Senate Appropriates $2.765 Billion for Capitalization Grants for State Revolving Funds (SRFs)

On Thursday, July 27, the Senate Appropriations Committee approved the Interior-Environment Bill by a 28-0 vote. The Committee approved a total of $2.765 billion for capitalization grants for the State Revolving Funds (SRFs), with $1.126 billion for the Drinking Water SRF capitalization grant and $1.639 billion for the Clean Water SRF. However, from the capitalization grants, $243.6 million from the Drinking Water SRF and $345.1 million from the Clean Water SRF is targeted for Congressionally Directed Spending (CDS) grants for the construction of drinking water, waste-water, and storm-water infrastructure. Each project shall provide not less than 20 percent matching funds from non-Federal sources, unless approved for a waiver. The continued use of the SRF capitalization grants for CDS grants erodes the ability of SRFs to revolve the funding, i.e., make new loans for additional projects through loan repayments.

What happens next is challenging to predict. The House and Senate will likely convene to reconcile differences in their bills before bringing bills to the floor for a full vote of each chamber. If past is any indication of the final outcome, the final budget is likely to include all CDS projects from both Senate and House bills. Timing for approvals of all 12 appropriations bills will be challenging due to the differences between the two chambers in their respective appropriations bills, the August recess and the end of the Federal Fiscal Year on September 30th.