Federally Supported Projects and Programs for Wastewater, Drinking Water, and Water Supply Infrastructure

July 30, 2020 – September 29, 2023 R46471

Federally Supported Projects and Programs for September 29, 2023
Wastewater, Drinking Water, and Water
Jonathan L. Ramseur,
Supply Infrastructure
Coordinator
Specialist in Environmental
For decades, Congress has authorized, modified, and funded federal programs to help
Policy
communities address water supply and water infrastructure needs, including both wastewater and

drinking water. Departments and agencies that administer these assistance programs 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).
There are generally two approaches to authorization and funding: individual project authorization and program authorization.
Reclamation and USACE administer a number of individual projects pursuant to direct authorizations from Congress. Other
agencies administer programs with standing authorizations that establish eligibility criteria rather than identify specific
projects. As a practical matter, individual project authorizations generally must be funded each year and provide no guarantee
of funding or predictable assistance over time. By comparison, the authorized programs generally provide a relatively
consistent source of funding for a range of eligible activities and recipients. Although these authorized programs are not
guaranteed to receive annual appropriations, in recent years Congress has generally provided some level of annual
appropriations to the water infrastructure programs identified in this report.
The federal agencies responsible for administering water-related projects and programs undertake these activities pursuant to
wide-ranging missions with varying scopes. For example, EPA’s authorities relate to protecting public health and the
environment, whereas the EDA and HUD focus on community and economic development. Some agencies’ activities 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 “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 the funds provided in the 2021 Infrastructure
Investment and Jobs Act (IIJA; P.L. 117-58). FY2023 appropriations highlights include the following:
• $775.8 million for capitalization grants to states under EPA’s clean water state revolving fund (SRF)
program and $516.9 million for EPA’s drinking SRF program; and $863.1 million for wastewater
infrastructure and $609.3 million for drinking water infrastructure through “community project
funding/congressionally directed spending”; IIJA provided $2.202 billion for each SRF program;
• $3.0 billion for EPA’s drinking water SRF program for lead service line replacement and related activities;
• $68.0 million for subsidy costs for the EPA-administered Water Infrastructure Finance and Innovation Act
(WIFIA) program, allowing the agency to provide credit assistance up to $12.5 billion;
• $430.0 million for grants, $1.4 billion in direct loan authority, and $50.0 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);
• $161.0 million for EDA’s Public Works and Economic Adjustment Assistance programs (water and
wastewater projects are among many eligible uses);
• $168.5 million for USACE environmental infrastructure projects;
• $327.0 million for Reclamation water storage projects; $248.0 million for Reclamation rural water
construction projects from the IIJA and $125.3 million from annual appropriations; and
• $298.0 million for Reclamation’s Title XVI reclamation/recycling projects.
Congressional Research Service

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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, modified, and funded federal programs and projects to
help communities address water supply and water infrastructure needs. The approaches and
statutory frameworks supporting water infrastructure vary. For example, the Department of the
Interior (DOI) Bureau of Reclamation (Reclamation) and the U.S. Army Corps of Engineers
(USACE) administer a number of individual projects pursuant to direct authorizations from
Congress. These projects require direct, individual project authorizations from Congress prior to
being eligible to receive appropriations.1
Other agencies administer programs with standing authorizations that establish eligibility criteria
rather than identify specific projects. Although these authorized programs are not guaranteed to
receive annual appropriations, Congress has generally provided some level of annual
appropriations in recent years to the water infrastructure programs identified in this report.
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 addition, the projects and programs differ due to the varied scopes and missions of the
implementing agencies. For example, the statutory requirements for EPA-administered programs
generally focus on protecting public health and the environment. The EDA and HUD programs
focus on community and economic development. Further, the scope of the specific programs and
authorized projects discussed in this report—while all address either water supply or wastewater
and drinking water infrastructure to some degree—differ in other 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 their 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, colonias,2 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.
Congressional Research Service

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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., ones administered by 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, the level and scope of federal funding for the
programs and projects discussed in this report varies greatly. Congressional funding for the water
programs 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, without replacing, 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

FY2023 Enacted Fundinga
FY2024 President Funding
Projects or
Program
Financial
Nonfederal Cost
Amount of
Request and FY2024 IIJA
Program
Purposes
Assistance
Share
Assistance
Enacted
DOI Bureau of
Multipurpose
De facto 40-50
0%/100%, with
Not applicable
$1.93 billion
$1.45 billion
Reclamationb
projects, which may
year loan
interest for M&I
include some
uses
municipal and
industrial (M&I)
activities
DOI Bureau of
Multipurpose
Direct funding for 50%/50% for federal Not applicable
$134.0 million
—
Reclamation
projects, which may
the federal share
projects; 25%/75%
Water
include some M&I
of costs, with the
for nonfederal
Infrastructure
activities
reimbursable
projects
Improvements
share of these
for the Nation
costs subject to
(WIIN) Act
repayment (i.e.,
Water Storage
de facto loans)
Projects
DOI Bureau of
Wastewater
De facto grant
Up to 25%/75%;
Not readily
$60.0 million
$4.0 million
Reclamation
reclamation and
dollar limits may
available
(Title XVI, P.L.
reuse,c which may
apply
102-575)b
include some M&I
activities
DOI Bureau of
Indian and non-
De facto grant,
Non-Indian
Not applicable
$125.3 million
$57.8 million
Reclamation
Indian rural water
plus loan
projects: range from
(see report text

Rural Water
supply
75%/25% to
for detail)
Supply
IIJA:
IIJA:
b
80%/20%; Indian
projects: 100%/0%
$248.0 million
$108.0 million
DOI Bureau of
Brackish and
Grant
Up to 25%/75%;
Not readily
$12.0 million
—
Reclamation
seawater
dollar limits may
available
Desalination
desalination, which
apply
Project
may include some
Construction
M&I activities
CRS-3

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Agency and

Project/

Type of

Federal/

Average

FY2023 Enacted Fundinga
FY2024 President Funding
Projects or
Program
Financial
Nonfederal Cost
Amount of
Request and FY2024 IIJA
Program
Purposes
Assistance
Share
Assistance
Enacted
USACE
Reservoirs may
Upfront federal
0%/100%, with
Not applicable
$7.0 million
$25.0 million
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
collected from
nonfederal
entities
USACE
Assistance is typically Technical/planning 75%/25% generally;
Varies (see
$148.5 milliond
$5.0 million
Environmental
for public drinking
and design
some authorities
report text for

Infrastructure
water and
services or
are 65%/35%
detail)
Assistance
wastewater
grants; design and
P.L. 117-180:
infrastructure and
construction
$20.0 million
source water
services or grants

protection and
development
USDA Rural
Municipal water
Loans and grants
Up to 75%/25% for
Not readily
Direct loans: $3.0 million loan
Direct loans: $155.0 million loan
Utilities Service,
supply and
to eligible entities
grants
available
subsidy to support $1.42 billion subsidy to support $1.61 billion in
Water and
treatment,
0%/100% for loans
in loan authority
loan authority
Waste Disposal
wastewater facilities,
Loan guarantees: No loan
Loan guarantees: No loan subsidy
Program
and waste disposal
subsidy needed to support
needed to support $500.0 million in
$50.0 million in loan authority
loan authority
Grants: $430.0 million
Grants: $538.0 million
USDA Rural
Construction,
Grants to private
100%/0%
Loans up to
Grants: $5.0 million
Grants: $5.0 million
Utilities Service,
refurbishing, and
nonprofit
$15,000 per
Rural
servicing of individual
organizations for
household
Decentralized
household water
the purpose of
Water Systems
well systems and
providing loans
Program
decentralized
and subgrants to
wastewater systems
eligible individuals
USDA Rural
For water treatment, Grants for public
100%/0%
Water source
Grants: $15.0 million
Grants: $15.0 million
Utilities Service,
storage, or
or private
grants up to $1.0
Emergency
distribution projects
nonprofit entities
million
Community
to secure adequate
CRS-4

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Agency and

Project/

Type of

Federal/

Average

FY2023 Enacted Fundinga
FY2024 President Funding
Projects or
Program
Financial
Nonfederal Cost
Amount of
Request and FY2024 IIJA
Program
Purposes
Assistance
Share
Assistance
Enacted
Water
quantities of safe
Water
Assistance
water
transmission line
Grants
grants up to
$150,000
USDA
Multiple activities but Project grants and 100%/0%
Not applicable
$75.0 million (discretionary)
$175.0 million (discretionary)
Watershed and
must generally
technical advisory
Varies according to
$50.0 million (mandatory)
$50.0 million (mandatory)
Flood Prevention
include flood control
services
purpose of
Operations
measures
$20.6 million in community
improvement
Program
project funding/congressionally
activity
directed spending (CPF/CDS)

USDA Small
Dam rehabilitation
Project grants and 100%/0%
Not applicable
$2.0 million
$10.0 million
Watershed
technical advisory
Varies according to
Rehabilitation
services
purpose of
Program
improvement
activity
EPA, Clean
Municipal
Grants to states
80%/20% for grants
Average
$775.8 million for capitalization $1.639 billion for capitalization grants
Water State
wastewater
to capitalize loan
to states to
capitalization
grants

Revolving Fund
treatment,
funds
capitalize SRFs
grant to state:
$863.1 million (CPF/CDS)
(SRF) Loan
stormwater
IIJA:
SRF loans made
0%/100%e (project
$58.0 million
Program
infrastructure, and

by states to local
loans are repaid
(FY2022)f
$2.403 billion for capitalization grants
other eligible
project sponsors
100% to states)
Average
Infrastructure Investment and
$225.0 million for emerging
projects and
assistance from
Jobs Act (IIJA):
contaminants
activities
States required to
provide a
SRF: $4.8 million
$2.202 billion for capitalization
minimum level of
(FY2021)g
grants
additional
$100.0 million for emerging
subsidization (e.g.,
contaminants
principal
forgiveness) and
authorized to
provide further
subsidization
CRS-5

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Agency and

Project/

Type of

Federal/

Average

FY2023 Enacted Fundinga
FY2024 President Funding
Projects or
Program
Financial
Nonfederal Cost
Amount of
Request and FY2024 IIJA
Program
Purposes
Assistance
Share
Assistance
Enacted
EPA, Drinking
Public water supply
Grants to states
80%/20% for grants
Average
$516.9 million for capitalization Request: Capitalization grants $1.126
Water State
projects needed to
to capitalize loan
to states to
capitalization
grants
billion
Revolving Fund
meet federal drinking
funds
capitalize SRFs
grant to state:
$609.3 million (CPF/CDS)

(SRF) Loan
water standards and
SRF loans made
0%/100%e (project
$45.1 million
Program
to address serious

IIJA:
by states to local
loans are repaid
(through
health risks
project sponsors
100% to states)
FY2022)h
IIJA:
$2.403 billion for capitalization grants
States required to
Average
$2.202 billion for capitalization
$3.0 billion for lead service line (LSL)
provide a
assistance from
grants
replacement
minimum level of
SRF: $2.8 million
$3.0 billion for lead service line $800.0 million for emerging
additional
(FY2022)
(LSL) replacement
contaminants
subsidization (e.g.,
$800.0 million for emerging
principal
contaminants
forgiveness) and
authorized to
provide further
subsidization
EPA, Water
Wastewater and
Loans or loan
In general, WIFIA
$174.0 million
$68.0 million to cover subsidy
$71.9 million to cover subsidy costs;
Infrastructure
drinking water
guarantees
funding cannot
(average of 88
costs; authorized to provide no authorized to provide no more than
Finance and
projects with costs
exceed 49% of
closed loans)i
more than $12.5 billion in
$12.5 billion in credit assistance
Innovation Act
of $20.0 million or
project costs
credit assistance
(WIFIA)
larger (or $5.0
Program
million for rural
areas)
EPA, Sewer
Sewer overflow or
Grants to states,
55%/45%
Not availablej
$50.0 million
$280.0 million
Overflow and
stormwater
which make
Stormwater
infrastructure
grants to
Grant Program
projects, with
municipalities
priority for
financially distressed
communities
CRS-6

