administration’s view, were fully capable of
running construction programs and have a clear responsibility to construct
treatment capacity to meet environmental objectives that were primarily
established by states.
Thus, the Reagan Administration sought a phaseout of the act’s construction grants program by
1990. Many states and localities supported the idea of phasing out the grants program, since many
were critical of what they viewed as burdensome rules and regulations that accompanied the
federal grant money. However, they sought a longer transition and ample flexibility to set up
long-term financing to promote state and local self-sufficiency.
Congress’s response to this debate was contained in 1987 amendments to the act (P.L. 100-4, the
Water Quality Act of 1987). It authorized $18 billion over nine years for sewage treatment plant
construction, through a combination of the Title II grants program and a new State Water
Pollution Control Revolving Funds (SRF) program. Under the new program, in Title VI of the
act, federal grants would be provided as seed money for state-administered loans to build sewage
treatment plants and, eventually, other water quality projects. Cities, in turn, would repay loans to
the state, enabling a phaseout of federal involvement while the state builds up a source of capital
for future investments. Under the amendments, the SRF program was phased in beginning in
FY1989 (in FY1989 and FY1990, appropriations were split equally between Title II and Title VI
grants) and entirely replaced the previous Title II program in FY1991. The intention was that
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states would have flexibility to set priorities and administer funding, while federal aid would end
after FY1994.
The authorizations provided in the 1987 amendments expired in FY1994, but pressure to extend
federal funding has continued, in part because, although Congress has appropriated nearly $93
billion in assistance since 1972, funding needs remain high: an additional $298.1 billion
nationwide is needed for all types of projects eligible for funding under the act, according to the
most recent formal estimate by EPA and states.1 Thus, Congress has continued to appropriate
funds, and continued to assist states and localities in meeting water infrastructure needs.
In contrast to the 40-plus years of federal support for financing municipal wastewater treatment
facilities, Congress 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
more recently, in 1996.2 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. 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. According to the most recent EPA-state survey, future funding needs for
projects to treat and deliver public drinking water supplies in the United States are $384 billion
over the next 20 years.3
1 U.S. Environmental Protection Agency, Office of Wastewater Management, Clean Watersheds Needs Survey 2008,
Report to Congress, May 2010, http://epa.gov/cwns/cwns2008rtc.pdf.
2 For information, see CRS Report RS22037, Drinking Water State Revolving Fund (DWSRF): Program Overview and
Issues, by Mary Tiemann.
3 U.S. Environmental Protection Agency, Drinking Water Infrastructure Needs Survey, Fifth Report to Congress, April
2013, EPA-816-R-13-006.
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EPA analyses have focused attention on the issue of local governments’ need for funds and what
the federal role should be in assisting states and cities. In 2002, EPA released a study, called the
Gap Analysis, which assessed the difference between current capital spending for wastewater and
drinking water infrastructure and total funding needs. EPA estimated that, over the next two
decades, the United States would need to spend nearly $660 billion to replace existing wastewater
and drinking water infrastructure systems and to build new ones. According to the study, without
increased investment, there would be about an $11 billion per year gap between then-current
capital expenditures for water infrastructure ($23 billion annually) and projected spending needs.
Although that study is now more than a decade old, the analysis is still recognized as a strong
indicator of the gap between water infrastructure investment and perceived needs. Table 1
summarizes funding for water infrastructure programs since enactment of P.L. 100-4.
In appropriations legislation, funding for these EPA programs is contained in the measure
providing funds for the Department of the Interior, Environment, and Related Agencies.4 Within
the portion of the bill which funds EPA, wastewater treatment assistance first was specified in an
account called Construction Grants, which was later renamed State Revolving
Funds/Construction Grants, then renamed Water Infrastructure. Since FY1996, this account has
been titled State and Tribal Assistance Grants (STAG). The remainder of this report summarizes,
in chronological order, congressional activity to fund items in the STAG account since the 1987
Clean Water Act amendments.
Table 1. EPA Water Infrastructure Funding
($ in millions)
Fiscal
CWA
SDWA
President’s
Total
Year
Authorization
Authorization
Request
Appropriation
1986 $2,400
$2,400 $1,800
1987 2,400
2,000 2,361
1988 2,400
2,000 2,304
1989 2,400
1,500 1,950
1990 2,400
1,200 1,980
1991 2,400
1,600 2,100
1992 1,800
1,883 2,383
1993 1,200
2,467 2,483
1994 600
599 2,047 2,375
1995 —
1,000 2,528 2,769
1996 —
1,000 2,365 2,155
1997 —
1,000 2,178 2,201
1998 —
1,000 2,078 2,468
1999 —
1,000 2,028 2,527
4 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.
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Fiscal
CWA
SDWA
President’s
Total
Year
Authorization
Authorization
Request
Appropriation
2000 —
1,000 1,753 2,561
2001 —
1,000 1,753 2,621
2002 —
1,000 2,233 2,660
2003 —
1,000 2,185 2,599
2004 —
— 1,798 2,610
2005 —
— 1,794 2,335
2006 —
— 1,649 2,006
2007 —
— 1,570 2,005
2008 —
— 1,553 1,695
2009 —
— 1,397 7,702a
2010 —
— 3,920 3,674
2011 —
— 3,307 2,505
2012 —
— 2,560 2,385
2013 —
— 2,045 2,251b
2014 —
— 1,927 2,371
2015 —
— 1,790 2,371
Total
$18,000 $9,599
$61,478
$76,227
Source: Compiled by CRS from annual appropriations acts.
a. The FY2009 total includes $6.0 billion in supplemental appropriations provided under the American
Recovery and Reinvestment Act, P.L. 111-5, consisting of $4.0 billion for CWA SRF capitalization grants and
$2.0 billion for SDWA SRF capitalization grants.
b. FY2013 total reflects post-sequester/post-rescission amounts. See text for detail.
The STAG account now includes all water infrastructure funds and management grants provided
to assist states in implementing air quality, water quality, and other media-specific environmental
programs. The FY1996 appropriation was the first to include both water infrastructure and other
state environmental grants; the latter previously were included in EPA’s general program
management account. Amounts shown in Table 1 include funds for Clean Water Act
infrastructure grants, drinking water SRF grants (discussed below), and earmarked infrastructure
projects grants (also discussed below), but Table 1 does not include the funds for consolidated
state environmental management grants. However, these state grants are discussed below in
sections providing the appropriations chronology.
Trends in Water Infrastructure Funding
Three changes are especially evident in the recent history of water infrastructure funding, as
reflected in the appropriations account where these funds are detailed. One is inclusion in the
account of non-infrastructure grants to states. This began in FY1993 with addition of Clean Water
Act Section 319 grants for state programs to manage nonpoint source pollution and was expanded
in FY1996 to include all state grants for management of environmental programs, in a single
consolidated grants appropriation.
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A second trend—until recently—has been an increasing number and amount of specially
earmarked grants for needy cities and other special purpose projects. A third trend is expansion of
the account to include SRF capitalization grants for drinking water projects, under authority of
the Safe Drinking Water Act Amendments of 1996 (P.L. 104-134).
SRF Capitalization Grants vs. Special Purpose Project Grants
The practice of earmarking a portion of the construction grants/SRF account for specific
wastewater treatment and other water quality projects began in the FY1989 legislation. Since then
it has increased to the point of representing a significant portion of appropriated funds (31% of
the total water infrastructure appropriation in FY1994, for example, but less in recent years: 2.5%
in FY2009 and 5% in FY2010). The number of projects receiving these earmarked funds also has
increased: from 4 in FY1989 to 319 in FY2010. Since FY2000, the larger total number of
earmarked projects has resulted in more communities receiving such grants, but at the same time
receiving smaller amounts of funds. Thus, while a few communities have received individual
earmarked awards of $1 million or more in recent years, the average size of earmarked grants has
shrunk: $18.1 million in FY1995, $4.9 million in FY1999, $1.08 million in FY2006, and
$586,000 in FY2010. (Conference reports on the individual appropriations bills, noted in the later
discussion in this report, provide some detail on projects funded in this manner.) The effective
result of earmarking has been to reduce the amount of funds provided to states to capitalize their
SRF programs. Of the nearly $60 billion appropriated to EPA for wastewater and drinking water
infrastructure programs since 1986, $7.5 billion has gone to earmarked project grants.5
Interest groups representing state water quality program managers and administrators of
infrastructure financing programs have criticized this practice of appropriators. They contend that
earmarking undermines the intended purpose of the state funds, to promote water quality
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 of special projects diminishes the level of
seed funding to SRFs, it delays the time when states will be financially self-sufficient and may
actually prolong the time when states seek continued federal support.
The practice of earmarking 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, as is the case with a
loan through an SRF), and the practice sidesteps the standard CWA 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 CWA authorizing committees. This is especially true since FY1992,
when special purpose grant funding was 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 for a specific community for a number of reasons. In some
cases, the communities may have been unsuccessful in seeking state approval to fund the project
under an SRF loan or other program. For some, the cost of a project financed through a state loan,
which the community must fully repay, is deemed unacceptably high, because repaying the loan
5 For additional information, see CRS Report RL32201, Water Infrastructure Projects Designated in EPA
Appropriations: Trends and Policy Implications, by Claudia Copeland.
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can result in such increased user fees that ratepayers feel are unduly burdensome. The community
then seeks a grant to avoid this costly financial scenario. This is often the case with wastewater
projects in small and rural communities. A number of the special purpose grants have been made
to projects characterized as “needy cities” based on local economic conditions.
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
earmarking by rejecting or reducing amounts and projects included in House-passed legislation.
With this difference in legislative approach, special purpose grant funding on several occasions
was an issue during the House-Senate conference on the appropriations bill. Beginning in
FY1999, however, both the House and Senate have proposed earmarked 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 more than two
decades since the last major amendments to the Clean Water Act, the desire by some Members to
address special needs problems that might be debated during reauthorization has increased, thus
leading to greater pressure on House and Senate Members to use the appropriations process to
handle such concerns.6
Technically, the Clean Water Act Title II grants program ended when authorizations for it expired
after FY1990. One result of earmarking 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 has resulted in Congress providing EPA grants for drinking water system
projects, which had not previously been available. However, as discussed in the next section,
general opposition to congressional earmarking stopped the practice each year since FY2011.
Local Cost Share on Special Purpose Grants
The federal percentage share and local match required on special purpose grants depends on the
project and the year of funding. For example, in the case of appropriations for projects in Boston,
San Diego, New York City, and Des Moines, IA (discussed below in the section concerning
FY1989), authorization of appropriations and federal cost share were specified in the 1987 Clean
Water Act amendments. For a number of other projects for which appropriations were provided in
FY1992 and FY1993, the appropriations acts specified that funds were provided “as grants under
title II,” resulting in a requirement for local communities to provide a 45% share of project costs.
After FY1993, the appropriations acts themselves are the authority for the special purpose
projects grants. In the FY1995 appropriation bill, which also directed allocation of funds
appropriated in FY1994 to several needy cities, Congress addressed the issue of federal and local
cost shares in report language accompanying the bill, but not in the appropriation act itself.7
The conferees are in agreement that the agency should work with the grant recipients on
appropriate cost-share arrangements. It is the conferees’ expectation that the agency will
6 In the 104th Congress, the House passed a comprehensive CWA reauthorization bill that included provisions
concerning water infrastructure, but because of controversies with a number of provisions, the legislation was not
enacted. Congress has considered water infrastructure funding issues several times since the 107th Congress, but no
legislation other than appropriations has been enacted. For information, see CRS Report R41594, Water Quality Issues
in the 112th Congress: Oversight and Implementation, by Claudia Copeland.
