The primary funding mechanism for water infrastructure is the Clean Water State Revolving Loan Fund, otherwise known as the S-R-F. The federal government provides grants to states to capitalize their loan funds. The states use this money to make low interest loans to local governments for the construction of sewage treatment plants and other infrastructure projects. As the loans are repaid, the principal and the interest return to the fund, creating a perpetual funding source for projects. Since the creation of the program in 1987, the S-R-F has done an amazing job of funding wastewater infrastructure projects. Every state in the Nation has established a revolving fund, and the S-R-F has provided more than $27 billion in loans to local governments.
While the S-R-F program has been remarkably successful, the need for investment in infrastructure is still very high. According to the latest Clean Water Needs Survey conducted by the EPA, our Nation faces $140 billion in wastewater infrastructure needs over the next 20 years. The EPA is currently in the process of revising this estimate, and the revised number is expected to be roughly $200 billion. EPA is also in the process conducting a "gap" analysis to determine the discrepancy between our annual needs for wastewater infrastructure and our annual investments in wastewater infrastructure. Preliminary data indicates that the gap is around $6 billion annually. This data indicates that our Nation is facing a very large bill, and the Congress needs to do some careful thinking about how we are going to meet this burden.
The bills before us this morning seek to address this issue. Senator Smith's bill, S. 914, focuses on the problem of Combined Sewer Overflows. During the wet season, hundreds of communities around the Nation with combined sewer systems are forced to discharge raw sewage into nearby water bodies. While there are ways to stop this problem, many of the solutions entail significant investment and involve expanding treatment works or constructing storage facilities. Senator Smith's bill would codify the existing CSO policy and create a grants program to help fund CSO control projects.
Senator Voinovich has introduced a bill which would re-authorize the Clean Water S-R-F. The bill increases funding levels to $3 billion annually for the next 4 years. The bill also contains sections which expand the eligibility of the S-R-F, and provide additional assistance to small and disadvantaged communities. Finally, the bill contains language relating to the cap on administrative fees, the state match contribution and other federal requirements.
Our third bill is S. 968, the Alternative Water Supply Act of 1999, introduced by Senator Graham. As our population grows and expands, increasing amounts of water are needed for urban development, agriculture and environmental needs. In many high growth areas, traditional sources of water supply will no longer satisfy the demand. The bill would create a competitive grants program within EPA for the purpose of helping states develop alternative water supplies. Eligibility for this program would be limited to states that do not receive money from the Bureau of Reclamation for water supply projects.