Congress Approves COVID-19 Bill With Significant Water Funding

Mar 10, 2021

Message from NACWA's CEO - I am happy to inform you that earlier today, Congress passed the latest round of COVID-19 relief legislation which is on its way to President Biden for signature and includes substantial additional and new federal funding for the public water sector.

Specifically, NACWA helped secure $500 million in additional funding for low-income water and wastewater ratepayer assistance in this legislation, building on the initial $638 million provided by Congress in December. The legislation also expands eligible uses for the new round of $350 billion provided through the Coronavirus State and Local Fiscal Recovery Funds program and explicitly makes public water and clean water utilities eligible to access these funds.

Unlike earlier rounds of COVID-19 relief legislation passed into law by Congress last year, which limited access to state and local relief funds for the purposes of addressing COVID-19 related expenses, the legislation on the way to the President now additionally allows this $350 billion pot to be used for lost state and local revenues as a result of the COVID-19 pandemic, as well as for necessary investments in water and sewer infrastructure unrelated to the pandemic. In addition to broadband, water and sewer are the only other infrastructure sectors specifically called out in the bill for access to these funds.

This is a major achievement for the sector and demonstrates the value and importance of the ongoing advocacy NACWA and its members are tirelessly doing to ensure Congress understands the needs of their communities in providing safe, reliable, and more affordable clean water services.

The full text of the bill can be found here and the following is a summary of the key provisions in the bill and the sections they are provided for under:

  • $500 million in new/additional funding for the Department of Health and Human Services (HHS) low-income water program to be provided to the states and then as grants directly to water and wastewater utilities. As with the initial $638 million provided by Congress in December, there are NO onerous restrictions on utilities for the use of the funds, including NO requirements for utilities to enact water shutoff moratoriums as a condition of using the funds. NACWA and the water sector are currently engaging with HHS to provide input on standing up this program and beginning implementation with utilities. Funds would continue to be available until September 30, 2021 (Section 2912).
  • $350 billion in new Coronavirus State and Local Fiscal Recovery Funds through the U.S. Treasury to remain available through the end of 2024. As mentioned above, this new round of funding provides enhanced eligibilities and direct access for public clean water utilities to address COVID-19 expenses, recoup lost revenues as a result of the COVID-19 pandemic, or to make necessary investments in water and sewer infrastructure unrelated to COVID-19. This last part is very important, as it allows utilities to apply for the grant funds for any infrastructure project they may be undertaking or planning. The legislation provides two main funding pots under which utilities can access funds for these purposes (Section 9901):

o    $220 billion Coronavirus State Fiscal Recovery Fund. $25.5 billion of this pot will be allocated equally among each state and DC and the remainder will be distributed by formula based on state's share of unemployed workers.

o    $130 billion Coronavirus Local Fiscal Recovery Fund. Metropolitan cities, nonentitlement units of local government (typically 50,000 population and under), and counties would receive funding based on each of their allotment formulas outlined in the legislation. Local governments would receive their allocations in two tranches—the first half 60 days after enactment and the other half one year later.

o    There is also an additional $10 billion Coronavirus Capital Projects Fund for making payments to States, territories, and Tribal governments to carry out critical capital projects directly enabling work, education, and health monitoring in response to the COVID-19 pandemic. NACWA is working to better understand if or how these funds may help public water utilities.

Given the large influx and enhanced eligibilities of these new state and local dollars, it is important for utilities to begin discussions with their state and local community leaders to best position themselves to compete for these funds. If NACWA members are interested in accessing these funds, especially for water and sewer infrastructure investments, you should start conversations now with your state and local authorities that will be distributing these funds at the state and local level. These conversations now will help ensure you are at the front of the line for consideration.

The legislation also provides the following that may be beneficial to NACWA’s public agency members:

  • $10 billion for a Homeowner Assistance Fund through U.S. Treasury, which can in part be used for utility payments, including water, and shall remain available through September 2025 (Section 3206).
  • $21.5 billion in additional Emergency Rental Assistance, which can in part be used for utility payments, including water, and shall remain available through September 2027 (Section 3201).
  • Allows state and local governments moving forward to be eligible for COVID-19 related (FFCRA) payroll tax credits for emergency paid sick and family leave. NACWA has continued to push for this language that amends provisions passed by Congress in last year’s second COVID-19 relief package, which only allowed private employers and not state and local governments to be eligible for payroll tax credits for emergency paid sick and family leave (Sections 9642 & 9643).

NACWA will be providing additional details on this legislation and these new additional funding sources as they further unfold. In the meantime, please contact the appropriate NACWA staff with any questions you may have.

I wanted to thank all NACWA members for your continuous dedication to clean water advocacy. Without your efforts, none of these achievements that benefit the entire sector would be possible.



Adam Krantz | CEO

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