A $1.1 trillion FY14 omnibus appropriations bill approved by Congress this month eliminates drastic cuts to the Drinking Water and Clean Water State Revolving Fund (SRF) programs that House lawmakers had proposed last year, but also imposes new “Buy American” rules for iron and steel products used in SRF-funded projects.
The FY14 omnibus legislation (H.R. 3547) includes a total of $8.2 billion for EPA – an increase of about $300 million above the agency’s 2013 sequestration-impacted funding level and equal to President Obama’s request. Within this, the bill sets aside $906.9 million for the DWSRF and $1.489 billion for the CWSRF – thus nearly restoring each program to its pre-sequestration funding level.
The final spending levels for EPA and the SRFs closely match numbers floated by Democratic Senate appropriators late last year, and are significantly higher than a proposal offered by House Republicans. That proposal included only $5.5 billion for EPA, and $350 million and $250 million for the DW and CW SRFs, respectively.
In keeping with current practice, the omnibus bill requires states to reserve between 20 and 30 percent of their DW and CW SRF dollars to provide additional subsidies to qualified recipients in the form of principal forgiveness, negative interest loans, or grants. Appropriators also directed EPA to deliver a report detailing how this additional subsidization authority has been used, including information on the number and amount of loans awarded, recipient communities, and project descriptions.
The bill continues a requirement that each state use at least 10 percent of its share of CWSRF dollars for green infrastructure or “environmentally innovative” activities. The DWSRF is not subject to a similar green infrastructure set-aside, though the bill permits each state to fund such projects at its discretion.
Notably, the omnibus legislation includes a new requirement that all iron and steel products used in SRF-funded projects be made in the United States. Iron and steel products subject to the “Buy American” restrictions are defined as “lined or unlined pipes and fittings, manhole covers and other municipal castings, hydrants, tanks, flanges, pipe clamps and restraints, valves, structural steel, reinforced precast concrete, and construction materials.”
EPA will be allowed to waive the rules for individual projects if it determines domestic iron and steel products are not available in sufficient quantities or of satisfactory quality, would increase a project’s overall costs by more than 25 percent, or their use would be “inconsistent with the public interest.”
While the water utility community has raised concerns about “Buy American” restrictions, the language in the omnibus does not go as far as similar provisions that were part of the 2009 economic stimulus legislation. The 2009 law required the use of American-made manufactured goods – in addition to iron and steel products – and was thus much more far-reaching than the current version.