Drinking Water Infrastructure Needs: Background and Issues for Congress

December 18, 2023 R47878

Drinking Water Infrastructure Needs:
December 18, 2023
Background and Issues for Congress
Elena H. Humphreys
Congress has demonstrated interest in the provision of safe drinking water and in the
Analyst in Environmental
maintenance of existing drinking water infrastructure. Outbreaks of waterborne diseases (e.g.,
Policy
Legionnaires’ disease) and extended boil water notices in some cities have brought attention to

the current condition of the United States’ drinking water infrastructure. In 2023, the U.S.
Environmental Protection Agency (EPA) estimated that, over the next 20 years, the investment

needed for drinking water system infrastructure would cost $648.8 billion (2022 dollars). This
latest estimate is roughly $51 billion (2022 dollars), or 7.62%, more than EPA’s prior estimate, published in 2018.
Approximately 67% (i.e., $436.8 million) of the latest survey’s estimated needs are for projects to repair or rehabilitate water
systems’ transmission and distribution networks. EPA’s reports on drinking water infrastructure needs raise several
considerations for Congress.
EPA’s 2023 needs estimates follow recent increased congressional interest in drinking water infrastructure. As a reflection of
this interest, Congress has increased appropriations in recent years for drinking water financial assistance programs
administered by EPA. For example, the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58) provides five fiscal years
of supplemental appropriations, beginning in FY2022, for the Drinking Water State Revolving Fund (DWSRF). Further,
several recent acts amended the Safe Drinking Water Act (SDWA) to authorize other grant programs intended to address
specific issues or assist particular communities.
Under SDWA, EPA is required to assess the “capital improvement needs of eligible public water systems” every four years.
From 1996 to 2018, EPA published six reports that estimated drinking water infrastructure needs. In 2018, America’s Water
Infrastructure Act (AWIA; P.L. 115-270) amended SDWA to require EPA to include an assessment in the needs survey of
the costs to replace all lead service lines (LSLs) in eligible public water systems. EPA published the seventh report including
these LSL estimates in 2023.
Over the agency’s seven reports, EPA’s estimates of the costs of needed drinking water infrastructure projects have increased
(after accounting for changes due to inflation). General findings from EPA’s seven reports include (1) the costs of
infrastructure projects for small water systems (defined as those systems serving 3,300 or fewer individuals) comprise a
smaller percentage of total drinking water need, but result in higher per-household costs; and (2) the costs associated with
replacement or rehabilitation of water system distribution and transmission networks represent the majority of the total
estimated drinking water infrastructure need. Although not included in the seventh report, the first through sixth reports
identified that the direct costs of infrastructure projects needed to comply with SDWA drinking water regulations (e.g.,
treatment upgrades) remain a smaller percentage of total drinking water investment need.
Congress has both explicitly and implicitly prioritized certain drinking water infrastructure needs. Statutory requirements
provide examples of explicit congressional prioritization, and federal funding decisions arguably provide examples of
implicit prioritization. Under the DWSRF, Congress requires that states prioritize projects that are needed to address the most
serious human health risks, that are necessary to ensure SDWA compliance, and that assist systems most in need on a per-
household basis according to state affordability criteria. Implicit prioritization may take the form of appropriations for
specific drinking water financial assistance programs as well as dedicated funding to certain types of projects or specific
projects through appropriations.
The increasing scale of drinking water infrastructure needs, including for specific categories of infrastructure needs, raises
questions, including about how infrastructure needs are prioritized, how the EPA drinking water infrastructure needs survey
aligns with congressional interests, and how that affects use of the survey’s results. Given congressional activities to support
drinking water infrastructure needs, one consideration might involve how well the needs surveys align to congressional
priorities. An example of how Congress has amended SDWA to align the needs survey to its priorities is the AWIA
amendments to require EPA to report on LSL replacement costs. Another consideration might involve the data collection
methods used to estimate needs, and the potential tradeoffs of these methods. In addition, a consideration for Congress may
involve the scale of needs estimated by the seventh survey, and the distribution of these needs among states. Given the
increasing estimated needs, the needs survey and its findings are likely to continue to generate congressional attention.
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Drinking Water Infrastructure Needs: Background and Issues for Congress

Introduction
Congress has a demonstrated interest in the provision of safe drinking water and in the
maintenance of existing drinking water infrastructure. Through statute, appropriation, and report
language, Congress has provided the U.S. Environmental Protection Agency (EPA) with
authorities, funding, and direction to support state and local entities in meeting regulatory needs
and furthering public health protection. Some key questions facing policymakers are whether
available funding and efforts align with infrastructure needs and priorities and whether the
present reporting mechanisms are sufficient to assess these needs.
The United States’ drinking water infrastructure plays a primary role in protecting public health.
Outbreaks of waterborne diseases (e.g., Legionnaires’ disease) and extended boil water notices in
some cities have brought attention to the current condition of the country’s drinking water
infrastructure. Breaks or leaks in the transmission and distribution system may result in
contamination of treated water, particularly where sewer pipes are installed adjacent to drinking
water mains.1
In 2023, EPA compiled data from states and estimated that, over the next 20 years, the investment
needed for drinking water system infrastructure would cost $648.8 billion (2022 dollars).2 This
latest estimate is roughly $51 billion (2022 dollars), or 7.62%, more than EPA’s prior estimate,
published in 2018.3 About 67% (i.e., $436.8 million in 2022 dollars) of the estimated needs are
for projects to repair or rehabilitate water systems’ transmission and distribution networks.4 The
need for routine replacement and rehabilitation projects is not novel, as a report from more than
20 years ago stated that water systems were then entering “the replacement era.”5
Although federal spending on drinking water infrastructure represents a small portion of public
spending in this sector,6 in recent years, Congress has increased appropriations for drinking water
financial assistance programs administered by EPA. For example, the Infrastructure Investment
and Jobs Act (IIJA; P.L. 117-58) provides five fiscal years of supplemental appropriations, which
began in FY2022, for the Drinking Water State Revolving Fund (DWSRF). Further, several
recent acts amended the Safe Drinking Water Act (SDWA) to authorize other grant programs
intended to address specific needs or provide support to particular communities.7

1 Contamination of drinking water from a sewer pipe depends on if that sewer pipe also had a break or leak. The U.S.
Environmental Protection Agency (EPA), Using DWSRF Funds for Transmission and Distribution Infrastructure
Needs, EPA 816-F-03-003, Washington, DC, February 2003.
2 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Seventh Report to Congress, September 2023,
https://www.epa.gov/system/files/documents/2023-09/Seventh%20DWINSA_September2023_Final.pdf.
3 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Sixth Report to Congress, March 2018,
https://nepis.epa.gov/Exe/ZyPURL.cgi?Dockey=P100UA7Z.txt.
4 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Seventh Report to Congress.
5 American Water Works Association, Dawn of the Replacement Era: Reinvesting in Drinking Water Infrastructure,
Denver, CO, May 2001.
6 The Congressional Budget Office (CBO) reports that, in 2017, the federal share of total public spending on water and
wastewater utilities was 4%, while state and local government expenditures accounted for 96% of all public spending
on this infrastructure. CBO, Public Spending on Transportation and Water Infrastructure, 1956 to 2017, 2018, p.
22, https://www.cbo.gov/publication/54539.
7 In addition to provisions added to SDWA, Congress has added a number of authorizations for the U.S. Army Corps of
Engineers, within the Department of Defense, and the Bureau of Reclamation, within the Department of Interior, to
address municipal water infrastructure. Further, Congress has authorized rural development programs for the U.S.
Department of Agriculture’s (USDA’s) Rural Utilities Service. These authorities are not discussed in this report. See
CRS Report R46471, Federally Supported Projects and Programs for Wastewater, Drinking Water, and Water Supply
Infrastructure, coordinated by Jonathan L. Ramseur, for details on these and other programs.
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The increasing scale of drinking water infrastructure needs, including for specific categories of
infrastructure needs, raises questions, including how infrastructure needs are prioritized, how the
EPA drinking water infrastructure needs survey aligns with congressional interests, and how that
affects use of the survey’s results.
This report begins with background on the federal role in drinking water infrastructure, as well as
SDWA requirements for estimating drinking water infrastructure needs. It then analyzes how
those needs have shifted over time. This report also provides information about how drinking
water infrastructure projects are generally funded. The report ends with some congressional
considerations, including an analysis of needs and congressional priorities, as well as context
regarding the survey.
Federal Support for Drinking Water Infrastructure
Congress created the DWSRF partly to provide support to communities that were challenged to
afford projects needed to comply with federal drinking water regulations, which significantly
increased after the Safe Drinking Water Act Amendments of 1986 (P.L. 99-339).8 Through the
Safe Drinking Water Act Amendments of 1996 (P.L. 104-182), Congress authorized EPA to use
appropriations to make grants to states.9 States use their grant to capitalize a state revolving loan
fund. Each state must match 20% of its grant and develop intended use plans (IUPs) each year
indicating how the allotted funds will be used.10 States are authorized to use their DWSRF
capitalization grant to provide financial assistance (primarily subsidized loans) to eligible public
water systems for the types of capital infrastructure projects that EPA has determined will
facilitate SDWA compliance or significantly further the act’s health protection objectives.11 Public
water systems eligible to receive DWSRF assistance are community water systems (whether
publicly or privately owned) and nonprofit noncommunity water systems.12 The federal grants
and state match—combined with funds from loan repayments, leveraged bonds, and other
sources—were intended to generate an ongoing (i.e., revolving) source of water infrastructure
funding.
Estimating Drinking Water Infrastructure Needs
In part to understand the state of drinking water infrastructure, Congress amended SDWA in 1996
and required EPA to assess the “capital improvement needs of eligible public water systems”