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Agency and

Project/

Type of

Federal/

Average

FY2023 Enacted Fundinga
FY2024 President Funding
Projects or
Program
Financial
Nonfederal Cost
Amount of
Request and FY2024 IIJA
Program
Purposes
Assistance
Share
Assistance
Enacted
EPA, Lead
Drinking water
Grants to
80%/20% for grants
EPA awarded an
$25.0 million
$182.0 million
Reduction
projects and
community water
(EPA may waive
average of $4.7
Projects Grant
activities to reduce
systems, tribal
match under certain
million to grant
Program
lead in drinking
water systems,
circumstances)
recipientsm
water; replacement
states, schools,
of lead service lines;
and municipalities
corrosion control
activities
EPA, Small
Projects that
Grants to
90%/10% for grants
No assistance
$7.0 million
$25.0 million
Water Systems
increase water use
community water
(EPA may waive
provided to date
Resilience and
efficiency, enhance
systems, tribal
match under certain
Sustainability
water supply
water systems,
circumstances)
Grant Program
through watershed
states
management or
desalination, and
increase energy
efficiency in the
conveyance or
treatment of
drinking water
EPA, Midsize and Projects include
50% of grants for
100%/0%
No assistance
$5.0 million
$50.0 million
Large Water
water conservation,
water systems
provided to date
Systems
desalination
serving 10,000 or
Resilience and
construction, and
more to 100,000
Sustainability
watershed
individuals, and
Grant Program
management
50% for systems
activities, among
serving more than
others
100,000
individuals
CRS-8

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Agency and

Project/

Type of

Federal/

Average

FY2023 Enacted Fundinga
FY2024 President Funding
Projects or
Program
Financial
Nonfederal Cost
Amount of
Request and FY2024 IIJA
Program
Purposes
Assistance
Share
Assistance
Enacted
HUD,
Multipurpose
Formula grants,
100%/0%
Entitlement
$3.3 billion
$3.3 billion
Community
community
70% of which are
formula grants:
Development
development
reserved for
$2.1 million;
Block Grant
projects; may include
urban areas, 30%
average award to
Programn
water and waste
for state grants
state programs:
disposal
$20.0 million
(for subawards
to communities)
in FY2021
Commerce,
Multipurpose
Project grants
Generally 50%/50%
Average Public
$121.5 million allocated for the $100.0 million requested for the
EDA, Public
economic
Works grant
Public Works program and
Public Works program and $33.0
Works and
development
$1.4 million;
$39.5 million for the EAA
million for the EAA program
Economic
projects; may include
average EAA
program
Adjustment
water and sewer
grant $650,000
Assistance
(FY2023)
(EAA)o
Source: CRS.
Notes: A “—” indicates that the President did not make a funding request.
a. Unless otherwise noted, FY2023 funding provided in P.L. 117-328. In some cases, funding amounts may address other objectives.
b. These projects must generally be authorized by Congress prior to construction. Municipal water supply is not the primary purpose of these projects.
c. Title XVI supports what is generally considered water reuse and reclamation. Reclamation is treatment of wastewater or other impaired surface water (e.g.,
seawater) or groundwater (e.g., groundwater with high levels of contaminants, such as arsenic or salts) to make it usable or reusable for nonpotable or indirect
potable use (e.g., potable use after storage and recovery, such as after groundwater recharge). Reuse connotes planned beneficial use (e.g., landscape watering,
agricultural irrigation, and industrial cooling) of treated municipal wastewater.
d. P.L. 117-328 Division D provided $130.5 million. Division N provided $18.0 million.
e. 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.
f.
Based on FY2022 allotments to states from appropriations in P.L. 117-103 (EPA, “Annual Allotment of Federal Funds,” FY2022 table, at 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, at
https://www.epa.gov/system/files/documents/2022-03/combined_srf-implementation-memo_final_03.2022.pdf).
CRS-9

g. Based on total dollars of annual assistance provided and total number of assistance agreements from CWSRF National Information Management System, “National
Report,” at https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-national-information-management-system-reports.
h. “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,” at
https://www.epa.gov/dwsrf/annual-allotment-federal-funds-states-tribes-and-territories.
i.
Based on 88 closed loans, totaling $15.3 billion. EPA, “WIFIA Closed Loans,” at https://www.epa.gov/wifia/wifia-closed-loans.
j.
In November 2022, EPA announced the availability of FY2022 funding and invited states to apply for grants to support eligible projects. In August 2023, EPA
announced the availability of FY2023 funding. For more information, see EPA, “Sewer Overflow and Stormwater Reuse Municipal Grants Program,” at
https://www.epa.gov/cwsrf/sewer-overflow-and-stormwater-reuse-municipal-grants-program.
k. For more information, see EPA, “Technical Assistance for Treatment Works,” at https://www.epa.gov/small-and-rural-wastewater-systems/technical-assistance-
treatment-works.
l.
EPA, “EPA Selects Recipients for $25.7 Million in Technical Assistance Funding to Help Rural Communities Access Clean Water” May 18, 2023, at
https://www.epa.gov/newsreleases/epa-selects-recipients-257-million-technical-assistance-funding-help-rural-communities.
m. EPA, “WIIN Grant: Reduction in Lead Exposure Via Drinking Water,” at https://www.epa.gov/dwcapacity/wiin-grant-reduction-lead-exposure-drinking-water.
n. Community Development Block Grant (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), the
Assistance to Nuclear Closure Communities (NCC), and Assistance to Biomass Closure Communities (BCC) initiatives.

CRS-10

Federally Supported Water Projects and Programs

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. In P.L. 117-169 (popularly known as the Inflation
Reduction Act, or IRA), Congress appropriated $550.0 million for Reclamation to provide up to
100% of the cost for water projects where the primary purpose is to provide domestic water
supplies to disadvantaged communities or households (see text box below).

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, at 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.
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Bureau of Reclamation’s Disadvantaged Community Domestic Water Supply
Projects
IRA Section 50231 appropriated $550.0 million, available through FY2031, for the Bureau of Reclamation
(Reclamation) to provide up to 100% of the cost for the planning, design, and/or construction of water projects
where the primary purpose is to provide domestic water supplies to disadvantaged communities or households.
The Commissioner of Reclamation is to establish and adopt criteria to identify applicable disadvantaged
communities or households that do not have reliable access to domestic water supplies in a Reclamation state or
territory (43 U.S.C. §391). The funding mechanism may be via grants, contracts, or financial assistance agreements
at a cost share determined by the Commissioner. On May 9, 2023, Reclamation announced the agency was making
$5.5 million available to the U.S. territories of American Samoa, Guam, the Commonwealth of the Northern
Mariana Islands, and the U.S. Virgin Islands for projects that will provide domestic water supplies to communities
or households that do not have reliable access to potable water.9 As of June 2023, Reclamation has not released
further information or guidance on how it will implement the IRA funding.
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.10 A similar arrangement is required for the federal portion of WIIN Act water storage
projects. For M&I projects under rural water, Title XVI, desalination, and disadvantaged
community domestic water supply authorities, Congress has established terms providing some or
all federal funding for projects on a nonreimbursable basis.
“Traditional” Multipurpose Reclamation Projects11
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.12 Once a feasibility study is completed, congressional authorization is
typically sought prior to a request for construction appropriations.13 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

9 Bureau of Reclamation, “Biden-Harris Administration Announces $5.5 Million Investment in Domestic Water
Supplies for U.S. Territories,” May 9, 2023, at https://www.usbr.gov/newsroom/news-release/4513.
10 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.
11 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 (WIIN) Act, by Charles V. Stern.
12 See Section 8 of the Federal Water Project Recreation Act of 1965 (P.L. 89-72, 16 U.S.C. §460l-19).
13 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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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. Costs for M&I portions
of such projects are generally considered reimbursable to the government 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 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 FY2023 were $1.93 billion. The total FY2024 budget request for
Reclamation was $1.45 billion.14
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 Projects15
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.16 Congress authorized $335.0 million in discretionary
appropriations for these projects, and approved a different approach than the traditional

14 These amounts include funding requests for Rural Water and Title XVI programs, discussed below.
15 For more on this authority, see CRS In Focus IF10626, Reclamation Water Storage Projects: Section 4007 of the
Water Infrastructure Improvements for the Nation (WIIN) Act, by Charles V. Stern.
16 43 U.S.C. §390b note.
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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.17
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, 2021.18 As of June 2023, Reclamation had recommended
funding for 13 projects in three states; Reclamation also recommended 8 of these projects for
construction prior to the aforementioned WIIN Act deadline. These projects are eligible for
construction funding moving forward.
Project Purposes
Congress did not specify purposes for WIIN Act water storage projects, only that a project must
be feasible and have federal benefits “in accordance with the reclamation laws.”19 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, subject 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 which 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.

17 For more information, see §4007(a) and (b) of P.L. 114-322.
18 P.L. 114-322, §4007(i).
19 P.L. 114-322, §4007(b)(3)(A), §4007(c)(2)(B)(i).
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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. “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—are also eligible for funding under this
section.20
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 $134.0 million in
FY2023 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 $210.0 million in IIJA funding to be obligated on these
projects in its FY2022 IIJA spend plan.21 The Administration requested no funding for these
projects in its FY2024 budget request, but it recommended allocation of another $95.0 million in
IIJA funding for these projects in its FY2023 IIJA spend plan.22
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 Projects23
Similar to its traditional multipurpose projects, Reclamation has undertaken individual rural water
projects, largely at the explicit direction of Congress. In lieu of the project-based approach to
authorizing new rural water projects, Congress authorized a rural water supply program in the
Reclamation Rural Water Supply Act of 2006 (Title I of P.L. 109-451; 42 U.S.C. §§2401 et seq.).
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.24 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.
Congress continues to provide funding for previously authorized rural water projects. In addition,
in the Clean Water for Rural Communities Act (Division FF, Title XI, §1110, of P.L. 116-260),

20 P.L. 114-322, §4007(a)(1)-(2).
21 Bureau of Reclamation, Implementation of the Bipartisan Infrastructure Law, FY2022 Spend Plan, at
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.”
22 Bureau of Reclamation, Implementation of the Bipartisan Infrastructure Law, FY2023 Spend Plan, at
https://www.usbr.gov/bil/docs/spendplan-2023/FY-2023-Reclamation-BIL-Spend-Plan.pdf. Hereinafter “FY2023
Reclamation Bipartisan Infrastructure Law Spend Plan.”
23 See also CRS Report R46308, Bureau of Reclamation Rural Water Projects, by Anna E. Normand.
24 43 C.F.R. §404.
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Congress authorized a new rural water project, the Musselshell-Judith Rural Water System, and
the review of the Dry-Redwater Regional Water Authority System.25
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
Reclamation Rural Water Supply Act of 2006.
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.26 However, the authority for the program has
since expired, and Congress last authorized a project in 2009.27 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 FY2023 was $125.3 million from the
Consolidated Appropriations Act, 2023, and $248.0 million from the IIJA. The amount provided
in the Consolidated Appropriations Act, 2023, included funding for one project above the
President’s budget request that was requested as congressionally directed spending ($12.0 million
for Lewis and Clark Rural Water System) and $50.0 million in additional funding for rural water

