Capitalization Grants for Clean Water State Revolving Funds

Published on AidPage by IDILOGIC on Jun 24, 2005

Administered by:

US Federal Government Agency (see all agencies)
Environmental Protection Agency , Office of Water
CFDA #: 66.458

Purpose of this program:

To create State Revolving Funds (SRFs) through a program of capitalization grants to States which will provide a long term source of State financing for construction of wastewater treatment facilities and implementation of other water quality management activities (see 66.418). Funding Priority: Capitalization grants are available to each State for the purpose of establishing a Clean Water State Revolving Fund for providing assistance for: (1) construction of publicly owned wastewater treatment works; (2) implementing nonpoint source management activities included in State Plans developed pursuant to Section 319; and (3) developing and implementing an estuary comprehensive conservation and management plan under Section 320. The capitalization grant is deposited in the state's SRF, which is used to provide loans and other types of financial assistance, but not grants, to local communities and intermunicipal and interstate agencies. Assistance may be provided to persons for implementing nonpoint source and estuary management activities provided for in State Plans developed under Sections 319 and 320. Up to 4 percent of the grant amounts may be used by the states for the cost of administering the SRF.

Possible uses and use restrictions...

Capitalization grants are available to each State for the purpose of establishing a Clean Water State Revolving Fund for providing assistance for: (1) construction of publicly owned wastewater treatment works; (2) implementing nonpoint source management activities included in State Plans developed pursuant to Section 319; and (3) developing and implementing an estuary conservation and management plan under Section 320. The capitalization grant is deposited in the state's SRF, which is used to provide loans and other types of financial assistance, but not grants, to local communities and intermunicipal and interstate agencies. Assistance may be provided to persons for implementing nonpoint source and estuary management activities provided for in State Plans developed under Sections 319 and 320. Up to 4 percent of the grant amounts may be used by the states for the cost of administering the SRF.

Who is eligible to apply...

States and Puerto Rico are eligible to receive capitalization grants under Title VI. The District of Columbia, territories, possessions of the U.S. and Indian tribes are eligible to receive grants from Title VI for the construction of municipal wastewater facilities.

Eligible Applicant Categories:
Eligible Functional Categories:

To receive a capitalization grant, a State shall enter into an agreement with the EPA Regional Administrator which shall include, but not be limited to, the 10 specifications set forth in Section 602(b) of the CWA. OMB Circular No. A-87, "Cost Principles Applicable to Grants and Contracts with State and Local Governments" applies to State grantees.

Note:This is a brief description of the credentials or documentation required prior to, or along with, an application for assistance.

About this section:

This section indicates who can apply to the Federal government for assistance and the criteria the potential applicant must satisfy. For example, individuals may be eligible for research grants, and the criteria to be satisfied may be that they have a professional or scientific degree, 3 years of research experience, and be a citizen of the United States. Universities, medical schools, hospitals, or State and local governments may also be eligible. Where State governments are eligible, the type of State agency will be indicated (State welfare agency or State agency on aging) and the criteria that they must satisfy.

Certain federal programs (e.g., the Pell Grant program which provides grants to students) involve intermediate levels of application processing, i.e., applications are transmitted through colleges or universities that are neither the direct applicant nor the ultimate beneficiary. For these programs, the criteria that the intermediaries must satisfy are also indicated, along with intermediaries who are not eligible.

How to apply...

Application Procedure:

The standard application for EPA non-construction grant assistance (SF424-A and B) is submitted to the appropriate Regional Office. The State must certify in its application that it has the legal, managerial, technical and operational capabilities to administer the SRF program competently and that it will comply with Federal anti-discrimination laws and other applicable Federal statutes. Regulation 40 CFR Part 31 applies to the State. Establishment of the SRF is a prerequisite for a grant award.

Note: Each program will indicate whether applications are to be submitted to the Federal headquarters, regional or local office, or to a State or local government office.

Award Procedure:

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.

Note: Grant payments may be made by a letter of credit, advance by Treasury check, or reimbursement by Treasury check. Awards may be made by the headquarters office directly to the applicant, an agency field office, a regional office, or by an authorized county office. The assistance may pass through the initial applicant for further distribution by intermediate level applicants to groups or individuals in the private sector.

Deadlines and process...


Applications should be submitted to the appropriate Regional Office no later than July 3 of the year following the year of appropriation to allow sufficient time for review and processing prior to the September 30 reallotment deadline.

Note: When available, this section indicates the deadlines for applications to the funding agency which will be stated in terms of the date(s) or between what dates the application should be received. When not available, applicants should contact the funding agency for deadline information.

Range of Approval/Disapproval Time

Approval time averages 45 days.

Preapplication Coordination

An applicant (State) should seek preapplication assistance from the appropriate EPA Regional Office. The State is required to prepare and provide for public comment a plan identifying the intended uses of the funds in the SRF (an intended use plan) and how those uses support the goals of the SRF. The plan 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 wastewater facilities. 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.

