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The Environmental Protection Agency (EPA) conducts an infrastructure needs assessment every four years to estimate the future capital investment needs of local drinking water systems. In its most recent survey, EPA estimated that nearly $151 billion will be needed during the next 20 years to repair, replace, and upgrade the nation's 55,000 community water systems. The needs assessment survey serves as the basis for EPA's grants to the states under the drinking water revolving fund program. To ensure that it collected valid data to estimate drinking water infrastructure needs EPA conducted site visits to selected systems and had states review supporting documentation. However, EPA cannot tell how closely the estimates reflect actual state-by-state needs because it did not calculate the precision of estimates. GAO found that 31 out of 50 states surveyed established revolving loan funds programs to assist disadvantaged communities. In fiscal years 1991 through 2000, nine federal agencies made available about $44 billion in grants, loans, and loan guarantees for drinking water and wastewater capital improvements.

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