7 H.Rept. 103-715, accompanying H.R. 4624, 103rd Cong., 2d sess., p. 42.
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apply the 45% local cost share requirement under Title II of the Clean Water Act in most
cases.
In the FY1996 appropriations, both the act and accompanying reports were silent on federal/local
cost share and applicability of Title II requirements. Because of that, EPA officials planned to
require only a 5% local match for most of the special purpose grants in that bill, which is the
standard matching requirement for other EPA non-infrastructure grants. Under the agency’s rules,
the local match could include in-kind services, as well as funding toward the project.
In the FY1997 appropriations, Congress included report language as it had in FY1995 concerning
federal and local cost share requirements.8
The conferees are in agreement that the Agency should work with the grant recipients on
appropriate cost-share agreements and to that end the conferees direct the Agency to develop
a standard cost-share consistent with fiscal year 1995.
The FY1998 and FY1999 appropriations included neither bill nor report language on this point.
However, language in the House and Senate Appropriations Committees’ reports on the FY1998
and FY1999 bills directed EPA to work with grant recipients on appropriate cost-share
arrangements.9
For FY2000, Congress included explicit report language concerning the local match.10
The conferees agree that the $331,650,000 provided to communities or other entities for
construction of water and wastewater treatment facilities and for groundwater protection
infrastructure shall be accompanied by a cost-share requirement whereby 45 percent of a
project’s cost is to be the responsibility of the community or entity consistent with long-
standing guidelines for the Agency. These guidelines also offer flexibility in the application
of the cost-share requirement for those few circumstances when meeting the 45 percent
requirement is not possible.
Similar report language concerning local cost-share requirements accompanied the conference
reports on the appropriations bills from FY2001 through FY2005. Beginning with FY2004,
Congress specified in the appropriations legislation that the local share of project costs shall be
not less than 45%. Similarly, beginning with the FY2003 appropriations legislation, Congress
also specified that, except for those limited instances in which an applicant meets the criteria for a
waiver of the cost-share requirement, the earmarked grant shall provide no more than 55% of an
individual project’s cost, regardless of the amount appropriated.
The practice of earmarking special project water infrastructure grants has changed recently. First,
in FY2007, Congress applied a one-year moratorium on earmarks in all appropriations bills. For
the next three years, special project grants were allowed in appropriations bills—including
EPA’s—but again in FY2011, no special project funding was provided for congressional projects.
Following the 2010 mid-term election and during subsequent months while FY2011
appropriations were under consideration (discussed below), the general issue of congressional
8 H.Rept. 104-812, accompanying H.R. 3666, 104th Cong., 1st sess., p. 74.
9 H.Rept. 105-175, accompanying H.R. 2158, 105th Cong., 1st sess., p. 69; S.Rept. 105-216, accompanying S. 2168,
105th Cong., 2nd sess., p. 82.
10 H.Rept. 106-379, accompanying H.R. 2684, 106th Cong., 1st sess., p. 141.
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earmarks of specific projects had become highly controversial because of the overall growing
number of them, concern over the influence of special interests on spending decisions, and lack of
congressional oversight. In response, President Obama said he would veto any legislation
containing earmarks, the House extended the ban on earmarks under the Republican Conferences
rules, and the chairman of the Senate Appropriations Committee announced a moratorium on
earmarks for FY2011 and FY2012. Thus, the FY2011 full-year appropriations measure agreed to
in April 2011 contained no congressionally directed special project funds for water infrastructure
projects in the EPA STAG account. However, it did include funds requested by the President: $10
million for Alaska native and rural villages and $10 million for U.S.-Mexico Border projects.
The FY2012 full-year appropriations measure, enacted in December 2011, also contained no
special project funding in the EPA STAG account. The FY2012 bill did include funds for Alaska
native and rural villages ($10 million) and for U.S.-Mexico Border projects ($5 million).
The moratorium on congressional earmarks continued in FY2013. The FY2013 full-year
appropriations measure (P.L. 113-6) contained no special project funding in the STAG account.
As with other recent bills, however, it did include funds for Alaska native and rural villages ($9.5
million) and for U.S.-Mexico Border projects ($4.7 million). Similarly, the moratorium on
earmarks continued in FY2014 and FY2015; P.L. 113-76 contained no special project funding in
the STAG account for FY2014, but did include funds for Alaska native and rural villages ($10
million) and for U.S.-Mexico Border projects ($5 million). The FY2015 funding bill, P.L. 113-
235, was the same as FY2014.
Capitalization Grants for a Drinking Water SRF
One additional aspect of earmarking a portion of the account’s appropriation began in FY1994
when the Administration requested and Congress agreed to provide funds to capitalize state
drinking water SRFs. In response, Congress appropriated drinking water SRF grants three times,
but those actions were contingent on enactment of authorizing legislation, which occurred in
1996, as described above. Subsequently, capitalization grants for drinking water SRF programs
were provided for the first time in FY1997 and have been included in each subsequent
appropriations bill. These appropriations have totaled $19.1 billion. As Congress continues to
support both clean water SRFs and drinking water SRFs, the two types of grants share whatever
overall level of funding is available within the account.
Appropriations Chronology
FY1986, FY1987
The authorization period covered by P.L. 100-4 was FY1986-FY1994. By the time the
amendments were enacted, FY1986 was over, as was a portion of FY1987. Thus, appropriations
for those two years only indirectly reflected the policy and program changes for later years that
were contained in P.L. 100-4. For FY1986, Congress appropriated a total of $1.8 billion,
consisting of $600 million approved in December 1985 (while Congress was beginning to debate
reauthorization legislation that eventually was enacted as P.L. 100-4 in January 1987) and $1.2
billion more in July 1986.
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For FY1987, while debate on CWA reauthorization continued, President Reagan requested $2.0
billion, consistent with his legislative proposal to terminate the grants program by FY1990. In
October 1986, Congress appropriated $2.4 billion (P.L. 99-500/P.L. 99-591). However, only $1.2
billion of that amount was released immediately, pending enactment of a reauthorization bill,
which was then in conference. Following enactment of the Water Quality Act of 1987, remaining
FY1987 funds were released as part of a supplemental appropriations bill (P.L. 100-71).
Conferees on that measure agreed, however, to shift $39 million of the remaining unreleased
grant funds to other priority water quality activities authorized in P.L. 100-4. The final total of
construction grant monies was $2.361 billion.
FY1988
For FY1988 the President again requested $2.0 billion. In December 1987, Congress approved
legislation providing FY1988 appropriations (P.L. 100-202, the omnibus continuing resolution to
fund EPA and other federal agencies). In it, Congress appropriated $2.304 billion for construction
grants. Final action on the EPA budget and other funding bills had been delayed by budget-cutting
talks between Congress and the White House. Reduced construction grants funding was one of
many spending cuts required to implement a congressional-White House “summit agreement” on
the budget. The final construction grants appropriation was less than funding levels that had been
provided in separate versions of a bill passed by the House and Senate before the budget summit,
$2.4 billion.
FY1989
For FY1989, President Reagan requested $1.5 billion, or 35% below FY1988 appropriations and
37.5% less than the authorized level of $2.4 billion for FY1989. In separate versions of an EPA
appropriations bill, the House and Senate voted to provide $1.95 billion and $2.1 billion
respectively. The final figure, in P.L. 100-404, was $1.95 billion, which included $68 million for
special projects in four states. Thus, the actual amount provided for grants was $1.882 billion.
That total was divided equally between the previous Title II grants program and new Title VI SRF
program, as provided in the authorizing language of P.L. 100-4.
The FY1989 legislation was the first to include earmarking of funds for specified projects or
grants in EPA’s construction grants account, an action that continued in subsequent years, as
discussed above. All of the projects funded in the 1989 legislation were ones that had been
authorized in provisions of the Water Quality Act of 1987 (WQA, P.L. 100-4). The designated
projects were in Boston (authorized in Section 513 of the WQA, to fund the Boston Harbor
wastewater treatment project), San Diego/Tijuana (Section 510, to fund an international sewage
treatment project needed because of the flow of raw sewage from Tijuana, Mexico, across the
border), Des Moines, IA (Section 515, for sewage treatment plant construction), and Oakwood
Beach/Redhook, NY (Section 512 of the WQA, to relocate natural gas distribution facilities near
wastewater treatment works in New York City).
FY1990
For FY1990, President Reagan’s budget requested $1.2 billion in wastewater treatment assistance,
or 50% less than the authorized level and 38.5% less than the FY1989 enacted amount of $1.95
billion. Further, the Reagan budget proposed that the $1.2 billion consist of $800 million in Title
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VI monies and $400 million in Title II grants, contrary to provisions of the CWA directing that
appropriations be equally divided between the two grant programs, as in FY1989. President
Bush’s revised FY1990 budget, presented in March 1989, made no changes from the Reagan
budget in this area.
In acting on this request, Congress agreed to provide $2.05 billion, including $46 million for three
special projects (Boston, San Diego/Tijuana, and Des Moines), leaving a total of $1.002 billion
each for Titles II and VI (P.L. 101-144). Title II funds were reduced by $6.8 million, however, due
to funds earmarked for a specific project in South Carolina. Although these amounts were
appropriated, all funds in the bill were reduced by 1.55% (or, a $31.8 million reduction from the
construction grants account) to provide funds for the federal government’s anti-drug program.
Final FY1990 appropriations were altered again by passage of the FY1990 Budget Reconciliation
measure and implementation of the Balanced Budget and Emergency Deficit Control Act (the
Gramm-Rudman-Hollings Act), which established procedures to reduce budget deficits annually,
resulting in a zero deficit by 1993. For each fiscal year that the deficit was estimated to exceed
maximum targets established in law, an automatic spending reduction procedure was triggered to
eliminate deficits in excess of the targets through “sequestration,” or permanent cancellation of
budgetary resources.
Thus, to meet budget reduction mandates and, in particular, deficit reduction targets under the
Balanced Budget and Emergency Deficit Control Act (the Gramm-Rudman-Hollings Act),
additional funding cuts were included in P.L. 101-239, the Budget Reconciliation Act of 1989,
affecting construction grants funding and all other accounts not exempted from Gramm-Rudman
procedures. P.L. 101-239 provided that the “sequestration” procedures under the Gramm-
Rudman-Hollings Act would be allowed to apply for a portion of FY1990 (for 130 days, or 35.6%
of the year), providing an additional automatic spending reduction in EPA and other agencies’
programs subject to the act.
As a result of these reductions, funding for wastewater treatment aid in FY1990 totaled $1.98
billion, or $30 million more than in FY1989. The total included $53 million for special projects in
San Diego, Boston, Des Moines, and Honea Path/Ware Shoals, SC, $960 million for Title II
grants, and $967 million for Title VI grants. The combined reductions amounted to 3.4% less than
the amount agreed to by conferees on P.L. 101-144 (i.e., $2.05 billion), before subtracting funds
for anti-drug programs and accounting for effects of the Gramm-Rudman partial-year sequester.
