Tuesday, April 15, 2014

Building Infrastructure for Water Services

The Clean Water Act and State Revolving Funds

What many of us mean by the term “Clean Water Act” (CWA) is actually a series of federal statutes enacted from 1972 through 1987 having to do with protecting and improving the quality of certain surface waters in the United States.

The legislation in 1972 provided for federal grants to assist in the construction of public sewage treatment plants.  In 1987, the grants were replaced with low-interest loans from a revolving fund created by the federal government and administered by the states.  States are required to contribute an additional 20 percent.   

“Revolving” means that, as loans are repaid with interest, those funds are made available again for new loans.  Thus, the fund has grown and grown.

Over the years, Clean Water State Revolving Funds (CWSRF) have provided many billions in financing for more than 33,000 projects.  Loans can be as high as 100 percent of construction costs, repayable in 20 years.  States can enhance their lending power for clean water infrastructure by issuing CWSRF-backed bonds.  There are several options besides loans to support water-related improvements.

Michigan’s many CWSRF projects are monitored by the Department of Environmental Quality (DEQ).  An overview of Michigan’s clean water funding can be seen on DEQ’s website.

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