FAQs: Emerging Contaminants (EC) in Small or Disadvantaged Communities Grant (SDC)

Frequently Asked Questions 

Grant Definitions

1. What is an Emerging Contaminant?

To receive EC-SDC grant program funds, a project must be otherwise eligible and the primary purpose must be to address one or more emerging contaminants in drinking water. Projects that address any contaminant listed on any of the EPA’s Contaminant Candidate Lists are eligible (i.e., CCL1, 2, 3, 4, 5, and draft 6). Projects addressing per- and polyfluoroalkyl substances (PFAS) are also eligible. States may request consideration of other contaminants that they find to be of concern in the state. States contemplating this are encouraged to contact the EPA to discuss it prior to submitting their application.

Click here for the EPA’s Contaminant Candidate Lists.

2. What is a small or disadvantaged community?

Small and disadvantaged communities are eligible to receive EC-SDC grant program funds in accordance with Section 1459A(c) of SDWA. Small communities are public water systems that have a population of 10,000 or less and do not have the capacity to incur debt sufficient to finance a project. Disadvantaged communities are public water systems that satisfy their state’s Drinking Water State Revolving Fund (DWSRF) program disadvantaged community definition, consistent with Section 1452(d)(3) of SDWA. Communities that may become disadvantaged, per their state DWSRF definition, as a result of carrying out a project using EC-SDC funds are also eligible.

Grant Eligibilities

3. Who is eligible to apply for the grant?

The Grant Program is a noncompetitive program.  States and Territories can apply for and receive EC-SDC funds, which includes the geographical 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.

 4. Are PFAS-focused projects still eligible for EC-SDC grant funding despite the recent final announcement of National Primary Drinking Water Regulation (NPDWR) for six PFAS? 

The EPA announced the final National Primary Drinking Water Regulation (NPDWR) for six PFAS on April 10th, 2024. PFAS-focused projects are still eligible for funding under the EC-SDC appropriation. More information on PFAS is located here: https://www.epa.gov/pfas

5. What types of projects are eligible for BIL EC-SDC funding?

States may use funding to implement projects or activities that assist public water systems serving small or disadvantaged communities to address one or more emerging contaminants, including per- and polyfluoroalkyl substances (PFAS), in drinking water. Additionally, for Fiscal Year (FY) 2024 funds only, Congress included “owners of drinking water wells that are not public water systems or connected to a public water system” as eligible beneficiaries of the EC-SDC grant program (See question “Can the funds be used for drinking water wells that are not public water systems?”). Further examples of eligible activities under Section 1459A of SDWA9 that can be funded under the EC-SDC Grant Program can be found in Appendix D of the Implementation Manual.

6. What kinds of planning and assessment activities are eligible for BIL emerging contaminant funding?  

Examples include, but are not limited to the following:        

1. Developing emerging contaminant action plans
2. Preliminary engineering reports
3. Alternatives analyses
4. Preliminary and final design
5. Climate and cybersecurity risk assessment
6. Energy efficiency analyses
7. Source water protection plans and plan updates
8. Environmental and archaeological review, including the costs to hire a cultural resources management firm if required based upon archaeological or historic issues discovered during the environmental review process
9. Permit fees

7. Will funding be made available to support drinking water systems that serve Tribes?

Yes, the EPA reserves 2% of EC-SDC program funding each fiscal year of the BIL appropriation (FY 2022-2026) for grants to public water systems serving federally-recognized Tribes. The EC-SDC Tribal Grant Program funds are administered by the EPA’s Regional Offices. For more information, visit the EC-SDC Tribal Grant Program website here: https://www.epa.gov/tribaldrinkingwater/emerging-contaminants-small-or-disadvantaged-communities-ec-sdc-tribal-grant.

8. How does a state determine whether particular components of projects are eligible for the BIL Emerging Contaminant pot of funding?