FY1991
For FY1991, President Bush requested $1.6 billion in funding for wastewater treatment
assistance. This total included $15.4 million to be earmarked for the San Diego project authorized
in Section 510 of the Water Quality Act of 1987, to fund construction of an international sewage
treatment project. The remainder, $1.584 billion, would be only for capitalization grants under
Title VI of the act, as the 1987 legislation provides for no new Title II grants after FY1990.
In acting on EPA’s appropriations for FY1991 (P.L. 101-507), Congress agreed to provide $2.1
billion in wastewater treatment assistance. Beginning in FY1991, all appropriated funds are
utilized for capitalization grants under Title VI of the act (as provided in the Water Quality Act of
1987); funding for the traditional Title II grants program was no longer available.
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The enacted level included several earmarkings: $15.7 million for San Diego, $20 million for
Boston Harbor (Section 513 of the WQA), and $16.5 million for a new Water Quality
Cooperative Agreement Program under Section 104(b)(3) of the act.11 The President’s budget had
requested $16.5 million to support state permitting, enforcement, and water quality management
activities, especially to offset the reductions in aid to states due to elimination of state
management setasides from the previous Title II construction grants program. Congress agreed to
the level requested, but provided it as a portion of the wastewater treatment appropriation, rather
than as part of EPA’s general program management appropriation, as in the President’s request.
As a result of these earmarkings, $2.048 billion was provided for Title VI grants.
FY1992
For FY1992, President Bush requested $1.9 billion in wastewater treatment funds, or $100
million more than authorized under the Water Quality Act of 1987 for Title VI grants in FY1992.
However, out of the $1.9 billion total, the President’s request sought $1.5 billion for Title VI SRF
grants and $400 million as grants under the expired Title II construction grants program for the
following coastal cities: Boston, San Diego, New York, Los Angeles, and Seattle. Two of the five
designated projects had been authorized in the 1987 Clean Water Act amendments; the other three
did not have explicit statutory authorization. Also, $16.5 million was requested for Water Quality
Cooperative Agreement grants to the states.
In acting on the request in November 1991, Congress provided total wastewater funds of $2.4
billion (P.L. 102-139). The total was allocated as follows:
• $1,948.5 million for SRF capitalization grants,
• $16.5 million for Section 104(b)(3) grants,
• $49 million for the special project in San Diego-Tijuana (Section 510 of the
Water Quality Act),
• $46 million to the Rouge River (MI) National Wet Weather Demonstration
Project, and
• $340 million as construction grants under title II of the Clean Water Act for
several other special projects—the Back River Wastewater Treatment Plant
(Baltimore), Maryland, the Boston Harbor project, New York City, Los Angeles,
San Diego (a wastewater reclamation project), and Seattle.
This appropriation bill was the first to include special purpose grant funding for several projects
not specifically authorized in the Clean Water Act or amendments to that law.
FY1993
For FY1993, President Bush requested $2.484 billion for state revolving funds/construction
grants (now called the water infrastructure account). The requested total included $340 million to
be targeted for 55% construction grants to six communities: Boston, New York, Los Angeles, San
11 Section 104(b)(3) grants have been used to support a variety of special studies and projects allowing states and
localities to demonstrate innovative approaches to implementing the core water quality program.
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Diego, Seattle, and Baltimore. In addition, the President requested that $130 million be directed
toward a Mexican Border Initiative, consisting of $65 million for construction of the international
treatment plant at San Diego (to address the Tijuana sewage problem), $15 million for projects at
Nogales, AZ, and New River, CA, and $50 million as 50% grants for colonias in Texas.12 The
President also requested $16.5 million for Section 104(b)(3) grants. Along with these special
project and grant amounts, the request sought $2.014 billion for SRF assistance.
Final action on FY1993 funding occurred on September 25, 1992 (P.L. 102-389). It provided an
appropriation of $2.55 billion, but $622.5 million of this amount was reserved for special projects
and other grants. The bill provided $50 million in CWA Section 319 grants13 and $16.5 million in
Section 104(b)(3) grants out of the SRF amount. It included $556 million for the following
special purpose grants: the international treatment plant at San Diego (Tijuana—Section 510 of
the WQA, with bill language capping funding for that project at $239.4 million), plus projects in
Boston; New York; Los Angeles; San Diego; Seattle; Rouge River, MI; Baltimore; Ocean County,
NJ; Atlanta; and for colonias in Texas, Arizona, and New Mexico. The final SRF grant amount
under the bill was $1.928 billion.
Early in 1993, President Clinton requested that Congress approve “economic stimulus and
investment” spending, in the form of supplemental FY1993 appropriations. Both his original
proposal and a subsequent modified proposal included additional SRF grant funds, but neither of
the bills enacted by Congress in response to these requests (P.L. 103-24, P.L. 103-50) provided
additional SRF funds.
FY1994
For FY1994, the Clinton Administration requested $2.047 billion for water infrastructure. The
funds in this request were $1.198 billion to capitalize State Revolving Funds, $150 million for
Mexican Border Project grants, and $100 million for a single hardship community (Boston). The
request also included $599 million to capitalize new state drinking water revolving funds.
The final version of the FY1994 legislation (P.L. 103-124) provided $2.477 billion for water
infrastructure/state revolving funds. Of this total amount, $599 million was to be reserved for
drinking water SRFs, if authorization legislation were enacted; $80 million was for Section 319
grants; $22 million was for Section 104(b)(3) grants; and $58 million was for Tijuana/San
Diego—Section 510 of the WQA. This resulted in an appropriation of $1.718 billion for clean
water SRFs.
In addition, the final bill provided that $500 million be used to support water infrastructure
financing in economically distressed/hardship communities. Under the bill, these funds were not
12 Colonias are unincorporated areas outside city boundaries along the U.S.-Mexico border. Most lack adequate public
utilities, especially water and wastewater services.
13 The 1987 Clean Water Act amendments authorized federal grants to assist states in implementing programs to
manage water pollution from nonpoint sources such as farm and urban areas, construction, forestry, and mining sites.
Because of competing demands for funding, it had been difficult for Congress to fund this grant program and other
water quality initiatives in the 1987 Act. Appropriators did fund Section 319 grants in EPA’s general program
management account (abatement, control and compliance) in FY1990, FY1991, and FY1992, but well below
authorized levels. In the FY1993 Act, appropriators moved funding into the SRF/construction grants account, thereby
providing a degree of protection from competing priorities.
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available for spending until May 31, 1994, and were set aside until projects were authorized in the
CWA for this purpose.
Thus, the bill as enacted provided $1.218 billion immediately for clean water SRFs, with the
expectation that $500 million more would be available for financing hardship community projects
after May 31, 1994.
FY1995
For FY1995, President Clinton requested $2.65 billion for water infrastructure consisting of $1.6
billion for CWA SRFs, $100 million for Section 319 nonpoint source management grants to
states, $52.5 million for a grant to San Diego for a wastewater project pursuant to Section 510 of
the WQA, $47.5 million for other Mexican border projects, $50 million to the state of Texas for
colonias projects, and $100 million for grants under Title II for needy cities (intended for
Boston). The request included $700 million for drinking water SRFs, pending enactment of
authorizing legislation. The President’s budget also requested $21.5 million for Section 104(b)(3)
grants/cooperative agreements.
Final agreement on FY1995 funding was contained in P.L. 103-327, enacted in September 1994,
which provided a total of $2.962 billion for water infrastructure financing. Of the total, $22.5
million was for grants under Section 104(b), $100 million for Section 319 grants, $70 million for
public water system grants (grants to states under the Safe Drinking Water Act to support state
implementation of delegated drinking water programs), $52.5 million for the Section 510 project
in San Diego, and $700 million for drinking water SRFs (contingent upon enactment of
authorization legislation).
The remaining $2.017 billion was for CWA projects. Of this amount, $1.235 billion was for clean
water SRF grants to states under Title VI of the CWA. The remaining $781.8 million (39% of this
amount, 26% of the total appropriation) was designated for 45 specific, named projects in 22
states. The earmarked amounts ranged in size from $200,000 for Southern Fulton County, PA, to
$100 million for the city of Boston.
Finally, the conferees included bill language concerning release of the $500 million in FY1994
needy cities money (because the authorizing committees of Congress had not acted on legislation
to authorize specific projects, as had been intended in P.L. 103-124) as follows:
• $150 million to Boston, $50 million for colonias in Texas, $10 million for
colonias in New Mexico, $70 million for a New York City wastewater
reclamation facility, $85 million for the Rouge River project, $50 million for the
city of Los Angeles, $50 million for the county of Los Angeles, and $35 million
for Seattle, WA.
FY1996
In February 1995, President Clinton submitted the Administration’s budget request for FY1996. It
requested $2.365 billion for water infrastructure funding consisting of $1.6 billion for clean water
state revolving funds, $500 million for drinking water state revolving funds, $150 million to
support Mexico border projects under the U.S.-Mexican Border Environmental Initiative and
NAFTA, and $100 million for special need/economically distressed communities (not specified in
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the request, but presumed to be intended for Boston), plus $15 million for water infrastructure
needs in Alaska Native Villages.
In February 1995, congressional appropriations committees began considering legislation to
rescind previously appropriated FY1995 funds, as part of overall efforts by the 104th Congress to
shape the budget and federal spending. These efforts resulted in passage in July of P.L. 104-19,
which rescinded $16.5 billion in total funds from a number of departments, agencies, and
programs. In the water infrastructure area, it rescinded $1,077,200,000 from prior year
appropriations including the $3.2 million for a project in New Jersey (it had mistakenly been
funded twice in P.L. 103-327) and $1,074,000,000. Although not contained in bill language, it
was understood that the larger rescinded amount consisted solely of drinking water SRF funds
(leaving $1.235 billion for FY1995 clean water SRF funds, $778.6 million for earmarked
wastewater projects—both amounts as originally appropriated—and $225 million in FY1994-
FY1995 drinking water SRF funds that had not yet been authorized).
It took until April 1996 for Congress and the Administration to reach agreement on FY1996
appropriations for EPA as part of omnibus legislation (P.L. 104-134) that consolidated five
appropriations bills not yet enacted due to disagreements over funding levels and policy.
Agreement came as the fiscal year was more than one-half over.
Before that, however, congressional conferees reached agreement in November 1995 on FY1996
legislation for EPA (H.R. 2099, H.Rept. 104-353). Conferees agreed to provide $2.323 billion for
a new account titled State and Tribal Assistance Grants, consisting of infrastructure assistance and
state environmental management grants for 16 categorical programs that had previously been
funded in a separate appropriations account. The total included $1.125 billion for clean water
SRF grants, $275 million in new appropriations for drinking water SRF grants, and $265 million
for special purpose project grants. Report language provided that the drinking water SRF money
also included $225 million from FY1995 appropriations that were rescinded in P.L. 104-19. The
drinking water SRF money would be available upon reauthorization of the Safe Drinking Water
Act; otherwise, it would revert to clean water SRF grants if the SDWA were not reauthorized by
June 30, 1996. This made the total for drinking water SRF grants $500 million.
