Clean Water & Drinking Water State
Revolving Funds
American Iron and Steel Requirement
2019 Annual
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A MESSAGE FROM THE OFFICE DIRECTORS
We are pleased to share the 2019 State Revolving Fund (SRF) American Iron and Steel (AIS)
Annual Report. Since enactment of the AIS requirement in 2014, several thousand critical water
infrastructure projects have successfully implemented the requirement and brought business to
domestic manufacturers.
During State Fiscal Year (SFY) 2019, our Clean Water and Drinking Water SRF AIS Teams
conducted 102 educational site visits to communities with ongoing SRF projects and discussed the
AIS requirement at 1 2 training events and conferences around the country. This oversight of the
requirement and the SRF programs ensures that domestic products are being used in SRF projects.
We appreciate everyone's dedication to implementing the AIS requirement and continued
commitment to domestic manufacturing and American jobs.
Sincerely,
Jennifer L. McLain, Director
Office of Ground Water and Drinking Water
Andrew D. Sawyers, Director
Office of Wastewater Management
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I. Overview of the American Iron and Steel (AIS) Requirement
A. Background
The Clean Water and Drinking Water State Revolving
Fund (SRF) programs were established in 1987 and
1 996, respectively. Each of the 50 states and Puerto
Rico operates its own SRF program. They receive
annual capitalization grants from EPA, which they use
to provide low interest loans and other types of
assistance for clean water and drinking water
infrastructure projects.
The AIS domestic preference requirement was first
introduced to the SRF programs in 2014. Later that
same year, the AIS requirement was made permanent
for the Clean Water State Revolving Fund (CWSRF)
via amendments to the Clean Water Act. In 201 8, the
AIS requirement was extended for the Drinking Water
State Revolving Fund (DWSRF) through 2023.
The AIS requirement states that SRF assistance
recipients must use iron and steel products that are
produced in the United States for the construction,
alteration, maintenance, or repair projects of public
water system or treatment works.
Exhibit 1 shows a timeline of the legal authorities of
the AIS requirement for the SRF programs through
Federal Fiscal Year (FFY) 2023.
Exhibit 1: Timeline of AIS Legal Authority for the SRF Programs
2014 Congress passed the Consolidated Appropriations Act (CAA) of 2014, which included
the AIS requirement for SRF funded projects through September 30, 2014
2014 Congress passed the Water Resources and Reform Development Act (WRRDA) of 2014,
which made the AIS requirement permanent for the CWSRF
2014 Congress passed the Consolidated and Further Continuing Appropriations Act of 2015,
which included the AIS requirement for SRF programs through September 30, 2015
2015 Congress passed the CAA of 2016, which included the AIS requirement for the DWSRF program
through September 30, 2016
2016 Congress passed the Further Continuing and Security Assistance Appropriations Act of 2017, which
included the AIS requirement for DWSRF programs through April 28, 2017
2018 Congress passed the CAA of 201 8, which included the AIS requirement for the DWSRF program
through September 30, 201 8
2018 Congress passed the America's Water Infrastructure Act of 201 8 (AWIA), which extended the AIS
requirement for the DWSRF program through September 30, 2023
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Iron and Steel Products Covered by the AIS
Requirement
Under the AIS requirement, an iron or steel product is
defined as any item listed below, primarily made of
iron or steel, and permanently incorporated into a
public water system or treatment works project:
	Lined or unlined pipes or fittings
	Manhole covers
	Municipal castings
	Hydrants
	Tanks
	Flanges
	Pipe clamps and restraints
	Valves
	Structural steel
	Reinforced precast concrete
	Construction materials
Primarily Iron or Steel and Permanently
Incorporated Definitions
Under the AIS requirement, a product is considered to
be primarily iron or steel if it is made of greater than
50% iron or steel measured by material cost. For
example, the iron portion of a fire hydrant would
likely be the bonnet, body and shoe, and the cost then
would include the pouring and casting to create those
components. The other material costs would include
non-iron or steel internal workings of the fire hydrant
(i.e., stem, coupling, valve, seals, etc.). Any additional
machining or other work and assembly of the internal
workings into the hydrant body would not be included
in this cost calculation since those are considered
labor costs.
