The FLOWS Act of 2026 directs the EPA Administrator to create a grant program that pays for digital infrastructure technology at rural public water systems and treatment works. Eligible uses include design, construction, operation and maintenance of remote sensing, flow and pressure monitoring, SCADA/industrial control systems, hydraulic modeling and related software; workforce training; and on-site cybersecurity training and countermeasures.
The statute explicitly allows grant funds to cover the initial purchase and ongoing maintenance of software.
The bill targets very small and community-owned systems by requiring the Administrator to prioritize systems that serve fewer than 3,300 people and those “most in need,” such as community-controlled or prefab home community systems. It authorizes $50 million per year for fiscal 2027–2031, requires a Comptroller General study of digital adoption in rural water projects, and preserves the applicability of all other federal and state laws to projects funded under the program.
At a Glance
What It Does
The EPA must establish and run a competitive grant program that finances digital technologies for water and wastewater infrastructure in rural areas, including software acquisition/maintenance, workforce development, and cybersecurity measures. Grants may be used across the project lifecycle: design, construction, operation and asset-condition monitoring.
Who It Affects
The program applies to owners/operators of public water systems and treatment works serving rural areas, states and tribes applying on their behalf, community-owned utilities (including manufactured-home communities), technology vendors, cybersecurity consultants and workforce trainers. The bill singles out systems serving fewer than 3,300 people for priority consideration.
Why It Matters
This is an explicit federal funding stream focused on digital modernization for small, rural water utilities — a population that typically lacks capital and technical capacity. By authorizing software maintenance costs and cybersecurity training, the bill aims to reduce water loss, improve asset management and increase operational resilience, but it also moves small systems into territory that requires new technical and cybersecurity capabilities.
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What This Bill Actually Does
The bill defines “digital infrastructure technology” broadly to include remote sensing and real-time monitoring, industrial control systems (like SCADA), artificial or embedded intelligence, acoustic data collection tools, and hydraulic and digital design software. That definition determines what projects are eligible: anything from pressure monitoring and flow sensors to advanced hydraulic modeling for distribution networks, desalination or reuse facilities, and groundwater recharge projects.
Eligible applicants are the owner or operator of a publicly owned public water system or treatment works that serves a rural area, the rural area itself, or a State or Tribe applying on behalf of those entities. The Administrator runs a single grant program to provide infrastructure assistance for the entire lifecycle of digital projects: designing, building, operating and maintaining the technologies listed in the definition.
The statute expressly permits funds to be spent for both the initial acquisition of software and ongoing maintenance costs — an important carve-out that can cover licences, subscriptions, or SaaS-style services where permitted.Beyond equipment and software, the program finances training and workforce development so project managers and utility operators can use the new tools, and it funds on-site cybersecurity training and technical assistance to mitigate vulnerabilities in operational technology. The bill calls out a range of water infrastructure types as eligible—from drinking water and wastewater treatment works to stormwater systems, water distribution and conveyance, and projects that protect or develop surface and groundwater resources.The Administrator must prioritize applicants that own or operate systems serving fewer than 3,300 people and those the EPA judges “most in need,” naming manufactured-home (prefabricated) community organizations and other community-controlled utilities as examples.
Congress authorized $50 million per fiscal year for 2027 through 2031, with those funds remaining available until expended. The bill also preserves all other federal and state legal requirements for any funded project.Finally, the Comptroller General must evaluate the program’s impacts and conduct a broader digital-transformation study in rural water systems — identifying water loss, combined-sewer vulnerabilities, effective models and simulations, and issuing recommendations on interoperability, prioritization, cost reductions and how digital tools affect affordability, resiliency and sustainability.
The results of the study and the program must be reported to the relevant congressional committees.
The Five Things You Need to Know
The bill authorizes $50 million per year for fiscal years 2027–2031, with funds available until expended.
The Administrator must prioritize grants for public water systems or treatment works that serve fewer than 3,300 people and community-owned systems such as manufactured-home community organizations.
Grant funds may be used for the initial acquisition and ongoing maintenance of software, explicitly allowing subscription or licensing costs where applicable.
Eligible grant activities include design, construction, operation and maintenance of digital infrastructure technology, workforce training, and on-site cybersecurity training and countermeasures.
The Comptroller General must complete a study on digital technology adoption in rural water projects (identifying water-loss, CSO bottlenecks, effective models) and submit a report on both the study and program results to Congress.
Section-by-Section Breakdown
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Short title
Establishes the act’s name as the “Futureproofing Local Operations for Water Systems Act of 2026” or the “FLOWS Act of 2026.” This is a nominal provision but it frames subsequent references in statutory and regulatory drafting.
Definitions that set the program’s scope
Defines key terms that determine program coverage: the EPA Administrator, public water system (by cross-reference to the Safe Drinking Water Act), treatment works (by cross-reference to the Clean Water Act), rural area (by reference to PURPA’s definition) and, importantly, a broad definition of “digital infrastructure technology” that includes sensors, SCADA/industrial control systems, AI/embedded intelligence and hydraulic modeling/design software. That breadth allows a wide range of hardware, software and analytics to qualify but also raises questions about standards and interoperability down the road.
