**[FY 2008 WATER EARMARK DEFINITION]{.underline}**

The FY 2008 Omnibus Appropriations Act language states that *"not less
than \$300,000,000 shall be made available for safe drinking water and
sanitation supply projects, including water management related to safe
drinking water and sanitation, only to implement the Senator Paul Simon
Water for the Poor Act of 2005 (Public Law 109-121)."*

**Definition:** The purpose of this earmark is to increase sustainable
access to safe drinking water and sanitation and improve hygiene.
Eligible activities must have a stated intent to address these goals as
a primary or secondary objective, and demonstrate that intent through
objectively verifiable indicators linked to these goals.

**[General Requirements]{.underline}**

Activities eligible for allocation or attribution to this earmark must
meet all of the following conditions:

-   An activity must state as a primary or secondary objective increased
    access to drinking water supply or sanitation services, better
    quality of those services, and/or hygiene promotion. The objective
    may correspond to either direct or indirect support, but it must
    make explicit the linkage to drinking water supply, sanitation or
    hygiene outcomes.

-   Activities must identify objectively verifiable indicators and
    targets that track progress towards the identified drinking water
    supply, sanitation, and/or hygiene objective. To the extent
    possible, the use of common FACTS indicators is encouraged. For
    those interventions that do not lend themselves to the standardized
    FACTS indicators, activity managers may also develop customized
    indicators to track progress.

-   In programs that include both earmark eligible and non-eligible
    activities, funding may be attributed to the earmark only in
    proportion to the activity's support of the earmark definitions
    provided here.

**[ANNEX: Guidelines for Utilization of FY 2008 Water Earmark
Funds]{.underline}**

The FY 2008 Omnibus Appropriations Act language states that *"not less
than \$300,000,000 shall be made available for safe drinking water and
sanitation supply projects, including water management related to safe
drinking water and sanitation, only to implement the Senator Paul Simon
Water for the Poor Act of 2005 (Public Law 109-121)."*

**Definition:** The purpose of this earmark is to increase sustainable
access to safe drinking water and sanitation and improve hygiene.
Eligible activities must have a stated intent to address these goals as
a primary or secondary objective, and demonstrate that intent through
objectively verifiable indicators linked to these goals.

This earmark fits within the broader context of U.S. international water
sector programming which includes a wide range of activities beyond the
focus area of water supply, sanitation and hygiene. Water is a
cross-cutting issue in the U.S. Foreign Assistance Framework with
activities under all five program objectives. The overall U.S.
government water portfolio embraces a broad spectrum of water sector
interventions that are critical to protecting human health and
responding to humanitarian crises; promoting broad-based and sustainable
economic growth; enhancing environmental and national security; and
developing public participatory processes that improve transparency and
accountability in providing a resource essential to people's lives and
livelihoods. These activities are critical components of a comprehensive
strategy to address the world's water challenges in an integrated and
sustainable way.

This earmark is focused on a specifically defined subset of
interventions linked to water supply, sanitation and hygiene within this
broader context. Four categories of activities have been defined to be
eligible for total or partial allocation or attribution to this earmark
when they support the objective of access to drinking water and
sanitation services or improved hygiene: (I) drinking water supply,
sanitation, and hygiene (WSH); (II) water resources management; (III)
water productivity; and (IV) water security. Each of these categories is
described in detail below

Missions and Operating Units reporting programs under this earmark
should consider as a first order of preference those activities that
directly support drinking water supply and sanitation service delivery
or hygiene promotion (Category I), including infrastructure as well as
those activities related to organizational/institutional capacity
building and sector and utility reforms needed to create sustainable
management and improved service delivery. A preference should also be
given to activities that focus on the poor.

The following guidance is provided on application of the water earmark
by Missions and Operating Units. Information on how eligible activities
relate to the Foreign Assistance framework and funding accounts is also
presented.

**[General Requirements]{.underline}**

Activities eligible for allocation or attribution to this earmark must
meet all of the following conditions:

-   An activity must state as a primary or secondary objective increased
    access to drinking water supply or sanitation services, better
    quality of those services, and/or hygiene promotion. The objective
    may correspond to either direct or indirect support as defined in
    Categories I-IV below, but it must make explicit the linkage to
    drinking water supply, sanitation or hygiene outcomes.

