[Senate Hearing 106-70]
[From the U.S. Government Publishing Office]


                                                         S. Hrg. 106-70

 
                       IMPLEMENTATION OF THE 1996
                   SAFE DRINKING WATER ACT AMENDMENTS

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                 FISHERIES, WILDLIFE AND DRINKING WATER

                                 OF THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 3, 1999

                               __________

  Printed for the use of the Committee on Environment and Public Works

                               ----------

                      U.S. GOVERNMENT PRINTING OFFICE
57-255 CC                     WASHINGTON : 1999
_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington DC 
                                 20402


               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       one hundred sixth congress
                 JOHN H. CHAFEE, Rhode Island, Chairman
JOHN W. WARNER, Virginia             MAX BAUCUS, Montana
ROBERT SMITH, New Hampshire          DANIEL PATRICK MOYNIHAN, New York
JAMES M. INHOFE, Oklahoma            FRANK R. LAUTENBERG, New Jersey
CRAIG THOMAS, Wyoming                HARRY REID, Nevada
CHRISTOPHER S. BOND, Missouri        BOB GRAHAM, Florida
GEORGE V. VOINOVICH, Ohio            JOSEPH I. LIEBERMAN, Connecticut
MICHAEL D. CRAPO, Idaho              BARBARA BOXER, California
ROBERT F. BENNETT, Utah              RON WYDEN, Oregon
KAY BAILEY HUTCHISON, Texas
                     Jimmie Powell, Staff Director
               J. Thomas Sliter, Minority Staff Director
                                 ------                                

         Subcommittee on Fisheries, Wildlife and Drinking Water

                   MICHAEL D. CRAPO, Idaho, Chairman

CRAIG THOMAS, Wyoming                HARRY REID, Nevada
CHRISTOPHER S. BOND, Missouri        FRANK R. LAUTENBERG, New Jersey
JOHN W. WARNER, Virginia             RON WYDEN, Oregon
ROBERT F. BENNETT, Utah              BOB GRAHAM, Florida
KAY BAILEY HUTCHISON, Texas          BARBARA BOXER, California

                                  (ii)




                            C O N T E N T S

                              ----------                              
                                                                   Page

                             MARCH 3, 1999
                           OPENING STATEMENTS

Baucus, Hon. Max, U.S. Senator from the State of Montana.........     2
Boxer, Hon. Barbara, U.S. Senator from the State of California...     5
Chafee, Hon. John H., U.S. Senator from the State of Rhode Island    11
Crapo, Hon. Michael D., U.S. Senator from the State of Idaho.....     1
Graham, Hon. Bob, U.S. Senator from the State of Florida.........     5
Lautenberg, Hon. Frank R., U.S. Senator from the State of New 
  Jersey.........................................................     3
Reid, Hon. Harry, U.S. Senator from the State of Nevada..........    13

                               WITNESSES

Biberstine, Jerry C., drinking water specialist, Colorado 
  Department of Public Health and Environment, on behalf of the 
  Association of State Drinking Water Administrators.............    22
    List, Safe Drinking Water Act Principles.....................    65
    Prepared statement...........................................    62
    Responses to additional questions from Senator Crapo.........    65
Bingham, Merril, public works director, Provo City (UT) Water 
  Resources, on behalf of American Water Works Association.......    24
    Prepared statement...........................................    67
    Responses to additional questions from Senator Crapo.........    71
Chapman, Andrew, president, Elizabeth Town (NJ) Water Company, on 
  behalf of the National Association of Water Companies..........    31
    Prepared statement...........................................    89
    Responses to additional questions from Senator Crapo.........    92
Fox, J. Charles, assistant administrator, Office of Water, 
  Environmental Protection Agency; accompanied by Cynthia 
  Dougherty, director, Office of Ground and Drinking Water.......     7
    Prepared statement...........................................    46
    Responses to additional questions from:
        Senator Boxer............................................    57
        Senator Crapo............................................    52
        Senator Graham...........................................    54
Gunter, Gurnie, director, Kansas City Water Services Department, 
  on behalf of the Association of Metropolitan Water Agencies....    28
    Prepared statement...........................................    80
Levy, Steve, executive director, Atlantic States Rural Water 
  Association, on behalf of the National Rural Water Association.    30
    Prepared statement...........................................    83
Noonan, Norine, assistant administrator, Office of Research and 
  Development, Environmental Protection Agency...................     9
    Prepared statement...........................................    46
Olson, Erik D., senior attorney, Natural Resources Defense 
  Council........................................................    26
    Prepared statement...........................................    73
    Responses to additional questions from Senator Crapo.........    80

                                 (iii)




     IMPLEMENTATION OF THE 1996 SAFE DRINKING WATER ACT AMENDMENTS

                              ----------                              


                        WEDNESDAY, MARCH 3, 1999

                               U.S. Senate,
       Committee on Environment and Public Works,  
                     Subcommittee on Fisheries, Wildlife,  
                                        and Drinking Water,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:04 a.m. in 
room 406, Senate Dirksen Building, Hon. Michael D. Crapo 
(chairman of the subcommittee) presiding.
    Present: Senators Crapo, Reid, Lautenberg, and Chafee [ex 
officio].
    Also present: Senator Baucus.

          OPENING STATEMENT OF HON. MICHAEL D. CRAPO, 
              U.S. SENATOR FROM THE STATE OF IDAHO

    Senator Crapo. The hearing will come to order.
    We welcome everyone here. This is the Safe Drinking Water 
Act oversight hearing, for the Fisheries, Wildlife and Drinking 
Water Subcommittee. We welcome those who are here to testify as 
well as those who are here to observe and participate.
    For an opening statement, I would just indicate that the 
reauthorization of the Safe Drinking Water Act in 1996 was 
considered by most to be one of the successful collaborative 
efforts in trying to find a path forward by bringing everyone 
together to work out a statute that would provide the 
regulatory flexibility necessary to let those who were involved 
in State and local government as well as in the private sector, 
work with the Federal Government as we seek to obtain the 
common goal of making sure that our drinking water across the 
country is protected and safe.
    The purpose of this hearing is to take a look now several 
years later to see how it's working and to hear from the EPA 
and the other interested parties who are working and dealing 
with the statute on a daily basis to see if the intended 
results are being achieved and if there need to be any 
corrections or revisions in the legislation or the approach of 
EPA or the participants in the process.
    I think drinking water clearly is one of the most important 
environmental concerns that we face in the country. We do have 
a strong, solid drinking water system in this country but it's 
one of those things that we find has many different facets from 
the large systems to the very small systems.
    I come from a State where a lot of the systems are very 
small and we have a continuous need to make sure that we have 
the flexibility to deal with it properly. In my opportunity to 
ask questions, I'm sure I'll get into some of those types of 
issues.
    Without anything further, I will turn to Senator Baucus to 
see if you would like to make an opening statement.

  OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE 
                        STATE OF MONTANA

    Senator Baucus. Thank you, Mr. Chairman.
    First of all, I want to congratulate you, Senator Crapo, on 
your chairmanship of this important subcommittee.
    Senator Crapo. Thank you.
    Senator Baucus. As you well know, you have big shoes to 
fill.
    Senator Crap. That's true. I've got some help though and I 
know where he is.
    Senator Baucus. He knows where you are too.
    [Laughter.]
    Senator Baucus. I compliment Senator Kempthorne 
particularly for his openmindedness and his desire to be 
pragmatic and find solutions to problems. Certainly safe 
drinking water is one.
    I remember his work on the Endangered Species Act, where he 
put in a lot of hard work and came within a gnat's eyelash of 
getting that passed. We worked very closely together. I know 
you'll do the same because you come from a great tradition of 
getting things done.
    Senator Crapo. Thank you.
    Senator Baucus. I think this hearing is important for a 
couple of reasons. First, it shows that we intend to follow 
through. Very often we pass legislation and then don't pay 
enough attention to how it's working. Here we are with an 
oversight hearing on the Safe Drinking Water Act to see what's 
working, to see what adjustments, if any, should be made. I 
compliment you for this hearing.
    Second, it gives us a chance to consider the lessons of the 
Act. We all know the Act has had a tortured history. It was 
passed some time ago and then we thought that the statute was 
not tight enough, so we passed the 1986 amendments and went way 
overboard. Then we had to come back and provide some balance. 
My guess is we're pretty close to the mark. This is probably 
pretty good, although it's not perfect.
    Some of these lessons are substantive. The 1996 Act, I 
think, takes very innovative approaches to solving the primary 
problems. For example, the Flexible State Revolving Fund is 
patterned after the Fund in the Clean Water Act. It is an 
innovation to help smaller communities get financing, with 
special attention to the needs of small, rural communities. We 
all know in drinking water issues, economies of scale matter, 
and it is particularly important to pay attention to rural 
communities.
    Then there is the public empowerment that comes from 
consumer confidence reports.
    In addition, the measure to use cost-benefit analyses, 
we're trying to get a little confidence in cost-benefit 
analysis. People throw that term around a lot. We want to do 
what we can to assure it is a usable tool, and also a flexible 
multimedia approach to the regulation of radon. Radon is quite 
vexing, but I think we found something that works pretty well 
to deal with it. Certainly, let's find out.
    By considering how well these approaches are working, we 
hope to get some insight into other environmental laws. This 
leads me to another point. That is, there is another lesson in 
all this and it is a political one.
    The enactment of the Safe Drinking Water Act of 1996 shows 
that we can achieve consensus and find positive solutions to 
environmental problems. I think that is an important statement, 
that we can achieve consensus, we can find positive solutions 
to environmental problems. We did it with the Safe Drinking 
Water Act. The leadership came not only from Senator 
Kempthorne, Senator Chafee, Senator Reid but all the members of 
this committee. I compliment all of them.
    It came from many others who are here in this room: Cynthia 
Dougherty of EPA who worked very closely with Administrator 
Browner and Bob Perciasepe, Erik Olson of the NRDC and Diane 
Van De Hei of the Association of Metropolitan Water Agencies. 
The point here is that the 1996 Safe Drinking Water Act was 
passed not top down, but bottom up. The groups worked together, 
rolled up their sleeves, did not grab any headlines, and came 
to us with legislation that we'd been working on for a good 
period of time. It was a ``done deal'' in many respects by the 
time it came to us.
    People had all kinds of different perspectives, they worked 
hard. I take my hat off to them. This is really what service 
is. Sure all of us are in public service but everyone else who 
worked on this is in public service too and I take my hat off 
to them particularly because their names aren't in the papers 
or on marquees, they don't get a lot of the public credit for 
the end result, but they know they've done a good job. I just 
think it's important for us to recognize the hard work they 
have all done.
    Thank you very much, Mr. Chairman.
    Senator Crapo. Thank you, Senator Baucus.
    Senator Lautenberg.

        OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, 
           U.S. SENATOR FROM THE STATE OF NEW JERSEY

    Senator Lautenberg. Thanks very much, Mr. Chairman.
    I, too, want to congratulate you on your meteoric rise to 
seniority.
    Senator Crapo. Thank you.
    Senator Lautenberg. When I first got here, I sat in the 
senior Senator's chair and at that time, I was next to Scoop 
Jackson. He said, don't get used to it and about a week later, 
I was off in the corner.
    [Laughter.]
    Senator Crapo. I'm used to that position as well.
    [Laughter.]
    Senator Lautenberg. Thanks very much for holding this 
hearing on safe drinking water.
    I think it is the ideal time to hold this hearing. EPA and 
the States are at a very important stage in implementing the 
Safe Drinking Water Act amendments of 1996. Among other things, 
they are selecting the means by which they will identify and 
publicly disclose potential threats to public health from 
drinking water contamination.
    Unfortunately, in evaluating the implementation of this law 
in my State, I'd have to say that the program needs 
improvement. When our drinking water bill passed in 1996, I 
praised it because I believed the bill would enhance both the 
quality of our drinking water and America's confidence in its 
safety.
    The bill did not require the States to perform every 
measure necessary to protect public health but it provided 
tremendous flexibility and it allowed discretion to the States 
to do so. I was especially hopeful that in my State, the most 
densely populated State in the country, a State with a legacy 
of industry and thus, equally a legacy of industrial pollution, 
and where newspaper articles routinely describe threats to 
drinking water, and I would have hoped our State agencies would 
exercise their discretion to be more protective of the public 
health and the minimums required under the 1996 law.
    I'm sad to say that I've been disappointed, that in my 
State and probably in others as well, the State agency has 
clung too closely to just the bare minimum requirements. A good 
example of this is a plan called ``The Source Water Assessment 
Plan,'' proposed by the State of New Jersey last November as 
required by the 1996 law.
    Under that law, the State is required to perform source 
water assessments to identify geographic areas that are the 
sources of public drinking water, assess the water systems' 
susceptibility to contamination and to inform the public of the 
results.
    Mr. Chairman, there are serious deficiencies in my State's 
proposed source water assessment plan. These are deficiencies 
that I fear may characterize other States' plans as well. Most 
importantly, under the proposed plan, the State will not 
identify and evaluate the threat presented by contaminants 
unless they are among the 80 or so specifically regulated under 
the Safe Drinking Water Act. Radium 224, recently discovered in 
drinking water across my State, might not be evaluated under 
the State's plan until specifically regulated.
    With a gap like that in our information, what do I tell the 
families when they want to now what is in their drinking water, 
is it safe? The public must have access to comprehensive 
assessments with the right-to-know component of the Drinking 
Water Program in order for it to be effective.
    Soon, I will be formally introducing legislation to make 
this happen. I hope we can consider improvements to this law in 
this Congress. Mr. Chairman, this is a good step along the way 
and I look forward to hearing from our witnesses.
    Senator Crapo. Thank you, Senator. We appreciate your 
comments and your concern on these issues.
    We have two panels today. Our first panel is going to be 
from the EPA and consists of: Mr. J. Charles Fox, assistant 
administrator, Office of Water and Dr. Norine Noonan, assistant 
administrator, Office of Research and Development. We welcome 
you. You are accompanied by Ms. Cynthia Dougherty, director, 
Office of Ground and Drinking Water.
    We'd like to remind all witnesses that we try to keep to 
the 5 minutes for your oral presentations. We've had your 
written testimony in advance. I've read it, I know the other 
Senators have read it, and it will be thoroughly reviewed and 
will be made a part of the full record.
    I also will place into the record the statements of 
Senators Graham and Boxer.
    [The prepared statements of Senators Graham and Boxer 
follow:]
     Prepared Statement of Hon. Bob Graham, U.S. Senator from the 
                            State of Florida
    Mr. Chairman, members of the committee, Mr. Fox, Ms. Dougherty, Dr. 
Noonan, representatives of states, water utilities, and the public, 
thank you for the opportunity to speak briefly about implementation of 
the 1996 Safe Drinking Water Act Amendments in Florida.
    Water supply and water quality are critical issues in many areas of 
Florida, as our population of over 15 million continues to grow at a 
rate of over 700 new residents each day. Floridians are highly 
dependent on ground water for their drinking water supplies, with only 
19 of 7,000 water systems using surface water. Small systems serving 
fewer than 500 people make up 6400 of Florida's 7,000 water systems. 
Naturally occurring radon is also an issue in some areas of my state.
    I'd like to commend the Environmental Protection Agency for their 
success to date in meeting the deadlines set forth in the 1996 
amendments to the Safe Drinking Water Act, and for their efforts to 
work with the states and other stakeholders in implementing this 
important program. Clean and safe drinking water is taken for granted 
by many Americans, thanks to the efforts of local water suppliers with 
the guidance and support of the states and the EPA. There are many 
challenges ahead as EPA, the states, and water suppliers pursue an 
aggressive schedule to conduct necessary research, develop new 
regulations, upgrade our infrastructure, and educate consumers about 
the quality of their drinking water.
    The 1996 amendments call for consideration of risk to human health 
as well as costs of implementation in the setting of new drinking water 
standards. Much new research is needed on occurance of contaminants, 
health effects, and treatment technologies in order to ensure that 
standards are based on sound science. I encourage EPA to work closely 
with Congress to set research priorities and assign adequate resources 
to these important activities.
    State agencies are on the front lines of implementation of Safe 
Drinking Water Act requirements. The 1996 amendments allow flexibility 
for states to choose the most effective approaches that are appropriate 
for citizens of each state, with guidance and support provided by EPA. 
The alternative multimedia approach to radon regulation currently under 
consideration is an example of innovative environmental management that 
I'd like to encourage.
    Small water supply systems provide drinking water for many 
Americans, particularly in more sparsely populated areas of the 
country. These systems and their consumers have limited resources 
available for implementation of new regulations. EPA and the states 
need to work together to provide information and technical and 
financial assistance to small systems so that the health of rural water 
consumers is adequately protected at an affordable cost.
    I look forward to today's discussions. Thank you.
                                 ______
                                 