A state must develop a workplan with eligible projects to submit an application in Grants.gov. If the project component is integral to the emerging contaminant purpose of the project, then expenses related to that component may be drawn from the BIL EC-SDC grant funding. For example, if an existing water treatment plant is being upgraded to add PFAS treatment, but other components/upgrades are necessary at the plant to support this addition (in other words, the other upgrades are essential to the function or security of the PFAS treatment component being installed), then the additional components/upgrades are also eligible under the BIL EC-SDC funding.

9. Can the funds be used for drinking water wells that are not public water systems?

In March 2024, in the FY 2024 Consolidated Appropriations Act, Congress included “owners of drinking water wells that are not public water systems or connected to a public water system” as eligible beneficiaries of FY24 funds that are awarded to States and Territories through grant programs under SDWA sections 1459A(a)-(j), which includes the State and Territory EC-SDC grant program. Note that this use of the funds is not permissible for FY 2022 and FY 2023 funds.  For information about Point of Entry (POE) and Point of Use (POU) filters, which are eligible, see question “Can EC-SDC funds be used to acquire POE or POU filters?”.

Funding with other programs and set-asides

10. Can I apply to the BIL EC SDC grant program as well as other water grant/loan programs such as the DWSRF and WIIN SUDC programs?

Yes, States may apply to other EC funding programs for eligible projects. However, recipients must comply with respective funding program eligibility and reporting requirements and maintain adequate records for each program. For example, recipients must ensure funds from multiple programs are not used for the same activities.

11. Are there set-asides or administrative caps for the use of EC-SDC funds?

“Administrative costs” is generally a category that encompasses indirect costs. Some EPA grant programs have statutory limits on the use of program funds for administrative costs, including indirect costs.  For example, the Clean Water Act (CWA) section 319 program as well as the Lead Testing in Schools program at SDWA section 1464(d)(5) have statutory administrative cost limits. The EC-SDC program does not have statutory limitations on administrative costs. In the absence of any statutory limitation on administrative costs, see the EPA’s indirect cost rate general grant term and condition as well as the EPA’s IDC policy regarding recipient indirect cost rates. This is covered in the EPA’s October 1, 2024, general grant terms and conditions, in term and condition #18.

 Build America, Buy America Act (BABA)

12. Does BABA apply to the BIL EC-SDC grant program?

Yes. For BIL EC-SDC recipients, BABA introduces domestic preference requirements for iron and steel, construction materials, and manufactured goods used in infrastructure projects. The EPA released implementation procedures for BABA compliance for federal water infrastructure grant funding programs in November 2022. The EPA recognizes this is a new and complex law and will work closely with States, Tribes, and territories on technical assistance, compliance, and training.

13. What is the role of States in ensuring compliance with BABA in implementation of the EC-SDC program?

States are expected to:

1. Ensure BIL EC-SDC subrecipients and program beneficiaries are aware of the BABA domestic preference requirements and/or waiver eligibilities, including incorporating BABA requirements into any subawards for projects where BABA applies. EPA will work with states to develop and provide information to BIL EC-SDC recipients.
2. Assist with overseeing BABA implementation across state BIL EC-SDC-funded projects, as applicable, and relay detailed information, as provided by EPA and the Office of Management and Budget, on BABA compliance requirements, flexibilities, and processes to recipients.
3. Educate subrecipients about their eligibility for waivers and provide help applying for waivers. The EPA will develop appropriate waivers and processes to facilitate compliance with these requirements.
4. Adhere to the performance and reporting requirements as provided under the Uniformed Grant Guidance under 2 CFR parts 200 and 1500, as well as part of the terms and conditions of the receipt of the awarded funds.  States will be provided with oversight of grant progress by the EPA and its Regional EPA Offices.

14. Do I qualify for a BABA waiver?

The following waivers may apply to EC-SDC projects. More detailed information can be found on the agency’s webpage for BABA- https://www.epa.gov/cwsrf/build-america-buy-america-baba.