25 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.
26 73 Federal Register 67782, November 17, 2008.
27 Department of the Interior, “Reclamation Rural Water Supply Program,” 73 Federal Register 67778-67791,
November 7, 2008, at 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.
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projects that Reclamation distributed in its spend plan.28 Reclamation released an FY2023 spend
plan for the IIJA funding that details the allocation among seven projects.29 For FY2023, the
Administration’s spend plan for IIJA funding includes $108.0 million for rural water supply
projects. The FY2024 budget proposal requested $57.8 million for six ongoing authorized rural
water projects.30
Statutory and Regulatory Authority
The Rural Water Supply Program was authorized by the Reclamation Rural Water Supply Act of
2006. 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”
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, and 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.31 The WIIN Act also authorized a
competitive grant program for construction of projects approved under this authority.32
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 $500.0 million.33
In contrast to “regular” Title XVI projects (which are generally limited to the lesser of $20.0
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

28 See “Explanatory Statement Accompanying H.R. 2471, Consolidated Appropriations Act, 2022,” Congressional
Record, vol. 168, part 42-III (March 9, 2022), pp. H2320-H2321, at 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, at
https://www.usbr.gov/budget/2022/fy2022-Spendplan/FY2022DistributionofAdditionalFundsforOngoingWork.pdf.
29 Bureau of Reclamation, “Bureau of Reclamation Implementation of the Bipartisan Infrastructure Law, Addendum to
FY2023 Spend Plan: Rural Water,” March 2, 2023, at https://www.usbr.gov/bil/docs/spendplan-2023/Reclamation-
BIL-Spend-Plan-Addendum-Rural-Water-03-02-23.pdf.pdf.
30 Bureau of Reclamation, “Bureau of Reclamation Implementation of the Bipartisan Infrastructure Law, Annual Spend
Plan Update, FY2024 Submission,” at https://www.usbr.gov/bil/docs/spendplan-2024/FY-2024-Reclamation-BIL-
Spend-Plan.pdf.
31 These guidelines were published in Bureau of Reclamation, Reclamation Manual Directive and Standard WTR 11-
01, February 8, 2017, at https://www.usbr.gov/recman/wtr/wtr11-01.pdf.
32 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.
33 See Title IX, §40905 of P.L. 117-58.
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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). 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 $20.0 million (1996 dollars) or 25% of total project
costs.34 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.
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.35
Prior to enactment of the WIIN Act, Administration requests for construction funding had
generally been limited to individual congressionally authorized 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 the 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.36 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 2018.37

34 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).
35 For example, Congress has authorized three projects for construction in Hawaii (P.L. 109-70).
36 See generally P.L. 114-322, §4009(c).
37 Bureau of Reclamation, Title XVI Water Reclamation and Reuse Program, Updated Evaluation Criteria for Review
and Comment, March 2018, at https://www.usbr.gov/watersmart/title/docs/2018/Title%20XVI-Evaluation-Criteria-
Review.pdf.
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Recent Federal Funding
The total regular appropriations for the Title XVI program in FY2023 was $60.0 million, with
$20.0 million of this funding designated as being available for WIIN Act-authorized projects. The
Administration also allocated $240.0 million in IIJA funding for Title XVI projects in its FY2022
IIJA spend plan,38 and it allocated an additional $150.0 million for “regular” projects and $50.0
million for large-scale Title XVI projects in its FY2023 IIJA spend plan.39 The Administration’s
FY2024 budget request for all Title XVI projects was $4.0 million.40
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
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 they 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.41

38 FY2022 Reclamation Bipartisan Infrastructure Law Spend Plan.
39 FY2023 Reclamation Bipartisan Infrastructure Law Spend Plan.
40 Bureau of Reclamation, FY2024 Bureau of Reclamation Congressional Justification, at https://www.usbr.gov/
budget/2024/FY-2024-Bureau-of-Reclamation-Budget-Justifications.pdf.
41 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, at https://www.usbr.gov/
recman/wtr/wtr11-01.pdf.
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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.42
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.43 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 completed feasibility studies that have been submitted to
Reclamation and that meet all of the requirements in Reclamation’s Directive and Standard for
feasibility study review of Title XVI and Desalination Projects.44 Projects must also be included
in a state-approved plan or, as an alternative, be requested by the governor of the state in which it
is located. The sponsor of any project in a western state that meets the aforementioned criteria
may be eligible to apply for grants under this authority.
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.
Recent Federal Funding
Grants for desalination project construction are funded through Reclamation’s research and
development program for desalination and water purification; total FY2023 regular
appropriations for that program were $17.7 million, of which $12.0 million was designated for
grants under the WIIN Act authority. Congress also appropriated $250.0 million for these projects
in the IIJA over the FY2022-FY2026 period; Reclamation included $15.0 million for desalination
projects in its FY2022 IIJA spend plan and $20.0 million for these projects in its FY2023 IIJA

42 See generally P.L. 114-322, §4009(a).
43 Cost-shares and other requirements under this section were established administratively. For more information, see
Bureau of Reclamation, “WaterSMART: Desalination,” at https://www.usbr.gov/watersmart/desalination/index.html.
44 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, at https://www.usbr.gov/
recman/wtr/wtr11-01.pdf.
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spend plan.45 The Administration did not request any funding for desalination construction
projects in its FY2024 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 Defense46
U.S. Army Corps of Engineers (USACE) Civil Works
USACE Civil Works 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.47 M&I water supply is generally not a USACE reservoir’s or
project’s primary purpose.48 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 projects 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 $13.0 million and $24.0
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

45 See FY2022 Reclamation Bipartisan Infrastructure Law Spend Plan and FY2023 Reclamation Bipartisan
Infrastructure Law Spend Plan.
46 This section was prepared by Anna E. Normand, Analyst in Natural Resources Policy, Resources, Science, and
Industry Division; and Nicole T. Carter, Specialist in Natural Resources Policy, Resources, Science, and Industry
Division.
47 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
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.
48 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.
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storage projects,49 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 of 2014 (WIFIA) authorizes USACE and EPA to provide credit assistance—loans
or loan guarantees—for a broad range of water projects.50 USACE’s program is known as Corps
Water Infrastructure Financing Program (CWIFP) to differentiate it from EPA’s WIFIA program.
In December 2021, Congress created an account for USACE to implement its WIFIA authority.
From FY2021 through FY2023, Congress provided USACE with a total of $81.0 million for
credit assistance, as well as funding for program administration. Congress has limited the
available appropriations for credit assistance to nonfederal dam safety projects (based on dam
ownership information in the National Inventory of Dams).51 Dam safety projects can include
work to upgrade, repair, and maintain a dam, and can include dam removals.52 USACE identifies
12 selection criteria for its CWIFP credit assistance, including the extent to which the project is
nationally or regionally significant in generating public benefits (e.g., water quality and quantity,
including aquifer recharge, and protection of drinking water, including source water protection).
USACE may be able to make up to $7.5 billion in loans with the appropriations available through
FY2023. USACE’s final rule for the program went into effect on June 21, 2023. On September
20, 2023, USACE published a Notice of Funding Availability to solicit preliminary applications
from prospective borrowers seeking credit assistance under CWIFP for nonfederal dam safety
projects.53 The first loans are expected to close roughly two years later.
The program’s loans are long-term, low-cost loans with flexible repayment options for
creditworthy nonfederal borrowers. CWIFP-eligible entities include various state, local, and tribal
government entities and various private entities (e.g., corporations, partnerships, and trusts) that
are publicly sponsored.54

49 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 $65.0 million; M&I costs are 100% nonfederal).
50 WIFIA 2014, Title V, Subtitle C, of P.L. 113-121; 33 U.S.C. §§3901-3914, as amended by P.L. 115-270.
51 Congress authorized USACE’s program for a broader set of activities than have been funded. Congress authorized
USACE to provide credit assistance 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
appropriations have been limited to nonfederal dam safety projects.
52 An eligible dam safety project must also be a project for flood damage reduction, hurricane and storm damage
reduction, environmental restoration, coastal or inland harbor navigation improvement, or inland and intracoastal
waterways navigation improvement that the Secretary determines is technically sound, economically justified, and
environmentally acceptable.
53 USACE, Department of Defense, “Notice of Funding Availability for Applications for Credit Assistance Under the
Corps Water Infrastructure Financing Program,” 88 Federal Register 64892-64897, September 20, 2023.
54 33 U.S.C. §3907(a)(4)).
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Given the program’s current focus on nonfederal dam safety projects, CWIFP is not discussed
further in this report. For more information on USACE’s program, see CRS Insight IN12021,
Corps Water Infrastructure Financing Program (CWIFP). 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.55 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.56 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. 57
2. The Flood Control Act of 1944 authorizes USACE to provide, through temporary
agreements, surplus water from USACE reservoirs.58 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.59 Neither authority allows USACE to sell or allocate
quantities of water. Instead, USACE M&I agreements are for space in a reservoir.60 They provide
no guarantee of a fixed quantity of water to be delivered in a given year. Under these authorities,

55 U.S. Army Engineer Institute for Water Resources (IWR), FY 2016 Municipal, Industrial, and Irrigation Water
Supply Database Report, 2017-R-02, Alexandria, VA, June 2017, p. 6, at https://publibrary.planusace.us/#/document/
e71cd9b9-faff-4d63-8d42-8ee1baa3cc7f. Hereinafter: “IWR FY 2016 Municipal, Industrial, and Irrigation Water
Supply Database Report, 2017.”
56 IWR FY 2016 Municipal, Industrial, and Irrigation Water Supply Database Report, 2017. p. 8.
57 43 U.S.C. §390b.
58 33 U.S.C. §708.
59 43 U.S.C. §390b; 33 U.S.C. §708.
60 U.S. Army Corps of Engineers (USACE), Planning Guidance Notebook, ER 1105-2-100, April 22, 2000, p. 3-31.
Hereinafter “USACE Planning Guidance Notebook.”
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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.61 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,62 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.
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 to identify 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.63 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.64
Recent Federal Funding
USACE primarily uses annual appropriations for administration of its water supply authorities.
From FY2023 annual appropriations, USACE planned to use $7.0 million for USACE’s costs for
implementing its reservoir-related water supply authorities.65 The Administration’s FY2024
budget request included $25.0 million for USACE’s implementation costs.66

61 USACE Planning Guidance Notebook, p. E-209.
62 Ibid.
63 43 U.S.C. §390b; USACE Planning Guidance Notebook, pp. 3-31-3-36.
64 43 U.S.C. §390b(e).
65 P.L. 117-58 did not specifically provide for water supply funding.
66 USACE, Fiscal Year 2024 Civil Works Budget of the U.S. Army Corps of Engineers, March 2023, p. 6, at
https://usace.contentdm.oclc.org/utils/getfile/collection/p16021coll6/id/2317.
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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),67 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
Since 1992, Congress has enacted more than 400 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 $1.0 billion for a
seven-state EI program. As with Reclamation’s rural 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 46 states, the
District of Columbia, Guam, Puerto Rico, the U.S. Virgin Islands, and the Northern Mariana
Islands. CRS did not identify authorities for EI assistance in Iowa, Maine, Nebraska, Rhode
Island, 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).

