Summary: Congress authorized the creation of state revolving funds in 1987 to help local governments and others build projects that would improve water quality. The federal government provides annual grants to the states as "seed money" to help capitalize their revolving loan funds. The states use their revolving funds to make loans to local governments and others; as the loans are repaid, the fund is replenished, and more loans can be made. All 50 states and Puerto Rico have set up state revolving funds, and through fiscal year 1996, Congress had provided more than $11 billion to those revolving funds. GAO surveyed nine states with revolving fund programs--Arizona, Florida, Illinois, Louisiana, Maryland, Missouri, Oregon, Pennsylvania, and Texas. This report provides information on (1) the amount of funds lent and the percentage of available funds lent as of the end of each state's fiscal year 1996 and (2) the factors at the federal and state levels that constrained the amount and percentage of funds lent.
