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

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

Agriculture (USDA), the U.S. Environmental Protection Agency (EPA), the Department of
Housing and Urban Development (HUD), and the Department of Commerce’s Economic Development Administration
(EDA).
These agencies administer these programs in multiple ways. In terms of funding mechanisms, projects developed or assisted
by Reclamation and USACE are often funded through direct, individual project authorizations from Congress. In contrast, the
other agencies administer programs with standing authorizations that establish eligibility criteria rather than identify specific
projects. A key practical difference is that with the individual project authorizations, there is no predictable assistance or even
guarantee of funding after a project is authorized, because funding must be secured each year in the congressional
appropriations process. The programs, on the other hand, have generally received some level of annual appropriations and
have set program criteria and processes by which eligible parties can seek funding.
In terms of scope and mission, the primary responsibilities of the federal agencies discussed in this report cover a wide range.
For example, EPA’s authorities relate to protecting public health and the environment. The EDA and HUD focus on
community and economic development. Likewise, the specific programs differ in several respects. Some are national in scope
(those of USDA, EPA, and EDA, for example), while others are regionally focused (Reclamation’s programs and projects).
Some focus primarily on urban areas (HUD) and some on rural areas (USDA), and others do not distinguish based on
community location or size (e.g., EPA, USACE, EDA).
Federal funding for these programs and projects varies greatly. Congressional funding for the water supply and wastewater
and drinking water programs continue to compete with many other programs that are supported by discretionary spending.
Stakeholders and others continue to call for increased appropriations for these programs. FY2021 appropriations highlights
include the following:
 $1.126 billion for capitalization grants to states under EPA’s State Revolving Fund (SRF) loan program for
drinking water systems and $1.639 billion for EPA’s SRF program for wastewater projects;
 $59.5 million for subsidy costs for the EPA-administered Water Infrastructure Finance and Innovation Act
(WIFIA) program, allowing the agency to provide credit assistance for drinking water and wastewater
infrastructure projects, not to exceed $12.5 billion;
 $463.4 million for grants, approximately $1.4 billion in direct loan authority, and $50 million for
guaranteed loan authority for USDA’s rural water and waste disposal program;
 $3.45 billion for HUD’s Community Development Block Grant (CDBG) program (water and wastewater
projects are among many eligible uses);
 $157 million for EDA’s Public Works and Economic Adjustment Assistance programs (water and
wastewater projects are among many eligible uses);
 $100 million for USACE environmental infrastructure projects; and
 $64 million for Reclamation’s Title XVI reclamation/recycling projects.

Congressional Research Service

link to page 53 Federally Supported Water Projects and Programs

Contacts
Author Information ........................................................................................................................ 49

Congressional Research Service

Federally Supported Water Projects and Programs

Introduction
This report provides background and funding information on water infrastructure projects,
including wastewater and drinking water, and water supply projects traditionally funded by the
federal government. The report also discusses federal funding programs that provide assistance to
communities to support these types of projects and related, eligible activities.
For decades, Congress has authorized and modified federal programs to help communities
address water supply and water infrastructure needs. The agencies that administer these programs
differ in multiple ways. For example, the funding mechanisms illustrate a key practical
difference: Projects developed or assisted by the Bureau of Reclamation (Reclamation) and the
U.S. Army Corps of Engineers (USACE) often require direct, individual project authorizations
from Congress. Under this funding mechanism, there is no predictable assistance or guarantee of
funding after Congress authorizes a project, because funding must be secured each year in the
congressional appropriations process.
In contrast, programs with standing authorizations generally have specific funding criteria and
provide a process under which eligible applicants seek funding. Agencies administering such
programs covered in this report include
 the Department of Agriculture (USDA),
 the Environmental Protection Agency (EPA),
 the Department of Housing and Urban Development (HUD), and
 the Department of Commerce’s Economic Development Administration (EDA).
In terms of scope and mission, the primary responsibilities of the federal agencies discussed in
this report cover a wide range. For example, EPA’s statutory requirements generally focus on
protecting public health and the environment. The EDA and HUD focus on community and
economic development. Likewise, the specific programs discussed in this report—while all
address either water supply or wastewater and drinking water infrastructure to some degree—
differ in important respects. Some are national in scope (those of USDA, EPA, and EDA, for
example), while others are regionally focused (Reclamation’s programs and projects). Some
focus primarily on urban areas (HUD), some on rural areas (USDA).
For each of the projects and programs discussed, this report describes purposes, financing
mechanisms, eligibility requirements, recent funding, and statutory/regulatory authority. The
report does not address special projects and programs aimed specifically at assisting Indian tribes,
Alaska Native Villages, and colonias1 or other regional programs such as those associated
exclusively with the Appalachian region or U.S. territories.
This report focuses on programs that support drinking water and wastewater infrastructure
projects and also municipal and industrial (M&I) water supply projects and activities. This report
generally does not address water projects and programs for irrigation, flood control,
hydroelectricity, and recreation. However, in some cases (noted below), a federal program or
agency (e.g., Reclamation and USDA) may primarily support one or more of these other
objectives while providing some support for M&I activities, even if only incidentally.

1 Colonias are typically rural, unincorporated communities or housing developments near the U.S.-Mexico border that
lack some or all basic infrastructure, including plumbing and public water and sewer.
Congressional Research Service

1

link to page 7 link to page 37 link to page 37 Federally Supported Water Projects and Programs

Other federal authorities (e.g., those of Reclamation and USACE) may be available to assist with
the provision of emergency water and wastewater needs, such as improving access to water
supplies during a drought. Such authorities are generally not discussed in this report.2
Table 1 summarizes financial and other key elements of the projects and program activities
discussed in this report. As indicated in the table, federal funding for the programs and projects
discussed in this report varies greatly. Congressional funding for the water programs discussed in
this report continue to compete with many other federal programs supported by discretionary
spending. Stakeholders and others continue to call for increased funding for these programs.
While Congress has maintained or increased federal support in recent years for some traditional
financing tools—project grants, formula grants, capitalization grants, direct and guaranteed
loans—policymakers have also considered alternative financing approaches and options to
encourage private sector investments and public-private partnerships (e.g., the Water
Infrastructure Finance and Innovation Act Program). Some supporters of these approaches see
them as options to supplement or complement, but not replace, traditional financing tools. In
addition, in recent years, Congress has revised some existing programs and authorized new grant
programs in an effort to target water infrastructure needs of small and disadvantaged
communities.

2 These programs are summarized in CRS Report R43408, Emergency Water Assistance During Drought: Federal
Non-Agricultural Programs, by Nicole T. Carter, Tadlock Cowan, and Joanna Barrett.
Congressional Research Service

2

link to page 12 link to page 12 link to page 12 link to page 12 link to page 12
Table 1. Wastewater, Drinking Water, and Water Supply Infrastructure:
Federal Funding for Projects and Programs
Agency and
Type of
Federal/
Average
FY2022
Project/
FY2021
Projects or

Financial

Nonfederal Cost

Amount of

Funding
Program Purposes
Fundinga
Program
Assistance
Share
Assistance
Request
USDOI Bureau of

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

Wastewater
De facto grant
Up to 25%/75%; dollar Not readily
$64.0 million
$5.0 million
Reclamation (Title
reclamation and
limits may apply
available
XVI, P.L. 102-
reuse,c which may
575)b
include some M&I
activities
USDOI Bureau of

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

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

Financial

Nonfederal Cost

Amount of

Funding
Program Purposes
Fundinga
Program
Assistance
Share
Assistance
Request
USACE

Reservoirs may
Upfront federal
0%/100%, with
Not applicable
$7.0 million for
$5.0 million for
Multipurpose
provide M&I water
financing of
interest
USACE to
USACE to
Reservoirs with
storage through
reservoirs; M&I
administer water
administer water
Storage for M&I
permanent or
storage is repaid
supply storage
supply storage
Waterb
temporary storage
through fees
activities
activities
agreements
collected from
nonfederal entities
USACE

Assistance is typically
Technical/planning
75%/25% generally;
Varies (see
$100.0 million
None
Environmental
for public drinking
and design services
some authorities are
report text for
Infrastructure
water and wastewater
or grants; design
65%/35%
detail)
Assistance
infrastructure and
and construction
source water
services or grants
protection and
development
USDA Rural

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

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

Construction,
Grants to private
100%/0%
Loans and

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

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

Financial

Nonfederal Cost

Amount of

Funding
Program Purposes
Fundinga
Program
Assistance
Share
Assistance
Request
USDA Rural

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

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

Multiple activities but
Project grants and
100%/0%
Not applicable
$225 million
$50 million ($175
and Flood
must generally include
technical advisory
Varies according to
($175 million
discretionary,
Prevention
flood control
services
purpose of
discretionary,
$150 million
Operations
measures
improvement activity
$50 million
mandatory)
Program
mandatory)
USDA Small

Dam rehabilitation
Project grants and
100%/0%
Not applicable
$10 million
$10 million
Watershed
technical advisory
Varies according to
Rehabilitation
services
purpose of
Program
improvement activity
EPA, Clean Water
Municipal wastewater
Grants to states to 80%/20% for grants to Average
Capitalization
Capitalization
State Revolving
treatment and other
capitalize loan
states to capitalize
capitalization
grants: $1.639
grants: $1.871
Fund (SRF) Loan
eligible projects and
funds
SRFs
grant to state:
billion
billion
Program
activities
SRF loans made by
0%/100%d (project
$31 million
states to local
loans are repaid 100%
(FY2021)e
project sponsors
to states)
Average
assistance from
SRF: $5.7 million
(FY2020)f
CRS-5

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

Financial

Nonfederal Cost

Amount of

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

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

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

Sewer overflow or
Grants to states,
55%/45%
No assistance
$40 million
$60 million
Overflow and
stormwater
which make grants
provided to
Stormwater Grant
infrastructure
to municipalities
dateh
Program
projects, with priority
for financially
distressed
communities
CRS-6

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

Financial

Nonfederal Cost

Amount of

Funding
Program Purposes
Fundinga
Program
Assistance
Share
Assistance
Request
EPA, Lead

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

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

d. This ratio does not account for additional subsidization. Under certain conditions, states may provide additional subsidization, including principal forgiveness,
negative interest loans, or a combination. In addition, appropriations acts in recent years have required states to use minimum percentages of their allotted funds to
provide additional subsidization, including grants.
e. EPA, “Annual Allotment of Federal Funds,” FY2021 table, https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-allotments-federal-funds-states.
f.
Based on annual dollar amount of binding commitments and annual number of binding commitments from CWSRF National Information Management System,
National Report, https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-national-information-management-system-reports.
g. EPA, “ WIFIA Closed Loans,” https://www.epa.gov/wifia/wifia-closed-loans.
h. For more information, see EPA, “Sewer Overflow and Stormwater Reuse Municipal Grants Program,” https://www.epa.gov/cwsrf/sewer-overflow-and-stormwater-
reuse-municipal-grants-program.
i.
For more information, see EPA, Technical Assistance for Treatment Works, https://www.epa.gov/small-and-rural-wastewater-systems/technical-assistance-
treatment-works.
j.
EPA, “EPA Selects Funding Recipients to Provide Training and Technical Assistance for Small Systems,” May 12, 2021, https://www.epa.gov/dwcapacity/training-and-
technical-assistance-small-systems-funding.
k. For more information, see EPA, “WIIN Grant: Assistance for Small and Disadvantaged Communities Drinking Water Grant,” https://www.epa.gov/dwcapacity/wiin-
grant-assistance-small-and-disadvantaged-communities-drinking-water-grant.
l.
EPA, “WIIN Grant: Reduction in Lead Exposure Via Drinking Water,” https://www.epa.gov/dwcapacity/wiin-grant-reduction-lead-exposure-drinking-water.
m. CDBG figures in this table do not include Community Development Fund set-asides.
n. The totals for the EAA program do not include supplemental appropriations or annual appropriations directed to the Assistance to Coal Communities (ACC) and
the Assistance to Nuclear Closure Communities (NCC) initiatives.