67 For information on USACE’s civil works program, see USACE, “Missions: Civil Works,” at
https://www.usace.army.mil/Missions/Civil-Works/.
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Recent Federal Funding
Only a subset of the approximately $12.8 billion in authorized USACE EI activities has received
appropriations.68 Congress provided USACE with $168.5 million for EI assistance activities in
FY2023.
The explanatory statement accompanying Division D of the Consolidated Appropriations Act,
2023 (P.L. 117-328) included recommendations to fund $130.5 million for EI assistance
specifically requested by Members as community project funding or congressionally directed
spending proposals (32 requests were funded). In addition, Division N of P.L. 117-328 provided
$18.0 million in emergency appropriations for USACE to allocate to EI assistance authorities in
an agency work plan. Division A of the Continuing Appropriations and Ukraine Supplemental
Appropriations Act, 2023 (P.L. 117-180) provided $20.0 million for EI assistance, which USACE
allocated to assistance for Jackson, MS, water and wastewater infrastructure. The FY2024
President’s budget request included $5.0 million for EI assistance; this is the first time an
Administration has requested EI assistance funding.69
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 400 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 acts have 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
(Title I of P.L. 114-322) and WRDA 2018 (Title I of P.L. 115-270), Congress expanded the
Section 7001 process for nonfederal entities to propose modifications to existing authorities for
EI assistance.70 Congress amended EI authorities in WRDA 2018 and WRDA 2020 (Division AA
of P.L. 116-260).71
Congressional interest in expanding EI assistance continued in the 117th Congress, which
included new EI assistance authorities in WRDA 2022. The respective WRDA bills from the
Senate Environment and Public Works Committee and the House Transportation and
Infrastructure Committee, S. 4136 and H.R. 7776,72 included Member proposals and proposals
transmitted by the Administration (e.g., nonfederal proposals included in a Section 7001 report)
for new and amended authorizations for EI assistance. In total, the enacted WRDA 2022
(Division H, Title LXXXI; P.L. 117-263) increased the authorization of appropriations for EI by

68 For more information, see CRS Report R47162, Overview of U.S. Army Corps of Engineers Environmental
Infrastructure (EI) Assistance, by Anna E. Normand.
69 USACE, FY2024 Construction Budget Justification, p. 114, March 2023, at https://usace.contentdm.oclc.org/utils/
getfile/collection/p16021coll6/id/2354.
70 §1157 of WRDA 2016 and §1332 of WRDA 2018. For more information on the Section 7001 process, see CRS
Insight IN11118, Army Corps of Engineers: Section 7001 Report on Future Studies and Projects, by Anna E.
Normand.
71 §1303 of WRDA 2018 and §352 of WRDA 2020.
72 The Senate Environment and Public Works Committee reported S. 4136, WRDA 2022, on May 4, 2022, without a
report. The House Transportation and Infrastructure Committee ordered reported H.R. 7776, WRDA 2022, on May 18,
2022.
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$6.6 billion, more than doubling the authorization of appropriations previously provided by EI
authorities.
In WRDAs, Congress has also authorized various processes to deauthorize existing authorities
meeting certain criteria. In two instances, these processes have resulted in the deauthorization of
EI assistance authorities.73
Department of Agriculture
Rural Utilities Service (Water and Waste Disposal Programs)74
USDA administers a variety of water and waste disposal75 programs that provide loans and grants
for drinking water, sanitary sewer, and storm drainage facilities in rural communities. Eligibility
is limited to rural communities with populations of 10,000 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.
Over the last six years, RUS obligated $8.4 billion to 3,418 direct loans for water and waste
disposal projects.76 During that time, RUS obligated $115.0 million for 80 guaranteed loans and
$4.4 billion for over 2,587 grants for water and waste disposal projects.77
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 3% to 5% 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.78 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 approximately

73 CRS did not identify any enacted provisions where Congress has deauthorized individual EI assistance authorities.
74 This section was prepared by Lisa Benson, Analyst in Agricultural Policy, Resources, Science, and Industry
Division.
75 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.
76 USDA, Office of Budget and Program Analysis, “2024 USDA Explanatory Notes – Rural Utilities Service,” at
https://www.usda.gov/sites/default/files/documents/34-2024-RUS.pdf.
77 Ibid.
78 7 U.S.C. §1926(a)(14)(C), Rural Water and Wastewater Technical Assistance Training Programs.
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$37.0 million annually in recent years.79 For FY2023, Congress provided funding for technical
assistance for water and waste disposal facilities in the amount of $38.0 million.80 In addition, the
similar Circuit Rider technical assistance program has an appropriation of $21.0 million for
FY2023.81 The 2018 farm bill authorized appropriations for this program at $25.0 million
annually for FY2019-FY2023.82
Financing or Funding Mechanism
USDA supports water and waste disposal projects through direct loans, guaranteed loans, and
grants. USDA provides loans and grants for water and waste disposal projects that serve the
“most financially needy communities.”83
Water and Waste Disposal Loans
Water and Waste Disposal Program loans are authorized by Section 306 of the Consolidated Farm
and Rural Development Act.84 Among other activities, loans can be used (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.85 Applicants must certify in
writing that they are unable to obtain financing for the project through commercial credit
institutions at reasonable rates and terms.86 Loans are repayable in not more than 40 years or the
useful life of the facilities, whichever is less.87 USDA makes either direct loans to applicants or
guarantees up to 90% of loans made by third-party lenders such as banks and savings and loan
associations.
Loan interest rates are based on the community’s economic capacity and health environment.
Interest rates are designated as poverty, market, or intermediate. Poverty-rate loans are made in
areas where the median household income (MHI) falls below 80% of the statewide
nonmetropolitan MHI or the poverty level, whichever is higher, and where the project is needed
to meet health or sanitary standards.88 By law, this rate is set at 80% of the market rate and cannot
exceed 5% annually.89 The intermediate rate applies to loans that do not meet the criteria for the
poverty rate and where the median household income (MHI) is not more than 100% of the
statewide nonmetropolitan MHI.90 By law, this rate is set at 80% of the market rate and cannot

79 As per the USDA, Office of Budget and Program Analysis’s “FY2024 USDA Explanatory Notes – Rural Utilities
Service,” appropriations for the technical assistance grants for rural waste systems for FY2021 were $36.777 million
and for FY2022 were $37.387 million.
80 Consolidated Appropriations Act, 2023 (P.L. 117-328).
81 Ibid.
82 Agriculture Improvement Act of 2018 (2018 farm bill; P.L. 115-334).
83 7 C.F.R. §1780.2.
84 7 U.S.C. §1926.
85 7 U.S.C. §1926(a)(1).
86 7 C.F.R. §1780.7(d).
87 7 C.F.R. §1780.13(e).
88 7 C.F.R. §1780.13(b).
89 Ibid.
90 7 C.F.R. §1780.13(c).
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exceed 7% annually.91 The market rate applies to all loans that do not qualify for poverty-rate
loans or intermediate-rate loans.92 The market rate is set using the Bond Buyer Index.93
Water and Waste Disposal Grants
Water and Waste Disposal Program grants are also authorized by Section 306 of the Consolidated
Farm and Rural Development Act.94 Grants can be used 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.95 The 2018 farm bill (P.L. 115-334) authorized appropriations at $15.0
million annually for FY2019-FY2023 for these grants.96
Grant funds may be available for up to 75% of the cost of a project.97 Priority is given to projects
that (1) serve rural areas with lower populations, (2) support health initiatives, and (3) support
populations with lower median household incomes.98
Eligibility Requirements
Eligible entities are municipalities, counties, and other political subdivisions of a state;
associations, cooperatives, and organizations operated on a not-for-profit basis; Indian Tribes on
federal and state reservations; and other federally recognized Tribes.99 USDA’s loan and grant
programs are limited to community service areas (including areas in cities or towns) with
populations of 10,000 or fewer for grants and direct loans and 50,000 or fewer for guaranteed
loans.100 To be eligible for assistance, communities must be unable to get financing for the
proposed projects from their own resources or through commercial credit at reasonable rates and
terms.101
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.102
Recent Federal Funding
FY2023 appropriations for USDA’s water and waste disposal programs and related programs
were included in the Consolidated Appropriations Act, 2023 (P.L. 117-328). Division A, Title III

91 Ibid.
92 7 C.F.R. §1780.13(d).
93 Ibid.
94 7 U.S.C. §1926.
95 7 U.S.C. §1926(a)(2).
96 Agriculture Improvement Act of 2018 (2018 farm bill; P.L. 115-334).
97 7 C.F.R. §1780.10(c).
98 7 C.F.R. §1780.17.
99 7 C.F.R. §1780.7.
100 7 C.F.R. §1780.3 and 7 C.F.R. §5001.3.
101 7 C.F.R. §1780.7(d).
102 For additional information on RUS water and environmental programs, see USDA, “Water & Waste Disposal Loan
& Grant Program,” at http://www.rd.usda.gov/programs-services/water-waste-disposal-loan-grant-program.
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provided $596.0 million in total for FY2023.103 The appropriations included $430.0 million in
water and waste disposal grants; $1.0 million to capitalize revolving funds for water and waste
disposal projects; and $70.0 million for water and waste disposal grants for colonias, Alaskan
Native and rural villages, and Native American tribes. Congress provided a $3.0 million loan
subsidy to support $1.42 billion in loan authority for water and waste disposal direct loans, and
$50.0 million in loan authority for water and waste disposal loan guarantees (no loan subsidy was
needed to support the loan authority). Congress also included $38.0 million for water and waste
disposal technical assistance grants and $21.0 million for the Circuit Rider Program.
For FY2024, the Administration requested $882.0 million for USDA’s water and waste disposal
and related programs.104 The request included $538.0 million in water and waste disposal grants;
$1.0 million to capitalize revolving funds for water and waste disposal projects; and $87.0 million
for water and waste disposal grants for colonias, Alaskan Native and rural villages, Native
American tribes, and Hawaiian home lands. The request provided $1.61 billion in loan authority
for water and waste disposal direct loans (with a loan subsidy of $155.0 million to support the
loan authority), and $50.0 million for water and waste disposal loan guarantees (no loan subsidy
is needed to support the loan authority). The request included $42.0 million for water and waste
disposal technical assistance grants and $25.0 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.105 Grants ranging from $10,000 to a
maximum of $1.0 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 also authorized appropriations of an
additional $50.0 million per year through FY2023 for this program.106
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.

103 U.S. Congress, House Committee on Appropriations, Consolidated Appropriations Act, 2023, committee print, 117th
Congress, 2nd session, H.Prt. 50-347.
104 USDA, Office of Budget and Program Analysis, “2024 USDA Explanatory Notes – Rural Utilities Service,” at
https://www.usda.gov/sites/default/files/documents/34-2024-RUS.pdf.
105 7 U.S.C. §1926a.
106 Agriculture Improvement Act of 2018 (2018 farm bill; P.L. 115-334).
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Congress provided $15.0 million for the Emergency Community Water Assistance Grant Program
for FY2023.107 The FY2024 Administration request also includes $15.0 million for the
program.108
Rural Decentralized Water Systems Grants
USDA is also authorized to make grants to private nonprofit organizations for the purpose of
providing loans to eligible individuals for construction, refurbishing, and servicing of “individual
household water well systems and individually owned decentralized wastewater systems.”109
Loans are limited to $15,000 per household. The 2018 farm bill authorized $20.0 million for each
fiscal year through FY2023 for the program.110
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 $5.0 million for the Rural Decentralized Water Systems Grant Program for
FY2023.111 The FY2024 Administration request also included $5.0 million for the program.112
Natural Resources Conservation Service113
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. The fourth watershed authority is an emergency program that is not
discussed in this report.114
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).

