(a) In general

Section 205 of the Federal Water Pollution Control Act (33 U.S.C. 1285) is amended by striking the section designation and heading and all that follows through the end of subsection (c) and inserting the following:

205. Allotments

(a) Definitions

In this section:

(1) Buy American oversight

The term Buy American oversight means any activity carried out by the Administrator for the purposes of management or oversight with respect to section 608.

(2) Clean watersheds needs survey

The term clean watersheds needs survey means the assessment prepared by the Administrator under section 609.

(3) State

The term State means—

(A)

each of the 50 States;

(B)

the District of Columbia; and

(C)

the Commonwealth of Puerto Rico.

(4) United States territory

The term United States territory means—

(A)

American Samoa;

(B)

the Commonwealth of the Northern Mariana Islands;

(C)

the United States Virgin Islands; and

(D)

Guam.

(b) Set asides

Before making an allotment to States under subsection (c), of the amounts made available from appropriation to carry out this section for a fiscal year, the Administrator shall set aside the following:

(1) Buy American oversight

Not less than 0.1 percent to carry out Buy American oversight.

(2) Allotments for Indian Tribes

Pursuant to section 518(c)(2), 2 percent for Indian tribes (as defined in section 518(h)) for the purposes described in section 518(c)(3).

(3) Allotments for United States territories

1.5 percent for allotment to United States territories in an amount consistent with the allotment the United States territory received in fiscal year 2026.

(c) Allotments to States

(1) Formula

Beginning with the first fiscal year after the publication of the initial formula pursuant to paragraph (3)(A), of the amounts appropriated to carry out this section for a fiscal year that remain available after the set-asides required under subsection (b) and any other required set-asides, the Administrator shall allot to States—

(A)

60 percent based on the proportion that—

(i)

the needs of a State, as identified in the categories and associated proportions included in the most recent clean watersheds needs survey; bears to

(ii)

the needs of all States, as identified in that most recent clean watersheds needs survey;

(B)

20 percent based on the proportion that—

(i)

the population of a State, as identified in the most recent decennial census or American Community Survey 1-year estimate of population; bears to

(ii)

the population of all States, as identified in that most recent decennial census or American Community Survey 1-year estimate of population; and

(C)

20 percent based on the proportion that—

(i)

the share of the population of a State at or below 200 percent of the Federal poverty level, as identified in the most recent American Community Survey 1-year estimate of poverty; bears to

(ii)

the total of the share of the population of all States at or below 200 percent of the Federal poverty level, as identified in that most recent American Community Survey 1-year estimate of poverty.

(2) Transition period

For the first fiscal year after the publication of the initial formula pursuant to paragraph (3)(A), and for each of the 3 subsequent fiscal years thereafter, the Administrator shall ensure that the allotment pursuant to paragraph (1) for each State does not, as compared to the amount allotted to the State during the immediately prior fiscal year—

(A)

increase by more than 200 percent; or

(B)

decrease by more than 25 percent.

(3) Publication

(A) Initial formula

The Administrator shall publish in the Federal Register the formula and allotment amounts pursuant to this subsection by not later than September 30 of the first fiscal year after the publication of the first clean watersheds needs survey after the date of enactment of the Clean Water Allotment Modernization Act of 2026.

(B) Updates required

The Administrator shall publish annually in the Federal Register updates, as appropriate, to the allotments for each State based on the most recently released—

(i)

decennial census;

(ii)

American Community Survey 1-year estimates of population and poverty; and

(iii)

clean watersheds needs survey.

(b) Minimum allotments

Section 205(e) of the Federal Water Pollution Control Act (33 U.S.C. 1285(e)) is amended by striking (e) For and all that follows through 1990 in the first sentence and inserting the following:

(e) Minimum allotment; additional appropriations; ratio of amount available

For fiscal year 2027 and each fiscal year thereafter

(c) No effect on infrastructure funds

Nothing in this section or an amendment made by this section affects—

(1)

by striking subsection (b); and

(2)

by redesignating subsections (c) through (e) as subsections (b) through (d), respectively.

(1)

in the subsection heading, by striking use and inserting uses;

(2)

by striking A State may and inserting the following:

(1) Technical assistance

A State may; and

(3)

by adding at the end the following:

(2) Clean watersheds needs surveys

Notwithstanding any other provision of this section, of the amounts received by a State through a capitalization grant with funds made available under this title and section 205(m) each fiscal year, a State may use not more than 0.5 percent to carry out activities necessary for the assessment under section 609.