Water Infrastructure Financing: History of EPA Appropriations Page: 7 of 26
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CRS-4
FY1993 with addition of Clean Water Act section 319 grants for state programs to
manage nonpoint source pollution and was expanded in FY1996 to include all state
grants for management of environmental programs, in a single consolidated grants
appropriation.
A second trend, discussed below, has been an increasing number and amount of
specially earmarked grants for needy cities and other special purpose projects. A third
trend, also discussed below, is expansion of the account to include SRF grants for
drinking water projects, under authority of the Safe Drinking Water Act Amendments
of 1996 (P.L. 104-134).
SRF Grants vs. Special Purpose Project Grants. The practice of
earmarking a portion of the construction grants/SRF account for specific wastewater
treatment and other water quality projects began in the FY1989 legislation. Since
then it has increased to the point of representing a significant portion of appropriated
funds (31% of the total water infrastructure appropriation in FY1994, for example,
28% in the FY1995 bill). The number of projects receiving these earmarked funds
also has increased: from four in FY1989, to eight in FY1994, 45 in FY1995, and 237
in FY2001. (Conference reports on the individual appropriations bills, noted in the
discussion in this report, provide some additional detail on projects funded in this
manner.) The effective result has been to reduce the amount of funds provided to
states to capitalize their SRF programs. Of the $39.7 billion appropriated for water
infrastructure programs since 1986, $5.3 billion, or 13%, has gone to earmarked
project grants.
Interest groups representing state water quality program managers and
administrators of infrastructure financing programs have criticized this practice of
appropriators. They contend that earmarking undermines the intended purpose of the
state funds, to promote water quality improvements nationwide. State officials would
prefer that funds be allocated more equitably, not based on what they view largely as
political considerations, and they would prefer that state environmental and financing
officials retain responsibility to set actual spending priorities. Further, they say,
because directed funding of special projects diminishes the level of seed funding to
SRFs, it delays the time when states will be financially self-sufficient and may actually
prolong the time when states seek continued federal support.
The practice of earmarking has been criticized because designated projects are
receiving more favorable treatment than other communities' projects: they generally
are eligible for 55% federal grants (and will not be required to repay 100% of the
funded project cost, as is the case with a loan through an SRF), and the practice
sidesteps the standard CWA process of states' determining the priority by which
projects will receive funding. It also means that the projects have generally not been
reviewed by the CWA authorizing committees. This is especially true since FY1992
when special purpose grant funding has been designated for projects not authorized
in the Act or amendments to it.
In the early years of this congressional practice, special purpose grant funding
originated in the House version of the EPA appropriations bill, while the Senate for
the most part resisted earmarking by rejecting or reducing amounts and projects
included in House-passed legislation. With this difference in legislative approach,
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Copeland, Claudia. Water Infrastructure Financing: History of EPA Appropriations, report, December 3, 2001; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc817982/m1/7/: accessed July 17, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.