Federally Supported Projects and Programs for August 2, 2022
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, some projects developed or
assisted by Reclamation and USACE are funded through direct, individual project authorizations from Congress. Other
agencies administer programs with standing authorizations that establish eligibility criteria rather than identify specific
projects. (Reclamation and USACE also administer some programs.) A key practical difference is that with 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
(e.g., USDA and EPA), while others are regionally focused (e.g., Reclamation’s programs and projects, which are limited to
the 17 arid and semiarid “reclamation states” in the West). Some focus primarily on urban areas (HUD), whereas others
concentrate mainly on rural areas (USDA).
Federal funding for these programs and projects varies greatly. Congressional funding for the water supply and wastewater
and drinking water programs continues to compete with many other programs that are supported by discretionary spending.
Some of these programs have received supplemental appropriations, such as provided in the 2021 Infrastructure Investment
and Jobs Act (IIJA; P.L. 117-58). Stakeholders and others continue to call for increased appropriations for these programs.
FY2022 appropriations highlights include the following:
 $728.3 million for capitalization grants to states under EPA’s State Revolving Fund (SRF) loan program
for drinking water systems and $1.195 billion for EPA’s SRF program for wastewater projects; IIJA
provided an additional $1.902 billion and $1.902 billion for each program, respectively; $397.8 million for
drinking water infrastructure and $443.6 million for wastewater infrastructure provided by “community
project funding/congressionally directed spending,” which some refer to as “earmarks”;
 $3 billion (provided by IIJA) for EPA’s drinking water SRF program for lead service line replacement and
related activities;
 $63.5 million for subsidy costs for the EPA-administered Water Infrastructure Finance and Innovation Act
(WIFIA) program, allowing the agency to provide credit assistance for drinking water and wastewater
infrastructure projects, not to exceed $12.5 billion;
 $490 million for grants, $1.4 billion in direct loan authority, and $50 million for guaranteed loan authority
for USDA’s rural water and waste disposal program;
 $3.3 billion for HUD’s Community Development Block Grant (CDBG) program (water and wastewater
projects are among many eligible uses);
 $158 million for EDA’s Public Works and Economic Adjustment Assistance programs (water and
wastewater projects are among many eligible uses);
Congressional Research Service

Federally Supported Water Projects and Programs

 $292 million for USACE environmental infrastructure projects, of which $200 million was from the IIJA
and $92 million was from community project funding or congressionally directed spending requests;
 $327 million for Reclamation water storage projects, of which $210 million was from the IIJA and $117
million was from annual appropriations;
 $420 million for Reclamation rural water construction projects from the IIJA and $15 million from annual
appropriations; and
 $298 million for Reclamation’s Title XVI reclamation/recycling projects, of which $245 million was from
the IIJA and $53 million was annual appropriations.

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Contacts
Author Information ........................................................................................................................ 54

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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 constructed or assisted by the Department of the Interior (DOI) Bureau of
Reclamation (Reclamation) and the U.S. Army Corps of Engineers (USACE) often require direct,
individual project authorizations from Congress prior to being eligible to receive appropriations.1
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 programmatic 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 (e.g., USDA and EPA), while others are
regionally focused (e.g., Reclamation’s programs and projects). Some focus primarily on urban
areas (HUD), whereas others concentrate mainly 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 colonias2 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

1 For Reclamation, this also includes some projects that must be submitted to, and approved by, Congress prior to
funding (but no direct authorization is required). For more information, see below section, “Bureau of Reclamation.”
2 Colonias are typically rural, unincorporated communities or housing developments near the U.S.-Mexico border that
lack some or all basic infrastructure, including plumbing and public water and sewer.
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agency (e.g., Reclamation and USDA) may primarily support one or more of these other
objectives while providing some support for M&I activities, even if only incidentally.
Other federal authorities (e.g., those of Reclamation and USACE) may be available to assist with
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.3
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 continues 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.

3 These programs are not discussed further in this report except for the Emergency Community Water Assistance
Grants administered by the U.S. Department of Agriculture. The emergency programs are summarized in CRS Report
R43408, Emergency Water Assistance During Drought: Federal Non-Agricultural Programs, by Nicole T. Carter,
Tadlock Cowan, and Joanna Barrett.
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Table 1. Wastewater, Drinking Water, and Water Supply Infrastructure:
Federal Funding for Projects and Programs
Agency and
Project/
Type of
Federal/
Average
Projects or
Program
Financial
Nonfederal Cost
Amount of
FY2022 Enacted
FY2023 President Funding
Program
Purposes
Assistance
Share
Assistance
Fundinga
Request
USDOI Bureau
Multipurpose
De facto 40-50
0%/100%, with
Not applicable
Not readily available
Not readily available
of Reclamationb
projects, which may
year loan
interest for M&I
Total agency approps. are
Total agency approps. request
include some M&I
uses
$1.9 bil ion in current gross
is $1.41 bil ion
activities
discretionary authority

USDOI Bureau
Multipurpose
Direct funding for 50%/50% for federal Not applicable
P.L. 117-103: $117 mil ion
Request: $0
of Reclamation
projects, which may
the federal share
projects; 25%/75%
P.L. 117-58: $210 mil ion
FY2023 Enacted (P.L. 117-58):
Water
include some M&I
of costs, with the
for nonfederal
Infrastructure
activities
reimbursable
projects
$95 mil ion
Improvements
share of these
for the Nation
costs subject to
(WIIN) Act
repayment (i.e.,
Water Storage
de facto loans)
Projects
USDOI Bureau
Wastewater
De facto grant
Up to 25%/75%;
Not readily
P.L. 117-103: $53 mil ion
Request: $4.0 mil ion
of Reclamation
reclamation and
dol ar limits may
available
P.L. 117-58: $245 mil ion
FY2023 Enacted (P.L. 117-58):
(Title XVI, P.L.
reuse,c which may
apply

102-575)b
include some M&I
$150 mil ion
activities

USDOI Bureau
Indian and non-
De facto grant,
Non-Indian
Not applicable
P.L. 117-103: $130.2 mil ion
Request: $63.0 mil ion
of Reclamation
Indian rural water
plus loan
projects: range
(see report text
P.L. 117-58: $420.0 mil ion
FY2023 Enacted (P.L. 117-58):
Rural Water
supply
from 75%/25% to
for detail)
Supplyb
80%/20%; Indian
$248.0 mil ion
projects: 100%/0%
USDOI Bureau
Brackish and
Grant
Up to 25%/75%;
Not readily
P.L. 117-103: $10.5 mil ion
Request: $0
of Reclamation
seawater
dol ar limits may
available
P.L. 117-58: $15 mil ion
FY2023 Enacted (P.L. 117-58):
Desalination
desalination, which
apply
Project
may include some
$20 mil ion
Construction
M&I activities
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Agency and
Project/
Type of
Federal/
Average
FY2023 President Funding
Projects or
Program
Financial
Nonfederal Cost
Amount of
FY2022 Enacted
Fundinga
Request
Program
Purposes
Assistance
Share
Assistance
USACE
Reservoirs may
Upfront federal
0%/100%, with
Not applicable
P.L. 117-103: $6 mil ion
$5 mil ion
Multipurpose
provide M&I water
financing of
interest
Reservoirs with
storage through
reservoirs; M&I
Storage for M&I
permanent or
storage is repaid
Waterb
temporary storage
through fees
agreements
col ected from
nonfederal
entities
USACE
Assistance is typically Technical/planning 75%/25% generally;
Varies (see
P.L. 117-103: $86.5 mil ion
None
Environmental
for public drinking
and design
some authorities
report text for
from Community Project
Infrastructure
water and
services or
are 65%/35%
detail)
Funding/Congressionally
Assistance
wastewater
grants; design and
Directed Spending
infrastructure and
construction
(CPF/CDS) and $13.0 mil ion
source water
services or grants
in additional funding
protection and
P.L. 117-58: $200.0 mil ion
development
USDA Rural
Municipal water
Loans and grants
Up to 75%/25% for
Grants
Grants: $490 mil ion
Grants: $511.9 mil ion
Utilities Service,
supply and
to eligible entities
grants
(FY2019): $1.3
Direct loans:
Direct loans: $1.54 bil ion loan
Water and
treatment,
0%/100% for loans
mil ion
$1.4 bil ion loan authority;
authority; $26.499 mil ion loan
Waste Disposal
wastewater facilities,
Direct loans:
$0 loan subsidy
subsidy
Program
and waste disposal
$2.3 mil ion
Guaranteed loans: $50
Guaranteed loans: $50 mil ion loan
Guaranteed
mil ion loan authority;
authority; $0 loan subsidy
loans: $1.4
$45,000 loan subsidy
mil ion
USDA Rural
Construction,
Grants to private
100%/0%
Loans and
$5 mil ion
$5 mil ion
Utilities Service,
refurbishing, and
nonprofit
subgrants are
Rural
servicing of individual
organizations for
limited to
Decentralized
household water
the purpose of
$15,000 per well
Water Systems
well systems and
providing loans
or wastewater
Program
decentralized
and subgrants to
system
wastewater systems
eligible individuals
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Agency and
Project/
Type of
Federal/
Average
FY2023 President Funding
Projects or
Program
Financial
Nonfederal Cost
Amount of
FY2022 Enacted
Fundinga
Request
Program
Purposes
Assistance
Share
Assistance
USDA Rural
For water treatment, Grants for public
100%/0%
Maximum grant
$15 mil ion
$15 mil ion
Utilities Service,
storage, or
or private
award is
Emergency
distribution projects
nonprofit entities
$1,000,000
Community
to secure adequate
Water
quantities of safe
Assistance
water
Grants
USDA
Multiple activities but Project grants and 100%/0%
Not applicable
$650 mil ion ($100 mil ion
$175 mil ion ($125 mil ion
Watershed and
must generally
technical advisory
Varies according to
discretionary, $50 mil ion
discretionary, $50 mil ion
Flood Prevention
include flood control
services
purpose of
mandatory, and $500 mil ion
mandatory)
Operations
measures
improvement
from IIJA)
Program
activity
USDA Small
Dam rehabilitation
Project grants and 100%/0%
Not applicable
$119 mil ion ($1 mil ion
$10 mil ion
Watershed
technical advisory
Varies according to
discretionary, $118 mil ion
Rehabilitation
services
purpose of
from P.L. 117-58)
Program
improvement
activity
EPA, Clean
Municipal
Grants to states
80%/20% for grants
Average
P.L. 117-103:
Request: Capitalization grants
Water State
wastewater
to capitalize loan
to states to
capitalization

$1.639 bil ion

Capitalization grants:
Revolving Fund
treatment,
funds
capitalize SRFs
grant to state:
$1.195 bil ion

