Supplemental Appropriations for Hurricanes Helene and Milton and the Hawai'i Wildfires FAQs

Does the American Iron and Steel requirement apply?

Yes, American Iron and Steel (AIS) applies. 

What is the scope of the statutory exception of BABA (seen in BABA section 70912(4)(B)) for the Supplemental Appropriations for Hurricanes Helene and Milton and the Hawai'i Wildfires (HMW) funds? Is it limited to projects that are in counties that had a Stafford Act declaration?

supplemental funding (e.g., federal financial assistance from the American Relief Act for water and wastewater treatment works impacted by Hurricanes Helene and Milton) do not have to comply with BABA. Therefore, the exception of BABA for HMW funds is not limited to projects in counties that had a Stafford Act declaration. Section 70912(4)(B) of IIJA, which defines BABA, specifically excludes "federal financial assistance" authorized under sections of the Stafford Act "relating to a major disaster or emergency declared by the President... or pre and post disaster or emergency response expenditures." The hurricanes and wildfires are presidentially declared disasters, and the expenditure of funds from these HMW appropriations qualifies as "pre and post disaster or emergency response expenditures."  

Can state SRF programs co-fund HMW projects with the SRF base or IIJA general supplemental funds without implicating BABA?

As stated in OMB's BABA guidance 2 CFR 184, projects that are funded with disaster supplemental funding do not have to comply with BABA. Any additional funding awarded to these disaster-related resiliency projects must ensure all contracts and assistance agreements are closely related in purpose, place, and time to the original in order for BABA exemption to apply. Since the project (not the funding source) does not have BABA requirements, BABA does not apply to these projects regardless of cofunding sources.  

What types of conservation projects are eligible? If a conservation project results in avoided impacts, e.g., prevents septic systems from being installed in a vulnerable area, would that qualify?

If a conservation project is a capital improvement project that makes a publicly owned treatment work or decentralized/septic system impacted by Helene more resilient to flooding, CWSRF and CWSRF Decentralized SA-HMW would be eligible to fund the project. For DWSRF, EPA would need to review on a case-by-case basis to confirm eligibility.

What is the process for determining project eligibility? Would a business case be required for certain projects?

A project is eligible under this supplemental if it is 1. otherwise eligible for CWSRF or DWSRF funding, 2. the applicant in an area affected by Hurricane Helene, Hurricane Milton, or the Hawai’i wildfires, and 3. has a purpose of reducing flood or fire damage risk and vulnerability or enhancing resiliency to rapid hydrologic change or natural disaster at treatment works (as defined by section 212 of the Federal Water Pollution Control Act) or any eligible facilities under section 1452 of the Safe Drinking Water Act. If a proposed project doesn't fit into a predefined eligibility category, a case can be made to the EPA region and EPA headquarters as to why it would be eligible under this supplemental.

How is natural disaster defined?

The term “natural disaster” means any hurricane, tornado, storm, flood, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, drought, fire, or other catastrophe in any part of the United States which causes, or which may cause, substantial damage or injury to civilian property or persons (defined in 42 USC 5195).

Do projects have to be related to the type of natural disaster that impacted them? For example, can Hawaii only apply to wildfire-related projects, or can they also apply for projects that are flood-related?

The projects can be related to any type of natural disaster. There is nothing in the law or implementation guidance that prevents Hawaii from using this funding for projects that are flood-resilience-related, or that would prevent North Carolina from using this funding for projects that are fire-resilience-related. 

Can non-profits apply for SA-HMW/HRF funds?

The same rules apply as the regular SRF programs, with the addition that the system needs to have been impacted by Hurricane Helene, Hurricane Milton, or the Hawai’i wildfires. For the DWSRF, only privately owned and publicly owned community water systems and non-profit non-community water systems are eligible for funding (see 40 CFR 35.3520(a)). For the CWSRF, non-profits are eligible to receive funding to assist owners and operators of small and medium publicly owned treatment works (POTWs) with centralized wastewater treatment projects. This includes construction activities as well as activities necessary to plan, develop, and obtain financing for CWSRF-eligible projects. Additionally, non-profits may be eligible to receive funding for other types of CWSRF projects that increase resiliency to floods or fire at treatment works. Additional information on those projects can be found in the CWSRF Eligibility Handbook and HMW Implementation Memo. For the SA-HMW funds, these projects also must have the purpose of increasing resiliency to floods or fire at treatment works. Non-profits could be eligible for SA-HMW CWSRF Decentralized work related to impacted decentralized systems for resiliency projects.

Are there certain qualifications to demonstrate the effect from the hurricanes and wildfires? 

EPA leaves it up to each state to document impact from these disasters, but examples could include power outage or Supervisory Control and Data Acquisition (SCADA) reports, state resource request(s) for assistance during the emergency, picture(s), mutual aid request(s), etc.

Can states use SA-HMW funds to pay for increased/purchase capacity for wastewater treatment plants? For example, instead of building a new POTW or upgrading an existing POTW to increase treatment capacity, can they use the SRF funds to purchase treatment capacity from another POTW? 

