Regulatory Developments, Special Topics in Environmental Management

More Funds to Address Lead in Drinking Water Provided by 1-Year Law

President Donald Trump backed up the administration’s priority environmental commitment to clean drinking water by signing into law the Water Infrastructure Funding Transfer Act (S. 1689).

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The law authorizes states to transfer additional funds from the Clean Water Act’s (CWA) Clean Water State Revolving Fund (CWSRF) to the Safe Drinking Water Act’s (SDWA) Drinking Water State Revolving Fund (DWSRF). The state must use the newly transferred funds “to address a threat to public health as a result of heightened exposure to lead in drinking water.” Authorization to transfer the funds expires 1 year after the October 4, 2019, signing of the legislation.

Federal Plan

In its 2018–2022 U.S. EPA Strategic Plan, the EPA listed the provision of clean drinking water among its top goals. Motivated by the drinking water crisis in Flint, Michigan, the Agency stated that its “highest priorities include reducing exposure to lead in the nation’s drinking water systems.” In addition to the CWSRF and DWSRF, other federal tools used to leverage nonfederal dollars for drinking water improvements include the Water Infrastructure Finance and Innovation Act (WIFIA) and the Federal Action Plan to Reduce Childhood Lead Exposures and Associated Health Impacts.

States Strapped for Cash

Introduced by New Jersey’s Democratic Senator Cory Booker, S. 1689 notes that lead has been found in the drinking water of all 50 states. The Senate Report on the legislation establishes that “lead is a toxic chemical which is harmful to human health and specifically to young children; that some states do not have sufficient funds to cover the costs of lead abatement; and that some states have funds remaining in their CWSRFs that could be used to assist in addressing lead in drinking water.”

5% Increase

Before the signing of S. 1689, states were authorized to transfer up to 33% of the capitalization grants awarded from one revolving fund to the other. S. 1689 authorizes states, in consultation with the EPA, to transfer up to an additional 5% of the federal grant funds in their CWSRF to their DWSRF for projects to address public health threats related to lead exposure in drinking water. Funds may be used in the form of a grant, forgiveness of principal, negative interest, loan, or a combination of these mechanisms.

Using information from the EPA, the Congressional Budget Office estimated that implementing S. 1689 would require the agency to update program guidance and would cost less than $500,000 over the 2019–2024 period. Implementing the bill would also have a negligible net effect on the EPA’s spending on capitalization grants because any decreases in spending on CWSRF grants would have a corresponding increase in spending on DWSRF grants. Any spending would be subject to the availability of appropriated funds.

Newark’s Lead Problem

“This new law gives our state and local partners an important flexible financing option to fund projects that will reduce lead in drinking water and protect public health, especially the health of our nation’s children,” said EPA Administrator Andrew Wheeler.

“The federal government has a responsibility to restore their peace of mind and this legislation will give states desperately needed resources to repair and upgrade their drinking water systems,” said Booker.

Newark, New Jersey, reportedly has 18,000 privately owned lead service lines. New Jersey has committed to spending $120 million to replace every lead service line at no cost to taxpayers. With the added authority of S.1689, the state will be able to transfer up to $100 million in federal funds to the replacement project.

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