(SRF) Loan
stormwater
SRF loans made
0%/100%d (project
$58 mil ion
Program
infrastructure, and

CPF/CDS items: $443.6 FY2023 Enacted (P.L. 117-58):
by states to local
loans are repaid
(FY2022)e
other eligible
mil ion
project sponsors
100% to states)
Average

Capitalization grants: $2.202
projects and
assistance from

bil ion
activities
States required to
provide a
SRF: $4.8 mil ion
P.L. 117-58:

Grants for emerging
minimum level of
(FY2021)f

contaminant projects: $225.0

Capitalization grants:
additional
$1.902 bil ion
mil ion
subsidization (e.g.,

Grants for emerging
principal
contaminant projects:
forgiveness) and
$100.0 mil ion
authorized to
provide further
subsidization
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Agency and
Project/
Type of
Federal/
Average
FY2023 President Funding
Projects or
Program
Financial
Nonfederal Cost
Amount of
FY2022 Enacted
Fundinga
Request
Program
Purposes
Assistance
Share
Assistance
EPA, Drinking
Public water supply
Grants to states
80%/20% for grants
Average
P.L. 117-103:
Request: Capitalization grants
Water State
projects needed to
to capitalize loan
to states to
capitalization

$1.126 bil ion

Capitalization grants:
Revolving Fund
meet federal drinking
funds
capitalize SRFs
grant to state:
$728.3 mil ion

(SRF) Loan
water standards and
SRF loans made
0%/100%d (project
$45.1 mil ion
Program
to address serious

FY2023 Enacted (P.L. 117-58):
by states to local
loans are repaid
(through

CPF/CDS items:
health risks
$397.8 mil ion
project sponsors
100% to states)
FY2022)g

Capitalization grants: $2.202

bil ion
States required to
Average
provide a
assistance from
P.L. 117-58:

Capitalization grants for lead
minimum level of
SRF: $2.79

service line replacement

Capitalization grants:
additional
mil ion (FY2021)
$1.902 bil ion
projects: $3.0 bil ion
subsidization (e.g.,



Capitalization grants for

Grants for emerging
principal
lead service line
contaminant projects: $800.0
forgiveness) and
replacement projects:
mil ion
authorized to
$3.0 bil ion
provide further
subsidization

Grants for emerging
contaminant projects:
$800.0 mil ion
EPA, Water
Wastewater and
Loans or loan
In general, WIFIA
$174 mil ion
$63.5 mil ion to cover
$72 mil ion to cover subsidy costs;
Infrastructure
drinking water
guarantees
funding cannot
(average of 88
subsidy costs; authorized to
authorized to provide no more than
Finance and
projects with costs
exceed 49% of
closed loans)h
provide no more than $12.5
$8 bil ion in credit assistance
Innovation Act
of $20 mil ion or
project costs
bil ion in credit assistance
(WIFIA)
larger (or $5 mil ion
Program
for rural areas)
EPA, Sewer
Sewer overflow or
Grants to states,
55%/45%
No assistance
$43 mil ion
$280 mil ion
Overflow and
stormwater
which make
provided to datei
Stormwater
infrastructure
grants to
Grant Program
projects, with
municipalities
priority for
financially distressed
communities
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Agency and
Project/
Type of
Federal/
Average
FY2023 President Funding
Projects or
Program
Financial
Nonfederal Cost
Amount of
FY2022 Enacted
Fundinga
Request
Program
Purposes
Assistance
Share
Assistance
EPA, Technical
Assist rural, small,
Grants to
100%/0%
EPA awarded $4 $20 mil ion
$18 mil ion
Assistance for
and tribal publicly
qualified
mil ion grants to
Rural, Small, and
owned treatment
nonprofits to
three entities in
Tribal
works and
provide technical
2021j
Wastewater
decentralized
assistance
Systems
wastewater
treatment systems
to comply with the
Clean Water Act
and apply for
financing from the
clean water SRF
EPA, Technical
Assist public water
Grants to
100%/0%
FY2021 awards
$22 mil ion
$0
Assistance for
systems and
qualified
were made to
Rural, Small, and
particularly small
nonprofits to
two entities,
Tribal Drinking
systems (serving 25-
provide technical
average grant
Water Systems
10,000 customers)
assistance
amount was
with SDWA
$10.3 mil ionk
compliance
EPA, Small and
Drinking water
Grants to states
55%/45% for grants
Appropriations
P.L. 117-103:
Request: $80.0 mil ion
Disadvantaged
projects needed to
on behalf of an
(EPA may waive
distributed
$27.2 mil ion
FY2023 Enacted (P.L. 117-58):
Communities
meet federal drinking
underserved
match under certain
noncompetitively
Drinking Water
water standards,
community, public
circumstances)
to states. State
P.L. 117-58:
$1.0 bil ion for grants to address
Grant Program
household water
water systems,
amount averaged
$1.0 bil ion for grants to
emerging contaminants
quality testing,
tribal water
$612,000
address emerging
assistance that
systems
through FY2021l
contaminants
benefits a
community on a per-
household basis
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Agency and
Project/
Type of
Federal/
Average
FY2023 President Funding
Projects or
Program
Financial
Nonfederal Cost
Amount of
FY2022 Enacted
Fundinga
Request
Program
Purposes
Assistance
Share
Assistance
EPA, Lead
Drinking water
Grants to
80%/20% for grants
Lead service line
$22.0 mil ion
$182.0 mil ion
Reduction
projects and
community water
(EPA may waive
grants awarded
Projects Grant
activities to reduce
systems, tribal
match under certain
to three entities
Program
lead in drinking
water systems,
circumstances)
in 2020 averaged
water; replacement
states, schools,
$5.7 mil ion; lead
of lead service lines;
and municipalities
removal grants
corrosion control
awarded to
activities
seven schools
and child care
centers averaged
$3.3 mil ionm
HUD,
Multipurpose
Formula grants,
100%/0%
Entitlement
$3.300 bil ion
$3.607 bil ion
Community
community
70% of which are
formula grants:
Development
development
reserved for
$2.1 mil ion;
Block Grant
projects; may include
urban areas, 30%
average award
Programn
water and waste
for state grants
to state
disposal
programs: $20
mil ion (for
subawards to
communities) in
FY2021
Commerce,
Multipurpose
Project grants
Generally 50%/50%
Average Public
$120.5 mil ion allocated for
$124 mil ion requested for the
EDA, Public
economic
Works grant
the Public Works program
Public Works program and $48
Works and
development
$1.4 mil ion;
and $37.5 mil ion for the
mil ion for the EAA programq
Economic
projects; may include
average EAA
EAA programp
Adjustment
water and sewer
grant $650,000
Assistance
(FY2020)
(EAA)o
Source: CRS.
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
CRS-8

potable use (e.g., potable use after storage and recovery, such as after groundwater recharge). Reuse connotes planned beneficial use (e.g., landscape watering,
agricultural irrigation, and industrial cooling) of treated municipal wastewater.
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. Based on FY2022 allotments to states from appropriations in P.L. 117-103 (EPA, “Annual Allotment of Federal Funds,” FY2022 table, https://www.epa.gov/cwsrf/
clean-water-state-revolving-fund-cwsrf-allotments-federal-funds-states); and FY2022 allotment to states from supplemental appropriations in P.L. 117-53 (EPA,
Memorandum: Implementation of the Clean Water and Drinking Water State Revolving Fund Provisions of the Bipartisan Infrastructure Law, March 8, 2022,
https://www.epa.gov/system/files/documents/2022-03/combined_srf-implementation-memo_final_03.2022.pdf).
f.
Based on total dol ars of annual assistance provided and total number of assistance agreements from CWSRF National Information Management System, National
Report, https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-national-information-management-system-reports.
g. “Average annual capitalization grant” includes emergency supplemental appropriations provided by the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58)
directed toward specific project purposes (e.g., lead service line replacement). EPA, “Annual Allotment of Federal Funds for States, Tribes, and Territories,”
https://www.epa.gov/dwsrf/annual-allotment-federal-funds-states-tribes-and-territories.
h. Based on 88 closed loans, totaling $15.3 bil ion. EPA, “WIFIA Closed Loans,” https://www.epa.gov/wifia/wifia-closed-loans.
i.
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.
j.
For more information, see EPA, Technical Assistance for Treatment Works, https://www.epa.gov/small-and-rural-wastewater-systems/technical-assistance-
treatment-works.
k. EPA, “EPA Selects Recipients for $21.7 Mil ion to Support Clean, Safe Water for Rural Communities” May 18, 2022, https://www.epa.gov/dwcapacity/training-and-
technical-assistance-small-systems-funding.
l.
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.
m. EPA, “WIIN Grant: Reduction in Lead Exposure Via Drinking Water,” https://www.epa.gov/dwcapacity/wiin-grant-reduction-lead-exposure-drinking-water.
n. CDBG figures in this table do not include Community Development Fund set-asides.
o. 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.
p. Explanatory statement accompanying the Consolidated Appropriations Act, 2022 (P.L. 117-103), Congressional Record (pp. H1772-H1773), March 9, 2022,
https://www.congress.gov/117/crec/2022/03/09/168/42/CREC-2022-03-09-bk3.pdf.
q. EDA, FY2023 Congressional Budget Justification, pp. 25, 59, https://www.commerce.gov/sites/default/files/2022-03/FY2023-EDA-Congressional-Budget-
Submission.pdf.

