Capitalization Grants for Clean Water State Revolving Funds

 

To create State Revolving Funds (SRFs) through a program of capitalization grants to States which will provide a long term source of State financing for construction of wastewater treatment facilities and implementation of other water quality management activities. Funding Priority - Fiscal Year 2019: Capitalization grants are available to each State for the purpose of establishing a Clean Water SRF for providing assistance for: (1) construction of publicly owned wastewater treatment works; (2) implementing nonpoint source management activities included in State Plans developed pursuant to Section 319; and (3) developing and implementing an estuary comprehensive conservation and management plan under Section 320. The 2014 Water Resources Reform and Development Act (WRRDA) included amendments to the Clean Water SRF. The amendments included additional types of assistance available in the SRF, changed the amount of funding that is available for administering the SRF and provided the opportunity for States to offer additional subsidy. In addition to the assistance mentioned above, SRF may now provide assistance for:(1) the construction, repair, or replacement of decentralized wastewater treatment systems that treat municipal wastewater or domestic sewage; (2) measures to manage, reduce, treat or recapture stormwater or subsurface drainage water; (3) any municipality or intermunicipal, interstate, or State agency for measures to reduce the demand for publicly owned treatment works capacity through water conservation, efficiency or reuse; (4) the development and implementation of watershed projects meeting the criteria set forth in section 122; (5) any municipality or interrmunicipal, interstate, or State agency for measures to reduce the energy consumption needs for publicly owned treatment works; (6) reusing or recycling wastewater, stormwater, or subsurface drainage water; (7) measures to increase the security of publicly owned treatment works; and (8) any qualified nonprofit entity, as determined by the Administrator, to provide assistance to owners and operators of small and medium publicly owned treatment works. The capitalization grant is deposited in the State's SRF, which is used to provide loans and other types of financial assistance, to local communities and intermunicipal and interstate agencies. 4 percent of the grant amounts, $400,000 each year or 1/5 percent per year of the current valuation (net profit) of the fund may be used by the States for the cost of administering the SRF. States determine priorities for funding within their State in accordance with the CWA. A portion of the funding must be used to provide additional subsidy in the form of grants, principal forgiveness or negative interest loans. The maximum percentage that may be provided as additional subsidy will range from 0 percent to 30 percent based on the amount of the total appropriation. For example, if the total appropriation is less than or equal to $1 billion, no additional subsidy would be authorized; if the total appropriation is greater than or equal to $1.3 billion, additional subsidy up to 30 percent of the grant would be authorized; but, if the total appropriation is greater than $1 billion but less than $1.3 billion, a percentage equal to the percentage by which the appropriation exceeds $1 billion would be authorized. Additional subsidy may only be provided to a municipality or intermunicipal, interstate, or State agency and used to benefit a municipality who meets the SRF affordability criteria, benefits individual ratepayers in residential user rate class or to implement a process, material, technique, or technology to address water efficiency goals, energy efficiency goals, mitigate stormwater runoff or encourage sustainable project planning, design and construction. The program supports the Agency's strategic goal of providing clean and safe water. The Disaster Relief Act, 2019, (Public Law 116-20), provides additional funding for states and water systems impacted by the Hurricanes Florence and Michael, Typhoon Yutu, and the 2018 wildfires and earthquakes. These disasters affected drinking water and wastewater in EPA regions 4, 9, and 10. Based on the information EPA has, only California had wildfires with major disaster declarations for public assistance during calendar year 2018 and only Alaska had an earthquake with major disaster declaration for public assistance. The Act did not provide an allocation among affected states. The distribution of the disaster supplemental resources took into account several variables, including the number and geographical location of facilities that were directly impacted during the incidents, and the population served by those systems.

