The Clean Water State Revolving Fund (CWSRF) is a self-perpetuating loan assistance authority for

water quality Water quality refers to the chemical, physical, and biological characteristics of water based on the standards of its usage. It is most frequently used by reference to a set of standards against which compliance, generally achieved through tr ...

improvement projects in the United States. The fund is administered by the

Environmental Protection Agency A biophysical environment is a biotic and abiotic surrounding of an organism or population, and consequently includes the factors that have an influence in their survival, development, and evolution. A biophysical environment can vary in scale f ...

and

state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States * ''Our S ...

agencies. The CWSRF, which replaced the

Clean Water Act The Clean Water Act (CWA) is the primary federal law in the United States governing water pollution. Its objective is to restore and maintain the chemical, physical, and biological integrity of the nation's waters; recognizing the responsibiliti ...

Construction Grants program, provides loans for the construction of municipal

wastewater Wastewater is water generated after the use of freshwater, raw water, drinking water or saline water in a variety of deliberate applications or processes. Another definition of wastewater is "Used water from any combination of domestic, industr ...

facilities and implementation of

nonpoint source pollution Nonpoint source (NPS) pollution refers to diffuse contamination (or pollution) of water or air that does not originate from a single discrete source. This type of pollution is often the cumulative effect of small amounts of contaminants gathered ...

control and

estuary An estuary is a partially enclosed coastal body of brackish water with one or more rivers or streams flowing into it, and with a free connection to the open sea. Estuaries form a transition zone between river environments and maritime environment ...

protection projects.

Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of a ...

established the fund in the Water Quality Act of 1987. Since inception, cumulative assistance has surpassed US$153.6 billion as of 2021, and is continuing to grow through interest earnings, principal repayments, and leveraging.

Revolving structure

All 50 states, plus

Puerto Rico Puerto Rico (; abbreviated PR; tnq, Boriken, ''Borinquen''), officially the Commonwealth of Puerto Rico ( es, link=yes, Estado Libre Asociado de Puerto Rico, lit=Free Associated State of Puerto Rico), is a Caribbean island and Unincorporated ...

operate a CWSRF. The 51 CWSRF programs function like environmental

infrastructure Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and priv ...

banks by distributing low interest rate loans for water quality projects. Loan repayments are recycled back into individual CWSRF programs. States can only use the funds to make loans, purchase local debt, or issue financial guarantees. They cannot make

grants Grant or Grants may refer to: Places *Grant County (disambiguation) Australia * Grant, Queensland, a locality in the Barcaldine Region, Queensland, Australia United Kingdom *Castle Grant United States * Grant, Alabama *Grant, Inyo County, C ...

or otherwise dissipate the capital in their funds. Principal repayments plus interest earnings become available to finance new projects, allowing the funds to "revolve" over time. States can also increase their CWSRF financing capacity by issuing CWSRF-backed revenue or general obligation bonds. As of 2007, 27 states have leveraged their programs in this way, raising an additional $20.6 billion for important water quality projects. The 51 funds are capitalized in part by federal and state contributions. For every dollar contributed by the federal government, states contribute 20 cents. As of 2017, the cumulative federal appropriation to the 51 CWSRF programs had reached over $42 billion, with corresponding state contributions of $84 billion. Financial leveraging techniques conducted by state funds had snowballed federal and state contributions into $153 billion in 2021. States are responsible for the operation of their CWSRF program. Under the CWSRF, states may provide various types of assistance, including loans, refinancing, purchasing, or guaranteeing local debt and purchasing bond insurance. States may also set specific loan terms, including interest rates from zero percent to market rate and repayment periods of up to 30 years. States have the flexibility to target financial resources to their specific community and environmental needs. States may customize loan terms to meet the needs of small and disadvantaged communities, or to provide incentives for certain types of projects. Beginning in 2009, Congress authorized the CWSRFs to provide further financial assistance through additional subsidization, such as grants, principal forgiveness, and negative interest rate loans. Through the Green Project Reserve, the CWSRFs target critical green infrastructure, water and energy efficiency improvements, and other environmentally innovative activities.

