Water Infrastructure Projects Designated in EPA Appropriations: Trends and Policy Implications
Congressional research reportOct 30, 2014
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Water Infrastructure Projects Designated in
EPA Appropriations: Trends and Policy
Implications
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Specialist in Resources and Environmental Policy
October 30, 2014
Congressional Research Service
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RL32201
Water Infrastructure Projects Designated in EPA Appropriations
Summary
Designating funds within appropriations legislation for specified projects or locations has been a
way for Congress to help communities meet needs to build and upgrade water infrastructure
systems, whose estimated future funding needs exceed $630 billion. Such legislative action has
often been popularly referred to as earmarking. This report discusses appropriations for water
infrastructure programs of the Environmental Protection Agency (EPA), focusing on such
designations in the account that funds these programs. Information on the programmatic history
of EPA involvement in assisting wastewater treatment and drinking water projects is provided in
two appendixes.
Congressional appropriators began the practice of supplementing appropriations for the primary
Clean Water Act (CWA) and Safe Drinking Water Act (SDWA) assistance programs with grants
for individually designated projects in FY1989. These designated project grants are often referred
to as earmarks, or as STAG grants. Since 1989, of the $67 billion appropriated to EPA for water
infrastructure assistance, $7.4 billion has gone to designated project grants. Beginning in FY2000,
appropriators awarded such grants to a larger total number of projects, resulting in more
communities receiving such assistance, but at the same time receiving smaller amounts of funds,
on average.
Members of Congress may intervene to provide funding for a specific community for a number of
reasons. In some cases the community may have been unsuccessful in getting state approval to
fund the project under other programs. Some, especially small and rural communities, seek a
grant because the cost of a project financed through a state loan which must be fully repaid is
deemed unacceptably high (loans are the primary assistance under the CWA and SDWA).
However, this congressional practice has been criticized by state water program managers and
administrators of infrastructure financing programs because designated projects are receiving
more favorable treatment (55% federal grants, rather than loans) and because the practice
sidesteps the standard process of states’ determining the priority by which projects will receive
funding. Projects so funded through appropriations acts also have generally not been reviewed by
congressional authorizing committees.
Attention is often drawn to the relatively few projects that have received large special project
grants (more than $100 million), especially over multiple years. The majority of designated
projects, however, have received comparatively small amounts. More than 75% of the projects
designated in the EPA appropriations legislation received total awards (either in a single year or
over multiple years) of $2 million or less. Growing criticism of congressional earmarks resulted
in banning the practice since FY2011, but some policy makers and constituents would like to see
a return of congressionally designated special project funds for EPA’s water infrastructure and
other programs.
Congressional Research Service
Water Infrastructure Projects Designated in EPA Appropriations
Contents
Introduction...................................................................................................................................... 1
Defining Special Purpose Project Grants......................................................................................... 2
Trends in Congressionally Designated Project Grants .............................................................. 2
Project Grants for Specific Cities .............................................................................................. 5
No Special Project Grants in FY2007 or Since FY2011 ........................................................... 6
Policy Implications .................................................................................................................... 7
Conclusion ....................................................................................................................................... 8
Tables
Table 1. Water Infrastructure Grants Designated in EPA Appropriations Acts ................................ 3
Appendixes
Appendix A. Background: Federal Involvement in Wastewater Treatment................................... 10
Appendix B. Background: Federal Involvement in Drinking Water ............................................. 12
Contacts
Author Contact Information........................................................................................................... 12
Congressional Research Service
Water Infrastructure Projects Designated in EPA Appropriations
Introduction
Designating funds within appropriations legislation for specified projects or locations has been a
way for Congress to provide funding for designated communities to build and upgrade water
infrastructure systems. In the past, such legislative action has often been popularly referred to as
earmarking. The future needs for projects to treat municipal wastewater or treat and deliver public
drinking water supplies in the United States are large—$298 billion for wastewater treatment and
$335 billion for public water systems, according to the most recent estimates reported by states
and the Environmental Protection Agency (EPA).1
Federal funding to assist communities in meeting the goals and requirements of environmental
laws has been provided first through programs in the Clean Water Act and also, more recently,
through a program in the Safe Drinking Water Act. Under the core assistance programs in these
acts, Congress annually appropriates block amounts which are allocated among states according
to specified allotment formulas. States, then, make assistance awards to individual communities.
