The Water Quality Act contained language that expressed the intent of Congress for the Clean Water State Revolving Fund (CWSRF) program to serve certain classes of communities: communities with significant environmental need, communities with populations less than 10,000, and communities facing financial hardship. In addition, Congress allowed CWSRF funds to be used to fund nonpoint pollution projects. Using data from EPA in conjunction with other data, a series of regression models are presented to determine the factors and conditions that lead states to meet these uses. The models and hypotheses tested in this chapter are developed in Chapter Six. Using data for all 50 states measured between 1988 and 2016, the models indicate that factors over which states have control- whether to leverage, the program structure, and others- determine the ability of states to meet the needs of most categories of applicants. State political factors are less important, although demographic variables do provide some explanatory power. Water quality needs matter for communities with significant environmental need. The results also indicate that communities facing financial hardship are not being well served by the program.

This chapter develops and presents a model of state choice in the Clean Water State Revolving Fund (CWSRF) program. Based on the extant literature on both the CWSRF and water quality policy more generally, a model is presented that includes elements of state implementation choice in program structure and operation, initial state sufficiency of program resources, and state commitment to water quality. Control variables in the model include a series of demographic variables, political variables, and a measure of water quality need. The dependent variables in the model are measures of the distribution of program resources for different categories of program recipients, as indicated by the dollar value of loans, and the percentage of total loans, to each category of recipient. The recipient categories includes program resources to communities with significant environmental need, communities with populations less that 10,000 residents, and communities facing financial hardship. Finally, a fourth category represents the number (and percentage) of loans made by a state for nonpoint pollution needs.