CRS-9

Federally Supported Water Projects and Programs

Department of the Interior3
Bureau of Reclamation4
The Bureau of Reclamation was established to implement the Reclamation Act of 1902, which
authorized the construction of water works to provide water for irrigation in arid western states.5
Reclamation owns and manages 475 dams and 337 reservoirs, which are capable of storing 245
million acre-feet of water.6 These facilities serve approximately 31 million people, delivering a
total of approximately 28.5 million acre-feet7 of water annually in nondrought years. Of this
amount, M&I water deliveries total approximately 2.8 million acre-feet annually and have more
than doubled since 1970.
Reclamation primarily provides M&I water supplies as part of larger, multipurpose reclamation
projects serving irrigation, flood control, power supply, and recreation purposes. However, since
1980, Congress has individually authorized construction of “rural water supply” projects.
In 1992, Congress authorized reclamation wastewater and reuse/recycling projects. These
projects, discussed below, are known as Title XVI projects because they were first authorized in
1992 under Title XVI of P.L. 102-575. This title also authorized Reclamation to undertake
specific and general feasibility studies for reclamation wastewater and reuse projects and to
research, construct, and operate demonstration projects. Even so, these projects remain a small
part of the overall Reclamation portfolio.
Historically, Reclamation constructed projects with federal funds, then established a repayment
schedule based on the amount of total construction costs allocated to specific project purposes.
Reclamation project authorizations typically require 100% repayment, with interest, for the M&I
portion of water supply facilities, which makes Reclamation assistance a de facto long-term loan.8
However, for M&I projects under rural water and Title XVI authorities, Congress has established
terms providing some or all federal funding for projects on a nonreimbursable basis (i.e., a de
facto grant). For example, the federal government fully funds rural water projects serving Indian
populations. For non-Indian rural water supply projects, Congress has authorized
nonreimbursable federal funding of as much as 75%-85% of project costs.9 The federal share of
costs for Title XVI projects is generally much lower than for rural water projects. It is limited to a

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

10

Federally Supported Water Projects and Programs

maximum of 25% of total project costs or, for projects authorized since 1996, a maximum of $20
million per project authorization.
“Traditional” Multipurpose Reclamation Projects10
Unlike many other programs described in this report, Reclamation undertakes projects largely at
the explicit direction of Congress. Local project sponsors may approach Reclamation or Congress
with proposals for project construction and funding. However, except where blanket feasibility
study authorizations exist (e.g., certain program areas described below), specific project
feasibility studies must first be authorized by Congress.11 Once a feasibility study is completed,
congressional authorization is typically sought prior to a request for construction appropriations.12
Because there is no “program” per se, there are no general eligibility or program criteria for
selecting large, multipurpose projects. Rather, Congress relies on information provided in
feasibility studies, including cost-benefit, engineering, and environmental analyses and policy
considerations.
Project Purposes
Individual authorization statutes establish project purposes. Generally, M&I projects are part of
larger, multipurpose projects such as those built for irrigation water supply, flood control, and
hydropower purposes. Projects may be authorized under the rural water supply or Title XVI water
reuse programs described below.
Financing Mechanism
Projects are financed and constructed up front by the federal government, and costs for M&I
portions of such projects are generally scheduled to be repaid 100%, with interest, via
“repayment” or “water service” contracts. Irrigation districts must also repay their share of project
benefits, but such payments are not subject to interest charges.
Eligibility Requirements
Generally, local governments and organizations such as irrigation, water, or conservation districts
may approach Reclamation and/or Congress for project support. All construction project funding
must be appropriated by Congress. As noted earlier, Reclamation only works on projects located
in the 17 western states (32 Stat. 388; 43 U.S.C. §391 et seq.) unless otherwise specifically
authorized.

10 This section discusses “traditional” authority for Reclamation to construct water resources projects. Reclamation also
has a similar (but separate) authority to construct new surface water storage projects under Section 4007 of the Water
Infrastructure Improvements for the Nation Act (P.L. 114-322). For more information about how this authority differs
from Reclamation’s traditional construction authority, see CRS In Focus IF10626, Reclamation Water Storage
Projects: Section 4007 of the Water Infrastructure Improvements for the Nation Act, by Charles V. Stern.
11 See Section 8 of the Federal Water Project Recreation Act of 1965 (P.L. 89-72, 16 U.S.C. §460l-19).
12 Section 9(a) of the Reclamation Project Act of 1939 (53 Stat. 1193; 43 U.S.C. §485h(a)) provides that, if the
Secretary of the Interior finds that the allocable benefits of the project equal or outweigh anticipated costs, then the
project shall be deemed authorized. Even so, the Secretary of the Interior has first sought congressional approval for
large construction projects in recent decades. In any case, Congress would need to provide appropriations for any new
project construction.
Congressional Research Service

11

Federally Supported Water Projects and Programs

Funding
Funding information for the M&I portions of multipurpose projects is not readily available. Total
discretionary Reclamation appropriations (gross current authority, not including permanent
funding) for FY2021 were $1.691 billion. The total FY2022 budget request for Reclamation was
$1.38 billion.13
Statutory and Regulatory Authority
Reclamation generally carries out its water supply activities in 17 western states as authorized by
the Reclamation Act of 1902, as amended (32 Stat. 388; 43 U.S.C. §391 et seq.), as well as
through hundreds of individual project authorization statutes.
Rural Water Supply Projects14
Similar to its traditional multipurpose projects, Reclamation has undertaken individual rural water
projects largely at the explicit direction of Congress. In most cases, Congress has prioritized
appropriation of funding for already-authorized projects rather than fund new rural water
construction projects.
In lieu of the project-based approach to authorizing new rural water projects, in 2006 Congress
authorized a rural water supply program (P.L. 109-451). Under the program, Reclamation was
authorized to work with rural communities and Indian tribes to identify municipal and industrial
water needs and options to address such needs through appraisal investigations and, in some
cases, feasibility studies. In 2008, Reclamation published an interim final rule establishing future
program criteria.15 According to Reclamation, between 2006 and 2016, it used this authority to
study approximately 22 projects to varying extents. It did not recommend any projects for
construction, as authorized by Congress. No projects have been constructed under this authority,
which expired at the end of FY2016 and has not been renewed. However, Congress continues to
provide funding for previously authorized rural water projects.
Project Purposes
Individual authorization statutes have established rural water project purposes. Some rural water
project authorizations meet obligations under Indian water settlements or otherwise provide
benefits to Indian tribes.
Financing Mechanism
Projects are generally cost-shared between the federal government and local sponsors. The federal
government pays up to 100% of the cost of Indian rural water supply projects, and the federal cost
share for current nontribal projects ranges from 75% to 80%. Reclamation requests and
distributes funding from Congress generally based on prioritization criteria aimed to reflect both
the priorities identified in the statutes that authorized individual projects and the goals of the
Rural Water Supply Act of 2006.

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

12

Federally Supported Water Projects and Programs

Eligibility Requirements16
Local governments and organizations such as water and conservation districts or associations,
including tribes, may approach Reclamation and/or Congress for project support. Currently, all
construction project funding must be authorized at the project level and appropriated by
Congress. As noted earlier, Reclamation works only on projects located in the 17 western states
(32 Stat. 388; 43 U.S.C. §391 et seq.) unless specifically authorized by Congress.
Reclamation previously published an interim final rule (43 C.F.R. Part 404) that established
criteria for developing new rural supply projects. However, the authority for the program has
since expired, and Congress last authorized a project in 2009.17 The rule does not apply to
previously authorized projects. As previously stated, ongoing rural water construction activities
are limited to ongoing, previously authorized projects.
Funding
Enacted funding for rural water supply projects in FY2021 was $145.0 million. This amount is
$114.7 million above the Administration’s FY2021 budget request. The Administration proposed
to allocate funding at the project level by Reclamation in the subsequent work plan for FY2021.
For FY2022, the Administration’s budget proposal requested $92.9 million for six ongoing
authorized rural water projects.
Statutory and Regulatory Authority
The Rural Water Supply Program was authorized by the Rural Water Supply Act of 2006 (P.L.
109-451, Title I; 120 Stat. 3345; 43 U.S.C. §§2401-2408 note). This programmatic authority
expired at the end of FY2016 and has not been renewed. Construction and operations and
maintenance are ongoing for several geographically specific projects that were previously
authorized under various individual acts.
Title XVI Projects
Title XVI of the Reclamation Projects Authorization and Adjustment Act of 1992 (P.L. 102-575)
directs the Secretary of the Interior to develop a program to “investigate and identify”
opportunities to reclaim and reuse wastewater and naturally impaired ground and surface water.
Water reclaimed via Title XVI projects is primarily used for M&I water supply (nonpotable and
indirect potable purposes only). Other uses include irrigation supply, groundwater recharge, fish
and wildlife enhancement, or outdoor recreation.
The original Title XVI legislation authorized construction of five reclamation wastewater projects
and six wastewater and groundwater recycling/reclamation studies. The act was amended in 1996
(P.L. 104-266) to authorize another 18 construction projects and an additional study and has been
amended several times since, resulting in a total of 53 projects individually authorized for
construction. Most recently, amendments to Title XVI enacted in December 2016 in the Water
Infrastructure Improvements for the Nation Act (WIIN Act, P.L. 114-322) made changes to the

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

13

Federally Supported Water Projects and Programs

program, including authorizing the Secretary of the Interior to accept and review nonfederal
feasibility studies for potential planning, design, and construction projects.18 As of August 2019,
54 projects had been approved under the WIIN Act authority. The WIIN Act also authorized a
competitive grant program for construction of projects approved under this authority, including an
authorization of $50 million in appropriations.19 Based on agency data, CRS estimates that as of
early 2021, the backlog of remaining federal funding needed to construct the 63 active authorized
Title XVI projects (i.e., both “traditional” and WIIN Act authorized projects) exceeded $600
million.20
Project Purposes
The general purpose of Title XVI projects is to provide supplemental water supplies by
recycling/reusing agricultural drainage water, wastewater, brackish surface and groundwater, and
other sources of contaminated water. Projects may be permanent or for demonstration purposes.
Financing Mechanism
Title XVI projects are funded through partial de facto grants. The funding is part of the larger
Reclamation WaterSMART program, which also provides grants for water conservation and river
basin studies under separate authority granted in the Secure Water Act (P.L. 111-11, Subtitle B).
Title XVI project construction costs are shared by the federal government and a local project
sponsor or sponsors. The federal share is generally limited to a maximum of 25% of total project
costs and is nonreimbursable, resulting in a de facto grant to the local project sponsor(s). In 1996,
Congress limited the federal share of individual projects to $20 million in 1996 dollars (P.L. 104-
266).
The federal share of feasibility studies is limited to 50% of the total study cost except in cases of
“financial hardship.” However, the federal share must be reimbursed. The Secretary may also
accept in-kind services that are determined to positively contribute to the study.
Eligibility Requirements
Similar to other Reclamation activities, the Title XVI water reclamation and wastewater recycling
program is limited to projects and studies in the 17 western states unless otherwise specified.21
Authorized recipients of program assistance include “legally organized non-federal entities,” such
as irrigation districts, water districts, municipalities, and Indian tribes. Prior to enactment of the
WIIN Act, Administration requests for construction funding had generally been limited to
projects where (1) an appraisal investigation and feasibility study have been completed and
approved by the Secretary, (2) the Secretary determined that the project sponsor was capable of
funding the nonfederal share of project costs, and (3) the local sponsor entered into a cost-share
agreement with Reclamation. The WIIN Act provided the Department of Interior with additional
authority to accept nonfederal feasibility studies and to approve and consider these projects for
construction funding if they meet Title XVI program criteria. These criteria require that (1) the

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

14

Federally Supported Water Projects and Programs

study comply with federal laws and regulations applicable to water reuse and recycling studies,
and (2) the project is technically and financially feasible and provides a federal benefit in
accordance with Reclamation laws. The WIIN Act authority has essentially rendered unnecessary
the prior practice of obtaining specific authorizations for individual Title XVI projects before
Reclamation can pursue funding.
Over time, Reclamation has issued and revised multiple documents outlining evaluation criteria
for prioritizing Title XVI projects. Reclamation posted the most recent evaluation criteria for Title
XVI projects in March 2018.22
Funding
The total regular appropriation for the Title XVI program in FY2021 was $64.0 million, with $20
million of this funding designated as being available for WIIN Act–authorized projects. The
Administration’s FY2022 request for Title XVI was $5.0 million.
Funding for projects authorized prior to 1996 ranged in size from $152 million ($38 million for
Reclamation’s share) to $690 million ($172 million for Reclamation’s share). Post-1996 project
authorizations have been smaller, ranging from $6.6 million ($1.65 million for Reclamation’s
share) to $319 million ($20 million for Reclamation’s share).
Statutory and Regulatory Authority
The original statutory authority for the Reclamation wastewater and reuse program is the
Reclamation Wastewater and Groundwater Study and Facilities Act, Title XVI of P.L. 102-575, as
amended (43 U.S.C. §390h et seq.). Other statutes that authorized Title XVI projects include the
Reclamation Recycling and Water Conservation Act of 1996 (P.L. 104-266); the Oregon Public
Land Transfer and Protection Act of 1998 (P.L. 105-321); the 1999 Water Resources
Development Act (WRDA, P.L. 106-53, §595); the Consolidated Appropriations Act for FY2001
(P.L. 106-554, Division B, §106); a bill amending the Reclamation Wastewater and Groundwater
Study and Facilities Act (P.L. 107-344); the Consolidated Appropriations Act for FY2003 (P.L.
108-7, Division D, §211); the Emergency Wartime Supplemental Appropriations Act of 2003
(P.L. 108-11); the Irvine Basin Surface and Groundwater Improvement Act of 2003 (P.L. 108-
233); the Williamson County Water Recycling Act of 2004 (P.L. 108-316); the Hawaii Water
Resources Act of 2005 (P.L. 109-70); the Consolidated Appropriations Act, 2008 (P.L. 110-161);
the Consolidated Natural Resources Act of 2009 (P.L. 110-229); the Omnibus Public Land
Management Act of 2009 (P.L. 111-11; Title IX, Subtitle B); and the WIIN Act (P.L. 114-322,
Title III, Subtitle J).
Department of Defense23
Army Corps of Engineers (Civil Works)
As part of its civil works activities, USACE operates water resource projects throughout the
country. USACE civil works projects and authorities are concentrated on three principal

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

15

Federally Supported Water Projects and Programs

missions—navigation, flood damage reduction, and aquatic ecosystem restoration. Some USACE
activities may also support M&I water supply storage, hydroelectric generation, fish and wildlife,
and recreation. The most common way that USACE infrastructure supports M&I water supply is
through providing storage of M&I water at a USACE reservoir.24 M&I water supply is generally
not a USACE reservoir’s or project’s primary purpose.25
Congress has authorized two USACE civil works projects to have significant water supply
components. Both are located in Arkansas and address groundwater overdraft: the Grand Prairie
Area Demonstration Project and the Bayou Meto Basin Project. These projects received USACE
funding most recently in FY2020. In Section 155 of the Water Resources Development Act of
2020 (Division AA of P.L. 116-260), Congress authorized USACE to carry out small water
storage projects,26 including for water supply; the authority has not been funded and is not
discussed further in this report.
At the direction of Congress, USACE also provides assistance for municipal environmental
infrastructure, which typically consists of assistance with municipal drinking water and
wastewater infrastructure projects and municipal source water protection and development.
The Water Infrastructure Finance and Innovation Act (WIFIA), as amended, authorizes USACE
and EPA to provide credit assistance—secured (direct) loans or loan guarantees—for a broad
range of water projects.27 Congress authorized USACE to provide WIFIA support for water
resource projects, such as flood control, hurricane and storm damage reduction, aquatic
ecosystem restoration, and navigation, and multipurpose projects that are supported by USACE
and the EPA WIFIA authorities (e.g., drinking water, wastewater, and/or stormwater system
improvements). In December 2021, Congress created a WIFIA account for USACE to implement
its WIFIA authority and provided the first funding for implementing USACE’s program―the
Civil Works Infrastructure Financing Program (CWIFP). In Division D of the Consolidated
Appropriations Act, 2021 (P.L. 116-260), Congress appropriated $14.2 million for CWIFP for
FY2021; of that, $12 million is specifically to support dam safety projects for nonfederally owned
dams (according to ownership information in the National Inventory of Dams), with the
remaining $2.2 million for USACE administrative expenses to carry out the program. USACE
has not begun providing WIFIA credit assistance; CWIFP is not discussed further in this report.

Industry Division.
24 Prior to the enactment of the WIIN Act (P.L. 114-322), USACE participated in water conservation at its reservoirs in
two ways. Congress had authorized specific USACE projects to have water conservation as a purpose for project
operations. This allowed USACE to provide for seasonal M&I use of storage space at those USACE reservoirs. The use
could be either as a direct withdrawal from the reservoir or for enhancing groundwater supplies (e.g., the USACE dam
would release water in a way that would benefit passive or active groundwater recharge efforts). Second, according to
USACE planning guidance, “project operations may be modified to enhance ground water replenishment, to increase
downstream flows, or to otherwise enhance usage of projects for M&I purposes. Modifications must be consistent with
authorized project purposes and law” (USACE, Planning Guidance Notebook, Engineer Regulation 1105-2-100, April
22, 2000, pp. 3-34). With enactment of WIIN Act (Sections 1116, 1117, and 1118), Congress provided some general
authority for USACE to operate reservoirs for “water conservation,” including groundwater recharge.
25 Congress in Section 221 of P.L. 116-260 (enacted in December 2020) directed that USACE provide the authorizing
committees within 18 months of enactment a report that analyzes the benefits and consequences of including water
supply and water conservation as a primary mission of USACE in carrying out water resources development projects.
26 The provision provides various criteria for the maximum size of the storage projects and other specific project and
program requirements (e.g., federal project costs are limited to $65 million; M&I costs are 100% nonfederal).
27 P.L. 115-270; U.S.C. §§3901-3914. For more details, see CRS Report R43315, Water Infrastructure Financing: The
Water Infrastructure Finance and Innovation Act (WIFIA) Program, by Jonathan L. Ramseur, Mary Tiemann, and
Elena H. Humphreys.
Congressional Research Service

16

link to page 37 link to page 37 Federally Supported Water Projects and Programs

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

17

Federally Supported Water Projects and Programs

Eligibility Requirements
For USACE’s water supply activities conducted using the above general authorities, nonfederal
entities can contact USACE directly about pursuing water supply activities under the general
authorities. Otherwise, nonfederal entities may submit a proposal to add or adjust water supply
aspects of specific USACE projects through an annual public proposal submission process (for
more information, see CRS Insight IN11118, Army Corps of Engineers: Section 7001 Annual
Report on Future Studies and Projects, by Anna E. Normand). Congress has used submitted
Section 7001 proposals in identifying activities to be authorized in USACE authorization
legislation.
For new USACE projects with M&I water supply, existing law and agency policy require that (1)
water supply benefits and costs be equitably allocated among multiple purposes, (2) repayment by
state or local interests be agreed to before construction, (3) the water supply allocation for
anticipated demand at any project not exceed 30% of the total estimated cost, (4) repayment shall
be either during construction (without interest) or over 30 years (with adjustable interest rates),
and (5) users reimburse USACE annually for all associated operation and maintenance or
replacement costs. Congress has enacted occasional exceptions to USACE’s general authority,
which is generally limited to storage of water supply at existing projects that does not “seriously
affect” other project purposes.28
Funding
USACE primarily uses annual appropriations for administration of its water supply authorities.
From FY2021 annual appropriations, USACE planned to use $7 million for USACE’s costs for
implementing its water supply authorities. The Administration’s FY2022 budget request included
$5 million for USACE’s implementation costs.
Statutory Authority
Statutory authority is provided in the Water Supply Act of 1958 (Title III, 72 Stat. 320, as
amended; 43 U.S.C. §390b);29 the Flood Control Act of 1944 (§6, 58 Stat. 890, as amended, 33
U.S.C. §708); and project-specific authorities in WRDAs or similar legislation.
Environmental Infrastructure Assistance
Project Purpose
Federal policy is generally that community water supply is a local and state responsibility.
However, communities, particularly rural and small communities, have increasingly sought
federal water supply assistance. Since 1992, Congress has enacted more than 350 authorizations
allowing USACE to provide designated communities, counties, and states with design and
construction assistance for drinking water and wastewater infrastructure (including treatment and
distribution/collection facilities) and source water protection and development. These activities
are known as environmental infrastructure (EI) projects or programs. The authorizations of
federal appropriations for these activities has varied widely from $0.5 million to $25 million for
planning and design assistance and from $0.2 million to $585 million for construction assistance.
As with Reclamation’s rural water supply and Title XVI projects, congressional funding of these

28 43 U.S.C. §390b(e).
29 For information on USACE’s civil works program, see http://www.usace.army.mil/Services/Pages/Services.aspx.
Congressional Research Service

18

Federally Supported Water Projects and Programs

authorizations has enlarged the scope of USACE’s activities. Like many USACE activities,
congressional support for specific EI assistance authorizations and appropriations is complicated
by the authorities’ geographic specificity, which is problematic under congressional earmark bans
and moratoria.
Financing Mechanism
Under most USACE EI assistance authorizations, federal assistance typically requires a 75%
federal and 25% nonfederal cost-share (some authorities are 65% federal and 35% nonfederal).
Congress typically provides the federal portion in annual Energy and Water Development
Appropriations acts. How USACE and nonfederal financing is managed varies according to the
specifics of the authorization. USACE may perform the authorized design or construction work
and can often use appropriated funds to reimburse nonfederal sponsors for work the sponsors
perform, subject to the availability of appropriations.
Eligibility Requirements
Because EI assistance activities are not part of a national USACE program per se, there are no
general eligibility criteria. Most USACE EI authorities specify a specific geographic location
(e.g., a city, county, or state) and types of projects (e.g., municipal drinking water) as the principal
eligibility requirements. Consequently, USACE evaluates an activity’s eligibility by identifying
whether there is an authorization for the geographic area of the activity and whether the type of
activity is eligible under that authorization. Based on a review of enacted legislation likely to
include EI assistance authorities, CRS identified authorized EI assistance in at least 44 states, the
District of Columbia, Puerto Rico, the U.S. Virgin Islands, and the Northern Mariana Islands.
CRS did not identify authorities for EI assistance in Delaware, Hawaii, Iowa, Maine, Nebraska,
Washington, and other U.S. territories. Because this assistance is not associated with a traditional
USACE water resources projects, it is not subject to USACE planning requirements (e.g., a
benefit-cost analysis is not performed).
Funding
Only a subset of authorized USACE EI activities has received appropriations. Since 1992,
Congress has provided USACE roughly $2 billion in funds for EI assistance. Congress provided
USACE with $100 million for EI assistance activities in FY2020 and FY2021. These funds are
part of the “additional funding” provided by Congress in appropriations acts. The Administration
follows guidance provided in the appropriations acts and accompanying reports to guide its use of
these funds for authorized EI assistance activities. USACE identifies selected EI assistance
activities in the agency’s Work Plan for the fiscal year, which is typically available within two
months after enactment of appropriations.30 Funds are generally used to continue ongoing EI
assistance, but in FY2020, one authority received funding for the first time since FY2010.31

30 EI assistance is funded through the agency’s Construction account in Energy and Water Appropriations acts. USACE
Work Plans for recent fiscal years are published at this USACE website http://www.usace.army.mil/Missions/Civil-
Works/Budget/. For more information on USACE appropriations, see CRS Report R46320, U.S. Army Corps of
Engineers: Annual Appropriations Process and Issues for Congress, by Anna E. Normand and Nicole T. Carter.
31 For more information, see CRS In Focus IF11184, Army Corps of Engineers: Environmental Infrastructure
Assistance, by Anna E. Normand.
Congressional Research Service

19

Federally Supported Water Projects and Programs

The Biden Administration requested no funding for these activities in its FY2022 request. Since
the first authorization for EI assistance in 1992, no Administration has asked for funding for
USACE EI assistance.
Statutory Authority
Prior to 1992, USACE was generally not widely involved with municipal drinking water
treatment and distribution and wastewater collection and treatment. The agency is now authorized
to contribute to more than 350 EI projects and programs. A WRDA or similar legislation is the
typical legislative vehicle for USACE authorizations.32 Beginning with Sections 219 and 313 of
WRDA 1992 (P.L. 102-580), Congress has authorized USACE to assist local interests with
planning, design, and construction assistance for EI projects. Subsequent USACE authorization
bills included new EI assistance activities and raised the authorized funding ceilings for
previously authorized projects. Policies limiting congressionally directed spending have limited
recent congressional authorizing activity of EI assistance. In WRDA 2016 and WRDA 2018,
Congress expanded the Section 7001 process for nonfederal entities to propose modifications to
existing authorities for EI assistance. For those proposals that meet the criteria established by
Congress, the Administration transmits those proposals to Congress for its consideration as part
of deliberations regarding USACE authorization legislation.33
Department of Agriculture
Rural Utilities Service (Water and Waste Disposal Programs)34
USDA administers a variety of water and waste disposal35 programs that provide loans and grants
for drinking water, sanitary sewer, and storm drainage facilities in rural communities. Eligibility
is limited to rural communities of 10,000 population or fewer for grants and direct loans and
50,000 or fewer for guaranteed loans. These programs are administered at the national level by
the Rural Utilities Service (RUS) at USDA. RUS allocates program funds to the USDA State
Rural Development offices through an allocation formula based on rural population, poverty, and
unemployment. Loans originate at the USDA’s State Rural Development offices.
Between 2009 and 2016, RUS funded $13.9 billion for nearly 5,825 projects for water and
wastewater facilities.36 According to an RUS FY2016 annual report (most recent available), 46%
of $1.8 billion in investments in that year were for water systems, 49% were for wastewater

32 For more on this public proposal process, see CRS Insight IN11118, Army Corps of Engineers: Section 7001 Annual
Report on Future Studies and Projects, by Anna E. Normand; and this USACE website: http://www.usace.army.mil/
Missions/Civil-Works/Project-Planning/WRRDA-7001-Proposals/.
33 For more on this public proposal process, see CRS Insight IN11118, Army Corps of Engineers: Section 7001 Annual
Report on Future Studies and Projects, by Anna E. Normand; and this USACE website: http://www.usace.army.mil/
Missions/Civil-Works/Project-Planning/WRRDA-7001-Proposals/.
34 This section was prepared by Tadlock Cowan, Analyst in Natural Resources and Rural Development Policy,
Resources, Science, and Industry Division.
35 The programs’ official titles contain “Waste Disposal,” but note that the vast majority of the waste disposal projects
are for wastewater infrastructure. A very small amount of funding, typically less than 1%, goes to technical assistance
related to solid waste management, although Congress authorizes annual appropriations for solid waste management
grants.
36 USDA, “Water and Environmental Program: FY2016 Progress Report,” https://www.rd.usda.gov/files/WEP-
AnnualProgressReport2016Final.pdf.
Congressional Research Service

20

Federally Supported Water Projects and Programs

systems, and the remaining 5% were for combined projects. There is heavy demand for water and
wastewater disposal funds for small rural communities. At the end of FY2018, USDA reported a
$2.5 billion backlog of requests for water and wastewater projects.37
Water and Wastewater Loans and Grants
Program Purpose
The purpose of these programs is to provide basic human amenities, alleviate health hazards, and
promote the orderly growth of the nation’s rural areas by meeting the need for new and improved
rural water and waste disposal facilities. Eligible projects can include drinking water facilities,
sanitary sewers, and stormwater drainage and disposal facilities. Funds may be used for
installation, repair, improvement, or expansion of rural water facilities, including costs of
distribution lines and well-pumping facilities.
USDA is required to use a portion of the water and waste grants appropriation to make grants to
qualified nonprofits to provide technical assistance and training to help communities identify
solutions to water and waste problems, prepare applications for grants and loans, and improve
operation and maintenance of existing water and waste disposal facilities in rural areas.38 The
2018 farm bill (P.L. 115-334) directed the Secretary to reserve 3%-5% of total water and waste
grant funding for this technical assistance and training. This activity has received $18 million to
$20 million annually in recent years. For FY2020, Congress specified that funding for technical
assistance for water and waste disposal facilities may not exceed $30 million.39 In addition, the
similar Circuit Rider technical assistance program has an appropriation of $19.6 million for
FY2020.40 The 2018 farm bill authorized appropriations for this program at $25 million annually
for FY2019-FY2023.
Financing Mechanism
Direct loans, guaranteed loans, and grants provide USDA support for water and waste disposal
projects. USDA prefers making direct loans. Grants are made only when necessary to reduce
average annual user charges to a reasonable level, particularly for lower-income communities.
The split between loans and grants distributed from the regular infrastructure program, which is
the large majority of spending, was about 75-25 in 2015 and 2016.41 There is no statutory
distribution formula. USDA allocates funds to states based upon rural population, number of
households in poverty, and unemployment. There are no matching requirements for states.
Water and Waste Disposal Loans
The Rural Development Act of 1972 authorized establishment of the Rural Development
Insurance Fund under the Consolidated Farm and Rural Development Act. Among other
activities, this fund is used for loans (direct and guaranteed) for projects for the development,
storage, treatment, purification, or distribution of water or the collection, treatment, or disposal of
waste in low-income rural areas. Loans are repayable in not more than 40 years or the useful life

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

21

Federally Supported Water Projects and Programs

of the facilities, whichever is less. USDA makes either direct loans to applicants or guarantees up
to 90% of loans made by third-party lenders such as banks and savings and loan associations.
Loan interest rates are based on the community’s economic capacity and health environment.
Interest rates are designated poverty, market, or intermediate. Poverty interest rate loans are made
in areas where the median household income (MHI) falls below 80% of the statewide nonurban
MHI or the poverty level, whichever is higher, and where the project is needed to meet health or
sanitary standards. By law, this rate is set at 60% of the market rate. The market rate is adjusted
quarterly and is set using the average of a specified 11-bond index. It applies to loans to
applicants where the MHI of the service area exceeds the statewide nonurban MHI. The
intermediate rate applies to loans that do not meet the criteria for the poverty rate and do not have
to pay the market rate. By law, this rate is set at 80% of the market rate.42 Interest rates on
guaranteed loans are negotiated between the borrower and the lender. The 2014 farm bill (P.L.
113-79) amended (1) the water and waste disposal direct and guaranteed loan programs to
encourage financing by private or cooperative lenders to the maximum extent possible; (2) use of
loan guarantees where the population exceeds 5,500; and (3) use of direct loans where the impact
of a guaranteed loan on rate payers would be significant. The average direct loan amount for
FY2019 was $2.3 million. The average guaranteed loan amount was $1.4 million.
Water and Waste Disposal Grants
Grants for water and waste disposal projects in rural areas are also authorized under the
Consolidated Farm and Rural Development Act. Only communities with poverty and
intermediate-rate incomes qualify for USDA grants. An eligible project must serve a rural area
that is not likely to decline in population below the level for which the project was designed and
constructed so that adequate capacity will or can be made available to serve the reasonably
foreseeable growth needs of the area. The 2018 farm bill (P.L. 115-334) authorized appropriations
at $15 million annually for FY2019-FY2023 for these grants. The appropriation for water and
wastewater grants for FY2020 is $443 million. The average grant award in FY2019 was $1.3
million.
Grant funds may be available for up to 75% of the cost of a project and should be used only to
reduce user costs to a reasonable level. Grants are made only after RUS determines the maximum
amount of loan that a community can afford and still have reasonable user rates. Grants, which
typically provide 35%-45% of project costs, may be used to supplement other funds borrowed or
furnished by applicants for project costs and may be combined with USDA loans when the
applicant is able to repay part, but not all, of the project costs. Priority is given to projects serving
populations of less than 5,500.
Eligibility Requirements
Eligible entities are municipalities, counties, and other political subdivisions of a state;
associations, cooperatives,43 and organizations operated on a not-for-profit basis; Indian tribes on
federal and state reservations; and other federally recognized tribes. USDA’s loan and grant
programs are limited to community service areas (including areas in cities or towns) with
population of 10,000 or fewer for grants and direct loans and 50,000 or fewer for guaranteed
loans. To be eligible for assistance, communities must be unable to get reasonable credit through

42 For current interest rates, see http://www.rd.usda.gov/programs-services/water-waste-disposal-loan-grant-program.
43 Rural electric cooperatives (coops) are private entities that build and manage rural utility systems. The 1990 farm bill
(P.L. 101-624) authorized rural coops to expand from their traditional electricity and telephone services. An estimated
80-90 rural electric coops (fewer than 10% of the total number of coops nationwide) are currently involved in some
aspect of drinking water or wastewater management, with the majority dealing with drinking water management.
Congressional Research Service

22

Federally Supported Water Projects and Programs

normal commercial channels. Also, communities must be below certain income levels. Loans and
grants are made for projects needed to meet health or sanitary standards, including Clean Water
Act and Safe Drinking Water Act standards and requirements.
Funding
FY2020 appropriations for USDA’s water and waste disposal programs and related programs
were included in the Further Consolidated Appropriations Act, 2020 (P.L. 116-94). Title III of
Division B provided $659.5 million in total for FY2020, including $443.0 million in grants, $63.8
million in direct loan subsidies ($1.40 billion in loan authority), and $70,000 in subsidy to
support guaranteed loans ($50.0 million in loan authority). Out of the total FY2020 funds, USDA
has appropriations of $1.0 million for grants to capitalize revolving loans for water and waste
disposal systems and $68.0 million to support water and waste disposal projects in the colonias,
Alaska Native communities, and Hawaiian Native communities. For FY2021, the Administration
is requesting $1.27 billion in direct loan authority, $58.0 million for guaranteed loans, and $463
million for water and waste disposal grants. No appropriation for supporting loan subsidies was
requested.
Statutory and Regulatory Authority
Statutory authority for the water and waste disposal loan and grant programs, water technical
assistance, and other rural water assistance programs is the Consolidated Farm and Rural
Development Act, as amended, (§306, 7 U.S.C. §1926). Regulations for these programs are
codified at Title 7, Parts 1779-1780, of the Code of Federal Regulations.44
Emergency Community Water Assistance Grants
RUS is also authorized to help eligible communities prepare for or recover from an emergency
that threatens the availability of safe, reliable drinking water.45 Grants, ranging from $10,000 to a
maximum of $1 million are provided for projects to serve a rural area with a population of 10,000
or fewer that has an MHI not in excess of the statewide nonmetropolitan MHI. Grants for repairs,
partial replacement, or significant maintenance of an established system cannot exceed $150,000.
Communities use the funds for new systems, waterline extensions, construction of water source
and treatment facilities, and repairs or renovation of existing systems and may be awarded for
100% of project cost. Applicants compete on a national basis for available funding. Funding for
this program is provided primarily through a reservation of 5%-7% of appropriated water and
waste disposal grant funds. The 2018 farm bill (P.L. 115-334) also authorized the appropriation of
an additional $50 million per year through FY2023 for this program. Amounts provided through
this program have been quite variable over time, depending on need. In FY2014, $14.7 million
was distributed in 14 states. In FY2015, $2.5 million was distributed in 14 states. Congress
appropriated $15 million for the program for both FY2019 and FY2020.
Statutory authority for the emergency community water assistance grant program is the
Consolidated Farm and Rural Development Act, as amended, Section 306A (7 U.S.C. §1926a).
Regulations for this program are codified at Title 7, Part 1778, of the Code of Federal
Regulations.

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

23

Federally Supported Water Projects and Programs

Rural Decentralized Water Systems Grants
USDA is also authorized to make grants to private nonprofit organizations for the purpose of
providing loans and subgrants to eligible individuals for construction, refurbishing, and servicing
of “individual household water well systems and individually owned decentralized wastewater
systems.”46 Loans and subgrants are limited to $15,000 per water well or decentralized system.
The 2018 farm bill (P.L. 115-334) authorized $20.0 million for the program through FY2023.
Appropriations for the program for FY2020 are $5.0 million and for FY2019 were $1.5 million.
Statutory authority for the rural decentralized water systems grant program is the Consolidated
Farm and Rural Development Act, as amended, Section 306E (7 U.S.C. §1926e). Regulations for
this program are codified at Title 7, Part 1776, of the Code of Federal Regulations.
Natural Resources Conservation Service47
The USDA provides assistance for watershed activities under four closely related authorities that
are administered by the Natural Resources Conservation Service (NRCS). The Watershed and
Flood Prevention Operations Program (WFPO) consists of two authorities—P.L. 83-566 and P.L.
78-534. Projects funded under these authorities are referred to as P.L. 566 and P.L. 534 projects,
respectively. These authorize NRCS to provide technical and financial assistance to state and
local organizations to plan and install measures to prevent erosion, sedimentation, and flood
damage and to conserve, develop, and utilize land and water resources. Dams constructed under
the WFPO program may also be eligible to receive assistance under the Small Watershed
Rehabilitation Program, authorized by Congress in 2000. The fourth watershed authority is an
emergency program that is not discussed in this report.48
Watershed and Flood Prevention Operations
The WFPO program consists of projects built under two authorities—the Watershed Protection
and Flood Prevention Act of 1954 (P.L. 83-566) and the Flood Control Act of 1944 (P.L. 78-534).
The vast majority of the projects (referred to as P.L. 566 projects) have been built pursuant to the
authority of P.L. 83-566, which authorizes the chief of the NRCS to approve construction of
smaller projects (discussed below). Larger projects must be approved by Congress. In FY2020,
NRCS funded 41 new projects and 18 backlog projects.49
Eleven specific projects were authorized under P.L. 78-534 (referred to as P.L. 534 projects).
They are much larger and more expensive than P.L. 566 projects. In total, the P.L. 534 projects
encompass almost 37.9 million acres and are divided into component projects in subwatersheds.
Approximately 90% of the work on the P.L. 534 projects is complete. With the exception of the
two smallest projects, the estimated federal costs for each of these projects range from $40
million to more than $275 million. Three of the projects have been completed, and work on the
remainder continues in one or more subwatersheds.

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

24

Federally Supported Water Projects and Programs

The FY2021 Consolidated Appropriations Act (P.L. 116-260, Division A) appropriated $175
million in FY2021. Amendments in the 2018 farm bill (P.L. 115-334) permanently authorized an
additional $50 million annually from mandatory sources to the WFPO program.
Program Purpose
The purpose of the WFPO program is to provide technical and financial assistance to states and
local organizations to plan and install watershed projects. Both P.L. 566 and P.L. 534 projects
have similar objectives and are implemented following similar procedures. Both project types
fund land treatment and nonstructural and structural facilities for flood prevention, erosion
reduction, agricultural water management, public recreation development, fish and wildlife
habitat development, and municipal or industrial water supplies. Structural measures can include
dams, levees, canals, and pumping stations. Local sponsors agree to operate and maintain
completed projects.
Financing Mechanism
USDA provides partial project grants plus technical advisory services. Financing for water
projects under the WFPO program varies depending on project purposes. The federal government
pays all costs related to construction for flood control purposes only. Costs for nonagricultural
water supply must be repaid by local organizations. However, up to 50% of costs for land,
easements, and rights-of-way allocated to public fish and wildlife and recreational developments
may be paid with program funds. Additionally, sponsors may apply for RUS Water and Waste
Program loans to finance the local share of project costs. Participating state and local
organizations pay all operation and maintenance costs.
Eligibility Requirements
P.L. 566 has been called the small watershed program because no project may exceed 250,000
acres, and no structure may exceed more than 12,500 acre-feet of floodwater detention capacity
or 25,000 acre-feet of total capacity.50 The Senate and House Agriculture Committees must
approve projects that need an estimated federal contribution of more than $25 million for
construction or include a storage structure with a capacity in excess of 2,500 acre feet. If the
storage structure will have a capacity in excess of 4,000 acre feet, approval is also required from
the Senate Environment and Public Works Committee and the House Transportation and
Infrastructure Committee. There are no population or community income-level limits on
applications for P.L. 566 projects, but at least 20% of the total benefits of the project must directly
relate to agriculture (including rural communities).
Funding
The enacted FY2021 appropriation provided WFPO with $175 million. Of the $175 million, $65
million is required to be allocated to projects and activities that (1) can “commence promptly;”
(2) address regional priorities for flood prevention, agricultural water management, inefficient
irrigation systems, fish and wildlife habitat, or watershed protection; or (3) address ongoing P.L.

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

25

Federally Supported Water Projects and Programs

534 projects. The FY2022 Administration’s request proposes $175 million in discretionary
funding for the WFPO program.
Beginning in FY2014, Congress has annually directed a portion of the appropriation for the
Conservation Operations account to fund WFPO projects.51 The Conservation Operations account
funds general conservation technical assistance offered by NRCS. This congressionally directed
amount is in addition to the funds made available for the program as a whole.
In addition to discretionary funding through appropriations, the 2018 farm bill permanently
authorizes $50 million annually from mandatory sources.52 This mandatory funding will be
available unless otherwise amended by Congress. Mandatory funds are authorized for P.L. 566
projects as well as rehabilitation work under the Small Watershed Rehabilitation Program. The
FY2022 Administration’s request proposes a $100 million increase in annual mandatory funding
for the WFPO program as part of the American Jobs Plan.
Statutory and Regulatory Authorities
The WFPO program consists of two authorities: the Flood Control Act of 1944, P.L. 78-534, as
amended, 58 Stat. 905 (33 U.S.C. §701b-1); and the Watershed Protection and Flood Prevention
Act of 1954, P.L. 83-566, as amended, 68 Stat. 666 (16 U.S.C. §§1001-1008). Regulations are
codified at Title 7, Part 622, of the Code of Federal Regulations.53
Small Watershed Loans
As part of its lending responsibilities, RUS makes loans to local organizations to finance the local
share of the cost of installing, repairing, or improving facilities, purchasing sites and easements,
and related costs for P.L. 566 and P.L. 534 projects (see discussion above). Loans are limited to
$10 million, they must be repaid within 50 years, and the cost-share assistance may not exceed
the rate of assistance for similar projects under other USDA conservation programs. NRCS and
the local organization must also agree on a plan of work before a loan is obligated. Over the life
of the program, 495 RUS loans have been made at a value of almost $176 million.
Small Watershed Rehabilitation
Some of the oldest P.L. 566 projects that have exceeded their design life (dams were constructed
starting in 1948) need rehabilitation work to continue to protect public health and safety by
reducing any possibility of dam failure and to meet changing resource needs. By December 2021,
approximately 5,948 watershed dams will have reached the end of their originally designed life
spans. By the end of 2025, 6,793 watershed dams will have reached the end of their designed life
spans. In response to this concern, Congress created a dam rehabilitation program, known as the
Small Watershed Rehabilitation Program, in Section 313 of the Grain Standards and Warehouse
Improvement Act of 2000 (P.L. 106-472), which revised the WFPO program. From 2000 to 2020,

51 Congressionally directed amounts of Conservation Operations funding for WFPO projects include $3 million in
FY2014, $5.6 million in FY2015, $10.6 million in FY2016, $5.6 million annually in FY2017-FY2020, and $10 million
in FY2021.
52 The 2018 farm bill authorizes mandatory funding from the Commodity Credit Corporation, a government-owned
entity that finances programs supporting U.S. agriculture. For more information, see CRS Report R44606, The
Commodity Credit Corporation (CCC), by Megan Stubbs.
53 For information on the program, see NRCS, “Watershed and Flood Prevention Operations Program,”
https://www.nrcs.usda.gov/wps/portal/nrcs/main/national/programs/landscape/wfpo/.
Congressional Research Service

26

Federally Supported Water Projects and Programs

the program authorized the rehabilitation of 254 dams in 25 states. Of this total, 166 projects are
complete, 67 are in progress, and the remaining projects are waiting for funding.
Program Purpose
The purpose of rehabilitation is to extend the service life of the dams and bring them into
compliance with applicable safety and performance standards or to decommission the dams so
they no longer pose a threat to life and property.
Financing Mechanism
Partial project grants, plus provision of technical advisory services, are provided. NRCS may
provide 65% of the total rehabilitation costs but no more than 100% of the actual construction
cost and is prohibited from funding operation and maintenance expense. Rehabilitation projects
also provide an opportunity to modify projects to provide additional benefits, including municipal
water supplies. Local watershed project sponsors provide 35% of the cost of a rehabilitation
project and obtain needed land rights and permits. The source of these funds varies from state to
state and may include bonds, local taxing authority, state appropriations, or in-kind technical
services.
Eligibility Requirements
Only dams constructed under the P.L. 83-566 authority, the Resource Conservation and
Development program, and pilot watershed projects authorized in the Agriculture Appropriations
Act of 1953 are eligible for assistance under the Small Watershed Rehabilitation Program.
Funding
Since FY2000, Congress has appropriated more than $700 million for rehabilitation projects. The
Small Watershed Rehabilitation Program has discretionary funding authority of up to $85 million
annually. The program has received an average annual appropriation of $10.4 million over the last
five years, including $10 million in FY2021. The FY2022 Administration’s request proposes $10
million in discretionary funding for the Small Watershed Rehabilitation program. This is the first
request for funding since the FY2011. Previous budget proposals cite the position that the
maintenance, repair, and operation of these dams are the responsibility of local project sponsors.
In the past, the program was authorized through omnibus farm bills to receive mandatory funding
to remain available until expended. This funding was frequently restricted through annual
appropriations and used to offset other discretionary spending.54 The FY2018 appropriations act
(P.L. 115-141) was the first to not restrict the remaining mandatory carryover, thereby making
approximately $55 million available for obligation. According to the FY2022 Administration’s
request, this carryover is expected to be fully utilized in FY2021. The 2018 farm bill reauthorized
discretionary funding authority of $85 million annually for the program, but no additional
mandatory funding authority was provided.55

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

27

Federally Supported Water Projects and Programs

Statutory and Regulatory Authorities
The Small Watershed Rehabilitation Program is authorized by the Watershed Protection and
Flood Prevention Act of 1954, P.L. 83-566, as amended by Section 313 of the Grain Standards
and Warehouse Improvement Act of 2000, P.L. 106-472, 114 Stat. 2077 (16 U.S.C. §1012).
Regulations are codified at Title 7, Part 622, of the Code of Federal Regulations.56
Environmental Protection Agency
Clean Water State Revolving Fund Loan Program57
In 1987, Congress amended the Clean Water Act (CWA)58 to establish the Clean Water State
Revolving Fund (CWSRF) program.59 All 50 states, plus Puerto Rico, participate in the CWSRF
program.60 EPA receives annual appropriations to support the CWSRF program and distributes
grants to the states based on a CWA statutory formula.61 States provide matching funds equal to
20% of the federal grant to capitalize the CWSRF and use their funds primarily to provide loans
to cities and other eligible recipients. Over the long term, the loan programs are intended to be
sustained through repayment of loans to states, thus creating a continuing source of assistance for
other communities. According to the most recent formal estimate by EPA and states (prepared in
2016), an additional $271 billion nationwide is needed over the next 20 years for all types of
projects eligible for funding through the CWSRF program.62
EPA data indicate that since 1988, 68% of all awarded loans and other assistance have gone to
assist communities with 10,000 people or fewer. These loans and assistance have accounted for
23% of total CWSRF funding.63
Program Purpose
The CWSRF program provides assistance in constructing and upgrading publicly owned
municipal wastewater treatment plants and related equipment (including stormwater
infrastructure), implementing nonpoint pollution management programs, developing and
implementing management plans under the National Estuary Program, and supporting a range of
other eligible activities that were added to the program in 2014.