Since 1972, Congress has provided more than $100 billion for these core programs. Under both
laws, federal funds capitalize state revolving funds (SRFs), which states then use to make loans to
communities for water infrastructure capital projects. Local communities, in turn, repay loans to
the state revolving fund, not the federal government.
In FY1989, congressional appropriators began the practice of supplementing appropriations for
the SRF programs with designated project grants in the EPA appropriations account that funds
Clean Water Act and Safe Drinking Water Act assistance. Unlike loans under the two SRF
programs, these grants generally are provided on the basis of 55%-45% federal-local cost sharing,
with no requirement to repay the federal share. Since 1989, Congress has awarded $7.4 billion for
these grants, which have increased as a portion of appropriated water infrastructure funds in that
account. Notably since FY2000, appropriators have awarded grants to a larger total number of
specified projects (e.g., 46 in FY1995, compared with 319 in FY2010), resulting in more
communities receiving such assistance, but at the same time most of them receiving smaller
amounts of funds, on average (e.g., $18.1 million in FY1995, compared with $585,508 in
FY2010).
This report discusses appropriations for EPA water infrastructure programs, focusing on
congressional special project designations in the account that funds these programs. Because
some Members of Congress, interest groups, and Administration officials criticize these types of
congressional actions, the practice of congressionally designated special project funds for EPA’s
water infrastructure and other programs was banned in FY2011, but some policy makers and
constituents would like to see it restored. Information on the programmatic history of EPA
involvement in assisting wastewater treatment and drinking water projects also is provided in two
appendixes.2
1
U.S. Environmental Protection Agency, Clean Watersheds Needs Survey 2008, Report to Congress, Washington DC,
June 2010, 1 vol., EPA-832-R-10-002; Drinking Water Infrastructure Needs Survey, Fourth Report to Congress,
February 2009, EPA-816-R-09-001.
2
For additional background, see CRS Report RL31116, Water Infrastructure Needs and Investment: Review and
Analysis of Key Issues, by (name redacted) and (name redacted).
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Water Infrastructure Projects Designated in EPA Appropriations
Defining Special Purpose Project Grants
In appropriations legislation, funding for EPA clean water and drinking water programs is
contained in the measure providing funds for the Department of the Interior, Environment, and
Related Agencies.3 Within the portion of that bill which funds EPA, wastewater treatment and
drinking water assistance are specified in an account called State and Tribal Assistance Grants
(STAG). This appropriations account includes all water infrastructure funds, as well as
management grants that assist states in implementing air quality, water quality, and other mediaspecific environmental programs.4
Today, the STAG account includes appropriations both for the primary Clean Water Act and Safe
Drinking Water Act assistance programs (see Appendixes A and B for background) and for
congressionally designated special purpose project grants, which many persons have popularly
referred to as earmarks, or often as STAG grants. There is no single definition of the term
“earmark” that is accepted by all practitioners and observers of the congressional appropriations
process, nor has there been a standard practice across all 13 appropriations bills. While definitions
of this practice vary, an earmark generally is considered to be an allocation of resources to
specifically targeted beneficiaries. They may be proposed by the President or may be originated
by Congress. In the 110th Congress, a number of budget process reform proposals were debated,
including changes to House and Senate rules affecting earmarking, leading to Congress banning
the practice since FY2011. Although the practice is not currently in use, the focus of this report is
funds set aside within the EPA STAG account during years when it did occur to fund individual
water infrastructure projects, locations, or organizations, detailed either in the appropriations act
or the joint explanatory statement of its accompanying conference report, and not distinguishing
those requested by the Executive from those designated by Congress.
Trends in Congressionally Designated Project Grants
Pressure to provide designated special project grant funding has been evident in the
appropriations process where for several years Congress reserved as much as 30% of funds in the
account that provides clean water and drinking water assistance for specified communities. The
practice of designating a portion of the construction grants/SRF account for specific wastewater
treatment and other water quality projects began in the FY1989 EPA appropriations legislation.
Subsequently it increased as a portion of appropriated funds in the STAG account (3% of the total
water infrastructure appropriations in FY1990, for example, increasing to 31% in FY1994, but
somewhat less in recent years: 11% in FY2009 and 12% in FY2010).