If a product is listed above, is made primarily of iron
or steel (i.e., meets the greater than 50% threshold),
and is permanently incorporated into the project, then
the product must be produced in the United States or
otherwise covered by a waiver (discussed further in
Section II). For a product to be produced in the United
States, all manufacturing processes (excluding the
application of external coatings) must take place
domestically. EPA published an implementation memo
and a series of question and answer documents that
address the types of projects that must comply with
the AIS requirement and the types of products
covered by the AIS requirement.
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Project Highlight: Highwood, Montana (CWSRF)
The Town of Highwood, Montana, received a
$230,000 CWSRF loan for the Highwood
Wastewater Treatment Facility Improvements Project
to replace lagoon liners in two of three cells in their
lagoon system. The project also replaced non-
functioning valves and removed accumulated lagoon
sludge. With forward thinking, the town was able to
procure domestic valves early in order to avoid the
long lead times and potential construction delays. The
construction start date was August 2019 with an
anticipated completion date of November 2019, and
by July 201 9 the valves were already on site.
II. Compliance with the AIS Requirement
A.	First and Foremost, Buy Domestic
SRF assistance recipients should procure domestic iron
and steel products to ensure compliance with the AIS
requirement. A state or assistance recipient can
contact EPA if they are having difficulty locating a
domestic product, and EPA can help with product
availability research.
B.	Certification Letters
Manufacturers should provide certification letters to
verify that their iron or steel products comply with the
AIS requirement. These certification letters establish
accountability and enable assistance recipients to
demonstrate compliance with AIS. A proper
certification letter should assert that all manufacturing
processes for purchased iron or steel products were
performed domestically. EPA highly recommends that
each certification letter contains the five following key
elements:
1.	Reference to Specific Project: The letter
should include the name of the project or
jurisdiction where the product was delivered.
2.	Products Delivered: The letter should list the
specific iron or steel product(s), including
quantity, delivered to the project site.
3.	Location of Manufacturer: The letter should
include the city and state of the manufacturing
facility where the processes took place (not its
headquarters). Multiple locations are okay as
long as all of them are in the United States.
4.	Signature of Company Representative: The
letter should include a signature (electronic is
acceptable) from a company representative
and be on company letterhead.
5.	Reference to the AIS requirement: The letter
should include a reference to EPA's AIS
requirement, especially if the letter also
references other domestic preference laws
(e.g. Buy American or Buy America Act).
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C. Waivers
EPA has the authority to waive the AIS requirement
when (1) applying the requirement is inconsistent with
the public interest, (2) iron and steel products are not
produced domestically in sufficient and reasonably
available quantities or of a satisfactory quality; or
(3) inclusion of iron and steel products produced in the
United States wiil increase the cost of the overall
project by more than 25%. There are two main types
of waivers: national and project specific.
National Waivers
EPA has issued five national waivers to date: De
Minimis; Minor Components in Iron and Steel Products
(with Cost Ceiling); Plans and Specs; Pig Iron and
Direct Reduced Iron; and the now-expired Short-Term
Stainless-Steel Nuts and Bolts Used in Pipe Couplings,
Restraints, Joints, Flanges, and Saddles. These
national waivers are available for use by assistance
recipients or manufacturers and therefore do not
require any approval by EPA prior to use.
For example, the de minimis waiver is a versatile
waiver that allows an assistance recipient to use up to
5% of their total materials cost for non-domestic or
unknown origin iron and steel products, with certain
conditions. No single item can cost more than 1% of
the total materials cost. The assistance recipient
should keep a record of which items are included on
their de minimis list.