8 In 1986, responding to criticisms about EPA’s regulatory pace, Congress amended the Safe Drinking Water Act
(SDWA) to require EPA to establish regulations for 83 contaminants within three years, with regulations for an
additional 25 contaminants every three years thereafter. After the 1986 amendments, EPA promulgated new regulations
and revised existing regulations for more than 80 contaminants, attempting to keep pace with the statutory
requirements. EPA, states, and water systems found this regulatory pace unworkable. CRS Report R46652, Regulating
Contaminants Under the Safe Drinking Water Act (SDWA), contains additional details regarding SDWA’s regulatory
development provisions.
9 SDWA §1452(a); 42 U.S.C. §300j-12(a).
10 SDWA §1452(e); 42 U.S.C. §300j-12(e); SDWA §1452(b); 42 U.S.C. §300j-12(b).
11 SDWA §1452(a)(2)(B); 42 U.S.C. §300j-12(a)(2)(B).
12 SDWA Section 1401 defines a public water system as a system that provides water through pipes or other
conveyances to at least 15 service connections or that regularly serves at least 25 individuals. The act also defines
community water systems as those that regularly serve at least 25 individuals year-round and noncommunity water
systems as public water systems that are not community water systems.
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every four years.13 EPA undertook this assessment via a state-level needs survey. This state-by-
state distribution of estimated need is a primary determinant of the state allotments of DWSRF
appropriations. SDWA requires EPA to distribute the DWSRF funds among the states based on
each state’s proportional share of infrastructure needs as identified by the most recent needs
survey, with no state receiving less than 1% of available funds.14
From 1996 to 2018, EPA published six reports that estimated drinking water infrastructure needs.
In 2018, America’s Water Infrastructure Act of 2018 (AWIA; P.L. 115-270) amended Section
1452(h) to require EPA to include an assessment of the costs to replace all lead service lines
(LSLs) in eligible public water systems in the needs survey.15 EPA published the seventh report
including these LSL estimates in 2023. These reports are further detailed below.16
From the first to the seventh report, EPA made some revisions to the methodology used to
estimate drinking water infrastructure needs, and Table A-1 provides a summary of the
differences. EPA’s basic methodology relies on a survey of the largest systems’ infrastructure
needs,17 and a survey of a sample of smaller systems’ infrastructure needs, using those results to
extrapolate or project state- and national-level estimates.18
Understanding the survey’s methodology, how it has changed, and its potential limitations is
useful for assessing the robustness of states’ estimated needs. Survey changes intended to
minimize the survey’s burden on certain systems, states, or populations have led to the use of
modeled or projected data from older surveys, as discussed below.
Some systems may lack capacity to document costs or plan for needed projects.19 To address this,
the first, second, and fourth surveys relied upon site visits to a sample of roughly 500 to 600 of
the nearly 40,000 community water systems that serve 3,300 or fewer people to assess their
infrastructure needs.20 Such systems make up approximately 81% of the community water
systems operating nationally. EPA used these sample data to extrapolate state- and national-level
estimates of needed projects.21 For the third survey, EPA projected these costs using data collected
from the second survey. For the fifth and sixth surveys, EPA projected these costs using data

13 SDWA §1452(h); 42 U.S.C. §300j-12(h). EPA must report each needs assessment to Congress. Concurrently, and in
consultation with the Indian Health Service within the U.S. Department of Health and Human Services and Indian
tribes, EPA is required to assess needs for drinking water treatment facilities that serve Indian tribes and Alaska Native
villages.13 This report does not discuss tribal and Alaskan Native drinking water infrastructure needs.
14 SDWA §1452(a)(1)(D)(ii); 42 U.S.C. §300j-12(a)(1)(D)(ii).
15 SDWA §1452(h)(2); 42 U.S.C. §300j-12(h)(2).
16 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Seventh Report to Congress.
17 Between the third and fourth surveys, EPA changed the population threshold of what systems are considered “large”
versus “medium.” For the first through third surveys, large water systems served more than 50,000 people, and medium
water systems served 3,301 to 50,000 people. Beginning in the fourth survey, EPA designated water systems serving
more than 100,000 people as large, and those serving 3,301 to 100,000 people as medium.
18 Initially, EPA and states, and now primarily states, review water system responses to determine that projects had
acceptable documentation to estimate their costs and demonstrate their need.
19 EPA, Drinking Water Infrastructure Needs Survey: First Report to Congress, EPA 812-R-97-001, Washington, DC,
January 1997, https://www.epa.gov/sites/default/files/2015-07/documents/epa812r97001.pdf.
20 EPA, Drinking Water Infrastructure Needs Survey: First Report to Congress; EPA, Drinking Water Infrastructure
Needs Survey: Second Report to Congress, EPA 816-R-01-004, Washington, DC, February 2001, https://nepis.epa.gov/
Exe/ZyPDF.cgi/200024WV.PDF?Dockey=200024WV.PDF; EPA, Drinking Water Infrastructure Needs Survey and
Assessment: Fourth Report to Congress, EPA 816-R-09-001, Washington, DC, February 2009,
https://nepis.epa.gov/Exe/ZyPURL.cgi?Dockey=P1004B0B.txt.
21 EPA, Drinking Water Infrastructure Needs Survey: First Report to Congress; EPA, Drinking Water Infrastructure
Needs Survey: Second Report to Congress; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fourth
Report to Congress; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Seventh Report to Congress.
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collected from the fourth survey. In the seventh survey, EPA collected new data through a sample
of roughly 600 small water systems.22
Similarly, EPA generated infrastructure need estimates for nonprofit noncommunity water
systems by conducting site visits at 100 of the 21,400 locations for the second survey in 1999.
These data informed projected costs for the third through sixth surveys. For the seventh survey,
EPA did not project data from the 1999 survey for the seventh report. The agency updated its
estimates through site visits to 134 of the roughly 26,000 locations.23
In addition to employing sampling and projections, EPA made changes to the methodology to
address state concerns about the reporting burden. Beginning in 2007 with the fourth survey, EPA
provided an option for certain states to have a lower level of participation.24 States that received
the minimum DWSRF allotment of 1% could choose to forgo data collection for “medium”
systems that serve 3,301 to 100,000 individuals.25 For states that chose this “partial” survey
option, EPA then projected medium water system cost data to determine the national estimate of
drinking water infrastructure need.26 EPA made this option available to these “partial
participation” states in the fifth, sixth, and seventh surveys.27
This “partial participation” approach results in some states’ drinking water infrastructure needs
being calculated solely based on projected data. For example, as identified in at least three of the
needs surveys, some partial participation states did not have a large water system.28 Since EPA did
not perform new site visits in the fifth and sixth surveys, the need estimates for Vermont and West
Virginia, two of the partial participation states, were based solely on projected data.29 Unless EPA
selected smaller water systems in these states for a site visit or to survey for the fourth and
seventh surveys, the need estimates of partial participation states without a large water system
would also be based only on projections.
Trends in Drinking Water Infrastructure Needs
An analysis of the seven needs survey reports highlights trends in the types of needed drinking
water infrastructure projects over time. Table 1 shows that, over the agency’s seven reports,
EPA’s estimates of drinking water infrastructure needs have generally increased. Starting with its
initial report in 1997, EPA has presented the 20-year needs estimates for projects by category:
transmission and distribution, treatment, source, storage, and other.30 EPA also includes estimates
of the infrastructure needs associated with small, medium, and large community water systems. A

