Specialist in Resources and Environmental Policy
principal federal program to aid municipal wastewater treatment plant
construction is authorized in the Clean Water Act (CWA). Established as a
grant program in 1972, it now capitalizes state loan programs.
Authorizations since 1972 have totaled $65 billion, while appropriations
have totaled more than $85 billion. It has represented 25%-30% of total funds appropriated
to the Environmental Protection Agency (EPA) in recent years.
In appropriations legislation, funding for EPA wastewater assistance is
contained in the measure providing funds for the Department of the
Interior, Environment, and Related Agencies, which includes EPA. Within
the portion of that bill which funds EPA, wastewater treatment assistance is specified
in an account now called State and Tribal Assistance Grants (STAG). Three
trends in the funding of this account are most prominent: inclusion of
non-infrastructure environmental grants to states, beginning in FY1993;
increasing number and amount of special purpose grants since FY1989; and
the addition of grant assistance for drinking water treatment projects in
FY1997. This report summarizes, in chronological order, congressional activity
to fund items in this account since 1987.
Prior to the 1987 amendments, wastewater treatment assistance was provided in
the form of grants made to municipalities. The federal share of project
costs was generally 55%; state and local governments were responsible for
the remaining 45%. The 1987 amendments altered this arrangement by
replacing the traditional grant program with one that provides federal grants
to capitalize state clean water loan programs, or state revolving funds
(SRFs). Appropriations for the clean water SRF program through FY2012 have
totaled nearly $36 billion. As a general matter, states and cities support
the program changes made by the 1987 amendments 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 projects costs, rather than
45%, because they are required to repay loans to states. The greater
financial burden of the act’s loan program on some cities has caused some to
seek continued grant funding.
This has been particularly evident in the appropriations process where, in
recent years, Congress has reserved as much as 30% of funds in the STAG
account for special purpose grants directed to specified communities.
Since FY2000, appropriators have awarded earmarks to a larger total number
of projects, resulting in more communities receiving such grants, but at the
same time receiving smaller amounts of funds, on average. Most of the
funded projects are not authorized in the Clean Water Act or the Safe
Drinking Water Act. State water quality officials, state infrastructure
financing officials, and EPA have objected to this practice, since it reduces
the amount of funding for state SRF programs. Since FY1997, the STAG
account also has been used to fund a drinking water SRF program
established by Congress in 1996. Appropriations for the drinking water SRF
program through FY2012 have totaled $16.4 billion.
Date of Report: December 3, 2012
Number of Pages: 35
Order Number: 96-647
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