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

On January 28, 2009, the House passed H.R. 1, the American Recovery and Reinvestment Act of 2009. On February 10, the Senate passed an amended version of H.R. 1 (S.Amdt. 570). On February 13, the House and Senate adopted a conference report (H.Rept. 111-16) that reconciled differences between the two bills. The President signed the bill into law on February 17 (P.L. 111- 5). This report identifies funding for water infrastructure programs and projects contained in the legislation, including amounts in the House- and Senate-passed versions that preceded the conference agreement. 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. Under the legislation, additional appropriations are directed 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, which would be available for obligation for the remainder of FY2009 and through September 30, 2010, is provided to five federal agencies and one commission would total $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 will be 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 enacted legislation provides $1.38 billion in grants and loans. Additional funding in the bill for these programs would be three to four times more than the level of current 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) small watershed program, and $220 million for the Department of State’s International Boundary and Water Commission (IBWC) levee and dam upgrades. Little is publicly known about how most of these funds will be distributed among individual projects, because water resources programs generally do not distribute based on pre-defined formulas. Which projects and how much each state will receive largely will be determined by the Administration within the eligibility and prioritization direction provided in the legislation and its accompanying conference report. Even after enactment, implementation of the additional water infrastructure funding in the American Recovery and Reinvestment Act is likely to raise a number of issues, including how the additional funds included in this legislation will influence decisions on regular appropriations bills beyond FY2009. 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