22 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Seventh Report to Congress.
23 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Seventh Report to Congress.
24 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fourth Report to Congress.
25 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fourth Report to Congress.
26 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fourth Report to Congress.
27 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fifth Report to Congress, EPA 816-R-13-006,
Washington, DC, April 2013, https://www.epa.gov/sites/default/files/2015-07/documents/epa816r13006.pdf; EPA,
Drinking Water Infrastructure Needs Survey and Assessment: Sixth Report to Congress; EPA, Drinking Water
Infrastructure Needs Survey and Assessment: Seventh Report to Congress.
28 EPA identified that, in the fourth through sixth surveys, Wyoming and Vermont chose not to survey their medium
systems, and that no large water systems operate in these states. In the fourth and fifth surveys, EPA identified that
North Dakota chose not to survey its medium systems and had no operating large water system.
29 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fifth Report to Congress; EPA, Drinking Water
Infrastructure Needs Survey and Assessment: Sixth Report to Congress.
30 Examples of projects in the “other” category include laboratory equipment to test water quality, emergency power
generators, and upgrades to protect infrastructure against floods and earthquakes.
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comparison of the needs based on system size is challenging, because the definitions of these
categories have changed over time.31
The agency reports on the subset of projects needed for compliance with SDWA regulations,
differentiating between needs associated with microbial contaminant regulations and chemical
contaminant regulations.32 Generally, the reports have found that
• small water systems (defined as those systems serving 3,300 or fewer
individuals) comprise roughly 81% of all community water systems, and their
needs account for roughly 18% (on average) of the total need; in addition, their
needs result in higher per-household costs, compared to households served by
larger systems; and
• the costs associated with replacement or rehabilitation of water system
distribution and transmission networks, which comprise the bulk of a water
system’s capital value, represent the majority of the total estimated drinking
water infrastructure need.
Table 1. EPA’s Estimates of State and Territory Drinking Water Infrastructure Need
(in billions, adjusted to 2022 dollars)
First
Second
Third
Fourth
Fifth
Sixth
Seventh
Project
Survey
Survey
Survey
Survey
Survey
Survey
Survey
Category
(1995)
(1999)
(2003)
(2007)
(2011)
(2015)
(2021)
Transmission
and Distribution
$198.32
$192.98
$382.63
$316.03
$349.24
$398.96
$436.82
Treatment
$93.08
$66.50
$89.80
$107.16
$85.99
$100.57
$110.41
Source
$28.18
$22.32
$26.58
$31.08
$25.99
$27.79
$25.86
Storage
$30.68
$42.21
$51.12
$57.53
$50.09
$60.60
$57.46
Other
$4.94
$4.35
$4.85
$3.58
$5.35
$9.57
$18.28
Total
$355.19
$328.36
$554.96
$515.38
$516.67
$597.49
$648.83
Source: Calculated by CRS from EPA, Drinking Water Infrastructure Needs Survey: First Report to Congress, 1997;
EPA, Drinking Water Infrastructure Needs Survey: Second Report to Congress, 2001; EPA, Drinking Water Infrastructure
Needs Survey: Third Report to Congress, 2005; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fourth
Report to Congress, 2009; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fifth Report to Congress,
2013; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Sixth Report to Congress, 2018; EPA, Drinking
Water Infrastructure Needs Survey and Assessment: Seventh Report to Congress, 2023; and the U.S. Bureau of
Economic Analysis (BEA), “Table 5.9.4. Price Indexes for Gross Government Fixed Investment by Type,”
accessed October 17, 2023.
Notes: Values may not total due to rounding. FY2022 dol ars calculated using price index data from line 42,
“water systems,” of BEA Table 5.9.4. This table includes estimated needs for states and territories. The first
survey included estimates for dam and raw water reservoir projects, and did not survey nonprofit
noncommunity water systems. In the third survey, EPA made changes intended to encourage systems to evaluate
their assets, and estimate what rehabilitation and replacement projects would be needed over the long term.

31 For the first through third surveys, “large” water systems were those systems serving more than 50,000 people,
“medium” systems were those serving 3,301 to 50,000 people, and “small” systems were those serving 3,300 or fewer
individuals. Between the third and fourth reports, EPA adjusted the size cutoffs for large and medium systems.
Beginning in the fourth survey, large water systems serve more than 100,000 individuals, and medium systems serve
3,301 to 100,000 individuals.
32 See Appendix B for more detail.
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The first through sixth reports indicate that the direct costs of infrastructure projects needed to
comply with SDWA drinking water regulations (e.g., treatment upgrades) remain a comparatively
smaller percentage (e.g., 9% to 21%) of total drinking water need. Such projects are a subset of
the projects that make up the treatment category. These SDWA regulatory costs comprised the
highest proportion (i.e., 21%) of total need in the second survey; since then, they have comprised
a smaller portion of overall need, making up roughly 12% in the sixth survey. Of this “regulatory
need,” the costs of projects needed to comply with microbial contaminant regulations generally
outpaced those associated with chemical contaminants.33 The seventh report did not provide
analogous details on estimated need for SDWA compliance.34
While overall infrastructure needs have increased, transmission and distribution, storage, and
“other” categories of need have grown most from the first to the seventh surveys. In general, EPA
attributes the increase in reported needs in these categories as resulting from water systems’
improved efforts to inventory their needed projects. For example, the increase in transmission and
distribution needs between the second and third surveys overlapped with the revised asset
management approach that the third survey’s questionnaire employed, which led water systems to
“consider and report a larger number of rehabilitation and replacement projects.”35 This may
explain the increase between the second and third surveys, though it does not fully address why
this category of need has increased from the fourth to seventh surveys. While some categories
have increased more than others, the relative proportion of each category of need has remained
similar over time. Figure 1 shows each category’s proportion of overall need for each survey.
The percentage of need associated with “source” and “treatment” project categories has generally
decreased. For example, treatment needs comprised roughly 26% of the first report’s overall
estimated need.36 Beginning with the fifth report, treatment needs have remained at about 17% of
the total overall need.37 Similarly, the “source” project category has reduced from almost 8% of
overall need, as estimated by the first report, to 4% of the estimated need in the seventh report.38
While these categories’ percentages of total need have decreased, the numeric values of some of
these categories have increased.