Program highlights

Since the inaugural CWSRF project was funded in 1988, the 51 state-run CWSRF programs have provided over $145 billion in assistance for water quality projects through 38,441 loans. In 2017, the programs provided over $7.4 billion in assistance to loan recipients of all sizes, including farmers, homeowners, small businesses, nonprofit organizations, and major municipalities. In 2017 the average loan interest rate was 1.4%, compared to the prevailing market rate of 3.5%. While

wastewater treatment Wastewater treatment is a process used to remove contaminants from wastewater and convert it into an effluent that can be returned to the water cycle. Once returned to the water cycle, the effluent creates an acceptable impact on the environme ...

projects have comprised 96 percent of all CWSRF funding to date, over $4.6 billion has gone to nonpoint source and estuary projects. The number of assistance agreements for nonpoint source projects has grown significantly over the years, from only two projects in 1990 to 1,305 in 2007. The low cost and flexibility of CWSRF financing has helped the programs serve communities of all sizes. In 2007, two-thirds of all loans went to communities with populations below 3,500. In addition, over $1.1 billion in assistance targeted communities with fewer than 10,000 people (see Figure 3). The programs are projected to continue to grow over time, as interest earnings and repayments of loans increase (see Figure 4). Nationally, the CWSRF program provides a remarkable return on federal investment: as of 2017, the program has financed $3 in projects for every dollar the federal government has invested. The demand for CWSRF funds nationwide can be attributed to high needs, low interest rates, and flexible financing options. The rate of fund utilization has increased steadily since 1988, signaling increased demand for funds as well as efficient state operations. As of 2007, 97 percent of all available funds were committed to projects. To meet high levels of demand, 27 states have chosen to implement leveraging approaches by issuing revenue and general obligation bonds that are secured by CWSRF assets. Through leveraging, states have increased their capacity to finance important water quality projects.

The use of leveraging in the CWSRF

27 CWSRF's

leverage Leverage or leveraged may refer to: *Leverage (mechanics), mechanical advantage achieved by using a lever * ''Leverage'' (album), a 2012 album by Lyriel *Leverage (dance), a type of dance connection *Leverage (finance), using given resources to ...

their funds to increase the amount of capital available for loan assistance. This means that these states augment their CWSRF capital by issuing

municipal bonds A municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often, ...

. Typically, they loan the proceeds of the bonds while investing their capitalization funds (both state and federal). These investments serve two purposes. First, they are pledged to the bondholders as additional collateral, thus more than assuring a AAA bond rating. Second, the interest on the invested capital is used to pay subsidies to the CWSRF program's local utility borrowers.

CWSRF Benefits Reporting System

The CWSRF Benefits Reporting System (CBR), launched in 2005 and adopted by all 51 state programs, produces a quantifiable record of the environmental and public health impact of CWSRF investments. Figures 6 and 8 present data reported in the CBR System to date. CBR allows users to record anticipated water quality improvements from every CWSRF loan directed towards water quality improvement. The 51 state programs have used CBR to track the environmental impact of 4,878 projects. The data link $15.8 billion in CWSRF loans to projects that protect and restore drinking water sources, recreational areas, and aquatic wildlife throughout the country. In 2007, CWSRF programs funded more than 964 projects designed to protect and restore water bodies, including 597 projects with direct human health benefits.

Statutory authority

Clean Water Act sections 212, 319, and 320 provide the statutory authority for programs funded by the CWSRF. The CWSRF is authorized to provide financial assistance for the construction of publicly owned treatment works (sec. 212), the development and execution of state's comprehensive conservation management plans (sec. 319), and the development and execution of an estuary conservation and management plan (sec. 320).