107 U.S. Congress, House Committee on Appropriations, Consolidated Appropriations Act, 2023, committee print, 117th
Congress, 2nd session, H.Prt. 50-347.
108 USDA, Office of Budget and Program Analysis, “2024 USDA Explanatory Notes – Rural Utilities Service,” at
https://www.usda.gov/sites/default/files/documents/34-2024-RUS.pdf.
109 7 U.S.C. §1926e.
110 Agriculture Improvement Act of 2018 (2018 farm bill; P.L. 115-334).
111 U.S. Congress, House Committee on Appropriations, Consolidated Appropriations Act, 2023, committee print, 117th
Congress, 2nd session, H.Prt. 50-347.
112 USDA, Office of Budget and Program Analysis, “2024 USDA Explanatory Notes – Rural Utilities Service,” at
https://www.usda.gov/sites/default/files/documents/34-2024-RUS.pdf.
113 This section was prepared by Megan Stubbs, Specialist in Agricultural Conservation and Natural Resources Policy,
Resources, Science, and Industry Division.
114 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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The vast majority of the projects (referred to as P.L. 566 projects) have been built pursuant to the
authority of P.L. 83-566, which authorizes the chief of the NRCS to approve construction of
smaller projects (discussed below). Larger projects must be approved by Congress. In FY2022,
NRCS funded 261 projects in 39 states and territories.115
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 $40.0
million to more than $275.0 million. Three of the projects have been completed, and work on the
remainder continues in one or more subwatersheds.116
The FY2023 Consolidated Appropriations Act (P.L. 117-328, Division A) appropriated $75.0
million, of which $20.6 million (27.5%) was identified as congressionally directed spending.
Amendments in the 2018 farm bill (P.L. 115-334) permanently authorized an additional $50.0
million annually from mandatory sources to the WFPO program.117
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.118

115 USDA, FY2024 USDA Budget Congressional Justification, “2024 USDA Explanatory Notes—Natural Resources
Conservation Service,” at https://www.obpa.usda.gov/explan_notes.html (hereinafter referred to as FY2024 USDA
Budget Justification).
116 FY2024 USDA Budget Justification.
117 For additional discussion, see CRS Report R47560, Agricultural Conservation: FY2023 and FY2024
Appropriations, by Megan Stubbs.
118 For additional information on financing requirements, see USDA, NRCS, “Watershed Programs – Sponsor Guide,”
at https://www.nrcs.usda.gov/sites/default/files/2022-08/Sponsor%20Guide.pdf.
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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.119 The Senate and House Agriculture Committees must approve
projects that need an estimated federal contribution of more than $25.0 million for construction or
include a storage structure with a capacity in excess of 2,500 acre feet. If the storage structure
will have a capacity in excess of 4,000 acre feet, approval is also required from the Senate
Environment and Public Works Committee and the House Transportation and Infrastructure
Committee. There are no population or community income-level limits on applications for P.L.
566 projects, but at least 20% of the total benefits of the project must directly relate to agriculture
(including rural communities).120
Recent Federal Funding
The enacted FY2023 appropriations provided WFPO with $75.0 million. Of the $75.0 million,
$20.6 million is directed to “community project funding/congressionally directed spending”
(CPF/CDS) items, which some have referred to as “earmarks”; $10.0 million is directed to
projects that provide water to rural communities; and $10.0 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.121 The Administration’s
FY2024 budget requested $175.0 million in discretionary funding for the WFPO program.122
In addition to discretionary funding through appropriations, the 2018 farm bill permanently
authorizes $50.0 million annually from mandatory sources.123 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.124

119 The enacted FY2023 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 FY2023 annual appropriation.
120 16 U.S.C. §1002.
121 For additional information on FY2023 WFPO earmarks, see CRS Report R47560, Agricultural Conservation:
FY2023 and FY2024 Appropriations, by Megan Stubbs.
122 FY2024 USDA Budget Justification.
123 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.
124 For information on the program, see NRCS, “Watershed and Flood Prevention Operations (WFPO) Program,” at
https://www.nrcs.usda.gov/programs-initiatives/watershed-and-flood-prevention-operations-wfpo-program.
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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
$10.0 million, they must be repaid within 50 years, and the cost-share assistance may not exceed
the rate of assistance for similar projects under other USDA conservation programs. NRCS and
the local organization must also agree on a plan of work before a loan is obligated. Over the life
of the program, 495 RUS loans have been made at a value of almost $176.0 million.125
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 2022, the program
authorized the rehabilitation of 269 dams in 26 states. Of this total, 176 projects are complete, 62
are in the design or construction phase, and the remaining projects are waiting for funding.126
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.127
Eligibility Requirements
Only dams constructed under the P.L. 83-566 authority, the Resource Conservation and
Development program, and pilot watershed projects from 1953 are eligible for assistance under
the Small Watershed Rehabilitation Program.128

125 FY2024 USDA Budget Justification.
126 Ibid.
127 For additional information on financing requirements, see USDA, NRCS, “Watershed Programs – Sponsor Guide,”
at https://www.nrcs.usda.gov/sites/default/files/2022-08/Sponsor%20Guide.pdf.
128 16 U.S.C. §1012.
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Recent Federal Funding
Since FY2000, Congress has appropriated more than $880.0 million for rehabilitation projects.
The Small Watershed Rehabilitation Program has discretionary funding authority of up to $85.0
million annually through the end of FY2023. The program has received an average annual
appropriation of $6.6 million over the last five years, not including the $118.0 million provided
by the Infrastructure Investment and Jobs Act (P.L. 117-58) in 2022. The Administration’s
FY2024 budget requested $10.0 million in discretionary funding for the Small Watershed
Rehabilitation Program.129
In the past, the program was authorized through omnibus farm bills to receive mandatory funding
to remain available until expended. This funding was frequently restricted through annual
appropriations and used to offset other discretionary spending.130 The 2018 farm bill reauthorized
discretionary funding authority of $85.0 million annually for the program.131 Mandatory funds
authorized for WFPO through the 2018 farm bill may also be used for rehabilitation work under
the Small Watershed Rehabilitation Program.132 Discretionary funding authority expires at the end
of FY2023. Mandatory funding authority is permanent.
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.133
Environmental Protection Agency
Clean Water State Revolving Fund Loan Program134
In 1987, Congress amended the Clean Water Act (CWA)135 to establish the Clean Water State
Revolving Fund (CWSRF) program.136 All 50 states, plus Puerto Rico, participate in the CWSRF
program.137 EPA receives annual appropriations to support the CWSRF program and distributes

129 FY2024 USDA Budget Justification.
130 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.
131 16 U.S.C. §1012.
132 For additional information, see CRS Report R45698, Agricultural Conservation in the 2018 Farm Bill, by Megan
Stubbs.
133 For information on the program, see NRCS, “Watershed Rehabilitation Program,” at https://www.nrcs.usda.gov/
programs-initiatives/watershed-rehabilitation.
134 This section was prepared by Jonathan Ramseur, Specialist in Resources and Environmental Policy, Resources,
Science, and Industry Division.
135 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.
136 Prior to 1989 (when the CWSRF program became effective), EPA states used their annual allotment to make grants
to cities and other eligible recipients.
137 U.S. territories, Indian tribes, and the District of Columbia receive grants from EPA under separate CWA
authorities.
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grants to the states based on a CWA statutory formula.138 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 $271.0 billion nationwide is needed over the next 20 years for
all types of projects eligible for funding through the CWSRF program.139
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.140
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 and in subsequent amendments.
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.141 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.142
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

138 For more information, see CRS Report RL31073, Allocation of Wastewater Treatment Assistance: Background and
Formula History, by Jonathan L. Ramseur.
139 EPA, Clean Watersheds Needs Survey 2012, 2016, at https://www.epa.gov/cwns.
140 Based on data in EPA, National Information Management System (January 30, 2023), at https://www.epa.gov/
cwsrf/clean-water-state-revolving-fund-cwsrf-national-information-management-system-reports.
141 33 U.S.C. §1383(d).
142 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.
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recipients in the form of forgiveness of principal, negative interest loans, or grants (or any
combination of these).”143 In an EPA memorandum on May 12, 2022, EPA interprets the
additional subsidization provided in appropriations act to be “additive” to the 10% floor in the
Clean Water Act.144 Therefore, as long as these appropriations acts’ provisions continue, states are
effectively required to provide at least 20% of their annual financing as additional subsidization.
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.145
Eligibility Requirements
In general, eligible loan recipients for CWSRF assistance are any municipal, intermunicipal,
interstate, or state agency. Private utilities are not eligible to receive funds for construction of
wastewater treatment works and most other eligible activities, but in some cases, privately owned
projects are eligible for certain types of activities (e.g., decentralized wastewater treatment
projects; projects to manage, reduce, or treat stormwater; or development of watershed
management projects).
Projects or activities eligible for funding were initially those needed for constructing or upgrading
(and planning and designing) publicly owned municipal wastewater treatment plans. As defined
in Clean Water Act Section 212, devices and systems used in the storage, treatment, recycling,
and reclamation of municipal sewage are eligible.146 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.147 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.148 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 types of projects and
activities, including
• replacement of decentralized treatment systems (e.g., septic tanks);
• energy-efficiency improvements at treatment works;

143 For example, see the Consolidated Appropriations Act, 2023 (P.L. 117-328); and the Consolidated Appropriations
Act, 2022 (P.L. 117-103).
144 Memorandum from Michael Deane (EPA Office of Wastewater Management) to EPA Regions, “FY 2022 CWSRF
Base Allotment Availability,” May 12, 2022, at https://www.epa.gov/system/files/documents/2022-05/
FY%202022%20CWSRF%20Base%20Allotment%20Availability.pdf.
145 For more information, see U.S. Department of Labor, “Davis-Bacon and Related Acts,” at https://www.dol.gov/
whd/govcontracts/dbra.htm.
146 33 U.S.C. §1292.
147 33 U.S.C. §1382(b)(5).
148 For a detailed breakdown of SRF funding by category, see EPA, Clean Water SRF Program Information, National
Summary, updated annually, at https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-national-
information-management-system-reports.
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• 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
approximately $56 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 approximately $163 billion
in SRF assistance to support more than 46,000 SRF loans and debt refinance agreements.149
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 included 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 included
CPF/CDS items. The act set aside 27% ($443.6 million) of the FY2022 CWSRF appropriations
($1.639 billion) to CPF/CDS. Similarly, the FY2023 CWSRF appropriation includes both
supplemental appropriations from IIJA of $2.202 billion and regular appropriations of $1.639
billion, a portion of which will not go directly to the CWSRF program. P.L. 117-328 includes
CPF/CDS items and sets aside 53% ($863.1 million) of the FY2023 CWSRF appropriation to
CPF/CDS. The CPF/CDS 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.150
For FY2024, the President requested $1.639 billion for the CWSRF program.151 This would be in
addition to the FY2024 supplemental appropriations of $2.403 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.152 EPA also provides direct grants to Indian tribes.153 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.