33 For the first and sixth reports, EPA did not include the compliance-related costs for proposed or recently
promulgated regulations. For the seventh report, EPA did not specify costs for existing or proposed regulations.
34 EPA, Drinking Water Infrastructure Needs Survey: Seventh Report to Congress.
35 EPA, Drinking Water Infrastructure Needs Survey: Third Report to Congress, Washington, DC, June 2005,
https://nepis.epa.gov/Exe/ZyPDF.cgi/91019EXM.PDF?Dockey=91019EXM.PDF.
36 EPA, Drinking Water Infrastructure Needs Survey: First Report to Congress.
37 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fifth Report to Congress; EPA, Drinking Water
Infrastructure Needs Survey and Assessment: Sixth Report to Congress; EPA, Drinking Water Infrastructure Needs
Survey and Assessment: Seventh Report to Congress.
38 EPA, Drinking Water Infrastructure Needs Survey: First Report to Congress; EPA, Drinking Water Infrastructure
Needs Survey and Assessment: Seventh Report to Congress.
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Figure 1. State and Territory Drinking Water Infrastructure Need, by Project
Category

Source: EPA, Drinking Water Infrastructure Needs Survey: First Report to Congress, 1997; EPA, Drinking Water
Infrastructure Needs Survey: Second Report to Congress, 2001; EPA, Drinking Water Infrastructure Needs Survey: Third
Report to Congress, 2005; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fourth Report to Congress,
2009; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fifth Report to Congress, 2013; EPA, Drinking
Water Infrastructure Needs Survey and Assessment: Sixth Report to Congress, 2018; and EPA, Drinking Water
Infrastructure Needs Survey and Assessment: Seventh Report to Congress, 2023.
Note: The first through sixth needs surveys were completed in 4-year increments, beginning in 1995. The sixth
needs survey was conducted in 2015, and the seventh was conducted in 2021.
Paying for Drinking Water Infrastructure
A fundamental question related to the drinking water infrastructure investment need is who pays
for these projects. The Congressional Budget Office (CBO) found that (between 1956 and 2017)
federal sources made up a small portion (4%) of public funding for both drinking water and
wastewater infrastructure projects.39
The two primary categories of water system spending are operations and maintenance (O&M)
and capital investments. EPA’s drinking water needs surveys include only the costs of needed
capital investments. Generally, O&M spending covers the activities needed to (1) ensure the
system produces and distributes treated water, and (2) ensure that the treatment plant and other
equipment is working. Typically, customers’ water bills support O&M and sometimes long-term
capital investments.40
Nearly 50,000 community water systems operate nationally, and water pricing structures vary
(e.g., tiered rates to encourage conservation or flat rates for all users). Although systems generally
have flexibility in determining a pricing structure, certain privately owned systems in most states
(and, in some states, publicly owned systems) are subject to local and state requirements,
including from state public utility commissions, that may involve establishing rates at a level that
fully covers the costs of providing the service as well as long-term capital plans.41 Smaller

39 CBO, Public Spending on Transportation and Water Infrastructure, 1956 to 2017, 2018, https://www.cbo.gov/
publication/54539.
40 EPA, The Clean Water and Drinking Water Infrastructure Gap Analysis, EPA-816-R-02-020, Washington, DC,
September 2002, p. 17.
41 EPA, An Overview of PUC s for State Environment and Energy Officials, May 10, 2010, https://www.epa.gov/sites/
default/files/2016-03/documents/background_paper.pdf.
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privately owned systems and most publicly owned systems may not be subject to full-cost-
recovery rate-setting requirements.42
What customers pay for water service depends on several factors, including investments needed
to repair aging infrastructure or to comply with regulatory requirements, and system
characteristics like size and source water quality. For example, larger urban water systems serve
more customers in a concentrated area, meaning that these systems have a larger rate base from
which to support costs. Smaller rural systems may have customers who are spread out, requiring
an extensive piped distribution system. Accordingly, distribution or transmission projects in rural
areas may result in a higher per-household cost, as compared to those that take place in larger
urban cities with higher-density development. For example, the American Water Works
Association estimated in 2001 that household cost impacts of drinking water infrastructure
projects would be two to three times higher in smaller systems due to their smaller rate base as
well as their “tendency for replacement needs to be less spread out over time.”43
In addition to the question of payment is whether the existing level of water system spending (i.e.,
supported by revenues from customers’ water bills and/or financing) is sufficient to cover the
need. Assessing whether projected water service payments or financing would cover the
estimated need would require detailed national-level estimates of water spending. Some water
rate information exists publicly. Specifically, the Environmental Finance Center at the University
of North Carolina, Chapel Hill, provides water rate information for utilities that voluntarily
submitted such data from a subset of states.44 Other states collect rate information for all or a
subset of drinking water systems.45 Regarding national-level data, EPA published a report in 2002
finding that a “significant” funding gap may develop between estimated needs and spending over
20 years if the systems’ levels of spending and operational practices continued, though the report
also stated that an increase of 3% in water revenues would make the gap “largely disappear.”46
Needs Survey Observations
The seventh report identified the largest estimated need for drinking water capital infrastructure
projects out of the surveys completed so far. Generally, stakeholders have attributed the increases
in drinking water infrastructure needs to the age of drinking water infrastructure,47 though the
increase in estimated need likely arises from several factors, discussed below.
One factor that likely drives states’ estimated needs is the number of people who live in that state.
Among the surveys, either 8, 9, or all of the 10 states with the highest estimated needs were the
states with the largest populations.48 Further, the characteristics of the water systems within a

42 EPA, An Overview of PUC s for State Environment and Energy Officials.
43 American Water Works Association, Dawn of the Replacement Era: Reinvesting in Drinking Water Infrastructure,
Denver, CO, May 2001.
44 SDWA Section 1420(g) requires EPA to provide initial funding for one or more university-based “environmental
finance centers” to provide technical assistance to state and local officials to develop water system capacity.
45 See, for example, Ohio Environmental Protection Agency, “Sewer and Water Rate Survey, 2022,”
https://epa.ohio.gov/divisions-and-offices/environmental-financial-assistance/reports-and-data/sewer-and-water-rate-
survey.
46 EPA, The Clean Water and Drinking Water Infrastructure Gap Analysis.
47 See, for example, American Society of Civil Engineers, “2021 Report Card for America’s Infrastructure: Drinking
Water,” https://infrastructurereportcard.org/cat-item/drinking-water-infrastructure/.
48 CRS analysis of state-by-state needs estimates from EPA’s needs surveys, and data on state populations identified in
the U.S. Census Bureau’s 2000-2010 Intercensal Estimates; State Population Totals: 2010-2019; and State Population
(continued...)
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state may also affect infrastructure estimates. For example, 8 of the 10 states with the greatest
number of “large” community water systems, serving more than 100,000 people, also had the
highest estimated needs.49 Of the 461 large community water systems, 284 are located in these 8
states.50
Another factor leading to increased needs could be improved capacity by states and water systems
to estimate needed projects. Between the publication of the two most recent surveys (i.e., the
sixth and seventh), Congress enacted SDWA capacity development revisions, which encourage
asset management. The increase in total drinking water infrastructure needs between the two
latest surveys could be partially attributed to better project identification due to water systems’
asset management activities. The scale of the effect of these more recent statutory changes is
challenging to assess, however, as EPA’s questionnaire relied upon an asset management
approach that was in place since the third survey in 2003.
Deferred maintenance of existing infrastructure may be another factor contributing to the increase
in drinking water infrastructure needs. Federal support through the DWSRF is available for
capital infrastructure improvements, not for O&M costs.51 In 2000, EPA calculated that O&M
spending comprised 70% of total drinking water infrastructure spending, and anticipated that
O&M costs would increase as infrastructure ages.52 Increasing O&M costs may challenge water
systems’ finances, particularly if such systems keep customer rates constant.53 One potential way
that water systems may manage increasing O&M costs is to postpone (i.e., defer) capital
infrastructure projects, using funds set aside for those purposes to pay for O&M. Accordingly,
increasing O&M costs may result in increased need for capital infrastructure projects. EPA argued
that deferring capital projects may further drive costs upward, as deteriorating infrastructure
likely requires more spending (than making repairs before deterioration) to maintain levels of
service.54
Treatment Need
Generally, identifying factors that affect specific categories of need is not straightforward. In
EPA’s needs survey, the “treatment” category demonstrates the range of factors that may
influence a project category. Since the 1996 SDWA amendments, EPA has not finalized any
drinking water regulations for new contaminants, but has proposed regulations covering several
new contaminants.55 The agency has also revised or announced that it intends to revise

