HR5833-119

What This Bill Does

The Clean Water Affordability Act changes how States can use Clean Water State Revolving Fund capitalization grants for additional subsidization. It clarifies that assistance can help ratepayers maintain access to wastewater, including stormwater, treatment services. It raises the annual cap on additional subsidization to the greater of 50 percent of the State's federal capitalization grant or the State's 10-year average of deposits from State money above required matching deposits. When enough qualifying applications exist, the State must use at least 20 percent of the capitalization grant for additional subsidization. The bill also says a loan with an interest rate equal to or greater than zero percent does not count as additional subsidization, so States need to provide actual principal forgiveness, negative-interest support, grants, or comparable subsidy rather than treating ordinary zero-interest loans as the required affordability aid.

Who Benefits and How

Low-income wastewater ratepayers benefit because States can use more subsidy to maintain access to wastewater and stormwater treatment services. Municipal wastewater utilities benefit when affordability subsidies help customers pay for required treatment investments. State water pollution control revolving fund programs benefit from clearer maximum and minimum subsidy rules. Communities with qualifying affordability applications benefit from the 20 percent minimum subsidization requirement.

Who Bears the Burden and How

State revolving fund administrators must calculate the greater-of cap and satisfy the 20 percent minimum when qualifying applications exist. States relying on zero-interest loans must change accounting because those loans no longer count as additional subsidization. EPA clean water financing staff must oversee compliance with the revised subsidy limits. Federal taxpayers and State matching funds bear the cost of larger affordability subsidies.

Key Provisions

• Expands additional subsidization uses to help ratepayers maintain wastewater and stormwater treatment access.
• Raises the annual additional-subsidization cap to the greater of 50 percent of capitalization grants or a 10-year State deposit average.
• Requires at least 20 percent additional subsidization when sufficient qualifying applications exist.
• Provides that loans with interest rates of zero percent or higher do not count as additional subsidization.