56 For information on the program, see NRCS, “Watershed Rehabilitation Program,” http://www.nrcs.usda.gov/wps/
portal/nrcs/main/national/programs/landscape/wr/.
57 This section was prepared by Jonathan Ramseur, Specialist in Resources and Environmental Policy, Resources,
Science, and Industry Division.
58 The official statutory name is the Federal Water Pollution Control Act (P.L. 92-500), as amended, codified at Title
33, Section 1251 et seq, of the U.S. Code.
59 Prior to 1989 (when the CWSRF program became effective), EPA states used their annual allotment to make grants
to cities and other eligible recipients.
60 U.S. territories, Indian tribes, and the District of Columbia receive grants from EPA under separate CWA authorities.
61 For more information, see CRS Report RL31073, Allocation of Wastewater Treatment Assistance: Formula and
Other Changes, by Jonathan L. Ramseur.
62 EPA, Clean Watersheds Needs Survey 2012, 2016, https://www.epa.gov/cwns.
63 EPA, “Did You Know,” https://www.epa.gov/cwsrf (accessed August 10, 2021).
Congressional Research Service

28

Federally Supported Water Projects and Programs

Financing Mechanism
EPA grants (from appropriated funds) and state matching funds help capitalize state CWSRF
programs. These programs may provide seven general types of financial assistance: making
loans; buying or refinancing existing local debt obligations; guaranteeing or purchasing insurance
for local debt obligations; guaranteeing CWSRF debt obligations (i.e., to be used as security for
leveraging the assets in the CWSRF); providing loan guarantees for local government revolving
funds; earning interest on fund accounts; and supporting reasonable costs of administering the
CWSRF. Loans are made at or below market interest rates, including zero interest loans, as
determined by the state in negotiation with the applicant.
Although the CWSRF program is generally a loan program, states may (under certain conditions)
provide “additional subsidization”—such as principal forgiveness, negative interest loans, or a
combination—to eligible entities that meet the state’s affordability criteria and for particular
projects, such as those that implement water or energy efficiency goals or mitigate stormwater
runoff. In addition, appropriations acts in recent years have required states to use minimum
percentages of their allotted funds to provide additional subsidization. This trend began with the
American Recovery and Reinvestment Act of 2009 (P.L. 111-5), which required states to use at
least 50% of their funds for this purpose. Recent appropriations acts included an identical
condition, requiring 10% of the CWSRF grants be used “to provide additional subsidy to eligible
recipients in the form of forgiveness of principal, negative interest loans, or grants (or any
combination of these).”
All principal and interest payments on loans must be credited directly to the SRF, and loans are to
be repaid within 30 years of a project’s completion, not to exceed the project’s useful life. States
are required to ensure that CWSRF-funded projects use American iron and steel products and
apply the prevailing wage requirements of the Davis-Bacon Act.64
Eligibility Requirements
In general, eligible loan recipients for CWSRF assistance are any municipal, intermunicipal,
interstate, or state agency. Private utilities are not eligible to receive funds for construction of
wastewater treatment works and most other eligible activities, but in some cases, privately owned
projects are eligible for certain types of activities (e.g., decentralized wastewater treatment
projects; projects to manage, reduce, or treat stormwater; or development of watershed
management projects).
Projects or activities eligible for funding were initially those needed for constructing or upgrading
(and planning and designing) publicly owned municipal wastewater treatment plans. As defined
in Clean Water Act Section 212,65 devices and systems used in the storage, treatment, recycling,
and reclamation of municipal sewage are eligible. These include construction or upgrading of
secondary or advanced treatment plants; construction of new collector sewers, interceptor sewers,
or storm sewers; and projects to correct existing problems of sewer system rehabilitation,
infiltration/inflow of sewer lines, and combined sewer overflows. Operation and maintenance are
not eligible activities. All funds in the CWSRF resulting from federal capitalization grants are
first to be used to assure compliance with enforceable deadlines, goals, and requirements of the
act, including municipal compliance.66 After satisfying the “first use” requirement, funds may be

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

29

Federally Supported Water Projects and Programs

used to implement other eligible uses, which initially included nonpoint source management
programs and estuary activities in approved State Nonpoint Management Programs and estuarine
Comprehensive Conservation and Management Plans, respectively.67
In 2014, the Water Resources Reform and Development Act of 2014 (WRRDA; P.L. 113-121)
amended the list of eligible projects by adding several projects and activities, including
 replacement of decentralized treatment systems (e.g., septic tanks);
 energy-efficiency improvements at treatment works;
 reuse and recycling of wastewater or stormwater; and
 security improvements at treatment works.
In 2018, the America’s Water Infrastructure Act of 2018 (AWIA; P.L. 115-270) amended the list
of eligible activities to allow qualified nonprofits to provide assistance to certain individuals for
the repair or replacement of existing decentralized wastewater treatment systems or for the
connection of an individual household to a centralized publicly owned treatment works.
Funding
Since the first appropriations for the CWSRF program in FY1989, Congress has provided more
than $49 billion in grants to states and Puerto Rico to capitalize their CWSRFs. According to
EPA’s national CWSRF funding data report, federal funds—together with state matching
contributions, repaid loans, and other funds—have provided $149 billion in SRF assistance to
support more than 42,000 SRF loans and debt refinance agreements.68
For both FY2016 and FY2017, Congress provided $1.394 billion for the CWSRF program. For
each of FY2018 and FY2019, Congress increased the appropriation to the CWSRF program,
providing $1.694 billion. For FY2020 and FY2021, Congress appropriated $1.639 billion (P.L.
116-94 and P.L. 116-260). For FY2022, the President requested $1.871 billion for the CWSRF
program.
Through a separate process, EPA provides direct grants for the District of Columbia, the U.S.
Virgin Islands, American Samoa, Guam, and the Commonwealth of Northern Marianas.69 EPA
also provides direct grants to Indian tribes.70 The funding for the District of Columbia, U.S.
territories, and Indian tribes is part of the SRF appropriation to EPA.
Statutory and Regulatory Authority
Statutory authority for the clean water SRF program is the Clean Water Act, as amended, Sections
601-607 (33 U.S.C. §§1381-1387). Regulations are codified at Title 40, Section 35.3100, of the
Code of Federal Regulations.

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

30

Federally Supported Water Projects and Programs

Drinking Water State Revolving Fund Loan Program71
The Safe Drinking Water Act (SDWA) requires public water systems to comply with federal
drinking water regulations promulgated by EPA.72 Through these regulations, EPA has set
standards to control the levels of more than 90 contaminants in drinking water, and more
regulations are under development. To help communities meet these federal mandates and to meet
the act’s public health objectives, Congress amended the SDWA in 1996 to establish a drinking
water state revolving fund (DWSRF) loan program. The program is patterned closely after the
CWSRF and authorizes EPA to make grants to states to capitalize drinking water state revolving
loan funds. States use their DWSRFs to provide assistance to public water systems for
infrastructure and other drinking water projects.73 States may use a portion of their annual grants
to administer the DWSRF program and to implement other SDWA requirements. States must
match 20% of the federal capitalization grant.
Each year, states are required to develop an “intended use plan” that includes a list of projects the
state intends to fund through the DWSRF. The law generally directs states to give funding priority
to projects that (1) address the most serious health risks; (2) are needed to ensure compliance with
SDWA regulations; and (3) assist systems most in need on a per household basis, according to
state affordability criteria. The law also directs states to make available at least 15% of their
annual allotment to public water systems that serve 10,000 or fewer persons (to the extent the
funds can be obligated to eligible projects). Over the life of the program, roughly 71% of DWSRF
assistance agreements and 38% of funds have gone to these smaller systems. Capitalization grants
are allotted among the states according to the results of the most recent quadrennial survey of the
capital improvements needs of eligible water systems. Needs surveys are prepared by EPA and
the states, and the most recent survey indicates that public water systems need to invest at least
$472.6 billion on infrastructure improvements over 20 years ($23.63 billion annually) to ensure
the provision of safe drinking water and compliance with federal standards.74
Program Purpose
This state-administered program provides assistance for infrastructure projects and other
expenditures that facilitate compliance with federal drinking water regulations or that promote
public health protection. The SDWA directs states to give funding priority to infrastructure
projects that are needed to achieve or maintain compliance with SDWA requirements, protect
public health, and assist systems with economic need. Further, states may use a portion of the
capitalization grant for specified purposes, including programs for protecting sources of drinking
water and improving the managerial and technical capacity of water systems.
Financing Mechanism
States may use the DWSRF to make low- or zero-interest loans to public water systems, and loan
recipients must generally repay the entire loan plus any interest to the state. DWSRFs may also be

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

31

Federally Supported Water Projects and Programs

used to buy or refinance local debt obligations, guarantee or purchase insurance for a local
obligation, provide revenue or security for payment of principal and interest on state revenue or
general obligation bonds if the proceeds of bond sale are deposited into the DWSRF, and earn
interest on DWSRF accounts.
The statute authorizes states to use up to 35% of their annual DWSRF grants to provide additional
subsidies (e.g., principal forgiveness and negative interest rate loans) to help economically
disadvantaged communities of any size.75 (A disadvantaged community is one in which the
service area of a public water system meets state-established affordability criteria.) The
Consolidated Appropriations Act, 2021 (P.L. 116-260), requires states to use 14% of their
DWSRF capitalization grants “to provide additional subsidy to eligible recipients in the form of
forgiveness of principal, negative interest loans, or grants (or any combination of these).”
Eligibility Requirements
Drinking water systems that are eligible to receive DWSRF assistance include community water
systems, whether publicly or privately owned, and not-for-profit noncommunity water systems.
Federally owned systems are not eligible to receive assistance from this program.
Projects eligible for DWSRF assistance include (1) capital investments to rehabilitate or replace
infrastructure in order to continue providing the public with safe drinking water (e.g., storage
facilities and transmission and distribution pipes); (2) projects needed to address violations of
SDWA regulations (e.g., treatment facilities); and (3) project design and planning and associated
preconstruction activities. Assistance may also be available for construction of new wells to
replace contaminated wells, source water protection, land acquisition, security measures
(including infrastructure improvements), and consolidation of water supplies (e.g., in cases where
individual homes or public water systems have a water supply that is contaminated or a system is
unable to maintain compliance for financial or managerial reasons).
Projects and activities not eligible for funding include projects primarily intended to serve future
growth or to provide fire protection, construction of dams or reservoirs (except reservoirs for
treated water), monitoring, and operation and maintenance. Ineligible systems include those that
lack the financial, technical or managerial capacity to maintain SDWA compliance and systems in
significant noncompliance with any SDWA regulation (unless the project is likely to ensure
compliance).
Funding
For FY2020, the President requested $863.2 million for the DWSRF program, and Congress
provided $1,126.1 million in P.L. 116-94. For FY2021, the President again requested $863.2
million, and Congress again provided $1,126.1 million in P.L. 116-260.76 For FY2022, the
President requested $1,357.9 million for the DWSRF program. In recent years, the estimated
average state capitalization grant has been roughly $20.77 million per fiscal year. The estimated
average grant to territories was $4.14 million per fiscal year.77

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

32

Federally Supported Water Projects and Programs

From FY1997 through FY2020, cumulative appropriations for the DWSRF program reached
$24.36 billion. Adjusted for set-asides, cumulative net federal contributions totaled $23.09 billion.
When combined with the 20% state match ($4.33 billion), bond proceeds, loan principal
repayments, and other funds, the total DWSRF investment through FY2019 had reached $46.73
billion, and the program had provided more than $44.74 billion in assistance. Over the same
period, more than 16,686 projects had received assistance, and 11,760 had been completed.78
Statutory and Regulatory Authority
The statutory authority for the DWSRF program is the Safe Drinking Water Act Amendments of
1996 (P.L. 104-182, Section 1452, 42 U.S.C. §300j-12). Regulations are codified at Title 40,
Section 35.3500, of the Code of Federal Regulations.79
Water Infrastructure Finance and Innovation Act Program80
Localities are primarily responsible for providing water infrastructure services, which include
both drinking water and wastewater infrastructure. According to the most recent estimates by
states and EPA, funding needs for projects eligible for CWSRF or DWSRF funding—described in
the sections above (i.e., projects needed to address water quality and public health-related
problems or regulations)—total over $840 billion over a 20-year period.81 However, many water
infrastructure capital needs are ineligible for assistance through the SRF programs or are too large
or otherwise not suited for those programs.
The Water Infrastructure Finance and Innovation Act (WIFIA) authorizes EPA to provide credit
assistance—secured (direct) loans or loan guarantees—for a broad range of drinking water and
wastewater projects.82 In contrast to SRF programs, EPA provides credit assistance directly to
eligible recipients. Thus far, EPA has provided credit assistance in the form of secured loans, and
the agency does not expect much demand for loan guarantees.83
Section 4201 of AWIA (P.L. 115-270) amended WIFIA to authorize EPA to enter into agreements
with relevant federal agencies to administer and service loans that such agencies are authorized to
make. Section 4301 of AWIA directs EPA and Reclamation to enter into such an agreement. In
October 2019, EPA and Reclamation entered into a memorandum of understanding for
administering and servicing credit instruments. Under this agreement, EPA is responsible for
providing support in administering and servicing Reclamation federal credit instruments,
including determining project creditworthiness and loan terms, among other responsibilities.84

78 Detailed national and state program data are available at https://www.epa.gov/drinkingwatersrf/drinking-water-state-
revolving-fund-national-information-management-system-reports.
79 DWSRF program information, regulations, facts, and statistics are available at http://www.epa.gov/safewater/
dwsrf.html.
80 This section was prepared by Jonathan Ramseur, Specialist in Environmental Policy, Resources, Science, and
Industry Division.
81 EPA published its most recent estimate of capital needs for wastewater infrastructure in 2016. See EPA, Clean
Watersheds Needs Survey 2012, Report to Congress, 2016. EPA issued the most recent EPA needs estimate for
drinking water infrastructure in 2018. See EPA, Drinking Water Infrastructure Needs Survey and Assessment, 2018.
82 In 2014, WRRDA established a five-year WIFIA pilot program. In 2018, AWIA (P.L. 115-270) amended the WIFIA
provisions to remove the pilot designation from the program. For more details, see CRS Report R43315, Water
Infrastructure Financing: The Water Infrastructure Finance and Innovation Act (WIFIA) Program, by Jonathan L.
Ramseur, Mary Tiemann, and Elena H. Humphreys.
83 See EPA, WIFIA Program Handbook, 2019, footnote 24.
84 See EPA’s WIFIA website, https://www.epa.gov/wifia/mou-administering-and-servicing-federal-credit-instruments.
Congressional Research Service

