	Introduction

Designating funds within appropriations legislation for specified projects or locations has been a way for Congress to provide funding for designated communities to build and upgrade water infrastructure systems. In the past, such legislative action has often been popularly referred to as earmarking. This report discusses appropriations for EPA water infrastructure programs, focusing on congressional special project designations in the account that funds these programs. Because some Members of Congress, interest groups, and Administration officials criticize these types of congressional actions, the practice of congressionally designated special project funds for EPA's water infrastructure and other programs was banned in FY2011, but some policy makers and constituents would like to see it restored. Information on the programmatic history of EPA involvement in assisting wastewater treatment and drinking water projects also is provided in two appendixes. After FY2000, the larger total number of projects resulted in more communities receiving such grants, but at the same time receiving smaller amounts of funds. Of the $67 billion appropriated to EPA for water infrastructure programs since 1989 (both for wastewater, under the Clean Water Act, and drinking water projects, under the Safe Drinking Water Act), $7.4 billion, or 11%, was directed to specified project grants. Policy Implications

Groups representing state water program managers and administrators of infrastructure financing programs have criticized the congressional practice of awarding grants to designated communities. The practice has been criticized because designated projects have received more favorable treatment than other communities' projects: they generally are eligible for 55% federal grants (and are not required to repay 100% of the funded project cost, which they must do in the case of a loan through an SRF), and the practice sidesteps the standard process of states' determining the priority by which projects will receive funding. It also means that the projects have generally not been reviewed by the congressional authorizing committees. Members of Congress may intervene to provide funding for a specific community for a number of reasons. In some cases, the community may have been unsuccessful in getting state approval to fund the project under an SRF loan or other program. For some, especially small and rural communities, the cost of a project financed through a state loan, which the community must repay in full, is deemed unacceptably high, because repaying the loan can result in increased user fees that ratepayers feel are unduly burdensome. Conclusion

Attention is often drawn to the relatively few projects that received large grant awards by Congress, especially over multiple years. Even with the large awards described here for some communities, more than 75% of the projects designated in the EPA appropriations legislation received total awards (either in a single year or over multiple years) of $2 million or less.
Designating funds within appropriations legislation for specified projects or locations has been a way for Congress to help communities meet needs to build and upgrade water infrastructure systems, whose estimated future funding needs exceed $630 billion. Such legislative action has often been popularly referred to as earmarking. This report discusses appropriations for water infrastructure programs of the Environmental Protection Agency (EPA), focusing on such designations in the account that funds these programs. Information on the programmatic history of EPA involvement in assisting wastewater treatment and drinking water projects is provided in two appendixes.
Congressional appropriators began the practice of supplementing appropriations for the primary Clean Water Act (CWA) and Safe Drinking Water Act (SDWA) assistance programs with grants for individually designated projects in FY1989. These designated project grants are often referred to as earmarks, or as STAG grants. Since 1989, of the $67 billion appropriated to EPA for water infrastructure assistance, $7.4 billion has gone to designated project grants. Beginning in FY2000, appropriators awarded such grants to a larger total number of projects, resulting in more communities receiving such assistance, but at the same time receiving smaller amounts of funds, on average.
Members of Congress may intervene to provide funding for a specific community for a number of reasons. In some cases the community may have been unsuccessful in getting state approval to fund the project under other programs. Some, especially small and rural communities, seek a grant because the cost of a project financed through a state loan which must be fully repaid is deemed unacceptably high (loans are the primary assistance under the CWA and SDWA). However, this congressional practice has been criticized by state water program managers and administrators of infrastructure financing programs because designated projects are receiving more favorable treatment (55% federal grants, rather than loans) and because the practice sidesteps the standard process of states' determining the priority by which projects will receive funding. Projects so funded through appropriations acts also have generally not been reviewed by congressional authorizing committees.
Attention is often drawn to the relatively few projects that have received large special project grants (more than $100 million), especially over multiple years. The majority of designated projects, however, have received comparatively small amounts. More than 75% of the projects designated in the EPA appropriations legislation received total awards (either in a single year or over multiple years) of $2 million or less. Growing criticism of congressional earmarks resulted in banning the practice since FY2011, but some policy makers and constituents would like to see a return of congressionally designated special project funds for EPA's water infrastructure and other programs.