The November 1995 agreement on H.R. 2099 included $658 million for consolidated state
environmental grants. In doing so, Congress endorsed an Administration proposal for a more
flexible approach to state grants, a key element of EPA’s efforts to improve the federal-state
partnership in environmental programs. In lieu of traditional grants provided separately to support
state air, water, hazardous waste, and other programs, consolidated grants are intended to reduce
administrative burdens and improve environmental performance by allowing states and tribes to
target funds to meet their specific needs and integrate their environmental programs, as
appropriate. Congress’s support was described in accompanying report language.14
The conferees agree that Performance Partnership Grants are an important step to reducing
the burden and increasing the flexibility that state and tribal governments need to manage
and implement their environmental protection programs. This is an opportunity to use
limited resources in the most effective manner, yet at the same time, produce the results-
14 H.Rept. 104-384, accompanying H.R. 2099, 104th Cong., 1st sess., in Congressional Record, vol. 141, no. 193, daily
ed. December 6, 1995, p. H 14132. This was the second conference report on this bill; a previous agreement, reflected
in H.Rept. 104-353, was rejected by the House on November 29. However, amounts in the State and Tribal Assistance
Grants account were the same in both versions.
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oriented environmental performance necessary to address the most pressing concerns while
still achieving a clean environment.
Including state environmental grants in the same account with water infrastructure assistance
reflects Congress’s support for enhancing the ability of states and localities to implement
environmental programs flexibly and support for EPA’s ability to provide block grants to states
and Indian tribes.
The H.R. 2099 conference agreement also included legislative riders intended to limit or prohibit
EPA from spending money to implement several environmental programs. The Administration
opposed the riders. The House and Senate approved this bill in December, but President Clinton
vetoed it, because of objections to spending and policy aspects of the legislation.
With no full-year funding in place from October 1995 to April 1996, EPA and the programs it
administers (along with agencies and departments covered by four other appropriations bills not
yet enacted) were subject to a series of short-term continuing resolutions, some lasting only a day,
some lasting several weeks. In March 1996, the House and Senate began consideration of an
omnibus appropriations bill to fund EPA and other agencies for the remainder of FY1996, finally
reaching agreement in April on a bill (H.R. 3019) enacted as P.L. 104-134.15 Congress agreed to
provide $2.813 billion for a new account titled State and Tribal Assistance Grants, consisting of
state grants and infrastructure assistance, as in H.R. 2099, the vetoed measure. The total was
divided as follows:
• $658 million for consolidated state environmental grants,
• $1.3485 billion for clean water SRF grants (including $50 million for
impoverished communities),
• $500 million in new appropriations for drinking water SRF grants,
• $150 million for Mexico-border project grants and Texas colonias, as requested,
• $15 million for Alaskan Native Villages, as requested, and
• $141.5 million for 17 special purpose project grants.
Report language provided that the drinking water SRF money also included $225 million from
FY1995 appropriations that remained available after the rescissions in P.L. 104-19, for a total of
$725 million. The drinking water SRF money was contingent upon reauthorization of the Safe
Drinking Water Act by August 1, 1996; otherwise, it would revert to clean water SRF grants.
The final agreement (P.L. 104-134) included several of the legislative riders from previous
versions of the legislation, including riders related to drinking water and clean air, but dropped
others strongly opposed by the Administration.
Funds within the State and Tribal Assistance Grants account were redistributed after Congress
passed Safe Drinking Water Act amendments in August 1996. Enactment of the amendments (P.L.
104-182) occurred on August 6—after the August 1 deadline in P.L. 104-134 that would have
15 The conference report on H.R. 3019 (H.Rept. 104-537) references the conference report on the vetoed H.R. 2099,
making the two reports together the full statement of the conference committee regarding EPA funding and the State
and Tribal Assistance Grants account.
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made $725 million available for drinking water SRF grants in FY1996. Thus, the previously
appropriated $725 million reverted to clean water SRF grants, making the FY1996 total for those
grants $2.0735 billion.
FY1997
While debate over the FY1996 appropriations was continuing, in March 1996, President Clinton
submitted the details of a FY1997 budget. For water infrastructure and state and tribal assistance,
the request totaled $2.852 billion consisting of
• $1.35 billion for clean water SRF grants (the request included language that
would authorize states the discretion to use this SRF money either for clean water
or drinking water projects),
• $165 million for US-Mexico border projects, Texas colonias, and Alaskan Native
Village projects,
• $113 million for needy cities projects,
• $674 million for state performance partnership consolidated management grants,
and
• $550 million for drinking water infrastructure SRF funding, contingent upon
enactment of authorizing legislation.
In response to the Administration’s request, in June 1996 the House approved legislation (H.R.
3666) providing FY1997 funding for EPA. In the State and Tribal Assistance Grants account, the
House approved $2.768 billion, $84 million less than requested but on the whole endorsing the
budget request. The total provided the following: $1.35 billion for clean water SRF grants, as
requested; $165 million, as requested, for U.S.-Mexico border projects, Texas colonias, and
Alaskan Native Village projects; $450 million for drinking water SRF funding, contingent upon
authorization; $674 million for state performance partnership consolidated management grants;
and $129 million for seven special purpose grants.
In July, the Senate Appropriations Committee reported its version of H.R. 3666. The committee
approved $2.815 billion for this account, consisting of $1.426 billion for clean water SRF grants;
$550 million for drinking water SRF grants, contingent upon authorization; $165 million, as
requested, for U.S.-Mexico border projects, Texas colonias, and Alaskan Native Village projects;
and $674 million for consolidated state grants. The committee rejected the provision of the
House-passed bill providing $129 million for special purpose grants, including funds for Boston
and New Orleans requested by the Administration, saying in report language that earmarking is
provided at the expense of state revolving funds and does not represent an equitable distribution
of grant funds (S.Rept. 104-318).
During debate on H.R. 3666 in September, the Senate adopted an amendment to reduce the
FY1997 appropriation for clean water SRF grants by $725 million in order to fund the new
drinking water SRF program. This action was intended to restore funds to the drinking water
program which had been lost when Safe Drinking Water Act amendments were not enacted by
August 1, 1996. Thus, the Senate-passed bill provided $701 million for clean water SRF grants
and $1.275 billion for drinking water SRF grants for FY1997. Other amounts in the account were
unchanged.
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The conference report on H.R. 3666 (H.Rept. 104-812) was approved by the House and Senate on
September 24, 1996. President Clinton signed the bill September 26 (P.L. 104-204). It reflected
compromise of the House- and Senate-passed bills, providing the following amounts within the
State and Tribal Assistance Grants account ($2.875 billion total):
• $625 million for clean water SRF grants,
• $1.275 billion for drinking water SRF grants,
• $165 million, as requested, for U.S.-Mexico border projects, Texas colonias, and
Alaskan Native Village projects,
• $674 million for consolidated state grants, and
• $136 million for 18 specific wastewater, water, and groundwater project grants
(the 7 specified in House-passed H.R. 3666, plus 11 more; the bill provided funds
for each of the needy cities projects requested by the Administration, but in lesser
amounts).
The allocation of clean water and drinking water SRF grants was consistent with the Senate’s
action to restore funds to the drinking water program after enactment of the Safe Drinking Water
Act amendments in early August.
Subsequently, Congress passed a FY1997 Omnibus Consolidated Appropriations bill to cover
agencies and departments for which full-year funding had not been enacted by October 1, 1996
(P.L. 104-208). It included additional funding for several EPA programs, as well as $35 million
(on top of $40 million provided in P.L. 104-204) for the Boston Harbor cleanup project.
FY1998
President Clinton presented the Administration’s budget request for FY1998 in February 1997.
For water infrastructure and state and tribal assistance, the request totaled $2.793 billion,
consisting of $1.075 billion for clean water SRF grants, $725 million for drinking water SRF
grants, $715 million for consolidated state environmental grants, and $278 million for special
project grants.
House and Senate committees began activities on FY1998 funding bills somewhat late in 1997,
due to prolonged negotiations between Congress and the President over a five-year budget plan to
achieve a balanced budget by 2002. After appropriators took up the FY1998 funding bills in June,
the House passed EPA’s appropriation in H.R. 2158 (H.Rept. 105-175) on July 15. In the State
and Tribal Assistance Grants account, the House approved $3.019 billion, consisting of $1.25
billion for clean water SRF grants ($600 million more than FY1997 levels and $175 million more
than requested by the President), $750 million for drinking water SRF grants ($425 million less
than FY1997 levels, but $25 million more than the request), $750 million for state environmental
assistance grants, and $269 million for special projects. The latter included funds for the special
projects requested by the Administration but at reduced levels ($149 million total for these
projects), plus $120 million in special project grants for 21 other communities.
The Senate passed a separate version of an FY1998 appropriations bill on July 22, 1997 (S. 1034,
S.Rept. 105-53). It provided $3.047 billion for the STAG account, consisting of $1.35 billion for
clean water SRF grants, $725 million for drinking water SRF grants, $725 million for state
environmental assistance grants, and $247 million for special project grants. The Senate bill
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provided the amounts requested by the Administration for U.S.-Mexico border projects, Texas
colonias, and Alaskan Native Village projects (but no special funds for others requested by the
President), plus $82 million for 18 special project grants for other communities identified in
report language.
Conferees reached agreement on FY1998 funding in early October 1997 (H.R. 2158, H.Rept.
105-297). The final version passed the House on October 8 and passed the Senate on October 9.
President Clinton signed the bill October 27 (P.L. 105-65). As enacted, it provided $3.213 billion
for the STAG account, consisting of $1.35 billion for clean water SRF grants, $725 million for
drinking water SRF grants, $745 million for consolidated state environmental assistance grants,
and $393 million for 42 special purpose project and special community need grants for
construction of wastewater, water treatment and drinking water facilities, and groundwater
protection infrastructure. It included the following amounts for grants requested by the
Administration:
• $75 million for U.S.-Mexico border projects,
• $50 million for Texas colonias,
• $50 million for Boston Harbor wastewater needs,
• $10 million for New Orleans,
• $3 million for Bristol County, MA, and
• $15 million for Alaskan Native Village projects.
The final bill also provided funds for all of the special purpose projects included in the separate
House and Senate versions of the legislation, plus three projects not included in either earlier
version.
Bill language was included in P.L. 105-65 to allow states to cross-collateralize clean water and
drinking water SRF funds, that is, to use the combined assets of amounts appropriated to State
Revolving Funds as common security for both SRFs, which conferees said is intended to ensure
maximum opportunity for states to leverage these funds. Senate committee report language also
said that the conference report on the 1996 Safe Drinking Water Act Amendments had stated that
bond pooling and similar arrangements were not precluded under that legislation. The
appropriations bill language was intended to ensure that EPA does not take an unduly narrow
interpretation of this point which would restrict the states’ use of SRF funds.16
On November 1, 1997, President Clinton used his authority under the Line Item Veto Act (P.L.
104-130) to cancel six items of discretionary budget authority provided in P.L. 105-65. The
President’s authority under this act took effect in the 105th Congress; thus, this was the first EPA
appropriations bill affected by it. The cancelled items included funding for one of the special
purpose grants in the bill, $500,000 for new water and sewer lines in an industrial park in
McConnellsburg, PA. Reasons for the cancellation, according to the President, were that the
project had not been requested by the Administration; it would primarily benefit a private entity
and is outside the scope of EPA’s usual mission; it is a low priority use of environmental funds;
16 S.Rept. 105-53, accompanying S. 1034, 105th Cong., 1st sess., p. 71.
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and it would provide funding outside the normal process of allocating funds according to state
environmental priorities.17
However, in June 1998, the Supreme Court struck down the Line Item Veto Act as
unconstitutional, and in July the Office of Management and Budget announced that funding
would be released for 40-plus cancellations made in 1997 under that act (including those
cancelled in P.L. 105-65) that Congress had not previously overturned. (For additional
information, see CRS Report RL33635, Item Veto and Expanded Impoundment Proposals:
History and Current Status, by Virginia A. McMurtry.)