149 This figure includes funds through the end of FY2022, as it is based on data in EPA, National Information
Management System (September 2022), at https://www.epa.gov/cwsrf/clean-water-state-revolving-fund-cwsrf-
national-information-management-system-reports.
150 For more information, see CRS Report R47633, The Role of Earmarks in CWSRF and DWSRF Appropriations in
the 117th Congress, by Elena H. Humphreys.
151 OMB, Budget of the U.S. Government, FY2024, Appendix, at https://www.whitehouse.gov/wp-content/uploads/
2023/03/hud_fy2024.pdf.
152 See 33 U.S.C. §1384 note.
153 See 33 U.S.C. §1377.
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Drinking Water State Revolving Fund Loan Program154
The Safe Drinking Water Act (SDWA) requires public water systems to comply with federal
drinking water regulations promulgated by EPA.155 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.156 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.157 States may use a portion of their annual grants
to administer the DWSRF program and to implement other SDWA requirements.158 States must
match 20% of the federal capitalization grant.159
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.160 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.161 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).162 Over the life of the program, roughly
71% of DWSRF assistance agreements and 38% of funds have gone to these smaller systems.
Capitalization grants are allotted among the states according to the results of the most recent
quadrennial survey of the capital improvements needs of eligible water systems.163 Needs surveys
are prepared by EPA and the states, and the most recent survey (2023) indicates that public water
systems need to invest at least $625 billion in infrastructure improvements over 20 years ($31.25
billion annually) to ensure the provision of safe drinking water and compliance with federal
standards.164
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

154 This section was prepared by Elena Humphreys, Analyst in Environmental Policy, Resources, Science, and Industry
Division.
155 See CRS Report RL31243, Safe Drinking Water Act (SDWA): A Summary of the Act and Its Major Requirements,
by Elena H. Humphreys and Mary Tiemann.
156 P.L. 104-182.
157 Private, residential wells are not regulated under the SDWA and are not eligible for assistance through this program.
158 42 U.S.C. §300j-12(a)(2).
159 42 U.S.C. §300j-12(e).
160 42 U.S.C. §300j-12(b).
161 42 U.S.C. §300j-12(b)(3).
162 42 U.S.C. §300j-12(a)(2) (F).
163 Detailed national and state program data are available at EPA, “Drinking Water State Revolving Fund National
Information Management System Reports,” at https://www.epa.gov/drinkingwatersrf/drinking-water-state-revolving-
fund-national-information-management-system-reports.
164 This estimate is not adjusted for inflation. EPA, 7th Drinking Water Infrastructure Needs Survey and Assessment,
April 2023, at https://www.epa.gov/system/files/documents/2023-04/Final_FAQ_DWINSA_4.4.23.v1.pdf.
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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. 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.165
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.166 The Consolidated Appropriations Act, 2023 (P.L. 117-
328), requires states to use 14% of their DWSRF capitalization grants for additional subsidization
to eligible recipients. In EPA memorandum from 2023, the agency clarified its interpretation that
the appropriations act’s additional subsidization percentage is additive to the SDWA additional
subsidization statutory floor of 12% for the DWSRF, meaning that states are required to dedicate
26% of their capitalization grant amounts to additional subsidization.167
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.168
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.169 Assistance may also be available for construction of new wells to
replace contaminated wells, source water protection, land acquisition, security measures
(including infrastructure improvements), and consolidation of water supplies (e.g., in cases where
individual homes or public water systems have a water supply that is contaminated or a system is
unable to maintain compliance for financial or managerial reasons).170
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

165 42 U.S.C. §300j-12(a)(2).
166 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. A disadvantaged community is one in which the service
area of a public water system meets state-established affordability criteria.
167 EPA, FY 2023 Allotments for the Drinking Water State Revolving Fund based on the Seventh Drinking Water
Infrastructure Needs Survey and Assessment, May 2023, at https://www.epa.gov/dwsrf/annual-allotment-federal-funds-
states-tribes-and-territories.
168 42 U.S.C. §300j-12(a)(2)(A).
169 42 U.S.C. §300j-12(a)(2)(B).
170 For more information, see EPA’s website “DWSRF Eligibility Handbook” at https://www.epa.gov/dwsrf/dwsrf-
eligibility-handbook.
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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 FY2022, two acts provided appropriations for the DWSRF program. IIJA (P.L. 117-58)
provided three appropriations for the DWSRF. It included $1,902.0 million for the DWSRF
program, $3,000.0 million through the DWSRF for lead service line replacement projects and
related activities, and $800.0 million through the DWSRF for grants to support projects to address
emerging contaminants with a focus on per- and polyfluoroalkyl substances (PFAS). 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 CPF/CDS items. Accordingly, the
act provides $728.3 million for the DWSRF program.
The Consolidated Appropriations Act, 2023 (P.L. 117-328) provided $1,126.1 million for the
DWSRF. Of this total appropriation, $609.3 million is dedicated to earmarks and the remaining
$516.9 million is for the DWSRF program. In addition, for FY2023, IIJA (P.L. 117-58) provides
three appropriations for FY2023 of
1. $2,202.0 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.
For FY2024, the President requested $1,126.1 million for the DWSRF program.171
From FY1997 through FY2022, more than 18,843 projects had received DWSRF financial
assistance, and 13,109 had been completed.172
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.173
Water Infrastructure Finance and Innovation Act Program174
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

171 EPA, Fiscal Year 2024 Justification of Appropriation Estimates for the Committee on Appropriations, EPA-
190R23001, Washington, DC, March 2023, at https://www.epa.gov/system/files/documents/2023-03/fy-2024-
congressional-justification-all-tabs.pdf.
172 Detailed national and state program data are available at EPA, “Drinking Water State Revolving Fund National
Information Management System Reports,” at https://www.epa.gov/drinkingwatersrf/drinking-water-state-revolving-
fund-national-information-management-system-reports.
173 DWSRF program information, regulations, facts, and statistics are available at https://www.epa.gov/dwsrf.
174 This section was prepared by Jonathan Ramseur, Specialist in Environmental Policy, Resources, Science, and
Industry Division.
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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.175 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.176 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.177
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.178 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.179
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
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

175 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.
176 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.
177 See EPA, WIFIA Program Handbook, 2019, footnote 24.
178 33 U.S.C. §3909(g).
179 See EPA’s WIFIA website at https://www.epa.gov/wifia/mou-administering-and-servicing-federal-credit-
instruments.
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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.).180
Although subsidy rates are project-specific, in the Administration’s FY2023 budget proposal,
OMB estimated a 1.01% subsidy rate for WIFIA in FY2023.181 At this subsidy rate, $10.0 million
in appropriations could support direct loans totaling $990.0 million.182 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;
• prevention, reduction, or mitigation of the effects of drought;183 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 $20.0 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 $5.0 million or more.184

180 33 U.S.C. §3901(13).
181 OMB, Budget of the United States Government, FY2024, Federal Credit Supplement, Table 1, at
https://www.govinfo.gov/app/collection/budget/2024.
182 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 $20.0 million budgetary allocation could theoretically support a $200.0
million loan. A lower subsidy rate would support a larger loan amount.
183 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.
184 33 U.S.C. §3907(a).
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Recent Federal Funding
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 Consolidated
Appropriations Act, 2023 (P.L. 117-328) provides $75.6 million for WIFIA (including $7.6
million for administrative costs). For FY2024, the President requested $80.4 million for the
program (including $8.5 million for administrative costs).185
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.186 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.187 In 2023, EPA’s
WIFIA website announced that the program has funding available on an “ongoing basis” that
allows for a “rolling selection process.”188
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 Programs189
In recent WRDAs, Congress has authorized several new drinking water and wastewater
infrastructure funding programs. These programs are discussed below.190
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).191 At that time, Congress authorized
annual appropriations of $750.0 million for FY2002 and FY2003, but the program never received
appropriations.

185 Office of Management and Budget, Budget of the U.S. Government, FY2024, Appendix, at
https://www.whitehouse.gov/wp-content/uploads/2023/03/hud_fy2024.pdf.
186 For more up-to-date details of project selection, see EPA’s WIFIA website at https://www.epa.gov/wifia.
187 EPA, “Notice of Funding Availability for Credit Assistance Under WIFIA Program,” 87 Federal Register 36489,
June 17, 2022, at https://www.epa.gov/wifia/wifia-available-funding.
188 See EPA, “WIFIA Available Funding,” at https://www.epa.gov/wifia/wifia-available-funding.
189 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.
190 Other drinking water grant programs include the Voluntary Lead Testing in Drinking Water at Schools and Child
Care Program Grant Program (authorized in SDWA §1464(d), added by P.L. 114-322 §2107) and the Drinking Water
Fountain Replacement for Schools Grant Program (authorized in SDWA §1465, added by P.L. 115-270, §2006(b)).
191 P.L. 106-554.
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In 2018, AWIA Section 4106 amended the grant program by modifying the eligibility provisions
to include stormwater infrastructure, among other changes.192 In addition, AWIA reauthorized
appropriations for the grant program for $225.0 million for FY2019 and FY2020.193 IIJA
reauthorized appropriations for $280.0 million annually for FY2022 through FY2026.194
Under this program, EPA provides grants to states, which in turn, provide sub-awards to eligible
entities. The grants to states are allocated based on a formula prepared by EPA.195 In November
2022, EPA announced the availability of FY2022 funding and invited states to apply for grants to
support eligible projects.196 In August 2023, EPA announced the availability of FY2023
funding.197
Recent Federal Funding
For FY2022, the Consolidated Appropriations Act, 2022 (P.L. 117-103) provided $43.0 million
for this program. For FY2023, the Consolidated Appropriations Act, 2023 (P.L. 117-328) provides
$50.0 million for the program. For FY2024, the President requested $280.0 million for this
program.198
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.199 For this purpose, AWIA authorized appropriations of
$25.0 million per year for FY2019 through FY2023. IIJA reauthorized appropriations of $75.0
million per year for FY2022 through FY2026 to carry out grant programs in Section 104(b)(8), as

192 P.L. 115-270.
193 AWIA §4106.
194 IIJA §50204.
195 EPA, “State Formula Allocations for Sewer Overflow and Stormwater Reuse Grants,” 86 Federal Register 11287,
February 24, 2021, at https://www.federalregister.gov/documents/2021/02/24/2021-03756/state-formula-allocations-
for-sewer-overflow-and-stormwater-reuse-grants.
196 EPA, Memorandum from Assistant Administrator Radhika Fox to EPA Regional Water Division Directors,
“Amendments to the Sewer Overflow and Stormwater Reuse Municipal Grants Program and Allocation of Federal
Fiscal Year 2022 Funding,” November 18, 2022, at https://www.epa.gov/system/files/documents/2022-11/OSG-BIL-
amendments-and-FY22-allotment.pdf.
197 EPA, Memorandum from Assistant Administrator Radhika Fox to EPA Regional Water Division Directors,
“Allocation of Federal Fiscal Year 2023 Funding for the Sewer Overflow and Stormwater Reuse Municipal Grant
Program,” August 9, 2023, at https://www.epa.gov/system/files/documents/2023-08/OSG-FY2023-Allotment-August-
2023.pdf.
198 OMB, Budget of the U.S. Government, FY2024, Appendix, at https://www.whitehouse.gov/wp-content/uploads/
2023/03/hud_fy2024.pdf.
199 For more information, see EPA, “Technical Assistance for Treatment Works,” at https://www.epa.gov/dwcapacity/
training-and-technical-assistance-small-systems-funding.
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well as Section 104(b)(3) and Section 104(g). These latter two programs have not received
appropriations in recent years.
Recent Federal Funding
For FY2022, the Consolidated Appropriations Act, 2022 (P.L. 117-103) provided $20.0 million
for this program. For FY2023, the Consolidated Appropriations Act, 2023 (P.L. 117-328) provides
$27.0 million for the program. For FY2024, the President requested $18.0 million for this
program. In addition, the President requested $75.0 million to carry out this grant program and
grant programs in Section 104(b)(3) and Section 104(g).200
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).201 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.
This technical assistance is intended to enable small systems to achieve and maintain compliance
with drinking water regulations. Assistance may include circuit-rider and multistate regional
technical assistance programs, training, and assistance in implementing regulations; source water
protection plans; monitoring plans; and water security enhancements. 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 FY2021, the Consolidated Appropriations Act, 2021 (P.L. 116-260), provided $19.0 million
for this program. For FY2022, the Consolidated Appropriations Act, 2022 (P.L. 117-103),
provided $22.0 million for this program. The Consolidated Appropriations Act, 2023 (P.L. 117-
328), provided $26.0 million for this program. For FY2024, 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)).

