The lack of funding is a primary reason behind the difficulty many water systems have with installing needed treatment, upgrading existing systems, or making other improvements necessary to meet new regulations set under the Safe Drinking Water Act (SDWA). Providing a mechanism for federal funding for drinking water systems is a key objective of pending legislation. Current legislative proposals are patterned after the state revolving loan fund (SRF) concept used for funding wastewater treatment facilities under the Clean Water Act (CWA). The federal government would provide capitalization grants to states that meet the minimum requirements set by the US Environmental Protection Agency (USEPA). The states would provide loans and other financial assistance to eligible water systems who would repay the loans, thereby perpetuating the fund. Includes table.