Grant program: establishment and permitted uses
Directs the Administrator to establish a grant program to provide infrastructure assistance to eligible rural entities. The statute lists permitted uses across the project lifecycle—design, construction, operation and maintenance—covering drinking water, wastewater, stormwater, distribution and groundwater projects, as well as desalination and reuse. It also authorizes funding for workforce development and for measures to mitigate cyber vulnerabilities in digital infrastructure technology.
Software and prioritization rules
Makes an explicit exception allowing recipients to use grant funds for both initial acquisition and ongoing maintenance of software, notwithstanding other laws including the Safe Drinking Water Act—this clears a legal obstacle for funding SaaS or licensed products. The Administrator must prioritize systems serving under 3,300 people and entities the Administrator finds “most in need,” with specific examples such as prefab home community organizations and community-controlled utilities. Prioritization is discretionary, and the examples guide but do not limit the Administrator’s choices.
Funding authorization
Authorizes $50 million annually for fiscal years 2027 through 2031, with the amounts to remain available until expended. The statute does not establish matching requirements or formulas for award size, leaving those details to EPA implementation and notice-of-funding-opportunity guidance.
Legal preservation, study and reporting
Clarifies that the Act does not waive or limit any federal or state law that would otherwise apply to a funded project. It requires the Comptroller General to conduct a digital-transformation study (not later than five years after enactment) identifying water-loss issues, combined-sewer bottlenecks, effective models, and to issue recommendations on planning, interoperability, cost control and affordability. The GAO’s study and the program results must be reported to the Senate Environment and Public Works Committee and the House Transportation and Infrastructure Committee.
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Explore Infrastructure in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Very small public water systems (serving fewer than 3,300 people) — the bill elevates these systems to a top priority for federal digitalization grants and funds technologies that can reduce water loss and improve asset management.
- Community-owned and community-controlled utilities, including manufactured-home community organizations — explicit prioritization and the allowance for software maintenance lower financial and technical barriers for locally owned systems.
- Tribes and states acting on behalf of rural entities — they can apply for and manage grants to deliver technical assistance and centralized procurement for multiple small systems.
- Water technology and engineering vendors — expanded market opportunity for sensors, SCADA, hydraulic modeling tools, analytics platforms, and ongoing software licensing or support contracts.
- Local workforce and operators — grant-funded training and workforce development will build operator capacity to run modern monitoring and control systems, creating local technical roles.
Who Bears the Cost
- Environmental Protection Agency — program setup, application evaluation, oversight, and cybersecurity technical assistance will require staffing and administrative resources within EPA.
- Small utilities post-grant — while the bill funds initial acquisition and maintenance, long-term recurring costs, upgrades, or replacement costs after grant funds are spent may fall to local utilities with constrained rate bases.
- State and tribal agencies — although the bill allows states and tribes to apply on behalf of entities, administering multi-jurisdictional projects and ensuring compliance with other federal/state laws will require staff time and possible matching or coordination costs.
- Federal budget/taxpayers — the bill authorizes $250 million total over five fiscal years; appropriations will compete with other priorities.
- Technology vendors and integrators — to meet program expectations (interoperability, cybersecurity, training), vendors may need to adapt products, provide extended support and accept tighter procurement terms.
Key Issues
The Core Tension
The core dilemma is this: the bill pushes small rural water systems to modernize with sensors, analytics and networked control—actions that can cut water loss, improve planning and lower long‑term costs—but doing so embeds those same resource‑strained systems in complex software, subscription models and cyber risk exposure. Policymakers must choose between accelerating adoption (and accepting vendor dependence and new security burdens) or protecting small systems from technical complexity (and foregoing potential efficiency and resilience gains).
The bill takes a broad approach to ‘‘digital infrastructure technology,’’ which helps include modern tools but leaves open what technical standards, interoperability requirements or procurement rules will apply. That gap increases the risk of vendor lock-in, inconsistent data formats, and systems that don’t interoperate across utilities or with state systems.
Although the statute permits software maintenance costs, it does not set limits on allowable licensing models or require open interfaces, so recipients could end up depending on proprietary vendors for years after federal dollars run out.
Connecting operational technology and industrial control systems to networks creates real cybersecurity exposure. The measure funds on-site cybersecurity training and countermeasures, but it stops short of prescribing minimum security standards, incident response obligations, liability allocation, or ongoing certification for OT assets.
Implementation will require the EPA to reconcile operational modernization with security hardening, and small utilities may lack the staff or procurement experience to evaluate tradeoffs. There is also an internal inconsistency in timing: the bill requires a Comptroller General study not later than five years after enactment while also setting a reporting deadline of December 31, 2030; depending on the enactment date that could compress or predate the study period.
Finally, the prioritization standard "most in need" is discretionary and could produce uneven award distribution unless the Administrator publishes explicit criteria and metrics for need, affordability impacts and expected outcomes.
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