-   Activities must identify objectively verifiable indicators and
    targets that track progress towards the identified drinking water
    supply, sanitation, and/or hygiene objective. To the extent
    possible, the use of common FACTS indicators is encouraged. For
    those interventions that do not lend themselves to the standardized
    FACTS indicators, activity managers may also develop customized
    indicators to track progress.

-   In programs that include both earmark eligible and non-eligible
    activities, funding may be attributed to the earmark only in
    proportion to the activity's support of the earmark definitions
    provided here.

**[Eligible Activities]{.underline}**

Activities from any of the categories described below that meet the
above conditions may be eligible for total or partial attribution to the
earmark.

**I. Drinking Water Supply, Sanitation, and Hygiene**

Earmark funds may be used for activities that have primary and direct
goals of increasing access to improved drinking water supply and
sanitation services; enhancing the quality of those services; and/or
improving hygiene conditions. Funds targeted to interventions in this
category are 100% attributable to the earmark. Illustrative examples of
eligible activities are provided in Annex I (Section I).

**II. Water Resources Management**

Earmark funds may be used to support management of water and associated
natural resources that support access to drinking water supply or
sanitation services, and/or hygiene. Provision of drinking water supply,
sanitation and hygiene is more sustainable when supported by an
integrated approach to water management. This may include support to a
sound information base and analysis about hydrologic resources and
ecosystems; equitable allocation among multiple competing human demands
for water resources; best practices in land and water resources
management; and strong and capable governance structures and processes
relating to all water uses.

Activities in this category may be attributed to the earmark only in
proportion to their support to WSH objectives - partial attributions are
acceptable. Illustrative examples of eligible activities are provided in
Annex I (Section II).

**III. Water Productivity**

Earmark funds may be used to support economic or productive uses of
water in agriculture, industry, commerce, services, or energy resources
that support access to drinking water supply or sanitation services,
and/or hygiene.

There is a strong relationship between domestic and productive uses of
water. In many communities, water sources and water infrastructure are
shared by both domestic and productive users (i.e., multiple use
systems). In other contexts, the sustainability of community-managed
infrastructure depends on enhancing household incomes to support
operations and maintenance of domestic drinking water supply systems.
Efficiency, conservation, demand management, and pollution prevention by
both domestic and productive water users can ensure that sufficient
quantity and quality of drinking water supply is available to meet all
human needs and sustain ecosystem health.

Activities in this category may be attributed to the earmark only in
proportion to their support to WSH objectives - partial attributions are
acceptable. Illustrative examples of eligible activities are provided in
Annex I (Section III).

**IV. Water Security**

Earmark funds may be used to support water security by managing
transboundary or shared water resources to support access to improved or
improved access to drinking water supply or sanitation services, and/or
hygiene (WSH).

When nations share surface or groundwater resources, cooperation will be
necessary to ensure near and long-term availability of water supplies
for all water users, and prevent or mitigate potential conflict around
limited resources.

Activities in this category may be attributed to the earmark only in
proportion to their support to WSH objectives - partial attributions are
acceptable. Illustrative examples of eligible activities are provided in
Annex I (Section IV).

**[Funding Accounts]{.underline}**

Funds that support or may be attributed to this earmark may come from
the Development Assistance (DA), Global Health and Child Survival
(GHCS), Economic Support Funds (ESF), Andean Counterdrug Initiative
(ACI), Support for East European Democracy (SEED), Freedom Support Act
(FSA), International Disaster Assistance (IDA), or Transition Initiative
(TI) accounts, with the following stipulations:

-   The FY 2008 appropriations report language indicates that of the
    entire earmark, not less than \$150 million should be from the DA
    account.

-   While there is no directive for the use of IDA and/or TI account
    funds, when activities implemented with these funds meet the above
    requirements for eligibility they will be counted towards the
    earmark. These funds cannot be used for planning purposes and will
    only be attributed towards the earmark retrospectively. []{.mark}

-   Any separate or additional guidelines on the use of GHCS funds for
    water-related activities should be consulted.

In FY 2008, no funds may be attributed towards this earmark from either
the PL-480/Title II account or any supplemental appropriation.

**[Operational Plans]{.underline}**

Water is a highly cross-cutting activity, with applicability and
relevance throughout the Foreign Assistance Framework. Water-related
activities that are eligible under the earmark may therefore be assigned
to several Objectives, Areas, and Elements within Operational Plans.

More detailed guidance is being prepared to assist Operating Units in
determining the most appropriate way(s) to include their water-related
activities within the context of the Foreign Assistance Framework.

