U.S. Environmental Protection Agency (EPA) Water Infrastructure Programs and FY2021 Appropriations

U.S. Environmental Protection Agency (EPA) Water Infrastructure Programs and FY2021 Appropriations

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January 11, 2021
U.S. Environmental Protection Agency (EPA) Water
Infrastructure Programs and FY2021 Appropriations
The condition of the nation’s drinking water and
DWSRF or the CWSRF to provide primarily subsidized
wastewater infrastructure, the federal role in supporting
loans to eligible public water systems or publicly owned
infrastructure improvements, and the financial challenges
treatment works (and other eligible recipients), respectively.
many communities encounter regarding water infrastructure
CWSRF financial assistance is available generally for
are perennial subjects of debate and attention in Congress.
projects needed for constructing or upgrading (and planning
Such challenges include the ability of communities—
and designing) publicly owned treatment works, among
especially low-income communities—to finance projects
other purposes defined in CWA Section 603(c) (33 U.S.C.
needed to (1) repair or replace water infrastructure, much of
1383(c)). DWSRF financial assistance is available for
which was constructed more than 50 years ago; (2) comply
statutorily specified expenditures and those that EPA has
with new or revised federal regulatory requirements; and
determined, through guidance, will facilitate SDWA
(3) address damage from or improve resilience to extreme
compliance or significantly further the act’s health
weather events and other natural hazards.
protection objectives.
EPA Water Infrastructure Programs
Table 1. EPA Water Infrastructure: Enacted
FY2021 Appropriations
Appropriations for FY2020 and FY2021
The Consolidated Appropriations Act, 2021 (P.L. 116-260),
(dol ars in mil ions, not adjusted for inflation)
Division G, Title II, contains appropriations for multiple
water infrastructure programs administered by the U.S.
Program
FY2020
FY2021
Environmental Protection Agency (EPA), including the
State and Tribal Assistance Grants (STAG) Account
Clean Water State Revolving Fund (CWSRF) and the
Drinking Water State Revolving Fund (DWSRF). The act
CWSRF
$1,638.8
$1,638.8
also includes appropriations for the Water Infrastructure
DWSRF
$1,126.1
$1,126.1
Finance and Innovation Act (WIFIA) loan program, two
Grants for U.S.-Mexico Border Projects
$25.0
$30.0
regional infrastructure grant programs, four drinking water
Grants for Rural and Alaska Native
$29.2
$36.2
infrastructure grant programs, and one wastewater
Vil ages
infrastructure grant program. Appropriations for the
Grants for Small and Disadvantaged
$25.4
$26.4
CWSRF, DWSRF, and other grant programs are provided
Communities
within the State and Tribal Assistance Grants (STAG)
account. A separate account funds WIFIA.
Grants for Testing School Water for
$26.0
$26.5
Lead
As presented in Table 1, the act appropriates a total of
Grants for Reducing Lead in Drinking
$19.5
$21.5
$3.01 billion for FY2021 for these water infrastructure
Water
programs, $33 million (1%) more than the total FY2020
Grants for Drinking Water System
$3.0
$4.0
enacted level prior to rescissions (P.L. 116-94). Also for
Resilience and Sustainability
FY2020, P.L. 116-113, Title IX, included a supplemental
Grants for Sewer Overflow and
$28.0
$40.0
appropriation of $300 million for wastewater projects at the
Stormwater
U.S.-Mexico border.
Water Infrastructure Finance and Innovation Act (WIFIA) Account
State Revolving Fund Programs
WIFIA
$60.0
$64.5
The Clean Water Act (CWA) and the Safe Drinking Water
Total
$2,981.0
$3,014.0
Act (SDWA) authorize complementary financial assistance
Source: CRS, using data from P.L. 116-94 (Division D, Title II) and
programs to help publicly owned treatment works and
P.L. 116-260 (Division G, Title II). This table does not include the
public water systems finance improvements needed for
supplemental appropriation provided in P.L. 116-113, as it only
compliance and other statutory purposes. The Clean Water
provided additional funding for specific locations and narrower types
State Revolving Fund (SRF) provides financial assistance
of projects; or grants for technical assistance for smal , rural water
for infrastructure projects to publicly owned treatment
systems and treatment works, as described below.
works and other eligible recipients (33 U.S.C. §§1381-
1387). The Drinking Water SRF provides assistance to
While the SRFs generally provide subsidized loans, states
public water systems, which may be publicly or privately
may use the DWSRF and the CWSRF (under certain
owned (42 U.S.C. §300j-12). In both SRF programs, EPA
conditions) to provide “additional subsidization”—such as
makes grants to states to capitalize a state revolving loan
principal forgiveness and/or negative interest loans—to
fund. Each state must match 20% of its annual
municipalities that meet the state’s affordability criteria. For
capitalization grant. States are authorized to use the
the CWSRF, the additional subsidization is also available
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U.S. Environmental Protection Agency (EPA) Water Infrastructure Programs and FY2021 Appropriations
for specified projects, such as those that implement water-
to EPA for grants. P.L. 116-260 provides $26.5 million for
or energy-efficiency goals or mitigate stormwater runoff.
these grants for FY2021.
States, local communities, and others have raised concerns
Grants for Reducing Lead in Drinking Water
regarding increasing funding needs (e.g., replacement of
The WIIN Act further amended SDWA by adding Section
lead pipes) and affordability of infrastructure projects for
1459B (42 U.S.C. §300j-19b), which directs EPA to
