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Wednesday, November 3, 2010

Water Infrastructure Projects Designated in EPA Appropriations: Trends and Policy Implications

Claudia Copeland
Specialist in Resources and Environmental Policy

Congressional action to designate funds within appropriations legislation for specified projects or locations has been increasing in recent years as a way 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 $56.8 billion appropriated to EPA for water infrastructure assistance, more than 13% ($7.4 billion) has gone to designated project grants. Notably since FY2000, appropriators have 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, receive comparatively small amounts. More than 75% of the projects designated in the EPA appropriations legislation have received total awards (either in a single year or over multiple years) of $2 million or less. While some Members of Congress, interest groups, and Administration officials are critical of these types of congressional actions, it is likely that communities will continue to seek this type of assistance, and there is little indication that the practice will cease.

Date of Report: October 28, 2010
Number of Pages: 15
Order Number: RL32201
Price: $29.95

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