FY1999
President Clinton’s budget request for FY1999, presented to Congress in February 1998,
requested $2.9 billion for the State and Territorial Assistance Grants account, representing 37% of
the $7.9 billion total requested for EPA programs. The total included $1.075 billion for clean
water SRF grants, $775 million for drinking water SRF grants, $115 million for water
infrastructure projects along the U.S.-Mexico border projects and in Alaskan Native Villages, $78
million for needy cities projects, and $875 million for consolidated state environmental grants.
Legislative action on the budget request occurred in mid-1998. Both houses of Congress
increased amounts for water infrastructure financing, finding the Administration’s request for
clean water and drinking water SRF grants, as well as special project funding, not adequate. First,
the Senate Appropriations Committee reported its version of an EPA spending bill in June (S.
2168, S.Rept. 105-216). This bill, passed by the Senate July 17, provided $3.2 billion for the
STAG account, consisting of $1.4 billion for clean water SRF grants, $800 million for drinking
water SRF grants, $105 million for U.S.-Mexico and Alaskan Native Village projects, $100
million for 39 other special needs infrastructure grants, and $850 million for state performance
partnership/categorical grants. As in FY1998, the committee included bill language allowing
states to cross-collateralize their clean water and drinking water State Revolving Funds, making
the language explicit for FY1999 and thereafter.
Second, the House passed its version of EPA’s funding bill (H.R. 4194, H.Rept. 105-610) on July
29. This bill provided $3.2 billion for the STAG account, consisting of $1.25 billion for clean
water SRF grants, $775 million for drinking water SRF grants, $70 million for U.S.-Mexico and
Alaskan Native Village projects, $253.5 million for 49 other special needs infrastructure grants
(including nine projects also funded in the Senate bill), and $885 million for state environmental
management grants (a 20% increase above FY1998 amounts for these state grants).
Conferees resolved differences between the two versions in October 1998 (H.R. 4194, H.Rept.
105-769). The conference agreement provided $3.4 billion for the STAG account, consisting of
$1.35 billion for clean water SRF grants, $775 million for drinking water SRF grants, $80 million
for U.S.-Mexico and Alaskan rural and Native Village projects, $301.8 million for 80 other
special needs project grants, and $880 million for state and tribal environmental program grants.
17 Office of Management and Budget. “Cancellation Pursuant to Line Item Veto Act,” 62 Federal Register 59768,
November 4, 1997. The President also cancelled funding for two other projects in the EPA portion of the bill, a water
and wastewater training institute in Alabama and a solar aquatic wastewater treatment plant in Vermont. These projects
were funded under a separate EPA account in the bill, the environmental programs and management account.
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The House and Senate approved the agreement on October 7 and 8, respectively, and President
Clinton signed the bill into law on October 21 (P.L. 105-276).
Additional funding was provided in the Omnibus Consolidated and Supplemental Appropriations
Act, FY1999 (P.L. 105-277). This bill, which provided full-year funding for agencies and
departments covered by seven separate appropriations measures, directed $20 million more in
special needs grants for the Boston Harbor wastewater infrastructure project, on top of $30
million that was included in P.L. 105-276.
FY2000
For FY2000, beginning on October 1, 1999, the Administration requested $2.638 billion for water
infrastructure assistance and state environmental grants. The total, $370 million less than the
FY1999 appropriation for this account, consisted of $800 million for clean water SRF grants,
$825 million for drinking water SRF grants, $128 million for Mexican Border and special project
grants, and $885 million for consolidated state environmental grants.
The request included one SRF policy issue. The Administration asked the appropriators to grant
states the permission to set aside up to 20% of FY2000 clean water SRF monies in the form of
grants for local communities to implement nonpoint source pollution and estuary management
projects. Currently, under the Clean Water Act, SRFs may only be used to provide loans. Some
have argued that some types of water pollution projects which are eligible for SRF funding may
not be suitable for loans, as they may not generate revenues which can be used to repay the loan
to a state. This new authority, the Administration said, would allow states greater flexibility to
address nonpoint pollution problems. Critics of the proposal said that making grants from an SRF
would reduce the long-term integrity of a state’s fund, since grants would not be repaid.
Members of Congress and stakeholder groups were particularly critical of the budget request for
clean water SRF grants, $550 million (40%) less than the FY1999 level. Critics said the request
was insufficient to meet the needs of states and localities for clean water infrastructure. In
response, EPA acknowledged that several years ago the Administration made a commitment to
states that the clean water SRF would revolve at $2 billion annually in the year 2005. Because of
loan repayments and other factors, EPA said, the overall fund will be revolve at $2 billion per
year in the year 2002, even with the 20% grant setaside included in the FY2000 request.
According to EPA, the $550 million decrease from 1999 would have only a limited impact on
SRFs and would still allow the agency to meet its long-term capitalization goal of providing an
average amount of $2 billion in annual assistance.
The House and Senate passed their respective versions of an EPA appropriations bill (H.R. 2684)
in September 1999. The conference committee report resolving differences between the two
versions (H.Rept. 106-379) was passed by the House on October 14 and the Senate on October 15
and was signed by the President on October 20 (P.L. 106-74). The final bill provided $7.6 billion
overall for EPA programs, including $3.47 billion for the STAG account. Within that account, the
bill included $1.35 billion for clean water SRF grants, $820 million for drinking water SRF
grants, $885 million for consolidated state grants, $80 million for U.S.-Mexico Border and Alaska
Rural and Native Village projects, and $331.6 million for 141 other special needs water and
wastewater grants specified in report language. The final bill did not approve the Administration’s
request to allow states to use up to 20% of clean water SRF monies as grants for nonpoint
pollution and estuary management projects.
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Subsequent to enactment of the EPA funding bill, Congress passed the Consolidated
Appropriations Act for FY2000 with funding for five other agencies (P.L. 106-113), which
included provisions requiring a government-wide cut of 0.38% in discretionary appropriations.
The bill gave the President some flexibility in applying this across-the-board reduction. Details of
the reduction were announced at the time of the release of the FY2001 budget. EPA’s distribution
of the rescission resulted in a total reduction of $16.3 million for 139 of the special needs water
and wastewater projects identified in P.L. 106-74. These projects were reduced 4.9% below
enacted levels. The agency did not reduce funds for the two projects that had been included in the
President’s FY2000 budget request (Bristol County, MA, and New Orleans, LA) or for the United
States-Mexico Border and the Alaska Rural and Native Villages programs. EPA also reduced
funds for the clean water SRF (enacted at $1.35 billion) by 0.3%, for a final funding level of
$1.345 billion. The drinking water SRF appropriation was not reduced, nor were consolidated
state grants.
FY2001
The President’s budget for FY2001 requested a total of $2.9 billion for EPA. For the second year
in a row, President Clinton requested $800 million for the clean water SRF program, a $545
million reduction from the FY2000 level. The request included $825 million for the drinking
water SRF program, $100 million for U.S.-Mexico Border project grants, $15 million for Alaskan
Native Villages projects, two needy cities grants totaling $13 million (Bristol County, MA, and
New Orleans, LA), plus $1.069 billion for consolidated state environmental grants.
The budget included a policy request similar to one in the FY2000 budget, which Congress
rejected. The FY2001 budget sought flexibility for states to set aside up to 19% of clean water
SRF monies in the form of grants for local communities to implement nonpoint source pollution
and estuary management projects.
The House approved its version of EPA’s funding bill (H.R. 4635, H.Rept. 106-674) on June 21,
2000. For the STAG account, H.R. 4635 provided $3.2 billion ($273 million more than requested,
but $288 million below the FY2000 level). The total in the STAG account consisted of $1.2
billion for clean water SRF grants, $825 million for drinking water SRF grants, $1.068 billion
(the budget request) for categorical state grants, and $85 million for U.S.-Mexico Border and
Alaska Rural and Native Villages projects. Beyond these, however, the House-passed bill
included no funds for other special needs grants.
The Senate approved its version of the funding bill (S.Rept. 106-410) on October 12. For the
STAG account, the Senate-passed bill provided $3.3 billion, consisting of $1.35 billion for clean
water SRF grants, $820 million for drinking water SRF grants, $955 million for categorical state
grants, $85 million for U.S.-Mexico Border and Alaska Rural and Native Village projects, and
$110 million for special needs water and wastewater grants.
In October, the House and Senate approved EPA’s funding bill for FY2001 (H.Rept. 106-988),
providing $1.35 billion for clean water SRF grants (the same level enacted for FY2000) and $825
million for drinking water SRF grants. The enacted bill included $110 million for water
infrastructure project grants in Alaskan Rural and Native Villages and U.S.-Mexico border
projects and an additional $336 million for 237 other specified project grants throughout the
country. The bill also provided $1,008 million for state categorical program grants ($60 million
less in total than requested). Total funding for the STAG account was $3.6 billion. Congress
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disapproved the Administration’s policy request concerning use of clean water SRF monies.
President Clinton signed the bill October 27 (P.L. 106-377).
Subsequently, in December, Congress provided $21 million more for five more special project
water infrastructure grants (in addition to the $336 million in P.L. 106-377) as a provision of H.R.
4577, the FY2001 Consolidated Appropriations bill (P.L. 106-554). Also in that legislation,
Congress enacted the Wet Weather Water Quality Act, authorizing a two-year, $1.5 billion grants
program to reduce wet weather flows from municipal sewer systems. The provision was included
in Section 112, Division B, of P.L. 106-554.
FY2002
In April 2001, the Bush Administration presented its budget request for FY2002. The
Administration requested a total of $2.1 billion for clean water infrastructure funds, consisting of
$823 million for drinking water SRF grants, $850 million for clean water SRF grants (compared
with $1.35 billion appropriated for FY2001), and $450 million for the new program of municipal
sewer overflow grants under legislation enacted in December, the Wet Weather Water Quality
Act. However, that act provides that sewer overflow grants are only available in years when at
least $1.35 billion in clean water SRF grants is appropriated. Subsequently, Administration
officials said they would request that Congress modify the provision linking new grant funds to at
least $1.35 billion in clean water SRF grants. The Bush budget requested no funds for special
earmarked grants, except for $75 million to fund projects along the U.S.-Mexico border and $35
million for projects in Alaskan Native Villages (both are the same amounts provided in FY2001).
In response, some Members of Congress and outside groups criticized the budget request, saying
that it did not provide enough support for water infrastructure programs. The President’s budget
also requested $1.06 billion for state categorical program grants.
The House passed its version of FY2002 funding for EPA on July 30 (H.R. 2620, H.Rept. 107-
159). The House-passed bill provided a total of $2.4 billion for water infrastructure funds,
consisting of $1.2 billion for clean water SRF grants, $850 million for drinking water SRF grants,
$200 million for special project grants (individual projects were unspecified in the report
accompanying H.R. 2620), $75 million for U.S.-Mexico Border projects, and $30 million for
Alaskan Rural and Native Villages. The House bill provided no separate funds for the new wet
weather overflow grant program, which the Administration had requested. Including $1.08 billion
for state categorical program grants, total STAG account funding in the bill was $3.44 billion,
about $150 million higher than the President’s request.