Totals and Components of Change: 2020-2022. Data from the first and second surveys not included in the average
calculations. Appendix C contains state-by-state details.
49 CRS analysis of EPA’s seven drinking water infrastructure needs surveys and EPA’s Safe Drinking Water
Information Systems, Water System Summary report, generated November 9, 2023. The search parameters were
“community water systems” not including those owned by the federal government. Data on state populations identified
in the U.S. Census Bureau’s 2000-2010 Intercensal Estimates; State Population Totals: 2010-2019; and State
Population Totals and Components of Change: 2020-2022. Data from the first survey are not included in these
calculations, as U.S. Census Bureau population estimates for 1997 were not readily available.
50 EPA, Safe Drinking Water Information Systems (SDWIS), Water System Summary report, generated November 9,
2023. The search parameters were “community water systems” not including those owned by the federal government.
51 SDWA §1452(a)(2)(B); 42 U.S.C. §300j-12(a)(2)(B).
52 EPA, The Clean Water and Drinking Water Infrastructure Gap Analysis.
53 EPA, The Clean Water and Drinking Water Infrastructure Gap Analysis.
54 EPA, The Clean Water and Drinking Water Infrastructure Gap Analysis.
55 For example, EPA proposed a drinking water regulation to cover six per- and polyfluoroalkyl substances (PFAS).
CRS In Focus IF12367, Safe Drinking Water Act: Proposed National Primary Drinking Water Regulation for Specified
PFAS contains more information on this proposal.
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regulations for existing contaminants. As such, factors other than new federal regulations may
influence the increases in this category of need. These factors could include anticipation of a
proposed drinking water regulation, treatment projects to address deteriorating source waters, or
projects to address state-promulgated drinking water regulations.
The first through sixth reports specifically identified the cost of projects needed for compliance
with existing or proposed SDWA regulations. In addition to costs associated with existing SDWA
regulations, the second through fifth reports identified treatment costs associated with proposed
or recently promulgated regulations based on such regulations’ economic analyses.56 EPA’s
seventh report did not identify the cost of projects needed for compliance with existing or
proposed SDWA regulations.57 Given the seventh report’s September 2023 publication date, it is
uncertain if that report includes costs to comply with EPA’s March 2023 proposed drinking water
regulation for per- and polyfluoroalkyl substances (PFAS).58 EPA’s economic analysis for the
proposed PFAS regulation estimates that annual water system treatment costs, including O&M,
could range from $640.9 million to $791.6 million in 2022 dollars.59 It is not clear what portion of
these annual treatment cost estimates would be for installing treatment technology rather than
O&M.
Transmission and Distribution Need
An estimated 2.2 million miles of pipe comprise the transmission lines and distribution mains that
provide treated water to those served by the nation’s approximately 50,000 community water
systems.60 EPA states that the distribution and transmission network comprises the majority of a
water system’s capital value.61 This network being the largest asset of a water system could
explain why this project category’s needs represent the majority of overall drinking water
infrastructure need.
Infrastructure age and soil characteristics affect the need for transmission and distribution
projects. In 2022, EPA estimated that the useful life of transmission lines and distribution mains
ranges from 35 to 40 years.62 Previously, EPA reported that the majority of the nation’s
transmission and distribution systems were constructed after the 1960s,63 meaning that much of
the nation’s transmission and distribution network is at the end of its useful life. Yet, the
deterioration rate of these piped networks varies depending on water system age, climatic
conditions, pipe material, water characteristics, and soil properties. EPA notes that pipes of the
same material can last anywhere from 15 years to more than 200 years based on the
characteristics of the soil.64 Further, the rate that pipes deteriorate is affected by the relative age of

56 See Table B-1 for details on needs associated with existing or proposed SDWA regulations.
57 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Seventh Report to Congress.
58 For more information about this proposed regulation, see CRS In Focus IF12367, Safe Drinking Water Act:
Proposed National Primary Drinking Water Regulation for Specified PFAS, by Elena H. Humphreys.
59 EPA, “PFAS National Primary Drinking Water Regulation Rulemaking,” 88 Federal Register 18638-18754, March
29, 2023. “Table 37—National Annualized Costs, Proposed Option” presents the treatment costs in 2021 dollars as
$617.1 million to $762.5 million. CRS calculated FY2022 dollars using price index data from line 42, “water systems,”
of U.S. Bureau of Economic Analysis (BEA), “Table 5.9.4. Price Indexes for Gross Government Fixed Investment by
Type,” accessed October 17, 2023.
60 EPA, Drinking Water Infrastructure Needs Survey and Assessment: Sixth Report to Congress.
61 EPA, The Clean Water and Drinking Water Infrastructure Gap Analysis.
62 EPA, Asset Management: A Handbook for Small Water Systems, EPA 816-R-21-006, Washington, DC, April 2022.
63 EPA, Using DWSRF Funds for Transmission and Distribution Infrastructure Needs, EPA 816-F-03-003,
Washington, DC, February 2003.
64 EPA, The Clean Water and Drinking Water Infrastructure Gap Analysis.
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the transmission and distribution system, with older pipes deteriorating at a faster rate than newer
pipes.65
Congressional Prioritization of Needs
Congress has both explicitly and implicitly prioritized certain types of drinking water
infrastructure needs. Statutory requirements provide examples of explicit congressional
prioritization, and federal funding decisions arguably provide examples of implicit prioritization.
While federal spending remains a small percentage of overall public spending in this sector, an
evaluation of federal funding levels and allocation (i.e., which types of projects receive support)
provides an indication of congressional prioritization of needs. The primary federal drinking
water infrastructure assistance program is the DWSRF, though other programs exist that may
support such projects.66
From the time of the program’s establishment, Congress has explicitly prioritized certain types of
needs within the DWSRF. Congress established the DWSRF, in part, to support communities’
compliance with newly adopted federal drinking water regulations, some of which required
infrastructure improvements for certain systems. Under the DWSRF, Congress requires that states
prioritize projects that are needed to address the most serious human health risks, that are
necessary to ensure SDWA compliance, and that assist systems most in need on a per-household
basis according to state affordability criteria.
Over time, Congress has clarified the eligibility provisions for the DWSRF program. Before
2018, the act did not identify specific project types eligible for the DWSRF, providing instead that
they be focused on SDWA compliance or needed to further the act’s public health protection
goals. Yet, SDWA does explicitly exclude projects needed to support population-related growth
from being eligible for DWSRF assistance, as well as O&M expenditures.67 Aside from these
limitations, SDWA delegated to EPA to clarify which project types would meet statutory
objectives. In more recent amendments to the DWSRF, Congress explicitly added that among the
types of projects eligible are rehabilitation and replacement projects.68 These changes indicate
congressional support for more routine needed projects. This clarification may be related to
findings from the needs survey that the proportion of SDWA regulatory need has decreased as a
proportion of the total need.
Other legislative activities provide further indication of congressional support for specific types
of needs. For example, Congress has provided additional support to address the needs of
communities that may be challenged to afford drinking water infrastructure projects. Recent
DWSRF amendments authorize states to provide more “additional subsidization” (e.g., principal
forgiveness) rather than a subsidized loan for communities that meet state affordability criteria.
Further, in the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5), Congress
began explicitly directing states through appropriations to use a percentage of their DWSRF
capitalization grant for additional subsidization. More recently, in the Infrastructure Investment
and Jobs Act (IIJA; P.L. 117-58), Congress increased the percentage dedicated to additional

