Federally Supported Water Supply and Wastewater Treatment Programs

Claudia Copeland, Coordinator
Specialist in Resources and Environmental Policy

Betsy A. Cody
Specialist in Natural Resources Policy

Mary Tiemann
Specialist in Environmental Policy

Nicole T. Carter
Specialist in Natural Resources Policy

Megan Stubbs
Analyst in Agricultural Conservation and Natural Resources Policy

Charles V. Stern
Analyst in Natural Resources Policy

Although the federal government has played a significant role in developing water quality regulations and standards for municipal and industrial (M&I) water use, it historically has provided a relatively small percentage of the funding for construction of water supply and treatment facilities for M&I uses. Yet, several programs exist to assist communities with development of water supply and treatment projects, and it appears that Congress is more frequently being asked to authorize direct financial and technical assistance for developing or treating water supplies for M&I use.

This report provides background information on the types of water supply and wastewater treatment projects traditionally funded by the federal government and the several existing programs to assist communities with water supply and wastewater recycling and treatment. These projects and programs are found primarily within the Department of Agriculture (USDA), Department of Commerce, Department of Defense (DOD), Department of Housing and Urban Development (HUD), Department of the Interior (DOI), and the Environmental Protection Agency (EPA).

The focus of some programs has been enlarged over the years. The Department of the Interior’s Bureau of Reclamation (Reclamation) was established to implement the Reclamation Act of 1902, which authorized the construction of water works to provide water for irrigation in arid western states. Congress subsequently authorized other uses of project water, including M&I use. Even so, the emphasis of Reclamation’s operations was to provide water for irrigation. Similarly, the U.S. Army Corps of Engineers (DOD) constructed large reservoirs primarily for flood control, but was authorized in 1958 to allocate water for M&I purposes. Over the past 30-plus years, Congress has authorized and refined several programs to assist local communities in addressing other water supply and wastewater problems. These programs serve generally different purposes and have different financing mechanisms; however, there is some overlap.

Federal funding for the programs and projects discussed in this report varies greatly. For example, in FY2011 Congress provided $963 million appropriations for grants to states under EPA’s State Revolving Fund (SRF) loan program for drinking water facilities and $1.5 billion for EPA’s SRF program for wastewater facilities; funds appropriated for the USDA’s rural water and waste disposal grant and loan programs are $527 million for FY2011; HUD Community Development Block Grant (CDBG) funds (used partly but not exclusively for water and wastewater projects) are $3.3 billion for FY2011. In contrast, Reclamation’s Title 16 reclamation/recycling projects are scheduled to receive $20.5 million under the agency’s FY2011 operating plan.

For each of the projects and programs discussed, this report describes project or program purposes, financing mechanisms, eligibility requirements, recent funding, and the Administration’s FY2012 budget request.


Date of Report: May 27, 2011
Number of Pages: 33
Order Number: RL30478
Price: $29.95

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