The number of projects receiving these designated funds also increased: from four in FY1989 to
319 in FY2010. After FY2000, the larger total number of projects resulted in more communities
receiving such grants, but at the same time receiving smaller amounts of funds. Thus, while a few
communities received individual awards of $2 million or more, the average size of grants shrank:
3
Prior to the 109th Congress, EPA appropriations were included in legislation funding the Department of Veterans
Affairs, Department of Housing and Urban Development, and Independent Agencies (VA/HUD). In January 2005,
House and Senate Appropriations Committees reorganized, and jurisdiction over funding for EPA and several other
entities was moved to the appropriations subcommittees covering Interior and Related Agencies.
4
For additional discussion, see CRS Report 96-647, Water Infrastructure Financing: History of EPA Appropriations,
by (name redacted).
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Water Infrastructure Projects Designated in EPA Appropriations
$18.1 million in FY1995, $4.9 million in FY1999, $1.08 million in FY2006, and $585,508 in
FY2010. See Table 1 for additional detail. Conference reports on the individual appropriations
bills provide some description of projects funded in this manner, but the text is typically very
brief.
The effective result of using substantial amounts for congressionally designated project grants has
been to reduce the amount of funds provided to states to capitalize their revolving loan programs.
Of the $67 billion appropriated to EPA for water infrastructure programs since 1989 (both for
wastewater, under the Clean Water Act, and drinking water projects, under the Safe Drinking
Water Act), $7.4 billion, or 11%, was directed to specified project grants.
Unlike loans under the two SRF programs, these grants generally were provided on the basis of
55%-45% federal-local cost sharing, or the maximum dollar amount specified in the
appropriations act, whichever is less, with no requirement to repay the federal share. The
matching requirements were spelled out in statutory and/or report language.5
From FY1989 to FY1995, the Boston Harbor project, discussed below, received the largest single
project grant each year ($25 million in FY1989, $100 million in FY1994). In all years except
FY2008, since FY1996, the largest single special project grant in each year’s appropriations act
was designated for “architectural, engineering, planning, design, construction and related
activities in connection with the construction of high priority water and wastewater facilities in
the area of the United States-Mexico Border” (P.L. 109-54). Earmarked appropriations for these
U.S.-Mexico Border projects have totaled nearly $815 million.
From FY1989-FY1994, designated project grants were used only to assist wastewater treatment
projects. The first two such grants for drinking water projects were provided in FY1995
appropriations legislation, two more were awarded in FY1997, and 12 (out of 42 total) were
designated in FY1998. Subsequently, the number of designations for individual drinking water
projects increased, and since FY2005, project grants were divided approximately equally between
wastewater treatment projects and projects involving drinking water or water supply. Further, for
several years, more than one-third of the individual grants were repeats, that is, grants awarded to
projects that had previously received one or more.
Table 1. Water Infrastructure Grants Designated in EPA Appropriations Acts
Fiscal Year
# of Projects
Total Grants
Average Grant
Range of Grant Awards
1989
4
$68,000,000
$17,000,000
$3 million-$25 million
1990
4
$53,000,000
$13,250,000
$6.8 million-$20 million
1991
2
$35,700,000
$17,850,000
$15.7 million-$20 million
1992
8
$435,000,000
$54,375,000
$35 million-$100 million
1993
13
$556,000,000
$42,769,231
$7 million-$100 million
1994
9
$558,000,000
$62,000,000
$10 million-$150 million
1995
46
$834,100,000
$18,132,609
$200,000-$100 million
5
See, for example, Interior Department and Further Continuing Appropriations, Fiscal Year 2010, P.L. 111-88, 123
Stat. 2936.