Yes, provided that the funds go to a capital project that has the purpose of reducing flood or fire damage risk or vulnerability or enhancing resiliency to rapid hydrologic change or natural disaster of the treatment works. For example, an eligible project could disconnect a treatment plant, connect two collection systems, and increase treatment capacity at the second treatment plant, which is at less risk of flooding. The funds cannot pay for an ongoing purchase of wastewater treatment capacity at a plant since this would be operations- and maintenance-related. 

Would the purchase of a vac truck be eligible?

Yes, this would be eligible if it increases resiliency in the event of flooding.

Are all decentralized systems eligible for SA-HMW CWSRF Decentralized funding?

Decentralized systems must have proof of impact from Hurricanes Helene or Milton and the project purpose must incorporate resiliency improvement to be eligible. See section 3 subsection B of the SA-HMW implementation memo.  

Can planning for stormwater project/flood mitigation projects be funded?

CWSRF SA-HMW funding can be used for stormwater projects and/or flood mitigation projects if they are related to protecting POTWs from flooding. In addition, the POTW must be the applicant for the funding.

Would a project that is installs a gravity sewer be eligible for a town that is switching from septic to sewer?

Assuming the town was impacted by Hurricane Helene or Hurricane Milton and the project purpose incorporates resiliency, the town could be eligible to receive both CWSRF SA-HMW funds and CWSRF Decentralized SA-HMW funds for the project. Note that the CWSRF SA-HMW funds are limited to projects at treatment works, as defined by section 212 of the Federal Water Pollution Control Act, while the CWSRF SA-HMW Decentralized Funds are limited for projects at decentralized wastewater treatment systems that improve the resilience, assess the potential to connect homes to centralized wastewater systems, or fund such connections. States should evaluate the components of each project to determine a project's individual eligibility as states apply to the two supplemental capitalization grants.

Are stormwater projects that increase resiliency to flood prone areas or were impacted by Helene eligible (for stormwater projects that do not have a Facility ID)?

The stormwater project must be otherwise eligible for SA-HMW funding and the purpose must be tied to improving resiliency of a POTW that was impacted by Helene for a CWSRF project. 

If there are dams that need rehabilitation or repairs due to hurricane flooding, but they are not directly connected to a drinking water system or located at a drinking water treatment plant, can the state still apply  for a class exemption waiver from the SRF prohibition? Can dam repairs be eligible under SRF if not related to specific public water systems?

The requirements of the SA-HMW funds still apply, so there needs to be a resiliency component of the project purpose for a project to be eligible. To use the class deviation from 40 CFR 35.3520(e)(1) and (3), the dam would have to be owned by a public water system and the reservoir's primary purpose must be for drinking water. If the dam rehabilitation or repair project does not meet the class deviation criteria, a community could try for a project-specific exemption, but there would need to be a compelling public health protection reason and the loan recipient would have to be a public water system. Dam repairs may be eligible under the CWSRF if failure of the dam would result in flooding of a downstream POTW. For more information, reach out your EPA Region or see https://www.epa.gov/system/files/documents/2021-07/dwsrf-class-deviation-dam-reservoir-rehab-2021_0.pdf

Would land purchase for a drinking water facility or treatment works at a higher elevation to mitigate from the flooding that occurred in that area be an eligible project under SA-HMW funds?

Yes, but the need for the land purchase at a higher elevation must be documented. 

Can states use the SA-HMW funds to refinance bridge loans that the state issued during or immediately after the disaster to assist the communities with immediate needs? 

In this situation, this would simply be an issuance of a new SRF loan, rather than a refinancing. States can issue loans (with or without principal forgiveness) with the SA-HMW funds. The community would use the new SRF loan to pay back the original loan, rather than refinancing. The loan recipient must be SA-HMW eligible and have followed all applicable SRF requirements (including applicable crosscutters). The state should carefully review all invoices to ensure that the expenses are SA-HMW eligible, given that the SA-HMW law narrowed SRF eligibilities further than the base SRF program. See pages 7 and 8 of the SA-HMW Implementation Memo for more information.

What is the process and timeframe for distributing unused funds?

The process for distributing unused funds will follow the same process as for regular SRF funds. Please see the reallotment procedure memo for more details.

Can Hawaii use “Programmatic Financing” (ProFi) to fund the entire capital improvement program for Maui, the way a municipal bond does, rather than individual projects?

Yes, but the state should be mindful of SA-HMW’s more narrow eligibilities (vs. the base SRF program). There may be portions of the projects that are not resiliency-focused and would not be eligible under SA-HMW.

Can this funding be used in conjunction with any Federal funding?

SA-HMW funds are federal funds. Projects can be co-funded with other SRF capitalization grants (e.g., base funds, Infrastructure Investment and Jobs Act (IIJA) general supplemental funds) or with other Federal funding (e.g., FEMA disaster assistance grants, see DHS-EPA MOU). However, Federal (or state) dollars cannot be used to fund the same work twice (see 42 USC 300j-12 for nonduplication of work and 2 CFR 200 for duplicative items). For instance, the revolved state SRF funds could pay for planning and design while the HMW Federal funds could pay for construction. Phasing projects with clear scope describing the funding source and keeping clear documentation will help the project avoid paying for the same work twice. We strongly recommend coordination between all federal funding agencies used in each project to ensure all requirements are satisfied.