Wave of Federal Funding for Water Infrastructure

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The $55 billion for water infrastructure included in the passage of the Infrastructure Investment & Jobs Act (IIJA) last fall is starting to make waves across the country. As disbursements are made to the U.S Environmental Protection Agency’s (USEPA) State Revolving Fund (SRF) programs now is the time for communities to engage and strengthen the resiliency of their utility systems. The Bureau of Reclamation and other Federal agencies have begun releasing enhanced Notice of Funding Opportunities (NOFO) thanks to additional funding from the IIJA.  

Do not wait to act!

SRF programs, which will administer the vast majority of the funds from the IIJA, have already begun disbursing the increased funding in most States. States will see an increase in funding over a five-year period, so there is time, but do not wait too long or you may miss out on this historic opportunity. And better yet, new rules mandate that much of this funding must go out as grants, or forgivable loans, as opposed to the more traditional low-interest financing assistance SRFs normally provides.   

Where does that money go? And what are the new rules? 

The SRF funding for both Drinking Water SRF and Clean Water SRF generally falls into three buckets: general supplemental, emerging contaminants, and lead service line replacement (only for DWSRF). The IIJA mandates are really positive in terms of providing grant funding, but each bucket has a slightly different process and eligibility requirements, so pay close attention!

SRF funding will be appropriated over the next five years as follows*; 

  • $11 Billion in additional Drinking Water SRF
    • 49% will be provided as grants or principal forgiveness loans
    • 49% of which needs to go to Disadvantaged Communities
  • $15 Billion for Lead Pipes replacement and identification
    • 49% will be provided as grants or principal forgiveness loans
    • 49% of which needs to go to Disadvantaged Communities
  • $9 Billion for PFAS & Emerging Contaminates
    • 100% provided as grants or principal forgiveness loans
    • 25% of which needs to go to Disadvantaged Communities
  • $11 Billion in additional Clean Water SRF
    • 49% will be provided as grants or principal forgiveness loans
    • 49% of which needs to go to communities meeting an affordability index or otherwise encourages energy efficiency and sustainability
  • $1 Billion for Clean Water emerging contaminates
    • 100% provided as grants or principal forgiveness loans

*States have flexibility in defining Disadvantaged Communities and other program options. Please verify with your State’s SRF officials on specifics.

More Funding for States on Emerging Contaminants from USEPA

The IIJA also provided the USEPA’s Water Infrastructure Improvements for the Nation (WIIN) program with an additional $5 billion to combat emerging contaminants. The USEPA will make $1 billion available to States in each of the next five years. The WIIN program for Small, Underserved, and Disadvantaged Communities helps fund projects to address capacity building and respond to drinking water contaminants.

Beyond the USEPA – Bureau of Reclamation get $8.3 Billion for Water Infrastructure!

The Bureau of Reclamation provides a wealth of programs for water infrastructure and is using its $8.3 billion in additional funding from the IIJA to enhance its popular WaterSmart programs along with standing up its other offerings. Each program is unique, but a significant amount of funding provides an incentive to look into what program might be best for your community. A high-level summary of how the funding from the IIJA is distributed across its key funding programs:

  • WaterSMART Grants under the SECURE Water Act                                          ($400.0 million)
  • Water Storage, Groundwater Storage, and Conveyance Projects                 ($1.05 billion)
  • Drought Contingency Plan Implementation – Colorado River Basin             ($300 million)
  • Small Surface Water and Ground Water Storage Projects                              ($100.0 million)
  • Aging Infrastructure Account – Extraordinary Maintenance                          ($3.2 billion)
  • Rural Water Projects                                                                                                ($1 billion)
  • Water Recycling and Reuse Projects                                                                    ($1 billion)
  • Water Desalination                                                                                                   ($250.0 million)
  • Watershed Management Projects                                                                        ($100.0 million)
  • Multi-Benefit Watershed Health Improvement                                                 ($100.0 million)

More information on the Bureau of Reclamation’s funding programs from the IIJA can be found at https://www.usbr.gov/bil/.

Wait, there is more?

While historic in itself, the IIJA was not the end of the Federal investment into water. In August 2022, the Inflation Reduction Act became law and provided over $4 billion in funding to combat drought and provide mitigation solutions.

The bill provides 5 years of funding, primarily through the Bureau of Reclamation. Reclamation has not yet written the rules to disburse this funding, but the following is a high-level summary of funding for water-related projects in the bill. 

  • Drought Mitigation in the Reclamation States – $4B
    • Grants to mitigate the impacts of drought in Reclamation States (CO, MT, UT, ID, ND, SD). Priority given to the Colorado River Basin, including Utah and Colorado. 
  • Bureau of Reclamation Domestic Water Supply Projects – $550M
    • Grants for disadvantaged communities for planning, design, or construction of projects to provide domestic water supplies to communities that do not have reliable access to water.
  • Emergency Drought Relief for Tribes – $12.5M
    • To mitigate drought impacts for Indian Tribes that are impacted by the operation of a Bureau of Reclamation water project.
  • Canal Improvement Projects – $25M
    • Design, study, and implementation of projects to cover water conveyance facilities with solar panels to generate renewable energy that increase water efficiency.

Shoot Your Shot – FEMA BRIC Program Gets $1 Billion

FEMA’s Building Resilient Infrastructure & Communities (BRIC) grant program was granted $1 billion under IIJA. Better yet, the Notice of Funding Opportunity (NOFO) for the first year of funding was just released, with applications due January 27, 2023! 

Eligible projects for BRIC funding include flood and drought risk reduction projects, mitigation reconstruction, property acquisition, and more! BRIC applications also include the requirement to complete a benefit cost analysis as part of eligibility.

More information on FEMA BRIC can be found at https://www.fema.gov/grants/mitigation/building-resilient-infrastructure-communities.

If you have questions in the meantime, please feel free to contact Rocky Schneider at [email protected] or 701-306-4505.