GAO Issues New Report on Drinking Water SRF

GAO Issues New Report on Drinking Water SRF

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Here is a link to the new report.  CRS DWSRF Report 5-3-2017.


The Safe Drinking Water Act (SDWA) is the federal authority for regulating contaminants in public water supplies. It includes the Drinking Water State Revolving Fund (DWSRF) program, established in 1996 to help public water systems finance infrastructure projects needed to comply with federal drinking water regulations and to meet the SDWA’s health objectives. Under this program, states receive annual capitalization grants to provide financial assistance (primarily subsidized loans) to public water systems for drinking water projects and other specified activities. Between FY1997 and FY2015, Congress had appropriated approximately $20 billion, and more than 12,400 projects had received assistance through the program.

The latest Environmental Protection Agency (EPA) survey of capital improvement needs indicates that public water systems need to invest $384.2 billion on infrastructure improvements over 20 years to ensure the provision of safe drinking water. EPA reports that, although all of the projects identified in the survey would promote the public health objectives of the SDWA, just $42.0 billion (10.9%) of reported needs are attributable to SDWA compliance. A study by the American Water Works Association estimates that restoring aging infrastructure and expanding water systems to keep up with population growth would require a nationwide investment of at least $1 trillion through 2035.

Key program issues include (1) the gap between estimated needs and funding, (2) the growing cost of complying with SDWA standards (particularly for small communities), (3) the ability of small or disadvantaged communities to afford DWSRF financing, and (4) the broader need for cities to maintain, upgrade, and expand infrastructure unrelated to SDWA compliance. Several overarching policy questions are under debate, including “What is the appropriate federal role in providing financial assistance for local water infrastructure projects?” and “What other funding mechanisms could supplement or replace a program reliant on annual appropriations?”

Enacted in 2014, the Water Infrastructure Finance and Innovation Act (WIFIA; P.L. 113-121, Title V, Subtitle C) authorized a five-year pilot loan guarantee program to promote increased development of, and private investment in, large water infrastructure projects. Congress noted that the pilot program is intended to complement, not replace, the drinking water SRF program and the similar Clean Water Act SRF program for wastewater infrastructure. For FY2017, President Obama requested $20.0 million for EPA to begin providing loan guarantees for water infrastructure projects under WIFIA. Congress provided this amount in P.L. 114-254, the Continuing and Security Assistance Appropriations Act of 2017.

For FY2016, the President requested $1.19 billion for the DWSRF program, and Congress provided $863.2 million. For FY2017, President Obama requested $1.02 billion. The program has been funded under continuing resolutions at roughly FY2016 levels. The Consolidated Appropriations Act, 2017 (Senate Amdt. 1 to H.R. 244, Division G, Title II), includes $863.23 million for DWSRF capitalization grants for FY2017 and an additional $10 million for WIFIA.

In the 114th Congress, the Water Infrastructure Improvements for the Nation Act (WIIN Act; P.L. 114-322) made several revisions to the DWSRF program and authorized $100 million in DWSRF appropriations to Michigan to assist the city of Flint in repairing its drinking water infrastructure. In P.L. 114-254, Congress appropriated the funding authorized in the WIIN Act to assist Flint.

The state of the nation’s water infrastructure and the challenges many communities face in addressing infrastructure needs continue to receive congressional attention. A number of bills have been introduced in the 115th Congress to revise and increase funding authority for the DWSRF program and to increase investment in water infrastructure through new approaches.

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