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Department of the Interior4
Bureau of Reclamation5
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.6
Reclamation owns and manages 475 dams and 337 reservoirs, which are capable of storing 245
million acre-feet of water.7 These facilities serve approximately 31 million people, delivering a
total of approximately 28.5 million acre-feet8 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.
Historically, Reclamation primarily supports M&I water supplies as part of larger, multipurpose
federal reclamation projects serving irrigation, flood control, power supply, and recreation
purposes. However, it has constructed few such projects in recent years. Since 1980, Congress
has individually authorized construction of several “rural water supply” projects that have also
served these purposes. Further, since 1992 Congress has also authorized nonfederal participation
in 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.
Congress has recently expanded Reclamation’s involvement in other types of nonfederal water
supply projects. In the 2016 Water Infrastructure Improvements for the Nation Act (WIIN Act;
P.L. 114-322), Congress added authority for Reclamation to support nonfederal construction of
brackish and seawater desalination projects and added new authority for Reclamation to support
water storage project construction (generally referred to here as “WIIN Act water storage
projects”) on a cost-shared basis, including construction of nonfederal water storage projects.
Each of these areas is discussed below.
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.9
A similar arrangement is required for the federal portion of WIIN Act water storage projects. For

4 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.
5 For more information on Bureau of Reclamation water supply authorities and activities, see CRS Report R46303,
Bureau of Reclamation: History, Authorities, and Issues for Congress, by Charles V. Stern and Anna E. Normand.
6 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).
7 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.
8 An acre-foot is the amount of water needed to cover one acre of land one foot deep, or 325,851 gallons.
9 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.
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M&I projects under rural water, Title XVI, and desalination authorities, Congress has established
terms providing some or all federal funding for projects on a nonreimbursable basis.
“Traditional” Multipurpose Reclamation Projects10
Reclamation undertakes “traditional” reclamation projects (i.e., projects authorized under the
structure laid out in the Reclamation Act of 1902 and related laws) at the explicit direction of
Congress. Local project sponsors may approach Reclamation or Congress 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. While
Reclamation maintains almost 200 of these projects throughout the country, it has constructed few
new reclamation projects in recent years.
Project Purposes
Individual authorization statutes establish project purposes. Generally, M&I projects are part of
larger, multipurpose projects such as those built for irrigation water supply, flood control, and
hydropower purposes.
Financing or Funding Mechanism
Projects are financed and constructed up front by the federal government, and costs for M&I
portions of such projects are generally considered reimbursable and are thus scheduled to be
repaid in full, with interest, over extended terms. Irrigation districts must also repay their share of
project benefits, but such payments are not subject to interest charges. Other water supply costs,
such as costs for fish and wildlife enhancement, are considered nonreimbursable pursuant to
federal law, and repayment is not required.
Eligibility Requirements
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 works only on projects located

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.
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in the 17 western states (32 Stat. 388; 43 U.S.C. §391 et seq.) unless otherwise specifically
authorized.
Recent Federal Funding
Funding information for the M&I portions of multipurpose reclamation projects is not readily
available. Total discretionary Reclamation appropriations (gross current authority, not including
permanent funding) for FY2022 were $1.90 billion. The total FY2023 budget request for
Reclamation was $1.41 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.
WIIN Act Water Storage Projects14
Congress enacted new authority for Reclamation to support surface and groundwater storage
projects (i.e., authority apart from the aforementioned “traditional” project authority) under
Section 4007 of the WIIN Act.15 Congress authorized $335 million in discretionary appropriations
for these projects, and approved a different approach than the traditional reclamation law process
of federal project study and construction with full, up-front federal funding for individual
projects.
Funding for water storage projects under Section 4007 is available for two primary project types.
Federally owned storage projects (surface water storage projects to which the United States holds
title and which were authorized to be constructed pursuant to reclamation law and regulations)
may be no more than 50% federally funded. State-led storage projects (surface water or
groundwater storage projects constructed, operated, and maintained by states or political
subdivisions) may be no more than 25% federally funded. Prior to the WIIN Act, Congress had
not authorized Reclamation to fund state-led water storage projects.
Before projects can receive federal support under the WIIN Act authority, several milestones must
be met. The Secretary of the Interior must find that the project is feasible and provides benefits
proportionate to the federal government’s cost share, and project sponsors must agree to pay their
portion of project costs up front. Appropriations under the Section 4007 authority are available to
individual projects only after the Secretary transmits a list of recommended projects and funding
levels to Congress, and Congress designates those projects by name in an enacted appropriations
act.16
Any project that meets the aforementioned criteria is eligible for funding allocations by
Reclamation. However, Congress also stipulated that in order to move forward, the Secretary
must find projects feasible by January 1, 2021.17 As of June 2022, Reclamation had recommended

13 These amounts include funding requests for Rural Water and Title XVI programs, discussed below.
14 For more on this authority, see CRS In Focus IF10626, Reclamation Water Storage Projects: Section 4007 of the
Water Infrastructure Improvements for the Nation Act, by Charles V. Stern.
15 43 U.S.C. §390b note.
16 For more information, see §4007(a) and (b) of P.L. 114-322.
17 P.L. 114-322, §4007(i).
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for funding for 13 projects in three states; Reclamation also recommended 8 of these projects for
construction prior to the aforementioned WIIN Act deadline.
Project Purposes
Congress did not specify purposes for WIIN Act water storage projects, only that a project is
feasible and has federal benefits “in accordance with the reclamation laws.” To date, projects
receiving funding under this authority are expected to provide benefits related to agricultural
irrigation and/or M&I uses, among other things.
Financing or Funding Mechanism
Water storage projects determined by Reclamation to be eligible under Section 4007 of the WIIN
Act may receive direct, up-front federal funding in amounts recommended by Reclamation and
approved by Congress, pursuant to the WIIN Act’s authorized cost shares (i.e., 50% for federal
projects, 25% for nonfederal projects). Similar to the “traditional” multipurpose federal
reclamation projects discussed above, the federal share for WIIN Act storage projects is subject to
a cost allocation by Reclamation during the study process that determines what portions of the
federal cost share are reimbursable and nonreimbursable. Reimbursable costs, which include the
portions of benefits estimated to accrue to M&I agricultural water supplies, must be repaid by
project sponsors over a 40-year period (with interest for M&I water supply benefits, and without
interest for agricultural irrigation benefits). Nonreimbursable costs, such as water supplies for fish
and wildlife purposes and flood control, are considered federal benefits and do not have to be
repaid.
Eligibility Requirements
Eligible projects must be located in the 17 western states and territories authorized in reclamation
law and may include federal projects—projects to which the United States holds title and were
authorized and constructed pursuant to reclamation laws—as well as “state-led” projects—
projects constructed, operated, and maintained by any state, department of a state, subdivision of
a state, or public agency organized pursuant to state law.
Recent Federal Funding
Similar to funding for traditional reclamation projects, there is no funding breakdown available
for the M&I portions of WIIN Act water storage projects. Congress enacted $117 million in
FY2022 discretionary funding for WIIN Act water storage projects in P.L. 117-103. Congress also
appropriated $1.05 billion for these projects over the FY2022-FY2026 time period in the IIJA
(P.L. 117-58). Reclamation allocated $210 million in IIJA funding to be obligated on these
projects in its FY2022 IIJA spend plan.18 The Administration requested no funding for these
projects in its FY2023 budget request, but recommended allocation of another $95 million in IIJA
funding for these projects in its FY2023 IIJA spend plan.19

18 Bureau of Reclamation, Implementation of the Bipartisan Infrastructure Law, FY2022 Spend Plan,
https://www.usbr.gov/bil/docs/spendplan-2022/Consolidated-Reclamation-BIL-Spend-Plan-2022-With-DS-RW-
AI.pdf. Hereinafter “FY2022 Reclamation Bipartisan Infrastructure Law Spend Plan.”
19 Bureau of Reclamation, Implementation of the Bipartisan Infrastructure Law, FY2023 Spend Plan,
https://www.usbr.gov/bil/docs/spendplan-2023/FY-2023-Reclamation-BIL-Spend-Plan.pdf. Hereinafter “FY2023
Reclamation Bipartisan Infrastructure Law Spend Plan.”
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Statutory and Regulatory Authority
Subtitle J, Section 4007 Water Infrastructure Improvements for the Nation Act (130 Stat. 1863-
1866, 43 U.S.C. §390b note).
Rural Water Supply Projects20
Similar to its traditional multipurpose projects, Reclamation has undertaken individual rural water
projects largely at the explicit direction of Congress. In most cases, Congress has prioritized
appropriations for already-authorized projects rather than fund new rural water 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 M&I 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.21 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, and in the Clean Water for Rural Communities Act
(Division FF, Title XI, §1110, of P.L. 116-260), Congress authorized another rural water project,
the Musselshell-Judith Rural Water System, and the review of the Dry-Redwater Regional Water
Authority System.22
Project Purposes
Individual authorization statutes have established rural water project purposes. Some rural water
project authorizations meet obligations under Indian water settlements or otherwise provide
benefits to Indian tribes.
Financing or Funding 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.

20 See also CRS Report R46308, Bureau of Reclamation Rural Water Projects, by Anna E. Normand.
21 43 C.F.R. §404.
22 The Clean Water for Rural Communities Act (§1110 of Title XI of Division FF of P.L. 116-260) directed the
Secretary of the Interior to enter into a cooperative agreement to provide assistance at a 65% federal cost share for the
planning, design, and construction of the Musselshell-Judith Rural Water System and authorized appropriations at
$56.7 million subject to cost indexing for the 2014 cost estimate of the feasibility report. The act also authorized $5.0
million for reviewing the Dry-Redwater Regional Water Authority System submitted to Reclamation on September 1,
2010, and for completing any additional work to ensure the study complied with Reclamation’s feasibility standards.
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Eligibility Requirements
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 2009.23 The rule does not apply to
previously authorized projects. As previously stated, ongoing rural water construction activities
are limited to ongoing, previously authorized projects.
Recent Federal Funding
Enacted funding for rural water supply projects in FY2022 was $130.2 million from the
Consolidated Appropriations Act and $420.0 million from the IIJA. This amount provided in the
Consolidated Appropriations Act included funding for two projects above the President’s budget
request that were requested as congressionally directed spending ($9.6 million for Eastern New
Mexico Water Supply and $12.7 million for Lewis and Clark Rural Water System) and $15.0
million in additional funding for rural water that Reclamation distributed in its spend plan.24
Reclamation released a FY2022 spend plan for the IIJA funding that details the allocation among
six projects.25 For FY2023, the Administration’s spend plan for IIJA funding includes $248.0
million for rural water supply projects, and the budget proposal requested $63.3 million for five
ongoing authorized rural water projects.26
Statutory and Regulatory Authority
The Rural Water Supply Program was authorized by the Rural Water Supply Act of 2006 (P.L.
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 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”

