Utilize flexibility in federal water and coastal funding programs
The U.S. EPA and the National Oceanic and Atmospheric Administration (NOAA) provide funding to states for projects that help reduce non-point source pollution. States often use federal dollars to construct and upgrade wastewater treatment facilities, and to fulfill other capital needs that address water quality protection goals.
Federal dollars, particularly under EPA's state revolving fund program, EPA's Clean Water Act Section 319 grants, and NOAA's coastal zone protection program, can be used for land use and development practices, such as land conservation or infill development, that help reduce non-point source pollution. Additionally, states can add funding criteria to these programs that align capital and infrastructure investments and actions with smart growth objectives.
ProcessState Revolving Loan Fund
EPA offers two state revolving loan fund programs, the Safe Drinking Water State Revolving Fund and the Clean Water State Revolving Loan Fund. The Safe Drinking Water State Revolving Fund primarily provides low-interest loans to community and public water suppliers for improvements to wastewater treatment infrastructure. The program requires priority to be given to projects that: (1) address the most serious human health risks, (2) are necessary to ensure safe drinking water, and (3) serve systems that are most in need.
Once these criteria are met, states can use additional criteria to align infrastructure investments with smart growth goals. For example, states can develop criteria for a "fix-it first" strategy that targets investments to existing wastewater treatment facilities rather than constructing new facilities. (see Policy #7, Change the criteria for water and wastewater infrastructure, in this section). States can leverage smart growth benefits out of existing State Revolving Fund resources by granting additional funds for smart growth enhancements to traditional projects or providing technical assistance on smart growth to project applicants. States could also require long-term comprehensive growth plans, or encourage limits on sewer connections or capacity for new growth in designated areas. Funds also could be used to support and create incentives for comprehensive planning and maintenance of existing water infrastructure.
Both the Safe Drinking Water State Revolving Fund and the Clean Water State Revolving Fund can be used to purchase undeveloped land or conservation easements to protect source water. In addition, Clean Water State Revolving Fund resources can be used to clean up and reuse brownfields.Section 319 (h) grants
Typically administered by the states, section 319(h) of the Clean Water Act is one of the primary funding mechanisms for addressing non-point sources of pollution. Under Section 319(h), States can use 319(h) funds to support a range of activities, including technical and financial assistance, training, demonstration projects, and monitoring the results of nonpoint source implementation projects.
Non-point source pollution associated with development can be a major cause of water quality impairment. The State should develop and implement selection criteria for the 319(h) funds to favor projects that achieve the dual objectives of reducing non-point source pollution and supporting smart growth outcomes. This might include:
- street and road design guidelines that minimize non-point source runoff;
- audits of parking requirements for new development, redevelopment, and infill;
- audits of zoning, subdivision ordinances, and building codes to remove barriers and provide incentives for infill and redevelopment; and
- other pollution-reduction strategies for infill projects.
The NOAA gives states funds to protect coastal resources and address non-point sources of pollution under their coastal zone management program. The state develops the project selection criteria and establishes the program areas for which funds are provided. This provides flexibility for the programs to be used to support projects that achieve reductions in non-point source pollution to coastal waters and are consistent with smart growth outcomes. For instance, coastal zone grant program funds can be used to support brownfield redevelopment or fund community planning activities, such as code audits, community visioning efforts and design charettes, and public awareness and education programs.
- Maryland’s Water Quality Revolving Loan Fund
Maryland’s Water Quality Revolving Loan Fund provides financial assistance for projects that protect or improve the quality of the state’s rivers, streams, lakes, estuaries, and other water resources. The State prohibits the use of revolving loan funds for projects outside urban growth boundaries established by the counties. Exceptions will be made if serious health conditions exist.
— Maryland Department of Environment Water Quality Revolving Loan Fund
- Iowa's Clean Water Revolving Loan Fund
In 2002, Iowa created the Smart State Revolving Fund for Iowa Clean Water program. This program allows the use of the state’s drinking water SRFs for smart growth initiatives, including brownfields cleanup, watershed management, low-impact development practices, and riparian land conservation. The Iowa Finance Authority and the Iowa Department of Natural Resources launched the initiative to change the state’s non-point source protection plan and the SRF statute to allow the use of SRF funding for smart growth projects.
— Iowa Department of Natural Resources Clean Water State Revolving Fund Loan Program