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Water Infrastructure Projects Designated in EPA Appropriations
Fiscal Year
# of Projects
Total Grants
Average Grant
Range of Grant Awards
1996
20
$306,500,000
$15,325,000
$150,000-$100 million
1997
21
$301,000,000
$14,333,333
$50,000-$100 million
1998
42
$393,125,000
$9,360,119
$100,000-$75 million
1999
82
$401,750,000
$4,899,390
$100,000-$50 million
2000
143
$395,344,000
$2,764,643
$285,000-$50 million
2001
244
$466,370,000
$1,911,352
$50,000-$75 million
2002
339
$458,900,000
$1,353,687
$100,000-$75 million
2003
491
$413,407,272
$841,970
$19,870-$49.7 million
2004
520
$425,077,160
$817,456
$84,598-$49.7 million
2005
669
$401,685,600
$600,427
$29,760-$49.6 million
2006
259
$288,806,966
$1,084,197
$49,300-$49.3 million
2007
2
$83,749,000
$41,874,500
$34.5 mil.-$49.3 million
2008
282
$177,192,000
$628,340
$78,750-$24.6 million
2009
303
$183,500,000
$605,611
$138,000-$20.0 million
2010
319
$186,777,000
$585,508
$68,000-$17 million
2011
2
$19,960,000
$9,980,000
$9.98 million-$9.98 million
2012
2
$14,976,000
$7,488,000
$4,99 million-$9.84 million
2013
2
$14,195,000
$7,097,500
$4.7 million-$9.5 million
2014
2
$15,000,000
$7,500,000
$5 million-$10 million
Source: Compilation by CRS of water infrastructure project grants in the VA/HUD appropriations acts for
FY1989-FY2005, the Interior, Environment, and Related Agencies Appropriations Act for FY2006, the
Consolidated Appropriations Act for FY2008 (Division F), the Omnibus Appropriations Act, 2009, the Interior,
Environment and Related Agencies Appropriations Act, 2010 the Department of Defense and Full-Year
Continuing Appropriations Act, 2011, Omnibus Appropriations Act, 2012, the FY2013 Consolidated and Further
Continuing Appropriations Act, the FY2014 Omnibus Appropriations Act, and accompanying conference
reports.
In the early years of this congressional practice, special purpose grant funding originated in the
House version of the EPA appropriations bill, while the Senate, for the most part, resisted the
practice by rejecting or reducing amounts and projects included in House-passed legislation. With
this difference in legislative approach, special purpose grant funding was an issue on several
occasions during the House-Senate conference on the appropriations bill. After FY1999, however,
both the House and Senate proposed projects in their respective versions of the EPA
appropriations bill, with the final total number of projects and dollar amounts being determined
by conferees. In addition, as it has now been 25 years since the last major amendments to the
Clean Water Act, the desire by some Members to address special needs wastewater problems that
might be debated during reauthorization of that act has increased, thus leading to greater pressure
on House and Senate Members to use the appropriations process to handle such concerns.6
6
In the 104th Congress, the House passed a comprehensive CWA reauthorization bill, H.R. 961, but provisions in it that
addressed regulatory relief and similar issues were controversial, and no further action occurred. Since the 107th
Congress, House and Senate committees have considered legislation to reauthorize water infrastructure financing
programs. The House has passed reauthorization bills twice, and legislation has been reported to the Senate, but no bill
(continued...)
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Water Infrastructure Projects Designated in EPA Appropriations
Since the practice of designating projects began to increase in the early 1990s, the position of the
Clinton, Bush, and Obama Administrations has been to propose a limited number of such grants
for inclusion in the President’s annual budget submission (such as U.S.-Mexico Border projects),
but generally to oppose the congressional practice of specifying a large number of projects as a
significant portion of funds in the STAG account, especially in recent years. Appropriators
supported most but not all projects requested by the President, while modifying the funding
amounts for some of the Administration’s requests and adding many more projects not requested
by the Administration. For example, the first Administration request for a specified project was in
the FY1992 budget. The George H.W. Bush Administration sought $400 million at that time for
grants to be directed to six projects in coastal cities. Congress agreed to funding for those six,
plus two others. Likewise, in FY1993, Congress agreed to grants for six projects requested by the
Administration, plus seven others. This pattern of Administration requests and congressional
response continued. In FY2010, the Administration requested grants for two special needs
projects; Congress funded both of them, plus 317 others.
Project Grants for Specific Cities
The four projects designated in FY1989 were projects for which funding had been authorized in
the 1987 Water Quality Act (WQA, P.L. 100-4). (These project authorizations were in Title V of
the WQA, which did not specifically amend the Clean Water Act.) The authorized projects were:
•
Boston, to provide secondary treatment of wastewater and improve the
environmental quality of Boston Harbor,
•
San Diego, to remedy discharges of untreated sewage from Tijuana, Mexico,
•
Des Moines, a sewage treatment plant project, and
•
Oakwood Beach, New York, for relocation of natural gas facilities related to two
sewage treatment facilities.