23 Department of the Interior, “Reclamation Rural Water Supply Program,” 73 Federal Register 67778-67791,
November 7, 2008, http://edocket.access.gpo.gov/2008/pdf/E8-26584.pdf. Under the rule, priority was given to
domestic, residential, and municipal uses. Communities or groups of communities with populations under 50,000 were
also eligible. The use of water for commercial irrigation purposes was not allowed.
24 See “Explanatory Statement Accompanying H.R. 2471, Consolidated Appropriations Act, 2022,” Congressional
Record, vol. 168, part 42-III (March 9, 2022), pp. H2320-H2321, https://www.congress.gov/117/crec/2022/03/09/168/
42/CREC-2022-03-09-bk3.pdf; and Bureau of Reclamation, FY2022 Additional Funding for Ongoing Work,
https://www.usbr.gov/budget/2022/fy2022-Spendplan/FY2022DistributionofAdditionalFundsforOngoingWork.pdf.
25 Bureau of Reclamation, Bureau of Reclamation Implementation of the Bipartisan Infrastructure Law, FY 2022 Spend
Plan, https://www.usbr.gov/bil/2022-spendplan.html.
26 Bureau of Reclamation, Bureau of Reclamation Implementation of the Bipartisan Infrastructure Law, FY 2023 Spend
Plan, https://www.usbr.gov/bil/2022-spendplan.html.
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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 has been amended on
multiple occasions, resulting in a total of 53 projects individually authorized for construction.
Amendments to Title XVI enacted in the WIIN Act made changes to the program, including
authorizing the Secretary of the Interior to accept and review nonfederal feasibility studies for
potential planning, design, and construction projects.27 The WIIN Act also authorized a
competitive grant program for construction of projects approved under this authority.28
In the IIJA, Congress further amended the Title XVI authority and created a new category of
“large-scale” Title XVI projects, defined as projects with total costs in excess of $500 million.29
In contrast to “regular” Title XVI projects (which are generally limited to the lesser of $20
million or 25% federal cost share), projects under this section are entitled to a federal cost share
of 25% of project costs, with no dollar cap on federal support. As a result, Reclamation currently
supports three types of water reuse and recycling projects: congressionally authorized Title XVI
projects; WIIN Act Title XVI projects, and large-scale water reuse/recycling projects.
Project Purposes
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 or Funding Mechanism
Title XVI projects are funded through grants that are available only to authorized projects (i.e.,
projects with individual authorizations from Congress or approved by the Administration and
Congress pursuant to the WIIN Act and/or the IIJA). Title XVI project construction costs are
shared by the federal government and a local project sponsor or sponsors. The federal share is
nonreimbursable, and is generally limited to the lesser of $20 million (1996 dollars) or 25% of
total project costs.30 The exception is large-scale water reuse and recycling projects funded
pursuant to the IIJA, which are eligible to receive up to 25% of project costs, with no comparable
cost cap.

27 These guidelines were published in Bureau of Reclamation, Reclamation Manual Directive and Standard WTR 11-
01, February 8, 2017, https://www.usbr.gov/recman/wtr/wtr11-01.pdf.
28 While selection criteria for WIIN Act grants have generally been the same as those for “traditional” Reclamation
projects, the two groups of projects are typically allocated funding amounts separately by Congress, and Reclamation
solicits grant proposals for each category separately.
29 See Title IX, §40905 of P.L. 117-58.
30 The exceptions are individually authorized projects where Congress authorized costs shares that differ from this
amount, and large-scale water recycling and reuse projects receiving support under the IIJA (authorized to receive up to
25% of total costs, with no dollar cap).
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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.31
Authorized recipients 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 had 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 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, although Congress may still choose to authorize individual projects where it
wishes to alter the terms for federal support.
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 2018.32
Recent Federal Funding
The total regular appropriations for the Title XVI program in FY2022 was $53 million, with $20
million of this funding designated as being available for WIIN Act-authorized projects. The
Administration also allocated $240 million in IIJA funding for Title XVI projects in its FY2022
IIJA spend plan,33 and allocated an additional $150 million for “regular” projects and $50 million
for large-scale Title XVI projects in its FY2023 IIJA spend plan.34 The Administration’s FY2023
budget request for all Title XVI projects was $5.0 million.
Statutory and Regulatory Authority
The original statutory authority for the Reclamation wastewater and reuse program is the
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 individual 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,
2001 (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
Resolution, 2003 (P.L. 108-7, Division D, §211); the Emergency Wartime Supplemental

31 For example, Congress has authorized three projects for construction in Hawaii (P.L. 109-70).
32 Bureau of Reclamation, Title XVI Water Reclamation and Reuse Program, Updated Evaluation Criteria for Review
and Comment, March 2018, https://www.usbr.gov/watersmart/title/docs/2018/Title%20XVI-Evaluation-Criteria-
Review.pdf.
33 FY2022 Reclamation Bipartisan Infrastructure Law Spend Plan.
34 FY2023 Reclamation Bipartisan Infrastructure Law Spend Plan.
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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); and the Omnibus Public Land Management Act of 2009 (P.L. 111-11; Title IX, Subtitle
B). Programmatic authority for Reclamation to approve studies and grant funding for individual
Title XVI projects was provided in the WIIN Act (P.L. 114-322, Title III, Subtitle J) and the IIJA
(P.L. 117-58).
Desalination Projects
Desalination projects develop and supplement water supplies through the treatment of ocean or
brackish water. Water supplies created by desalination projects are primarily used for M&I and
irrigation water supply, but may also be used for other purposes. Congress authorized the
Secretary of the Interior, through Reclamation, to support nonfederal construction of ocean or
brackish water desalination projects in Section 4009(a) of the WIIN Act. Similar to
congressionally authorized Title XVI projects, this funding is awarded as grants to projects with a
completed feasibility study that has been submitted to Reclamation and that meets all of the
requirements in Reclamation’s Directive and Standard for feasibility study review of Title XVI
and Desalination Projects.35
Project Purposes
The general purpose of desalination construction projects is to provide supplemental water
supplies by treating seawater or brackish water. Projects may be permanent or for demonstration
purposes.
Financing or Funding Mechanism
Desalination projects are funded through grants, which are available only to projects that have
submitted a feasibility study to Reclamation. Project construction costs are shared by the federal
government and a local project sponsor or sponsors. The maximum federal share is 25% of total
project costs; thus, nonfederal sponsors must be capable of funding 75% of project costs. These
costs may be made available through cash, costs contributed by the applicant, or third-party in-
kind contributions. Other federal funding may not be counted toward the required nonfederal cost
share, unless the statute authorizing a program stipulates that it may be made available for
matching cost-share requirements.
Eligibility Requirements
Like other Reclamation activities, support for nonfederal desalination projects is limited to
nonfederally owned and operated projects and studies in the 17 western United States or
territories identified in the Reclamation Act of 1902, as amended. Projects must meet several
other requirements, including having a completed feasibility study that has been submitted to
Reclamation and that meets all of the requirements in Reclamation’s Directive and Standard for
feasibility study review of Title XVI and Desalination Projects.36 Projects must also be included

35 Bureau of Reclamation, Title XVI Water Reclamation and Reuse Program and Desalination Construction Program
Feasibility Study Review Process, Reclamation Manual, WTR 11-01, October 18, 2019, https://www.usbr.gov/recman/
wtr/wtr11-01.pdf.
36 Bureau of Reclamation, Title XVI Water Reclamation and Reuse Program and Desalination Construction Program
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in a state-approved plan or, as an alternative, be requested by the governor of the state in which it
is located.
Several types of projects are not eligible for funding under this authority, including projects with
water reuse and recycling components (some of which may be eligible for funding from the
aforementioned Title XVI program), research and/or demonstration projects, and operations,
maintenance, and repair projects. The sponsor of any project in a western state that meets the
aforementioned criteria may be eligible to apply for grants under this authority.
Recent Federal Funding
Grants for desalination project construction are funded through Reclamation’s research and
development program for desalination and water purification; total FY2022 regular
appropriations for that program were $20 million, of which $10.5 million was designated for
grants under the WIIN Act authority. Congress also appropriated $250 million for these projects
in the IIJA over the FY2022-FY2026 period; Reclamation included $15 million for desalination
projects in its FY2022 IIJA spend plan, and $20 million for these projects in its FY2023 IIJA
spend plan.37 The Administration did not request any funding for desalination construction
projects in its FY2023 budget.
Statutory and Regulatory Authority
Water Desalination Act of 1996, P.L. 104-298, as amended by Section 4009(a) of Title II, Subtitle
J of the WIIN Act, P.L. 114-322.
Department of Defense38
U.S. Army Corps of Engineers (Civil Works)
USACE Projects
Storage at USACE Authorized and Constructed Reservoirs. As part of its civil works
activities, USACE operates water resource projects throughout the country. USACE civil works
projects and authorities are concentrated on three principal missions—navigation, flood damage
reduction, and aquatic ecosystem restoration. Some USACE 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.39 M&I water supply is generally not a USACE reservoir’s or

Feasibility Study Review Process, Reclamation Manual, WTR 11-01, October 18, 2019, https://www.usbr.gov/recman/
wtr/wtr11-01.pdf.
37 See FY2022 Reclamation Bipartisan Infrastructure Law Spend Plan and FY2023 Reclamation Bipartisan
Infrastructure Law Spend Plan.
38 This section was prepared by Anna E. Normand, Analyst in Natural Resources Policy, Resources, Science, and
Industry Division; and Nicole Carter, Specialist in Natural Resources Policy, Resources, Science, and Industry
Division.
39 Prior to the enactment of the WIIN Act (P.L. 114-322), U.S. Army Corps of Engineers (USACE) participated in
water conservation at its reservoirs in two ways. First, Congress had authorized specific USACE projects to have water
conservation as a purpose for project operations. This allowed USACE to provide for seasonal M&I use of storage
space at those USACE reservoirs. The use could be either as a direct withdrawal from the reservoir or for enhancing
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project’s primary purpose.40 These projects are discussed further under the heading “Storage of
Municipal and Industrial Water at Multipurpose USACE Reservoirs.”
Specific Projects. Congress has authorized two USACE civil works projects to have significant
water supply 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 FY2022 at $13 million and $24 million, respectively.
These specific projects are not discussed further in this report.
Unfunded Construction Authority. In Section 155 of the Water Resources Development Act of
2020 (Division AA of P.L. 116-260), Congress authorized USACE to carry out small water
storage projects,41 including for water supply; the authority has not been funded and is not
discussed further in this report.
USACE Assistance for Nonfederal Projects
Environmental Infrastructure Assistance. At the direction of Congress, USACE also provides
assistance for municipal environmental infrastructure (EI), which typically consists of assistance
with municipal drinking water and wastewater infrastructure projects and municipal source water
protection and development. These authorities are discussed further under the heading
“Environmental Infrastructure Assistance.”
Upcoming USACE Credit Assistance Program. The Water Infrastructure Finance and
Innovation Act (WIFIA), as amended, authorizes USACE and EPA to provide credit assistance—
secured (direct) loans or loan guarantees—for a broad range of water projects.42 In December
2021, Congress created a WIFIA account for USACE to implement its WIFIA authority. In
FY2021 and FY2022, Congress provided USACE with a total of $81 million for credit assistance
and $15.4 million for program administration. The credit assistance was limited to nonfederal
dam safety projects.43 USACE has not begun providing WIFIA credit assistance; on June 10,
2022, in the Federal Register, USACE proposed a rule for the implementation of the USACE
credit assistance for nonfederal dam safety projects.44 USACE’s program is known as the Civil
Works Infrastructure Financing Program (CWIFP). CWIFP is not discussed further in this report.
For more information on USACE’s program, see CRS Insight IN11577, U.S. Army Corps of