    Prepared Statement of Hon. Barbara Boxer, U.S. Senator from the 
                          State of California
    I would like to welcome the new chairman of this subcommittee, 
Senator Crapo, and thank him for holding this hearing today.
    When the Safe Drinking Water Act was passed in 1974 many Americans 
took the purity of their drinking water for granted. Today, reports of 
cryptosporidium, disinfection byproducts, MTBE and other contaminants 
fouling our drinking water undermine public trust in that water.
    The 1996 Safe Drinking Water Act Amendments set us on a course to 
reversing this lack of public confidence. One way of addressing that 
problem was to give the public the right-to-know about the 
contamination threats to its drinking water.
    My consumer confidence reports provision, patterned after a similar 
requirement of California law, was designed to provide that right. The 
provision requires public water systems to tell consumers where they 
get their drinking water from, and the contamination problems 
threatening that water.
    I am very pleased to see that EPA has issued regulations to 
implement the consumer confidence provision. Thanks to that progress, 
by October 1999, citizens in the rest of the country will join 
Californians in receiving consumer confidence reports.
    Although EPA has made significant progress implementing this and 
other provisions of the 1996 amendments, children, pregnant women and 
those with weakened immune systems may still face greater risks from 
drinking water than the rest of us do.
    During the debate on the 1996 amendments, I fought to ensure that 
our drinking water standards specifically protect these groups. In this 
connection, so-called disinfection byproducts--particularly 
trihalomethanes--was a particular concern of mine.
    As you may recall, in 1992, California's Department of Health 
Services (DHS) released health studies finding higher miscarriage rates 
among women who drank more tap water than bottled water in early 
pregnancy. A follow-up 1998 DHS study (A Prospective Study of 
Spontaneous Abortion: Relation to Amount and Source of Drinking Water 
Consumed During Pregnancy, confirmed these earlier findings.
    The study found that women who drank five or more glasses of tap 
water per day containing high levels of common disinfection 
byproducts--particularly trihalomethanes--were at greater risk of 
miscarriage during their first trimester than women with less exposure.
    I understand that in December 1998, EPA released the first stage of 
its rule to deal with this threat. A second stage of that rule is now 
being prepared to deal with that threat more comprehensively. As EPA 
moves forward with that second stage, I would like to know whether it 
has a research agenda designed to build on the work performed in 
California.
    In particular, I understand that the Centers for Disease Control 
(CDC) has identified some discrete studies it could perform to add to 
the body of California's work. What action is EPA planning to take to 
conduct such studies so that we can be sure that EPA's second rule on 
disinfection byproducts protects pregnant women?
    More broadly speaking, I am also interested to learn how EPA is 
implementing my children's health provision of the 1996 amendments. 
That provision requires EPA to consider the risks drinking water 
contaminants present to children and other vulnerable subpopulations as 
it sets standards for those contaminants.
    This provision was patterned after my own Children's Environmental 
Protection Act (CEPA) which would expand the application of that 
requirement to provide that all standards EPA establishes under our 
environmental laws protect children.
    In addition, another provision I added to the 1996 amendments 
requires EPA to present a related study to Congress by August 6, 2000. 
That study must evaluate the extent to which children, pregnant women 
and other vulnerable subpopulations are likely to experience elevated 
health risks from contaminants in drinking water.
    I would like to know what progress EPA has made in meeting this 
deadline.
    Finally, one of the most significant threats facing nation's 
drinking water supply is contamination by the fuel additive methyl 
tertiary butyl ether (MTBE).
    In January, Lake Tahoe closed its 13th drinking water well due to 
MTBE contamination. All told, Tahoe has lost over 20 percent of its 
drinking water supply due to this contamination. Just three days ago, 
the Boston Globe reported that MTBE was detected in 137 drinking water 
sources in New Hampshire.
    On October 5, 1997, EPA placed MTBE on the Safe Drinking Water Act 
``Contaminant Candidate List.'' Once placed on this list, EPA 
determines whether or not to regulate that contaminant. I am interested 
to learn whether EPA has any immediate plans to regulate MTBE under the 
Safe Drinking Water Act.
    I congratulate EPA and the state drinking water program 
administrators here today for their work to implement the 1996 
amendments. I look forward to hearing the testimony today.
    Thank you.

    Senator Crapo. With that, why don't we get started. Mr. 
Fox, would you please begin and be our first witness?

STATEMENT OF J. CHARLES FOX, ASSISTANT ADMINISTRATOR, OFFICE OF 
WATER, ENVIRONMENTAL PROTECTION AGENCY; ACCOMPANIED BY CYNTHIA 
    DOUGHERTY, DIRECTOR, OFFICE OF GROUND AND DRINKING WATER

    Mr. Fox. Thank you, Mr. Chairman. It is a real pleasure to 
be here. I think this hearing is a very timely opportunity for 
us to look at the progress that we've been making in 
implementing the 1996 amendments. I think all of your comments 
about the bipartisanship that brought us to this point is 
absolutely correct. I know that spirit has guided our 
implementation and we have found a lot of support and 
cooperation with various members of the drinking water 
community as we've developed a very aggressive implementation 
schedule as outlined in the statute.
    At this point, I'm proud to say that we have completed 
every action that has been required of us under the statute. 
These actions have provided a solid foundation of guidance and 
assistance for the States, water suppliers and the public as 
they take the next steps in implementation.
    I would like to discuss some of our successes today as well 
as some of the challenges that I see facing us over the next 
couple of years.
    As you all know, the 1996 amendments included regulatory 
improvements, increased funding, new prevention programs and 
expanded public participation. I'm pleased to relay that all 50 
States and Puerto Rico received their first drinking water 
State Revolving Loan Fund capitalization grants for the 1997 
appropriations and that 32 States have received fiscal year 
1998 capitalization grants for a total to date of $1.6 billion. 
This is a remarkable accomplishment when you think about all 
the progress that we had to make, in many cases getting State 
laws passed to get us to this point.
    States have provided more than 350 loans to water systems 
to improve drinking water quality. A large percentage of the 
loans given out to date, the initial estimates are 
approximately 50 percent have gone to small systems and 47 
States have taken the technical assistance setaside to provide 
additional assistance to smaller systems throughout the 
country.
    The 1996 amendments also require States to complete 
assessments of the source water for all public water systems 
within the State as Senator Lautenberg mentioned. This source 
water protection program is an important first step in 
providing multiple barriers of public health protection which 
underwrite many of the Act's requirements.
    In 1997, EPA issued a source water assessment and 
protection guidance developed through an advisory committee 
that we created in response to the Act to assist States as they 
developed their programs. Almost all States have submitted 
programs by last month's deadline and others are on schedule to 
do so shortly.
    States are also working on two other prevention activities, 
capacity development strategies and operator certification 
programs. Last summer, EPA released guidance to help States 
assure that all drinking water systems have the technical, 
financial and managerial capacity to comply with drinking water 
standards.
    Last month, EPA released its final guidelines providing 
States with the minimum standards for their operator 
certification programs. Both of these EPA documents were 
developed with the assistance of the advisory committee and I'm 
confident that the States will develop both of these programs 
within the statutory timeframe.
    Last November, President Clinton joined Senator Chafee in 
releasing two rules to improve filtration and reduce exposure 
to harmful disinfection byproducts. These two rules will 
provide additional protections for nearly all Americans who use 
public water supplies by protecting them from microbiological 
contamination such as cryptosporidium.
    EPA has also established a new process for standard setting 
based on the greatest risks to public health. The amendments 
require EPA to make a regulatory determination on at least five 
contaminants by the year 2001. EPA established its contaminant 
candidate list to aid in this determination and to help set 
priorities for the agency's drinking water program.
    To provide sound occurrence data, EPA is developing its 
national contaminant occurrence data base which will provide 
information on the occurrences in drinking water of specific 
contaminants.
    The 1996 amendments included a requirement to create 
consumer confidence reports that are the centerpiece of the 
right-to-know provisions of the Act. The information contained 
in these reports will enable Americans to make practical, 
knowledgeable decisions about their health and their 
environment.
    Last August, President Clinton released the rules 
specifying the requirements of these reports in California. 
This fall, public water systems around the country will be 
providing citizens with new information about where their water 
comes from and what, if any, contaminants, were detected in 
their water.
    While I believe we have been very successful in 
implementation to date, I realize there are many challenges 
ahead of us as well. The biggest, single challenge of the next 
4 or 5 years is simply the cumulative number and size of the 
tasks that we face collectively with our State and local 
partners. The regulatory products required of EPA over the next 
4 to 5 years will need the support of a growing base of 
research and data that will be costly for EPA and demanding of 
our stakeholders. EPA will develop new regulatory products but 
we will also have the burden of implementing the regulations 
and programs developed since 1996.
    Another challenge is to ensure that we have the science and 
information we need to make good, well-founded regulatory 
decisions on these standards. A third challenge is the issue of 
data quality. Accurate information about the quality of our 
drinking water and its compliance with drinking water standards 
is vital to establishing new rules and evaluating the success 
of our program.
    In 1996, the Administration and Congress gave the American 
people a sensible and comprehensive law to protect public 
health. Implementation of the Act is moving forward very 
successfully. Americans can feel very confident that the 
quality of their drinking water is high, but I think as we have 
all learned, this is something we can't take for granted and we 
need to be ever vigilant to make sure their drinking water is 
protected.
    Thank you, Mr. Chairman.
    Senator Crapo. Thank you, Mr. Fox.
    Dr. Noonan.

STATEMENT OF NORINE NOONAN, ASSISTANT ADMINISTRATOR, OFFICE OF 
   RESEARCH AND DEVELOPMENT, ENVIRONMENTAL PROTECTION AGENCY

    Dr. Noonan. Thank you, Mr. Chairman.
    I'm very pleased to have this opportunity to speak to the 
committee this morning and briefly describe the Office of 
Research and Development Drinking Water Research Program. It 
continues to be a high priority, not only for us in ORD, but 
for the Agency as well.
    We've made tremendous advances over the years in our 
understanding of the risks posed by chemical and microbial 
contaminants in drinking water and in our ability to control or 
prevent risks by implementing effective risk management 
strategies. Nevertheless, there continues to be a critical need 
to further reduce uncertainties in the assessment of exposure 
and risks to these agents and to develop more cost-effective 
methods of water treatments for both large and small systems in 
the United States.
    Our commitment to a strong drinking water research program 
is evidenced by the fact that our total investment in drinking 
water research in recent years has doubled, growing from a 
level of almost $21 million in fiscal year 1995 to over $41 
million in the fiscal year 2000 President's budget. That is, in 
the context for ORD, of an essentially flat total budget for 
the office.
    To respond to these high priority needs, we have focused on 
the areas of health effects, exposure, risk assessment and risk 
management. We have ensured the scientific quality of EPA's 
research activity through the development of peer reviewed 
research plans for microbial and disinfection byproducts and 
for arsenic, along with a strict adherence to the peer review 
process for all technical and scientific products.
    A number of the important underlying scientific issues that 
are of concern to the drinking water program are also being 
addressed through our core research program to improve health 
risk assessment.
    We have strived to meet the extensive research demands of 
the 1996 amendments by establishing new drinking water research 
partnerships with other Federal agencies such as the Centers 
for Disease Control and Prevention and the National Institute 
of Environmental Health Sciences, and with outside research 
organizations some of whom you will hear from today such as the 
American Water Works Association Research Foundation.
    By strengthening the Extramural Research Grants Program in 
drinking water, we have also been able to substantially 
increase the involvement of the academic community in helping 
to solve the many difficult research challenges faced by the 
Agency.
    EPA research on waterborne pathogens in recent years has 
provided new information and methods to better characterize and 
control the risks posed by microbial contaminants in drinking 
water. Studies to determine the infectious dose of two 
important waterborne pathogens--cryptosporidium and norwalk 
virus--have demonstrated that exposure to low levels of these 
agents in drinking water may cause infection in healthy people.
    New technologies have been developed for increasing the 
operational efficiency of treatment, monitoring and predicting 
disinfectant concentration in the distribution system to help 
ensure the safety of drinking water delivered at the tap.
    Areas of current emphasis in our program include research 
to determine the nature and magnitude of waterborne disease in 
the United States and the development of simple, inexpensive 
and accurate detection methods for well-known waterborne 
pathogens such as cryptosporidium and for emerging pathogens 
such as the class known as microsporidia.
    EPA researchers are also developing cost-effective water 
treatment approaches for small systems and are conducting 
research to better understand how microbial intrusion into the 
distribution system occurs and how it can be detected.
    Scientists at EPA are using state-of-the art research tools 
to address key uncertainties in the risk assessment for 
arsenic. Studies to evaluate arsenic risks at low environmental 
exposure level are focused on trying to understand the 
biological processes responsible for its effects and the 
factors that influence human susceptibility.
    Another important area of research for us is the 
development of arsenic treatment technologies for small water 
systems. EPA, as you have heard, has established a contaminant 
candidate list to aid in priority-setting for the Agency's 
drinking water program. Contaminants in the regulation 
determination priority category are considered to have 
sufficient data available or data that can be quickly collected 
to evaluate both exposure and risk to public health and will be 
considered for regulation by August 2001.
    Contaminants listed under the research occurrence 
priorities category require additional data for making a 
determination. To determine the specific data needs in each of 
these categories and to prioritize contaminants for research, 
the Agency initiated the development of a strategic research 
plan for the CCL in May 1998. ORD and the Office of Water have 
been working in very close collaboration on a more refined plan 
that will identify research needs and priorities for all 
chemical and microbial contaminants on the list.
    The types of needs addressed by the plan include, 
information on the health effects and occurrence of CCL 
contaminants as well as validated analytical methods and 
effective treatment technologies. Research on a number of 
critical contaminants on the CCL such as MTBE, sulfate and 
waterborne microbial pathogens is already being conducted by 
EPA and general solicitations have already been made under the 
Agency's extramural grants program.
    We will seek the guidance of our Science Advisory Board, 
outside experts and drinking water stakeholders to make sure 
that the highest priority needs are being addressed in the most 
effective manner. Another key to meeting the research 
challenges of the future will be to continue to leverage 
capabilities and resources with other Federal agencies, the 
drinking water industry, academia and other outside 
organizations. We're confident that by following this path, we 
will be able to ensure that future drinking water regulations 
and risk management decisions will be focused on the most 
important public health problems and will be based on the best 
available science.
    I want to thank you, Mr. Chairman, for the opportunity to 
speak with you today and I look forward to answering your 
questions.
    Senator Crapo. Thank you, Dr. Noonan.
    We have been joined by our chairman, Senator Chafee. 
Senator, would you care to make an opening statement?

           OPENING STATEMENT OF HON. JOHN H. CHAFEE, 
          U.S. SENATOR FROM THE STATE OF RHODE ISLAND

    Senator Chafee. I will put one in the record, if I might. I 
just want to congratulate you for holding these hearings. This 
is a bill that we worked on a couple of years ago. Every so 
often we do something right around here and this worked out 
right as I understand it.
    Your predecessor, as you know, was the one who was the lead 
horse in putting that across, so I think it has worked out 
fine, but from this panel and the other panels we will find 
where we can do some fine tuning of the legislation.
    Thank you very much and I would ask my statement be put in 
the record.
    [The prepared statement of Senator Chafee follows:]
Prepared Statement of Hon. John H. Chafee, U.S. Senator from the State 
                            of Rhode Island
    Good morning. I am pleased to be here today, and I want to thank 
Senator Crapo for conducting this oversight hearing and congratulate 
him on his chairmanship. I would like to welcome everyone and thank you 
for coming. I especially want to thank Steve Levy, who works closely 
with our numerous small systems in Rhode Island.
    As you all know, it has been two and one-half years since Congress 
overwhelmingly passed the Safe Drinking Water Act Amendments of 1996. 
This Act is an excellent example of what can be achieved when we work 
together on a bipartisan basis. When we were drafting this legislation, 
the committee worked closely with the Administration, state and local 
governments, and stakeholders to ensure that when all was said and 
done, the result would be safe and clean drinking water for the 
American people.
    I have to say that I am happy with the outcome and the list of 
achievements is long. Since passage of the Act, EPA has worked closely 
with the expanded Drinking Water Advisory Committee on a number of 
issues. This process ensures that all interested parties are heard and 
their concerns addressed to the extent possible prior to the release of 
regulations. In addition, more than 350 loans have been issued from the 
State Revolving Loan Fund totaling $849 million. These funds will 
further aid compliance, especially for the numerous small systems.
    I am extremely pleased to say that EPA has not missed one statutory 
requirement included in the 1996 Amendments. This accomplishment would 
not have been possible without Cynthia Dougherty, Director of EPA's 
Office of Water. I applaud and thank her for all the hard work that she 
has expended in making sure that implementation of the Act is 
successful. I know my office has called her on a number of occasions 
and she is always responsive to our questions or concerns.
    Despite what has been achieved, there are a significant number of 
challenges that lie ahead. One of our biggest challenges will be 
ensuring that future regulations are based on sound and reliable 
science. The hard work has just begun, and to make this Act a success 
we will have to continue to work together.
    I look forward to hearing from the witnesses.

