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 2017: 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.

In addition to the above, the FY 2017 Appropriation required that ten percent of the capitalization grant be used as additional subsidy in the form of principal forgiveness, negative interest or grants.

The program supports the Agency's strategic goal of ensuring Clean and Safe Water.
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).

Fiscal Year 2017: 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: NA.


Agency - Environmental Protection Agency

The mission of the Environmental Protection Agency is to protect human health and the environment. Since 1970, EPA has been working for a cleaner, healthier environment for the American people.

Office - See Regional Agency Offices.

EPA Regional Offices listed in Appendix IV of the Catalog.



Selected Recipients for this Program


RecipientAmount Start DateEnd Date
New Jersey Department Of Environmental Protection $ 83,261,000   2010-07-012033-06-30
New Jersey Department Of Environmental Protection $ 50,776,186   2007-07-012031-06-30
New Jersey Department Of Environmental Protection $ 27,807,219   2008-07-012031-06-30
New Jersey Department Of Environmental Protection $ 27,582,601   2009-07-012031-06-30
New Jersey Dept Of Environmental Pr $ 35,784,441   2006-07-012031-06-30
Department Of Environment And Natural Resources $ 10,002,000   2010-08-042030-09-30
Environmental Quality, Utah Department Of $ 10,736,000   2010-02-102030-02-10
New Jersey Dept Of Environmental Pr $ 54,124,092   2003-07-012029-09-30
Health, North Dakota Department Of $ 6,548,600   2009-07-012029-09-30
State Lands And Investments, Wyoming Office Of $ 10,002,000   2010-09-012029-08-31



Program Accomplishments

Fiscal Year 2016: 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. Assistance in FY 17 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. Fiscal Year 2018: NA.

Uses and Use Restrictions

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.

Assistance agreement awards under this program may involve or relate to geospatial information.

Further information regarding geospatial information may be obtained by viewing the following website: http://geodata.epa.gov. Grant recipients and sub-recipients are encouraged to adopt and enforce policies that ban text messaging while driving company-owned or -rented vehicles or government-owned vehicles, or while driving privately-owned vehicles when on official government business or when performing any work for or on behalf of the government.

Grant recipients and sub-recipients are encouraged to conduct initiatives of the type described in section 3(a) of the Federal Leadership on Reducing Text Messaging While Driving Executive Order that was signed on October 1, 2009.

Eligibility Requirements

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).

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. 2 CFR 200, Subpart E - Cost Principles applies to this program.

Aplication and Award Process

Preapplication Coordination

An applicant (State) should seek preapplication 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.

Environmental impact information is not required for this program.

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.

Application Procedures

2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program. The standard application for EPA non-construction grant assistance (SF424-A and B) is submitted to the appropriate EPA Regional Office. Applicants may be able to use http://www.grants.gov to electronically apply for certain grant opportunities under this CFDA. 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. Applicants, except in limited circumstances approved by the Agency, must submit all initial applications for funding through http://www.grants.gov.

Award Procedures

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 office, as appropriate, for application deadlines.

Authorization

Clean Water Act (CWA), as amended, Public Law 95-217; Water Quality Act of 1987, Section 601-607,205(m), Public Law 100-4; American Recovery and Reinvestment Act of 2009, Public Law 111-5.

Range of Approval/Disapproval Time

Approval time averages 45 days.

Appeals

Disputes will be resolved under 2 CFR 1500 Subpart E, as applicable.

Renewals

For those portions of the State program that do not change from year to year, a subsequent grant application may incorporate by reference relevant portions of the previous year's application which have not changed or an operating agreement approved by the region.

Assistance Considerations

Formula and Matching Requirements

Statutory Formula: Title Clean Water Act. Matching Requirements: 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. This program does not have MOE requirements.

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. See the following for information on how assistance is awarded/released: The method of fund disbursement will be determined at the time of award.

Post Assistance Requirements

Reports

Beginning the first fiscal year after receiving payments, the State shall provide an annual report to the Regional Administrator in accordance with the schedule established in the grant agreement (generally not later than 90 days after the end of the fiscal year in which the payments were received).

The annual report shall describe how the State has met the goals and objectives for the preceding fiscal year, as identified in its intended use plan, including identification of loan recipients, loan amounts, and loan terms and similar details on other forms of financial assistance provided from the SRF.

For Recovery Act funds, States are required to input loan information into the CWSRF Benefits Reporting (CBR) database within one week of finalizing the loan.

For base funds, loan information is required to be put into CBR in the quarter in which the loan is made.

CBR includes data elements as prescribed by Public Law 111-5, Section 1512 and OMB Guidance.

Inputing loan data into CBR is required under this program.

Cash reports are required under this program.

Progress reports are required under this program.

Expenditure reports are required under this program.

Performance monitoring is required under this program.

Audits

In accordance with the provisions of 2 CFR 200, Subpart F - Audit Requirements, non-Federal entities that expend financial assistance of $750,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Non-Federal entities that expend less than $750,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 2 CFR 200.503. 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. In accordance with the provisions of 2 CFR 200, Subpart F - Audit Requirements, non-federal entities that expend $750,000 or more in a year in Federal awards shall have a single or a program specific audit conducted for that year. Non-federal entities that expend less than $750,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 2 CFR 200.503.

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.

Financial Information

Account Identification

68-0102-0-1-304; 68-0103-0-1-304.

Obigations

(Formula Grants) FY 16 $1,319,293,600; FY 17 est $1,369,202,000; and FY 18 est $1,393,387,000 - FY 16 $1,319,293,600; FY 17 est. $1,369,202,000; and FY 18 est. $1,393,387,000.

Range and Average of Financial Assistance

$6,500,000 to $147,000,000/fiscal year; $26,000,000;/fiscal year.

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.

Information Contacts

Regional or Local Office

See Regional Agency Offices. EPA Regional Offices listed in Appendix IV of the Catalog.

Headquarters Office

Sheila Platt, Sheila Platt, State Revolving Fund Branch, Municipal Support Division, (4204M), Office of Wastewater Management, Environmental Protection Agency, Washington, DC 20460. Telephone: (202) 564-0686; Fax: (202) 501-2403; E-mail: platt.sheila@epa.gov., Washington, District of Columbia 20460 Email: platt.sheila@epa.gov Phone: (202) 564-0686.

Criteria for Selecting Proposals

Grants are awarded to States that satisfy the requirements outlined in the application procedure section.



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