January 12, 2026

Last week, the U.S. House of Representatives passed a three-bill appropriations package that includes FY 2026 funding for key water reuse grant and loan programs administered by the U.S. Environmental Protection Agency (EPA) and Bureau of Reclamation (Reclamation). Unfortunately, the legislation cuts funding for the Title XVI Water Reclamation and Reuse Grants Program by 58 percent, from $30 million to $12.5 million, $10 million of which would be available for Title XVI competitive grants. WateReuse is working to reverse the cut ahead of Senate consideration of the conference agreement; the package, however, has strong bipartisan support and has already been informally agreed to by Senate leaders.

The cut to Title XVI comes as part of a larger funding cut to the Bureau of Reclamation’s Water and Related Resources account, within which Reclamation water programs sit. The package reduces funding for that account by more than $286 million, from roughly $1.75 billion to $1.47 billion. Appropriations Committee staff have pledged to work toward restoring Title XVI funding in FY 2027. Whereas the bill slashes funding for Reclamation water programs, it largely maintains funding for key EPA water programs and provides start-up funding of $2 million for the Pilot Program for Alternative Water Source Grants, a top WateReuse priority.

WateReuse will be working to grow funding for the Alternative Water Source Grants program over the next several years so that communities in every region of the country can access grant funding for water reuse. The bill maintains level funding for the Clean Water and Drinking Water State Revolving Fund (SRF) Programs; however, it dedicates a very significant portion of the SRF funding for earmark projects. The three-bill funding package now heads to the U.S. Senate for its consideration.  

On January 8th, the Government Accountability Office (GAO) released a report examining the Bureau of Reclamation’s implementation of the Large-Scale Water Recycling Projects Competitive Grants Program. The WateReuse Association helped create and fund the program as part of the Infrastructure Investment and Jobs Act (IIJA) of 2021.

Of the $450 million provided by the IIJA for the program, Reclamation has announced $308 million in awards to five different projects across Southern California and Utah. Two of the five agreements have yet to be executed by Reclamation, despite the awards being announced as early as 2024. WateReuse is meeting with Reclamation and Department of Interior leadership later this month and will be urging them to finalize the remaining agreements and post the next Notice of Funding Opportunity for the program.

The GAO report identifies implementation challenges and areas for improvement. These include an atypically prolonged review and approval process, and a need for better and more frequent communication with project sponsors. The report cites a decrease in Reclamation program staff as a potential cause.

The report also notes that IIJA funding doesn’t cover feasibility study costs, and that the expiration of Reclamation’s programmatic waivers for Build America, Buy America requirements may cause delays and necessitate project-specific waivers.

The overall recommendation that was generated from this report concluded that Reclamation should report the experience of implementing the Large-Scale Water Recycling Program to Congress to improve the program should it be revised or reauthorized. A summary of the report is available here.

For decades, courts and presidential administrations have contested and modified the bounds of federal jurisdiction over wetlands, rivers, streams, and other waters, largely through defining and redefining what constitutes “Waters of the United States” (WOTUS). Last month, WateReuse submitted comments on the Trump Administration’s recent redefinition of WOTUS. In our comments, we argue that water reuse facilities and features should be exempted from the definition of WOTUS in the same way wastewater facilities and groundwater are exempted under the Proposed Rule.  

The Trump Administration's proposed rule is available here.

Shortly before the holidays, the Environment Subcommittee of the U.S. House Committee on Commerce and Science held a hearing on per- and polyfluoroalkyl substances (PFAS), source control, and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The hearing, entitled “Examining the Impact of EPA’s CERCLA Designation for Two PFAS Chemistries and Potential Policy Responses to Superfund Liability Concerns,” featured testimony from long-time water sector leaders Tracy Mehan of the American Water Works Association (AWWA) and Susan Bodine of Earth & Water Law. The discussion largely mirrored those of previous PFAS hearings held in the House and Senate, including arguments both for and against a CERCLA liability shield for utilities.  

Congress took up a related topic last week when the U.S. House Committee on Science, Space, and Technology held a hearing entitled “Chemistry Competitiveness: Fueling Innovation and Streamlining Processes to Ensure Safety and Security.” The hearing focused on the U.S. Environmental Protection Agency’s (EPA) chemical review process under the Toxic Substances Control Act (TSCA). WateReuse has advocated for a robust chemical review process to ensure that potentially problematic chemicals and chemicals of emerging concern do not enter commerce and eventually water and wastewater streams.

Listen to the PFAS CERCLA hearing here.  

Listen to the TSCA chemical reviews hearing here.  

As Congress debates whether and when to move forward with tax policy legislation in 2026, the WateReuse Association continues to advocate for an investment tax credit to help manufacturers, data centers, and other industrial entities scale up their use of recycled water. Last year, four bipartisan members of the House Ways and Means Committee—which has jurisdiction over tax policy—introduced the Advancing Water Reuse Act (H.R. 2940), which now has 21 bipartisan sponsors. The legislation would establish a 30 percent tax credit for investments made by manufacturers, data centers, and other industrial entities in water reuse systems and infrastructure, including both onsite systems as well as municipal systems.

To help build the cosponsor list for H.R. 2940, review the current cosponsor list and reach out to WateReuse Director of Policy and Government Affairs, Greg Fogel (gfogel@watereuse.org), if your representative is not a current cosponsor. 

Last week, WateReuse Executive Director Bruno Pigott provided a deep dive on water reuse drivers, technologies, case studies, and policy and funding mechanisms on the Water Foresight podcast hosted by Dr. Matthew Klein. In the episode, titled “Anticipating the Future of Water Reuse,” Pigott details how reuse can help with discharge compliance, the role of federal funding mechanisms in executing projects, and more. Pigott explains how water reuse can transform water and wastewater policy: “Water and wastewater have always been connected, but from a legislative and aregulatory process, they’re separate. I see water reuse as a way to bridge both things, bringing back together two areas that, because of legislation, were totally separate.” 

Contact us at info@watereuse.org