    Senator Crapo. Would you like to begin with questions?
    Senator Chafee. Go ahead, please.
    Senator Crapo. I'm going to focus the first part of my 
questions on the issue of research. I don't know exactly which 
of you should answer, so all of you are welcome to answer.
    As we reviewed the current fiscal year's budget request, I 
noticed that in the basic research and development activities 
for drinking water, the request is $34.6 million, although it 
has been estimated, I believe by the Office of Water, that a 
$10-$12 million shortfall exists for the budget in that area. 
The authorization is $41.5 million.
    Then when you look at the general drinking water research 
funding, that is actually reduced in this budget request from 
$13.1 million down to $11.2 million, if I read the budget 
documents correctly.
    The question I have is, is the request level in both or 
either of these two areas adequate for the needs that we see as 
we seek to implement the drinking water statutes?
    Mr. Fox. Senator, that is an excellent question and one 
that we are spending a good deal of time trying to get the best 
and most precise answer for. The short answer that I will give 
you right now is that we feel very comfortable that we have 
sufficient investment to meet some of our short-term research 
needs in terms of the regulatory schedule that we are on. We 
might have to revisit whether or not there is additional 
investment required to meet some of our longer term needs. We 
will be doing that as we prepare our fiscal year 2001 budget.
    The work of the General Accounting Office has helped us to 
focus on this. Jointly, my office and Dr. Noonan's office are 
sitting down together to plan more specifically these longer 
term strategies.
    When you look at the deadlines that were laid out in the 
amendments, the challenge is that they are ambitious. We have a 
series of regulatory decisions that have to be made beginning 
in the year 2001, followed up in the year 2005 and we need to 
make sure we have an adequate scientific basis from which we 
can make those decisions.
    I feel comfortable that in terms of the more immediate 
regulations--decisions we have to make on radon or arsenic, or 
the next round of disinfection byproducts--that we have a very 
sound research base to make those decisions. It is some of 
these contaminants in the future that I think we're going to 
have to assess as we put together our next budgets.
    Dr. Noonan. Mr. Chairman, if I may add, our drinking water 
budget, as I indicated in my testimony, for research has 
doubled since 1995 in the context of essentially a flat budget 
for ORD in total. This kind of additional commitment, I think 
indicates the level of priority that drinking water has for us 
and for me personally. I think it certainly is true, and I 
agree with Mr. Fox, that for the near term, we have the 
resources that we need to make the kind of progress we're going 
to have to make in health effects exposure and assessment.
    We're working very hard with the Office of Water. Right now 
we are in the planning process for the fiscal year 2001 budget. 
In fact, my staff, my executive leads and our drinking water 
program managers are spending virtually all of their time 
meeting and working with the Office of Water and attending 
stakeholders meetings, hearing from them, trying to understand 
what are the needs, evaluate them, so that we can make a 
proposal in the 2001 budget that reflects our true need to meet 
these regulatory time lines in the future.
    Senator Crapo. It's my understanding that drinking water 
research makes up only 7 percent of the ORD budget, is that 
generally accurate?
    Dr. Noonan. It's about 8 percent, Mr. Chairman. It's a 
little over 8 percent in the fiscal year 1999 budget, about 8 
percent in the 2000 budget.
    Senator Crapo. I appreciate the answers you have both 
given. The question I see here may even be one that goes beyond 
the Safe Drinking Water Act and into other areas. It's this. 
From what I've read in the testimony of those who will 
participate later on, your own and others, research is sounding 
like it's going to be a very critical issue and good science, I 
think, is one of the key areas that we've got to address as we 
proceed in trying to find the common ground in this country on 
environmental issues because it is the science that should help 
us do the cost-benefit analysis or to work within the cost-
benefit analysis and to get good results without devastating 
communities or the economy.
    Because of that, I think it's critical that we have a 
strong commitment to research. As I see the numbers I've 
reviewed in the testimony presented about what we need to look 
at in the future, it raises the question to me whether we are 
giving now the resources to the research that needs to be 
given. I suspect this is an issue that is much broader than 
just drinking water.
    I see my time is up. In another round of questions, I'll 
probably come back to this issue or something similar. I just 
wanted to make you aware of my concern that we may be running 
into a problem where if we don't get on the leading edge of 
this issue, we may face some real serious problems in the 
future in terms of being ready to achieve the results required 
by the Act.
    Senator Reid, did you want to make an opening statement?
    Senator Reid. I'll ask it be made a part of the record.
    [The prepared statement of Senator Reid follows:]
     Prepared Statement of Hon. Harry Reid, U.S. Senator from the 
                            State of Nevada
    Good Morning, Mr. Chairman.
    Congratulations to you, Senator Crapo, on your chairmanship of this 
subcommittee. The state of Idaho has sent many Senators to this 
committee and all have represented the state and our nation with 
distinction. I am certain that you will continue that fine tradition.
    Your most immediate predecessor, Senator, now Governor Kempthorne, 
and I worked together on many issues in this subcommittee during his 
six years in the Senate, but I think the one that both of us are the 
most proud of is the Safe Drinking Water Act.
    During the 104th Congress, this subcommittee and this committee, 
wrote a sweeping reauthorization of the Safe Drinking Water Act. The 
original Safe Drinking Water Act of 1974 was a landmark piece of 
legislation, but was deeply flawed. Its implementation was a regulatory 
mess.
    In particular, small systems had tremendous problems in complying 
with the requirements both due to regulatory and resource problems. 
Also, the public was inadequately informed of health risks associated 
with contaminated or improperly treated water.
    The reauthorization that we wrote adds flexibility to the 
regulatory process, forces EPA to focus on contaminants posing the 
greatest health risk, and provided funding through a revolving loan 
fund to assist communities, especially small communities, comply with 
safe drinking water regulations. We also added language designed to 
prevent the contamination of source waters and to increase public 
awareness of drinking water issues.
    If I sound pleased with the Safe Drinking Water Act, it is because 
I am. Fortunately, I have also read all of the testimony that our 
witnesses are set to give today, and most of you seem positive about 
progress so far.
    Obviously, there are concerns, so of which may grow in the coming 
years. I am very concerned about funding issues. This is not an example 
of a program, like some in Washington, that can thrive while 
underfunded.
    Rural systems concern me the most. My state is dotted with hundreds 
of small water systems that provide services to only a few thousand, or 
more frequently, only a few hundred people. These systems simply cannot 
take advantage of the economies of scale that the larger, more urban or 
suburban systems can.
    However, the need for rural residents to have access to safe 
drinking water is no less important than for any other citizens.
    Before the day is over, I feel confident that we will come back to 
the issue of funding again and again, so I won't dwell on it now. 
However, to the extent possible, I would ask each of our witnesses to 
focus a little attention in their comments on rural implementation of 
the Safe Drinking Water Act and also on the Consumer Confidence Reports 
that are coming due later this year.
    Finally, as most of you know, in the West we are unable to separate 
issues of drinking water quality from drinking water quantity. 
Groundwater sources are being depleted more quickly than nature is 
refilling them in many areas. As the aquifers are drained, water 
quality, for a variety of reasons, typically declines.
    I bring this up for two reasons. First, it underscores the long-
term importance of having mechanisms in place to ensure that all 
Americans are drinking safe water. Secondly, I raise it because we as a 
nation are doing little to address the coming problems of water 
shortages. We trail much of the world in research and development of 
technologies that will allow us to inexpensively recycle and desalinate 
water.
    Although this is an issue for another day, it is one that I hope to 
focus some attention on during this Congress.
    Mr. Chairman. Welcome aboard. Thank you.

    Senator Crapo. Without objection, so ordered.
    Did you want to ask any questions at this point?
    Senator Reid. No, I don't.
    Senator Crapo. Thank you. We will turn next to Senator 
Baucus.
    Senator Baucus. I'm curious whether States are using 
alternative technologies. One of the visions in the Act, as you 
well know, allowed States, particularly smaller States, to do 
some innovation. Some of these systems are really small, some 
are trailer parks, not big cities. What's happening?
    Mr. Fox. Senator, the challenge of small systems is really 
one of the biggest challenges we face as a Nation. When you 
look at the structure of our drinking water systems, the vast 
majority of community water systems are very small systems.
    Senator Baucus. Are they using alternative systems?
    Mr. Fox. We've done some initial analysis pursuant to the 
requirements of the Act and found under the existing 
requirements, there are affordable technologies that are 
available for small systems today. We've done an analysis of 
that and have issued some technical guidance documents to small 
systems which list currently available technologies that they 
can use to meet these requirements.
    In the future, this is an area where we are going to have 
to continue to do some work. The way the flexibility is 
included in the new statute, if we wanted to allow a small 
system to implement some technology that wasn't quite at the 
overall standard for the other systems in the country, they can 
get a variance from the overall technology standards.
    We haven't issued any variances yet under the provisions of 
the 1996 Amendments. Our analysis suggests that so far, none of 
the requirements need these variances. This will be something 
we have to look at as we come up with some of the new 
requirements in the future.
    Senator Baucus. You published a list of technologies, is 
that correct, in 1997?
    Mr. Fox. That's correct.
    Senator Baucus. As far as you know, you haven't heard any 
significant complaints from small communities?
    Ms. Dougherty. We don't have any information as to whether 
States are actually allowing systems to use those technologies 
but we presume they should be doing that.
    Senator Baucus. You don't have information?
    Ms. Dougherty. We haven't asked for it yet from the States 
but the technology lists are out. We put out two lists, one in 
1997 for the surface water treatment rule, and one in 1998 for 
the other existing rules that we have. That information is out 
publicly for systems and States both to take advantage of.
    Senator Baucus. Does the same apply to alternative 
monitoring programs? Is it too early to tell or what is 
happening there?
    Ms. Dougherty. I think it's still a bit early to tell. We 
did put out guidance in terms of how States could use 
alternative monitoring programs, but I haven't heard the extent 
to which States have taken advantage of that yet.
    Senator Baucus. What about the cost-benefit analysis, how 
is that coming along? I know it's early. You just published 
your first rule February 26. Since we passed the Act and since 
you've been working on cost benefit, and I know you've applied 
it to radon, you've got this multimedia proposal, which I think 
is a good one, because it takes air as well as water into 
account. What is your advice on whether we should do anything 
about it. Tell us how well it's working thus far?
    Mr. Fox. As you suggested Senator, when Congress passed 
this statute you included some new cost-benefit analysis 
requirements that hadn't been included in other environmental 
statutes, basically requiring a lot more detailed work to be 
done as part of our development of rulemaking.
    The way the statute was constructed, these new cost-benefit 
requirements were only going to apply to some of the future 
rulemakings we were doing, as you suggested. The radon rule is 
actually the first one out of the door that is going to have 
this new analysis accompanying it. We published the draft 
health risk reduction and cost analysis for radon just in 
February of this year, so we are just now starting to get 
comments on it.
    In general, my reaction is that this is a valuable 
analytical tool that we can use to help make common sense 
decisions in the future about drinking water regulations, but 
it is also something that is going to have to evolve with time.
    When you analyze the health benefits and try to monetize 
the value of a human life or the cost of admission to a 
hospital, it gets to be difficult analysis. This is the kind of 
thing we're looking at for the future and hopefully will be 
refined for future regulation.
    Senator Baucus. With respect to radon, you're not looking 
at that because it's a cancer standard--a noncarcinogenic 
standard, if I understand it.
    Mr. Fox. That's correct.
    Senator Baucus. So you've taken the mid-range for value of 
life and applied it to your MCL and figured the benefits do 
exceed the costs, is that correct?
    Mr. Fox. That's correct. Under the statute the 
Administrator can make a determination and generally if she 
would decide to issue a rule, even if the cost outweighed the 
benefits, that is something she could do under the statute.
    Senator Baucus. Is it also true if States used your 
multimedia approach with respect to radon, in virtually every 
case, the benefits would exceed the cost?
    Mr. Fox. I want to get some more comments on this. That is 
generally our analysis right now. Just so others are aware, the 
Senator from Montana is very familiar with this rule but there 
is a very unique procedure we are developing for radon under 
the Safe Drinking Water Act allowing these tradeoffs between 
water sources of radon as well as air sources of radon. This 
analysis is a pathway for States to make some intelligent 
decisions about whether they could do radon controls more cost 
effectively from air programs, as opposed from the water 
programs. That is the promise of this rulemaking that we're 
developing right now.
    Senator Baucus. I see my time is up but is it also true 
that when you move into noncarcinogenic rules, the cost-benefit 
analysis can be much more complicated?
    Mr. Fox. That is correct.
    Senator Baucus. I look forward to seeing how you come 
along.
    Thank you.
    Senator Crapo. Senator Lautenberg.
    Senator Lautenberg. One of the things that I mentioned in 
my remarks which is a concern of mine is that my State, New 
Jersey, doesn't do much more than the minimum required. I 
mentioned also New Jersey being the most densely populated 
State in the country. We have a serious drain on quality water 
and quality water supplies. We have all kinds of contaminants 
in our drinking water.
    The minimum program doesn't adequately deal with the 
drinking water problems in the State. Is there anything EPA can 
do in overseeing New Jersey's drinking water program to make 
the State look beyond the minimum protections?
    Mr. Fox. I would like to suggest that perhaps on some case-
by-case basis, we can look at whether or not the State is 
taking sufficient action to protect its citizens from threats 
of drinking water. In general, the way the statute and the 
programs are set up is we set Federal minimums and the States 
try to implement those minimums. Some States want to go beyond 
that and that's their prerogative. Our job is generally to set 
the Federal minimums and let the States make those decisions.
    Senator Lautenberg. There is an awareness now, and one of 
the things I'd like to see changed, is to go beyond those 
materials that are regulated, especially when there is an 
awareness that something is threatening the human health, not 
to take forever to get them on a regulated list or get 
attention paid to those. So what can we do to encourage a State 
like mine or any State in the country to go beyond that which 
is a minimum, yet there is an awareness this is a threatening 
material?
    Mr. Fox. Two reactions to that. One is I think the consumer 
confidence reports that will be made available to all citizens 
beginning this fall will significantly increase the public's 
understanding of drinking water issues, where their drinking 
water comes from and probably end up stimulating more citizen 
engagement in what the States and local governments are doing 
to protect their water. I think that will be very valuable in 
spurring that kind of action. Similarly, the source water 
assessments that are going on will also tend to do that.
    I've been amazed in this job how often people aren't aware 
where their water comes from, they think they just turn on 
their tap and out it comes. They don't realize here in the 
District of Columbia, it comes from the Potomac River, or that 
someone may get their water from a groundwater source that 
might be near a gas station. I think in general that kind of 
increasing awareness will tend to spur more appropriate action 
by States and locals.
    Senator Lautenberg. They focus only on regulated materials, 
right?
    Mr. Fox. That's what the minimum standards generally focus 
on, regulated materials.
    Senator Lautenberg. Again, the same question, how do we get 
beyond those that are regulated, that we know pose a threat to 
human health or believe there is an assumption that can be 
made, what do we do to encourage States, besides writing new 
law?
    Mr. Fox. We do have an unregulated contaminant monitoring 
requirement which does broaden the base of monitoring 
information that we will have, and ultimately citizens will 
have to make some of those judgments.
    In the case of the specific radium compounds that you're 
concerned about in New Jersey, this might be something we need 
to look at in terms of its ability to be captured under other 
parts of the drinking water standards.
    Senator Lautenberg. You mentioned there's a lack of 
awareness in many cases of the source of drinking water. I have 
a State office in Newark, our State's largest city which draws 
some of its drinking water from the Passaic River, a river that 
I knew as a child that you could fish in and my mother used to 
swim in, but upstream from Newark, the drinking water intake on 
the Passaic River is industrial and sewage discharges.
    During a recent drought, 90 percent of the river's flow was 
sewage discharge. No doubt some of the contaminants dumped into 
the river from those industrial and sewage sources are not 
included on the list of the 80 contaminants regulated under 
safe drinking water. Wouldn't you say the State ought to 
evaluate the threats of these unregulated contaminants and 
shouldn't the water consumers, myself included, have the right 
to know about these contaminants. Shouldn't they have that 
right?
    Mr. Fox. I'm confident that the consumer confidence reports 
due out this fall will give citizens a lot more information 
than they have ever had before. I'm hopeful that the source 
water assessment programs the States are doing will look at all 
these various sources of pollution to the drinking water and 
encourage the kind of pollution control that we all would 
believe would be appropriate.
    Senator Lautenberg. One of the things that concerns me is 
who gets to know there may be a problem with the water supply. 
Should notice be sent to consumers rather than to the customer. 
The customer could be an apartment complex. Shouldn't the 
consumers be made aware of what the problems are?
    Mr. Fox. We faced a number of very difficult, practical 
implementation questions about how to make sure the people were 
aware of what was in their drinking water and to comply with 
the requirements in the consumer confidence provisions of the 
Act.
    Basically, we erred on the side of trying to encourage 
utilities to include it in their water bills so that most 
people would actually get it. In some of the smaller systems, 
we allowed them to make notices in newspapers, there could be 
notices put up in some of those apartment buildings. So we did 
have to offer some flexible, practical ways to reach consumers 
that might not get monthly water bills, for example.
    Senator Lautenberg. So they were suggestions rather than 
rules?
    Mr. Fox. That's correct.
    Senator Lautenberg. Thank you, Mr. Chairman.
    Senator Baucus. Mr. Chairman, I have an obligation to 
another committee but I'd like to come back and talk with the 
other panels.
    Senator Crapo. We would welcome you to do so. Thank you, 
Senator.
    I think we will do another round of questions right now. I 
would turn first to Chairman Chafee.
    Senator Chafee. I just want to say in line with what 
Senator Baucus was asking, I think trying to develop innovative 
technologies for this is terribly important. In my State, we 
have few trailer parks, basically we don't have the problem 
that some of the other States have but after all, this panel 
represents our Nation, not just one or two States.
    I urge you to keep up your work on that. It's important to 
us, to my State, but far more important to other States, 
perhaps Montana, Idaho and States like that, so I would urge 
you on.
    Thank you, Mr. Chairman.
    Dr. Noonan. Mr. Chairman, if I may address both Senator 
Baucus and Senator Chafee, and perhaps this is something the 
committee knows already, but we have a pretty robust program. 
We have a wide range of projects, both research and technology 
development to try to get cost-effective, portable, easy to 
manage systems for small communities or small water systems 
that don't require a large amount of monitoring or day-to-day 
care and feeding.
    In addition to that, we have a program in ORD called the 
Environmental Technology Verifications Program which with 
private sector partners, we help validate innovative 
technologies that vendors bring to us. Many of these have been 
in the drinking water area. We have standardized verification 
protocols and test plans and this has been a real boon to small 
businesses particularly who are looking to offer innovative 
solutions for small water systems.
    In addition to that, we have also focused our Small 
Business Innovation Research Program in the drinking water area 
so there are a lot of activities going on in the research 
directorate to address innovative technology for small systems.
    Senator Chafee. Thank you, Mr. Chairman.
    Senator Crapo. In fact, I think I'll use my questions to 
follow up on that general line.
    Mr. Fox, I believe it was you who said that in the 
revolving loan system, there had been 350 loans to date. I 
believe you said half of them were to small water systems. My 
recollection is that there are thousands, maybe tens of 
thousands, of small water systems around the country, isn't 
that correct?
    Mr. Fox. Yes, tens of thousands.
    Senator Crapo. Tens of thousands. So half of 350 loans is 
175 and what struck me is that using those numbers, we're not 
reaching out very far, very fast yet. Am I seeing that 
correctly?
    Mr. Fox. That is correct. There are some other pools of 
money that have been authorized and are finding their way to 
small systems that are worth mentioning. There was a set aside 
provision of the SRF that allows the States to take up to 2 
percent to provide technical assistance to small systems to 
help them implement the requirements.
    Congress has consistently provided an additional $8 million 
to $10 million worth of earmarks to again provide technical 
assistance to help small systems. So there are other pools of 
money that are out there trying to help them.
    Senator Crapo. One of those earmarks I believe is out in my 
State. Senator Kempthorne was very interested in the Treasure 
Valley Project. Are you aware of that particular one?
    Ms. Dougherty. Yes.
    Senator Crapo. Ms. Dougherty, how is that project 
proceeding?
    Ms. Dougherty. I haven't had an update on it recently but 
it's been underway for a couple of years now, so I think it's 
proceeding well.
    Senator Crapo. The latest update I've had is that it is 
proceeding well to date, but they are concerned, as I suspect 
everyone in the country is in these circumstances, about the 
resources to finish the project. I'll let you know at this 
point of that concern of mine as well.
    I noted in the budget that the State Revolving Fund Program 
request this year is at $825 million, which is a $50 million 
increase over 1999. Then I also noted in reading your's and 
some of the other testimony that the needs analysis shows the 
need is something like $138 billion. Again, we have an 
incredibly large differential between what the apparent need is 
and the resources that are being committed to it.
    I guess the question I have is, is that $138 billion figure 
accurate and if so, are we even scratching the surface of the 
need that we have?
    Mr. Fox. The $138 billion figure is as accurate as we had 
at the time. My estimate and my guess is that it is not 
completely accurate and that the needs are greater than $138 
billion.
    I think the important factor here is that we make sure we 
compare apples to apples and that $138 billion figure is 
actually a 20-year needs estimate, so it's kind of like the 
price of your house but then you have to figure out what your 
annual/monthly payment is.
    In general, drinking water was never perceived as a Federal 
responsibility that the Federal Government was going to provide 
assistance for, until Congress enacted the Safe Drinking Water 
Act amendments. So we are now wrapping up the Federal 
assistance and the Federal contribution in meeting these 
drinking water needs.
    We haven't done any analysis yet to figure out what the 
total annual needs are for the Federal Government versus State 
and local, and that's something we are looking at.
    Senator Crapo. I want to shift to one other area before the 
clock turns to yellow on me. That is there is some testimony I 
expect we will receive today that perhaps the standards that 
are being applied here are too onerous for small systems in 
that they may be requiring the cleanup be implemented when 
there isn't an actual danger shown or maybe there is a risk 
shown but not an actual problem in the system, or perhaps the 
levels of cleanup being required are as we often hear in many 
environmental debates, cleaner than the natural environment. We 
hear that a lot.
    Is it correct that there may be occasions in which the 
standards being used or developed for large systems are being 
imposed on smaller systems or that the standards, wherever they 
came from imposed on smaller systems, are creating a financial 
burden with very low health increase?
    Mr. Fox. Certainly my hope is the answer to that is ``no,'' 
and that we will, in the future, as we develop new standards 
make sure that we are including affordability in our evaluation 
of technology requirements, best available technology.
    The old law really didn't allow us to look at affordability 
for smaller systems. So under the new law, we are looking at 
that. We have come up with an affordability criteria based on 
some work we did with advisory committees that looks at 
different sizes, small systems to see what would be affordable. 
So I'm hopeful we will have some good answers to that in the 
future.
    Senator Crapo. One other quick question. I note the 1996 
law allowed for variances to be provided to small systems. Have 
any variances been granted to any small systems?
    Mr. Fox. Not to my knowledge yet.
    Senator Crapo. Is that because they haven't asked for them?
    Ms. Dougherty. Some States may have done variances under 
the old, existing law, but under the new law, no.
    Senator Crapo. Do you know whether there have been a 
significant number of requests for variances? In other words, 
are they all being turned down or are you not getting any 
requests?
    Ms. Dougherty. I'm not aware there are any requests. Most 
of the existing rules have been in place too long for systems 
to ask for variances against them.
    Mr. Fox. We have not heard of any reports under the 1996 
variance provisions.
    Senator Crapo. I'd appreciate that.
    Senator Reid.
    Senator Reid. We had some folks in from Nevada yesterday. 
As you know, Nevada, about 90 percent of the people live in the 
two metropolitan areas of Las Vegas and Reno; the 10 percent 
covers huge areas, Nevada being the seventh largest State in 
area in the country.
    In short, the rural water company interests were pleased 
with how they had been treated with the Revolving Fund. They 
felt there was a minimum amount of red tape and that it was 
relatively easy to get their hands on that money. I know that 
might surprise you but they felt very good about it.
    Arsenic occurs naturally in many areas of Nevada and can be 
found in fairly large numbers of rural water systems, 
especially in Churchill County. Could you describe EPA's 
efforts concerning the development of arsenic treatment 
technology for small water systems, Ms. Noonan?
    Dr. Noonan. Senator, I'd first like to indicate that we 
have developed a peer-reviewed arsenic research plan that 
includes both short- and long-term research needs. The four 
components of that plan are toxicology and epidemiology 
studies, analytical methods, a comprehensive assessment of the 
risks and the development of treatment technologies for small 
water systems.
    Senator Reid. They asked for this?
    Dr. Noonan. Yes, it was directed by the statute and we have 
developed this peer-reviewed arsenic research plan.
    Senator Reid. My point is do they have to ask for this 
before it comes forward?
    Dr. Noonan. Have to ask for?
    Senator Reid. If there is a county, for example, that has a 
lot of problems with arsenic, do they come to you and ask for 
this process or is it done automatically?
    Dr. Noonan. We're already field testing some innovative 
technologies for removing arsenic from small water systems. 
Ours is a research and technology development program, not a 
mitigation program in the sense of operationalizing the removal 
of arsenic in any existing system.
    Senator Reid. My question though is if a water system knows 
they have arsenic, how can you help them?
    Ms. Dougherty. We can provide technical assistance to the 
regional offices as well.
    Dr. Noonan. I think on a research scale, we can certainly 
provide technical assistance, we can work with them to 
understand what the key questions are and where they are, but 
from an operational point of view, we're not in a position to 
provide technical assistance to every water system that asks 
for it.
    Mr. Fox. Arsenic is a particularly difficult contaminant. 
We are under a deadline in the new law to come up with a new 
drinking water standard by the year 2001 which will likely make 
the current standard even more stringent, so this will cause 
even more treatment difficulties with communities.
    As Dr. Noonan suggested, we need to do more research on 
what kinds of technologies are affordable to remove arsenic. 
Some of the early data suggests that there are clearly some 
expensive technologies that are available, but we still have to 
find some affordable technologies to make this one work.
    Ms. Dougherty. When we put out new regulations in the 
future, at the time we put out the new rule, we'll be putting 
out what affordable technologies there are for smaller systems 
in the different size categories the law requires, along with 
any variance technologies if there are some size systems for 
which there would not be an affordable compliance technology. 
Hopefully we will have all that as well when we put out the new 
rule.
    Senator Reid. Mr. Chairman, I'm going to have to excuse 
myself. I appreciate your holding these hearings. We have the 
President coming to the Hill and I have to go greet him.
    I do very much appreciate your taking over the Idaho seat. 
We had good relations with Senator Kempthorne. Some of the best 
work we did never got completed. We had a great Endangered 
Species Act that we almost got completed. Maybe you can step in 
there and get us over the finish line on that.
    Senator Crapo. Thank you, Senator Reid. I appreciate your 
comments and look forward to working with you. We will try to 
get that one pushed over the finish line.
    Thank you.
    I have a lot more questions for this panel but in the 
interest of time, what I will do, and all the Senators will 
have this opportunity, is submit those questions to the panel 
in writing and ask for your response to them. We do need to 
bring forward the next panel.
    Senator Chafee, unless you have any further questions at 
this time?
    Senator Chafee. I don't, Mr. Chairman.
    Senator Crapo. Then we will excuse this panel. Thank you 
very much for your testimony.
    Now I'd like to call our second panel from the stakeholder 
organizations: Mr. Gerry C. Biberstine on behalf of the 
Association of State Drinking Water Administrators; Mr. Merril 
Bingham on behalf of the American Water Works Association; Mr. 
Erik Olson representing the National Resources Defense Council; 
Mr. Gurnie Gunter on behalf of the Association of Metropolitan 
Water Agencies; Mr. Steve Levy on behalf of the National Rural 
Water Association; and Mr. Andrew Chapman on behalf of the 
National Association of Water Companies.
    I would remind each of you that we do operate under a 5-
minute rule for the presentation of oral testimony. We ask you 
to try to keep your eye on this clock. If you go over very far, 
I'll tap the gavel to try to remind you to wrap up. We have 
your written testimony, we have reviewed it and will thoroughly 
review it. We want to have as much time as possible for us to 
engage in questions and answers.
    With that, we will start with Mr. Biberstine on behalf of 
the Association of State Drinking Water Administrators.

 STATEMENT OF JERRY C. BIBERSTINE, DRINKING WATER SPECIALIST, 
COLORADO DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT, ON BEHALF 
   OF THE ASSOCIATION OF STATE DRINKING WATER ADMINISTRATORS

    Mr. Biberstine. Thank you, Mr. Chairman.
    I'm the drinking water specialist for the State of 
Colorado, Public Health and Environment. I'm representing the 
State drinking water programs and the Association of State 
Drinking Water Administrators.
    First, I'd like to thank you and your committee and the 
other stakeholders for the passage of the Safe Drinking Water 
Act amendments of 1996. They made some very timely and needed 
improvements to the Safe Drinking Water Act. The States fully 
believe in and support the direction of the new Act which is 
based on public health protection, risk reduction, sound 
science and flexibility in funding.
    I've been asked to talk today about the progress over the 
last 2\1/2\ years and some of the challenges and concepts and 
concerns that we're facing in State implementation.
    I am pleased to report that significant progress in 
implementing the new provisions of the Safe Drinking Water Act 
have taken place. All States, as mentioned, presently have a 
State revolving fund in place; we've made over 354 loans 
totaling over $850 million for improvements to drinking water 
systems.
    Almost all the States met the deadline requirements to 
submit source water protection programs to EPA for their final 
approval. The States have produced second compliance reports 
and the third one will be out in July. These are reports to the 
public on the conditions of drinking water systems across the 
country.
    We're in the process of capacity development program 
formation across all the States and are actively seeking the 
administrative penalty authority and strengthening operator 
certification requirements.
    All these things present an enormous challenge to the State 
programs in implementing the Safe Drinking Water Act. We 
believe these changes are necessary and will result in a much 
strengthened Safe Drinking Water Act and better protection of 
public health.
     We do know we need the help and assistance of all the 
stakeholders who had a hand in the law's creation. 
Specifically, the States are concerned about a number of 
things, including funding and staff resources for the States, 
State input into the regulatory development process; the timing 
of the various new programs and other implementation issues.
    The States are prepared to begin the process of writing, 
adopting and implementing the rules in the 2 years authorized 
in the law. Thus, some regulations would be in the initial 
stage of adoption, others would be in implementation, others 
would be winding down. This was envisioned as a way for the 
States to maximize the limited personnel and resources 
available to them.
    Unfortunately, the timing of several new provisions is 
putting States in the position where they must redirect their 
resources and personnel before they have even adopted their own 
State regulations. The consumer confidence report is an example 
where implementation takes place 1 to 2 years prior to State 
requirements to adopt the rule. This leads to partial primacy 
whereby EPA comes into the State and actually enforces part of 
the rule package. This causes confusion among the water systems 
and generally is disagreeable to the utilities, the State and 
probably the EPA as well.
    In order to prevent EPA coming in, the State is basically 
forced to redirect their existing resources into programs 
earlier than anticipated and away from other needed programs.
    The stakeholder participation process is going very well. 
There are presently 30 to 40 working groups that State 
administrators are working on to involve stakeholders in 
regulations, new programs and data management issues. Primary 
among those are small system issues which I spend a lot of my 
time on.
    While this is definitely a drain on State resources, it 
tends to lend a greater buy-in and support to the State Safe 
Drinking Water Act and the requirements that we are developing. 
It does result in some requirements that are more complex and 
sometimes overly prescriptive. We think the public input to 
rulemaking is very effective but that the implementation issues 
need to remain a State/EPA partnership whereby a State's 
suggestions and recommendations on how to achieve maximum 
efficiency and effectiveness are strongly supported by the 
agency.
    Funding and staff resources are two additional challenges 
that States face. Interestingly, there is an ever-widening 
disparity in the State's capabilities to respond to many of 
these new requirements. While some States can access and 
utilize the many new funding sources that Congress provided, in 
some cases other States cannot access that money.
    Political issues of using drinking water State revolving 
funds for non-capital improvement such as program 
implementation is causing some real severe political problems 
in some States. In other States where we have either a voter 
imposed spending cap or hiring freezes, it causes additional 
problems whereby we're forced to go out for contracting for 
training, technical assistance and inspections. It is necessary 
to ensure that the maximum funding is possible, and the full 
funding authorized in the law is made available to the States 
for these implementation purposes.
    We also feel there are insufficient resources for the 
research needs necessary for this Act. EPA shows significant 
improvement in the area of acknowledging the research needed 
but there is no question it will take more research and more 
time than is currently available to include sound science 
before we go to rule adoption.
    We're concerned that the expectations of EPA and other 
stakeholders far exceeds the resources, both monetary and 
personnel, available to the States to adopt and implement these 
many new provisions.
    Senator Chafee [presiding]. Mr. Biberstine, your time is 
up, so please plan to wind up soon.
    Mr. Biberstine. Over the next 3 to 5 years, we expect at 
least 12 new regulatory and rule provisions under the Safe 
Drinking Water Act that will significantly impact utilities in 
the States. We just want you to understand that the States are 
working through it and strongly support the Safe Drinking Water 
Act. We want success in all phases of this Act and look forward 
to working under the Safe Drinking Water Act for that purpose.
    Thank you.
    Senator Chafee. Thank you.
    Mr. Bingham.

  STATEMENT OF MERRIL BINGHAM, PROVO CITY WATER RESOURCES, ON 
           BEHALF OF AMERICAN WATER WORKS ASSOCIATION

    Mr. Bingham. Good morning, Senator Chafee.
    I'm director of Public Works for the city of Provo, UT, and 
also chair the Legislative Committee of the Water Utility 
Council of the American Water Works Association. I'm here today 
speaking for AWWA.
    I commend the committee for having this hearing today. I 
think it is important to take kind of a mid-term checkup on 
where we're heading with the Safe Drinking Water Act 
amendments. We believe that the amendments of 1996 were a very 
important step and that they are not without their major 
challenges. We strongly believe that the successful 
implementation of the amendments of the 1996 reforms are 
essential in providing effective regulations that really 
protect public health.
    AWWA believes that the EPA Office of Groundwater and 
Drinking Water has made a good faith effort to implement the 
spirit and intent of the 1996 amendments. EPA has involved the 
public in the regulatory process to an extent not equaled by 
other Federal agencies and stands as a model for Federal 
rulemaking. This exemplary approach to public involvement 
should result in better regulations to protect public health.
    However, we do have some concerns. Drinking water research 
is not adequate to provide the good science necessary to 
support new contaminant regulations. The use of best-available, 
peer-reviewed, good science is the foundation of the new 
drinking water standard-setting process. The Safe Drinking 
Water Act amendments will require extensive drinking water 
research, particularly in the health effects area.
    EPA, in formal research funding projections discussed with 
stakeholders, indicates a shortfall to meet drinking water 
research needs from fiscal year 1999 through fiscal year 2005 
of approximately $20 million a year. Without a substantial 
investment on a continuing basis and a research program based 
on drinking water regulatory needs, EPA and public water 
suppliers cannot assure the American public that the 
contaminants selected for regulation are the appropriate ones 
and that health standards have been adequately established.
    Senator Chafee. You must have heard the Administration 
testify they thought they were getting enough money for 
scientific research? You were here when they testified earlier, 
weren't you?
    Mr. Bingham. Yes.
    Senator Chafee. What do you say to that?
    Mr. Bingham. We just believe there is a shortfall. I think 
their testimony would indicate really there is some shortfall.
    Additionally, one of our major concerns is that without 
investment in a carefully focused research program, we can't 
assure our consumers that the limited resources of our 
utilities are not being spent on water treatment scenarios that 
have little or no health effect benefits.
    Each day there are approximately 50,000 deaths in the world 
attributed to microbial contamination of drinking water. Much 
of this threat has essentially been eliminated in the United 
States through disinfection. However, it is now known that 
disinfection of drinking water can produce chemical byproducts 
some of which are suspected to be human carcinogens or which 
may cause other toxic effects.
    Controlling risks from these byproducts must be carefully 
balanced against the microbial risk to ensure that when 
reducing disinfection levels to lower byproduct risks, 
significant microbial risks are not created.
    The cost to the Nation of disinfection byproduct 
regulations under the Safe Drinking Water Act will certainly be 
in the billions and could be as high as $60 billion or more 
depending on the final rule. An appropriate investment in 
health effects research will ensure the cost of regulations 
will be commensurate with the health benefit and not driven to 
the extremes by lack of data. The cost of research is 
relatively minimal when compared to the cost of implementing 
this cluster of regulations.
    The 1996 Safe Drinking Water Act amendments also require 
the development of a comprehensive research plan on the health 
effects of low level or naturally occurring arsenic. Since 
significant start has not been made on the bulk of the 
necessary health effects research, which will take several 
years to complete, it is likely that very little of the 
necessary research will be completed in time to be used in 
developing a revised arsenic standard.
    I appreciate Dr. Noonan's stated commitment this morning to 
EPA's best effort to keep drinking water research appropriately 
ahead of the regulatory curve.
    I'd like to speak very briefly on the State revolving fund. 
AWWA has a long-term concern that the authorization of the new 
drinking water State Revolving Fund may not be adequate to 
address all of the needs identified to comply with Safe 
Drinking Water Act regulations. According to the EPA needs 
survey released in January 1997, between 1995 and 2015, a total 
of $138.4 billion will be needed to upgrade the infrastructure 
of the Nation's water utilities to meet the requirements of the 
Safe Drinking Water Act. Current SRF authorization provides for 
only 15 percent of those needs. This figure does not include 
other drinking water infrastructure needs such as replacing 
aging transmission or distribution facilities which are not 
eligible for State Revolving Fund funding.
    AWWA studies indicate that the combined need is in the 
neighborhood of $325 billion. AWWA does not expect that Federal 
funds will be available for 100 percent of the infrastructure 
needs for the Nation's water utilities, however, the State 
Revolving Fund funding is a major issue requiring future 
congressional oversight.
    AWWA also believes that it is not too early to begin 
exploring some of the issues that may be important during the 
next reauthorization of the Safe Drinking Water Act. In our 
written statement, we have outlined a few of those issues for 
your consideration.
    This concludes AWWA's statement on the implementation of 
the Drinking Water Act amendments of 1996. We appreciate our 
opportunity to testify today and will be happy to respond to 
questions or provide additional information.
    Thank you.
    Senator Crapo. Thank you, Mr. Bingham.
    Mr. Olson.

STATEMENT OF ERIK D. OLSON, SENIOR ATTORNEY, NATURAL RESOURCES 
                        DEFENSE COUNCIL

    Mr. Olson. I am Erik Olson, a senior attorney with the 
Natural Resources Defense Council and also serve as a 
coordinator of the 300-group Campaign for Safe and Affordable 
Drinking Water, though I speak today only for NRDC.
    I wanted to take just a moment to note that I think we're 
in the midst of what really is a historic change in how water 
is dealt with in the United States. We call it the third 
revolution in how drinking water is provided, the first being 
during the time of the Romans when water started being piped, 
the second being around the turn of the 20th century when we 
started treating water with chlorine, filtering it and using 
coagulation and sedimentation.
    We're on the cusp right now of significant change, with 
major new innovative technologies--some of which have been 
around for a while, some of which are new--that will improve 
how water is treated, and that will remove a broad spectrum of 
contaminants simultaneously.
    In addition, we believe part of that revolution is going to 
have to be source water protection as well as improvements in 
something we haven't heard a lot about today--the distribution 
systems themselves. These are the pipes that deliver the water; 
increasing evidence indicates the pipes are the source of some 
of the microbial and other problems that we continue to find in 
our drinking water.
    The 1996 amendments will move us toward solutions to some 
of these problems, but clearly there are some major challenges 
ahead of us. I would like to completely agree with the American 
Water Works Association that we need additional resources for 
health effects research as well as for treatment technology 
research. We believe that EPA does not have adequate resources.
    There was an unfortunate court decision that you may know 
about that ruled that the SRF set-aside that this committee 
wrote into the State Revolving Fund for health effects research 
is not a mandatory set-aside under the statute. Therefore, 
we're back to the traditional approach, every year going for 
appropriations for this research.
    We also wanted to identify one extremely high priority area 
of research. We think EPA needs to immediately fund which is 
the Centers for Disease Control and Prevention and Agency for 
Toxic Substances Disease Registry, to conduct some expedited 
research on birth defects from disinfection byproducts. The 
research would cost about $.5 million and could be fed into the 
negotiated rulemaking that is going forward starting this 
month.
    We think it is unfortunate that research hasn't been funded 
yet. It's a small amount of money. The costs of treatment could 
be large. We think it could narrow some of the uncertainties--
although we do believe we know enough to act now--but we think 
it's a high priority that needs to be funded immediately.
    We also think it is important to have an open process in 
planning for the research, as EPA has done in some cases, for 
example with disinfection byproducts. We're concerned about how 
in other cases, for example in the arsenic area, EPA 
essentially sat down with American Water Works Association 
Research Foundation and mapped out a research strategy and 
there wasn't much public participation until fairly late in the 
process.
    Finally, we're concerned about an apparent lack of progress 
in the research area under a provision this committee wrote 
into the Act. This provision requires EPA to do vulnerable 
population research, for example, on pregnant women and 
children and what the effects of drinking water contaminants 
are on those vulnerable populations.
    There is a requirement in the Act that EPA report back to 
this committee on its progress, and we have seen very little 
progress in that area and think it needs to be a high priority 
for the agency.
    On the right-to-know issue, we would certainly agree that 
we need to build public understanding. The new right-to-know 
reports that will be coming out will help educate the public 
why $138 billion-plus is going to have to be spent on improving 
our drinking water supply. We think, however, those reports 
alone are going to be insufficient and that the agency needs to 
have a major public education campaign to explain what those 
reports mean to help the public understand them.
    In addition, we certainly support some improvements in how 
those reports are issued and in our written testimony have some 
recommendations on that front.
    In the source water protection area, we think there are 
major opportunities there as well to improve, with cost-
effective approaches, ways to reduce drinking water 
contamination. We feel a lot of progress can and should be 
made, but that it has to be an open public process.
    On the State Revolving Fund issue, we believe that the 
current Federal resources of under $10 billion that has been 
set aside for State Revolving Fund will only make a small dent 
in the overall need. Clearly the Federal Government is not 
going to pay for all these improvements but we think a long-
term, larger commitment is going to be necessary.
    In the standard-setting arena, there are huge challenges 
for issuing numerous new standards. We've gone through them in 
our testimony but I think the bottom line is that we need to be 
thinking about new approaches for how we deal with drinking 
water contaminants.
    One new approach that we certainly think needs to be 
considered is the adoption of broad spectrum treatment in 
addition to source water protection, treatment that will remove 
multiple contaminants simultaneously so we're not addressing 
microbial contaminants today or arsenic today and tomorrow 
we're having to address radon or some other contaminant. There 
are technologies that can remove most of these simultaneously.
    To wrap up, we believe there are some compliance issues, 
there are some issues with implementation so far, but we think 
EPA largely is on the right track in implementing the new Act, 
but the jury is still out on exactly how and what the 
implications of that are.
    Senator Crapo. Thank you, Mr. Olson.
    Mr. Gunter.

    STATEMENT OF GURNIE GUNTER, DIRECTOR, KANSAS CITY WATER 
     SERVICES DEPARTMENT, ON BEHALF OF THE ASSOCIATION OF 
                  METROPOLITAN WATER AGENCIES

    Mr. Gunter. I'm the director of the Kansas City, MO, Water 
Services Department and I serve on the Board of Directors for 
the Association of Metropolitan Water Agencies. I appreciate 
the opportunity to testify today.
    I'm here today to represent AMWA, an association comprised 
of the Nation's largest, publicly-owned water suppliers, 
altogether serving over 100 million people with clean, safe 
drinking water.
    Largely through the efforts of the Senate Environment and 
Public Works Committee and its counterpart in the House, the 
Safe Drinking Water Act was reauthorized in 1996 making sure 
that the reforms instituted by the 1996 statute were 
implemented is one of many important jobs of the subcommittee.
    In the few minutes that I have for oral testimony, I would 
briefly like to touch on three issues: the need for research on 
future contaminants, the importance of the second stage of the 
MDBP rulemaking and last, the essential public information and 
cost-benefit analysis required under the 1996 amendments.
    Under the 1996 law, EPA is required to develop a list of 
contaminants for possible future regulation, study them and 
every 5 years make a decision on not fewer than five whether 
they should be regulated. In order for EPA to make a decision 
to regulate or not, research is essential.
    Both the General Accounting Office and the National 
Drinking Water Advisory Council have raised the issue that 
research funding is estimated to have a shortfall of between 
$10-$20 million annually for the next 3 to 5 years to address 
the regulation of future contaminants.
    Funding the necessary research to support development of 
future regulation is a priority for AMWA in fiscal year 2000, 
not 2001 and although this subcommittee does not have 
appropriations within its jurisdiction, we ask your help in 
obtaining the needed dollars to do this research.
    Second, later this spring, EPA will begin to develop Stage 
II of the microbial and disinfection byproducts rules. Stage II 
will look at further reducing disinfection byproducts and 
increasing microbial protection. So that the Stage II rules 
would be based on more science than was available in Stage I, 
EPA and the water supply community committed to providing 
millions of dollars to conduct health effects research and 
occurrence studies. To date, the Nation's largest water systems 
have invested well over $100 million in this data collection 
effort. The uncertainties we face without this information 
cannot be overemphasized.
    Unfortunately, there have been significant delays in 
executing the necessary research program. As a result, 
negotiations on the second stage of the MDBP rules may begin 
without the benefit of studies that are ongoing but not yet 
completed. AMWA is committed to looking at the science that is 
completed and the treatment that is available. We are committed 
to looking at what more can be done now but are also committed 
to looking at the research that is underway but won't be 
available in the timeframe laid out in the law and asking the 
question, what more will we know a year or two from now and 
should we ask Congress for more time so that the science can be 
completed.
    We request that the subcommittee remain open to the option 
of altering the compliance date for Stage II of the MDBP rules 
should reason dictate.
    The 1996 amendments require EPA to present information on 
public health effects and to conduct and publish an analysis of 
quantifiable and non-quantifiable benefits and costs. This 
provision, as indicated, does not require the Administrator to 
demonstrate that the dollar value of the benefits are greater 
or lesser than the dollar value of the cost but it does require 
her to make a determination with respect to the relative cost 
and benefits of each regulation when it is proposed.
    AMWA urges you to ensure that the letter and intent of the 
law are followed and that this analysis is conducted for all 
future rulemakings.
    EPA is making great strides to implement the requirements 
of the 1996 amendments but much remains to be done.
    Mr. Chairman and members of the subcommittee, thank you for 
the opportunity to testify. I'd be happy to answer any 
questions and I met the 5-minute deadline.
    Senator Crapo. I noticed that. Thank you very much, Mr. 
Gunter. You set the standard for everybody.
    Mr. Levy.

  STATEMENT OF STEVE LEVY, EXECUTIVE DIRECTOR, ATLANTIC STATE 
RURAL WATER ASSOCIATION, ON BEHALF OF THE NATIONAL RURAL WATER 
                          ASSOCIATION

    Mr. Levy. My name is Steven Levy and I'm executive director 
of the Atlantic States and Maine Rural Water Association, 
serving Rhode Island, Connecticut and Maine. I am here today on 
behalf of the National Rural Water Association.
    I testified before this committee in May 1990 on financing 
environmental facilities. I discussed the plight of the Long 
Pond Water Company, a tiny, 160-customer, private, unfiltered 
surface water supplier in Sorrento, ME. They faced the daunting 
prospect of compliance with the Safe Drinking Water Act which 
required them to install a filter plant. Their story 
demonstrates the impact of the Safe Drinking Water Act on small 
communities.
    The company and the town wanted to comply but did not know 
how to pay for the $1 million mandate. That mandate came with 
no funding and most small towns don't know what to do when hit 
by such costs. They did what thousands of other communities do 
in other States. They called the Rural Water Association. Each 
year rural water associations assist thousands of Long Ponds 
handle the onslaught of drinking water regulations.
    With Rural Water's help, the town stepped up and accepted 
the challenge of bringing that water system into compliance. 
With our technical assistance program, they created a non-
profit water district and with our help, secured a $1.5 million 
grant/loan from USDA to pay for their new treatment plant and a 
standpipe. Average water rates, however, went from about $81 a 
year to around $500 per year for that small system.
    The point of this story is that small towns will take the 
necessary measures to protect their water. However, they need 
common sense assistance in a form they can understand. It takes 
someone sitting down with them evening after evening, working 
with them through the entire process. Giving them a copy of the 
Federal Register and a phone number to call is no help at all.
    Each time we help a community, they learn how to handle it 
on their own the next time. This is the key, encouraging local 
responsibility. If the community does not accept and support 
measures to protect their water, no amount of regulation will 
protect it.
    Long Pond's work is not over. The system is now requiring 
approximately $1 million of additional funding through the SRF 
to replace their antiquated transmission line. This is the case 
with small systems everywhere. The flood of new regulations is 
increasing--consumer confidence reports, radon, groundwater 
rule, operator certification, source water protection, 
disinfection byproducts, capacity development, et cetera, et 
cetera.
    We urge the committee to expand technical assistance under 
the Act. We also urge you to expand the capital resources 
available to small systems, especially the USDA water and sewer 
grant and loan package and the SRF.
    Enormous progress has been made in drinking water 
protection since the passage of the 1986 and 1996 amendments. 
Much of the progress has been made by local people taking local 
actions. For example, in Rhode Island and Connecticut, Rural 
Water has assisted 44 communities and 13 non-community systems 
develop source water protection plans and waiver forms saving 
thousands of dollars per system in testing costs.
    EPA rulemaking has been especially challenging to our small 
public water systems who often lack full-time, trained help and 
can't take full advantage of the waivers in the Act. This is 
where we come in. In Maine, our staff in the last 6 months has 
helped 175 community and non-transient systems complete 
wellhead assessment forms and waiver forms for a total savings 
of about $186,000.
    The way to achieve long-term success in groundwater 
protection is to have the people who benefit from a cleaner 
environment take responsibility for protecting it. More 
regulation will not help poor communities who can't afford 
them. Providing resources to the folks at the grassroots level 
and recognizing local initiative has resulted in more 
environmental improvement than the regulatory alternative, 
increased enforcement.
    We encourage you to continue in this effort.
    Senator Crapo. Thank you very much, Mr. Levy.
    Mr. Chapman.

