Clean Water Allotment Modernization Act of 2026
- Sponsor
- Sen. Scott, Rick [R-FL]
- Committees
- Environment and Public Works Committee (primary)
- Last action
- Jul 16, 2026
Bottom line
The bill fundamentally alters how federal clean water infrastructure funds are distributed, aiming to direct more resources to states with greater needs and lower-income populations, while ensuring a transition period to mitigate drastic changes.
What it actually does
This bill amends the Federal Water Pollution Control Act to revise the formula for allotting federal funds to states for clean water programs, primarily through the Clean Water State Revolving Fund. It shifts the allocation criteria to prioritize states based on water infrastructure needs, population, and the proportion of low-income residents, while also establishing set-asides for Buy American oversight, Indian Tribes, and U.S. territories. It also includes a transition period to phase in the new formula.
Proponents argue
Supporters argue that the current funding formula is outdated and does not adequately address the most pressing water infrastructure needs or equitably distribute resources to communities that need them most, particularly those with significant low-income populations. They contend that modernizing the formula will ensure federal investments are more effectively targeted, leading to improved water quality and public health outcomes nationwide.
Opponents contend
Opponents, particularly from states that might see a reduction in their federal allotments under the new formula, would likely argue that the changes could disrupt ongoing projects, penalize states that have historically invested in their water infrastructure, and create instability in long-term planning. They might also raise concerns about the reliability and frequency of the data sources used for the new formula.
The bill is relatively short and its core changes are clearly articulated, making it accessible for an informed reader to understand its primary impacts within a short timeframe.
Section 2(a), amending FWPCA Section 205(c)(1)
Revised State Allotment Formula for Clean Water Funds
This provision establishes a new formula for distributing federal clean water funds to states. It allocates 60% based on a state's water infrastructure needs (from the Clean Watersheds Needs Survey), 20% based on population, and 20% based on the proportion of the state's population at or below 200% of the Federal poverty level. This replaces the previous, unspecified allotment method.
Supporters argue
Supporters argue this formula is more equitable and effective, directing funds to where they are most needed based on objective criteria like infrastructure needs and socioeconomic factors, rather than potentially outdated historical allocations.
Critics contend
Critics may argue that states that have historically received more funding, or those with lower poverty rates but significant water challenges, could see their allocations reduced, potentially hindering ongoing or planned projects.
Tradeoffs
Balances the desire for equitable distribution based on current needs and poverty levels against potential disruption to states accustomed to different funding levels and the political implications of reallocating resources.
Section 2(a), amending FWPCA Section 205(b)
Dedicated Funding Set-Asides
Before state allotments, the bill sets aside specific percentages of available funds: not less than 0.1% for "Buy American oversight," 2% for Indian Tribes (as defined in FWPCA Sec. 518(h)), and 1.5% for U.S. territories, ensuring territories receive at least their FY2026 allotment.
Section 2(a), amending FWPCA Section 205(c)(2)
Gradual Implementation of New Allotment Formula
For the first fiscal year after the new formula's publication and the three subsequent years, a transition period is established. During this time, no state's allotment can increase by more than 200% or decrease by more than 25% compared to the prior fiscal year's allotment. This aims to prevent sudden, drastic shifts in funding.
Section 2(a), amending FWPCA Section 205(c)(3)
Transparency and Regular Updates for Allotment Formula
The Administrator is required to publish the initial formula and allotment amounts in the Federal Register by September 30 of the first fiscal year after the first Clean Watersheds Needs Survey (CWNS) following the bill's enactment. Annual updates based on the most recent decennial census, American Community Survey (ACS) estimates, and CWNS are also mandated.
Section 3, amending FWPCA Section 516
Modernization of Clean Watersheds Needs Survey Requirements
This section repeals subsection (b) of Section 516 of the Federal Water Pollution Control Act, which previously mandated the Administrator to transmit a report on the national requirements for publicly owned treatment works to Congress every two years. This streamlines reporting requirements, likely aligning with the updated CWNS process.
Section 4, amending FWPCA Section 603(k)
States May Use Grant Funds for Clean Watersheds Needs Surveys
This provision allows states to use up to 0.5% of their annual capitalization grants (from the Clean Water State Revolving Fund) to carry out activities necessary for the assessment under section 609 (the Clean Watersheds Needs Survey). This provides states with dedicated funding to contribute to the data collection that informs their federal allotments.
This section updates the applicability of the minimum allotment clause in FWPCA Section 205(e) to apply "For fiscal year 2027 and each fiscal year thereafter," replacing an outdated reference to "1990." This ensures that the existing minimum allotment provisions continue to function correctly with the new formula.
Section 2(b), amending FWPCA Section 205(e)
Why it matters:This is standard legislative practice for updating statutory language to ensure continuity and correct temporal application.
Case for: Ensures that the minimum allotment protections for states, which prevent any state from receiving an extremely small share of funds, remain in effect and are properly aligned with the new fiscal year structure.
Case against: No significant case against; it's a technical correction.
Estimated impact: Ensures continued floor for state funding, preventing disproportionately small allocations for smaller states, thereby maintaining a baseline of support for all states.
This section explicitly states that nothing in the bill or its amendments affects amounts made available under Division J of the Infrastructure Investment and Jobs Act (Public Law 117-58) for FWPCA Section 205 or Title VI, nor any allocations of those amounts.
Section 2(c)
Why it matters:This is standard legislative practice to clarify the scope and avoid unintended interactions with other major pieces of legislation, ensuring that the new formula only applies to future appropriations and not existing, dedicated infrastructure funding.
Case for: Provides clarity and assurance that the significant, already-allocated infrastructure funds are not impacted by the new formula, preventing disruption to ongoing projects funded by the IIJA.
Case against: No significant case against; it's a clarifying provision.
Estimated impact: Preserves billions in existing infrastructure funding from the IIJA, ensuring those allocations proceed as planned, separate from the new formula's application to future appropriations.