The Short-Term Product Waiver for Stainless Steel
Nuts and Bolts Used in Pipe Couplings, Restraints,
Joints, Flanges, and Saddles wavier has expired. The
final temporary renewal of this waiver was approved
August 24, 2018, and the waiver expired February
24, 2020. It will not be renewed. Products purchased
by assistance recipients prior to the expiration date
are still covered by this waiver.
The exact language in the law and its applicability,
and the current approved national waivers can be
found on EPA's dedicated AIS Website.
Project-Specific Waivers
Project-specific waivers are for the use of a specified
non-domestic iron or steel product for a specific
project. An assistance recipient may request a waiver
from EPA through their state SRF program. Waiver
requests must be approved by EPA before a non-
domestic iron or steel product can be permanently
incorporated into an SRF-funded project. Because
these waiver requests are both project and product
specific, any other assistance recipient that wishes to
use a similar product must apply for a separate
waiver based on specific project circumstances.
As of June 30, 2019, EPA approved 23 project-
specific waivers for DWSRF projects, with 6 being
approved in SFY 2019, as well as 59 project-specific
waivers for CWSRF projects, with 1 4 being approved
in SFY 2019.
All approved and not approved project-specific
waiver requests can be found on EPA's dedicated AIS
Website.
Best Practice:
Connecticut DWSRF
The Connecticut DWSRF program has
developed a de minimis waiver tracking form
where the assistance recipient can easily
track items as the project progresses, it also
indicates that the final amount must be on
their "final utilization and certification form".
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D. Noncompliance
An SRF assistance recipient is in noncompliance with
the AIS requirement if a non-domestic iron or steel
product, not covered by an EPA-issued waiver, is
permanently incorporated into their project. If
potential noncompliance is discovered, the state SRF
program is responsible for working with the
assistance recipient on corrective measures (i.e.,
seeing if the product could be covered by a national
waiver or replacing the product with a domestic
alternative). EPA is available to assist the state SRF
program with assessing appropriate enforcement
action if the assistance recipient fails to complete the
corrective measures. To date, there have been
minimal cases of noncompliance across the country on
SRF projects.
Program Highlight: The State of Iowa
The Iowa SRF program has been extremely involved with the AIS requirement since the 2014 enactment. Iowa
was the first state to receive statewide AIS training and has since held a second training. Iowa frequently utilizes
other forms of AIS assistance, including sending questions to the AIS inbox and submitting product research
requests to EPA when SRF project managers cannot easily find domestic iron or steel products.
Project Highlight: Sugar City, Idaho
The City of Sugar City, Idaho, received DWSRF assistance for their $4.2 million Water System Improvements
Project. This project consisted of construction of a new well and booster pump station, installation of a new
water storage tank, and installation of a new water transmission main. It was divided in 4 phases: schedules I,
II, 111A and 1MB. AIS implementation required a great level of coordination between the engineering consultant
and the different construction contractors and subcontractors for each schedule. De minimis products were
identified and a tracking list was available for review.
Project Highlight: Calcasieu Parish, Louisiana (DWSRF)
The Calcasieu Parish in Louisiana used DWSRF assistance to construct a new booster station to increase
pressure and chlorine residual, replace 6-inch water mains with 8- to 1 2-inch water mains, and improve the
production and treatment facilities. The iron and steel products observed at an EPA site visit in June 2019 had
their respective AIS certification letter with all the recommended elements. The consulting engineer attended
an online AIS training webinar which facilitated the correct implementation of the AIS requirement.
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111. Oversight of the AIS Requirement
A. Project Site Visits
As a part of EPA's oversight of the AIS requirement,
EPA conducts informal project site visits. EPA tries to
visit every state every three to four years. These visits
assess consistency of AIS implementation and initiate
one-on-one discussions with assistance recipients to
reiterate the AIS requirement, conduct preliminary
reviews of project AIS documentation and materials,
and identify potential areas of noncompliance for
projects to address prior to substantial completion.
Following each site visit, EPA provides observations
and recommendations for improving AIS
documentation.