    STATEMENT OF ANDREW CHAPMAN, ON BEHALF OF THE NATIONAL 
                 ASSOCIATION OF WATER COMPANIES

    Mr. Chapman. Good morning, Mr. Chairman.
    My name is Andrew Chapman. I am president of the Elizabeth 
Town Water Company, an investor-owned water utility serving a 
population of 1 million in New Jersey. I am also a vice 
president and member of the executive committee of the National 
Association of Water Companies, the trade association for the 
Nation's investor-owned drinking water utilities.
    Our 320 companies in 42 States provide safe, reliable 
drinking water for 21 million Americans every day, including 
communities in Rhode Island and in Idaho.
    We share the comments from the earlier witnesses in terms 
of our appreciation for scheduling these hearings. We actively 
supported the 1996 Act and our members consider it to be a 
great example of how Congress can promote effective 
collaboration among diverse interests and produce good results 
for the public.
    We're also happy to report that based on our experience, 
the overall implementation of the Act has been successful. We 
commend officials at the EPA for meeting the Act's deadlines, 
while involving the diverse stakeholders in the regulatory 
process.
    There are two issues that our association would like to 
bring to your attention. The first relates to the State 
Revolving Fund and the second relates to tort litigation in 
California which frankly threatens to undermine the system of 
uniform national drinking water standards that we all support 
and that we have all spent so much time trying to develop.
    First, the State Revolving Loan Fund. The plain language of 
the SDWA amendments, as well as the legislative history, makes 
it clear that Congress intended these funds to benefit all 
consumers of public water systems regardless of the ownership 
of those systems. The policy was a deliberate departure from 
that of the Clean Water Act SRF which provides funds to 
publicly-owned wastewater systems only.
    EPA has supported this policy change and should be 
commended for their efforts to implement the SRF equitably. 
However, in spite of these efforts, implementation has been 
uneven in the States. According to a recent survey by our 
association, only 11 SRF applications have been approved for 
NAWC companies since the amendments became effective, for a 
total of $40 million across eight States.
    Senator Chafee. Just one question. NAWC, is that a private-
owned company?
    Mr. Chapman. Yes, NAWC represents privately-owned and 
investor-owned companies.
    Most significantly, 19 States, through their constitutions 
or statutes or official policies, have declared privately-owned 
systems to be ineligible for SRF assistance. Presently, the EPA 
is considering a policy that would base a State's SRF 
allocation only on those infrastructure needs that the State 
has determined to be eligible. This makes perfect sense. Why 
award an allocation to a State for infrastructure needs which 
it has no intention of assisting?
    NAWC believes that such a revised policy would be fair for 
all water systems and their customers, as well as the States. 
We urge the EPA to formally announce such a policy soon. If EPA 
concludes that it lacks legal authority, we urge Congress to 
make the authority explicit.
    Now to the second matter, the tort litigation in 
California. We are alarmed by ongoing lawsuits which seriously 
threaten the drinking water industry and the water quality 
regulatory system under which it has operated successfully for 
many years. In California, the plaintiff 's bar has organized 
and commenced 11 mass tort lawsuits against several community 
water systems, both municipally-owned and investor-owned, for 
allegedly delivering contaminated water, even though the 
companies claim to have been in full compliance with Federal 
and State standards.
    As you know, these standards have been developed by 
regulatory agencies over many years based on the health effects 
of contaminants, measurement capabilities and the feasibility 
of treatment. They are the product of extensive debate over the 
public health issues and the cost of treatment.
    If 12 jurors, after hearing so-called scientific testimony 
from so-called expert witnesses conclude that the national 
standards are inadequate, water systems all over the country 
will need to consider whether to comply with the uniform 
standards, or the standards set by the litigation.
    Furthermore, the litigation has the effect of frustrating 
research about the occurrence of contaminants, which is an 
essential part of the regulatory process. There are many of our 
member companies who are submitting information to EPA 
regarding unregulated substances. That is an essential part of 
the regulatory process, but to the extent that this data 
available on the Internet becomes grist for the plaintiff 's 
bar, companies will be less forthcoming and as a result, sound 
science, effective regulation and the public will suffer. 
Congress may want to examine more closely the potential impact 
of these lawsuits on the national drinking water standards 
program as well as possible legislative remedies.
    Thank you, Mr. Chairman.
    Senator Crapo. Thank you very much, Mr. Chapman.
    Mr. Chairman, would you like to ask questions?
    Senator Chafee. Thank you, Mr. Chairman.
    Unfortunately, I have to leave in about 5 minutes but I 
have a couple of questions if I might.
    Mr. Bingham, where do you get this figure that $138 billion 
will be needed for infrastructure improvements?
    Mr. Bingham. I think that is an EPA estimate that came from 
their needs study that was completed in 1997, I believe.
    Senator Chafee. It is a pretty sobering statistic. I get 
the impression from the testimony here and the previous panel 
that things are going along pretty well. You each have specific 
suggestions and certainly what Mr. Chapman was just talking 
about, the possible suits is a sobering thought, but I didn't 
know that $138 billion was lying in wait out there for 
improvements to the infrastructure.
    Mr. Bingham. One of the things that really concerns us is 
that this figure does not consider, as I indicated in my 
testimony, the need for distribution system and transmission 
system replacement which are not eligible at present for 
revolving fund funding. That, when coupled with those needs 
that are necessary to meet the requirements of the Safe 
Drinking Water Act, is sobering indeed.
    Senator Chafee. All of you seem to believe that more 
research has to be done, suggesting the science include 
additional funding. That was one of your points, wasn't it, Mr. 
Olson?
    Mr. Olson. Yes.
    Senator Chafee. Yet you heard the prior panel say that 
don't worry, we've got enough funding. What do you say to that?
    Mr. Olson. The President has submitted a budget and I 
assume that is what they are sticking with. Our concern is that 
this is certainly an area Congress needs to take a very careful 
look at, and there are pretty clear shortfalls that virtually 
everyone has put their finger on, including GAO.
    Senator Chafee. What do you say to the point Mr. Chapman 
was making about these suits? Supposed someone gets sick 
drinking your water, you've complied with all the regulatory 
requirements of the State and Federal Governments, and then you 
get hit with a lawsuit? You're one of the ones that probably 
would be suing.
    Mr. Olson. That's right. I think it's a great idea.
    Senator Chafee. You're the wrong one to ask.
    [Laughter.]
    Mr. Olson. At least I'll give you our take. We think there 
is a long tradition in anglo-American jurisprudence that just 
because you meet a regulatory standard, if someone is injured 
because of your activities, even though you meet a regulatory 
standard, that shouldn't necessarily be a defense.
    Senator Chafee. McPhearson v. Buick, was that the case.
    Mr. Gunter, what do you say to that, to the possibility of 
these suits?
    Mr. Gunter. One of the things we argued for was the 
research money and we believe we are going to come up with more 
contaminants that are required to be removed from drinking 
water, but we need to do it in a good science way.
    I think they will have a hard time in court proving that 
beyond the regulation, folks are going to have to come up with 
anything, but we would like to know, through research, what 
else we need to do in order to make sure it's safe.
    Senator Chafee. Mr. Levy, I thought what you had to say was 
very interesting. Certainly your organization has been of 
tremendous assistance as you pointed out to these small water 
companies. In some instances, like the one you cited, Long 
Pond, their clientele is such that they can afford to go from 
$100 to $500, but that's not true with many systems.
    In any event, thank you, Mr. Chairman. I think this has 
been a good panel. I appreciate the opportunity.
    Regrettably, I have to leave but I want to thank you for 
having this hearing.
    Senator Crapo. Thank you.
    It looks like I'm going to get to go without a 5-minute 
limit since I don't have anybody waiting for me.
    I have a number of questions that I'm going to direct to 
some of the individuals but if others on the panel would like 
to pitch in on some of the answers or have a comment to make, 
please indicate and I'd be glad to let you make a comment on 
the question I ask.
    Mr. Bingham, in your testimony you indicated that one of 
the areas we really need to focus on is research to make sure 
we have the solid science to back up the regulations. I think a 
very solid commitment to good science, which means funding the 
necessary research, is probably key to not only solving a lot 
of the problems we have with the drinking water statutes but 
also with a number of other environmental problems that we 
face.
    In fact, I think one of the ways we can build common ground 
through collaboration to get successes like we've had with the 
drinking water statute is through good science. As I looked at 
the numbers, what was authorized, what has been funded and read 
the testimony of everyone on this panel as well as the 
testimony from the EPA, it became evident to me in just this 
one area alone, drinking water, we are far below what we need 
to be doing.
    I guess I'm tossing you an open-ended question. How do you 
think we ought to approach this issue of funding adequate 
research?
    Mr. Bingham. That is a difficult question and I certainly 
wouldn't presume to tell you your business because obviously 
there are a lot of other needs and you have to take the 
resources available and split them as your wisdom would 
dictate.
    I appreciated Ms. Noonan's expressed commitment to keeping 
the research effort ahead of the regulatory curve. While it 
might be presumptuous to suggest that regulations be delayed 
pending the research being completed that is necessary to 
support good regulation and support sound science in making 
regulations, that might be a better alternative if the 
resources are simply not there than proceeding with regulations 
where the science is not available and make sure we're making 
good regulations.
    It's difficult for me to explain to my consumers increased 
treatment costs if I can't also assure them that this increased 
treatment cost is really going to buy them better water and 
safer water.
    Senator Crapo. So with regard to the cluster of regulations 
coming due in 2001, if those regulations are generated and 
promulgated without solid science behind them, what is the 
impact of that incomplete research on the community?
    Mr. Bingham. It's hard to say specifically because it 
depends on where the final numbers end up but the AWWA studies 
indicate the cost of compliance with the disinfection 
byproducts cluster of regulations is in the multiple of 
billions of dollars and could be as high as $60 billion to 
comply with that one cluster of regulations.
    Obviously we certainly don't want to make a mistake and 
drive the regulations either way, either too high or too low 
because we don't have the research in place to support those 
regulations. The mistake could be tragic on either side of that 
issue.
    Mr. Olson. I'd like to add something. I think one lesson we 
need to keep in mind is what happened under the Safe Drinking 
Water Act prior to the 1996 amendments which was basically 
there wasn't much research funded. That was problematic. We 
think it would be a mistake to simply automatically start 
delaying all the regulations because then there wouldn't be any 
incentive to do the research. That was sort of the conundrum we 
were in before where we kept seeing delays.
    The arsenic standard has not been changed since 1942, for 
example. The science that standard is based on is very poor. So 
I think if we get into the game of delaying all the standards 
because the research isn't done, research is never done. I've 
never seen a researcher make a presentation and say, we're done 
with the research in this area. I think we need a balancing 
act, but starting to delay the rules for which we already have 
deadlines would be a formula for a real problem.
    Mr. Bingham. I just want to make it clear that I'm not 
suggesting that it would be a good thing for the regulations to 
be delayed. I think we need to hold our collective feet to the 
fire to make sure the research is done in time to support good 
science-based regulations. I hope I didn't imply otherwise.
    Senator Crapo. I appreciate both comments. Mr. Olson, maybe 
I'll pursue with you the question of cost benefit.
    As we talk about research and how far it can take us in 
terms of analyzing the health risks and the contaminants, there 
has been testimony in this panel and I've seen it on many other 
occasions where the argument is made with our ever increasing 
ability to detect more and more minute contaminants, we go from 
parts per million to parts per billion to parts per trillion, 
the argument is made that we approach a point at which there is 
a de minimis level of contaminant left. It's sometimes put in 
the context of saying we're identifying contaminants below the 
level they naturally occur in the environment or below a level 
where there is any reasonable health risk benefit in addressing 
them at those levels.
    Do you accept that argument and is there a point, do you 
believe, that science should be able to show us, if we do the 
necessary research, where we don't have to literally eradicate 
the level of contaminants beyond the point of their natural 
occurrence in the environment?
    Mr. Olson. My answer would be there of course is a level 
for many contaminants at which we're no longer worried about 
them and we shouldn't have to remove them.
    As you know, in the 1996 amendments to the Safe Drinking 
Water Act, there are some extremely carefully crafted cost-
benefit provisions that apply to certain rules, that don't 
apply to other rules, that were negotiated by many people in 
this room into the wee hours of the night. I think they are 
very delicate and we haven't yet really seen how they work.
    We're optimistic that they can work and we've got a couple 
of rules coming up, including last Friday a radon assessment 
came out. I haven't had a chance to look at it but I think 
there will be in the next year or two, several examples we can 
evaluate as to whether the Act is really working or not.
    Senator Crapo. Whether we're actually getting the right 
balance?
    Mr. Olson. Right.
    Senator Crapo. Mr. Levy, I know you had some comments in 
your testimony about the impact on small systems in terms of 
the very rigid rules that require cleanup beyond even the 
levels of what is natural. Is that correct and would you like 
to comment on this issue?
    Mr. Levy. I'd love to comment. For the last 20 years, I've 
been working with small towns in three States much like the 
small towns that you represent. I have yet to see a small town 
that did not want to comply and provide the safest drinking 
water possible but they also had to be able to afford it. This 
is the dilemma that faces small communities throughout the 
country, they want to do the best they can, they want to meet 
all the standards and they have small communities and limited 
pocketbooks and a limit on how much they can do.
    We represented a very tiny water system, 24 customers and a 
small private school which had just spent $750,000 on a 
treatment plant. I was out with the superintendent and the 
media because they had a level higher than another water 
district on trihalomethanes which is a disinfectant byproduct. 
The report said, don't you think your customers deserve as good 
a water as that system.
    He said, we just spent $.75 million, what else can we do. I 
think that's the thing I'm faced with everyday when I work with 
these small towns.
    Senator Crapo. In that context, you submitted with your 
testimony the reprint from USA Today which raised the question 
of whether we really are getting the drinking water in this 
country clean. The thrust of that article was that there is not 
very good oversight and that results in a high risk of drinking 
water violations.
    I note Administrator Browner responded by saying 85 percent 
of the public is getting water from a system that does not have 
a violation. There is a bit of a debate underway as to what is 
the level of protection of our drinking water in the country 
today.
    Mr. Levy indicated that a lot of the violations and a lot 
of the concern that we see here is related more to process than 
to the regulatory system itself, in other words, we may have 
procedural violations out there as opposed to actually 
representing a risk to the quality of the water being consumed. 
Am I correct?
    Mr. Levy. Yes.
    Senator Crapo. The question I'm proposing is in this 
country do we have reasonably safe drinking water or not, Mr. 
Olson?
    Mr. Olson. I would say most water systems in the United 
States provide pretty safe drinking water. That's our view. 
We've said that repeatedly. However, there are many water 
systems that are providing water that doesn't meet the 
standards. That is what the USA Today piece was about.
    There are two sets of violations, the procedural ones, or 
for example, failing to test the water for contaminants. Those 
are called monitoring violations. Then there are the actual 
violations of the health standards. I believe the number is 
around 30 million people are served by water systems per year 
that fail to treat their water in accordance with EPA health 
standards or that fail to comply with EPA maximum contaminant 
levels.
    Senator Crapo. Those are actual health risks?
    Mr. Olson. Those are the health standards and then there is 
debate about is it the entire system that is affected by that 
violation or is it a subset. Those are the rough numbers.
    Senator Crapo. Mr. Levy, State and Federal agencies do have 
overlapping primacy responsibilities as new regulations are 
implemented until the States receive the authority from the 
Federal Government. Does this present a problem for the small 
systems, the fact the States don't get primacy until later on 
in the process?
    Mr. Levy. I hate to answer a question with ``It depends,'' 
but I will answer this question and say, ``It depends.''
    With the surface water treatment rule, for example, the 
State of Maine did not have primacy over that rule during most 
of the 1990's, which meant that the systems we were 
representing, who had surface water that needed to filter, were 
dealing with EPA and not the State of Maine. We felt the State 
of Maine had a better understanding of what they needed. 
However, they did not have primacy over that rule and that did 
present certain difficulties.
    The State of Maine now has primacy over the surface water 
treatment rule and that confusion has been eliminated. However, 
now we're looking at the consumer confidence reports which have 
been discussed quite a bit. The three States we're working in 
do not have primacy over that rule. In other words, we're 
dealing with EPA. Because of that, there are limits on guidance 
and understanding, on how this rule is going to be implemented. 
I think that is creating confusion.
    Senator Crapo. Mr. Bingham, I thought you had some very 
good suggestions for oversight with regard to resources that 
are being provided as well as the series of questions or issues 
that were at the conclusion of your testimony relating to areas 
we need to address as we approach the next reauthorization of 
the Safe Drinking Water Act.
    I think all of them were very interesting and may form a 
basis from which we could conduct some additional and helpful 
oversight. One I wanted to ask you about is you raised the 
question can safe drinking water be provided through a 
regulatory system in which the EPA sets broad health goals and 
local communities have the flexibility to choose how to meet 
those goals.
    Again, in a number of environmental arenas, one of the 
issues that comes up is Federal control versus State and local 
control. It seems to me that simply the fact you raised that 
question should cause us to address whether a better approach 
would be to have the Federal Government set the broad 
objectives or maybe even the standards but let the standards be 
met on an individual basis by the local communities.
    Do you think the Safe Drinking Water Act in its current 
form has the flexibility if properly administered to achieve 
that objective or do we need to make some structural changes if 
we wanted to approach that type of regulatory policy?
    Mr. Bingham. I don't think there's any question that the 
Safe Drinking Water, as amended in 1996, provides for more 
local control. I don't know that it goes so far as to provide 
the opportunity for Federal guidance, that is the general 
standards being set at the Federal level and then the local, 
State and even municipalities and other privately- and 
publicly-held water utilities meeting those standards as they 
can.
    The intriguing thing about that is I think that kind of 
circumstance would represent a fertile breeding ground for 
innovative technologies and innovative approaches to meeting 
those standards. It would not be without its problems. I think 
oversight, the opportunity to make sure the local agencies were 
rising to that challenge, to make sure they were not cutting 
corners, to make sure they really were meeting those general 
guidelines as established by the Federal Government, that kind 
of oversight would have to be in place. We believe there may 
well be some interesting opportunities in the future for that 
kind of an approach.
    Senator Crapo. Mr. Biberstine, the deadline for the States 
submitting programs for source water assessments passed in 
February and the deadline for completing the local source water 
assessments and delineations is May 2003, if I understand the 
statute correctly.
    The question I have is what is the impact of the early rule 
implementation? What I mean is, how does this affect State 
regulatory primacy?
    Mr. Biberstine. In a way that's two different questions.
    Senator Crapo. Go ahead and answer them both.
    Mr. Biberstine. Source water protection I think started out 
a few years ago with groundwater protection programs and is 
moving smoothly I think in most States to look at sources of 
contamination prior to treatment, protecting the water supply 
before it is used as water. I think most States welcome that 
effort and it's going to be a very widespread effort.
    It's not so much that we have a primacy issue related to 
source water protection, it's a program we're required to have 
and implement over a period of time. I think there is enough 
flexibility that will allow the States to pretty well do that 
job in a timely manner.
    It's not a program where EPA would come in and take over 
the source water protection program, as they do in other areas, 
if the State had not adopted rules and regulations in a timely 
manner, which is where the utilities tend to get confused. In 
that case, do they respond to EPA, do they respond to the State 
and how do you switch back and forth over that.
    The State implementation is usually much smoother than 
Federal implementation, especially related to small systems. So 
the States prefer not to have Federal action or have EPA step 
in to implement rules just because implementation dates are set 
prior to when the State has to adopt them.
    Senator Crapo. Mr. Gunter, you indicated with regard to the 
necessary research funding, that is a big priority for AMWA. In 
our previous discussion about research, it appears to me that 
there is a very significant gap in terms of the resources we 
have available and the research that needs to be done.
    I'm curious if you have a suggestion as to how we should 
approach it right now other than to simply try to beef up the 
research dollars available in the Federal system as much as 
possible. How are we going to address the entire need?
    Mr. Gunter. First of all, I think it's going to require 
some discussions on our part, and I mean all of us on the panel 
with EPA, to try to get them to realize it is very important to 
us that they increase that portion of their budget. We are in 
conversation with EPA and we're doing that.
    We're bringing the issue to Congress in order to get you to 
take a hard look at what we're saying and recognizing what Mr. 
Olson was saying about they have priorities and we will try to 
get them to change those priorities, but if they don't, we 
would appreciate it if you would get them to change those 
priorities.
    Senator Crapo. I can assure you one of my priorities is 
environmental research, not just on drinking water but in 
general. I think there may be a need to develop a very strong 
renewed commitment at the Federal level for environmental 
research. We've had a lot of research in the National Institute 
of Health, human health research. Does anyone of the panel 
know, does a significant amount of the drinking water research 
get benefited by the NIEHS, National Institute of Environmental 
Health Sciences?
    Mr. Olson.
    Mr. Olson. One of the areas we think EPA could leverage 
more research is by working with NIEHS which does have a pretty 
active environmental research program. Very little of it is 
targeted to specific drinking water research. The same is true 
of the Agency for Toxic Substances, Disease Registry down in 
Atlanta and the Centers for Disease Control, all of which have 
some research on drinking water.
    I think there is a need for better integration of these 
programs. For example, both CDC and ATSDR want to do, at a very 
low cost, some research that EPA could fund jointly for a lot 
less than they could pay for if they had to go outside the 
Federal Government.
    Senator Crapo. So we have CDC, the ATSDR, the NIEHS and the 
EPA.
    Mr. Olson. And NCI.
    Senator Crapo. And NCI. Is that where we need to look in 
general at least as to the way we are currently structured in 
approaching environmental research in the company?
    Mr. Olson. There is also several other institutes at NIH 
that have active programs; the National Institute for Allergy 
and Infectious Disease would be another potential partner I 
don't think EPA has done much outreach to.
    Senator Crapo. There's been some discussion and I don't 
know if this is a good idea or not, but I think we have to at 
least talk about the options. There's been some discussion 
about trying to bring under one roof the various efforts to 
approach environmental research. Anybody want to comment on 
that suggestion?
    [No response.]
    Senator Crapo. No one is going to jump on that one? All 
right.
    Mr. Chapman, I too was very concerned about the issue you 
raised with regard to the tort litigation in California. Could 
you please give me a little more background on the current 
status of the case? If I understood your testimony, the case is 
sort of in abeyance right now while there is some PUC activity 
underway or did I read that wrong?
    Mr. Chapman. That's correct, Senator. There are 11 cases 
pending in California and in March 1998, the California PUC 
stepped in and essentially said, we're responsible for 
regulating drinking water in California, it's really not a 
State court issue, it's properly a PUC issue and they are 
conducting their own investigation on this matter.
    That investigation is still open. It's not clear at this 
point what the resolution will be obviously, or what the legal 
effects would be on the litigation when that investigation is 
done.
    Senator Crapo. Do I also understand correctly that these 
cases relate to allegations against drinking water providers 
who are meeting Federal and State drinking water standards?
    Mr. Chapman. That is correct.
    Senator Crapo. So the allegation is that unrelated 
contaminants are harming people who are consumers of this 
water?
    Mr. Chapman. That's correct, regulated and unregulated 
contaminants, and the defendants in the cases are not only the 
drinking water purveyors, both municipal- and investor-owned, 
but also the supposed generators of these substances. So there 
is a whole basket of defendants in these cases. The industry's 
concern is that when you look at our business, there is a fair 
amount of order. There always has been a fair amount of order. 
There's been order in the standard-setting process, there is an 
effort about supporting the standard-setting process with sound 
science and so forth.
    The outcome of this litigation could be simply to upend all 
of that and that is our concern.
    Senator Crapo. I think that is a very valid concern and I 
can tell the chairman was very concerned and interested in that 
as am I. So we will look into this issue. It is a very 
disturbing trend if it were to become a trend.
    Mr. Olson. Senator, may I speak to that.
    Senator Crapo. Yes.
    Mr. Olson. As you probably know, there is a movie out now 
called ``A Civil Action'' and the controversy around Toms 
River, NJ, and other locations. I think this committee needs to 
keep in mind the situation where there are examples of a mother 
with a kid that has leukemia, whose child may have gotten 
leukemia because of a contaminant in the drinking water that 
EPA hasn't gotten around to regulating.
    The traditional approach has been that the Safe Drinking 
Water Act and other environmental statutes are baseline 
minimum, and the States are free to go above that minimum. 
That's always been the case in the Safe Drinking Water Act. It 
is certainly our very strongly held view that we should stick 
with that approach of a Federal floor and if the States choose 
to go beyond that, that's fine.
    Our concern is that we not see a situation where parents 
are barred from protecting their kids for illnesses they may 
have gotten from contaminated water, because we know there are 
a lot of contaminants out there that are not regulated by the 
Federal Government or that are poorly regulated.
    Senator Crapo. Mr. Chapman, is the allegation negligence in 
these lawsuits?
    Mr. Chapman. Essentially, yes, plus strict liability under 
product liability theory, and the contaminants involved are not 
only materials that are unregulated but also regulated. Let me 
describe a bit the kind of chicken and egg problem we have with 
this.
    Using testing technology, we always find things in the 
water before we really know whether they are bad for us, before 
there are regulations and before we really figure out the 
technology to get rid of these materials. I think there is a 
history among the water purveyors in this industry, certainly 
in the NAWC companies, of erring on the side of safety. There 
is a culture in these companies that puts, frankly, drinking 
water quality and safety at the top of the list.
    The way that process has worked in the industry is there 
has been a fair amount of information exchange among the people 
who run these plants, the vice presidents for water quality and 
all the various associations and so forth about what's coming 
down the pike and if there are contaminants that have come up 
suspected of being a problem and so forth. The reaction by the 
industry is basically, change the source, solve the problem, 
lead the regulation. I know our company does that all the time.
    The difficulty with this litigation is that public 
discourse within the industry could end up getting snuffed out 
because, all of a sudden there will be this perceived liability 
on all these issues. That really has our water treatment 
professionals very concerned.
    Senator Crapo. If the lawsuits are based on negligence, 
then it seems to me there would have to be a showing that 
someone, a purveyor or provider of water, or someone who caused 
a contaminant to get into the water, knew about it, knew it was 
harmful or at least didn't take reasonable precautions to 
prevent it and so forth, would you agree with that, Mr. Olson?
    Mr. Olson. I haven't read all the complaints in these cases 
but these suits are not easy to win. I think what will happen 
is that it will become clear that in only a very narrow set of 
cases will these suits be won where there is some degree of 
proof. Generally, there is a causation test in most State law. 
Generally, you have to make several elements of proof in order 
to win a case like this, and as we saw in Woburn, MA, and 
elsewhere, it doesn't happen easily. Generally, a case like 
this is only going to be filed I think if there is a strong 
degree of proof. If there isn't, they are going to lose.
    Senator Crapo. The proof would be of some type of 
negligence?
    Mr. Olson. Not necessarily negligence, it's a question of 
State law. Different States have different requirements. Some 
have other tests for strict liability, in some cases for 
abnormally dangerous activities for other areas.
    Senator Crapo. Mr. Chapman.
    Mr. Chapman. I agree with Mr. Olson's comments on causation 
as well. It's not altogether a strict negligence standard but 
again, take it to the real world. The real world is this 
subject and the health-related issues are being discussed all 
the time by the purveyors. Frankly, reasoned decisions are made 
all the time on basically taking sources in and out of service, 
whether a particular treatment methodology will solve a problem 
and so forth.
    Then you, after the fact, through the litigation process, 
come back and revisit all of those deliberations. The fact is 
those decisions are being made without the research having been 
done, they are being made by professionals trying to do the 
right thing, then all of a sudden, through the litigation 
process, you're coming back and revisiting all of those 
decisions years after the fact based on information known at 
that future date, not the information known at that time. So it 
puts the purveyor in an extremely difficult situation.
    Senator Crapo. I appreciate the discussion we've had on 
this. It's a difficult issue. We do want to be sure those who 
are wronged in society do not lose their right for civil 
redress. By the same token, we want to be sure that we don't 
create a standard by which there is no way to avoid liability 
in a strict liability sense where we could actually injure the 
health of our society at large by discouraging activities that 
would help increase public health.
    It's a difficult policy line and it's certainly an issue 
that if these suits proceed, will need to be addressed.
    I assume you were all listening when we had EPA before us. 
I asked a question with regard to variances. The information we 
received is that no variances have been granted to small 
systems by the EPA to date. The question I have is, is that 
because the EPA is just not granting variances or is it because 
variances aren't being requested, or for some other reason.
    To the whole panel, does anyone here know whether there are 
small systems in the country requesting variances?
    Mr. Levy.
    Mr. Levy. I can only share the experience of my work in 
three States and I'm not aware of anyone in any of the three 
States who has asked for one. Typically, the areas where 
variances may be necessary, people tend not to have problems.
    One of the areas in which we would like to have seen a 
variance was possibly in the surface water treatment because it 
was so expensive for so many small systems, but variances are 
not allowed under that rule. There were none for that.
    Senator Crapo. I don't know the law well enough to 
understand why there aren't variances allowed for that rule.
    Mr. Levy. I believe it was in the law, there were no 
variances on the surface water treatment.
    Senator Crapo. The statute itself provided that particular 
set of rules would not be open to variance. Anybody else know?
    Mr. Biberstine.
    Mr. Biberstine. Most of the States I'm aware of have not 
had any small systems apply for variances. One of the issues is 
that under the new rules, it requires innovative technology to 
go into place. At this point, there are no identified 
innovative technologies from EPA to be used in that case.
    Generally the cost of a variance under the old requirements 
was such that it was too expensive to implement for a variance. 
I would say no, there are very few variances anyplace in 
existence at this point.
    Senator Crapo. When you refer to the innovative 
technologies, is that a term of art? Is that something the EPA 
is supposed to be identifying and making known and available or 
is that just something the stakeholders need to identify 
themselves and propose to the EPA for a variance?
    Mr. Biberstine. EPA, for each of its rules, is required to 
identify innovative technology for small system compliance. 
Since the existing technologies may be too expensive for a 
small system to use, they are supposed to identify them. We're 
still in the process of new rule promulgation. I expect we will 
see more of that going on. At this point, EPA in their 
statement said there is no innovative technologies available at 
this time.
    As we get into rules such as the arsenic rule and the radon 
rule, I think they will probably be identifying innovative 
technology. States have been using alternative technologies for 
small systems for years. In fact, the States actually have a 
protocol on identifying alternative technologies for compliance 
purposes for small systems. So in that aspect, it is in use. 
It's just not official.
    Senator Crapo. Anybody else on that question?
    Mr. Levy.
    Mr. Levy. Three of the Senators have mentioned the need of 
alternative technology for small systems and there has also 
been a lot of discussion about research. I think there is a lot 
of room for growth in terms of developing research projects and 
innovative technology to help small systems comply with the 
variety of rules. Not only is it necessary to work on this type 
of technology but there also needs to be a means of informing 
systems of its existence and how to use it.
    Senator Crapo. I did want to get into the issue of cost-
benefit analysis. The 1996 reauthorization tried to institute 
the principle of cost-benefit analysis into the Safe Drinking 
Water Act. The question I have is has that been successful? Are 
we in the process now of seeing a success story generate where 
we can see how cost-benefit analysis should be done? Is it 
working? Are we getting that principle instituted in such a way 
that we are truly getting the most bang for the buck and 
getting good results for the lowest cost?
    Mr. Biberstine. From my perspective at the State level, 
we've not seen enough rules generated using the cost-analysis 
aspect yet to know how well it's being used or whether it's 
going to be effective. I think over the course of the next 
couple of years with the many rules coming out, we will get a 
much better feel for it. At this point, it's kind of a gray 
area yet as to where it's going.
    Senator Crapo. So we're not far enough along to answer the 
question yet?
    Mr. Biberstine. That's my feeling, yes.
    Mr. Chapman. We're also watching it and we're particularly 
watching it in the context of the promulgation of the radon 
MCLs and the cost-benefit analysis shows reasonably equivalent 
costs and benefits under a fairly wide range of potential MCLs.
    The issue we're wrestling with is whether the dollar spent 
on the radon rule at whatever level is set is best spent by the 
drinking water community to alleviate the prevalence in 
drinking water or whether it should be done on the air side and 
just indoor air, getting it out of basements and so forth, does 
that get you more bang for your buck.
    I would urge as we go through this process that we look at 
resources generally.
    Senator Crapo. Rather than limiting it simply to drinking 
water or air quality or whatever the issue may be.
    Mr. Chapman. Right and that the opportunity is going to 
vary tremendously from substance to substance.
