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Monday, February 22, 2010

Water Infrastructure Funding in the American Recovery and Reinvestment Act of 2009

Claudia Copeland
Specialist in Resources and Environmental Policy

Nicole T. Carter
Specialist in Natural Resources Policy

Betsy A. Cody
Specialist in Natural Resources Policy

Megan Stubbs
Analyst in Agricultural Conservation and Natural Resources Policy

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (P.L. 111-5, the ARRA, or Recovery Act). Among the purposes identified in the legislation are preservation and creation of jobs and promotion of U.S. economic recovery, and investment in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits. This report identifies funding for water infrastructure programs and projects contained in the legislation. 

The legislation directs additional appropriations to a number of existing federal programs that either directly invest in water infrastructure projects or provide assistance to states and localities for such activities. Water infrastructure funding in the bill, available for obligation through September 30, 2010, is provided to five federal agencies and one commission. This funding totals $13.5 billion. 

The bill provides funding for locally built wastewater and drinking water treatment projects through assistance programs administered by the Environmental Protection Agency (EPA) and the U.S. Department of Agriculture (USDA). For the EPA wastewater program, the enacted bill provides $4.0 billion. For the EPA drinking water program, P.L. 111-5 provides $2.0 billion in additional funds. These funds were allocated to states according to established formulas, and states will award actual assistance to projects and communities. For the USDA programs that benefit rural communities, the Recovery Act provides $1.38 billion in grants and loans; USDA state offices are making individual project decisions. Additional funding in the bill for these programs is three to four times more than the level of regular appropriations. 

The enacted legislation provides funding for water resources development and management projects administered by four agencies. It provides $4.6 billion for the U.S. Army Corps of Engineers (Corps) and $1.0 billion for the Bureau of Reclamation (Reclamation). The legislation also provides $340 million for USDA's Natural Resources Conservation Service (NRCS) agricultural watershed program, and $220 million for the Department of State's International Boundary and Water Commission (IBWC) for levee and dam upgrades. Congress directed that the funds be used consistent with the eligibility and prioritization constraints and direction provided in P.L. 111-5 and the accompanying conference report, H.Rept. 111-16. Discretion regarding which specific water resource projects received funds was largely left up to the Administration. 

Even after enactment, implementation of the additional water infrastructure funding in the ARRA is raising a number of issues, including how general restrictions in the legislation, such as "Buy American" requirements, will affect timely spending of ARRA funds. Another issue concerns matching fund requirements. Unless project assistance is provided entirely as grants, communities and project sponsors will need to come up with matching funds, which could be very challenging in the current fiscal environment. Congressional committees have held several hearings on use of ARRA water infrastructure funds, and additional oversight is likely during the remainder of the 111th Congress. 

Date of Report: February 1, 2010
Number of Pages: 20
Order Number: R40216
Price: $29.95

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