General information about this opportunity
Last Known Status
Active
Program Number
66.458
Federal Agency/Office
Environmental Protection Agency
Type(s) of Assistance Offered
A - Formula Grants
Program Accomplishments
Fiscal Year 2016 Each year, 51 grants are awarded to states and Puerto Rico. Assistance in FY 16 will include funding to prevent polluted runoff, upgrade wastewater treatment plants from secondary level treatment to advanced (tertiary) treatment to reduce pollutant loads, and improve water quality on a watershed basis. Each year, 51 grants are awarded to states and Puerto Rico. The program funds an estimated 10 to 20 percent of the nation's annual wastewater capital projects. The program has provided over $120 billion in cumulative assistance since 1988. Assistance has included funding to prevent polluted runoff, upgrade wastewater treatment plants from secondary level treatment to advanced (tertiary) treatment to reduce pollutant loads, and improve water quality on a watershed basis. In FY 16, the program provided $7.6 billion in assistance. This included $2.8 billion for secondary treatment to reduce pollutant loads, $1.7 billion to upgrade wastewater treatment plants from secondary level treatment to advanced (tertiary) treatment, and over $3.1 billion to prevent polluted runoff.
Fiscal Year 2017 Each year, 51 grants are awarded to states and Puerto Rico. The program funds an estimated 10 to 20 percent of the nation's annual wastewater capital projects. The program has provided over $100 billion in cumulative assistance since 1988. Assistance in FY 17 included funding to prevent polluted runoff, upgrade wastewater treatment plants from secondary level treatment to advanced (tertiary) treatment to reduce pollutant loads, and improve water quality on a watershed basis.
Fiscal Year 2018 Each year, 51 grants are awarded to states and Puerto Rico. Assistance in FY 18 included funding to prevent polluted runoff, upgrade wastewater treatment plants from secondary level treatment to advanced (tertiary) treatment to reduce pollutant loads, and improve water quality on a watershed basis.
Fiscal Year 2019 Each year, 51 grants are awarded to states and Puerto Rico. Assistance in FY 19 included funding to prevent polluted runoff, upgrade wastewater treatment plants from secondary level treatment to advanced (tertiary) treatment to reduce pollutant loads, and improve water quality on a watershed basis. Disaster Relief Act, 2019, funds are directed to certain areas of the country effected by specific hurricanes and other natural disasters per the statute.
Fiscal Year 2020 Each year, 51 grants are awarded to states and Puerto Rico. Assistance in FY 20 will include funding to prevent polluted runoff, upgrade wastewater treatment plants from secondary level treatment to advanced (tertiary) treatment to reduce pollutant loads, and improve water quality on a watershed basis.
Authorization
Clean Water Act, as amended, Public Law 95-217
Water Quality Act of 1987, Section 205(m), 601-607, Public Law 100-4
American Recovery and Reinvestment Act of 2009, Public Law 111-5
Disaster Relief Act, 2019, Public Law 116-20
Who is eligible to apply/benefit from this assistance?
Applicant Eligibility
States and Puerto Rico are eligible to receive capitalization grants under Title VI. Indian tribes are eligible to receive grants from Title VI for the construction of municipal wastewater facilities. The District of Columbia, territories, possessions of the U.S. are eligible to receive grants from Title VI for the construction of municipal wastewater facilities (see CFDA 66.418). The Disaster Relief Act, 2019, (Public Law 116-20), provides additional funding for states and water systems impacted by the Hurricanes Florence and Michael, Typhoon Yutu, and the 2018 wildfires and earthquakes. These disasters affected drinking water and wastewater in EPA regions 4, 9, and 10. Based on the information EPA has, only California had wildfires with major disaster declarations for public assistance during calendar year 2018 and only Alaska had an earthquake with major disaster declaration for public assistance. The Act did not provide an allocation among affected states. The distribution of the disaster supplemental resources took into account several variables, including the number and geographical location of facilities that were directly impacted during the incidents, and the population served by those systems.
Beneficiary Eligibility
For loans and other financial assistance (but not grants) for wastewater treatment facilities: local communities, intermunicipal, State, interstate agencies, and Indian tribes. For nonpoint source management programs and estuary activities in approved State Nonpoint Source Management Programs and Comprehensive Conservation and Management Plans: the public agencies listed above, individuals, and programs. .
Credentials/Documentation
To receive a capitalization grant, a State shall enter into an agreement with the EPA Regional Administrator which shall include, but not be limited to, the 10 specifications set forth in Section 602(b) of the CWA. 2 CFR 200 Subpart E applies to the program.
What is the process for applying and being award this assistance?
Pre-Application Procedure