Following are some common Elements that may be used in developing
Operational Plans that include water earmark funds, assuming that all
other eligibility conditions stated above have been met:

**For Drinking Water supply, Sanitation, or Hygiene activities:**

-   Investing in People Objective/Health Area, Water Supply and
    Sanitation Element, all sub-Elements (IIP 3.1.8)

-   Humanitarian Assistance Objective/Protection Assistance and
    Solutions Area, Assistance and Recovery Element (HA 5.1.2)

-   Peace & Security Objective/Counter-Narcotics Area, Alternative
    Development Element (P&S 1.4.2)

-   Investing in People Objective/Health Area, Maternal and Child Health
    Element, Household Level Water, Sanitation, Hygiene and Environment
    sub-Element (IIP 3.1.6.7)

-   Economic Growth Objective/Financial Sector Area/Financial Services
    Element (EG 4.3.2)

**For Watershed/Water Resources Management activities:**

-   Economic Growth Objective/Environment Area, Natural Resources and
    Biodiversity Element (EG 4.8.1)

-   Economic Growth Objective/Environment Area, Clean Productive
    Environment Element (EG 4.8.2)

**For Water Productivity:**

-   Economic Growth Objective/Environment Area, Clean Productive
    Environment Element (EG 4.8.2)

-   Economic Growth Objective/Agriculture Area, Agricultural Sector
    Capacity Element (EG 4.5.2)

**For Water Security:**

-   Peace and Security Objective/Conflict Mitigation and Reconciliation
    Area, Conflict Mitigation (PS 1.6.1)

-   Peace and Security Objective/Conflict Mitigation and Reconciliation
    Area, Peace and Reconciliation (PS 1.6.2)

-   Investing in People Objective/Health Area, Water Supply and
    Sanitation Element (IIP 3.1.8)

**[Monitoring and Reporting]{.underline}**

*[Funding:]{.underline}*

The 2005 Paul Simon Water for the Poor Act requires annual reporting to
Congress through 2015 detailing progress against the goals of the Act,
including the levels of funding allocated or attributed to each
objective and to each operating unit. Reporting for the Act includes all
water-related activities, not just those attributed to the FY2008
earmark.

"Water" has been identified as a key issue in the Foreign Assistance
Framework and the Foreign Assistance Coordination and Tracking System
(FACTS) to assist in overall reporting on the Act. The Guidance Annexes
for the FY 2008 Operational Plan and 2007 Performance Report place all
water-related activities into a single "key issue" category, whether or
not attributable to the earmark. For FY 2008, Operating Units should
assign their total water sector funding to this key issue, including
both attributable and non-attributable water funds.

As needed, additional information and/or justifications may be solicited
from operating units to determine the specific amount attributable to
the earmark definition, and to disaggregate funding into more detailed
activity subcategories consistent with the areas described above

*[Progress Indicators:]{.underline}*

Indicators associated with different aspects of the water sector are
located in different parts of the Foreign Assistance Framework and FACTS
database. Following are those standard indicators that will be most
relevant for reporting on programs under the Water Supply and Sanitation
Element (3.1.8) [only]{.underline} (i.e., related to Category I of
activities listed above).

-   Number of people in target areas with access to improved drinking
    water supply as a result of USG assistance.

-   Number of people in target areas with access to improved sanitation
    facilities as a result of USG assistance.

Other related and relevant indicators that correspond to Categories I-IV
may also be found under the Maternal and Child Health Element (3.1.6.7),
the Natural Resources and Biodiversity Element (4.1.8), and the Clean
Human Environment Element (4.8.2), as well as others. Additional
information on use of these indicators is provided in the Supplemental
Guidance Annexes to the Operational Plan Guidance for 2008. For those
interventions that do not lend themselves to the standardized FACTS
indicators, activity managers may also develop customized indicators to
track progress.

**[Environmental Compliance]{.underline}**

Compliance with USAID Environmental Procedures (22 CFR 216), including
appropriate environmental mitigation and monitoring measures, should be
considered an integral part of all activity development and
implementation under this earmark, including water supply or sanitation
infrastructure, hygiene promotion interventions, and WSH-related
activities in the areas of water resources management, water
productivity, or water security.