Note: This section indicates whether any prior coordination or approval is required with governmental or nongovernmental units prior to the submission of a formal application to the federal funding agency.


As described in EPA's Regulation 40 CFR Part 31, Subpart F.

Note: In some cases, there are no provisions for appeal. Where applicable, this section discusses appeal procedures or allowable rework time for resubmission of applications to be processed by the funding agency. Appeal procedures vary with individual programs and are either listed in this section or applicants are referred to appeal procedures documented in the relevant Code of Federal Regulations (CFR).


For those portions of the State 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 or an operating agreement approved by the region.

Note: In some instances, renewal procedures may be the same as for the application procedure, e.g., for projects of a non-continuing nature renewals will be treated as new, competing applications; for projects of an ongoing nature, renewals may be given annually.

Who can benefit...

For loans and other financial assistance (but not grants) for wastewater treatment facilities-local communities, intermunicipal, State, interstate agencies, and Indian tribes. For nonpoint source management programs and estuary activities in approved State Nonpoint Source Management Programs and Comprehensive Conservation and Management Plans - the above public agencies and individuals and programs.

About this section:

This section lists the ultimate beneficiaries of a program, the criteria they must satisfy and who specifically is not eligible. The applicant and beneficiary will generally be the same for programs that provide assistance directly from a Federal agency. However, financial assistance that passes through State or local governments will have different applicants and beneficiaries since the assistance is transmitted to private sector beneficiaries who are not obligated to request or apply for the assistance.

What types of assistance...

Formula Grants

Allocations of money to States or their subdivisions in accordance with distribution formulas prescribed by law or administrative regulation, for activities of a continuing nature not confined to a specific project.

How much financial aid...

Range and Average of Financial Assistance

$6,500,000 to $147,000,000; $26,000,000.

Note: This section lists the representative range (smallest to largest) of the amount of financial assistance available. These figures are based upon funds awarded in the past fiscal year and the current fiscal year to date. Also indicated is an approximate average amount of awards which were made in the past and current fiscal years.


FY 03 $1,250,000,000; FY 04 $1,342,035,000; and FY 05 est $850,000,000.

Note: The dollar amounts listed in this section represent obligations for the past fiscal year (PY), estimates for the current fiscal year (CY), and estimates for the budget fiscal year (BY) as reported by the Federal agencies. Obligations for non-financial assistance programs indicate the administrative expenses involved in the operation of a program.

Account Identification


Note: Note: This 11-digit budget account identification code represents the account which funds a particular program. This code should be consistent with the code given for the program area as specified in Appendix III of the Budget of the United States Government.

Examples of funded projects...

State revolving loan fund; wastewater treatment plants, nonpoint source projects (e.g., prevention of agricultural runoff), and estuary protection.

About this section

This section indicates the different types of projects which have been funded in the past. Only projects funded under Project Grants or Direct Payments for Specified Use should be listed here. The examples give potential applicants an idea of the types of projects that may be accepted for funding. The agency should list at least five examples of the most recently funded projects.

Program accomplishments...

Each year 51 grants are awarded to states and Puerto Rico. States and Puerto Rico, in turn, have provided over $47 billion to eligible recipients.

Criteria for selecting proposals...

Grants are awarded to States that satisfy the requirements outlined in the application procedure section.

Assistance considerations...

Length and Time Phasing of Assistance

Funds are available for EPA's obligation to the State during the fiscal year in which they are allotted and during the following year. The State must agree to enter into binding commitments with recipients to provide financial assistance from the SRF in an amount equal to 120 percent of each quarterly grant payment. The State is also required to agree to expend all funds in the SRF in an expeditious and timely manner.

Formula and Matching Requirements

The Regional Administrator may award capitalization grants from funds appropriated for this purpose. Allotments to the States are determined by a table of decimal fractions ("formula") in Section 205(c)(3) of the CWA. The required State match is 20 percent of the amount of each Federal grant payment.

A formula may be based on population, per capita income, and other statistical factors. Applicants are informed whether there are any matching requirements to be met when participating in the cost of a project. In general, the matching share represents that portion of the project costs not borne by the Federal government. Attachment F of OMB Circular No. A-102 (Office of Management and Budget) sets forth the criteria and procedures for the evaluation of matching share requirements which may be cash or in-kind contributions made by State and local governments or other agencies, institutions, private organizations, or individuals to satisfy matching requirements of Federal grants or loans.

Cash contributions represent the grantees' cash outlay, including the outlay of money contributed to the grantee by other public agencies, institutions, private organizations, or individuals. When authorized by Federal regulation, Federal funds received from other grants may be considered as the grantees' cash contribution.

In-kind contributions represent the value of noncash contributions provided by the grantee, other public agencies and institutions, private organizations or individuals. In-kind contributions may consist of charges for real property and equipment, and value of goods and services directly benefiting and specifically identifiable to the grant program. When authorized by Federal legislation, property purchased with Federal funds may be considered as grantees' in-kind contribution.