Preapplication coordination is required. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review. An applicant (State) should seek pre-application assistance from the appropriate EPA Regional Office. The State is required to prepare and provide for public comment a plan identifying the intended uses of the funds in the SRF (an intended use plan) and how those uses support the goals of the SRF. The plan is to be submitted no later than the application. An environmental impact statement is not required prior to grant award; however, a State environmental review process must be applied to all subsequent state assistance for wastewater facilities
Application Procedure
2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program. Applicants, except in limited circumstances approved by the Agency, must submit all initial applications for funding through https://www.grants.gov. Additional information on the EPA grant package can be found at: http://www.epa.gov/ogd/grants. The State must certify in its application that it has the legal, managerial, technical, and operational capabilities to administer the SRF program competently and that it will comply with Federal anti-discrimination laws and other applicable Federal statutes. Regulations at 2 CFR 200 and 1500, as applicable, applies to the State. Establishment of the SRF is a prerequisite for a grant award.
Award Procedure
A grant application is reviewed by the appropriate Regional Office and, if approved, the grant is awarded by the Regional Administrator under a delegation of authority from the Administrator of EPA.
Deadlines
Contact the headquarters or regional location, as appropriate for application deadlines
Approval/Disapproval Decision Time
From 30 to 60 days. Approval time averages 45 days.
Appeals
Disputes will be resolved under 2 CFR 1500 Subpart E, as applicable.
Renewals
Not applicable.
How are proposals selected?
Grants are awarded to States that satisfy the requirements outlined in the application procedure section.
How may assistance be used?
Capitalization grants are available to each State for the purpose of establishing a Clean Water SRF for providing assistance for: (1) construction of publicly owned wastewater treatment works; (2) implementing nonpoint source management activities included in State Plans developed pursuant to Section 319; and (3) developing and implementing an estuary conservation and management plan under Section 320;(4) the construction, repair, or replacement of decentralized wastewater treatment systems that treat municipal wastewater or domestic sewage; (5) measures to manage, reduce, treat or recapture stormwater or subsurface drainage water; (6) any municipality or intermunicipal, interstate, or State agency for measures to reduce the demand for publicly owned treatment works capacity through water conservation, efficiency or reuse; (7) the development and implementation of watershed projects meeting the criteria set forth in section 122; (8) any municipality or interrmunicipal, interstate, or State agency for measures to reduce the energy consumption needs for publicly owned treatment works; (8) reusing or recycling wastewater, stormwater, or subsurface drainage water; (10) measures to increase the security of publicly owned treatment works; and (11) any qualified nonprofit entity, as determined by the Administrator, to provide assistance to owners and operators of small and medium publicly owned treatment works. The capitalization grant is deposited in the state's SRF, which is used to provide loans and other types of financial assistance, but not grants, to local communities and intermunicipal and interstate agencies. Assistance may be provided to persons for implementing nonpoint source and estuary management activities provided for in State Plans developed under Sections 319 and 320. Up to 4 percent of the grant amounts, $400,000 each year or 1/5 percent per year of the current valuation (net profit) of the fund may be used by the States for the cost of administering the SRF. States determine priorities for funding within their State in accordance with the CWA.
What are the requirements after being awarded this opportunity?
Reporting
Performance Reports: Reporting requirements shall be determined at the time of grant award.
Auditing
A State must, at a minimum, comply with the provisions of 2 CFR 200, Subpart F. States are also encouraged to conduct annual independent audits. Grants and cooperative agreements are subject to inspections and audits by the Comptroller General of the United States, the EPA Office of Inspector General, other EPA staff, or any authorized representative of the Federal government. Reviews by the EPA Project Officer and the Grants Specialist may occur each year.
Records
As part of the annual review conducted by the agency to assess the State's performance against activities identified in the intended use plan and annual report, and to determine compliance with the terms of the capitalization grant agreement, the State or loan recipient shall make available to EPA such records as the Regional Administrator reasonably requires to review and determine State compliance with the requirements of the CWA.
Other Assistance Considerations
Formula and Matching Requirements
Statutory Formula: Title Clean Water Act Part Section 205(c)(3) Allotments to the States are determined by a table of decimal fractions ("formula") in Section 205(c)(3) of the CWA.

