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State Revolving Fund System Overview
With the passage of the Amendments to the Clean Water Act (CWA) in 1987, the U.S. Congress ushered in a new era in clean water funding. The new CWA called for the replacement of the long-running federal Construction Grants program with an innovative State Revolving Fund (SRF program). Under the SRF program, each state and Puerto Rico would create revolving loan funds to provide independent and permanent sources of low-cost financing for a range of water quality infrastructure projects. Funds to establish or capitalize the SRF programs would be provided by the federal (83%) and state (17%) governments.
Currently, all fifty states and Puerto Rico are operating successful SRF programs. Capitalization began in 1988; today, total assets of the SRF program stand at more than $20 billion. As payments are made on loans, funds are recycled to fund additional water protection projects. If capitalized as planned, the SRF will be available to play a key role in funding water quality infrastructure far into the future.
The SRF is a far more flexible program than its predecessor, the Construction Grants program. Under the SRF, States have a wide variety of options: states may choose from a variety of assistance options, including loan, refinancing, purchasing, or guaranteeing local debt, and purchasing bond insurance. States also set loans terms, including interest rates (from 0% to market rate), repayment periods (not to exceed 20 years), and many other loan features. SRFs are also available to fund a wide variety of water quality projects including all types of nonpoint source and estuary management projects, as well as more traditional municipal wastewater treatment projects. States may also customize loan terms to meet the needs of small and disadvantaged communities.
The SRF component in the Grants Information Control System (GICS) provides automated entry, updating, and retrieval of SRF Capitalization Grants administrative and financial data. The data provided here is a subset of the Capitalization Grant award information in GICS. Once a Capitalization Grant has been awarded, certain provisions may be modified. Most amendments are to make changes to financial data fields. A running total (referred to as a "cumulative" value) of each financial field is kept in the Capitalization Grant record. This cumulative value gives the current value of the Capitalization Grant's financial fields, as changed by any awarded amendments.
Supplemental Information:
Major subject areas include:
- Identification Information - Applicant name, address, legislative authority,
and grant number.
- Financial Information - Amount of funds awarded under the grant and the State
Match amounts.
- Grant Status Information - Award date.
- Grant Number - Each application for a SRF Capitalization grant is assigned a
unique assistance identification number.
- Authority - The authority code is a code identifying the statute authorizing
the EPA assistance. For the SRF Capitalization Grants included in Envirofacts, the
authority code is 3S, Clean Water Act: Title VI.
- Capitalization Grant - The assistance agreement by which EPA obligates and
awards funds allotted to a State for purposes of capitalizing that State's revolving fund.
- State Revolving Fund - A State Revolving Fund is a separate account established within a State
financing program that is dedicated solely to providing loans and other forms of financial assistance.
- Loans - An agreement between the SRF and the local recipient through which the SRF provides funds
for eligible assistance and the recipient promises to repay the principal sum back to the SRF over a period
not to exceed 20 years at an interest rate established between 0% and market interest rates (may be
interest free).
- State Match - Funds equaling at least 20% of the amount of the capitalization grant which the
State must deposit into the SRF.