200 OMB, Budget of the U.S. Government, FY2024, Appendix, at https://www.whitehouse.gov/wp-content/uploads/
2023/03/hud_fy2024.pdf.
201 42 U.S.C. §300j-1(e).
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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.202
Eligible projects include investments needed for SDWA compliance, household water quality
testing, and assistance that benefits a community on a per-household basis.203 Eligible grant
recipients include public water systems or tribal water systems that serve a disadvantaged
community or a community of 10,000 or fewer individuals or a state on behalf of an underserved
community.204 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.”205 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.206 EPA may waive this matching requirement if the grant recipient would
experience significant financial hardship from providing the nonfederal share.207
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.208 EPA reports that states need to develop a list of fundable projects that
meet the grant program’s eligibility criteria to receive their allotment of funding.209 For FY2020,
EPA announced that the agency would distribute $20.0 million for public water systems serving
tribal communities.210 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.211 For the FY2022 and FY2023 funding, EPA waived the 10%
statutory cost share and allotted $50.4 million among the states, after reserving $5.6 million for
projects serving Indian tribes and Alaska Native Villages.212

202 P.L. 114-322.
203 42 U.S.C. §300j-19a(c).
204 Ibid.
205 42 U.S.C. §300j-19a(a)(2).
206 42 U.S.C. §300j-19a(h).
207 Ibid.
208 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, at https://www.epa.gov/sites/production/files/2019-04/documents/
wiin_2104_allotment_memo_april_2019.pdf.
209 EPA, Assistance for Small and Disadvantaged Communities Drinking Water Grant Program: Grant Implementation
Document, August 2019, at https://www.epa.gov/sites/production/files/2019-08/documents/
assistance_for_small_and_disadvantaged_communities_grant_implementation_document_08_27_19.pdf.
210 See EPA website “WIIN Act Section 2104: Assistance for Small and Disadvantaged Communities Tribal Grant
Program,” at https://www.epa.gov/tribaldrinkingwater/wiin-act-section-2104-assistance-small-and-disadvantaged-
communities-tribal.
211 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, at
https://www.epa.gov/system/files/documents/2021-08/fy2021-initial-state-allotment-memo.pdf.
212 EPA, “Allotments for Fiscal Year 2022 and 2023 for the Assistance to Small, Underserved and Disadvantaged
Communities Grant, Authorized under Section 1459A of the Safe Drinking Water Act, as Amended by Section 2104 of
the Water Infrastructure Improvements for the Nation Act,” June 23, 2023, at https://www.epa.gov/system/files/
documents/2023-06/SUDC%20Grant%20Allotments%20for%20Fiscal%20Year%202022%20and%202023_0.pdf.
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Recent Federal Funding
Beginning in FY2018, Congress has appropriated funds each year 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. Similarly, IIJA provided this grant program with $1.0 billion dedicated to
emerging contaminant projects in FY2023. For FY2023, the Consolidated Appropriations Act,
2023 (P.L. 117-328) provided $30.2 million for this grant program. For FY2024, the President
requested $80.0 million for this grant program.213
Statutory Authority
The statutory authority for the Assistance for Small and Disadvantaged Communities Drinking
Water Grant program is SDWA Section 1459A (codified at 42 U.S.C. §300j-19a, added by the
WIIN Act, P.L. 114-322, §2104).
Lead Reduction Projects Grant Program
In 2016, Congress amended SDWA to direct EPA to establish a grant program for projects and
activities that reduce lead in drinking water.214 These 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.215 Eligible grant recipients include public water systems; tribal water systems;
qualified nonprofits with experience in lead reduction; and local, state, or municipal
governments.216 This grant program generally requires recipients to provide a 20% match. EPA
may waive this matching requirement for reasons of affordability.
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, 2022 (P.L. 117-103) provided $22.0 million for this grant

213 EPA, Fiscal Year 2024 Justification of Appropriation Estimates for the Committee on Appropriations, EPA-
190R23001, Washington, DC, March 2023, at https://www.epa.gov/system/files/documents/2023-03/fy-2024-
congressional-justification-all-tabs.pdf.
214 P.L. 114-322.
215 42 U.S.C. §300j-19b(a)(2).
216 42 U.S.C. §300j-19b(a)(1).
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program for FY2022. The Consolidated Appropriations Act, 2023 (P.L. 117-328) provided $25.0
million for this grant program. For FY2024, the President requested $182.0 million.217
Statutory Authority
The statutory authority for this grant program is SDWA Section 1459B (codified at 42 U.S.C.
§300j-19b, added by the WIIN Act, P.L. 114-322, §2105).
Small Water System Resilience and Sustainability Grant Program
In 2018, Congress amended SDWA to authorize EPA to establish the Drinking Water System
Infrastructure Resilience and Sustainability Program, a grant program for small and
disadvantaged public water systems.218 EPA is to award grant funds to eligible public water
systems for projects that increase resilience to natural hazards, including hydrologic changes.
Eligible projects include those that increase water use efficiency, enhance water supply through
watershed management or desalination, and increase energy efficiency in the conveyance or
treatment of drinking water.219 This grant program generally requires recipients to provide a 10%
cost share that EPA can waive.220
Recent Federal Funding
Congress first appropriated funds for this grant program in FY2020. In FY2020, the Further
Consolidated Appropriations Act, 2020 (P.L. 116-94), provided $3.0 million to support this grant
program. For FY2021, the Consolidated Appropriations Act, 2021 (P.L. 116-260), provided $4.0
million for this grant program. The Consolidated Appropriations Act, 2022 (P.L. 117-103),
provided $5.0 million for this grant program for FY2022. The Consolidated Appropriations Act,
2023 (P.L. 117-328), provided $7.0 million for this grant program. For FY2024, the President
requested $25.0 million.221
Statutory Authority
The statutory authority for the Small Water System Resilience and Sustainability grant program is
SDWA Section 1459A(l) (codified at 42 U.S.C. §300j-19a(l), added by AWIA (P.L. 115-270,
§2005)).
Midsize and Large Drinking Water System Infrastructure Resilience and
Sustainability Program
In 2021, Congress amended SDWA to direct EPA to establish a grant program for public water
systems serving 10,000 or more individuals to improve resilience to natural hazards and to
address cybersecurity vulnerabilities.222 Eligible uses of funds include various water conservation,

217 EPA, Fiscal Year 2024 Justification of Appropriation Estimates for the Committee on Appropriations, EPA-
190R23001, Washington, DC, March 2023, at https://www.epa.gov/system/files/documents/2023-03/fy-2024-
congressional-justification-all-tabs.pdf.
218 P.L. 115-270.
219 42 U.S.C. §300j-19a(l)(3).
220 42 U.S.C. §300j-19a(l)(5).
221 EPA, Fiscal Year 2024 Justification of Appropriation Estimates for the Committee on Appropriations, EPA-
190R23001, Washington, DC, March 2023, at https://www.epa.gov/system/files/documents/2023-03/fy-2024-
congressional-justification-all-tabs.pdf.
222 P.L. 117-58.
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desalination construction, and watershed management activities, among others.223 EPA is directed
to use 50% of amounts available for grants for water systems serving 10,000 or more to 100,000
individuals, and 50% for systems serving more than 100,000 individuals.224
Recent Federal Funding
Congress first provided appropriations for this grant program for FY2023. The Consolidated
Appropriations Act, 2023 (P.L. 117-328), provided $5.0 million for this grant program. For
FY2024, the President requested $50.0 million.225
Statutory Authority
The statutory authority for the Midsize and Large Drinking Water System Resilience and
Sustainability grant program is SDWA Section 1459F (codified at 42 U.S.C. §300j-19g, added by
IIJA (P.L. 117-58, §50107)).
Department of Housing and Urban Development226
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.227
The program statute requires that at least 70% of a grantee’s funds must benefit low- and
moderate-income persons.228
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.

223 42 U.S.C. §300j-19(g)(1)(c).
224 42 U.S.C. §300j-19(g)(1)(f).
225 EPA, Fiscal Year 2024 Justification of Appropriation Estimates for the Committee on Appropriations, EPA-
190R23001, Washington, DC, March 2023, at https://www.epa.gov/system/files/documents/2023-03/fy-2024-
congressional-justification-all-tabs.pdf.
226 This section was prepared by Joe Jaroscak, Analyst in Economic Development Policy, Government and Finance
Division.
227 24 C.F.R. § 570.208.
228 42 U.S.C. §5301(c).
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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
1993, Congress has appropriated approximately $99.6 billion in supplemental CDBG funding to
assist targeted states and local governments in their recovery and mitigation efforts, as CDBG-
Disaster Recovery (CDBG-DR) and CDBG-Mitigation (CDBG-MIT) funding.229
After subtracting any amounts specified in appropriations acts, 70% of CDBG funds (the
entitlement program) are allocated by formula to entitlement communities.230 Entitlement
communities are defined as central cities of metropolitan areas; metropolitan cities with
populations of 50,000 or more; and statutorily defined urban counties.231 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.232
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 FY2018 to FY2022, 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.233
Program Purpose
As noted, the primary goal of the CDBG program is the development of viable communities by
providing decent housing, a suitable living environment, and expanding economic opportunities,
principally for low- and moderate-income persons. Funds may also be used to aid in preventing or
eliminating slums and blight or to address an imminent threat to residents of the impacted area.
Financing or Funding Mechanism
The CDBG funding allocation process is outlined in the program’s statute.234 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

