Frequently Asked Questions for SRF Recovery Act Funding
- How can a community or utility get funding?
- How can the public find out what projects the state is considering for funding?
- How quickly will states use the funding?
- Does EPA anticipate that it might have to take funding away from states?
- What is EPA going to do to ensure that states fund green projects?
- Can a utility get a grant from Recovery Act funding?
- Can an individual get assistance from Recovery Act funding?
- Will states get to use any of these funds to help them run the program?
Communities that are interested in receiving assistance for a project must contact their state SRF programs to be placed on the state’s priority list for funding. States have been collecting information on projects that are ready to proceed to construction, but many have reopened their priority lists in response to final passage of the law.
States must prepare annual Intended Use Plans to describe how they will use funding in their SRF programs. In order to receive Recovery Act funding, a state will have to incorporate details of the new funding in their 2009 IUP or provide a supplemental IUP that describes how the funds will be used. As with their normal IUP, states will have to make the document available to public for review and comment.
Additionally, the Recovery Act requires states to provide detailed information on every project, including a description, the amount of assistance, and an estimate of the number of jobs that will be created or retained. Although EPA is still considering the process, pursuant to the Act, the Agency will make the information provided by the states available to the public.
President Obama and Congress have emphasized the fact that the purpose of these funds is to get people back to work. The law requires that states give priority to projects that will be ready to proceed to construction within 12 months of enactment of the Act. If a state fails to have project under contract or construction within 12 months, EPA will take grant funds that have not been committed to projects from the state and provide it to those states that do have projects ready to proceed. Based on past experience, EPA expects that projects will take from 1-3 years to complete construction.
EPA hopes that it will not have to reallocate funding. Over the past few months, states have been working in anticipation of funding to identify projects that are ready to proceed to construction. Many states have told EPA that it will have funding needs for ready projects that will exceed the amount they will receive from the Recovery Act. States may provide assistance to these projects using funds made available through their existing SRF programs, which together financed close to $8 billion in 2008.
The Act requires states to target not less than 20% of their funds to green projects, to the extent that there are eligible project applications. Before they can redirect these funds to traditional projects, a state must certify to EPA that they lack sufficient eligible applications. States will need to demonstrate that they made a good faith effort to solicit projects and allowed time for applications to be submitted and considered. To facilitate solicitation, EPA is allowing states to have additional time before finalizing the section of their Intended Use Plan that describes the green projects.
Congress has included provisions in the new law to recognize the economic hardship that many states and communities are facing across the country. Although SRF assistance is typically in the form of a low interest loan, the law requires that a minimum of 50% of the state grant be used to provide additional subsidization on assistance in the form of forgiveness of loan principal, negative interest rate loans, or grants.
The only scenario where a state would provide funding to an individual, as opposed to a public water system or a wastewater treatment system, is if they were providing CWSRF assistance under their non-point source program eligibility. For example, some states have developed programs that provide assistance to individuals for septic system rehabilitation or replacement. Others have developed programs that provide funding to farmers to implement best management practices that protect water quality. Each state selects projects for funding based on priority criteria they develop to assess how the project will further water quality protection, public health protection, and compliance with regulations and permits.
EPA has developed a Funding Nonpoint Source Activities with the Clean Water State Revolving Fund brochure (PDF) (24 pp, 266K, About PDF) that describes some of types of projects that can receive non-point source assistance. However, there is one notable difference between activities eligible under the existing CWSRF program and with funds made available from the Recovery Act. Unlike normal CWSRF funds, Recovery Act funding cannot be used for land acquisition or conservation easements that protect water quality.
Will states get to use any of these funds to help them run the program?
Yes. States will have the ability to use up to 4% of their grant to help them administer the program. State DWSRF programs will also have the ability to access other set-aside funding that can help them support and expand their existing drinking water protection programs.