The Senate passed its version of this appropriations bill on August 2 (S. 1216, S.Rept. 107-43).
Like the House, the Senate rejected separate funding for wet weather overflow grants, and the
Senate increased clean water SRF grant funding to the FY2001 level. The Senate-passed total for
the STAG account was $3.49 billion, including $1.35 billion for clean water SRF grants, $850
million for drinking water SRF grants, $140 million for special needs infrastructure grants
specified in accompanying report language, $75 million for U.S.-Mexico Border projects, $30
million for Alaskan Rural and Native Villages, and $1.03 billion for state categorical program
grants.
Resolution of this and other appropriations bills in fall 2001 was complicated by congressional
attention to general economic conditions and responses to the September 11 terrorist attacks on
the World Trade Center and the Pentagon. Nevertheless, the House and Senate gave final
approval to legislation providing EPA’s FY2002 funding (H.R. 2620, H.Rept. 107-272) on
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November 8, and President Bush signed the bill on November 26 (P.L. 107-73). The final bill did
not include separate funds for the new sewer overflow grant program requested by the
Administration, which both the House and Senate had rejected, but it did include $1.35 billion for
clean water SRF grants, $850 million for drinking water SRF grants, $344 million for 337
earmarked water infrastructure project grants specified in report language, and the requested $75
million for U.S.-Mexico Border projects and $30 million for Alaskan Rural and Native Villages.
The bill included total STAG funding of $3.7 billion.
FY2003
President Bush presented the Administration’s FY2003 budget request in February 2002, asking
Congress to appropriate $2.185 billion for EPA’s water infrastructure programs (compared with
$2.659 billion appropriated for FY2002). The FY2003 request sought $1.212 billion for clean
water SRF grants, $850 million for drinking water SRF grants, and $123 million for a limited
number of special projects (especially in Alaska Native Villages and in communities on the U.S.-
Mexico border). The Administration proposed to eliminate funds for unrequested infrastructure
project spending that Congress had earmarked in the FY2002 law, which totaled $344 million.
Also, the Administration requested no funds for the municipal sewer overflow grants program
enacted in 2000.
Members of Congress criticized the request level for clean water SRF capitalization grants, which
was $138 million below the FY2002 enacted amount. In August 2002, the Senate Appropriations
Committee approved an FY2003 funding bill for EPA that would provide $1.45 billion for clean
water SRF grants, $100 million more than the FY2002 level (S. 2797, S.Rept. 107-222). In
addition, the Senate committee bill included $875 million for drinking water SRF grants, $140
million for special needs infrastructure grants specified in report language, $45 million for
Alaskan Rural and Native Village project grants, $75 million for U.S.-Mexico Border projects,
and $1.134 billion for state categorical program grants.
The House Appropriations Committee approved its version of an FY2003 funding bill with $1.3
billion for the clean water SRF program (H.R. 5605, H.Rept. 107-740) in October. This bill also
included $850 million for drinking water SRF grants, $227.6 million for special needs
infrastructure grants enumerated in report language, $35 million for Alaskan Rural and Native
Village project grants, $75 million for U.S.-Mexico Border projects, and $1.173 billion for state
categorical program grants. Neither appropriations committee included funds for the sewer
overflow grant program authorized in 2000 (the Administration did not request FY2003 funds for
these grants).
Due to complex budgetary disputes during the year, final action did not occur before the 107th
Congress adjourned in November 2002, and it extended into 2003, more than five months after
the start of the fiscal year. Congress and the President reached agreement on funding levels for
EPA and other non-defense agencies in omnibus appropriations legislation, H.J.Res. 2 (H.Rept.
108-10), which the President signed on February 20 (P.L. 108-7). The EPA portion of the enacted
bill included $1.34 billion for clean water SRF grants, $844 million for drinking water SRF
grants, and $413 million more for 489 special water infrastructure project grants to individual
cities specified in conference report language, plus projects in Alaska Native Villages and
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communities on the U.S.-Mexico border. It also provided a total of $1.14 billion for categorical
state grants.18
FY2004
On February 3, 2003, before completion of the FY2003 appropriations, President Bush submitted
his budget request for FY2004. It requested a total of $1.798 billion for water infrastructure
funds, consisting of $850 million for clean water SRF grants, $850 million for drinking water
SRF grants, and $98 million for priority projects (especially in Alaska Native Villages and in
communities on the U.S.-Mexico border). As in previous years, the Administration requested no
funds for congressionally earmarked project grants for individual communities. Members of
Congress and interest groups criticized the request for clean water SRF grants ($490 million
below the FY2003 enacted level), but Administration officials responded by saying that the
request reflects a commitment to fund this program at the $850 million level through FY2011.
Funding at that level and over that long-term period, plus repayments of previous SRF loans
made by states, is expected to increase the revolving levels of the overall program from $2.0
billion to $2.8 billion per year, the Administration said. The President’s budget also requested
$1.2 billion for categorical state grants.
On July 25, the House approved H.R. 2861 (H.Rept. 108-235), providing FY2004 appropriations
for EPA. As passed, the bill included $1.2 billion for clean water SRF grants, $850 million for
drinking water SRF grants, $203 million for earmarked water infrastructure project grants, and
$75 million in grants for high-priority projects in Alaskan Native Villages and along the U.S.-
Mexico border. Senate action on its version of a funding bill for EPA (S.Rept. 108-143) occurred
on November 18. The Senate-passed bill provided $1.35 billion for clean water SRF grants, $850
million for drinking water SRF grants, $130 million for targeted infrastructure project grants, plus
$95 million in grants for projects in Alaskan Native Villages and along the U.S.-Mexico border.
Like the previous year’s appropriations, Congress did not enact legislation providing FY2004
funds for EPA before the beginning of the new fiscal year; thus EPA programs were covered by a
series of continuing resolutions (CRs). The last of these CRs (P.L. 108-135) extended FY2003
funding levels through January 31, 2004. On December 8, 2003, the House passed legislation
providing full-year funding for EPA and other agencies that lacked enacted appropriations (H.R.
2673). The conference report on this bill (H.Rept. 108-401) provided $1.34 billion for clean water
SRF grants, $845 million for drinking water SRF grants, and $425 million in grants for 520
earmarked grants in listed communities, Alaska Native Villages, and U.S.-Mexico border
projects.19 The Senate approved the conference report on January 22, 2004, and President Bush
signed the legislation January 23 (P.L. 108-199).
FY2005
The FY2005 EPA appropriation for water infrastructure funds was the lowest total for these
programs since FY1997 (the first year in which Congress provided both clean water and drinking
18 H.J.Res. 2 included an across-the-board 0.65% reduction to accounts funded by the legislation, and to each program,
project, and activity within an account. This reduction is reflected in amounts described here.
19 H.R. 2673 included an across-the-board 0.59% reduction to accounts funded by the legislation, and to each program,
project, and activity within an account. This reduction is reflected in amounts described here.
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water SRF capitalization grants, as well as earmarked project grants). The decline was due
primarily to a reduction in funding for the clean water SRF program from an average of $1.35
billion since FY1998 to $1.09 billion.
President Bush’s FY2005 budget, presented February 2, 2004, requested a total of $3.0 billion for
water infrastructure assistance and state environmental program grants. It included $850 million
for clean water SRF grants, $850 million for drinking water SRF grants, $94 million for priority
projects (primarily in Alaska Native Villages and along the U.S.-Mexico border), and $1.25
billion for categorical grants. As in recent budgets, the Administration requested no funds for
congressionally earmarked project grants. Anticipating that critics likely would focus on the clean
water SRF request ($492 million below the FY2004 level), in its budget documents the
Administration said that the request included funding for the clean water SRF at $850 million
annually through 2011, which, together with loan repayments, state matches, and other funding
sources, would result in a long-term average revolving level of $3.4 billion. Likewise, the budget
anticipated funding the drinking water SRF program at the same $850 million annually through
2011, resulting in a long-term average revolving level of $1.2 billion.
House and Senate Appropriations committees began review of the EPA budget request in March.
On September 9, 2004, the House Appropriations Committee reported FY2005 funding for EPA
in a bill that included the Administration’s requested level of $850 million for clean water SRF
grants, $850 million for drinking water SRF grants, and earmarked grants for priority water
infrastructure projects totaling $393.4 million (H.R. 5041, H.Rept. 108-674). On September 21,
the Senate Appropriations Committee reported its version of this bill (S. 2825, S.Rept. 108-353),
which included $1.35 billion for clean water SRF grants, $850 million for drinking water SRF
grants, and $217 million for earmarked project grants.
Final action on the FY2005 appropriation did not occur before the start of the fiscal year. On
November 20, the House and Senate passed H.R. 4818 (H.Rept. 108-792), the Consolidated
Appropriations Act, 2005, an omnibus appropriations bill comprising nine appropriations
measures, including funding for EPA. The bill provided total funding for EPA of $8.1 billion,20 a
decrease from the $8.4 billion approved in FY2004, but $340 million more than was requested by
the President in February. One of the most controversial items in the final bill was a $251 million
decrease for clean water SRF grants from the FY2004 level, although the $1.09 billion total is
$241 million more than in the President’s budget. The final measure also included $843 million
for drinking water SRF capitalization grants; $401.7 million for 669 earmarked grants in listed
communities, Alaska Native Villages, and U.S.-Mexico border projects; and $1.14 billion for
categorical state grants. The $2.34 billion total for water infrastructure programs and projects was
$542 million more than was requested by the President, but $276 million less than Congress
appropriated for FY2004. President Bush signed the legislation December 8, 2004 (P.L. 108-447).
FY2006
The FY2006 appropriation for water infrastructure funds marked the second consecutive year in
which Congress appropriated less funding for these programs, providing lower levels both for
clean water SRF capitalization grants and for earmarked project grants than in FY2005.
20 H.R. 4818 included an across-the-board 0.80% reduction to accounts funded by the legislation, and to each program,
project, and activity within an account. This reduction is reflected in amounts described here.
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President Bush presented the FY2006 budget request in February 2005. Overall for EPA, it
sought 5.6% less than Congress had appropriated for FY2005. The Administration’s deepest cuts
affecting EPA were proposed for the STAG account. The budget requested $730 million for clean
water SRF grants (33% below FY2005 appropriated funding and 45.6% below the FY2004 level),
$850 million for drinking water SRF grants (a slight increase from the FY2005 level), $69 million
for priority projects (primarily in Alaska Native Villages and along the U.S.-Mexico border), and
$1.2 billion for state categorical grants. As in previous years, the Administration requested no
funds for congressionally earmarked water infrastructure projects. Advocates for the SRF
programs (especially state and local government officials) contended that cuts to the clean water
program would impair their ability to carry out needed municipal wastewater treatment plant
improvement projects. Administration officials responded that the proposed SRF reductions for
FY2006 were because Congress had boosted funds above the FY2005 request level. These
officials said that the Administration plans to invest $6.8 billion in the clean water SRF program
between FY2004 and FY2011, after which federal funding is expected to end, and the state SRFs
are expected to have an annual revolving level of $3.4 billion. If Congress appropriates more than
is requested in any given year (as occurred in FY2005), they said, that target will be met sooner,
leading to reduced requests for the SRF in subsequent years until a planned phaseout in FY2011.