Maintenance of effort (MOE) is a requirement contained in certain legislation, regulations, or administrative policies stating that a grantee must maintain a specified level of financial effort in a specific area in order to receive Federal grant funds, and that the Federal grant funds may be used only to supplement, not supplant, the level of grantee funds.

Post assistance requirements...


Beginning the first fiscal year after receiving payments the State shall provide an annual report 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 fiscal year in which the payments were received). The annual report shall describe how the State has met the goals and objectives for the preceding fiscal year as identified in its intended use plan, including identification of loan recipients, loan amounts, and loan terms and similar details on other forms of financial assistance provided from the SRF.

Note: This section indicates whether program reports, expenditure reports, cash reports or performance monitoring are required by the Federal funding agency, and specifies at what time intervals (monthly, annually, etc.) this must be accomplished.


A State must, at a minimum, 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. State-conducted audits may be performed in conjunction with the Single Audit Act of 1984. In accordance with the provisions of OMB Circular No. A-133, "Audits of States, Local Governments, and Non-Profit Organizations," non-Federal entities that receive financial assistance of $500,000 or more within the State's fiscal year shall have an audit made for that year. The Office of Management and Budget (OMB) Circular No. A-133, "Audits of States, Local Governments, and Non-Profit Organizations," was published in the Federal Register on June 27, 2003. The Circular implements the Single Audit Act Amendments of 1996. The Circular requires non-Federal entities that expend more than $500,000 in Federal award dollars, to have an audit conducted in accordance with the Circular's provisions. With the revised Circular, the previous OMB Circular No. A-128 for single audits of State and local governments was rescinded and the single audit requirements for these entities were incorporated among the provisions of OMB Circular No. A-133.

Note: This section discusses audits required by the Federal agency. The procedures and requirements for State and local governments and nonprofit entities are set forth in OMB Circular No. A-133. These requirements pertain to awards made within the respective State's fiscal year - not the Federal fiscal year, as some State and local governments may use the calendar year or other variation of time span designated as the fiscal year period, rather than that commonly known as the Federal fiscal year (from October 1st through September 30th).


As part of the annual review conducted by the agency to assess the State's performance against activities identified in the intended use plan and annual report, and to determine compliance with the terms of the capitalization grant agreement, the State or loan 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 CWA.

Note: This section indicates the record retention requirements and the type of records the Federal agency may require. Not included are the normally imposed requirements of the General Accounting Office. For programs falling under the purview of OMB Circular No. A-102, record retention is set forth in Attachment C. For other programs, record retention is governed by the funding agency's requirements.



Clean Water Act, as amended; Public Law 95-217; Water Quality Act of 1987, Sections 601 through 607, 205(m); Public Law 100-4.

Note: This section lists the legal authority upon which a program is based (acts, amendments to acts, Public Law numbers, titles, sections, Statute Codes, citations to the U.S. Code, Executive Orders, Presidential Reorganization Plans, and Memoranda from an agency head).

Regulations, Guidelines, And Literature

Program guidance was issued January 28, 1988. A State Revolving Fund Management Manual was distributed in November, 1988. Regulations include 40 CFR Part 31 and SRF regulations 40 CFR Part 35, Subpart K which were issued in March 1990.

Contact information...

Web Sites
Regional Or Local Office

EPA Regional Offices listed in Additional Contact Information - FMR Help.

Note: This section lists the agency contact person, address and telephone number of the Federal Regional or Local Office(s) to be contacted for detailed information regarding a program such as: (1) current availability of funds and the likelihood of receiving assistance within a given period; (2) pre-application and application forms required; (3) whether a pre-application conference is recommended; (4) assistance available in preparation of applications; (5) whether funding decisions are made at the headquarters, regional or local level; (6) application renewal procedures (including continuations and supplementals) or appeal procedures for rejected applications; and (7) recently published program guidelines and material. However, for most federal programs, this section will instruct the reader to consult the so-called Appendix IV of the Catalog due to the large volume of Regional and Local Office Contacts for most agencies. This information is provided in Additional Contact Information (see below).

Headquarters Office

Sheila Platt, State Revolving Fund Branch, Municipal Support Division, (4204M), Office of Wastewater Management, Environmental Protection Agency, Washington, DC 20460. Telephone: (202) 564-0686, FAX: (202) 501-2403, E-mail:

Note: This section lists names and addresses of the office at the headquarters level with direct operational responsibility for managing a program. A telephone number is provided in cases where a Regional or Local Office is not normally able to answer detailed inquiries concerning a program. Also listed are the name(s) and telephone number(s) of the information contact person(s) who can provide additional program information to applicants.

Additional Contact Information (Appendix IV)

Due to the large volume of regional and local office contacts for most agencies, full contact information is also provided separately here in a PDF format: