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AWWA News Release

February 17, 2009

President Signs Economic Stimulus Bill with $2 Billion for Drinking Water Infrastructure

President Barack Obama signed into law on February 17 an economic stimulus bill that contains $2 billion in funding for drinking water infrastructure. The signing ceremony was held in Denver's Museum of Nature and Science to emphasize the "green" nature of many of the
law's features.

The House of Representatives approved the measure 246-183 early the afternoon of February 13, and the Senate voted its approval 60-38 at about 10:47 p.m. that evening. Bill supporters needed 60 votes to overcome any budgetary points of order.

AWWA will provide a webcast on the stimulus bill at 1 p.m. EDT February 26. AWWA has also prepared a summary of key provisions relevant to local governments.

Legislators were determined from the outset not to create new federal bureaucracies in the bill. Therefore, water infrastructure stimulus funds will be distributed via the state revolving loan fund (SRF) program. The $2 billion will be divided among the 50 states according to the existing SRF allocation formula.

Details from the U.S. Environmental Protection Agency (EPA) on how to apply for funds are pending. However, EPA officials did urge utilities to immediately contact their state drinking water SRF officials to begin discussions about their projects.

The total cost of the stimulus bill, also known as the American Recovery and Reinvestment Act, is about $787 billion. Congress provided $4 billion for wastewater utilities and $1.4 billion for rural drinking water, wastewater water and waste disposal projects. Following are highlights with regard to drinking water funding:

* $2 billion for drinking water infrastructure
* States will not be required to provide matching funds
* Priority for project funding will be given to projects on a state priority list that are ready to proceed to construction within 12 months of enactment of H.R. 1
* Each state shall use no less than 50 percent of its capitalization funds to provide “additional subsidization…in the form of forgiveness of principal, negative interest loans or grants or any combination of these…”
* At least 20 percent of the funds shall be used for “projects that address green infrastructure, water or water efficiency improvements or other environmentally innovative activities…” to the extent that there are sufficient eligible project applications
* Funds may be used to buy, refinance or restructure debt obligations of eligible recipients only when that debt was incurred on or after October 1, 2008
* EPA shall reallocate funds where projects are not under contract or construction within 12 months of enactment
* No funds may be used to acquire land or a conservation easement for source water protection, to implement source water protection measures, or to establish or implement wellhead protection programs
* EPA (and all other federal agencies receiving stimulus funds) must post its plans for using those funds on the Recovery.gov website, which will be publicly accessible.