Clean Water Current

Just before Labor Day, U.S. EPA released its final waiver regarding the Build America, Buy America Act (BABAA) compliance for the State Revolving Funds (SRFs) and other EPA Funding Programs.

Given that the majority of federal water and wastewater infrastructure investment dollars flow through the SRFs, the SRF waiver has been closely followed by the water sector. The other EPA Funding Programs waiver is also significant as it covers smaller water funding programs including Congressional earmarks, EPA’s Geographic Programs, Sewer Overflow Grants, certain Lead Programs, Section 319 Nonpoint Source Programs, and more. 

NACWA was very pleased to see that the final SRF waiver includes an adjustment period that grants a waiver from the expanded BABAA requirements to projects that had initiated project design planning prior to May 14, 2022, the statutory effective date of the BABAA requirements. Domestic procurement requirements regarding American Iron and Steel, which were in place before BABAA, will of course still apply to those projects.

In effect, this aligns BABAA’s SRF implementation with the waiver previously released for the WIFIA program, which NACWA supported. NACWA, other organizations, and numerous water and wastewater utilities provided comments to EPA in support of the WIFIA waiver and urged a similar approach for the SRFs, so we are pleased that EPA granted the sector’s request. 

The final Other Programs waiver takes a different approach. Rather than grandfathering in projects under design before May, these other programs will be subject to a six-month delay in BABAA’s implementation from the September 2^nd signing of the waiver. This will allow time for those programs, which do not have prior experience with domestic procurement, to align with BABAA. NACWA believes this is a prudent step that will avoid further delays for dollars such as Congressional earmarks getting out to communities receiving awards. 

While NACWA is pleased overall with these three waivers issued to date for WIFIA, SRFs, and other EPA programs, we remain concerned that EPA and the White House Office of Management and Budget (OMB) have not yet released comprehensive implementation guidance regarding manufactured goods and construction materials. This guidance will be critical in helping utilities, water technology and equipment providers and engineering firms know how to design for BABAA compliance – or evaluate the tradeoffs between seeking federal financing, or not, based on BABAA.

NACWA is continuing to work across the water sector to urge that further guidance be provided soon – and that EPA consider additional adjustment period waivers once the guidance comes out so that communities can prepare. Contact Kristina Surfus, NACWA Managing Director of Government Affairs, with questions or to discuss further.