1. Selected Programs - On September 2, 2022, a six-month Temporary Public Interest Waiver for Selected EPA Funding Programs in the Office of Water was approved. This waiver allowed EPA more time to prepare as well as States, industry, and other partners to begin developing compliance processes. Note that the Selected Programs Waiver expired on March 2, 2023.
2. Minor Components - This waiver allows manufacturers of iron and steel products to utilize a small portion (up to five percent by product material cost) of nondomestic or unknown origin iron and steel minor components within their otherwise domestically manufactured iron and steel products. 
3. De Minimis - for products used in and incorporated into a project that cumulatively comprise no more than five percent of the total project cost.
4. Small Projects - for assistance agreements or subawards under assistance agreements less than $250,000

15. How do I apply for a BABA waiver?

We have established a grant inbox for the purpose of questions and receiving waiver requests. Please do not hesitate to reach out to the grants team points of contact at HQ or send your questions/requests to [email protected]

Considerations With Other Existing Policies

16. Does the Brooks Act apply to the BIL EC-SDC grant program?

No. The Brooks Act is the name for the federal architectural and engineering (A&E) procurement requirements at 40 U.S.C Ch. 11 that apply to Clean Water State Revolving Fund (CWSRF) projects. This requirement is not included in SDWA, and it is not otherwise a requirement of the EC-SDC grant program.

17. Will a National Environmental Policy Act of 1969 (NEPA) review be required?

Consistent with the procedural requirements of the NEPA, 42 U.S.C. 4321 et seq., as implemented by the Council on Environmental Quality (CEQ) Regulations (40 CFR Parts 1500 through 1508), and the EPA’s NEPA Regulations (40 CFR Part 6), grant recipients may be required to conduct environmental reviews. The EPA’s voluntary NEPA policy applies only to projects implemented by the EPA or under an EPA award. Subawards to other entities are not subject to NEPA requirements and therefore, EPA’s voluntary NEPA policy does not apply to projects implemented under subawards.

18. Does Davis Bacon apply to the EC-SDC grant program?

No, it does not.

19. Does Executive Order 12803 apply to infrastructure assets funded by the EC-SDC grant?

Executive Order 12803 relates to infrastructure privatization. Executive Order 12803 may apply if the property or equipment disposition requirements under 2 CFR part 200 are triggered as a result of the privatization. For example, if a subrecipient water utility is sold or disposes of equipment by selling it to a private entity, and this equipment had been purchased using EC-SDC funds, the federal equipment disposition requirements would not apply unless the equipment will no longer be used for an originally authorized purpose under the grant. Recipients and subrecipients must use equipment for a program or program for which it was acquired and for as long as needed, whether or not the project or program continues to be supported by the federal award. Note that if states are disposing of equipment that they acquired using EC-SDC funds, they must follow their own equipment disposition procedures. See 2 CFR 200.313.

Grants Management

20. If States already submitted a Letter of Intent (LOI) to receive EC-SDC funding, do they need to submit another LOI to receive funding for future fiscal years (FY24, 25, and 26)?

No, they do not. If a State does not intend to request or accept the funding allocation in a given fiscal year, the state should indicate through correspondence this intention by the first quarter of the given federal fiscal year. Funds intended to be allocated to a State that chooses not to participate will be reallocated to participating States.

21. What are the procurement regulations that States and sub-recipients must follow when procuring good and services under EC-SDC awards? 

If a State is procuring goods and services under EC-SDC awards, per 2 CFR 200.317, the state must follow the same policies and procedures it uses for procurements from its non-Federal funds. However, if a state makes a subaward to a non-state entity under an EC-SDC award, the non-state subrecipient must have and use documented procurement procedures that conform to the procurement standards identified in 2 CFR  200.318 through 200.327.

22. What are the requirements of participant support costs and how do recipients or subrecipients need to document the charging of participant support costs? 

