Clean Water Allotment Modernization Act of 2026

Key Points

• The bill replaces the old, decades-old formula for dividing federal clean water infrastructure grants among states with one based on current data: each state's actual infrastructure needs, its total population, and its share of low-income residents.
• Under the new formula, 60 percent of funding is based on documented state infrastructure needs, 20 percent on total population, and 20 percent on the share of residents living at or below 200 percent of the federal poverty level.
• To prevent sudden funding swings, a four-year transition period caps any state's year-to-year funding change so it cannot drop by more than 25 percent or jump by more than 200 percent.
• The bill sets aside a small share of funding for Buy American oversight, and guarantees fixed shares of 2 percent for Indian tribes and 1.5 percent for U.S. territories like Puerto Rico, Guam, and the Virgin Islands before the new state formula is applied.
• States get new flexibility to spend up to 0.5 percent of certain federal water infrastructure grants on conducting the needs surveys used to justify their funding requests.