65 EPA, Using DWSRF Funds for Transmission and Distribution Infrastructure Needs.
66 See CRS Report R46471, Federally Supported Projects and Programs for Wastewater, Drinking Water, and Water
Supply Infrastructure, coordinated by Jonathan L. Ramseur, for more details on these programs.
67 42 U.S.C. §300j-12(g)(3).
68 America’s Water Infrastructure Act of 2018 (AWIA; P.L. 115-270) revised the DWSRF provisions to expressly state
that DWSRF funds can be used for projects to replace or rehabilitate aging treatment, storage, or distribution systems.
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subsidies in the DWSRF supplemental appropriations, and amended SDWA to increase the
amount of additional subsidization that states were required to provide.69
Congressional funding decisions also indicate prioritization of specific needs. This prioritization
may include increased appropriations for specific drinking water financial assistance programs as
well as dedicated funding to certain types of projects through appropriations. For example,
through IIJA, Congress provided additional funding for projects needed to address sources of
contamination that may be the result of prior practices or legacy industrial activity. IIJA provides
$3.0 billion to the DWSRF, beginning in FY2022, to support LSL replacement projects. Given
that the use of LSLs was popular during a particular time period, these appropriations may be
intended to assist communities that have a need due to the time of their development. Further, in
the National Defense Authorization Act for Fiscal Year 2020 (P.L. 116-92), Congress authorized a
grant program within the DWSRF for projects to address emerging contaminants, specifically
focused on PFAS.70 IIJA provided $4.0 billion over five fiscal years, beginning in FY2022, for
this grant program. The federal funding Congress provided for these specific types of projects—
to address sources of the contamination from plumbing practices from years ago,71 or from prior
industrial activity72—is another example of how Congress has provided support for specific
needs.
Outside of the DWSRF, Congress has prioritized certain projects and communities’ needs through
funding decisions in other statutes and programs. For example, the Water Infrastructure
Improvements for the Nation Act (WIIN Act; P.L. 113-422), America’s Water Infrastructure Act
of 2018 (AWIA; P.L. 115-270), and IIJA added a number of grant programs to SDWA. Some of
these programs were created to address lead in drinking water through “lead remediation
activities” and/or testing for lead in school and childcare program drinking water, or assisting
disadvantaged or “underserved” communities with projects needed for SDWA compliance.
Annual appropriations acts have provided appropriations for some, but not all, of these authorized
grant programs.73
Prioritization Mechanisms
Under some federal financial assistance programs, Congress has established different
mechanisms to determine which needs to support. For example, under the Water Infrastructure
Finance and Innovation Act (WIFIA) program,74 Congress directs EPA to prioritize credit

69 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.
70 Congress authorized appropriations of $100 million annually from FY2020 through FY2024 for this grant program.
As discussed in “Treatment Need,” the extent to which the treatment needs for PFAS were included in the seventh
survey is unclear.
71 For more information, see CRS Report R46794, Addressing Lead in Drinking Water: The Lead and Copper Rule
Revisions (LCRR), by Elena H. Humphreys.
72 For more information, see CRS Report R45986, Federal Role in Responding to Potential Risks of Per- and
Polyfluoroalkyl Substances (PFAS), coordinated by Elena H. Humphreys.
73 See the following CRS In Focus reports for details. CRS In Focus IF10883, Overview of U.S. Environmental
Protection Agency (EPA) Water Infrastructure Programs and FY2018 Appropriations; CRS In Focus IF11485, U.S.
Environmental Protection Agency (EPA) Water Infrastructure Programs and FY2020 Appropriations; CRS In Focus
IF11724, U.S. Environmental Protection Agency (EPA) Water Infrastructure Programs and FY2021 Appropriations;
CRS In Focus IF12103, U.S. Environmental Protection Agency (EPA) Water Infrastructure Programs and FY2022
Appropriations; CRS In Focus IF12309, U.S. Environmental Protection Agency (EPA) Water Infrastructure Programs
and FY2023 Appropriations.
74 The Water Resources Reform and Development Act of 2014 authorized the Water Infrastructure Finance and
(continued...)
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assistance and/or direct loans using broad selection criteria such as the water infrastructure
project’s national or regional significance with respect to economic and public benefits,
creditworthiness, and readiness.75 Further, WIFIA establishes a minimum project cost of $20.0
million or of $5.0 million for communities of 25,000 or fewer individuals, indicating a
prioritization of larger-scale projects. This program may be seen to complement the DWSRF
program, which is generally used for smaller-scale projects.76
Congressional mechanisms to address drinking water infrastructure needs go beyond structuring
assistance. For example, as previously noted, Congress amended SDWA in 2018 to encourage
water systems to adopt asset management plans.77 Other enacted SDWA amendments have
involved developing water system financial capacity, as well as technical and managerial
capacities, to comply with SDWA, including limiting assistance for systems that lack such
capacity. The existing SDWA capacity development provisions are consistent with EPA’s, states’,
and communities’ increased focus on alternative management and financing strategies to address
costs and promote greater financial self-reliance among water systems.
Role of “Earmarks”
Another mechanism indicating the prioritization of certain communities’ needs is the process of
earmarking funds for such communities’ projects. The 117th Congress reestablished the practice of
funding water infrastructure projects directly through community project funding/congressionally
directed spending (CPF/CDS) items, which are commonly referred to as earmarks.78 Congress
determines directly through the annual appropriations process the community projects that
receive an earmark. In contrast, under the DWSRF, states identify projects to be funded on the
IUP.
Congress may decide to use this mechanism of prioritization for a number of reasons. In some
cases, a community may have been unsuccessful in seeking state approval to fund a project under
the DWSRF or been unsuccessful under another program. Further, Congress may consider a more
direct role given the timing of specific water infrastructure projects. For some communities, the
cost of a project financed through a subsidized loan could be deemed unacceptably high, because
repaying the loan would result in increased user fees that may be challenging for customers. In
addition, Congress may directly assist communities that may be challenged in applying for
DWSRF assistance or may lack the capacity to do so. Accordingly, earmarks are another
mechanism by which certain communities’ needs are prioritized.
Considerations for Congress
EPA’s reports on drinking water infrastructure needs raise several considerations for Congress.
Given congressional activities to support drinking water infrastructure needs, one consideration

Innovation Act (WIFIA) program to promote development of and private investment in water infrastructure projects
(33 U.S.C. §§3901-3914).
75 33 U.S.C. §3907(b).
76 According to EPA’s 2022 National Information Management System report, the average assistance agreement
amount in FY2022 was $3.0 million for the DWSRF. See EPA, “Drinking Water State Revolving Fund National
Information Management System Reports,” https://www.epa.gov/dwsrf/drinking-water-state-revolving-fund-national-
information-management-system-reports.
77 SDWA §1420; 42 U.S.C. §300g-9.
78 CRS Report R47633, The Role of Earmarks in CWSRF and DWSRF Appropriations in the 117th Congress, by Elena
H. Humphreys, contains more details on this practice.
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might involve how well the needs estimates align to these priorities. Another consideration might
involve the data collection methods used to estimate needs, and the potential tradeoffs of EPA’s
estimation method. In addition, a consideration for Congress may involve the scale of needs
estimated by the seventh survey, and how the funding aligns to the state distribution of needs.
Needs Estimates and Congressional Priorities
Given EPA’s publication of the seventh report, one consideration for policymakers might be how
well the needs surveys align with congressional priorities, particularly given the role of the survey
in determining state DWSRF allotments. As discussed above, Congress has determined that
different needs warrant different levels and different types of support. For example, SDWA
requires states to prioritize projects needed for regulatory compliance when providing financial
support through the DWSRF. In its seventh survey report, EPA did not explicitly identify needs
for SDWA compliance. Estimates of these needs may be relevant given EPA’s March 2023
proposed PFAS regulation.79 EPA’s proposed regulation estimated that water bills for households
served by systems that have to install treatment to address PFAS or change a water source may
increase annually by $12.48 to $1,174 (in 2022 dollars).80 It is unclear whether needed treatment
projects to address PFAS are included in the seventh survey.
In addition, recent amendments to SDWA indicate support for assisting disadvantaged
communities with needed projects. So far, the needs surveys have not specifically reported on the
estimated needs of disadvantaged communities. An example of how Congress has amended
SDWA to align the needs survey to congressional priorities is the AWIA amendments, which
require EPA to report on LSL replacement costs. Other amendments to align the survey with
specific categories of needs (e.g., regulatory) or to certain communities (e.g., disadvantaged
communities) could be an option for Congress as it considers the latest needs survey results in the
context of recent congressional priorities. Deliberations may include whether the needs survey
could better capture explicit or implicit congressional priorities.
Survey Data Collection
Another consideration for policymakers regards the needs surveys’ data collection methods. The
data collection methods used to estimate needs vary depending on the size of water systems. For
each report, EPA sends questionnaires to all larger water systems in each state. Therefore, the
larger systems’ needs are based on actual responses from such systems. Smaller systems’ needs
are either extrapolated using a sample from existing systems or projected based on prior sampling
efforts.
This approach accounts for the different capacities of systems and reduces administrative burdens
for EPA. Yet, this practice may raise questions about the survey results’ utility in determining
allotments of DWSRF capitalization grants. The methods employed to calculate smaller systems’

