WateReuse Continues Work with Congress on Appropriations

Last week, the House released Fiscal Year 2021 (FY21) appropriation bills containing annual discretionary funding for many programs, and in some cases, additional stimulus-related emergency funding. By classifying stimulus funding as emergency funding in appropriations bills, Congress is able to spend above previously agreed-to budget caps. The House Appropriations Committee passed the FY 2021 Interior-Environment Appropriations bill on Friday, and is scheduled to pass the Energy and Water Appropriations bill today. Both bills include funding for programs that support water recycling.

The House Interior-Environment Appropriations bill for FY 2021 uses emergency spending rules to significantly increase funding for the Clean Water State Revolving Fund (CWSRF) Program and Drinking Water State Revolving Fund (DWSRF) program relative to FY 2020 spending. The base funding levels provided for the two programs are equal to last year’s levels; however, with emergency spending taken into account, the bill increases funding for the CWSRF from roughly $1.6 billion to $8 billion and for the DWSRF from $1.1 billion to $5 billion. Within the emergency funding provided for both programs, the bill waives existing matching requirements and requires additional loan subsidization. It also directs states to prioritize projects that can begin construction within 18 months.

The bill increases base funding for the Sewer Overflow and Stormwater Reuse Municipal Grants Program from $28 million in FY 2020 to $56.7 million, and adds $400 million in emergency spending for the program, for a total of $456.7 million. The bill provides level funding ($4 million) for the Drinking Water Infrastructure Resilience and Sustainability Program, and a one-million-dollar increase (to $7 million) for the National Priorities Research Program.

While the Interior-Environment Appropriations bill includes significant investments in many critical programs, it falls far short when it comes to supporting the Water Infrastructure Finance and Innovation Act (WIFIA) Program. The House proposed bill rescinds unobligated balances from prior to FY 2020. As a result, 51 projects whose loans have not yet closed, including nearly a dozen water reuse projects, could potentially lose the opportunity to fund their projects through the WIFIA program. WateReuse joined with water sector partners to deliver a letter to Congress strongly opposing this language, and urging its exclusion from appropriations legislation. A number of WateReuse members may be impacted by this language should it be enacted.

Alongside the Interior-Environment Appropriations bill, the House also released its draft FY 2021 Energy and Water Appropriations bill last week. The House proposal would make deep cuts to water recycling and desalination programs. In particular, the bill proposes to reduce the Title XVI-WIIN Water Reclamation and Reuse Program by 50 percent, to $10 million. It makes a similar cut to the Desalination and Water Purification Program, which supports both ocean and brackish water desalination projects. WateReuse is actively working to restore funding for these programs.

Unlike the House, the Senate has not yet begun to work on appropriations bills. We expect the House to bring its bills to the floor prior to the August recess. While a continuing resolution extending FY 2020 funding levels into at least December will almost certainly be necessary, the bills being passed through the Appropriations Committees will form the basis for final negotiations over FY 2021 spending levels. WateReuse will be working to increase investments in key programs, and will keep our members updated as developments occur.