**[Additional Information]{.underline}**

For additional information, please contact:

> Dan Deely (USAID/EGAT/NRM/W <ddeely@usaid.gov> )
>
> (after March 31, 2008, contact Jim Franckiewicz at USAID/EGAT/NRM/W)

**ANNEX I**

**Illustrative Activities Wholly or Partially Attributable to the Water
Earmark**

**I. Drinking Water Supply, Sanitation, and Hygiene**

Activities must meet the basic conditions set forth above for all
earmark attributable funds. Illustrative activity types under this
category include:

-   Access to improved drinking water supply as defined by the
    Millennium Development Goals, i.e., the availability of at least 20
    liters per person per day from an \"improved\" source within one
    kilometer of the user\'s dwelling. An "improved" source is one that
    is likely to provide safe water, including household connections to
    a water supply distribution network, public standpipes (connected to
    networked systems, or from a community well or surface water
    source), boreholes, protected dug wells, protected springs, and
    rainwater collection. Access to improved sources can be rural or
    urban, and may be provided through utilities, community-based
    systems, self supply, and/or other long-term and permanent systems.
    Unprotected wells, unprotected springs, rivers or ponds,
    vendor-provided water, bottled water, tanker truck water (e.g., for
    emergency purposes) are not considered improved and are not
    attributable to the earmark.

-   Access to improved sanitation at the household level as defined by
    the Millennium Development Goals, Sanitation facilities are
    considered adequate if they are private and if they separate human
    excreta from human contact, including improved sanitation
    facilities, connection to a public sewer, connection to a septic
    system, pour-flush latrines, simple covered pit latrines, and
    ventilated improved pit latrines. Access provided can be rural or
    urban, and may be provided through community-managed simplified
    systems, utility-managed central network systems, or self-supply.
    Unimproved household level sanitation facilities, including open pit
    latrines or bucket latrines, are not attributable to the earmark.

-   Access to public or shared improved sanitation facilities in
    communal or institutional settings (e.g., schools, health clinics,
    public markets, etc.) if they adequately separate human excreta from
    human contact and have a sustainable management and maintenance
    system in place, as well as sufficient hygiene facilities. (NOTE:
    Public or shared sanitation systems are not considered "improved"
    under the MDGs, and should not be reported under the FACTS
    sanitation access indicator. They are, however, considered eligible
    activities under this earmark if they meet the above conditions).

-   Improvements in the quality of existing drinking water supply or
    sanitation services, including increasing the number of hours of
    water access per day or quantity of water available from a networked
    water system, improving the quality of water delivered by a system,
    improving the maintenance of systems and reducing the number of days
    out of service, increasing the number of household connections for
    people who already had access to another communal improved source,
    etc.

-   Treatment of drinking water quality at the system or community
    level, prior to distribution to users (including treatment plants,
    chlorination and filtering at the source, etc).

-   Provision of multiple-use water services that include both domestic
    drinking water supply and water supply for productive use needs of
    the community (e.g., small-scale agriculture/gardening, livestock,
    microenterprise, etc.).

-   Hygiene promotion activities to support behavior change in key areas
    including handwashing, feces management (including sanitation
    promotion and marketing), and household point-of-use (POU) water
    treatment.

-   Protection of surface water and groundwater quality of potable water
    supply system from direct contamination prior to distribution to
    users, including installation of barriers to prevent access to the
    water point by animals, people, or other contamination sources, or
    water quality protection activities where there is a credible,
    direct, and specific cause-effect linkage between the contaminating
    activity and a high-quality drinking water source. Overall watershed
    management or water quality protection activities not entirely
    related to drinking water supply/sanitation/hygiene are not
    attributable under this category, but may be partially attributable
    under Category II below.

-   Enabling environment interventions related to the drinking water
    supply, sanitation, and hygiene sectors, including policy reform and
    legal and regulatory strengthening and enforcement.

-   Institutional strengthening and reform related to drinking water
    supply, sanitation and hygiene, including capacity building of
    government and other key actors and organizational development,
    water supply and wastewater utility governance/corporatization and
    utility reform, etc.

-   Water infrastructure financing at all scales, including increased
    access to credit, strengthening of domestic private capital markets,
    and facilitating support from domestic financial institutions.

-   Small-scale community-managed wastewater collection and treatment
    infrastructure.

-   Software aspects of wastewater management at all scales, including
    community capacity building in technical and financial aspects of
    system management, large-scale utility corporatization and reform,
    improved cost recovery, and innovative financing. Capital
    expenditures for large wastewater treatment systems are excluded
    from attribution under this category, but may be partially
    attributable under Category II below.