many communities. In its most recent capital investment
establish a grant program for projects and activities that
needs surveys, EPA estimated that the capital cost of
reduce lead in drinking water, including replacement of
wastewater and drinking water infrastructure needed to
lead service lines and corrosion control. Grants may be used
meet CWA and SDWA objectives exceeded $744 billion
to provide assistance to low-income homeowners to replace
over a 20-year period. This amount does not include costs
their portions of lead service lines. Eligible recipients
to extend services to accommodate population growth or to
include community water systems, tribal systems, schools,
repair infrastructure not linked to compliance or to related
states, and municipalities. P.L. 116-260 provides $21.5
health and environmental goals. FY2021 SRF
million for FY2021.
appropriations maintain the funding levels (not accounting
for inflation) provided for FY2020: $1.6 billion for the
Grants for Drinking Water System Resilience
CWSRF and $1.1 billion for the DWSRF.
America’s Water Infrastructure Act of 2018 (AWIA; P.L.
115-270) amended SDWA Section 1459A (42 U.S.C.
Water Infrastructure Finance and Innovation Act
§300j-19a) to authorize EPA to establish the Drinking
To promote development of water infrastructure projects
Water System Infrastructure Resilience and Sustainability
and encourage nonfederal and private sector investment,
Program, a grant program for small and disadvantaged
Congress established the WIFIA program in the Water
public water systems. EPA is authorized to provide grants
Resources Reform and Development Act of 2014 (P.L. 113-
to eligible systems for projects that increase resilience to
121, Title V; 33 U.S.C. §§3901-3914). WIFIA authorizes
natural hazards, including hydrologic changes. Eligible
EPA and the U.S. Army Corps of Engineers (USACE) to
projects include those that increase water use efficiency,
provide credit assistance—secured or direct loans—for a
enhance water supply through watershed management or
range of water infrastructure projects. (The USACE WIFIA
desalination, and increase energy efficiency in the
program first received a $14.2 million appropriation in P.L.
conveyance or treatment of drinking water. FY2020 was the
116-260.) In contrast to SRF programs, under WIFIA, EPA
first fiscal year that this program received funding ($3
provides credit assistance directly to an eligible recipient,
million). P.L. 116-260 provides $4.0 million for FY2021.
not through a program administered by the states. To be
eligible for WIFIA assistance, projects generally must have
Sewer Overflow and Stormwater Grant Program
costs of $20 million or more.
In 2000, the Consolidated Appropriations Act, 2001 (P.L.
106-554) amended the CWA by adding Section 221, which
Annual WIFIA appropriations primarily cover long-term
authorized EPA to establish a grant program to address
credit subsidy costs, which are calculated to cover the risk
overflows from municipal combined sewer systems and
that the loan will not be repaid. As such, relative to its
from municipal separate sanitary sewers (“wet weather”
budget authority (e.g., $59.5 million in FY2021 to cover
projects). The act authorized annual appropriations of
subsidy costs), WIFIA appropriations may provide a large
$750.0 million for each of FY2002 and FY2003. In 2018,
amount of credit assistance. For FY2021, Congress capped
AWIA made several amendments to Section 221, including
the WIFIA credit assistance authority at $12.5 billion.
modifying the program to include stormwater infrastructure
and authorizing appropriations of $225.0 million for each of
Grants for Small and Disadvantaged Communities
FY2019 and FY2020. FY2020 was the first fiscal year
In 2016, the Water Infrastructure Improvement for the
Congress appropriated funding ($28 million) for this
Nation Act (WIIN Act; P.L. 114-322) amended SDWA by
program. P.L. 116-260 provides $40.0 million for FY2021.
adding Section 1459A (42 U.S.C. §300j-19a), which directs
EPA to establish a grant program to assist disadvantaged
Technical Assistance for Water Systems
communities and small communities that are unable to
The CWA and SDWA authorize EPA to make grants to
finance projects needed to comply with SDWA. Eligible
qualified nonprofits to provide technical assistance to small
projects include investments needed for SDWA
wastewater and water systems (33 U.S.C. §1254(b)(8); 42
compliance, household water quality testing, and assistance
U.S.C. §300j-1(e)). AWIA amended the CWA in 2018 to
that primarily benefits a community on a per-household
add this grant program. While construction is not an eligible
basis. EPA may make grants to public water systems, tribal
activity, the grants may be used to help systems to achieve
systems, or states on behalf of an underserved community.
compliance and to apply for SRF assistance. P.L. 116-260
P.L. 116-260 provides $26.4 million for FY2021.
provides $18.0 million for the CWA technical assistance
program in the STAG account and $19.0 million for the
Grants for Testing School Water for Lead
SDWA program in the Environmental Programs and
In the WIIN Act, Congress amended SDWA Section
Management account.
1464(d) (42 U.S.C. §300j-24) to require EPA to establish a
voluntary program for testing for lead in drinking water at
Elena H. Humphreys, Analyst in Environmental Policy
schools and child care programs under the jurisdiction of
Jonathan L. Ramseur, Specialist in Environmental Policy
local education agencies (LEAs). States or LEAs may apply
IF11724
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U.S. Environmental Protection Agency (EPA) Water Infrastructure Programs and FY2021 Appropriations

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