For the next two years, appropriators continued to designate only WQA-authorized projects, with
one exception. Two of these authorized projects (Boston Harbor and San Diego/Tijuana)
continued to receive some funding through FY1999, but most designations since FY1992 have
been for projects not specifically authorized in federal law.
From FY1989 to FY1999, Congress appropriated a total of $740 million for the Boston Harbor
project—the largest total amount received by a single community under provisions in the EPA
appropriations act. A few other communities have received large total amounts of such grants
over multiple years. For example, the WQA-authorized San Diego project received $235 million
over seven years, and another San Diego project for a wastewater reclamation facility received a
total of $135 million in the early 1990s. Los Angeles was awarded a total of $160 million from
FY1992-1994 for unspecified projects. New York City received $210 million in grants over that
same time period, also for unspecified infrastructure projects. Detroit has received grants totaling
$352 million since FY1992 for a project called the Rouge River Wet Weather Demonstration
Project. Designated funding in the EPA appropriations act for projects along the U.S.-Mexico
(...continued)
other than appropriations has been enacted. For information, see CRS Report R41594, Water Quality Issues in the 112th
Congress: Oversight and Implementation, by (name redacted).
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border (distributed to multiple communities) have totaled $780 million since FY1996. Projects in
Alaska Native and rural villages (also distributed to multiple locations) have been awarded $452
million since FY1995.7 The large awards for these projects tend to mask the average value of
water infrastructure designated project grants. For example, in FY2010, the average of all 319
awards was $585,508, but discounting the $30 million for Alaska Native and rural village projects
and U.S.-Mexico border projects, the average for other individual grants was $494,565.
No Special Project Grants in FY2007 or Since FY2011
For FY2007, Congress was unable to enact all appropriations bills before the start of the fiscal
year, on October 1, 2006. Final action on appropriations for EPA, as well as for other domestic
agencies and departments funded under 11 of 13 appropriations acts, was delayed until midFebruary 2007—after the FY2008 budget request had been submitted. Congress then passed a
continuing appropriations resolution providing full-year funding through the end of FY2007 (P.L.
110-5). In order to complete the unfinished business in a timely manner, House and Senate
leaders decided to include no congressional special purpose grants in the resolution, explaining
the decision in a press release.8
There will be no Congressional earmarks in the joint funding resolution that we will pass.
We will place a moratorium on all earmarks until a reformed process is put in place.
Earmarks included in this year’s House and Senate bills will be eligible for consideration in
the 2008 process, subject to new standards for transparency and accountability. We will
work to restore an accountable, above-board, transparent process for funding decisions and
put an end to the abuses that have harmed the credibility of Congress.
Under the FY2007 appropriations bill for EPA that had been under congressional consideration
during 2006 (H.R. 5386), the House would have provided $200 million for 146 special project
grants. The Senate would have provided $210 million for 195 projects. As a result of the process
adopted in P.L. 110-5, none received funding. The congressional moratorium did not apply to
special project grants requested by the Administration in the President’s FY2007 budget request;
it had sought $14.9 million for Alaska Native and rural villages, $24.8 million for U.S.-Mexico
Border projects, and $990,000 for a single project in Puerto Rico. The final result in P.L. 110-5
(see Table 1), however, provided funding for Administration priorities at the same levels that
were enacted for FY2006: $34.5 million for Alaska Native and rural villages, $49.3 million for
U.S.-Mexico Border projects, and no funding for the Puerto Rico project.
7
Some water infrastructure projects funded in the EPA bill also have received designated funding in other
appropriations acts. For example, Alaska Native and rural village projects received $217 million in Agriculture
Appropriations acts from FY1997 to FY2006. Additionally, a small number of those with grants designated in EPA
appropriations also has received funding through Energy and Water Development Appropriations acts, which fund
water programs and projects of the U.S. Army Corps of Engineers and Bureau of Reclamation. Examples of water
infrastructure projects funded in this dual manner include combined sewer overflow projects in Lynchburg and
Richmond, Virginia, and Nashua, New Hampshire; construction of alternative water supply in Jackson County,
Mississippi; and projects to support an environmental restoration plan in Onondaga Lake, New York. In general,
projects so designated in the Energy and Water appropriations bill have previously been authorized in legislation such
as Water Resources Development acts (WRDA) before receiving appropriations. Since the 1992 WRDA (P.L. 102580), Congress has authorized more than 100 Corps environmental infrastructure projects and programs in that act and
subsequent amendments to it and has provided Energy and Water appropriations to about one-half of them.
8
“Byrd-Obey Announce FY 2007 Plan,” press release, December 11, 2006. Text available at
http://appropriations.house.gov/pr_121106.shtml.
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After this single year, Congress resumed including special purpose grants in EPA’s FY2008,
FY2009, and FY2010 appropriations (see Table 1). However, again in FY2011, no special project
funding was provided for congressional projects.
Congress took only limited action on FY2011 funding for EPA before the start of the new fiscal
year on October 1, 2010; a House Appropriations subcommittee approved a bill in July 2010, but
no further action followed. At the end of September 2010, the House and Senate passed a
continuing resolution to extend FY2010 funding levels for EPA and other federal agencies and
departments until December 3, 2010, because no FY2011 appropriations bills had been enacted
by October 1. President Obama signed the continuing resolution (CR) on September 30 (P.L. 111242). This bill was followed by six more short-term CRs before Congress came to final resolution
of FY2011 spending on April 14, 2011, enacting a bill to provide funding for EPA and all other
federal agencies and departments through September 30 (P.L. 112-10).
Following the 2010 mid-term election and during subsequent months while FY2011
appropriations were under consideration, the general issue of congressional earmarks of specific
projects had become highly controversial because of the overall growing number of them,
concern over the influence of special interests on spending decisions, and lack of congressional
oversight. In response, President Obama said he would veto any legislation containing earmarks,
the House extended the ban on earmarks under the Republican Conferences rules, and the
chairman of the Senate Appropriations Committee announced a moratorium on earmarks for
FY2011 and FY2012. Thus, the FY2011 full-year appropriations measure (P.L. 112-10) contained
no congressionally directed special project funds for water infrastructure projects in the EPA
STAG account. However, as was the case for FY2007, it did include funds requested by the
President for Alaska native and rural villages and for U.S.-Mexico Border projects. Likewise,
EPA’s appropriations for FY2012 were included in an omnibus act (P.L. 112-74), which included
no congressional earmarks for water infrastructure projects but did include funds requested by the
President for Alaska native and rural villages and for U.S.-Mexico Border projects. This also
occurred in FY2013 (P.L. 113-6) and FY2014 (P.L. 113-76) (see Table 1).
Policy Implications
Groups representing state water program managers and administrators of infrastructure financing
programs have criticized the congressional practice of awarding grants to designated
communities. They contend that it undermines the intended purpose of the state funds, which is to
promote environmental improvements nationwide. Many state officials prefer that funds be
allocated more equitably, not based on what they view largely as political considerations, and
they prefer that state environmental and financing officials retain responsibility to set actual
spending priorities. Further, they say, because directed funding to special projects diminishes the
level of seed funding for loans under state revolving funds, it delays the time when states will
become financially self-sufficient—and may actually prolong the period when states seek
continued federal support.
The practice has been criticized because designated projects have received more favorable
treatment than other communities’ projects: they generally are eligible for 55% federal grants
(and are not required to repay 100% of the funded project cost, which they must do in the case of
a loan through an SRF), and the practice sidesteps the standard process of states’ determining the
priority by which projects will receive funding. It also means that the projects have generally not
been reviewed by the congressional authorizing committees. This is especially true since FY1992,
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when special purpose grant funding was designated for projects not authorized in the Clean Water
Act or amendments to it or in the Safe Drinking Water Act.
Members of Congress may intervene to provide funding for a specific community for a number of
reasons. In some cases, the community may have been unsuccessful in getting state approval to
fund the project under an SRF loan or other program. For some, especially small and rural
communities, the cost of a project financed through a state loan, which the community must repay
in full, is deemed unacceptably high, because repaying the loan can result in increased user fees
that ratepayers feel are unduly burdensome. The community then seeks a grant to avoid this
costly financial scenario. A number of the special purpose grants were made to projects
characterized as “needy cities,” based on local economic conditions. Since FY1993, report
language accompanying the appropriations bills (and specifically legislative language since
FY2004) directed that grants awarded in this manner were to require that 45% of a project’s cost
be the responsibility of the local community. EPA has been allowed to be flexible in applying the
local cost-share, based on the community’s financial capability, but the agency has rarely
modified the general requirement.
Technically, the CWA Title II grants program ended when authorizations for it expired after
FY1990. One result of awarding special purpose grants in appropriations bills has been to
perpetuate grants as a method of funding wastewater treatment construction long after FY1990.
At the same time, it also resulted in grants which had not previously existed for drinking water
system projects.
Following enactment of an appropriations act, project grants designated by Congress were not
provided automatically to the designated recipient communities or organizations. Since the funds
are awarded as EPA grants, recipients must first meet all applicable EPA requirements in
regulations and guidelines that apply to other grant programs, including applying for the grant
and complying with other federal laws and requirements, and must continue to comply with
program- and project-specific rules as long as the grant remains active. Consequently, there are
administrative costs associated with special purpose grants both for the local communities and for
EPA, which has been administering several hundred more of these grants every year.
Conclusion
Attention is often drawn to the relatively few projects that received large grant awards by
Congress, especially over multiple years. However, the other side of that story is the large number
of projects that received relatively small amounts—especially as a percentage of the total cost of
water infrastructure projects, which has been very large. Even with the large awards described
here for some communities, more than 75% of the projects designated in the EPA appropriations
legislation received total awards (either in a single year or over multiple years) of $2 million or
less. The trend of appropriators to provide smaller awards is reflected in the fact that only a small
number of projects received awards of $1 million or more: 27 in FY2008 (9.6% of total
earmarks), 27 again in FY2009 (9% of total), and 22 in FY2010 (6.9% of total). As individual
award amounts got smaller, some questioned whether communities might conclude that the cost
of receiving such funding—both in terms of political capital spent to seek it and actual resources
spent subsequently to secure the grant from EPA—exceeds the benefits
This congressional practice raised two significant policy issues. The first is that it alters the
process of who decides which water infrastructure projects will receive funding, from state
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program officials to Members of Congress (for those projects not also requested by the
Executive), and how the merits of particular projects may be evaluated. The second issue, noted
above, is that it reduced the amount of funds provided to capitalize state revolving loan programs,
thus arguably delaying the time when states will become financially self-sufficient in
administering capital programs and potentially prolonging the time when states and communities
seek continued federal aid.
Some Members of Congress, interest groups, and Administration officials have been critical of
including special project grants in this and other appropriations acts. Other Members and many
local officials view it as an appropriate way to assist communities that would not be served by the
legislated programs. After the moratorium for FY2007, the practice resumed and continued in
FY2008, FY2009, and FY2010, although new rules were intended to provide greater transparency
by requiring that the sponsors of earmarks be identified in committee reports. As described above,
criticism of congressional earmarking resulted in banning the practice for EPA and other federal
agencies since FY2011. Still, some Members and interest groups have pressed for rules changes
that would relax the current ban. So far, Congress has not modified the prohibition on earmarks,
but could choose to do so in the future.
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Appendix A. Background: Federal Involvement in
Wastewater Treatment
The Water Pollution Control Act of 1948 (P.L. 80-845) was the first comprehensive statement of
federal interest in clean water programs. While it contained no federally required goals, limits, or
even guidelines, it started the trickle of federal aid to municipal wastewater treatment authorities
that grew in subsequent years. It established a grant program to assist localities with planning and
design work and authorized loans for treatment plant construction. With each of the four
successive amending statutes in the 1950s and 1960s, federal assistance to municipal treatment
agencies increased. A construction grant program replaced the loan program; the amount of
authorized funding went up; the percentage of total costs covered by federal funds was raised;
and the types of project costs deemed grant-eligible expanded.
In the Federal Water Pollution Control Act Amendments of 1972 (P.L. 92-500, popularly known
as the Clean Water Act (CWA)), Congress revised the existing federal clean water law, including
provisions related to wastewater systems. In the 1972 law, Congress strengthened the federal role
in clean water and established the first national standards for sewage treatment. A number of new
conditions were attached to projects constructed with grants (such as comprehensive planning
requirements). In order to assist communities in meeting the ambitious water quality
improvement goals of the new law, federal funds increased dramatically, and the federal share
was raised from 55% to 75%.
The grant program was reauthorized in 1977 (P.L. 95-217) and again in 1981 (P.L. 97-117).
Efforts began focusing on use of federal funds for projects with clear environmental benefits, out
of concern that the program’s wide scope was not well focused on key goals. Especially reflected
in the 1981 amendments were budgetary pressures and a desire to reduce federal spending.
