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Capitalization Grants for Drinking Water State Revolving Funds

This program contains Recovery Act funding.
Drinking Water State Revolving Fund
Number: 66.468
Agency: Environmental Protection Agency
Office: Office of Water

Program Information 

Program Number/Title (010):
66.468 Capitalization Grants for Drinking Water State Revolving Funds
Federal Agency (030):
Office of Water, Environmental Protection Agency
Authorization (040):
Safe Drinking Water Act (SDWA) Amendments of 1996, Section 130, Public Law 104-182; American Recovery and Reinvestment Act of 2009, Public Law 111-5.
Objectives (050):
Grants are made to States and Puerto Rico to capitalize their Drinking Water State Revolving Funds (DWSRFs) which will provide a long-term source of financing for the costs of drinking water infrastructure. Grants are also made to the District of Columbia, U.S. Territories (Virgin Islands, Mariana Islands American Samoa, and Guam), and Indian Tribes.

Funding Priority - Fiscal Year 2013: The funding priority established by the SDWA are for capitalization grants to each state for infrastructure improvement projects that are needed to achieve or maintain compliance with SDWA requirements, protect public health, and assist systems with economic need. A state may use a portion of the capitalization grant funds for programs that emphasize preventing contamination problems through source water protection and enhancing water system management. States and EPA Regions determine priorities for funding in accordance with SDWA. The program supports the Agency's strategic goal of ensuring clean and safe water.
Types of Assistance (060):
Uses and Use Restrictions (070):
Capitalization grants are made available to each State and Puerto Rico for the purpose of establishing a DWSRF for providing assistance to drinking water systems for infrastructure improvements. The capitalization grant is deposited in the State's DWSRF, and is used to provide loans and other types of financial assistance to eligible public water systems. A State may elect to use up to 31% of the capitalization grant for other eligible activities, including 4% for administration of the program. States may also elect to transfer up to one-third of the DWSRF capitalization grant to the Clean Water State Revolving Fund (CWSRF) or an equivalent amount from the CWSRF to the DWSRF program. Grants are also made available to Federally Recognized Indian Tribal Governments, U.S Territories, and the District of Columbia. Assistance agreement awards under this program may involve or relate to geospatial information. Further information regarding geospatial information may be obtained by viewing the following website:

Grant recipients and sub-recipients are encouraged to adopt and enforce policies that ban text messaging while driving company-owned or -rented vehicles or government-owned vehicles, or while driving privately-owned vehicles when on official government business or when performing any work for or on behalf of the government. Grant recipients and sub-recipients are encouraged to conduct initiatives of the type described in section 3(a) of the Federal Leadership on Reducing Text Messaging While Driving Executive Order that was signed on October 1, 2009.
Eligibility Requirements (080)
Applicant Eligibility (081):
States, the District of Columbia, U.S. Territories or Possessions (the Commonwealth of Puerto Rico, Virgin Islands, Mariana Islands American Samoa, and Guam), and Federally Recognized Indian Tribal Governments are eligible for grants from the program. For certain competitive funding opportunities under this CFDA description, the Agency may limit eligibility to compete to a number or subset of eligible applicants consistent with the Agency's Assistance Agreement Competition Policy.
Beneficiary Eligibility (082):
States, U.S. Territories or Possessions (the Commonwealth of Puerto Rico, Virgin Islands, Mariana Islands American Samoa, and Guam), Federally Recognized Indian Tribal Governments, local, and intrastate.
Credentials/Documentation (083):
To receive a grant, an applicant enters into an agreement with the EPA Regional Administrator which shall include, but is not limited to, the requirements set forth in Section 130 of the SDWA. Recipients must follow OMB Circular No. A-87, "Cost Principles for State, Local and Indian Tribal Governments.". OMB Circular No. A-87 applies to this program.
Application and Award Process (090)
Preapplication Coordination (091):
States are required to prepare and provide for public comment on a plan identifying the intended uses (Intended Use Plan, or IUP) of the funds in the DWSRF and how those uses support the goals of the DWSRF. The IUP is to be submitted no later than the application. An environmental impact statement is not required prior to grant award; however, a State environmental review process must be applied to all subsequent State assistance for drinking water systems. Regarding pre-application/pre-proposal assistance with respect to competitive funding opportunities under this program description, EPA will generally specify the nature of the pre-application/pre-proposal assistance, if any, that will be available to applicants in the competitive announcement. For additional information, contact the individual(s) listed as "Information Contacts" or see Appendix IV of the Catalog. Environmental impact information is not required for this program. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review.
Application Procedures (092):
OMB Circular No. A-102 applies to this program. This program is excluded from coverage under OMB Circular No. A-110. The standard application forms as furnished by the Federal agency and required by OMB Circular No. A-102 must be used for this program. EPA requires final applications to be made on Standard Form 424. Requests for application kits must be submitted to the Environmental Protection Agency, Grants and Interagency Agreements Management Division, 1200 Pennsylvania Avenue, N.W., Mailcode 3903R, Washington, DC 20460 or through the appropriate Regional Office listed in Appendix IV of the Catalog. Additional information on the EPA grant package can be found at: Grants for Tribes, U.S. Territories, and the District of Columbia are selected based on funding priorities established by EPA Regional Offices. States must certify that they have the legal authority to receive a capitalization grant and that they have the legal authority to operate the program. States must provide assurance in their applications that they have the legal, managerial, technical and operational capabilities to administer the DWSRF program competently and that they will comply with all applicable Federal cross-cutting authorities and Federal statutes. Applicants may be able to use to electronically apply for certain grant opportunities under this CFDA.
Award Procedure (093):
A grant application is reviewed by the appropriate Regional Office, and if approved, the grant is awarded by the Regional Administrator under a delegation of authority from the Administrator of EPA. EPA Headquarters retains the authority to review certain applications or parts thereof. For competitive awards, EPA will review and evaluate applications, proposals, and/or submissions in accordance with the terms, conditions, and criteria stated in the competitive announcement. Competitions will be conducted in accordance with EPA policies/regulations for competing assistance agreements.
Deadlines (094):
Contact the headquarters or regional office, as appropriate, for application deadlines.
Range of Approval/Disapproval Time (095):
Approval time averages 45 days.
Appeals (096):
Assistance agreement competition-related disputes will be resolved in accordance with the dispute resolution procedures published in 70 FR (Federal Register) 3629, 3630 (January 26, 2005). Copies of these procedures may also be requested by contacting the individual(s) listed as "Information Contacts." Disputes relating to matters other than the competitive selection of recipients will be resolved under 40 CFR 30.63 or 40 CFR 31.70, as applicable.
Renewals (097):
For those portions of the applicant's program that do not change from year to year, a subsequent grant application may incorporate by reference relevant portions of the previous year's application which have not changed.
Assistance Consideration (100)
Formula and Matching Requirements (101):
Statutory Formula: Title Safe Drinking Water Act. The funds available for allotment to State DWSRF programs are those funds appropriated by Congress under the Safe Drinking Water Act (SDWA 1452; 40 CFR 35.3540 and 35.3585). EPA allots funds to each State based on the State's proportional share of total eligible needs reported for the most recent Drinking Water Infrastructure Needs Survey (which is conducted every four years). The minimum proportional share that each State can receive is 1% of total funds available to States. EPA reserves up to 1.5% of the funds available for allotment to the States to provide grants to the U.S. Territories (Virgin Islands, Mariana Islands American Samoa, and Guam). The SDWA also requires the Administrator to reserve 1% of the funds available for allotment to the States to provide grants to the District of Columbia. The SDWA also allows EPA to reserve funds for national set-asides that include: up to 2.0% of the national appropriation for grants to Indian Tribes as well as funding for health effects studies, small system technical assistance, and monitoring of unregulated contaminants.
Matching Requirements: The required State match is 20% of the amount of the capitalization made to the State. States must also provide a match or demonstrate a credit for state funded eligible activities to receive Federal funds for certain program support activities. For Recovery Act funds, the required State match of 20% of the amount of the capitalization grant was waived. For additional information go to
This program does not have MOE requirements.
Length and Time Phasing of Assistance (102):
Funds are available for EPA's obligation to the State during the fiscal year in which they are allotted and during the following year. Recovery Act funds were available for EPA's obligation to the State until September 30, 2010. The term of the grant shall be determined at the time of award. States must agree to enter into binding commitments with loan recipients to provide financial assistance from the DWSRF in an amount equal to the sum of Federal assistance, less amounts used by the State for eligible set-aside purposes, and the State match. States are also required to agree to commit and expend all funds in the DWSRF as efficiently as possible, and in a timely manner. See the following for information on how assistance is awarded/released: The method of fund disbursement will be determined at the time of award.
Post Assistance Requirements (110)
Reports (111):
States shall provide biennial reports to the Regional Administrator in accordance with the schedule established in the grant agreement (generally not later than 90 days after the end of the second fiscal year during which the payments were received). The biennial report shall describe how the State has met the goals and objectives for the preceding two fiscal years as identified in its intended use plans for those periods, including identification of loan recipients, loan amounts, and loan terms and similar details on other forms of financial assistance provided from the DWSRF. For grants to Tribes and U.S. Territories, procedures for accounting, auditing, evaluating, and reviewing any program for activities in whole or in part shall be governed by regulations at 40 CFR Parts 31 and 35, "Environmental Program Grants for Tribes," with reports as required by the specific terms of the agreement. For Recovery Act funds, funding reports must be submitted in a prescribed format within 10 calendar days after the end of each calendar quarter, beginning October 10, 2009. These reports will include data elements as prescribed by Public Law 111-5, Section 1512 and OMB Guidance. Program reports are required under this program. Cash reports are required under this program. Progress reports are required under this program. Expenditure reports are required under this program. Performance monitoring is required under this program.
Audits (112):
In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133. Grants and cooperative agreements are subject to inspections and audits by the Comptroller General of the United States, the EPA Office of Inspector General, other EPA staff, or any authorized representative of the Federal government. Reviews by the EPA Project Officer and the Grants Specialist may occur each year. States must comply with the provisions of the Single Audit Act Amendments of 1996, and the OMB Circular No. A-133 and Compliance Supplement. States are also encouraged to conduct annual independent audits. The audit of the fund to be prepared by the State or an independent auditor must be in accordance with the standards of the Government Accountability Office (known as the Generally Accepted Government Auditing Standards). To the extent that the set-asides are used for project purposes that must be repaid, or are directly related to the DWSRF (e.g., administration) or are revolving funds themselves, they must be part of an audited opinion(s). The audits must provide an auditor's opinion on the DWSRF financial statements, a report on internal controls and a report on compliance with laws and regulations. Those set-aside funds that are not loaned out may be audited in conjunction with audits conducted under the Single Audit Act, as described in OMB Circular No. A-133 and OMB's Compliance Supplement for Single Audits of State and Local Governments.
Records (113):
Financial records, including all documents to support entries on accounting records and to substantiate changes to each grant, must be kept available to personnel authorized to examine EPA grant accounts. All records must be maintained for three years from the date of submission of the final expenditure report. If questions still remain, such as those raised as a result of audit, related records should be retained until the matter is completely resolved. As part of the annual review conducted by the Agency to assess a State's performance against activities identified in the intended use plan and biennial report, and to determine compliance with the terms of the capitalization grant agreement, the State or assistance recipient shall make available to EPA such records as the Regional Administrator reasonably requires to review and determine State compliance with the requirements of the SDWA.
Financial Information (120)
Obligations (122):
(Formula Grants) FY 12 $917,892,000; FY 13 est $861,900,000; and FY 14 est $813,000,000 - Recovery Act funds - FY 12 $0; FY 13 est. $0; and FY 14 est. $0.
Range and Average of Financial Assistance (123):
States: $8,975,000 to $83,957,000/fiscal year; $16,318,800/fiscal year. Tribes: $6,000 to $2,400,000/fiscal year; $480,000/fiscal year. Territories: $2,057,000 to $13,573,000/fiscal year; $4,189,000/fiscal year. Recovery Act funds - States: $19,500,000 to $160,000,000/fiscal year. Territories: $500,000 to $2,100,000/fiscal year. Tribes: $15,600 to $3,200,000/fiscal year.
Program Accomplishments (130):
Fiscal Year 2013: No Current Data Available Fiscal Year 2014: No Current Data Available Fiscal Year 2015: No Current Data Available
Regulations, Guidelines, and Literature (140):
EPA Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (40 CFR Part 31) and Drinking Water State Revolving Funds (40 CFR Part 35, Subpart L). Additional program information, including contact information for state program managers, is available online at
Information Contacts (150)
Regional or Local Office (151) :
See Regional Agency Offices. See EPA Regional Offices listed in Appendix IV of the Catalog, or online.
Headquarters Office (152):
Peter Shanaghan, Environmental Protection Agency, Infrastructure Branch (4606M), Drinking Water Protection Division, Office of Groundwater and Drinking Water, 1200 Pennsylvania Avenue, NW, Washington, District of Columbia 20460 Email: Phone: (202) 564-3848.
Website Address (153):
Examples of Funded Projects (170):
Fiscal Year 2013: No Current Data Available Fiscal Year 2014: No Current Data Available Fiscal Year 2015: No Current Data Available
Criteria for Selecting Proposals (180):
The evaluation and selection criteria for competitive awards under this CFDA description will be described in the competitive announcement.