Eligibility

Eligible projects under CWA section 212 include the capital costs for the construction and maintenance of

publicly owned treatment works A publicly owned treatment works (POTW) is a term used in the United States for a sewage treatment plant owned, and usually operated, by a government agency. In the U.S., POTWs are typically owned by local government agencies, and are usually desig ...

(POTWs). * Wastewater collection and treatment * Publicly owned municipal

stormwater Stormwater, also spelled storm water, is water that originates from precipitation (storm), including heavy rain and meltwater from hail and snow. Stormwater can soak into the soil ( infiltrate) and become groundwater, be stored on depressed la ...

projects *

Combined sewer A combined sewer is a type of gravity sewer with a system of pipes, tunnels, pump stations etc. to transport sewage and urban runoff together to a sewage treatment plant or disposal site. This means that during rain events, the sewage gets dilute ...

overflow *

Sanitary sewer overflow Sanitary sewer overflow (SSO) is a condition in which untreated sewage is discharged from a sanitary sewer into the environment prior to reaching sewage treatment facilities. When caused by rainfall it is also known as wet weather overflow. Cause ...

* Water pipes, storage, and treatment systems *

Green infrastructure Green infrastructure or blue-green infrastructure refers to a network that provides the “ingredients” for solving urban and climatic challenges by building with nature.Hiltrud Pötz & Pierre Bleuze (2011). Urban green-blue grids for sustainab ...

* Water quality portions of municipal

landfill A landfill site, also known as a tip, dump, rubbish dump, garbage dump, or dumping ground, is a site for the disposal of waste materials. Landfill is the oldest and most common form of waste disposal, although the systematic burial of the waste ...

projects *

Water conservation Water conservation includes all the policies, strategies and activities to sustainably manage the natural resource of fresh water, to protect the hydrosphere, and to meet the current and future human demand (thus avoiding water scarcity). Populati ...

and reuse * Energy Conservation and Efficiency. Eligible projects under CWA section 319 ( nonpoint source projects) may include: * Agricultural

runoff Runoff, run-off or RUNOFF may refer to: * RUNOFF, the first computer text-formatting program * Runoff or run-off, another name for bleed, printing that lies beyond the edges to which a printed sheet is trimmed * Runoff or run-off, a stock market ...

* Leaking on-site

septic system Onsite sewage facilities (OSSF), also called septic systems, are wastewater systems designed to treat and dispose of effluent on the same property that produces the wastewater, in areas not served by public sewage infrastructure. A septic tank a ...

s * Stormwater runoff *

Brownfield In urban planning, brownfield land is any previously developed land that is not currently in use. It may be potentially contaminated, but this is not required for the area to be considered brownfield. The term is also used to describe land prev ...

contamination * Atmospheric deposition * Runoff from closed landfills * Leaking

underground storage tanks An underground storage tank (UST) is, according to United States federal regulations, a storage tank, including any underground piping connected to the tank, that has at least 10 percent of its volume underground. Definition & Regulation in U.S. ...

.Clean Water Act. Title VI: "State Water Pollution Control Revolving Funds." ''et seq.'' CWA section 320 (estuary management) allows the CWSRF to fund publicly and privately owned projects, as long as the project is part of the state's Comprehensive Conservation Management Plan (CCMP) and is sanctioned in the plan. * Planting trees and shrubs within the watershed (

drainage basin A drainage basin is an area of land where all flowing surface water converges to a single point, such as a river mouth, or flows into another body of water, such as a lake or ocean. A basin is separated from adjacent basins by a perimeter, t ...

) * Purchasing equipment required for the CCMP * Environmental clean-up * Development and initial delivery of educational programs. Projects must have a direct benefit to the

of an estuary. This includes: * Protection of public water supplies * Protection and propagation of a balanced, indigenous population of

shellfish Shellfish is a colloquial and fisheries term for exoskeleton-bearing aquatic invertebrates used as food, including various species of molluscs, crustaceans, and echinoderms. Although most kinds of shellfish are harvested from saltwater envir ...