33

Federally Supported Water Projects and Programs

Program Purpose
WIFIA provides an additional source of funding for water infrastructure projects, including
projects eligible for CWSRF and DWSRF assistance. Some stakeholders have argued that the
clean water and drinking water SRF programs are structured in a way that makes them useful
primarily for smaller communities and smaller projects. The WIFIA program can provide credit
assistance to large water infrastructure projects that otherwise have difficulty obtaining financing.
Moreover, SRF funding is generally limited to projects that promote CWA or SDWA compliance
and other statutory objectives. WIFIA can provide capital at a low cost to the borrower, because
even though the interest on 30-year Treasury securities is taxable, Treasury rates can be less
expensive than rates on traditional tax-exempt municipal debt.
Financing Mechanism
In federal budgetary terms, WIFIA assistance has much less of an impact on federal spending
than a grant, which is not repaid to the U.S. Treasury. The volume of loans and other types of
credit assistance that the programs can provide is determined by the size of congressional
appropriations and calculation of the subsidy amount. WIFIA defines the subsidy amount as
follows:
The amount of budget authority sufficient to cover the estimated long-term cost to the
Federal Government of a Federal credit instrument, as calculated on a net present value
basis, excluding administrative costs and any incidental effects on governmental receipts
or outlays in accordance with the Federal Credit Reform Act of 1990 (2 U.S.C. §661 et
seq.).85
Although subsidy rates are project-specific, in the Biden Administration’s FY2022 budget
proposal, OMB estimated a 1.07% subsidy rate for WIFIA in FY2022.86 This equates to a 1:107
ratio. At this subsidy rate, a $10 million appropriation could support direct loans totaling $1.1
billion. Thus, one advantage of the WIFIA program is that it can provide a large amount of credit
assistance relative to the amount of budget authority provided.
Eligibility Requirements
WIFIA credit assistance is available to state infrastructure financing authorities for a group of
projects and individual project sponsors, which may include
 a corporation;
 a partnership;
 a joint venture;
 a trust; or
 a federal, state, local, or tribal government (or consortium of tribal governments).
Categories eligible for assistance by EPA include
 wastewater treatment and community drinking water facilities;
 enhanced energy efficiency of a public water system or wastewater treatment
works;

85 33 U.S.C. §3901(13).
86 OMB, Budget of the United States Government, FY2022, Federal Credit Supplement, Table 1,
https://www.govinfo.gov/app/collection/budget/2022/BUDGET-2022-FCS.
Congressional Research Service

34

Federally Supported Water Projects and Programs

 repair or rehabilitation of aging wastewater and drinking water systems;
 desalination, water recycling, aquifer recharge, or development of alternative
water supplies to reduce aquifer depletion;
 prevention, reduction, or mitigation of the effects of drought;87 or
 a combination of eligible projects.
The act authorizes EPA to provide credit assistance for a range of wastewater and drinking water
projects. Generally, project costs must be $20 million or larger to be eligible for credit assistance.
For projects in less populous communities (defined by WIFIA as populations of 25,000 or fewer),
project costs must be $5 million or more.
Funding
For FY2019, the Consolidated Appropriations Act, 2019 (P.L. 116-6), provided $68 million for
the WIFIA program (including $5 million for administrative costs). For FY2020, the Further
Consolidated Appropriations Act, 2020 (P.L. 116-94) provided $60 million for this program
(including $5 million for administrative costs). For FY2021, the Consolidated Appropriations
Act, 2021 (P.L. 116-260) provided $65 million for the program (including $5.5 million for
administrative costs) for WIFIA. For FY2022, the President requested $80.1 million for the
program (including $8 million for administrative costs).
To receive funding, a prospective borrower submits a letter of interest to EPA. The letter must
document project eligibility, financial creditworthiness, engineering feasibility, and alignment
with EPA’s policy priorities. From these submittals, the agency selects projects for funding.88 On
April 29, 2021, EPA announced a fifth round of WIFIA funding. EPA estimated that its FY2021
budget authority would provide approximately $5.5 billion in credit assistance.89
Statutory and Regulatory Authority
The statutory authority for the WIFIA program is WRRDA (P.L. 113-121, Title V, codified at 33
U.S.C. §§3901-3914). The Fixing America’s Surface Transportation Act (FAST Act, P.L. 114-94)
and AWIA amended WIFIA provisions in 2015 and 2018, respectively. EPA promulgated an
interim final rule for the program on December 19, 2016 (81 Federal Register 91822).
Regulations are codified at Title 40, Section 35.10000, of the Code of Federal Regulations.
Other EPA Water Infrastructure Funding Programs90
In recent WRDAs, Congress has authorized several new drinking water and wastewater
infrastructure funding programs. These programs are discussed below.91

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

35

Federally Supported Water Projects and Programs

Sewer Overflow and Stormwater Grant Program
In 2000, the Consolidated Appropriations Act, 2001, authorized EPA to establish a new grant
program in the CWA to address overflows from municipal combined sewer systems and from
municipal separate sanitary sewers (“wet weather” projects). At that time, Congress authorized
annual appropriations of $750 million for FY2002 and FY2003, but the program never received
appropriations.
In 2018, AWIA Section 4106 amended the grant program by modifying the eligibility provisions
to include stormwater infrastructure, among other changes. In addition, AWIA reauthorized
appropriations for the grant program for $225 million for FY2019 and FY2020.
Under this program, EPA will provide grants to states, which will provide sub-awards to eligible
entities. The grants to states will be allocated based on a formula prepared by EPA.92 As of the
date of this report, EPA has not issued any grants for this program.93
Funding
For FY2020, the Further Consolidated Appropriations Act, 2020 (P.L. 116-94), provided $28
million, the first appropriation for this program. For FY2021, the Consolidated Appropriations
Act, 2021 (P.L. 116-260) provided $40 million. For FY2022, the President requested $60 million
for this program.
Statutory Authority
The statutory authority for this program is CWA Section 221 (codified at 33 U.S.C. §1301). The
Consolidated Appropriations Act, 2001 (P.L. 106-554), amended the CWA in 2000 to provide this
authority. CWA Section 221 was subsequently amended in 2018 by AWIA (P.L. 115-270).
Technical Assistance for Rural, Small, and Tribal Wastewater Systems
In 2018, AWIA amended the CWA to authorize EPA to make grants to qualified nonprofits to
provide technical assistance to help rural, small, and tribal publicly owned treatment works and
decentralized wastewater treatment systems to comply with the CWA and apply for financing
from the CWSRF. For this purpose, AWIA authorized appropriations of $25 million per year for
FY2019-FY2023.
Funding
For FY2020, the Further Consolidated Appropriations Act, 2020 (P.L. 116-94), enacted December
20, 2019, provided $12 million for this program. For FY2021, the Consolidated Appropriations
Act, 2021 (P.L. 116-260) provided $18 million for this program. For FY2022, the President
requested $18 million for this program.94

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

36

Federally Supported Water Projects and Programs

Statutory Authority
The statutory authority for this technical assistance is CWA Section 104(b)(8) (codified at 33
U.S.C. §1254(b)(8)). This provision was added to the CWA in 2018 by AWIA (P.L. 115-270,
§4106).
Technical Assistance for Small, Rural, and Tribal Drinking Water Systems
Added in 1996, SDWA Section 1442(e) authorizes EPA and states to provide compliance
assistance to public water systems and particularly to small systems (serving 25-10,000
customers). Accounting for 92% of community water systems, these small systems frequently
lack both economies of scale and the financial, managerial, and technical capacity to meet
statutory requirements.
The technical assistance is intended to enable small systems to achieve and maintain compliance
with drinking water regulations and may include circuit-rider and multi-state regional technical
assistance programs, training, and assistance in implementing regulations, source water protection
plans, monitoring plans, water security enhancements, etc. The WIIN Act (P.L. 114-322) amended
Section 1442 to specify that technical assistance grants to tribes may be used for operator training
and certification.
Funding
For FY2020, the Further Consolidated Appropriations Act, 2020 (P.L. 116-94), enacted December
20, 2019, provided $15 million for this program. For FY2021, the Consolidated Appropriations
Act, 2021 (P.L. 116-260) provided $19 million for this program. For FY2022, the President did
not request funds for this program.
Statutory Authority
The statutory authority for this technical assistance is SDWA Section 1442(e) (codified at 42
U.S.C. §300j-1(e)).
Small and Disadvantaged Communities Drinking Water Grant Program
In 2016, Congress amended SDWA to add a drinking water grant program to help assist
disadvantaged or small communities afford projects needed to comply with SDWA regulations.
Eligible projects include investments needed for SDWA compliance, household water quality
testing, and assistance that benefits a community on a per-household basis. Eligible grant
recipients include public water systems or tribal water systems that serve a disadvantaged
community or a community of 10,000 or fewer individuals or a state on behalf of an underserved
community. For the purposes of this grant program, underserved community is defined to mean “a
political subdivision of a State that, as determined by the Administrator, has an inadequate system
for obtaining drinking water.”95 This grant program requires a cost share of 45% of total project
costs in the form of monetary funding, services, materials, supplies, or other in‐kind services.
EPA may waive this matching requirement if the grant recipient would experience significant
financial hardship from providing the nonfederal share.

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

37

Federally Supported Water Projects and Programs

In April 2019, EPA announced the distribution of FY2018 and FY2019 funding for these grants
among the states and territories, using a formula similar to the DWSRF allotment formula, with a
2% allotment for tribes.96 EPA reports that states will need to develop a list of fundable projects
that meet the grant program’s eligibility criteria to receive their allotment of funding.97
Funding
Beginning in FY2018, Congress has appropriated funds to support this grant program for small
and disadvantaged communities. For FY2018, Congress provided $20.0 million to support these
grants (P.L. 115-141). For FY2019, the Consolidated Appropriations Act, 2019 (P.L. 116-6)
provided $25.0 million for this grant program. For FY2020, the Further Consolidated
Appropriations Act, 2020 (P.L. 116-94) provided $25.4 million. For FY2021, the Consolidated
Appropriations Act, 2021 (P.L. 116-260) provided $26.4 million for this grant program. For
FY2022, the President requested $41.41 million for this grant program.
Statutory Authority
The statutory authority for the Assistance for Small and Disadvantaged Communities Drinking
Water Grant program is SDWA Section 1459A (codified at 42 U.S.C. §300j-19a, added by the
WIIN Act, P.L. 114-322, §2104).
Lead Reduction Projects Grant Program
In 2016, Congress amended SDWA to direct EPA to establish a grant program for projects and
activities that reduce lead in drinking water. Grants may be used to replace a publicly owned lead
service line; to test, plan, or perform other relevant activities to control lead in drinking water;
and to provide assistance to low-income homeowners to replace their portions of lead service
lines. Eligible grant recipients include public water systems; tribal water systems; qualified
nonprofits serving water systems; and local, state, or municipal governments. This grant program
generally requires recipients to provide a 20% match. EPA may waive this matching requirement
for reasons of affordability.
In October 2020, EPA provided the first funding for this grant program.98
Funding
Congress first appropriated funds for this grant program in FY2018. In FY2018, the Consolidated
Appropriations Act, 2018 (P.L. 115-141), provided $10.0 million to support these grants. In
FY2019, the Consolidated Appropriations Act, 2019 (P.L. 116-6), provided $15.0 million for this
grant program. In FY2020, the Further Consolidated Appropriations Act, 2020 (P.L. 116-94),
provided $19.5 million to support this grant program. For FY2021, the Consolidated

