EPA Unveils Funding Available to States, Tribes and Territories Through the Infrastructure Investment & Jobs Act

On December 2, 2021, the U.S. Environmental Protection Agency (the “EPA”) provided details on the billions of dollars in funding available to states, tribes and territories through the Infrastructure Investment & Jobs Act, including money to strengthen clean water and drinking water systems. In total, $7.4 billion is allocated for water infrastructure projects for 2022, with almost half of the funding available through grants and principal forgiveness loans. Over the next five years, nearly $44 billion will be made available – the single largest federal contribution to water infrastructure ever made, according to the EPA.

In a letter sent to the governors of each state, commonwealth, and territory, EPA Administrator Michael S. Regan detailed the funds made available to each state. In New England, Massachusetts will receive $188 million, while Rhode Island and Connecticut will receive $66 million and $76 million, respectively. In the Mid-Atlantic, New York will receive $428 million, New Jersey will receive $146 million, Pennsylvania will receive $240 million and Maryland will receive $144 million. The majority of the federal funding will be accessible to states through State Revolving Funds, which provide low-cost financing and grants to eligible projects.

State Revolving Funds are federal programs that are administered by the EPA and provide financial assistance to states for water infrastructure projects. The Drinking Water State Revolving Fund (“DWSRF”) was established through the Safe Water Drinking Act – an act that regulates the public’s drinking water – and provides much needed assistance for improving drinking water treatment technology, replacing outdated pipes, constructing water storage tanks and other water related projects required to protect the public welfare. Through the DWSRF, financial assistance may be in the form of loans, refinancing of existing loans, guaranteeing local debt and purchasing of bond insurance.

In addition to the DWSRF, the Clean Water State Revolving Fund (“CWSRF”) was established through amendments to the Clean Water Act, an act that regulates discharges in U.S. waters. The CWSRF allows states, tribes and territories to tackle water quality concerns by providing financial assistance for storm water and wastewater projects. Eligible projects for CWSRF funding include construction of wastewater facilities, creation of green infrastructure and control of nonpoint source pollution. Similar to the DWSRF, the CWSRF provides assistance through loans and other financial mechanisms.

The funding granted by the EPA will be divided between each state, tribe, and territory DWSRF and CWSRF. The EPA detailed the estimated contribution for each State Revolving Fund, with a large portion of the funds to be used for replacement of lead service lines and to address emerging contaminants, such as Perfluoroalkyl and Polyfluoroalkyl (“PFAS”). Lead and PFAS are both associated with health risks if the chemicals are ingested in high doses and in instances of prolonged exposure. A comprehensive federal regulatory scheme was created to limit the discharge and consumption of lead, however, no regulatory scheme currently exists for PFAS. To address PFAS, the EPA is developing a new drinking water regulation under the Safe Drinking Water Act. The EPA also released a PFAS strategic roadmap with three goals: understand how PFAS exposure affects human health; prevent harmful levels of PFAS from entering water, land and air; and to remediate PFAS contaminated sites. The money available through State Revolving Funds will assist states, tribes and territories in addressing issues associated with lead pipes and PFAS contamination.

Recently, New York Governor Hochul announced that more than $33 million of the funds granted to New York would be used to address emerging contaminants in Nassau and Suffolk County. In a press release, the Governor stated that $115 million in grants and financing from the DWSRF and CWSRF were approved to fund water infrastructure projects throughout the state. Eligible municipalities throughout New York and around the county are set to benefit as they look to upgrade their water infrastructure.

For additional information regarding the funds available for water infrastructure projects, please contact West Group Law at 914-898-2400.