229 U.S. Department of Housing and Urban Development (HUD), CDBG Grant History Report (as of April 2023), at
https://www.hudexchange.info/programs/cdbg-dr/reports/.
230 HUD, Awards and Allocations, at https://www.hudexchange.info/grantees/allocations-awards/.
231 42 U.S.C. §5302.
232 HUD, CDBG Expenditure Reports, National Expenditure Reports (FY2001-FY2020), All CDBG Disbursements, at
https://www.hudexchange.info/programs/cdbg/cdbg-expenditure-reports/.
233 Between FY2018 and FY2022, disbursements by CDBG recipients for water and sewer improvements averaged
$398.4 million per year. See HUD, CDBG Expenditure Reports, National Expenditure Reports (FY2001-FY2020), All
CDBG Disbursements, at https://www.hudexchange.info/programs/cdbg/cdbg-expenditure-reports/.
234 42 U.S.C. §5306.
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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).235
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 $7.0 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.
Recent Federal Funding
The Consolidated Appropriations Act, 2023, appropriated $6.4 billion for the Community
Development Fund (CDF),236 including $3.3 billion in CDBG entitlement, nonentitlement, and
insular area funds. The act included $3.0 billion in the CDF for Economic Development Initiative
funding, for congressionally directed community project spending, among other provisions.237 Of
the amount appropriated for CDBG grants in FY2023, $2.3 billion was allocated to entitlement

235 HUD, Consolidated Plan Process, Grant Programs, and Related HUD Programs, at https://www.hudexchange.info/
programs/consolidated-plan/consolidated-plan-process-grant-programs-and-related-hud-programs/.
236 The CDBG program is funded in an account called the Community Development Fund.
237 HUD, Economic Development Initiative—Community Project Funding Grants, March 2023, at
https://www.hud.gov/program_offices/comm_planning/
economic_development_initiative_community_project_funding_grants.
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communities, $987.9 million to states for distribution to nonentitlement communities, and $7.0
million to insular areas.238 The Administration’s FY2024 budget requested $3.4 billion for the
CDF, of which $3.3 billion was requested for the CDBG program.239
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).240 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
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.241
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

238 HUD’s Office of Community Planning and Development (CPD) administers the CDBG program. CPD’s
Appropriations Budget/Allocations table provides the FY2023 amount of funding allocated for entitlement (called
“local governments” in the table) and state CDBG programs. See HUD, “CPD Appropriations Budget/Allocations,” at
https://www.hud.gov/program_offices/comm_planning/appropriations_budget_allocations.
239 OMB, Budget of the U.S. Government, FY2024, Appendix, p. 562, at https://www.whitehouse.gov/wp-content/
uploads/2023/03/hud_fy2024.pdf.
240 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/.
241 42 U.S.C. §5308(a).
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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.242
Recent Federal Funding
For FY2023, Congress authorized a loan commitment ceiling of $300.0 million and directed
HUD to collect fees from borrowers that result in a credit subsidy cost of zero for guaranteeing
Section 108 loans.243 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 FY2014244
changed that arrangement, allowing HUD to collect a fee from the borrower to cover the cost of
the credit subsidy. The amount of the fee is determined annually by HUD based on a percentage
of the principal amount of the Section 108 guaranteed loan. For FY2024, the Administration
requested $400.0 million in Section 108 loan guarantee authority.245
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.

242 24 C.F.R. § 570.704.
243 P.L. 117-328.
244 P.L. 113-76, 128 Stat. 617.
245 OMB, Budget of the U.S. Government, FY2024, Appendix, p. 562, at https://www.whitehouse.gov/wp-content/
uploads/2023/03/hud_fy2024.pdf.
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Department of Commerce246
Economic Development Administration Public Works Program
The Department of Commerce’s Economic Development Administration (EDA) is authorized to
provide certain types of development assistance to areas experiencing substantial economic
distress.247 EDA grants for community water and sewer projects are available primarily through
its Public Works program.248 Similar assistance is also available under the agency’s Economic
Adjustment Assistance program, which is discussed in the subsequent section.249
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, and may 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.250 Federal law requires that eligible recipients retain ownership of EDA-funded
projects.251 Because EDA grants are designed to primarily support economic development, foster
job creation, and attract private investment, these grants are generally not available for residential
sewer and water supply development.252
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.253
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

246 This section was prepared by Julie Lawhorn, Analyst in Economic Development Policy, Government and Finance
Division.
247 42 U.S.C. §3161.
248 42 U.S.C. §3141.
249 42 U.S.C. §3149.
250 EDA, “Public Works,” at https://www.eda.gov/funding/programs/public-works.
251 13 C.F.R. §314.7.
252 EDA, “FY2023 Public Works and Economic Adjustment Assistance Notice of Funding Opportunity,” p. 10, at
https://www.grants.gov/web/grants/view-opportunity.html?oppId=346815. For additional information, see EDA,
“Public Works,” at https://www.eda.gov/funding/programs/public-works.
253 42 U.S.C. §3141(b).
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located, as determined by EDA.254 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.255 Credit may be given toward the nonfederal share for in-kind contributions,
including contributions of space, equipment, and services.256 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, Indian Tribes, economic development districts, 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.257 Individuals and for-profit,
private-sector entities do not qualify.258
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.259 Projects must also be consistent with the
region’s certified Comprehensive Economic Development Strategy (CEDS) or equivalent EDA-
accepted regional economic development strategy260 and have an adequate share of nonfederal
funds.261 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.262
Recent Federal Funding
In FY2020, Congress directed EDA to allocate $118.5 million of total appropriations for the
Public Works grant program.263 The amount of Public Works funding increased by $1.0 million

254 42 U.S.C. §3144. Additionally, agency regulations describe the economic distress criteria at 13 C.F.R. Part 301,
Subpart D—Investment Rates and Matching Share Requirements.
255 42 U.S.C. §3144(c).
256 42 U.S.C. §3144(b).
257 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).
258 42 U.S.C. §3122(4).
259 42 U.S.C. §3141(b).
260 42 U.S.C. §3141(b)(3).
261 42 U.S.C. §3144.
262 42 U.S.C. §3161. 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, FY2023, at https://www.grants.gov/web/grants/view-opportunity.html?oppId=
346815.
263 Congressional Record, December 17, 2019, pp. H10961-10962, at https://www.govinfo.gov/content/pkg/CREC-
2019-12-17/pdf/CREC-2019-12-17-house-bk2.pdf.
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each fiscal year through 2023, reaching $121.5 million in FY2023.264 For FY2024, the
Administration requested $100.0 million for the Public Works program.265
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.266
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
• construction of public 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; or
• market or industry research and analysis; technical assistance, including
feasibility studies; public services; and training.267
Federal law requires that eligible recipients retain ownership of EDA-funded projects.268 Because
EDA grants are designed to primarily support economic development, foster job creation, and

264 Congressional Record, vol. 166, no. 28 (December 21, 2020), p. H7922, at https://www.govinfo.gov/content/pkg/
CREC-2020-12-21/pdf/CREC-2020-12-21-house-bk3.pdf; Congressional Record, vol. 168, no. 42 (March 9, 2022), p.
H1772, at https://www.congress.gov/117/crec/2022/03/09/168/42/CREC-2022-03-09-bk3.pdf; and Congressional
Record, vol. 168, no. 198 (December 20, 2022), p. S7898, at https://www.congress.gov/117/crec/2022/12/20/168/198/
CREC-2022-12-20-pt1-PgS7819-2.pdf.
265 U.S. Department of Commerce (DOC), FY2024 EDA Congressional Budget Justification, p. 27, at
https://www.commerce.gov/sites/default/files/2023-03/EDA-FY2024-Congressional-Budget-Submission.pdf.
266 42 U.S.C. §3149. For additional information, see EDA, “Economic Adjustment Assistance,” at
https://www.eda.gov/economic-adjustment-assistance.
267 13 C.F.R. Part 307 and EDA, “FY2023 Public Works and Economic Adjustment Assistance Notice of Funding
Opportunity,” at https://www.grants.gov/web/grants/view-opportunity.html?oppId=346815.
268 13 C.F.R. §314.7.
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attract private investment, these grants are generally not available for residential sewer and water
supply development.269
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.270 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.271 Credit may be given toward the nonfederal share for in-kind contributions, including
contributions of space, equipment, and services.272 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,
Indian Tribes, economic development districts, 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.273 Individuals and for-profit, private-sector entities do
not qualify.274
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.275 Projects must also have an adequate share of local funds.276 With the exception of

269 EDA, “FY2023 Public Works and Economic Adjustment Assistance Notice of Funding Opportunity,” p. 10, at
https://www.grants.gov/web/grants/view-opportunity.html?oppId=346815. For additional information, see EDA,
“Public Works,” at https://www.eda.gov/funding/programs/public-works.
270 42 U.S.C. §3144. Additionally, agency regulations describe the economic distress criteria at 13 C.F.R. Part 301,
Subpart D—Investment Rates and Matching Share Requirements.
271 42 U.S.C. §3144(c).
272 42 U.S.C. §3144(b).
273 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).
274 42 U.S.C. §3122(4).
275 42 U.S.C. §3149.
276 42 U.S.C. §3144.
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strategy grants, EAA projects must also be consistent with the area’s CEDS.277 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.278
Recent Federal Funding
Congress directed EDA to allocate $37.0 million annually to the EAA program in FY2018-
FY2020 and $37.5 million to the program in FY2021 and FY2022.279 Congress directed EDA to
allocate $39.5 million to the EAA program in FY2023.280 For FY2024, the Administration’s
budget requested $33.0 million for the EAA program.281
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],
the Assistance to Nuclear Closure Communities [NCC], and Assistance to Biomass Closure
Communities [BCC] initiatives). Congress directed EDA to allocate $10.0 million in FY2015 and
$15.0 million in FY2016 to the ACC initiative.282 Funding for the ACC initiative remained at
$30.0 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 $15.0 million for
the first time to the NCC initiative and increased the amount to $16.5 million each fiscal year
from FY2021 through FY2023. 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. In
FY2023, Congress again directed EDA to provide $4.5 million to the BCC initiative. For
FY2024, the Administration requested $80.5 million for the ACC initiative and $10.0 million for
the NCC initiative.283 ACC, NCC, and BCC 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.284

277 42 U.S.C. §3149(b)(2).
278 42 U.S.C. §3161. 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, at https://www.grants.gov/web/grants/view-opportunity.html?
oppId=321695.
279 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.
280 Sen. Patrick Leahy, “Explanatory Statement Submitted by Mr. Leahy, Chair of the Senate Committee on
Appropriations, Regarding H.R. 2617, Consolidated Appropriations Act, 2023,” Senate, Congressional Record, vol.
168, No. 198 (December 20, 2022), p. S7898, at https://www.congress.gov/congressional-record/volume-168/issue-
198/senate-section/article/S7819-2.
281 U.S. Department of Commerce, FY2024 EDA Congressional Budget Justification, p. 57, at
https://www.commerce.gov/sites/default/files/2023-03/EDA-FY2024-Congressional-Budget-Submission.pdf.
282 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.
283 U.S. Department of Commerce, FY2024 EDA Congressional Budget Justification, pp. 69-75, at
https://www.commerce.gov/sites/default/files/2023-03/EDA-FY2024-Congressional-Budget-Submission.pdf.
284 For more information, see “Assistance to Energy Transition Communities” in CRS Report R46991, Economic
Development Administration: An Overview of Programs and Appropriations (FY2011-FY2023), 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, FY2023,” at https://www.grants.gov/web/grants/view-
opportunity.html?oppId=346815.
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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 $3.0 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.285
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.

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
Specialist 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

285 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, at https://www.eda.gov/
news/blogs/2021/03/22/eda-marks-cares-act-milestone.htm.
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Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
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copy or otherwise use copyrighted material.

Congressional Research Service
R46471 · VERSION 10 · UPDATED
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