Funding is on the way for lead service line identification, planning and design, as well as replacement projects. The U.S. Environmental Protection Agency (USEPA) announced $3 billion in 2026 state capitalization grant funds through the State Revolving Fund (SRF) program to reduce exposure to lead in drinking water. The $3 million is from Bipartisan Infrastructure Law (BIL) funds allocated in annual installments for the period of 2022 to 2026. This is the last installment of the previously allocated BIL funds.
Additionally, $1.1 billion in unused Drinking Water SRF (DWSRF) funds will be redistributed to eligible States with lead service line replacement needs. USEPA reviewed previously awarded funding and lead service line inventory data to determine the most impactful funding distributions and redistributions. The funding is meant to accelerate progress in identifying and removing lead service lines that deliver water to homes, schools, and businesses. Though a list of funding allotments to each State was not released with the funding announcement, USEPA says funding will be distributed based on updated lead service line inventories submitted by States.
Additional Funding Eligibility
Infrastructure Investment and Jobs Act DWSRF Lead Service Line Replacement (IIJA DWSRF LSLR) funds can only be used for lead service line identification and replacement projects. However, a memorandum from Jessica Kramer, USEPA Assistant Administrator for Water, outlines additional eligibility for utilizing IIJA DWSRF LSLR to give States more capacity to fund lead service line replacement projects.
The additional IIJA DWSRF LSLR eligibility includes:
- To be consistent with Lead and Copper Rule Improvements, galvanized pipes requiring replacement service lines and galvanized pipes downstream of lead goosenecks, pigtails, or other connectors are eligible for replacement with funding from all fiscal year LSLR appropriations under the IIJA. At a State’s request, USEPA will amend the FY24 IIJA DWSRF LSLR terms and conditions to remove the galvanized service line requirement.
- DWSRF assistance agreement terms stipulate the time between starting and completing full LSLR for individual service lines should not exceed three months. States may now identify extenuating circumstances that necessitate a longer replacement timeframe in limited situations. States have the authority to make such determinations and should document their decision accordingly. Weather delays, unexpected problems coordinating between State or local governments, or unexpected financing problems related to customer-owned lead service line replacements are examples of extenuating circumstances.
- Integrated components connected to lead services lines such as water mains, water meters, connectors, and backflow preventers were previously not considered eligible for replacement with LSLR funding. States may now determine that replacement of integrated components associated with a primary lead service line replacement project are eligible for replacement with IIJA DWSRF LSLR funds if the project meets all three criteria:
- Replacement of integrated components is directly connected to the community’s ability to do LSLR;
- Integrated components needing repair or replacement are directly connected to a lead service line; and
- Located in a disadvantaged community as described in SDWA Section 1452(d)(3).
For more information about the DWSRF program, visit https://www.epa.gov/dwsrf or contact Abby Ritz, Nexus Senior Funding Programs Specialist.ms Specialist.