Annual authorizations were reduced from $5 billion to $2.4 billion, the federal share was again
set at 55%, and project eligibilities were limited.
The most recent comprehensive CWA amendments were enacted in 1987 (P.L. 100-4). That
legislation authorized $18 billion over nine years for wastewater treatment plant construction,
through a combination of the traditional grant program and a new State Water Pollution Control
Revolving Funds (SRF) program. Under the new program, federal capitalization grants are
provided as seed money for state-administered loans to build sewage treatment plants and other
water quality projects. Local communities, in turn, repay loans to the state, a process intended by
Congress to enable a phaseout of federal involvement after states build up a source of capital for
future investments. Under the amendments, the SRF program was phased in beginning in FY1989
and entirely replaced the previous grant program in FY1991. The intention was that states would
have greater flexibility to set priorities and administer funding, while federal aid would end after
FY1994. As a general matter, states and cities supported the program changes and the shift to a
loan program that was intended to provide long-term funding for water quality and wastewater
construction activities. However, the change means that local communities now are responsible
for 100% of project costs financed under the SRF program, rather than 45% under the previous
grant program. Congress enacted certain changes to the SRF provisions of the CWA in 2014 (P.L.
113-121). These amendments addressed several issues, including extending loan repayment terms
from 20 years to 30 years, expanding the list of SRF-eligible projects to include energy- and
water-efficiency, increasing assistance to Indian tribes, and imposing “Buy American”
requirements on SRF recipients.
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While municipalities have made substantial progress toward meeting the goals and requirements
of the act, state water quality reports continue to indicate that discharges from wastewater
treatment plants are a significant source of water quality impairments nationwide. The original
authorizations expired in FY1994, but pressure to extend federal funding by reauthorizing the
Title VI SRF program and by providing appropriations both for SRF capitalization grants and
earmarked project grants, has continued, in part because estimated funding needs remain large.
Thus, Congress has continued to appropriate funds, and the anticipated shift to full state
responsibility has not yet occurred. Authorizations since 1972, for both the previous Title II grant
program and now for the Title VI SRF program, totaled $66 billion, while appropriations have
totaled $91.3 billion through FY2014.
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Appendix B. Background: Federal Involvement in
Drinking Water
In contrast to the 40-plus years of federal support for financing municipal wastewater treatment
facilities, Congress only recently—in 1996—established a program under the Safe Drinking
Water Act (SDWA) to help communities with financing of projects needed to comply with federal
drinking water regulations. Funding support for drinking water only occurred more recently for
several reasons. First, until the 1980s, the number of drinking water regulations was fairly small,
and public water systems often did not need to make large investments in treatment technologies
to meet those regulations. Second and relatedly, good quality drinking water traditionally has
been available to many communities at relatively low cost. By comparison, essentially all
communities have had to construct or upgrade sewage treatment facilities to meet the
requirements of the CWA.
Over time, drinking water circumstances have changed, as communities have grown, and
commercial, industrial, agricultural, and residential land-uses have become more concentrated,
thus resulting in more contaminants reaching drinking water sources. Moreover, as the number of
federal drinking water standards has increased, many communities have found that their water
may not be as good as once thought and that additional treatment technologies are required to
meet the new standards and protect public health. Between 1986 and 1996, for example, the
number of regulated drinking water contaminants grew from 23 to 83, and EPA and the states
expressed concern that many of the nation’s 52,000 small community water systems were likely
to lack the financial capacity to meet the rising costs of complying with the Safe Drinking Water
Act.
Congress responded to these concerns by enacting the 1996 SDWA Amendments (P.L. 104-182)
which authorized a drinking water state revolving loan fund (DWSRF) program to help systems
finance projects needed to comply with SDWA regulations and to protect public health. (For
additional background, see CRS Report RS22037, Drinking Water State Revolving Fund
(DWSRF): Program Overview and Issues, by (name redacted).) This program, fashioned after the
Clean Water Act SRF, authorizes EPA to make grants to states to capitalize DWSRFs which states
then use to make loans to public water systems. Appropriations for the program were authorized
at $599 million for FY1994 and $1 billion annually for FY1995 through FY2003. Actual
appropriations, first provided in FY1997, have totaled $18.2 billion through FY2014.
Author Contact Information
(name redacted)
Specialist in Resources and Environmental Policy
/redacted/@crs.loc.gov, 7-....
Congressional Research Service
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