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 WIIN Act Sections 1116, 1117,
and 1118, Congress provided some general authority for USACE to operate reservoirs for “water conservation,”
including groundwater recharge.
40 Congress in Section 221 of Division AA of P.L. 116-260 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.
41 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).
42 P.L. 115-270; 33 U.S.C. §§3901-3914.
43 Congress authorized USACE’s program for a broader set of activities than have been funded. Congress authorized
USACE to provide WIFIA support for water resource projects, such as flood control, hurricane and storm damage
reduction, aquatic ecosystem restoration, and navigation, and multipurpose projects that are supported by USACE and
the EPA WIFIA authorities (e.g., drinking water, wastewater, and/or stormwater system improvements). USACE’s
WIFIA appropriations have been limited to nonfederal dam safety.
44 U.S. Army Corps of Engineers, “Credit Assistance and Related Fees for Water Resources Infrastructure Projects,” 87
Federal Register 35473-35489, 2022.
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Engineers Civil Works Infrastructure Financing Program (CWIFP): Status and Issues. (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 USACE 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:
1. 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.
2. 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 or Funding 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.
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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 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.45
Recent Federal Funding
USACE primarily uses annual appropriations for administration of its water supply authorities.
From FY2022 annual appropriations, USACE planned to use $6 million for USACE’s costs for
implementing its reservoir-related water supply authorities.46 The Administration’s FY2023
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);47 the Flood Control Act of 1944 (§6, 58 Stat. 890, as amended, 33
U.S.C. §708); and project-specific authorities in Water Resource Development Acts (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 250 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 have varied widely, from $0.1 million for a water
monitoring station to $585 million for a seven-state EI program. As with Reclamation’s rural

45 43 U.S.C. §390b(e).
46 P.L. 117-58 did not specifically provide for water supply funding.
47 For information on USACE’s civil works program, see https://www.usace.army.mil/Missions/Civil-Works/.
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water supply and Title XVI projects, congressional funding of these authorizations has enlarged
the scope of USACE’s activities.
Financing or Funding Mechanism
Under most USACE EI assistance authorizations, federal assistance typically requires a 75%
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, for some authorities, 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 a type of project (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 42 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,
Massachusetts, Nebraska, Washington, and other U.S. territories. Because this assistance is not
associated with traditional USACE water resources projects, it is not subject to USACE planning
requirements (e.g., a benefit-cost analysis is not performed).
Recent Federal Funding
Only a subset of the $6.2 billion in authorized USACE EI activities has received appropriations.48
Congress provided USACE with $100 million for EI assistance activities in FY2021 as part of
the “additional funding” provided by Congress in appropriations acts.49 USACE allocated the
funding to 21 authorities in its FY2021 work plan. In FY2022, Congress provided $86.5 million
to 26 community project funding/congressionally directed spending (CPF/CDS) EI requests and
$13 million for USACE to distribute to EI authorities in its FY2022 work plan.50 In FY2022,
Congress also provided $200 million for EI authorities in the IIJA, which USACE allocated to EI

48 For more information, see CRS In Focus IF11184, Army Corps of Engineers: Environmental Infrastructure (EI)
Assistance, by Anna E. Normand.
49 EI assistance is funded through the agency’s Construction account in Energy and Water Appropriations acts. USACE
Work Plans for recent fiscal years are published at USACE, “Civil Works Budget and Performance,”
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.
50 See “Explanatory Statement Accompanying H.R. 2471, Consolidated Appropriations Act, 2022,” Congressional
Record, vol. 168, part 42-III (March 9, 2022), pp. H2192-H2197 and pp. H2302-2308, https://www.congress.gov/117/
crec/2022/03/09/168/42/CREC-2022-03-09-bk3.pdf.
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authorities in its FY2022 IIJA spend plan.51 Similar to previous requests, the Biden
Administration requested no funding for these activities in its FY2023 request.
Statutory Authority
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 280 EI projects and programs. A WRDA or similar legislation is the
typical legislative vehicle for USACE authorizations. Beginning with WRDA 1992 (P.L. 102-
580), Congress has authorized USACE to assist local interests with planning, design, and
construction assistance for EI projects. Subsequent USACE authorization bills included new EI
assistance activities and raised the authorized funding ceilings for previously authorized projects.
Policies limiting congressionally directed spending in the 112th through 116th Congresses limited
congressional authorizing activity of EI assistance during that period. 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.52 Congress has
amended EI authorities including in these Section 7001 reports in WRDA 2018 and WRDA 2020.
Department of Agriculture
Rural Utilities Service (Water and Waste Disposal Programs)53
USDA administers a variety of water and waste disposal54 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.
From FY2012 to FY2021, RUS obligated $11.1 billion to 5,568 direct loans for water and waste
disposal projects.55 During that time, RUS obligated $137 million for 89 guaranteed loans and
$5.9 billion for over 7,400 grants for water and waste disposal projects.56

51 See USACE, Army Civil Works Program Infrastructure Investment and Jobs Act, 2022 Construction Spend Plan -
Addendum, https://www.usace.army.mil/Missions/Civil-Works/Budget/.
52 For more on this public proposal process, see CRS Insight IN11118, Army Corps of Engineers: Section 7001 Report
on Future Studies and Projects, by Anna E. Normand; and USACE, “WRRDA 7001 Proposals,”
http://www.usace.army.mil/Missions/Civil-Works/Project-Planning/WRRDA-7001-Proposals/.
53 This section was prepared by Lisa Benson, Analyst in Agricultural Policy, Resources, Science, and Industry
Division.
54 The programs’ official titles contain “Waste Disposal,” but 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.
55 USDA, Office of Budget and Program Analysis, “2023 USDA Explanatory Notes – Rural Utilities Service,”
https://www.usda.gov/sites/default/files/documents/34-2023-RUS.pdf.
56 USDA, Office of Budget and Program Analysis, “2023 USDA Explanatory Notes – Rural Utilities Service,”
https://www.usda.gov/sites/default/files/documents/34-2023-RUS.pdf.
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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.57 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 $30 million to
$35 million annually in recent years.58 For FY2021, Congress specified that funding for technical
assistance for water and waste disposal facilities may not exceed $35 million.59 In addition, the
similar Circuit Rider technical assistance program has an appropriation of $20.157 million for
FY2021.60 The 2018 farm bill authorized appropriations for this program at $25 million annually
for FY2019-FY2023.
Financing or Funding 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 2016.61 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
of the facilities, whichever is less. USDA makes either direct loans to applicants or guarantees up
to 90% of loans made by third-party lenders such as banks and savings and loan associations.

57 7 U.S.C. §1926(a)(14), Rural Water and Wastewater Technical Assistance Training Programs.
58 As per the USDA, Office of Budget and Program Analysis’s “FY2022 USDA Explanatory Notes – Rural Utilities
Service,” appropriations for the technical assistance grants for rural waste systems for FY2019 was $30 million, for
FY2020 was $30 million, and for FY2021 was $35 million.
59 Consolidated Appropriations Act, 2021 (P.L. 116-260).
60 Consolidated Appropriations Act, 2021 (P.L. 116-260).
61 USDA, “Water and Environmental Program,” https://www.rd.usda.gov/programs-services/water-environmental-
programs.
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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.62 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.
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.
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,63 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
normal commercial channels. Also, communities must be below certain income levels. Loans and
grants are made for projects needed to meet health or sanitary standards, including Clean Water
Act and Safe Drinking Water Act standards and requirements.

62 For current interest rates, see USDA, “Water & Waste Disposal Loan & Grant Program,” http://www.rd.usda.gov/
programs-services/water-waste-disposal-loan-grant-program.
63 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.
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Statutory and Regulatory Authority
Statutory authority for the water and waste disposal loan and grant programs, water technical
assistance, and other rural water assistance programs is the Consolidated Farm and Rural
Development Act, as amended (§306, 7 U.S.C. §1926). Regulations for these programs are
codified at Title 7, Parts 1779-1780, of the Code of Federal Regulations.64
Recent Federal Funding
FY2022 appropriations for USDA’s water and waste disposal programs and related programs
were included in the Consolidated Appropriations Act, 2022 (P.L. 117-103). Division A, Title III
provided $653.3 million in total for FY2022.65 The appropriations included $490 million in water
and waste disposal grants; $1 million to capitalize revolving funds for water and waste disposal
projects; and $70 million for water and waste disposal grants for colonias, Alaskan Native and
rural villages, and Native American tribes. Congress provided $1.4 billion in loan authority for
water and waste disposal direct loans (no loan subsidy was needed to support the loan authority),
and $50 million for water and waste disposal loan guarantees (a loan subsidy of $45,000 was
provided to support the loan authority). Congress also included $37.5 million for water and waste
disposal technical assistance grants and $20.762 million for the Circuit Rider Program.
For FY2023, the Administration is requesting $716.5 million for USDA’s water and waste
disposal and related programs.66 The request includes $511.9 million in water and waste disposal
grants; $1 million to capitalize revolving funds for water and waste disposal projects; and $93
million for water and waste disposal grants for colonias, Alaskan Native and rural villages, Native
American tribes, and Hawaiian home lands. The request provides $1.54 billion in loan authority
for water and waste disposal direct loans (with a loan subsidy of $26.499 million to support the
loan authority), and $50 million for water and waste disposal loan guarantees (no loan subsidy is
needed to support the loan authority). The request includes $40 million for water and waste
disposal technical assistance grants, and $20.157 million for the Circuit Rider Program, which
also provides technical assistance.
Emergency Community Water Assistance Grants
RUS is also authorized to help eligible communities prepare for or recover from an emergency
that threatens the availability of safe, reliable drinking water.67 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 appropriations of an
additional $50 million per year through FY2023 for this program.