, fish, and wildlife * Actions that, in order to allow for recreational activities in and on water, require the control of point and nonpoint sources of pollution to supplement existing controls of pollution. In many cases, estuary level protection plans are combined with other elements of an overall project. Where the water quality portion of a project is clearly distinct from other portions of the project, only the water quality portion can be funded by the CWSRF.

Eligible use of funds

The CWSRF employs a variety of loan assistance mechanisms. ;Loans * Terms may not exceed 20 years. * Interest rates must be at or below market rate including interest-free. ;Purchase of debt or refinance * A community's debt may be purchased by an SRF program. * Under the ''Extended Term Finance Policy,'' the purchase may have terms greater than 20 years, up to the useful life of the project. * Targeted to disadvantaged communities, though a waiver of the restriction may be granted. * An SRF program may refinance previously issued debt. ;Guarantees and insurances * Guarantees or insurance can be used where such assistance will result in improved credit market access or reduced interest rates. * The SRF program does not disburse funds for construction; such funds are procured by a borrower in the market. ;Guarantee SRF revenue debt * Section 603(d)(3) of the Act authorizes CWSRF's to guaranty debt. Guaranty powers increase the funding capacity of CWSRF's as well as decrease annual payments which utility ratepayers must pay for their wastewater projects. Guaranties work very much like municipal

bond insurance Bond insurance, also known as "financial guaranty insurance", is a type of insurance whereby an insurance company guarantees scheduled payments of interest and principal on a bond or other security in the event of a payment default by the issuer of ...

. * SRF programs may issue debt guaranteed by SRF funds. * The revenue generated is used to provide assistance to borrowers for eligible projects. * This greatly expands the capacity of a program in the near-term. ;Provide loan guarantees * Similar revolving funds established by municipalities or inter-municipal agencies can receive loan guarantees. ;Additional Subsidization * Under certain conditions, CWSRF programs may provide up to a fixed percentage of their capitalization grants as additional subsidization in the form of principal forgiveness, negative interest rate loans, or grants. * The recipient must be a municipality or inter-municipal, interstate, or state agency. * Additional subsidization may only be used to help address affordability issues or to implement a process, material, technique, or technology that addresses water or energy efficiency goals; mitigates stormwater runoff; or encourages sustainable project planning, design, and construction. ;Earn Interest * CWSRFs may invest available funds in short-term investments. * All interest earnings must remain in the fund to be used for eligible purposes.

Return on federal dollar

Due to the income stream into the program from state match, loan repayments, interest earnings, investment earning, and bond proceeds from leveraging, the return on every federal dollar investment to the CWSRF is currently $3 as of 2017. EPA has projected that over a twenty-year time horizon, the initial federal investment into the CWSRF can result in the construction of up to three to four times as many projects compared to programs that utilize a one-time federal grant, depending on the allocation of resources to the program.

Addressing climate change

Climate change In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to E ...

threatens both water quality and water quantity. The CWSRF can assist water utilities and municipalities mitigate the effects of climate change as they relate to water quality by capitalizing costs related to planning and implementing new technologies. Eligible criteria include the following.

Energy conservation

Wastewater and stormwater treatment facilities consume energy to collect and distribute treated water. The CWSRF can fund capital costs needed to power these publicly owned treatment works (POTWs) and strongly encourages the implementation of energy efficient technology. * Energy efficient pumps * Clean energy technology (e.g., solar, wind, hydroelectric, geothermal) * Purchase of

energy audit An energy audit is an inspection survey and an analysis of energy flows for energy conservation in a building. It may include a process or system to reduce the amount of energy input into the system without negatively affecting the output. In com ...

s that have a reasonable prospect of resulting in a capital project *

Pro-rata ''Pro rata'' is an adverb or adjective meaning in equal portions or in proportion. The term is used in many legal and economic contexts. The hyphenated spelling ''pro-rata'' for the adjective form is common, as recommended for adjectives by some E ...

share of capital costs for off-site publicly owned clean energy facilities that provides power to POTWs.