On May 19, 2005, the House passed H.R. 2361, providing FY2006 funding for EPA. As passed, it
provided $850 million for clean water SRF grants ($120 million more than the President’s
request), $850 million for drinking water SRF grants, and $269 million for earmarked water
infrastructure grants. During debate, the House rejected two amendments to increase clean water
SRF funding. On June 29, the Senate passed its version of H.R. 2361, providing $1.1 billion for
clean water SRF grants, $850 million for drinking water SRF grants, and $290 million for
earmarked project grants. The House bill required that $100 million of the SRF funding come
from balances from expired contracts, grants, and interagency agreements from various EPA
appropriation accounts. The Senate bill, in contrast, called for a $58 million rescission of
unobligated amounts associated with grants, contracts, and interagency agreements in various
accounts, but did not specify that such monies go to SRF funding.
Conferees resolved differences between the bills (H.Rept. 109-188), and the House and Senate
approved the measure in July; the President signed it into law on August 2 (P.L. 109-54). As
enacted, the bill provided $900 million for clean water SRF grants; $850 million for drinking
water SRF grants; $285 million for 259 earmarked grants in listed communities, Alaska Native
Villages, and along the U.S.-Mexico border; and $1.13 billion for categorical state grants. The
final bill required a $80 million rescission from expired grants, contracts, and interagency
agreements in various EPA accounts (not just the STAG account) not obligated by September 1,
2006. It did not direct the rescinded funds to be applied to the clean water SRF, as proposed by
the House. The $2.03 billion total in the bill for EPA water infrastructure programs and projects
was $386 million more than was requested by the President, but $301 million less than Congress
appropriated for FY2005.
However, the funding amounts specified in P.L. 109-54 were reduced slightly. First, a provision
of P.L. 109-54, Section 439, mandated an across-the-board rescission of 0.476% for any
discretionary appropriation in that bill. Second, in December 2005 Congress enacted P.L. 109-
148, the FY2006 Department of Defense Appropriations Act, and Section 3801 of that bill
mandated a 1% across-the-board rescission for discretionary accounts in any FY2006
appropriation act (except for discretionary authority of the Department of Veterans Affairs). As a
result of these two rescissions, the final levels for the STAG account were $887 million for clean
water SRF grants; $838 million for drinking water SRF grants; $281 million for 259 earmarked
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grants in listed communities, Alaska Native Villages, and along the U.S.-Mexico border; and
$1.11 billion for categorical state grants. FY2006 EPA water infrastructure programs and projects
thus total $2.0 billion.
On October 28, President Bush requested that Congress rescind $2.3 billion from 55 “lower-
priority federal programs and excess funds,” including $166 million from clean water SRF
monies. In the end, Congress did not endorse the specific request to reduce clean water SRF
appropriations. The two rescissions resulting from P.L. 109-54 and P.L. 109-148 totaled a $13.2
million reduction from the $900 million specified in the EPA appropriations act.
FY2007
President Bush presented the Administration’s FY2007 budget request in February 2006, asking
Congress to appropriate $1.570 billion for EPA’s water infrastructure programs. The FY2007
request sought $687.6 million for clean water SRF grants, $841.5 million for drinking water SRF
grants, and $40.6 million for special projects in Alaska Native Villages, Puerto Rico, and along
the U.S.-Mexico border. When the 109th Congress adjourned in December 2006, it had not
completed action on appropriations legislation to fund EPA (or on nine other appropriations bills
covering the majority of domestic discretionary agencies and departments) for the fiscal year that
began October 1, 2006, thus carrying over this legislative activity into the 110th Congress. In
December 2006, Congress enacted a continuing resolution, P.L. 109-383 (the third such
continuing resolution since the start of the fiscal year on October 1), providing funds for EPA and
the other affected agencies and departments until February 15, 2007.
The President’s FY2007 budget request for clean water SRF capitalization grants was 22% less
than the FY2006 appropriation for these grants and 37% below the FY2005 funding level. The
request for drinking water SRF grants was essentially the same as in recent years ($4 million
more than FY2006, $1.7 million less than FY2005). As in recent budgets, the Administration
proposed no funding for congressionally designated water infrastructure grants, but, as noted
above, it did seek a total of $40.6 million for Administration priority projects. Advocates of the
clean water SRF program (especially state and local government officials) again contended, as
they have for several recent years, that the cuts would impair their ability to carry out needed
municipal wastewater treatment plant improvement projects. Administration officials responded
that cuts for the clean water SRF in FY2007 were necessary because Congress boosted funds
above the requested level in FY2005 and FY2006.
On May 18, 2006, the House passed H.R. 5386 (H.Rept. 109-465), providing the requested level
of $687.6 million for clean water SRF grants and $841.5 million for drinking water SRF grants.
The Senate Appropriations Committee approved the same funding levels for these grant programs
when it reported H.R. 5386 on June 29 (S.Rept. 109-275), but the Senate did not act on this
measure before the 109th Congress adjourned in December. Before adjournment, Congress
enacted a continuing resolution (CR), P.L. 109-383 (the third such CR since the start of the fiscal
year on October 1), providing funds for EPA and the other affected agencies and departments
until February 15, 2007. Funding levels provided under this CR followed a “lowest level” concept
for individual programs, that is, programs were funded at the lowest level under either House-
passed FY2007 appropriations, Senate-passed appropriations, or the FY2006 funding. For clean
water SRF grants, the resulting appropriation through mid-February was $687.6 million, as in
House-passed H.R. 5386. For drinking water SRF grants, the appropriation level through mid-
February was $837.5 million, the FY2006-enacted level. The CR included funds for
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congressionally earmarked water infrastructure project grants totaling $200 million, as in House-
passed H.R. 5386.
Returning to these issues in 2007, in mid-February, Congress passed H.J.Res. 20, a continuing
appropriations resolution that provides funding for EPA and the other affected agencies through
the end of FY2007. As passed, this full-year resolution held most programs and activities at their
FY2006 appropriated levels. However, clean water SRF capitalization grants were one of the few
programs that received a funding increase under the resolution: these grants received $1.08 billion
($197 million more than in FY2006, and $396 million more than the President requested for
FY2007). The resolution further prohibited project grants for congressional earmarks, but not for
special project grants requested in the President’s budget. The action to ban earmarks in FY2007
occurred when leaders in the 110th Congress sought to finish up appropriations actions that were
unresolved at the end of the 109th Congress, and at the same time the newly elected Congress
moved to adopt rules and procedures to reform the congressional earmarking process for the
future. (Water infrastructure project earmarks totaled $281 million in EPA’s FY2006
appropriation.) President Bush signed H.J.Res. 20 on February 15 (P.L. 110-5).
The final FY2007 amounts provided in P.L. 110-5 were
• $1.084 billion for clean water SRF capitalization grants,
• $837.5 million for drinking water SRF capitalization grants,
• $83.75 million for Alaskan Native Village and U.S.-Mexico Border project grants
requested by the Administration, and
• $1.11 billion for categorical state grants.
FY2008
The President’s FY2008 budget request was presented to Congress on February 5, 2007, before
finalization of the FY2007 appropriations. The budget sought $687.6 million for clean water SRF
grants, the same amount requested for FY2007; $842.2 million for drinking water SRF grants;
$25.5 million for special project grants for Alaskan Native Villages and the U.S.-Mexico Border
region; and $1.065 billion for categorical state grants.
In June 2007, the House passed H.R. 2643, providing FY2008 appropriations for EPA. This bill
included $1.125 billion for clean water SRF grants, $842.2 million for drinking water SRF grants,
plus $175.5 million for 143 congressionally designated water infrastructure project grants. The
Senate Appropriations Committee approved companion legislation (S. 1696) that similarly
included higher funding levels for several water quality programs. The Senate committee’s bill
provided less funding for clean water SRF grants than the House bill ($887 million), the same
amount for drinking water SRF grants, and slightly more for congressionally designated water
infrastructure project grants ($180 million). The Senate did not take up S. 1696.
By October 1, the start of FY2008, Congress had not enacted any appropriations bills for
FY2008, and Congress enacted several short-term continuing appropriations resolutions to
temporarily fund EPA and other government agencies until final agreement, which occurred in
December 2007. Full-year funding for EPA’s water infrastructure programs was included in the
Consolidated Appropriations Act for FY2008 (Division F, Title II), signed by the President
December 26, 2007 (P.L. 110-161).
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The final FY2008 amounts21 provided in this legislation were
• $689.1 million for clean water SRF capitalization grants ($1.5 million more than
requested by the Administration),
• $829.0 million for drinking water SRF capitalization grants ($13.2 million less
than requested),
• $177.2 million for 282 earmarked grants in listed communities, Alaska Native
Villages, and U.S.-Mexico border projects ($151.7 million more than requested),
and
• $1.078 billion for categorical state grants ($13.3 million more than requested).
FY2009
The President’s FY2009 budget request was presented to Congress on February 6, 2008. The
budget sought $555 million for clean water SRF grants, $134 million less than Congress
appropriated for FY2008; $842.2 million for drinking water SRF grants, $13 million more than
was appropriated for FY2008; $25.5 million for special project grants for Alaskan Native Villages
and the U.S.-Mexico Border region, $18.8 million less than was appropriated for FY2008; and
$1.057 billion for categorical state grants. As in past years, the budget requested no funds for
other earmarked grants.
In June 2008, a House Appropriations subcommittee approved a bill with FY2009 funding for
EPA, but no further action occurred before the start of the fiscal year. At the end of September
2008, Congress and the President agreed to legislation providing partial-year funding for EPA and
most other agencies and departments. This bill, the Consolidated Security, Disaster Assistance,
and Continuing Resolution Act, 2009 (P.L. 110-329), provided funding through March 6, 2009, at
FY2008 funding levels. A second short-term continuing resolution was enacted on March 6 (P.L.
111-6), while Congress was finishing consideration of a full-year omnibus FY2009 appropriations
bill that the President signed on March 11 (P.L. 111-8). The omnibus bill provides $689 million in
regular appropriations for clean water SRF grants, $829 million for drinking water SRF grants—
both are the same levels as were appropriated in FY2008—and $1.094 billion for categorical state
grants. The omnibus appropriations act also includes $183.5 million for earmarked water
infrastructure grants.
FY2009 Supplemental Appropriations, the American Recovery and
Reinvestment Act
In February 2009, Congress responded to the nation’s current economic crisis by enacting the
American Recovery and Reinvestment Act (ARRA, P.L. 111-5), legislation providing FY2009
supplemental appropriations to a number of government programs. Part of the philosophy
underlying the legislation is the concept of using federal investments to make accelerated
investments in the nation’s public infrastructure in order to create jobs while also meeting
infrastructure needs. To that end, the legislation includes $4.0 billion for clean water SRF
capitalization grants (for total FY2009 funds of $4.689 billion) and $2.0 billion for drinking water
21 Finals amounts shown here reflect a 1.56% across-the-board reduction of appropriated amounts for accounts included
in Division F of the legislation.