Exhibits 2 and 3 highlight the DWSRF and CWSRF
site visit locations in SFY 2019 compared to all
projects that received assistance that year. As of June
30, 2019, EPA conducted a total of 102 DWSRF and
CWSRF site visits. Projects are selected to vary in size,
cost, and type. The DWSRF projects visited in SFY
2019 ranged in total project cost from
approximately $380,040 to $149 million and served
populations of 1 50 people to over 280,000 people.
The CWSRF projects visited in SFY 2019 ranged in
total project cost from approximately $230,000 to
$76,000,000 and served populations of 171 people
to 51 0,000 people.
Exhibit 2: Drinking Water AIS Project Site Visit Map for State Fiscal Year 2019
DWSRF Site Visits in SFY 2019
DWSRF Projects in SFY 2019
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Exhibit 3: Clean Water AIS Project Site Visit Map for State Fiscal Year 2019


s



AK

M CWSRF Site Visits in SFY19
~ CWSRF Projects in SFY19
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B.	Trainings
EPA conducts trainings and outreach activities
to engage various groups through in-depth
discussions on the AIS requirement and
implementation. The trainings are attended
by assistance recipients, state program staff,
consulting engineers, general construction
contractors, suppliers, and manufacturers. EPA
tailors the information presented based on the
target audience. During SFY 2019, EPA
participated in 12 training and outreach
events, including manufacturer meetings, state
trainings, and national conference
presentations. EPA offers these trainings on an
ongoing basis upon request.
C.	EPA-USDA Partnership
The AIS requirement was introduced to the
United States Department of Agriculture
(USDA) Rural Utilities Service Water and
Environmental Programs (USDA-RUS WEP) in
May 2017. Since then, EPA has led monthly
coordination meetings to assist the USDA with
the development of their AIS requirement.
Both statutes are essentially the same, making
it easy for the USDA to implement the AIS
requirement in the same manner as EPA.
In August 2017, the USDA-RUS WEP
programs released a guidance bulletin.
detailing their AIS implementation. For co-
funded projects, the AIS certification letters
can mention one agency or the other and the
letter is acceptable for documenting
compliance for both programs. The USDA
has joined EPA on multiple occasions for
informal project site visits to observe how
EPA conducts these visits.
Implementing Continuous Improvements
EPA's Lean Management System (ELMS) consists of tools and behaviors which assist organizations
with sustaining lean activities and ultimately leads to an efficient organization. ELMS consists of
six elements: (1) Problem Solving, (2) Leader Behaviors, (3) Standard Work, (4) Business
Reviews, (5) Cascading Measures, and (6) Visual Management. ELMS is a complement to lean
activities and is seen as a constant driver towards excellence.
The AIS Team at EPA Headquarters has undertaken an ELMS process to improve the waiver
request tracking process and response time. Timely response on waiver requests is often critical
to the success of a project. The ELMS process has allowed EPA to process and make its
determination on waiver requests with much greater efficiency.
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The Future Looks Bright
Since 201 4, EPA has provided billions of dollars to states under the SRF programs for drinking
water infrastructure system upgrades and water quality improvement projects in thousands of
communities across the United States. With the successful implementation of the AIS requirement
to date, an overwhelming majority of these SRF projects have installed domestic products. This
use of domestic products protects American manufacturing jobs and creates local construction
jobs, while protecting water quality and public health. Based on this impressive track record,
these efforts will continue to promote domestic manufacturing and provide oversight to ensure
appropriate application of the AIS requirement.
For more information about the Drinking Water State Revolving
Fund, please contact us at:
Drinking Water State Revolving Fund Program
U.S. Environmental Protection Agency
1201 Constitution Avenue, NW (Mail code 4606M)
Washington, DC 20460
Internet: www.epa.gov/dwsrf
Clean Water State Revolving Fund Program
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue NW (4204M))
Washington, DC 20460
Internet: www.epa.gov/cwsrf
September 2020
EPA 816-R-20001
Clean Water
State Revolving Fund

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