79 See CRS In Focus IF12367, Safe Drinking Water Act: Proposed National Primary Drinking Water Regulation for
Specified PFAS, by Elena H. Humphreys, for more details.
80 EPA, Proposed PFAS Rule Economic Analysis: Table C-37, Mean Annualized Cost per Household in CWSs that
Treat or Change Water Source, Proposed Option (PFOA and PFOS MCLs of 4.0 ppt and HI of 1.0) (Commercial Cost
of Capital, $2021), Washington, DC, March 2023. CRS calculated FY2022 dollars using price index data from line 42,
“water systems,” of U.S. Bureau of Economic Analysis (BEA), “Table 5.9.4. Price Indexes for Gross Government
Fixed Investment by Type,” accessed October 17, 2023. Household-level costs vary widely depending on factors such
as water source quality and needed treatment, as well as the customer base of the water system. For example, these
costs may be higher for smaller systems that require advanced treatment to comply with the PFAS regulation, and
lower for larger systems that switch or blend water sources to comply with the regulation.
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needs involve a higher degree of uncertainty than for larger systems. As such, this could result in
an overestimation or underestimation of need for these systems.
In particular, the survey’s approach raises questions over the reliability of the data used to
estimate the bulk of the needs. From the first to the seventh survey, a majority of the total
estimated need has been calculated based on projected data or a sample of systems. In the latest
survey, roughly 62% of the total estimated need is based on projections from a sample or
projected data. As discussed in the “Estimating Drinking Water Infrastructure Need” section,
some partial participation states may have estimated needs based solely on projected data or a
sample for some surveys. Over the seven surveys, EPA has employed approaches intended to
ensure that sampling methodology is statistically sound, yet it is noteworthy that the majority of
the estimated needs are calculated based on either a sample approach or projections.
In addition, some may question whether the estimates appropriately account for geographical
factors and differences, particularly for medium systems. For example, for partial participation
states, medium systems’ needs are projected based on estimated data from other states’ medium
systems. The costs to complete projects may vary significantly depending on where the project is
located (e.g., in California versus in Alaska).
While the needs survey reports involve projections, tradeoffs exist to using more expansive
approaches to estimate water system needs. For example, requiring EPA to survey all or most
systems for each report would likely increase significantly the time and resources required to
complete the survey. Further, given the scale of needs for these smaller community water
systems, it is uncertain whether the accuracy gained by more robust surveying would result in
significant increases in the total need, though such an expanded approach may change the
distribution of some states’ estimated need. One question may be whether the accuracy gained
would warrant the increased resources required. Estimating the infrastructure needs of systems
and states requires EPA to develop an approach that balances the agency’s resources with the
objective of accuracy.
Regarding accuracy, other questions may include whether EPA has assessed the precision of prior
samples’ estimates or projections. Based on information provided in the seven reports, it is
uncertain if the agency has made such assessments. Making such assessments would likely
require additional resources to determine whether such needed projects materialized as the survey
estimated.
Understanding the scale of uncertainty may provide information to policymakers. In 2002, the
U.S. Government Accountability Office (GAO) recommended that EPA report the needs
estimates’ level of precision to account for uncertainty.81 Generally, EPA reports that the agency’s
objective is to be 95% confident that the needs of medium and large systems (serving 3,300 or
more individuals) is within 10% of the estimates for states that fully participate in the survey.
Given this level of uncertainty, one consideration may involve whether a higher degree of
precision is needed, particularly given the use of the results of the survey to allot DWSRF funds
among the states. Yet, as discussed, achieving a greater degree of precision may involve
additional resources and time for EPA, states, and water systems. Given these tradeoffs, the use of
the needs survey to identify the 20-year infrastructure need, and further calculate DWSRF
capitalization grants, may warrant attention, particularly given questions over the
representativeness of the majority of the estimated needs. At the same time, other federal
assistance programs for infrastructure projects are not structured to distribute assistance based on

81 U.S. Government Accountability Office, Drinking Water: Key Aspects of EPA’s Revolving Fund Program Need to
Be Strengthened, 02-135, January 2002, https://www.gao.gov/assets/a233252.html.
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needs estimated by a survey. As such, the needs survey and its role for determining state DWSRF
allotments is novel compared to other programs, such as the Clean Water State Revolving Fund.82
Scale of Needs and Investments
Other considerations for Congress involve the scale of estimated needs for states, and how the
funding provided aligns to the state distribution of overall need. The seventh report finds that
states vary significantly in their estimated needs. The two states with the highest and lowest
estimated needs provide an illustrative example. Over the next 20 years, the seventh report
estimates that Alaska’s annual need would be roughly $70.7 million (in 2022 dollars), while
California’s annual need would be $4.3 billion dollars (in 2022 dollars).83 For FY2023, Congress
provided $34.2 million for drinking water infrastructure projects to Alaska, roughly 48.3% of
Alaska’s estimated annual need; and $354.9 million to California, roughly 8.2% of California’s
estimated annual need.84 These values include funds provided as CPF/CDS items, or earmarks.
Since the establishment of the DWSRF, Alaska has received the minimum allotment percentage
of 1%, while California has generally received the highest percentage, receiving between 8% and
10% of the DWSRF appropriation available for state grants.85 At the same time, the past six
surveys indicate that Alaska’s annual need in constant dollars has not reduced over time, and
California’s need has more than doubled. This may cause some stakeholders to raise questions
over differences between the needs and the allotments. While federal spending makes up a
smaller percentage of public spending for these projects, policymakers considering this example
may explore questions over the capacity of states with larger systems and populations to pay for
needed projects, despite having larger rate bases. At the same time, an incentive exists for states
to report higher needs given the role of needs estimates in determining DWSRF allotments.
More generally, the increasing needs nationwide indicate that water system investment is not
keeping pace with the needs. On the role of water rates, the current state of water system rate-
setting practices—specifically, whether rates are set at levels that cover the full cost of providing
service, including identified future infrastructure needs—remains largely unknown at the national
level. In 2002, EPA identified that an increase in water system spending at the local level of
roughly 3% would largely close the funding gap between drinking water needs and the level of
spending.86 The results of the seventh survey indicate that gap has not been closed, as the needs
estimates have continued to increase. As such, an analysis of this topic (i.e., current rate-setting
practices) may be instructive for policymakers, particularly in light of the scale of need in the
seventh survey and deliberations over the federal role in supporting such needs.
Another question for policymakers might involve whether water systems’ ability to invest in
needed projects or establish rates that cover the full cost of providing service is affected by
customer affordability concerns. Such concerns could result in water rates set at levels below
those needed to operate sustainably. Under IIJA Section 50108, Congress has directed EPA to

82 CRS Report R47474, Clean Water State Revolving Fund Allotment Formula: Background and Options, by Jonathan
L. Ramseur, contains more details on the allotment of funds. The Clean Water Act requires a needs survey but directs
EPA to allot Clean Water State Revolving Fund capitalization grants based on a statutory formula rather than the
results of the needs survey.
83 Appendix C contains state-by-state details.
84 See more in CRS Report R47633, The Role of Earmarks in CWSRF and DWSRF Appropriations in the 117th
Congress, by Elena H. Humphreys.
85 For the American Recovery and Reinvestment Act (ARRA; P.L. 111-5) supplemental appropriations for the
DWSRF, Texas received a higher percentage than California.
86 EPA, The Clean Water and Drinking Water Infrastructure Gap Analysis.
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collect some information to assess the state of water system financial sustainability. Given the
most recent survey, congressional debate regarding the increasing drinking water infrastructure
needs, and which needs to support, is likely to continue, as are questions regarding the alignment
of the needs survey to congressional priorities, and over the reliability of the data used to estimate
needs.
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Appendix A. Selected Differences in Survey
Methods
Table A-1. Selected Differences in Drinking Water Infrastructure Needs Surveys