Green infrastructure

The CWSRF can fund the "capital costs" of

green infrastructure Green infrastructure or blue-green infrastructure refers to a network that provides the “ingredients” for solving urban and climatic challenges by building with nature.Hiltrud Pötz & Pierre Bleuze (2011). Urban green-blue grids for sustainab ...

projects with direct water quality benefits. Capital costs include traditional infrastructure expenditures (such as pipes, pumps and treatment plants), as well as unconventional infrastructure costs (like land conservation, tree plantings, equipment purchases, planning and design, environmental cleanups and even the development and initial delivery of environmental education programs). One of the few things the CWSRF cannot fund is the operation and maintenance costs of a project. The Water Infrastructure Finance and Innovation Act of 2014 established additional financing mechanisms and includes eligibility for green infrastructure projects.United States. Water Infrastructure Finance and Innovation Act of 2014. , title V, §5022. Approved 2014-06-10.

Carbon sequestration

The CWSRF can finance

carbon sequestration Carbon sequestration is the process of storing carbon in a carbon pool. Carbon dioxide () is naturally captured from the atmosphere through biological, chemical, and physical processes. These changes can be accelerated through changes in land ...

through a variety of methods, including urban heat-island reduction, energy saving achievement, and habitat preservation. Aquatic environments, green spaces, and geologic carbon storage are efficient

carbon sink A carbon sink is anything, natural or otherwise, that accumulates and stores some carbon-containing chemical compound for an indefinite period and thereby removes carbon dioxide () from the atmosphere. Globally, the two most important carbon si ...

s that can be utilized with CWSRF loans. *

Wetlands A wetland is a distinct ecosystem that is flooded or saturated by water, either permanently (for years or decades) or seasonally (for weeks or months). Flooding results in oxygen-free (anoxic) processes prevailing, especially in the soils. The ...

restoration * Land conservation (purchase of

easement An easement is a nonpossessory right to use and/or enter onto the real property of another without possessing it. It is "best typified in the right of way which one landowner, A, may enjoy over the land of another, B". An easement is a propert ...

s and preserved green spaces) * Tree plantings (

reforestation Reforestation (occasionally, reafforestation) is the natural or intentional restocking of existing forests and woodlands (forestation) that have been depleted, usually through deforestation, but also after clearcutting. Management A debate ...

green roof A green roof or living roof is a roof of a building that is partially or completely covered with vegetation and a growing medium, planted over a waterproofing membrane. It may also include additional layers such as a root barrier and drainage ...

s, tree boxes, parks, vegetated

swale Swale or Swales may refer to: Topography * Swale (landform), a low tract of land ** Bioswale, landform designed to remove silt and pollution ** Swales, found in the formation of Hummocky cross-stratification Geography * River Swale, in North ...

s and

median strip The median strip, central reservation, roadway median, or traffic median is the reserved area that separates opposing lanes of traffic on divided roadways such as divided highways, dual carriageways, freeways, and motorways. The term also a ...

s) *

scrubber Scrubber systems (e.g. chemical scrubbers, gas scrubbers) are a diverse group of air pollution control devices that can be used to remove some particulates and/or gases from industrial exhaust streams. An early application of a carbon dioxide scr ...

s on

power plants A power station, also referred to as a power plant and sometimes generating station or generating plant, is an industrial facility for the generation of electric power. Power stations are generally connected to an electrical grid. Many pow ...

that provide energy to POTWs.