**II. Water Resources Management**

Activities must meet the required conditions set forth above for all
earmark attributable funds. All activities must support as a primary or
secondary objective access to water supply and sanitation or hygiene
promotion. Activities in this category may be attributed to the earmark
only in proportion to their support to WSH objectives - partial
attributions are acceptable. Illustrative activity types under this
category include:

-   Watershed, river basin, or lake resource management, planning and
    governance strengthening.

-   Water resource management policy reform or legal/regulatory
    strengthening, including that related to decentralized resource
    management authority, water rights, stakeholder participation, water
    quality standards, etc.

-   Information collection, analysis, and management related to water
    quantity and quality in support of sound decision-making and
    sustainable resource management, including hydrologic water balance
    assessment, flow modeling, water quality monitoring, remote
    sensing/GIS analysis, etc.

-   Education, outreach and communications to promote the sustainable
    management of watersheds and water resources.

-   Best management practices in land use, vegetation, and soil and
    water management to ensure long-term water resource sustainability.

-   Water quality management, including point and non-point source
    pollution prevention and control, groundwater/aquifer protection and
    management, and water safety planning and implementation.

-   Protection of watersheds and water resources environmental services
    including establishment of Payment for Environmental Services (PES)
    schemes to support such management.

-   Hydrometeorological monitoring, modeling, forecasting, and early
    warning systems to improve disaster prediction, preparedness and
    response.

-   Water harvesting and storage infrastructure design, construction,
    and management at all scales.

-   Flood management and drought risk reduction activities.

-   Water demand management and water conservation promotion in the
    domestic, agricultural, industrial/commercial, or energy sector.

-   Large-scale wastewater treatment infrastructure (domestic and
    industrial) to protect overall water quality.

-   Wastewater reuse to meet domestic, productive, or ecosystem water
    needs.

-   Freshwater and coastal ecosystem management.

-   Activities to strengthen adaptation to climate variability or change
    and reduce vulnerability to altered hydrology and water-related
    climate extremes.

**III. Water Productivity**

Activities must meet the required conditions set forth above for all
earmark attributable funds. All activities must support as a primary or
secondary objective access to water supply and sanitation or hygiene
promotion. Activities in this category may be attributed to the earmark
only in proportion to their support to WSH objectives - partial
attributions are acceptable. Illustrative activity types under this
category include:

-   Increased water use efficiency in agricultural irrigation and
    irrigation efficiency improvement, and improved agricultural
    soil/water management (including rainwater harvesting and runoff
    management techniques).

-   Water use efficiency and productivity related to fisheries and
    sustainable aquaculture.

-   Water use efficiency and water demand management in the industrial,
    commercial, services, energy, microenterprise, and other sectors.

-   Water pollution prevention and water quality management by all
    productive sectors including agriculture, fisheries, industry,
    commercial, services, or energy.

**IV. Water Security**

Activities must meet the required conditions set forth above for all
earmark attributable funds. All activities must support as a primary or
secondary objective access to water supply and sanitation or hygiene
promotion. Activities in this category may be attributed to the earmark
only in proportion to their support to WSH objectives - partial
attributions are acceptable. Illustrative activity types under this
category include:

-   Promoting dialogue among riparian nations sharing water resources.

-   Building capacity of stakeholders to participate in effective and
    cooperative governance processes regarding transboundary or shared
    water resources.

-   Establishing/strengthening new/existing institutions for promoting
    cooperative management of shared water resources in a transboundary
    context.

-   Facilitating the development of legal agreements for the joint
    management of transboundary water resources.

-   Strengthening data and information gathering, analysis, management,
    and access to inform cooperative decision-making regarding
    allocation and sustainable use of transboundary water resources.

Cleared by:

OES/ENV: ASalzberg (ok)

OES/IHB: KBliss (ok)

NEA/REA:  Clawson (ok)

AF/EPS:  CTrimble (ok)

SCA/RA:  DGhosh (ok)

WHA/EPSC:  DThompson (ok)

EAP/RSP:  KArchea (ok)

EUR/PGI:  DTessler (ok)

F/EG: JEllis (ok)

F/IIP: CDabbs (info)

USAID/EGAT/NRM: Ddeely (ok)

USAID/GH/HIDN: JBorrazzo (ok)

USAID/AF/SD: BHirsch (ok)

USAID/ANE/TS: JWilson (ok)

USAID/LAC/RSD: VBullen (ok)

USAID/E&E/EG/EI: CMitchell (ok)

USAID/OFDA/DCHA: IMoise (ok)