Clean Water State Revolving Fund

Clean Water State Revolving Fund
Shorttitle	Clean Water State Revolving Fund
Othershorttitles	CWSRF
Colloquialacronym	CWSRF
Enacted by	101st
Effective date	Water Quality Act of 1987
Cite public law	Water Quality Act of 1987
Acts amended	Clean Water Act
Title amended	33
Introducedin	Senate
Committees	Senate Environment and Public Works
Passedbody1	Senate
Passedbody2	House
Signedpresident	Ronald Reagan
Signeddate	1987

Clean Water State Revolving Fund. The Clean Water State Revolving Fund is a federal-state partnership that provides low-interest loans and other financial assistance for water infrastructure projects across the United States. Established by amendments to the Clean Water Act, the program is administered by the Environmental Protection Agency in partnership with state agencies. Its primary goal is to finance the construction of publicly-owned wastewater treatment facilities, nonpoint source pollution control, and other critical water quality initiatives.

Overview

The program operates as a self-perpetuating financial mechanism, where federal capitalization grants are combined with state matching funds to create revolving loan pools. Each participating state and territory manages its own fund according to guidelines set by the EPA. This structure allows for the repayment of loans to be recycled back into the fund to finance future projects, creating a sustainable source of financing. The flexibility of the program enables states to address their most pressing water quality needs, from upgrading aging sewage treatment plants to managing stormwater runoff.

History and Legislation

The CWSRF was created by the Water Quality Act of 1987, which amended the existing Clean Water Act. This legislation was signed into law by President Ronald Reagan, marking a significant shift from the previous system of federal construction grants to a state-managed, revolving loan model. The change was driven by a need for more sustainable and flexible financing as the initial wave of wastewater plant construction under the original Clean Water Act began to age. Subsequent legislation, including the American Recovery and Reinvestment Act of 2009 and the Infrastructure Investment and Jobs Act, has periodically provided significant supplemental appropriations to the fund.

Funding and Allocation

Initial funding is provided through annual Congressional appropriations to the EPA, which then allocates capitalization grants to states based on a formula. This formula considers factors like population and water quality needs. States are required to provide a 20% match for these federal grants. The Infrastructure Investment and Jobs Act, signed by President Joe Biden, provided a historic $11.7 billion infusion into the CWSRF over five years. States have broad authority to set loan terms, including interest rates and repayment periods, which are typically more favorable than those available on the private market.

Eligible Projects

Eligible projects are diverse and focus on improving water quality and public health. Traditional projects include the construction and upgrading of municipal wastewater treatment facilities and sewer collection systems. The program also funds initiatives to control nonpoint source pollution from agricultural and urban runoff, water reuse and recycling projects, and efforts to manage combined sewer overflows and sanitary sewer overflows. Furthermore, funds can support the implementation of NPDES stormwater programs and projects to protect estuaries like the Chesapeake Bay.

Program Administration

The EPA’s Office of Water oversees the national program, developing regulations and guidelines, while day-to-day management is delegated to designated state agencies, such as a state’s Department of Environmental Quality or Department of Natural Resources. These state agencies develop Intended Use Plans that outline project priorities and funding strategies. They are responsible for processing loan applications, executing agreements, and managing the revolving fund's assets. This decentralized model allows programs in states like California and New York to tailor their activities to local conditions, such as addressing nutrient pollution in the Great Lakes.

Impact and Outcomes

Since its inception, the CWSRF has provided over $160 billion in total assistance through more than 45,000 loans and grants. This investment has been critical in increasing the percentage of the U.S. population served by secondary or better wastewater treatment. The program has directly contributed to the restoration and protection of vital water bodies across the country, including the Great Lakes, the Gulf of Mexico, and the Everglades. By providing affordable financing, it has helped communities like Flint and those in Appalachia address essential infrastructure needs while saving public utilities billions of dollars in interest payments compared to market-rate loans.

Category:Water in the United States Category:Environmental policy in the United States Category:United States federal environmental legislation