Methane capture

* Publicly owned equipment for the capture of

methane Methane ( , ) is a chemical compound with the chemical formula (one carbon atom bonded to four hydrogen atoms). It is a group-14 hydride, the simplest alkane, and the main constituent of natural gas. The relative abundance of methane on Eart ...

emitted from an

anaerobic Anaerobic means "living, active, occurring, or existing in the absence of free oxygen", as opposed to aerobic which means "living, active, or occurring only in the presence of oxygen." Anaerobic may also refer to: * Anaerobic adhesive, a bonding a ...

municipal

system and conversion to energy is eligible for CWSRF funding. * Methane capture equipment can be privately owned if the project is located within a designated National Estuary. * Public or privately owned equipment to capture

emitted from manure-containing ponds on animal feeding operations (AFOs), not regulated as concentrated animal feeding operations (CAFOs), and convert the methane to energy is eligible for CWSRF funding. * This equipment can be located at CAFOs in designated National Estuaries.

Water conservation and reuse

Eligible water conservation and reuse projects include: * Efficient plumbing fixture retrofits or replacement *

Grey water Greywater (or grey water, sullage, also spelled gray water in the United States) refers to domestic wastewater generated in households or office buildings from streams without fecal contamination, i.e., all streams except for the wastewater fro ...

recycling in public buildings * Efficient landscape

irrigation Irrigation (also referred to as watering) is the practice of applying controlled amounts of water to land to help grow Crop, crops, Landscape plant, landscape plants, and Lawn, lawns. Irrigation has been a key aspect of agriculture for over 5,00 ...

equipment for public facilities * Publicly owned stormwater treatment and reuse * Publicly owned wastewater distribution lines to support effluent reuse/recycling uses, including piping the effluent to the property line of a privately owned effluent consumer, as well as publicly owned equipment to reuse effluent * Water quality trading for construction projects that generate water pollution control credits or capital projects that may be located offsite the POTW * Replacing inefficient irrigation practices with efficient

drip irrigation Drip irrigation or trickle irrigation is a type of micro-irrigation system that has the potential to save water and nutrients by allowing water to drip slowly to the roots of plants, either from above the soil surface or buried below the surface. ...

Public-private partnerships

Public-private partnerships, or "P3s", are one investment technique by which municipalities can finance the upgrade, expansion, repair, or implementation of new technology for wastewater infrastructure. The CWSRF, because of its unique financing authorities, is authorized to oversee (in concert with the EPA's Assistant Administrator for Water), provide technical assistance, and guidance for municipalities that choose to investigate P3s for the provision of their wastewater services. A P3, as defined by the Environmental Financial Advisory Board, is a contractual, institutional, or other relationship between government and a private sector entity that results in sharing of duties, risks, and rewards of providing a service in which the government has an interest, recognizing that the government retains ultimate responsibility for insuring that social needs and objectives are met. P3s are sought by states and local governments as a way to reduce the financial burden of

water pollution Water pollution (or aquatic pollution) is the contamination of water bodies, usually as a result of human activities, so that it negatively affects its uses. Water bodies include lakes, rivers, oceans, aquifers, reservoirs and groundwater. Water ...

and infrastructure needs. It has been estimated that, of the costly capital improvements, upgrades, expansions, and new compliance requirements imposed on water and wastewater utilities, local governments bear 95% of the costs. Among local government expenditures, only education is higher.

Water Infrastructure Finance and Innovation Act

Congress passed the Water Infrastructure Finance and Innovation Act of 2014 (WIFIA) to provide an expanded credit program for water and wastewater infrastructure projects, with broader eligibility criteria than the previously authorized revolving funds for wastewater and drinking water. Pursuant to the act, EPA established its Water Infrastructure and Resiliency Finance Center in 2015 to help local governments and municipal utilities design innovative financing mechanisms, including public-private partnerships. Congress amended the WIFIA program in 2015 and 2016.United States.
1. Fixing America's Surface Transportation Act. , §1445. Approved 2015-12-04.
2. Water Infrastructure Improvements for the Nation Act of 2016. , §5008. Approved 2016-12-16.