Certain activities under EC-SDC could be structured as participant support costs, depending on how awarding and rebates or subsidies are structured by the State or Territory. The transfer of funds budgeted for participant support costs to other budget categories requires prior written approval from EPA (see 2 CFR 200.308(f)(5)). Recipients or subrecipients generally must exclude participant support costs from Modified Total Direct Costs (MTDC) for distribution of indirect costs.  The EPA has participant support cost guidance, revised as of October 1, 2024, that describes the EPA’s policy on the allowability of participant support costs. The EPA does not provide advice on tax issues relating to participant support costs. Recipients, subrecipients, and program beneficiaries should consult with their tax advisers, the U.S. Internal Revenue Service, or State, Tribal, and/or local tax authorities regarding the taxability of participant support costs.

Project Eligibilities

23. Can EC-SDC funds be used for the purchase of land?

No. Pursuant to SDWA section 1459A(g)(2), the recipient is expected to provide any land, easements, rights-of-way, and relocations necessary to carry out the EC-SDC project or activity. Therefore, EC-SDC funds cannot be used to cover these costs, including the purchase of land.  

24. Can EC-SDC funds be applied to pre-award costs?

Yes, consistent with 2 CFR 1500.9, EPA award recipients may incur allowable preaward costs at their own risk. Allowable project costs incurred 90 calendar days before the EPA makes the federal award. Expenses more than 90 calendar days pre-award require EPA prior approval. For example, planning and design work already completed for PFAS remediation serving a small system may be allowable as a pre-award cost under an EC-SDC grant.

25. Can EC-SDC funds be used by states to hire staff?

Personnel can be an eligible expense under the BIL EC-SDC grant. However, only work performed by personnel directly related to emerging contaminants in small or disadvantaged communities for projects funded under the EC-SDC grant are eligible expenses. Personnel hours/time need to be tracked and documented in accordance with 2 CFR 200.430(g). Additionally, only personnel costs incurred during the project period are allowable (unless they meet the requirements for pre-award costs).

26. Can EC-SDC funds be used to acquire POE or POU filters?

Yes, Point of Entry (POE) and Point of Use (POU) filters as water treatment devices are eligible for EC-SDC funding. However, these filtration methods are considered temporary or interim interventions for public water systems, and workplans need to detail future treatment planning and steps. For FY 2024 funds only, the initial purchase of POE and POU filters as water treatment devices are eligible for EC-SDC funding for drinking water wells that are not public water systems or connected to a public water system.

27. Can EC-SDC funds be used to cover the costs associated with testing to comply with the Fifth Unregulated Contaminant Monitoring Rule (UCMR 5)?

No. Although EC-SDC funds can be used to conduct non-routine/non-compliance monitoring to identify the presence, source, or extent of EC contaminations in water systems or source water, monitoring for the UCMR5 would be considered “compliance monitoring,” which is not eligible for funding under the EC-SDC program.

28. Is a community eligible for EC-SDC grant funding if it is financially disadvantaged, but exists within a larger municipality that does not meet disadvantaged criteria?

For the EC-SDC grant program, SDWA section 1452(d)(3) authorizes states to define a “disadvantaged community.” Note that this definition is the same definition used for the state’s DWSRF program. Some states define a disadvantaged community to include a large public water system where a particular project within the system addresses a sub-set of the service area that meets the affordability criteria. The EPA has accepted this type of definition and believes that it is consistent with Section 1452(d)(3) of SDWA. A disadvantaged community within a larger municipality can also be eligible, if it is distinguished by a specific indicator or marker, e.g. zip code, to differentiate the target from the larger area and is classified as disadvantaged under the State’s definition.

29. Can a water system can be classified as underserved based on the sole factor that its infrastructure is deteriorating, making it difficult for residents to receive clean and safe drinking water?

Per the EC-SDC appropriation, the EC-SDC grant program does not have a requirement to provide funds to underserved communities, as defined in SDWA 1459A. Eligible emerging contaminants-focused projects for public water systems either serve communities with a population of 10,000 or less and do not have the capacity to incur debt sufficient to finance a project or serve communities that are disadvantaged, or may become disadvantaged as a result of the project, according to each state’s affordability criteria and disadvantaged community definition for the state DWSRF program under SDWA section 1452(d)(3).  

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