Congress Passes Historic Infrastructure Bill Including Billions in New Federal Water Funds

Congress Passes Historic Infrastructure Bill Including Billions in New Federal Water Funds

Rural Water’s small and rural community membership secured a massive legislative victory on Friday when the House passed the Infrastructure Investment and Jobs Act (H.R.3684) by a 228-206 vote. This $1.2 trillion infrastructure investment bill passed the Senate back in August and now heads to the President’s desk for his imminent signature. The historic legislation includes $55 billion for drinking water and wastewater infrastructure (read EPA’s statement here) and the funding is mainly appropriated through the following state revolving fund provisions:

  • The Drinking Water State Revolving Fund (DWSRF) is funded for a total of $11.713 billion over five years: $1.902 billion for Fiscal Year (FY) ‘22, $2.202 billion for FY ‘23, $2.403 billion for FY ‘24, and $2.603 billion for FY ‘25-’26.  FY ‘22 and FY ‘23 funds require a 10% state match while FY ‘24-‘26 require a 20% match.  49% of the funds shall be used to provide additional subsidy to eligible recipients in the form of assistance agreements with 100% principal forgiveness or grants or a combination of the two. Up to 3% of FY ‘22 funding and 2% of FY ‘23-’26 funding is for salaries and administration.
  • A new dedicated lead service line replacement fund within the DWSRF is funded for a total of $15 billion through the DWSRF, $3 billion for each of five fiscal years (FY ‘22-’26).  Eligible activities include identification, planning, design, and replacement of lead service lines with 49% of the funds dedicated entirely for principal forgiveness or grants.  Funds provided under this new program are not subject to the matching or cost-share requirements.  Up to 3% of FY ‘22 funding and 2% of FY ‘23-’26 funding is directed to salaries and administration.
  • A new dedicated fund within the DWSRF for emerging contaminants focuses on PFAS and is funded for a total of $4 billion ($800 million for each of five fiscal years, FY ‘22-’26).  There is no matching requirement for the states.  100% of the funds are dedicated to principal forgiveness or grants or a combination of the two.  Up to 3% of FY ‘22 funding and 2% of FY ‘23-’26 funding is for salaries and administration.
  • A new dedicated fund for grants to Small and Disadvantaged Communities to target emerging contaminants is funded for a total of $5 billion ($1 billion each for each fiscal year, FY ‘22-’26).  EPA’s Small and Disadvantaged Communities’ program is defined in subsections (a) through (j) of section 1459A of the Safe Drinking Water Act (link).  No state match is required, and up to 3% of FY ‘22-’26 funding is to be used for salaries and administration.
  • The Clean Water State Revolving Fund (CWSRF) is provided with a total of $11.7 billion over five years, $1.902 billion for FY ‘22, $2.202 billion for FY ‘23, $2.403 billion for FY ‘24, and $2.603 billion for FY ‘25-‘26.  FY ‘22 and FY ‘23 funds require a 10% state match while FY ‘24-’26 require a 20% match.  49% of the funds shall be used to provide additional subsidy to eligible recipients in the form of assistance agreements with 100% principal forgiveness or grants or a combination of the two.  Up to 3% of FY ‘22 funding and 2% of FY ‘23-26 funding is for salaries and administration.
  • A new dedicated fund for grants within the CWSRF to address emerging contaminants is included in the bill with $100 million for FY ‘22 and $225 million for FY ‘23-26.  No state match is required.  100% of the funds are dedicated to principal forgiveness or grants or a combination of the two.  Up to 3% of FY ‘22 funding and 2% of FY ‘23-26 funding is for salaries and administration.

A special thanks to the Delaware Rural Water Association (DRWA), West Virginia Rural Water Association (WVRWA), and Wyoming Association of Rural Water Systems (WARWS) whose members were invited to testify in the Senate in support of the water provisions in the bill. DRWA and WVRWA testified in favor of additional grant assistance and targeting of state revolving funding for rural and small communities – as well as additional on-site technical assistance – both of which were prioritized in the legislation. The bill includes approximately $55 billion in EPA water programs, mainly in the state revolving funds directed to new federal priorities such as removal of lead service lines and grants to small and disadvantaged communities, spread out over five years.  

“On behalf of all small and rural communities across the country, the National Rural Water Association (NRWA) is extremely grateful for Congress’ historical bipartisan water infrastructure legislation, The Infrastructure Investment and Jobs Act,” said Matt Holmes, NRWA CEO. 

“This legislation and water infrastructure funding will be remembered as one of the most significant public water and wastewater initiatives in the country, especially in rural America. NRWA enthusiastically supports the enactment of the bill and appreciates the beneficial provisions for rural America. The legislation includes numerous helpful necessities such as an increase in state revolving funds, targeted funding to rural and small communities and expansion of on-site technical assistance programs,” Holmes said.

Additionally, this legislation does not include any new federal mandates on local governments. Small and rural communities have more difficulty affording public drinking water and wastewater service due to lack of population density and lack of economies of scale. Likewise, they have a much more challenging time complying with federal Clean Water Act (CWA) permits and Safe Drinking Water Act (SDWA) regulations. The Infrastructure Investment and Jobs Act addresses this challenge by directing the new $55 billion in water infrastructure funding to disadvantaged communities and by providing enhanced technical assistance.