President Biden signs Historic Infrastructure Bill Including Billions in New Federal Water Funds

President Biden signs Historic Infrastructure Bill Including Billions in New Federal Water Funds: On Friday, November 8, 2021, the House approved the $1 trillion bipartisan infrastructure bill (H.R. 3684), sending it to the President who signed it into law yesterday, November 15, 2021.  The bill reauthorizes existing federal infrastructure programs for five years and appropriates an additional $550 billion into water projects, broadband internet, electrical grid, among many other measures. NRWA 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.  For the list of EPA programs and new provisions funded under the $55 billion in H.R. 3684, see link. 

Rural Water’s small and rural community membership secured a massive legislative victory when the House passed the Infrastructure Investment and Jobs Act (H.R.3684) by a 228-206 vote. The $1.2 trillion infrastructure investment bill includes $55 billion for drinking water and wastewater infrastructure (read EPA’s statement here) and already passed the Senate back in August. The funding is mainly appropriated through the state revolving funds and includes the following 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.

In addition to revitalizing water and wastewater infrastructure by passing this legislation, Democrats are also trying to advance another bill, the Build Back Better Act (H.R. 5376) using the budget reconciliation process- without Republican support. House Democrats released draft legislative text earlier this month, but it could still take several days and even weeks to set a final vote on the centerpiece of the President’s economic agenda. While progressives publicly backed H.R. 5376, pivotal moderate Democratic Senators Joe Manchin and Kyrsten Sinema have yet to give an explicit endorsement of the proposal and will likely modify the text once it is the Senate’s turn to act on the legislation-possibly around Thanksgiving.