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

38

Federally Supported Water Projects and Programs

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

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

39

Federally Supported Water Projects and Programs

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

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

40

link to page 7 Federally Supported Water Projects and Programs

governments; (2) selecting local governments that will receive funds; and (3) monitoring local
government grant recipients and project implementation to ensure compliance with rules
governing the program.
Eligibility Requirements
There are three categories of recipients eligible for direct allocations of CDBG program funds:
entitlement communities, states (for distribution to nonentitlement communities), and insular
areas (U.S. territories). Before funds are allocated to states and entitlement communities, a
specific amount established by Congress is set aside annually for the U.S. territories or insular
areas of Guam, the Virgin Islands, American Samoa, and the Commonwealth of the Northern
Mariana Islands. These funds are awarded annually based on each insular area’s relative share of
aggregate population for all insular areas.
Eligible activities include a wide range of projects such as public facilities and improvements,
housing, public services, economic development, and brownfields redevelopment. State grantees
must ensure that each activity meets one of the program’s three national objectives: benefitting
low- and moderate-income persons (the primary objective), aiding in the prevention or
elimination of slums or blight, or assisting other community development needs that present a
serious and immediate threat to the health or welfare of the community. Under the state program
that assists smaller communities, states develop their own program and funding priorities and
have considerable latitude to define community eligibility and criteria, within general criteria in
law and regulations.
Funding
The Consolidated Appropriations Act, 2020 (P.L. 116-94) appropriated $3.425 billion for the
Community Development Fund,105 including $3.400 billion in CDBG entitlement,
nonentitlement, and insular area funds. The Consolidated Appropriations Act, 2021 (P.L. 116-260)
appropriated $3.475 billion for the Community Development Fund, including $3.450 billion in
CDBG entitlement, nonentitlement, and insular area funds (see Table 1). As in FY2020, the
Consolidated Appropriations Act, 2021 appropriated $25 million of the $3.475 billion for
activities authorized under the Substance Use-Disorder Prevention that Promotes Opioid
Recovery and Treatment for Patients and Communities Act (the SUPPORT for Patients and
Communities Act, P.L. 115-271). Of the amount appropriated for CDBG grants in FY2021,
$2.410 billion was allocated to entitlement communities, $1.033 billion to states for distribution
to nonentitlement communities, and $7 million to insular areas.106 The Trump Administration did
not request funds for CDBG in the Administration’s budget requests for FY2017 through
FY2021. In proposing termination of the program in FY2021, as in the previous four fiscal years,
the Trump Administration cited its intent to redefine the proper role of the federal government in
support of community and economic development by devolving responsibility to state and local
governments.107 The Biden Administration’s FY2022 budget has requested $3.770 for the

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

41

link to page 7 Federally Supported Water Projects and Programs

Community Development Fund, including $3.450 for the conventional CDBG program (see
Table 1).108
Statutory and Regulatory Authority
Statutory authority for the CDBG program is Title I of the Housing and Community Development
Act of 1974, as amended (42 U.S.C. §5301 et seq.). Regulations are codified at Title 24, Part 570,
of the Code of Federal Regulations. Regulations covering the CDBG state program for
nonentitlement communities are codified at Title 24, Part 570, Subpart I (§570.480).109 CDBG has
operated under an expired authorization since 1994.
CDBG Section 108 Loan Guarantees
Authorized under the same title (Title I of the Housing and Community Development Act of
1974) as the formula-based CDBG program, Section 108 provides loan guarantees that allow an
entitlement community or a state, on behalf of a nonentitlement community, to leverage its annual
CDBG allocation in support of large-scale economic development and housing rehabilitation
projects and the construction, reconstruction, or installation of public facilities.
Program Purpose
Consistent with the goals and objectives of the CDBG program, Section 108 loan guarantees are
intended to supplement CDBG program activities. The program allows entitlement communities
and states to extend the reach of the formula-based CDBG program, giving them access to
additional financial resources to undertake large-scale, transformative neighborhood revitalization
efforts.
Eligible activities include acquiring and rehabilitating publicly owned real property; housing
rehabilitation; economic development activities, including those carried out by for-profit and
nonprofit entities; debt service reserves; payment of interest on the guaranteed loan; issuance cost
of the public offering; and the acquisition, construction, reconstruction, and installation of public
facilities, including water and sewer improvements.
Financing Mechanism
Section 108 loan guarantees are financed through public offerings. Under the program, states and
communities are allowed to float bonds, notes, or debentures worth up to five times their annual
CDBG allocation, minus any existing Section 108 commitments or outstanding principal
balances, with a repayment period of up to 20 years. States and entitlement communities must
pledge their current and future CDBG allocations as security against default of the bonds or notes.
Section 108 funds are made available on an ongoing basis, allowing communities to apply for
funds any time during the year. Section 108 loan funds are made available to eligible public
entities that may re-loan the funds to private participants in a redevelopment project. Applicants
are encouraged to meet with HUD staff prior to submitting a formal application.

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

42

Federally Supported Water Projects and Programs

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

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

43

Federally Supported Water Projects and Programs

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

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

44

Federally Supported Water Projects and Programs

has exhausted its effective taxing and borrowing capacity, grants totaling 100% of a project’s cost
may be awarded. Credit may be given toward the nonfederal share for in-kind contributions,
including contributions of space, equipment, and services. No minimum or maximum project
amount is specified in law.
Eligibility Requirements
Public works grants may be made to states, cities, counties and other political subdivisions of
states, an Indian tribe, an economic development district, institutions of higher education or a
consortium of such institutions, and private or public not-for-profit organizations acting in
cooperation with officials of a political subdivision of a state.116 For-profit, private sector entities
do not qualify.
Qualified projects must fill a pressing need of the area and must (1) be intended to improve the
opportunities for the successful establishment or expansion of businesses, (2) assist in the creation
of additional long-term private sector employment, and (3) benefit long-term unemployed or
underemployed persons and low-income families. Projects must also be consistent with the area’s
CEDS and have an adequate share of nonfederal funds. In addition, eligible projects must be
located in areas that meet at least one of the following criteria: low per-capita income,
unemployment above the national average, or “special need” as determined by EDA.117
Funding
The Consolidated Appropriations Act, 2019 (P.L. 116-6), appropriated $265 million for EDA
programs, including $117.5 million for the Public Works grant program. The Further
Consolidated Appropriations Act, 2020 (P.L. 116-93) appropriated $292.5 million for EDA
programs, including $118.5 million for the Public Works program. The Consolidated
Appropriations Act, 2021 (P.L. 116-260) included $305.5 million for EDA programs and an
additional $40.5 million for salaries and expenses. Of the amount appropriated for EDA programs
in FY2021, Congress directed EDA to allocate $119.5 million for the Public Works program. For
FY2022, the Administration’s budget requested $124 million for the Public Works program.118
Statutory and Regulatory Authority
The statutory authority for the Public Works program is the Public Works and Economic
Development Act of 1965, as amended, P.L. 89-136 (42 U.S.C. §3121 et seq.). Regulations are
codified at Title 13, Chapter III, Parts 302, 305, 316, and 317, of the Code of Federal
Regulations.

116 Under this program, the term state includes the District of Columbia, the Commonwealth of Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the
Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. Under this program, the term Indian
tribe includes any Indian tribe, band, nation, pueblo, or other organized group or community, including any Alaska
Native village or Regional Corporation (as defined in or established under the Alaska Native Claims Settlement Act (43
U.S.C. §1601 et seq.)), that is recognized as eligible for the special programs and services provided by the United
States to Indians because of their status as Indians (42 U.S.C. §3122).
117 42 U.S.C. §3141. Additionally, agency regulations describe the economic distress criteria at 13 C.F.R. Part 300,
Subpart C—Economic Distress Criteria. See also EDA’s Notice of Funding Opportunity, Public Works and Economic
Adjustment Assistance Programs, FY2020, https://www.grants.gov/web/grants/view-opportunity.html?oppId=321695.
118 U.S. Department of Commerce (DOC), FY2022 EDA Congressional Budget Justification,
https://www.commerce.gov/sites/default/files/2021-05/fy2022_eda_congressional_budget_justification.pdf.
Congressional Research Service

45

Federally Supported Water Projects and Programs

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

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

46

Federally Supported Water Projects and Programs

Eligibility Requirements
EAA grants may be made to states, cities, counties and other political subdivisions of states, an
Indian tribe, an economic development district, institutions of higher education or a consortium of
such institutions, and private or public not-for-profit organizations acting in cooperation with
officials of a political subdivision of a state.120 For-profit, private-sector entities do not qualify.
Qualified projects must fill a pressing need of the area arising from actual or threatened severe
unemployment or economic adjustment problems resulting from severe changes in economic
conditions. Projects must also have an adequate share of local funds. With the exception of
strategy grants, EAA projects must also be consistent with the area’s CEDS. In addition, eligible
projects must be located in areas that meet at least one of the following criteria: low per-capita
income, unemployment above the national average, or “special need” as determined by EDA.121
Funding
Congress directed EDA to allocate $37 million annually to the EAA program in FY2018-FY2020
and $37.5 million to the program in FY2021.122 For FY2022, the Administration’s budget
requested $48 million for the EAA program.123
Congress has approved additional funding for EDA grant programs that support economic
transition strategies and help affected communities build economic development capacity through
the Assistance to Coal Communities (ACC) and the Assistance to Nuclear Closure
Communities (NCC) initiatives. Congress directed EDA to allocate $10 million in FY2015 and
$15 million in FY2016 to the ACC initiative.124 Funding for the ACC initiative remained at $30
million each year for FY2017 through FY2020 and increased to $33.5 million in FY2021. In
FY2020, Congress directed EDA to allocate $15 million for the first time to the NCC initiative
and increased the amount to $16.5 million in FY2021. For FY2022, the Administration’s budget
requested $80.5 million for the ACC initiative and $10 million for the NCC initiative.125 ACC and

120 Under this program, the term state includes the District of Columbia, the Commonwealth of Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the
Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. Under this program, the term Indian
tribe includes any Indian tribe, band, nation, pueblo, or other organized group or community, including any Alaska
Native village or Regional Corporation (as defined in or established under the Alaska Native Claims Settlement Act (43
U.S.C. 1601 et seq.)), that is recognized as eligible for the special programs and services provided by the United States
to Indians because of their status as Indians (42 U.S.C. §3122).
121 42 U.S.C. §3149. Additionally, agency regulations describe the economic distress criteria at 13 C.F.R. Part 300,
Subpart C—Economic Distress Criteria. See also the EDA’s Notice of Funding Opportunity, Public Works and
Economic Adjustment Assistance Programs, FY2020, https://www.grants.gov/web/grants/view-opportunity.html?
oppId=321695.
122 See explanatory statements accompanying P.L. 115-141, P.L. 116-6, P.L. 116-93, and P.L. 116-260.
123 DOC, FY2022 EDA Congressional Budget Justification, https://www.commerce.gov/sites/default/files/2021-05/
fy2022_eda_congressional_budget_justification.pdf.
124 In FY2015 and FY2016, the ACC initiative was administered as a component of the
multiagency POWER Initiative—a coordinated federal effort to assist coal-impacted communities. For more
information, see CRS Report R46015, The POWER Initiative: Energy Transition as Economic Development, by
Michael H. Cecire.
125 DOC, FY2022 EDA Congressional Budget Justification, https://www.commerce.gov/sites/default/files/2021-05/
fy2022_eda_congressional_budget_justification.pdf.
Congressional Research Service

47

Federally Supported Water Projects and Programs

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

126 For more information, see CRS Insight IN11648, The Economic Development Administration’s Assistance to Coal
and Nuclear Closure Communities Initiatives for Economic Transitions, by Julie M. Lawhorn; and the EDA’s Notice of
Funding Opportunity, Public Works and Economic Adjustment Assistance Programs, FY2020, https://www.grants.gov/
web/grants/view-opportunity.html?oppId=321695.
127 For more information, see CRS Insight IN11402, The Economic Development Administration’s Economic Recovery
Assistance for COVID-19 Impacted Communities, by Julie M. Lawhorn.
128 In March 2021, EDA announced that the agency had awarded more than $1 billion in CARES Act grants. See EDA,
“U.S. EDA Marks Milestone $1 Billion in CARES Act Grants Awarded,” March 22, 2021, https://www.eda.gov/news/
blogs/2021/03/22/eda-marks-cares-act-milestone.htm.
Congressional Research Service

48

Federally Supported Water Projects and Programs

Author Information

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

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

Elena H. Humphreys
Charles V. Stern
Analyst in Environmental Policy
Specialist in Natural Resources Policy

Joseph V. Jaroscak
Megan Stubbs
Analyst in Economic Development Policy
Specialist in Agricultural Conservation and Natural

Resources Policy

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

Congressional Research Service
R46471 · VERSION 4 · UPDATED
49