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SRF capitalization grants (for total FY2009 funds of $2.829 billion). The supplemental SRF
funds are available for obligation through FY2010, but under the legislation, states are to give
preference when awarding funds 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. States
are to give priority to wastewater projects that can proceed to construction within 12 months of
enactment, and funds for projects that are not under contract or under construction by February
12, 2010, will be reallocated by EPA to other states. Further, the legislation requires states to
reserve at least 20% of the SRF capitalization grant funds for a Green Project Reserve, that is,
projects intended to achieve improved energy or water efficiency. It also specifies that all
assistance agreements made in whole or in part with funds appropriated under the ARRA must
comply with prevailing wage requirements of the Davis-Bacon Act.22
FY2010
President Obama presented his Administration’s FY2010 budget request on May 7, 2009. For
EPA as a whole, the budget sought $10.5 billion, a 38% increase above levels enacted in EPA’s
regular FY2009 appropriations (P.L. 111-8). The bulk of the increase in the President’s budget
was for water infrastructure assistance, which would receive 157% above FY2009 levels
(excluding ARRA supplemental funds). The request included
• $2.4 billion for clean water SRF capitalization grants;
• $1.5 billion for drinking water SRF capitalization grants;
• $20 million for Alaska Native Village and U.S.-Mexico Border projects; and
• $1.111 billion for state categorical grants (1.5% above FY2009 levels).
Congress provided FY2010 appropriations for EPA in P.L. 111-88, passed by the House and
Senate in October 2009 and signed into law on October 30. In this measure, Congress provided
the following:
• $2.1 billion for clean water SRF capitalization grants;
• $1.387 billion for drinking water SRF capitalization grants;
• $186.7 million for 319 congressionally earmarked special project grants,
including assistance for Alaska Native Villages and U.S.-Mexico Border projects;
and
• $1.116 billion for state categorical environmental grants.
The FY2010 appropriations act includes some restrictions that Congress also had specified in the
American Recovery and Reinvestment Act, discussed above, namely a requirement that 20% of
SRF capitalization grant assistance be used for “green” infrastructure and also that Davis-Bacon
Act prevailing wage rules shall apply to construction of wastewater or drinking water projects
carried out in whole or in part with assistance from the SRF.
22 For additional information, see CRS Report R40216, Water Infrastructure Funding in the American Recovery and
Reinvestment Act of 2009, by Claudia Copeland, Megan Stubbs, and Charles V. Stern.
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FY2011
President Obama presented the FY2011 budget request in February 2010. For EPA as a whole, the
budget sought $10.02 billion in discretionary budget authority, a 3% decrease from levels enacted
for EPA in FY2010. The largest component of the reduced request, compared with FY2010, is
$200 million less for grants to capitalize clean water and drinking water SRF programs. In
explaining the request, EPA budget documents noted that even with a slight reduction, the budget
“continues robust funding for the SRFs.” As in past years, the President requested no funds for
congressionally designated water infrastructure projects.23 The request included
• $2.0 billion for clean water SRF capitalization grants;
• $1.287 billion for drinking water SRF capitalization grants;
• $20 million for Alaska Native Village and U.S.-Mexico Border projects; and
• $1.277 billion for state categorical grant programs (14% higher than the FY2010
enacted amount).
Congress took only limited action on FY2011 funding for EPA before the start of the new fiscal
year on October 1, 2010: a House Appropriations subcommittee approved a bill in July, but no
further action followed. At the end of September, the House and Senate passed a continuing
resolution to extend FY2010 funding levels for EPA and other federal agencies and departments
until December 3, 2010, because no FY2011 appropriations bills had been enacted by October 1.
President Obama signed the continuing resolution (CR) on September 30 (P.L. 111-242). This bill
was followed by six more short-term CRs before Congress came to final resolution of FY2011
spending on April 14, 2011, enacting a bill to provide funding for EPA and all other federal
agencies and departments through September 30 (P.L. 112-10). The final bill reduced overall
funding for EPA 15% below the FY2010 level.
The enacted bill included24
• $1.522 billion for clean water SRF capitalization grants;
• $963.1 million for drinking water SRF capitalization grants;
• $19.96 million for Alaska Native Village and U.S. Mexico-Border projects; and
• $1.254 billion for state categorical grant programs.
FY2012
Consideration of the budget for FY2012 began even as funding for FY2011 was still not final.
The President submitted the Administration’s FY2012 budget request on February 14, 2011. It
sought $9 billion total for EPA, a decrease of $1.3 billion from the FY2010 enacted level, but 3%
higher than the FY2011 enacted level. The President’s request included $1.55 billion for clean
water SRF capitalization grants, $990 million for drinking water SRF capitalization grants, $20
23 For additional information, see CRS Report R41149, Environmental Protection Agency (EPA): Appropriations for
FY2011, by Robert Esworthy et al.
24 These amounts reflect a mandated 0.2% across-the-board rescission that was included in the final bill.
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million for Alaska Native Village and U.S.-Mexico Border assistance, and $1.2 billion for state
categorical grants.
For several days in July 2011, the House debated H.R. 2584, providing FY2012 appropriations
for EPA, but did not take final action on the bill before the August recess. As reported, the bill
provided $7.3 billion for EPA, 17% less than FY2011 funds and 19% less than the President’s
FY2012 request. It reduced funds for the clean water SRF capitalization grants to $689 million
and $829 million for drinking water SRF capitalization grants (the same levels provided in
FY2008), while including no funds for congressionally designated special projects (i.e.,
earmarks). The reported bill also provided $1.002 billion for state categorical grants. There was
no action on this bill in the Senate.
Final congressional action on FY2012 appropriations for EPA and most other federal agencies
and departments did not occur until the end of December 2011, enacted in an omnibus
appropriations act, P.L. 112-74. The enacted bill included—25
• $1.466 billion for clean water SRF capitalization grants (3.7% below FY2011);
• $917.9 million for drinking water SRF capitalization grants (4.7% below
FY2011);
• $14.976 million for Alaska Native Village and U.S.-Mexico Border projects; and
• $1.089 billion for state categorical grants.
FY2013
President Obama presented the Administration’s FY2013 budget request in February 2012. It
sought $8.34 billion overall for EPA, or 4.7% below the level enacted for FY2012. The request
included $1.175 billion for clean water SRF capitalization grants, $850 million for drinking water
SRF capitalization grants, $20 million for Alaska Native Village and U.S.-Mexico Border
assistance, and $1.2 billion for state categorical grants. The total amount requested for SRF
capitalization grants is 15% below the FY2012 enacted level, reflecting a 20% reduction for the
clean water program and a 7.4% reduction for the drinking water program.
The House Appropriations Committee approved legislation providing FY2013 funds for EPA in
July 2012 (H.R. 6091). As reported, the bill provided $689 million for clean water SRF
capitalization grants (the same level provided in FY2008), $829 million for drinking water SRF
capitalization grants, $994 million for state categorical grants, and no funds for Alaska Native
Village or U.S.-Mexico Border projects.
The House did not take up H.R. 6091, nor did the Senate act on an EPA appropriations bill
(although the Senate Appropriations Committee released a draft bill in September 2012).26 Prior
to the start of FY2013 on October 1, Congress passed and the President signed a continuing
resolution bill providing funding for government agencies and departments through March 27,
25 These amounts reflect a mandated 0.16% across-the-board rescission for programs in EPA’s portion of the legislation
that was included in the final bill.
26 See http://www.appropriations.senate.gov/news.cfm?method=news.view&id=fc23708b-fb33-4569-99b4-
6cf0d0254457.
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2013 (P.L. 112-175). This measure funded the government generally at FY2012 levels plus a
0.6% increase.
Final action on FY2013 appropriations occurred in the Further Continuing Appropriations Act,
2013 (P.L. 113-6). Funding enacted in this bill included $1.452 billion for clean water SRF
capitalization grants, $908.7 million for drinking water SRF capitalization grants, $15 million for
Alaska Native Village and U.S.-Mexico Border assistance, and $1.1 billion for state categorical
grants. However, these amounts were reduced under the March 1, 2013, sequester order of the
President, which reduced affected accounts by 5.0%, and by an across-the-board rescission of
0.2% necessary to avoid exceeding the FY2013 discretionary spending limits in law. After these
reductions, available FY2013 funding is approximately $1.38 billion for the clean water SRF
capitalization grants, $860 million for drinking water SRF capitalization grants, $14 million for
Alaska Native Village and U.S.-Mexico Border assistance, and $1.0 billion for state categorical
grants.27
FY2014
The Administration’s FY2014 budget was presented in April 2013. It sought $8.15 billion overall
for EPA, including $1.095 billion for clean water SRF capitalization grants, $817 million for
drinking water SRF capitalization grants, $15 million for Alaska Native Village and U.S.-Mexico
Border projects, and $1.136 billion for state categorical grants. The total amount requested for
SRF capitalization grants was 19% below the FY2013 enacted level.
In mid-2013, the House Appropriations Subcommittee on Interior, Environment, and Related
Agencies drafted a bill (unnumbered) that would have reduced overall funding for EPA by 34%
from the FY2013 enacted level, including an 83% reduction for clean water SRF capitalization
grants (the bill would have provided $250 million) and a 65% reduction for drinking water SRF
capitalization grants ($350 million was included in the bill). According to subcommittee
documents, the reduction was appropriate because, despite recent federal support, little progress
has been made to reduce the known water infrastructure gap.28 The full committee did not
complete markup of this bill.
The Senate Appropriations Subcommittee on Interior, Environment, and Related Agencies drafted
an alternative bill that would have maintained funding for the clean water SRF program at $1.45
billion and funding for the drinking water SRF program at $907 million.29 There was no further
action on this bill.
Congress did not reach final agreement on FY2014 appropriations before the start of the fiscal
year on October 1, but did agree to a short-term continuing appropriations measure (P.L. 113-46),
which provided funding through January 15, 2014. Final action on appropriations for EPA and all
other federal agencies and departments occurred as part of the Consolidated Appropriations Act,
2014 (H.R. 3547, P.L. 113-76), signed by the President on January 17, 2014. This bill provides
$1.45 billion for clean water SRF capitalization grants (5% more than FY2013 funds and 32%
higher than the President’s FY2014 budget request) and $907 million for drinking water SRF
27 Personal communication, U.S. Environmental Protection Agency.
28 See http://appropriations.house.gov/uploadedfiles/hrpt-113-hr-fy2014-interior.pdf, p. 62.
29 See http://www.appropriations.senate.gov/news.cfm?method=news.view&id=b3e22f9d-a060-45eb-90ef-
1225244125a7.
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capitalization grants (5% more than FY2013 funds and 11% higher than the President’s FY2014
budget request). The bill also provides $15 million for Alaska Native Village and U.S.-Mexico
Border assistance, and $1.0 billion for state categorical grants.
FY2015
The Administration’s FY2015 budget was presented on March 4, 2014. It sought $7.89 billion
overall for EPA, including $1.018 billion for clean water SRF capitalization grants, $757 million
for drinking water SRF capitalization grants, $15 million for Alaska Native Village and U.S.-
Mexico Border projects, and $1.13 billion for state categorical grants. The total amount requested
for SRF capitalization grants was 25% below the FY2014 enacted level.
Final full-year appropriations were enacted as part of the Consolidated and Further Continuing
Appropriations Act, 2015, enacted in December 2014 (P.L. 113-235). The legislation provides the
same water infrastructure funding levels as in FY2014: $1.45 billion for clean water SRF
capitalization grants and $907 million for drinking water SRF capitalization grants. Like the
FY2014 appropriations, the bill provides $15 million for Alaska Native Village and U.S.-Mexico
Border assistance, and $1.0 billion for state categorical grants.
Author Contact Information
Claudia Copeland
Specialist in Resources and Environmental Policy
ccopeland@crs.loc.gov, 7-7227
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