64 For additional information on RUS water and environmental programs, see USDA, “Water & Waste Disposal Loan
& Grant Program,” http://www.rd.usda.gov/programs-services/water-waste-disposal-loan-grant-program.
65 Congressional Record, vol. 168, no. 42, Book III (March 9, 2022).
66 USDA, Office of Budget and Program Analysis, “2023 USDA Explanatory Notes – Rural Utilities Service,”
https://www.usda.gov/sites/default/files/documents/34-2023-RUS.pdf.
67 7 U.S.C. §1926a.
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Statutory authority for the emergency community water assistance grant program is the
Consolidated Farm and Rural Development Act, as amended, Section 306A (7 U.S.C. §1926a).
Regulations for this program are codified at Title 7, Part 1778, of the Code of Federal
Regulations.
Congress provided $15 million for the Emergency Community Water Assistance Grant Program
for FY2022. The FY2023 Administration request also includes $15 million for the program.
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.”68 Loans and subgrants are limited to $15,000 per water well or decentralized system.
The 2018 farm bill (P.L. 115-334) authorized $20 million for the program through FY2023.
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.
Congress provided $5 million for the Rural Decentralized Water Systems Grant Program for
FY2022. The FY2023 Administration request also includes $5 million for the program.
Natural Resources Conservation Service69
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.70
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

68 7 U.S.C. §1926e.
69 This section was prepared by Megan Stubbs, Specialist in Agricultural Conservation and Natural Resources Policy,
Resources, Science, and Industry Division.
70 The Emergency Watershed Protection (EWP) program is used to restore the natural functions of a watershed after a
natural disaster has occurred and to minimize the risks to property and life posed by floods by purchasing easements on
flood plains. For more information on the EWP program, see CRS Report R42854, Emergency Assistance for
Agricultural Land Rehabilitation, by Megan Stubbs.
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smaller projects (discussed below). Larger projects must be approved by Congress. In FY2021,
NRCS funded 49 new projects and 19 backlog projects.71
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.
In FY2022, the IIJA (P.L. 117-58, Division J, Title I) provided $500 million for WFPO that is
available until expended. The FY2022 Consolidated Appropriations Act (P.L. 117-103, Division
A) appropriated $100 million, of which $23.3 million (23%) was identified as congressionally
directed spending. Amendments in the 2018 farm bill (P.L. 115-334) permanently authorized an
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 or Funding 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.72 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

71 USDA, FY2023 USDA Budget Congressional Justification, “2023 USDA Explanatory Notes—Natural Resources
Conservation Service,” https://www.obpa.usda.gov/explan_notes.html.
72 The enacted FY2022 appropriation included a policy provision that waives the 250,000-acre project limit when the
project’s primary purpose is something other than flood prevention. This provision did not amend the WFPO
authorization. Therefore, it is effective only for the funds provided through the FY2022 annual appropriation.
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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).
Recent Federal Funding
The enacted FY2022 appropriations provided WFPO with $100 million. Of the $100 million,
$23.3 million is directed to earmarks, and $10 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. 534 projects.73 IIJA provided $500 million for
WFPO in FY2022 that is available until expended.74 The FY2022 joint explanatory statement
notes the IIJA additions for WFPO in reference to the reductions in the FY2022 annual
appropriated levels.75 The FY2023 Administration’s request proposes $125 million in
discretionary funding for the WFPO program.
In addition to discretionary funding through appropriations, the 2018 farm bill permanently
authorizes $50 million annually from mandatory sources.76 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.
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.77
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

73 For additional information on FY2022 WFPO earmarks, see CRS Report R46971, Agricultural Conservation:
FY2022 Appropriations, by Megan Stubbs.
74 For additional information, see CRS In Focus IF11990, Infrastructure Investment and Jobs Act (IIJA): Funding for
USDA Broadband, Watershed, and Bioproduct Programs, by Lisa S. Benson, Megan Stubbs, and Kelsi Bracmort.
75 WFPO has received an average of $160 million annually through appropriations between FY2017 and FY2022. See
FY2022 “Explanatory Statement Submitted by Ms. DeLauro, Chair of the House Committee on Appropriations,
Regarding the House Amendment to H.R. 2471, Consolidated Appropriations Act, 2022,” Congressional Record, vol.
168, part 42-Book III (March 9, 2022), p. H1713.
76 The 2018 farm bill authorizes mandatory funding from the Commodity Credit Corporation, a government-owned
entity that finances programs supporting U.S. agriculture. For more information, see CRS Report R44606, The
Commodity Credit Corporation (CCC), by Megan Stubbs.
77 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/.
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the local organization must also agree on a plan of work before a loan is obligated. Over the life
of the program, 495 RUS loans have been made at a value of almost $176 million.
Small Watershed Rehabilitation
Some of the oldest P.L. 566 projects that have exceeded their design life (dams were constructed
starting in 1948) need rehabilitation work to continue to protect public health and safety by
reducing any possibility of dam failure and to meet changing resource needs. By the end of 2025,
6,782 watershed dams will have reached the end of their designed life spans. In response to this
concern, Congress created a dam rehabilitation program, known as the Small Watershed
Rehabilitation Program, in Section 313 of the Grain Standards and Warehouse Improvement Act
of 2000 (P.L. 106-472), which revised the WFPO program. From 2000 to 2021, the program
authorized the rehabilitation of 263 dams in 26 states. Of this total, 171 projects are complete, 57
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 or Funding 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.
Recent Federal Funding
Since FY2000, Congress has appropriated more than $820 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 $8.2 million over the last
five years, including $1 million in the enacted FY2022 appropriations. The IIJA provided $118
million for the Small Watershed Rehabilitation Program in FY2022 that is available until
expended. Similar to WFPO, the FY2022 joint explanatory statement notes the IIJA additions for
the program in reference to the reductions in the FY2022 annual appropriated levels. The FY2023
Administration’s request proposes $10 million in discretionary funding for the Small Watershed
Rehabilitation Program.
In the past, the program was authorized through omnibus farm bills to receive mandatory funding
to remain available until expended. This funding was frequently restricted through annual
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appropriations and used to offset other discretionary spending.78 The 2018 farm bill reauthorized
discretionary funding authority of $85 million annually for the program. Mandatory funds
authorized for WFPO through the 2018 farm bill may also be used for rehabilitation work under
the Small Watershed Rehabilitation Program.79
Statutory and Regulatory Authorities
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.80
Environmental Protection Agency
Clean Water State Revolving Fund Loan Program81
In 1987, Congress amended the Clean Water Act (CWA)82 to establish the Clean Water State
Revolving Fund (CWSRF) program.83 All 50 states, plus Puerto Rico, participate in the CWSRF
program.84 EPA receives annual appropriations to support the CWSRF program and distributes
grants to the states based on a CWA statutory formula.85 States provide matching funds equal to
20% of the federal grant to capitalize their revolving loan funds 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.86
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.87

78 For additional information on past reductions to mandatory programs, see CRS In Focus IF10041, Reductions to
Mandatory Agricultural Conservation Programs in Appropriations Law, by Megan Stubbs.
79 For additional information, see CRS Report R45698, Agricultural Conservation in the 2018 Farm Bill, by Megan
Stubbs.
80 For information on the program, see NRCS, “Watershed Rehabilitation Program,” http://www.nrcs.usda.gov/wps/
portal/nrcs/main/national/programs/landscape/wr/.
81 This section was prepared by Jonathan Ramseur, Specialist in Resources and Environmental Policy, Resources,
Science, and Industry Division.
82 The official statutory name is the Federal Water Pollution Control Act (P.L. 92-500), as amended, codified at Title
33, §1251 et seq, of the U.S. Code.
83 Prior to 1989 (when the CWSRF program became effective), EPA states used their annual allotment to make grants
to cities and other eligible recipients.
84 U.S. territories, Indian tribes, and the District of Columbia receive grants from EPA under separate CWA authorities.
85 For more information, see CRS Report RL31073, Allocation of Wastewater Treatment Assistance: Formula and
Other Changes, by Jonathan L. Ramseur.
86 EPA, Clean Watersheds Needs Survey 2012, 2016, https://www.epa.gov/cwns.
87 EPA, “Did You Know,” https://www.epa.gov/cwsrf (accessed June 30, 2022).
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Program Purpose
The CWSRF program provides assistance in constructing and upgrading publicly owned
municipal wastewater treatment plants and related equipment (including stormwater
infrastructure), implementing nonpoint pollution management programs, developing and
implementing management plans under the National Estuary Program, and supporting a range of
other eligible activities that were added to the program in 2014.
Financing or Funding Mechanism
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. IIJA (P.L. 117-58) amended the CWSRF statutory provisions to direct states to use at least
10% of their capitalization grants for additional subsidization under certain conditions.88
Prior to the enactment of IIJA, appropriations acts in recent years have required states to use
minimum 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.89
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

88 For more information, see CRS Report R46892, Infrastructure Investment and Jobs Act (IIJA): Drinking Water and
Wastewater Infrastructure, by Elena H. Humphreys and Jonathan L. Ramseur.
89 For more information, see U.S. Department of Labor, “Davis-Bacon and Related Acts,” https://www.dol.gov/whd/
govcontracts/dbra.htm.
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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 212,90 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.91 After satisfying the “first use” requirement, funds may be
used to implement other eligible uses. The statutory list of eligible activities initially included
nonpoint source management programs and estuary activities in approved State Nonpoint
Management Programs and estuarine Comprehensive Conservation and Management Plans,
respectively.92 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.
Recent Federal 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 $153 billion in SRF assistance to
support more than 44,000 SRF loans and debt refinance agreements.93
For FY2020 and FY2021, Congress appropriated $1.639 billion (P.L. 116-94 and P.L. 116-260)
for the CWSRF program. The FY2022 CWSRF appropriations include both supplemental
appropriations from IIJA of $1.902 billion and regular appropriations (P.L. 117-103) of $1.639
billion, a portion of which did not go directly to the CWSRF program. P.L. 117-103 includes
“community project funding/congressionally directed spending” (CPF/CDS) items, which some

90 33 U.S.C. §1292.
91 33 U.S.C. §1382(b)(5).
92 For a detailed breakdown of SRF funding by category, see EPA, Clean Water SRF Program Information, National
Summary, updated annually, https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-national-information-
management-system-reports.
93 EPA, Clean Water SRF Program Information, National Summary, February 2022, https://www.epa.gov/cwsrf/clean-
water-state-revolving-fund-cwsrf-national-information-management-system-reports.
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have referred to as “earmarks.” The act sets aside 27% ($443.6 million) of the FY2022 CWSRF
appropriations ($1.639 billion) to CPF/CDS. Such funds are to be distributed directly to
recipients, instead of to states’ SRF programs. Thus, the reservation of funds effectively decreases
the total amount available for allotment as state capitalization grants to $1.195 billion.94 Thus, the
combined FY2022 appropriations for the CWSRF program are $3.097 billion.
For FY2023, the President requested $1.639 billion for the CWSRF program. This would be in
addition to the FY2023 supplemental appropriations of $2.202 billion provided by IIJA.
Through a separate process, EPA provides direct grants for the District of Columbia, the U.S.
Virgin Islands, American Samoa, Guam, and the Commonwealth of the Northern Mariana
Islands.95 EPA also provides direct grants to Indian tribes.96 The funding for the District of
Columbia, U.S. territories, and Indian tribes is part of the SRF appropriations 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.
Drinking Water State Revolving Fund Loan Program97
The Safe Drinking Water Act (SDWA) requires public water systems to comply with federal
drinking water regulations promulgated by EPA.98 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 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.99 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

