Part 4 of 5
Congress Responds With Funding For Drinking Water Infrastructure
In the 4th article of our 5-part series we focus on Congress responding to the challenges facing U.S. drinking water infrastructure. Congress is responding in a bipartisan fashion by providing funding to critical @EPA drinking water infrastructure financing programs. Two of the most prominent @EPA drinking water infrastructure programs are the Drinking Water State Revolving Fund (DWSRF) and the Water Infrastructure Finance and Innovation Act (WIFIA ) program. In general, both programs help water systems finance drinking water infrastructure projects and related activities.
Drinking Water State Revolving Fund
The DWSRF is a partnership between the federal government and states whereby @EPA awards capitalization grants to help water systems ensure safe drinking water. States provide a 20% match. The total funds are placed in a state’s dedicated revolving loan fund for eligible drinking water infrastructure projects. As money is paid back into the state’s revolving loan fund, the state makes new loans to other recipients. These recycled repayments of loan principal and interest earnings allow the state’s DWSRF to “revolve” over time. Since its creation in the 1996 amendments to the Safe Drinking Water Act (42 U.S.C. § 300j-12) the DWSRF has provided over $20 billion through FY 2018 for projects such as:
- improving drinking water treatment
- fixing leaky or old pipes (water distribution)
- improving source of water supply
- replacing or constructing finished water storage tanks
- other infrastructure projects needed to protect public health
In 2018 Congress reauthorized the DWSRF in the America’s Water Infrastructure Act of 2018 (AWIA). AWIA amended the list of eligible uses for DWSRF funding and gave states new authorities and requirements for administering the program.
This year in their annual FY 2020 appropriations bill for the Departments of Interior and Environment, the U.S. House of Representatives provided the AWIA-authorized amount of $1.3 billion for the DWSRF. AWIA ramps up federal spending for the DWSRF through FY 2021 when the authorized level of funding is $1.95 billion. Keeping the total @EPA funding constant ($8.058 billion) that means Congress is increasing funding for the DWSRF by 6% over the period FY 2019-2021.
In 2014 Congress created the Water Infrastructure Finance and Innovation Act (WIFIA) program. The WIFIA program also provides financing to local, state, tribal and federal entities, partnerships, joint ventures, corporations, trusts & Clean Water and DWSRF programs. The loans maintain low, fixed interest rates and the financial terms are flexible. Eligible projects include:
- Wastewater conveyance and treatment projects,
- Drinking water treatment and distribution projects,
- Enhanced energy efficiency projects at drinking water and wastewater facilities,
- Desalination, aquifer recharge, and water recycling projects,
- Acquisition of property if it is integral to the project or will mitigate the environmental impact of a project, and
- A combination of eligible projects secured by a common security pledge or submitted under one application by an SRF program.
The first year of funding for the WIFIA program occurred in FY 2017. Congress provided $30 million for WIFIA ($25 million for EPA to provide loan guarantees for water infrastructure projects and $5 million for administrative costs). In FY 2018 Congress appropriated $63 million for WIFIA. For FY 2019, $68 million was appropriated for WIFIA. Currently in the Interior and Environment Appropriations bill for FY 2020 the House is recommending $50 million for FY 2020, a reduction of $18 million.
House Members Ready Water Legislation to Attach to Larger Infrastructure Package
Members of Congress and the White House are continuing to work on a bipartisan infrastructure package that some have touted could total up to $2 trillion. While details remain to be negotiated, the House Energy and Commerce (E&C) Committee and Transportation and Infrastructure Committee have been continuing hearings on the infrastructure package.
Chairman of the Energy & Commerce Subcommittee on Environment and Climate Change, Paul Tonko (D-NY) has legislative language ready to include drinking water infrastructure in any comprehensive infrastructure package that begins moving in Congress. The legislation would significantly increase the authorization of spending on drinking water infrastructure to $4.14 billion in FY 2022, $4.8 billion in FY 2023 and $5.5 billion in FY 2024. Below is a chart showing the historic enacted level of appropriations for the Drinking Water State Revolving Fund and the proposed level of appropriations in future years. As evidenced, Congress understands the challenges the U.S. faces with its deteriorating drinking water infrastructure as it continues to prioritize annual funding.