Matching is mandatory. 20%. The required State match is 20 percent of the amount of each Federal grant payment. For Recovery Act funds, the required State match of 20 percent of the amount of each Federal grant payment was waived. The match requirement remains for Disaster Relief Act, 2019, funds. The Regional Administrator may award capitalization grants from funds appropriated for this purpose. Allotments to the States are determined by a table of decimal fractions ("formula") in Section 205(c)(3) of the CWA. The required State match is 20 percent of the amount of each Federal grant payment. For Recovery Act funds, the required State match of 20 percent of the amount of each Federal grant payment was waived. The match requirement for Disaster Relief Act 2019 is 20%. Allocations for the Disaster Relief Act, 2019 funds were developed based on impacts from Hurricanes Florence and Michael, Typhoon Yutu, and the 2018 wild fires and earthquakes.

MOE requirements are not applicable to this assistance listing.
Length and Time Phasing of Assistance
Funds are available for EPA's obligation to the State during the fiscal year in which they are allotted and during the following year. The State must agree to enter into binding commitments with recipients to provide financial assistance from the SRF in an amount equal to 120 percent of each quarterly grant payment. The State is also required to agree to expend all funds in the SRF in an expeditious and timely manner The method of fund disbursement will be determined at the time of award.
Who do I contact about this opportunity?
Regional or Local Office
None/Not specified.
Headquarters Office
Sheila Platt
Environmental Protection Agency
Office of Wastewater Management, State Revolving Fund Branch
1200 Pennsylvania Avenue, N.W.
(Mail Code: 4204M) (RM 7309 WJE )
Washington, DC 20460 US
platt.sheila@epa.gov
Phone: (202) 564-0686
Fax: (202) 501-2403
Website Address
https://www.epa.gov/cwsrf
Financial Information
Account Identification
68-0102-0-1-304
Obligations
(Formula Grants) FY 18$1,569,200,000.00; FY 19 est $1,638,800,000.00; FY 20 est $1,119,800,000.00; FY 16$1,319,293,600.00; FY 17 est $1,369,202,000.00; - FY 16 $1,319,293,600; FY 17 est. $1,369,202,000; and FY 18 est. $1,393,387,000. (Formula Grants) FY 18 FY 19 est $56,000,000.00; FY 20 - Total funds appropriated for Clean Water State Revolving Fund in Disaster Relief Act, 2019.
Range and Average of Financial Assistance
State Revolving Fund capitilization awards to the states in FY 2019 range from $7,879,000 to $177,146,000. Awards are also made to Indian Tribes and U.S. Territories.
Regulations, Guidelines and Literature
Program guidance was issued January 28, 1988. Interpretive Guidance on the Water Resources Reform and Development Act SRF amendments was issued on January 6, 2015. A State Revolving Fund Management Manual was distributed in November, 1988. Regulations include 2 CFR 200and 1500 as applicable, and SRF regulations 40 CFR Part 35, Subpart K which were issued in March 1990.
Examples of Funded Projects
Fiscal Year 2016 State revolving loan fund; wastewater projects involving advanced treatment, secondary treatment, infiltration/inflow correction, replacement/upgrade of pipe and equipment and expansion of existing wastewater treatment plants; nonpoint source and estuary protection projects (for example, septic system rehabilitation, leaking underground storage tank removal, contaminated soil removal, agricultural BMPs, conservation easements, wetlands protection/rehabilitation, and prevention of agricultural runoff). State revolving loan fund; wastewater projects involving advanced treatment, secondary treatment, infiltration/inflow correction, replacement/upgrade of pipe and equipment and expansion of existing wastewater treatment plants; nonpoint source and estuary protection projects (for example, septic system rehabilitation, leaking underground storage tank removal, contaminated soil removal, agricultural BMPs, conservation easements, wetlands protection/rehabilitation, and prevention of agricultural runoff).
Fiscal Year 2018 State revolving loan fund; wastewater projects involving advanced treatment, secondary treatment, infiltration/inflow correction, replacement/upgrade of pipe and equipment and expansion of existing wastewater treatment plants; nonpoint source and estuary protection projects (for example, septic system rehabilitation, leaking underground storage tank removal, contaminated soil removal, agricultural BMPs, conservation easements, wetlands protection/rehabilitation, and prevention of agricultural runoff).
Fiscal Year 2019 State revolving loan fund; wastewater projects involving advanced treatment, secondary treatment, infiltration/inflow correction, replacement/upgrade of pipe and equipment and expansion of existing wastewater treatment plants; nonpoint source and estuary protection projects (for example, septic system rehabilitation, leaking underground storage tank removal, contaminated soil removal, agricultural BMPs, conservation easements, wetlands protection/rehabilitation, and prevention of agricultural runoff).
Fiscal Year 2020 State revolving loan fund; wastewater projects involving advanced treatment, secondary treatment, infiltration/inflow correction, replacement/upgrade of pipe and equipment and expansion of existing wastewater treatment plants; nonpoint source and estuary protection projects (for example, septic system rehabilitation, leaking underground storage tank removal, contaminated soil removal, agricultural BMPs, conservation easements, wetlands protection/rehabilitation, and prevention of agricultural runoff).

 



Federal Grants Resources