94 For more information, see CRS In Focus IF12103, U.S. Environmental Protection Agency (EPA) Water
Infrastructure Programs and FY2022 Appropriations, by Elena H. Humphreys and Jonathan L. Ramseur.
95 See 33 U.S.C. §1384 note.
96 See 33 U.S.C. §1377.
97 This section was prepared by Elena Humphreys, Analyst in Environmental Policy, Resources, Science, and Industry
Division.
98 See CRS Report RL31243, Safe Drinking Water Act (SDWA): A Summary of the Act and Its Major Requirements, by
Mary Tiemann.
99 Private, residential wells are not regulated under the SDWA and are not eligible for assistance through this program.
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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 (2018) indicates that public water systems need to invest at
least $472.6 billion in infrastructure improvements over 20 years ($23.63 billion annually) to
ensure the provision of safe drinking water and compliance with federal standards.100
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 or Funding 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
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.101 (A disadvantaged community is one in which the
service area of a public water system meets state-established affordability criteria.) The
Consolidated Appropriations Act, 2022 (P.L. 117-103), requires states to use 14% of their
DWSRF capitalization grants “to provide additional subsidy to eligible recipients.”
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

100 This estimate is not adjusted for inflation. EPA, Drinking Water Infrastructure Needs Survey and Assessment: Sixth
Report to Congress, March 2018, https://www.epa.gov/sites/production/files/2018-10/documents/
corrected_sixth_drinking_water_infrastructure_needs_survey_and_assessment.pdf.
101 SDWA Section 1452(d)(2)(B) (42 U.S.C. §300j-12(d)(2)(B)) conditionally requires states to use at least 12% of
their capitalization grants to further subsidize DWSRF loans.
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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).
Recent Federal Funding
For FY2021, the President requested $863.2 million, and Congress again provided $1,126.1
million in P.L. 116-260.102 The President’s FY2022 Budget Request included $1,357.9 million for
the DWSRF program. For FY2022, two acts provided appropriations for the DWSRF program.
IIJA (P.L. 117-58) provides three appropriations for FY2022 of
1. $1,902.0 million for the DWSRF program,
2. $3,000.0 million through the DWSRF for lead service line replacement projects
and related activities, and
3. $800.0 million through the DWSRF for grants to support projects to address
emerging contaminants with a focus on per- and polyfluoroalkyl substances.
The Consolidated Appropriations Act, 2022 (P.L. 117-103) provided $1,126.1 million for the
DWSRF. Of this total appropriation, the act dedicates $397.8 million to “community project
funding/congressionally directed spending” items, which some have called “earmarks.”
Accordingly, the act provides $728.3 million for the DWSRF program.
For FY2023, the President requested $1,126.1 million for the DWSRF program. In recent years,
the estimated average state capitalization grant has been roughly $20.77 million per fiscal year.
The estimated average grant to territories was $4.14 million per fiscal year.103
From FY1997 through FY2021, cumulative appropriations for the DWSRF program reached
$25.12 billion. Adjusted for set-asides, cumulative net federal contributions totaled $24.39 billion.
When combined with the 20% state match ($4.46 billion), bond proceeds, loan principal
repayments, and other funds, the total DWSRF investment through FY2021 had reached $50.71
billion, and the program had provided more than $48.54 billion in assistance. Over the same
period, more than 17,779 projects had received assistance, and 12,752 had been completed.104

102 In 2018, AWIA reauthorized DWSRF appropriations for FY2019-FY2021. The authorized appropriations are
$1.174 billion in FY2019, $1.300 billion in FY2020, and $1.950 billion in FY2021. SDWA §1452(m); 42 U.S.C.
§300j-12(m).
103 Code of Federal Domestic Assistance, Capitalization Grants for Drinking Water State Revolving Funds, No. 66.468,
https://beta.sam.gov/fal/569f9cce42834328941b19aea8b9e2e6/view.
104 Detailed national and state program data are available at EPA, “Drinking Water State Revolving Fund National
Information Management System Reports,” https://www.epa.gov/drinkingwatersrf/drinking-water-state-revolving-
fund-national-information-management-system-reports.
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Statutory and Regulatory Authority
The statutory authority for the DWSRF program is the Safe Drinking Water Act Amendments of
1996 (P.L. 104-182, §1452, 42 U.S.C. §300j-12). Regulations are codified at Title 40, Section
35.3500, of the Code of Federal Regulations.105
Water Infrastructure Finance and Innovation Act Program106
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.107 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.108 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.109
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.110
Program Purpose
WIFIA provides an additional source of financing for water infrastructure projects, including
projects eligible for CWSRF and DWSRF assistance. Some stakeholders have argued that the
clean water and drinking water SRF programs are structured in a way that makes them useful
primarily for smaller communities and smaller projects. The WIFIA program can provide credit
assistance to large water infrastructure projects that otherwise have difficulty obtaining financing.
Moreover, SRF funding is generally limited to projects that promote CWA or SDWA compliance

105 DWSRF program information, regulations, facts, and statistics are available at https://www.epa.gov/dwsrf.
106 This section was prepared by Jonathan Ramseur, Specialist in Environmental Policy, Resources, Science, and
Industry Division.
107 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.
These estimates are not adjusted for inflation.
108 In 2014, WRRDA established a five-year WIFIA pilot program. In 2018, AWIA (P.L. 115-270) amended the
WIFIA 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.
109 See EPA, WIFIA Program Handbook, 2019, footnote 24.
110 See EPA’s WIFIA website, https://www.epa.gov/wifia/mou-administering-and-servicing-federal-credit-instruments.
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and other statutory objectives. WIFIA can provide capital at a low cost to the borrower, because
Treasury rates are typically lower than traditional municipal bonds.
Financing or Funding Mechanism
In federal budgetary terms, WIFIA assistance has much less of an impact on federal spending
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.).111
Although subsidy rates are project-specific, in the Biden Administration’s FY2023 budget
proposal, OMB estimated a 1.07% subsidy rate for WIFIA in FY2022.112 At this subsidy rate, $10
million in appropriations could support direct loans totaling $930 million.113 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;
 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;

111 33 U.S.C. §3901(13).
112 OMB, Budget of the United States Government, FY2023, Federal Credit Supplement, Table 1,
https://www.govinfo.gov/app/collection/budget/2023/BUDGET-2023-FCS.
113 The subsidy rate, which is often expressed in percentage terms or as a ratio, largely determines the amount of credit
assistance that can be made available to project sponsors. For example, if a project’s subsidy rate is 10% and is the only
charge against available budget authority, a $20 million budgetary allocation could theoretically support a $200 million
loan. A lower subsidy rate would support a larger loan amount.
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 prevention, reduction, or mitigation of the effects of drought;114 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.
Recent Federal 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 FY2022, the Consolidated Appropriations Act (P.L. 117-103) provided
$69.5 million for WIFIA (including $6.0 million for administrative costs). For FY2023, the
President requested $80.3 million for the program (including $8.2 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.115 On
June 17, 2022, EPA announced a sixth round of WIFIA funding. EPA estimated that its FY2022
budget authority would provide approximately $5.5 billion in credit assistance.116
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 Programs117
In recent WRDAs, Congress has authorized several new drinking water and wastewater
infrastructure funding programs. These programs are discussed below.118

114 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.
115 For more up-to-date details of project selection, see EPA’s WIFIA website at https://www.epa.gov/wifia.
116 EPA, “Notice of Funding Availability for Credit Assistance Under WIFIA Program,” 87 Federal Register 36489,
June 17, 2022, https://www.epa.gov/wifia/fy-2022-notice-funding-availability.
117 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.
118 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)).
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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. IIJA reauthorized
appropriations for $280 million annually for FY2022 through FY2026.
Under this program, EPA will provide grants to states, which will provide sub-awards to eligible
entities. The grants to states will be allocated based on a formula prepared by EPA.119 As of the
date of this report, EPA has not issued any grants for this program.120
Recent Federal 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 Consolidated Appropriations
Act, 2022 (P.L. 117-103) provided $43 million for this program. For FY2023, the President
requested $280 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 (adding Section 104(b)(8)) 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.121 For this purpose, AWIA authorized appropriations of $25
million per year for FY2019 through FY2023. IIJA reauthorized appropriations of $75 million per
year for FY2022 through FY2026 to carry out grant programs in Section 104(b)(8), as well as
Section 104(b)(3) and Section 104(g). These latter two programs have not received appropriations
in recent years.

119 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.
120 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.
121 For more information, see EPA, “Technical Assistance for Treatment Works,” https://www.epa.gov/small-and-rural-
wastewater-systems/technical-assistance-treatment-works.
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Recent Federal Funding
For FY2020, the Further Consolidated Appropriations Act, 2020 (P.L. 116-94), enacted December
20, 2019, provided $12 million for the Section 104(b)(8) grant program. For FY2021, the
Consolidated Appropriations Act, 2021 (P.L. 116-260) provided $18 million for this program. For
FY2022, the Consolidated Appropriations Act, 2022 (P.L. 117-103) provided $20 million for this
program. For FY2023, the President requested $18 million for this program. In addition, the
President requested $75 million to carry out this grant program and grant programs in Section
104(b)(3) and Section 104(g).
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 multistate 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.
Recent Federal 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 Consolidated
Appropriations Act, 2022 (P.L. 117-103) provided $22 million for this program. For FY2023, 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
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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.”122 This grant program requires a cost share of no less than 10% 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.
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.123 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.124 In
November 2020, EPA announced that the agency would provide $20 million for public water
systems serving tribal communities.125 For FY2021 funding, EPA allotted $23.2 million among
the states by using “an algorithmic formula that includes factors for population below poverty,
small water systems, and underserved communities,” after reserving 10% of available funds for
projects serving Indian tribes and Alaska Native villages.126
Recent Federal Funding
Beginning in FY2018, Congress has appropriated funds to support this grant program for small
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, two acts provided appropriations for this grant program. IIJA (P.L. 117-58) provided
appropriations for FY2022 of $1.0 billion for this grant program for projects to address emerging
contaminants. The Consolidated Appropriations Act, 2021 (P.L. 117-103) provided $27.2 million
for this grant program. For FY2023, the President requested $80.0 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).