Notes
First Survey
Excluded nonprofit noncommunity water systems (NPNCWS)
Survey in 1995;

Published in 1997
Included dam/raw water reservoir projects

Survey of “large” community water systems (CWS) that serve more than 50,000 people

Sample of “medium” CWS that serve 3,301 to 50,000 people

Site visits to a sample of “small” CWS that serve 3,300 or fewer people
Second Survey
Aligned surveyed needs to Drinking Water State Revolving Fund (DWSRF) eligibilities
Survey in 1999;
•
Dams/raw water reservoirs excluded
Published in 2001
•
Site visits to a sample NPNCWS
Third Survey
Changed questionnaire to better capture long-term replacement/rehabilitation projects
Survey in 2003;

Published in 2005
Projected small CWS and NPNCWS costs based on site visits from 1999 survey
Fourth Survey
Changed threshold between large and medium CWS
Survey in 2007;
•
Large CWS serve more than 100,000 people
Published in 2009
•
Medium CWS serve 3,301 to 100,000 people

Site visits to a sample of small CWS that serve 3,300 or fewer people

Projected NPNCWS costs based on site visits from 1999 survey

Option for states that receive the minimum DWSRF allotment of 1% to survey only large
CWS
Fifth Survey
Projected small CWS costs based on site visits from 2007 survey; projected NPNCWS costs
Survey in 2011;
based on site visits from second survey
Published in 2013
Sixth Survey
Similar to 2011 survey, resampled a percentage of the 2011 survey’s medium systems
Survey in 2015;

Published in 2018
Projected small CWS costs based on site visits from 2007 survey; projected NPNCWS costs
based on site visits from 1999 survey
Seventh
Included estimates of lead service lines
Survey

Survey in 2021;
Site visits to a sample of small CWS that serve 3,300 or fewer people and NPNCWS
Published in 2023
Source: EPA, Drinking Water Infrastructure Needs Survey: First Report to Congress, 1997; EPA, Drinking Water
Infrastructure Needs Survey: Second Report to Congress, 2001; EPA, Drinking Water Infrastructure Needs Survey: Third
Report to Congress, 2005; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fourth Report to Congress,
2009; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fifth Report to Congress, 2013; EPA, Drinking
Water Infrastructure Needs Survey and Assessment: Sixth Report to Congress, 2018; and EPA, Drinking Water
Infrastructure Needs Survey and Assessment: Seventh Report to Congress, 2023.
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Drinking Water Infrastructure Needs: Background and Issues for Congress

Appendix B. Safe Drinking Water Act (SDWA)
Regulatory Compliance Needs
Table B-1. Estimated 20-Year Costs Needed to Comply with SDWA Regulations
(in billions, adjusted to 2022 dollars)
First
Second
Third
Fourth
Fifth
Sixth
Survey
Survey
Survey
Survey
Survey
Survey

Microbiological Contaminant
Compliance Costs
$26.4
$52.9
$70.0
$52.3
$38.7
$48.4
Chemical Contaminant
Compliance Costs
$4.9
$20.7
$24.6
$30.0
$20.9
$25.7
Total SDWA Regulatory Need
$31.4
$73.5
$94.6
$82.3
$59.6
$74.1
Percent of Total Need
9%
21%
16%
16%
11%
12%
Source: Calculated by CRS from EPA, Drinking Water Infrastructure Needs Survey: First Report to Congress, 1997;
EPA, Drinking Water Infrastructure Needs Survey: Second Report to Congress, 2001; EPA, Drinking Water Infrastructure
Needs Survey: Third Report to Congress, 2005; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fourth
Report to Congress, 2009; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fifth Report to Congress,
2013; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Sixth Report to Congress, 2018; and the U.S.
Bureau of Economic Analysis (BEA), “Table 5.9.4. Price Indexes for Gross Government Fixed Investment by
Type,” accessed October 17, 2023.
Notes: FY2022 dol ars calculated using price index data from line 42, “water systems,” of BEA Table 5.9.4.
These totals include Indian tribe and Alaska Native vil age compliance costs. EPA did not provide analogous
information in the seventh report.
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19

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First
Second
Third
Fourth
Fifth
Sixth
Seventh
Survey
Survey
Survey
Survey
Survey
Survey
Survey

NJ
$4.68
$4.31
$7.26
$6.31
$5.63
$5.52
$6.36
NM
$1.35
$1.23
$0.97
a
a
a
$1.72a
NY
$13.06
$15.49
$15.55
$21.52
$15.68
$14.64
$18.24
NC
$3.52
$3.19
$11.52
$7.98
$7.15
$10.75
$10.38
ND
$0.76
$0.58
$0.64
a
a
a
$1.64a
OH
$6.36
$5.84
$10.16
$9.99
$8.67
$8.62
$8.34
OK
$2.63
$2.76
$5.04
$3.26
$4.62
$4.41
$5.04
OR
$2.78
$3.19
$4.48
$2.21
$3.96
$4.02
$5.25
PA
$6.16
$6.19
$11.53
$9.03
$10.12
$10.79
$12.61
PR
$2.92
$2.32
$2.39
$2.01
$2.29
$2.38
$1.90
RI
$0.85
$0.68
$0.42
a
a
a
$0.95a
SC
$1.89
$0.97
$1.31
$1.29
a
$3.94
$4.20
SD
$0.74
$0.52
$1.04
a
a
a
$1.13a
TN
$2.42
$1.66
$2.91
$2.81
$1.92
$5.64
$5.98
TX
$16.02
$15.39
$29.57
$20.73
$24.11
$29.04
$31.79
UT
$1.35
$0.61
$0.74
a
$2.65
$2.80
$2.72a
VT
$0.60
$0.36
$0.41
a
a
a
$0.92a
VA
$3.81
$2.42
$3.01
$4.81
$4.78
$5.23
$4.87
WA
$5.22
$4.65
$7.00
$7.74
$6.77
$7.54
$8.47
WV
$1.41
$1.20
$0.90
a
a
a
$2.37a
WI
$2.42
$3.65
$6.23
$4.91
$5.08
$5.51
$6.10
WY
$0.51
$0.52
$0.31
a
a
a
$0.82a
Source: CRS analysis from EPA, Drinking Water Infrastructure Needs Survey: First Report to Congress, 1997; EPA,
Drinking Water Infrastructure Needs Survey: Second Report to Congress, 2001; EPA, Drinking Water Infrastructure
Needs Survey: Third Report to Congress, 2005; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fourth
Report to Congress, 2009; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Fifth Report to Congress,
2013; EPA, Drinking Water Infrastructure Needs Survey and Assessment: Sixth Report to Congress, 2018; and EPA,
Drinking Water Infrastructure Needs Survey and Assessment: Seventh Report to Congress, 2023; and the U.S. Bureau of
Economic Analysis (BEA), “Table 5.9.4. Price Indexes for Gross Government Fixed Investment by Type,”
accessed October 17, 2023.
Notes: EPA’s needs surveys provide estimated drinking water infrastructure needs over a 20-year period. This
table presents each needs survey’s annual estimated needs by state. FY2022 dol ars calculated using price index
data from line 42, “water systems,” of BEA Table 5.9.4. This table includes estimated needs for states and Puerto
Rico.
a. Indicates a partial participation state. These states receive the 1% minimum DWSRF allotment and chose
not to conduct the survey for medium water systems. For the seventh survey, EPA calculated medium
system needs in these states based on average medium system needs nationally. EPA did not calculate state-
level needs for the partial participation states in the fourth through sixth surveys.

Congressional Research Service

21

Drinking Water Infrastructure Needs: Background and Issues for Congress

Author Information

Elena H. Humphreys

Analyst in Environmental Policy

Acknowledgments
Amber Hope Wilhelm, CRS Visual Information Specialist, provided graphics support for this report.
Michael M. McCarthy, CRS Office of Publishing Editor, provided formatting and editorial support.

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
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