Inflation Reduction Act includes funds for Western drought response

The Inflation Reduction Act (H.R. 5376), which Congressional Democrats are calling a major climate change and clean energy bill signed into law by President Joe Biden last week, included several modest provisions designed to respond to the ongoing drought affecting the Western United States.

While the $740 billion package is not focused on water, many of the provisions in the bill include potential impacts to water via the nexus with climate change, clean energy and environmental justice. The legislation was primarily focused on providing roughly $379 billion in clean energy incentives and grants, along with provisions to reduce the cost of prescription drugs and increase taxes on some high-income Americans. Democrats hailed the bill as “the most significant action ever to fight the climate crisis.”

To combat the Western drought, Section 50231 of the law provides $550 million through 2031 to help disadvantaged communities in Reclamation states plan, design and construct projects intended to provide water supplies to households that do not currently have reliable access. Section 50232 then provides $25 million through 2031 to support projects to cover water conveyance facilities with solar panels to generate renewable energy or similar solar projects that increase water efficiency.

Most notably, Section 50233 provides another $4 billion through 2026 to support certain drought mitigation activities in Reclamation states. Eligible activities include voluntary reductions in water consumption, voluntary system conservation projects that reduce water demand in the Upper or Lower Basins of the Colorado River, and ecosystem and habitat restoration projects that directly address issues in a river basin caused by drought.

With all of these provisions now law, the Bureau of Reclamation will be required to provide a report to Congress each year on expenditures carried out pursuant to these programs.

Congress passed IRA with Democratic votes only in the 50-50 Senate, under special rules that allow passage with just a simple majority. The House passed the bill on a similar Democratic party-line vote, 220-207. IRA enactment is likely to be the last sizeable legislative action President Biden will be able to complete before the midterm elections in November.  

Staff at the National Association of Clean Water Agencies (NACWA) is currently reviewing the specific provisions of IRA for the impacts as well as potential POTW eligibilities.


Sources: National Association of Clean Water Agencies, Association of Metropolitan Water Agencies

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