122 42 U.S.C. §300j-19a(a)(1).
123 EPA, “Final Allotments of FY2018 and FY2019 Appropriations for the Assistance to Small and Disadvantaged
Communities Grants, Authorized under Section 2104 of the Water Infrastructure Improvements for the Nation Act,”
April 29, 2019, https://www.epa.gov/sites/production/files/2019-04/documents/
wiin_2104_allotment_memo_april_2019.pdf.
124 EPA, Assistance for Small and Disadvantaged Communities Drinking Water Grant Program: Grant Implementation
Document, August 2019, https://www.epa.gov/sites/production/files/2019-08/documents/
assistance_for_small_and_disadvantaged_communities_grant_implementation_document_08_27_19.pdf.
125 See EPA website “WIIN Act Section 2104: Assistance for Small and Disadvantaged Communities Tribal Grant
Program,” https://www.epa.gov/tribaldrinkingwater/wiin-act-section-2104-assistance-small-and-disadvantaged-
communities-tribal.
126 EPA, “Final Allotments of FY2021 Appropriations for the Assistance to Small and Disadvantaged Communities
Grants, Authorized under Section 2104 of the Water Infrastructure Improvements for the Nation Act,” July, 27, 2021,
https://www.epa.gov/system/files/documents/2021-08/fy2021-initial-state-allotment-memo.pdf.
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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 with experience in lead reduction; 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.127
Recent Federal 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
Appropriations Act, 2021 (P.L. 116-260) provided $21.5 million for this grant program. The
Consolidated Appropriations Act, 2021 (P.L. 117-103) provided $22.0 million for this grant
program for FY2022. For FY2023, the President requested $182.0 million.
Statutory Authority
The statutory authority for the Reducing Lead in Drinking Water grant program is SDWA Section
1459B (codified at 42 U.S.C. §300j-19b, added by the WIIN Act, P.L. 114-322, §2105).
Department of Housing and Urban Development128
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.

127 See EPA, “WIIN Grant: Reduction in Lead Exposure Via Drinking Water,” https://www.epa.gov/dwcapacity/wiin-
grant-reduction-lead-exposure-drinking-water.
128 This section was prepared by Joe Jaroscak, Analyst in Economic Development Policy, Government and Finance
Division.
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Program regulations require that at least 70% of a grantee’s 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 Coronavirus Disease 2019 (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.129
After subtracting any amounts specified in appropriations acts, 70% of CDBG funds (the
entitlement program) are allocated by formula to entitlement communities.130 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
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.131
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.132
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.

129 HUD, CDBG Grant History Report (as of April 2021), https://www.hudexchange.info/programs/cdbg-dr/reports/.
130 HUD, Awards and Allocations, https://www.hudexchange.info/grantees/allocations-awards/.
131 HUD, CDBG Expenditure Reports, National Expenditure Reports (FY2001-FY2020), All CDBG Disbursements,
https://www.hudexchange.info/programs/cdbg/cdbg-expenditure-reports/.
132 Between FY2016 and FY2020, disbursements by CDBG recipients for water and sewer improvements have
averaged $388.4 million per year. See HUD, CDBG Expenditure Reports, National Expenditure Reports (FY2001-
FY2020), All CDBG Disbursements, https://www.hudexchange.info/programs/cdbg/cdbg-expenditure-reports/.
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Financing or Funding 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).133
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
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
statutory amount of $7 million 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. Grantees must
ensure that each activity meets one of the program’s three national objectives: benefiting 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.

133 U.S. Department of Housing and Urban Development, Consolidated Plan Process, Grant Programs, and Related
HUD Programs, https://www.hudexchange.info/programs/consolidated-plan/consolidated-plan-process-grant-
programs-and-related-hud-programs/.
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Recent Federal Funding
The Consolidated Appropriations Act, 2022 (P.L. 117-103) appropriated $4.841 billion for the
Community Development Fund (CDF),134 including $3.307 billion in CDBG entitlement,
nonentitlement, and insular area funds (see Table 1). The act included $1.516 billion in the CDF
for Economic Development Initiative funding, for congressionally directed community project
spending.135 As in FY2021, the Consolidated Appropriations Act, 2022 appropriated $25 million
of the $4.841 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
FY2022, $2.305 billion was allocated to entitlement communities, $987.9 million to states for
distribution to nonentitlement communities, and $7 million to insular areas.136 The Biden
Administration’s FY2023 budget requested $3.77 billion for the CDF, of which $3.607 billion
was requested for the CDBG program (see Table 1).137
Statutory and Regulatory Authority
Statutory authority for the CDBG program is Title I of the Housing and Community Development
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).138 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 to CDBG
grantees. The program allows entitlement communities and states, 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

134 The CDBG program is funded in an account called the Community Development Fund.
135 U.S. Department of Housing and Urban Development, Economic Development Initiative—Community Project
Funding Grants, May 2022, https://www.hud.gov/program_offices/comm_planning/
economic_development_initiative_community_project_funding_grants.
136 HUD’s Office of Community Planning and Development (CPD) administers the CDBG program. CPD’s
Appropriations Budget/Allocations table provides the FY2022 amount of funding allocated for entitlement (called
“local governments” in the table) and state CDBG programs. See U.S. Department of Housing and Urban
Development, “CPD Appropriations Budget/Allocations,” https://www.hud.gov/program_offices/comm_planning/
appropriations_budget_allocations.
137 OMB, Budget of the U.S. Government, FY2023, Appendix, p. 571, https://www.whitehouse.gov/wp-content/uploads/
2022/03/appendix_fy2023.pdf.
138 For more program information on CDBG entitlements grants, see https://www.hudexchange.info/programs/cdbg-
entitlement/cdbg-entitlement-program-eligibility-requirements/. For information on the CDBG state program, see
https://www.hudexchange.info/programs/cdbg-state/.
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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 or Funding 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 reloan the funds to private participants in a redevelopment project. Applicants
are encouraged to meet with HUD staff prior to submitting a formal application.
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, antidisplacement 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.
Recent Federal Funding
For FY2022, 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.139 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 FY2014140 changed
that arrangement, allowing HUD to collect a fee from the borrower to cover the cost of the credit

139 P.L. 117-103.
140 P.L. 113-76, 128 Stat. 617.
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subsidy. The amount of the fee is determined annually by HUD based on a percentage of the
principal amount of the Section 108 guaranteed loan. For FY2023, the Biden Administration
requested $300 million in Section 108 loan guarantee authority.141
Statutory and Regulatory Authority
Statutory authority for the Section 108 program is Title I of the Housing and Community
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 Commerce142
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.

141 OMB, Budget of the U.S. Government, FY2023, Appendix, p. 578, https://www.whitehouse.gov/wp-content/uploads/
2022/03/appendix_fy2023.pdf.
142 This section was prepared by Julie Lawhorn, Analyst in Economic Development Policy, Government and Finance
Division.
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Financing or Funding 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
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.143 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.144
Recent Federal Funding
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 grant program. The Consolidated
Appropriations Act, 2021 (P.L. 116-260) appropriated $305.5 million for EDA programs,
including $119.5 million for the Public Works program. The Consolidated Appropriations Act,
2022 (P.L. 117-103) included $330 million for EDA programs and an additional $43.5 million for
salaries and expenses. Of the amount appropriated for EDA programs in FY2022, Congress
directed EDA to allocate $120.5 million for the Public Works program. For FY2023, the
Administration’s budget requested $124 million for the Public Works program.145

143 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).
144 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.
145 U.S. Department of Commerce (DOC), FY2023 EDA Congressional Budget Justification, p. 25,
https://www.commerce.gov/sites/default/files/2022-03/FY2023-EDA-Congressional-Budget-Submission.pdf.
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Statutory and Regulatory Authority
The statutory authority for the Public Works program is the Public Works and Economic
Development Act of 1965, as amended, P.L. 89-136 (42 U.S.C. §3121 et seq.). Regulations are
codified at Title 13, Chapter III, Parts 302, 305, 316, and 317, of the Code of Federal
Regulations.
Economic Development Administration Economic Adjustment
Assistance Program
EDA, through its Economic Adjustment Assistance (EAA) grant program, awards development
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 affected 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.146
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 or Funding 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

146 13 C.F.R. Part 307.
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contributions of space, equipment, and services. No minimum or maximum project amount is
specified in law.
Eligibility Requirements
EAA grants may be made to states, cities, counties and other political subdivisions of states, an
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.147 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.148
Recent Federal 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 and FY2022.149 For FY2023, the Administration’s
budget requested $48 million for the EAA program.150
Congress has approved additional funding for EDA grant programs that support economic
transition strategies and help affected communities build economic development capacity through
Assistance to Energy Transition initiatives (e.g., 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.151 Funding for
the ACC initiative remained at $30 million each year for FY2017 through FY2020 and increased
to $33.5 million in FY2021 and to $41.5 million in FY2022. 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 annually in FY2021 and FY2022. For the first time in FY2022, Congress directed EDA to
provide funding ($4.5 million) through the EAA program to biomass power plant closure
communities. For FY2023, the Administration’s budget requested $80.5 million for the ACC

147 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).
148 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.
149 See explanatory statements accompanying P.L. 115-141, P.L. 116-6, P.L. 116-93, P.L. 116-260, and P.L. 117-103
150 U.S. Department of Commerce, FY2023 EDA Congressional Budget Justification, p. 59,
https://www.commerce.gov/sites/default/files/2022-03/FY2023-EDA-Congressional-Budget-Submission.pdf.
151 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 Julie
M. Lawhorn.
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initiative and $10 million for the NCC initiative.152 ACC and NCC grants are administered
primarily under the authority of EDA’s EAA program and can be used for a variety of eligible
activities, including infrastructure, water, and wastewater projects.153
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. 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. 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.154
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.

152 U.S. Department of Commerce, FY2023 EDA Congressional Budget Justification, pp. 65-67,
https://www.commerce.gov/sites/default/files/2022-03/FY2023-EDA-Congressional-Budget-Submission.pdf.
153 For more information, see “Assistance to Energy Transition Communities” in CRS Report R46991, Economic
Development Administration: An Overview of Programs and Appropriations (FY2011-FY2022), by Julie M. Lawhorn;
CRS Insight IN11648, The Economic Development Administration’s Assistance to Coal and Nuclear Closure
Communities Initiatives for Economic Transitions, by Julie M. Lawhorn; and EDA, “Notice of Funding Opportunity,
Public Works and Economic Adjustment Assistance Programs, FY2020,” https://www.grants.gov/web/grants/view-
opportunity.html?oppId=321695.
154 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.
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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

Nicole T. Carter
Charles V. Stern
Specialist in Natural Resources Policy
Specialist in Natural Resources Policy

Elena H. Humphreys
Megan Stubbs
Analyst in Environmental Policy
Specialist in Agricultural Conservation and Natural

Resources Policy

Joseph V. Jaroscak

Analyst in Economic Development Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
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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
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