    Senator Crapo. Is that what the 1996 reauthorization did in 
the Drinking Water Act or is the cost-benefit analysis in the 
Safe Drinking Water Act simply related to drinking water?
    Mr. Olson. As a general matter, it's a drinking water 
analysis that is done. I think radon is the one exception to 
that.
    Senator Crapo. Other comments?
    Mr. Bingham. I was going to say, ``I think one of the 
gentlemen on the earlier panel alluded to the very difficult 
challenge represented sometimes by cost-benefit analysis 
work.'' I saw a paper recently on the cost-benefit analysis of 
radon regulation and one of the numbers it listed which was 
fairly constant over the range of proposed MCLs was a cost per 
cancer death avoided. As I recall that number was in the $5-$6 
million range.
    I think what Mr. Chapman alluded to is, is that cost 
reasonable when weighed against the other risks associated with 
radon? For example, with the ambient air, and those become 
very, very difficult questions. If you're the guy who gets 
cancer, that number is probably reasonable but when you look at 
$5-$6 million to avoid a death, and compare it with the other 
risks associated with radon, then the analysis, in my mind, is 
very, very difficult. That's a very difficult call and I think 
that's one of the challenges that EPA will face as we begin to 
set those contaminant levels, even giving due consideration to 
cost-benefit analysis.
    Mr. Gunter. The point we were trying to make in our 
testimony is that it's a part of the law, it's a very, very 
difficult thing to do, and it's probably going to be different 
in every regulation that they write, but that's a cop out if 
they say they can't do it because every agency is required to 
come up with some parameters they can use that we can generally 
agree on to use as a basis of benefit-cost ratio. We're willing 
to work with them on every regulation to set those parameters 
and to agree on what they ought to be in order for us to at 
least have some measure to go by.
    Senator Crapo. You just raised another issue but there is 
an argument made that a part of the entire cost-benefit 
analysis needs to be the impact on health of taking resources 
away from a community. So it is not just a cost benefit in 
terms of how much is it going to cost and what is it going to 
mean to public health in a particular arena but what is it 
going to do to public health if we take these dollars from this 
use and put them over to this use, within the government or 
take these dollars away from this family and put them into 
government use in reducing this particular health risk.
    Is that all a part of the analysis that is going on now?
    Mr. Biberstine. No, it's not.
    Mr. Olson. It's too early to say but certainly one concern 
is that those are very speculative things to look at. How do 
you know if money doesn't go into this, it's going to go into 
something else. Some of our concern about how cost benefit has 
been done in the past is that there is a fair amount of 
speculation that's necessary to complete a cost-benefit 
analysis and there is only so much weight you can put in a 
document that is by necessity going to be somewhat speculative.
    Senator Crapo. I would think that would be true across the 
board. I would think cost-benefit analysis would be very 
difficult to do in a precise objective manner, but the 
speculative aspects of it are issues, as Mr. Gunter says, that 
we've got to address and we've got to deal with because even 
though they may not be able to be quantified, that doesn't mean 
they are not real.
     I'm curious how it's going to work out. Maybe we'll have 
another oversight hearing on that issue as we get further down 
the line and see what we can find.
    Thank you all for coming today. We will probably have 
further questions to respond to and would each of you be 
willing to respond in writing to further questions?
    Mr. Gunter. Yes, sir.
    Senator Crapo. Thank you very much. This panel is excused.
    Since we have no further business before the committee, 
this hearing is adjourned.
    [Whereupon, at 11:29 a.m., the committee was adjourned, to 
reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]
 Prepared Statement of J. Charles Fox, Assistant Administrator, Office 
of Water, and Norine Noonan, Ph.D., Assistant Administrator, Office of 
       Research and Development, Environmental Protection Agency
                              introduction
    Thank you, Mr. Chairman, for the opportunity to address the 
committee today. We are pleased to be able to discuss the Environmental 
Protection Agency's (EPA's) implementation of the Safe Drinking Water 
Act Amendments of 1996. We would like to describe the progress that we 
have made in carrying out the new amendments, and in changing how we do 
business. EPA has been working in partnership with the entire drinking 
water community to implement the legislation, and we believe that 
together we can be proud of our accomplishments to date.
    Two and a half years ago President Clinton signed into law 
amendments to the Safe Drinking Water Act (SDWA) passed by Congress. 
The bipartisan cooperation among this committee's members provided 
critical leadership to enact effective and workable changes to the law. 
The Amendments were well-crafted and widely supported, as shown by the 
unanimous Senate support for their passage. Congress and the 
Administration agreed to make some significant changes in the Act to 
increase public health protection while controlling costs, and EPA and 
its partners in the drinking water community have spent the last two 
and a half years making those changes a reality.
    We have completed every action required of us to date. These 
actions have provided a solid foundation of guidance and assistance for 
States, water suppliers, and the public as they take the next steps in 
implementation. At the same time we are planning for the future, to 
ensure that we will be able to meet the challenges of providing safe 
water into the future. I would like to discuss both our successes to 
date and highlight some of the challenges that we face over the next 
several years.
    The 1996 Amendments made significant changes in how the SDWA works, 
emphasizing cost-effective public health protection through regulatory 
improvements, increased funding, prevention programs, and public 
participation. A focus on risk-based priority-setting means that EPA 
will decide which contaminants to regulate based on data about the 
adverse health effects of the contaminant, its occurrence in public 
water systems, and the projected risk reduction. The Amendments also 
expanded the role for consideration of benefits and costs in standard 
setting and implementation. Also, States now have greater flexibility 
to implement the Act responsibly to meet their specific needs. Funding 
is significantly increased through higher State drinking water program 
grants and a new multi-year, multi-billion dollar Drinking Water State 
Revolving Fund (DWSRF) for infrastructure improvements for water 
systems. In addition, new State prevention initiatives were created and 
funded, including a source water assessment program, which will give 
States and water suppliers information they need to prevent 
contamination of a community's drinking water source, thereby better 
enabling them to add an extra layer of defense to the current treatment 
options. Finally, the Amendments recognize that effective drinking 
water protection must be founded on a base of government accountability 
and public understanding and support. Right-to-know provisions, such as 
the consumer confidence reports, will give consumers the information 
they need to make their own health decisions. These provisions will 
also promote accountability in decision-making.
    The 1996 Amendments also acknowledge that drinking water protection 
must be a shared effort across the entire drinking water community. EPA 
has used this concept to guide implementation of the new statute. 
Through our stakeholder process, the drinking water community has come 
together to work through a number of issues. We have greatly expanded 
the SDWA-authorized National Drinking Water Advisory Council (NDWAC) 
through a series of working groups on issues ranging from small system 
needs to a new approach to benefits assessment. All participants should 
be commended for their efforts.
                 success in implementing the amendments
Developing State and Local Programs
    The success in implementing the 1996 Amendments will be determined 
as much by our partners in the States, water systems, and public as by 
EPA. We have made great strides in this effort over the past 2\1/2\ 
years.
    Funding is necessary for States and water systems to implement the 
new requirements of the Amendments. I am pleased to announce that all 
50 States and Puerto Rico received their first Drinking Water State 
Revolving Fund capitalization grant from the fiscal year 1997 
appropriations, 32 States have received their fiscal year 1998 
capitalization grant, and Arizona has received its fiscal year 1999 
capitalization grant for a total to date of $1.696 billion. Continued 
federal capitalization will help us meet our long-term goal of the 
Drinking Water State Revolving Funds providing about $500 million in 
annual financial assistance to help communities ensure safe drinking 
water supplies. In order to address important drinking water needs, 
several States are leveraging their federal grants or considering 
transfers from their Clean Water State Revolving Funds to increase the 
amount of funds available to finance needed infrastructure projects. I 
believe that this is a remarkable achievement. Before passage of the 
1996 Amendments, there was no drinking water loan infrastructure 
program at the national level. Now States have provided more than 350 
loans to water systems to improve their ability to provide safe 
drinking water.
    Congress also provided flexibility by allowing States to reserve a 
portion of their DWSRF grants to fund a number of programmatic set-
asides, and States have taken advantage of that flexibility. 
Approximately 20 percent of the States' fiscal year 1997 capitalization 
grants and 13 percent of the fiscal year 1998 capitalization grants 
have been used to fund set-aside programs supporting State drinking 
water programs, source water assessment and protection efforts, and 
measures to enhance the technical, financial and managerial capacity of 
drinking water systems.
    Recognizing that preventing contamination of the source water is 
the first step in the multiple barrier approach to drinking water 
protection, the Amendments require States to complete assessments of 
the source water for all public water systems within the State. In 
1997, EPA issued a source water assessment and protection guidance, 
developed through a NDWAC working group, to assist States as they 
developed their programs. Almost all States submitted programs by the 
statutory February 6 deadline, and the others are on schedules to do so 
shortly. All States took the DWSRF set-aside that will help them fund 
the assessments.
    Implementation of the source water assessment and protection 
provisions will benefit from another Administration initiative, the 
Clean Water Action Plan. The Clean Water Action Plan brings together a 
wide range of federal agencies in support of clean water, including 
sources of drinking water. In October, federal agencies signed an 
agreement to support States as they conduct their source water 
assessments.
    The 1996 Amendments created capacity development tools to support 
drinking water systems in acquiring and maintaining the technical, 
financial, and managerial capability to plan for, achieve, and maintain 
compliance with drinking water standards. Last summer EPA released 
guidance, developed with the assistance of a NDWAC working group, to 
help States work together with water systems to carry out new capacity 
development provisions of the law, including a requirement that States 
have authority to prevent the formation of new public water systems 
that lack the capability to operate and manage a drinking water system 
that is in compliance. States must also implement a strategy to help 
existing systems develop the capability to operate and maintain their 
system and ensure long-term compliance. States have been working very 
hard on these provisions, and most States have developed, or are 
developing, their programs to ensure new system capacity. We have seen 
many creative, well-thought-out programs.
    Earlier this month EPA released its final operator certification 
guidelines. The final guidelines provide States with the minimum 
standards for the development, implementation, and enforcement of 
operator certification programs for community and nontransient 
noncommunity public water systems. These were also created with the 
assistance of a NDWAC working group, and will help ensure that all 
water systems have trained, qualified operators. Many States already 
have some type of operator training, so I am confident that States will 
develop these programs within the statutory time frame.
    We have also moved forward in implementing the several provisions 
which benefit small drinking water systems. In 1997 EPA released a 
listing of alternative technologies that small systems can use to 
achieve compliance with existing drinking water standards. The DWSRF 
requires that a percentage of loans go to small water systems, and 
provides a set-aside for technical assistance to small systems. A large 
percentage of the loans given out to date--initial estimates are nearly 
50 percent--have gone to small systems, and forty-seven States have 
taken the technical assistance set-aside. EPA has also funded small 
public water system Technical Assistance Centers in nine States. 
Finally, EPA issued regulations implementing the new small system 
variance procedures of the Act, and National Affordability Criteria 
that EPA will use in determining whether to list small system variance 
technologies. Affordable compliance technologies have been identified 
for all current standards, so no variance technologies have yet been 
listed.
Standard-setting
    In the area of new drinking water standards, the Amendments laid 
out four major areas of work for EPA: completing priority rulemakings 
for contaminants named in the law; improving the science and data 
supporting rulemakings and risk management decisions; establishing a 
new process to make determinations on future standards that includes 
explicit consideration of the costs and benefits of proposed standards; 
and, reviewing existing standards. We are moving forward in all of 
these areas.
    Last November, President Clinton released the Interim Enhanced 
Surface Water Treatment Rule (IESWTR) and the Disinfectants/
Disinfection Byproducts Rule (DBPR). These rules were among Congress' 
highest priorities in 1996 Amendments. The two rules, which between 
them will provide additional protections for nearly all Americans who 
use public water supplies, both protect from microbiological 
contamination and address the risk trade-offs with disinfection 
byproducts. The IESWTR will protect persons who get their water from 
large water systems drawing from rivers, lakes, and streams by 
addressing, for the first time, Cryptosporidium, and tightening water 
treatment plant performance requirements. The DBPR complements this 
rule by addressing potential health threats that may be related to the 
disinfection process itself. It strengthens standards for 
trihalomethane, establishes new drinking water standards for seven 
disinfectant byproducts and three disinfectants, and requires treatment 
techniques to further reduce exposure to disinfection byproducts.
    We have tried very hard to incorporate SDWA's ethic of public 
involvement in our rulemakings. I am proud to say that EPA developed 
these complex rules by using an extensive stakeholder involvement 
process, which included an advisory committee and numerous public 
meetings. As a result, we have two widely supported and understood 
rules that strengthen public health protection. We are now beginning a 
new round of discussions on the second phase of these rules, which will 
incorporate the results of the microbial and disinfection byproducts 
research that is currently ongoing.
    EPA has also established a new process for standard-setting based 
on the greatest risks to health. The Amendments require EPA to make a 
regulatory determination on at least five contaminants by 2001. Using 
recommendations from the public, the scientific community, and a NDWAC 
working group, EPA established its Contaminant Candidate List, to aid 
in this determination, and to help set priorities for the Agency's 
drinking water program. In establishing the list, EPA has divided the 
contaminants among those which are priorities for additional research, 
those which need additional occurrence data, and those which are 
priorities for consideration for rulemaking. To provide sound 
occurrence data, EPA is developing its National Contaminant Occurrence 
Database, which will provide information on the occurrences in drinking 
water of specific contaminants. Finally, EPA will begin development of 
a process for reviewing the current drinking water standards.
    At a time of great debate over the right framework for 
environmental and public health regulation, Congress and the 
Administration reached agreement on how to strengthen the consideration 
of cost and benefits in drinking water standards while continuing to 
ensure that health protection is maintained. Under the Amendments, EPA 
must conduct more extensive cost-benefit analyses for each regulation, 
and the Administrator may exercise new flexibility to ensure cost-
effective standards based on these analyses. EPA is working with its 
stakeholders, through a National Drinking Water Advisory Council 
workgroup, to improve our cost-benefit tools to enable us to carry out 
this new approach. In February, EPA released the Health Risk Reduction 
and Cost Analysis as part of the rulemaking process for radon. The 
radon rule will be the first rule that uses SDWA's new cost-benefit 
framework.
Consumer Confidence Reports
    The 1996 Amendments include a strong and pervasive ethic of public 
information and involvement. EPA has worked hard to incorporate this 
ethic by providing stakeholders with multiple opportunities to provide 
input into our rule development and implementation activities, and we 
are very proud of our efforts.
    The Administration believes that every American has the right to 
know about their environment, and consumer confidence reports are the 
centerpiece of the right-to-know provisions in SDWA. SDWA requires 
water systems to provide these annual reports to their customers on the 
state of their drinking water supply. The information contained in 
these reports will enable Americans to make practical, knowledgeable 
decisions about their health and their drinking water. Last August, EPA 
finalized its rule specifying the requirements of these reports. All 
water systems are required to issue these reports by this October. Last 
fall we formed the Public Right-to-Know working group of the NDWAC to 
discuss how to increase public knowledge of these reports. I would like 
to recognize the efforts of the many water systems who are working to 
make these reports an important new means to communicate with the 
public and build partnerships with their consumers.
                               challenges
    While I believe that we have been very successful in implementation 
to date, I realize that we have many challenges as well. The biggest 
single challenge over the next four to five years for the drinking 
water community as a whole, including EPA, is simply the cumulative 
number and size of the tasks we face. With greatly heightened efforts 
internally, with strong financial support from the Administration and 
Congress, with energetic and extensive cooperation from States and 
stakeholders, so far EPA has been able to produce--virtually all on 
time--durable and effective implementation products required by the 
law.
    But from here, it gets harder for everyone. The regulatory products 
required of EPA over the next four to five years will need not only to 
continue to address the intent of their respective provisions in the 
law and the fundamental concerns of stakeholders, they will also need 
to be supported by a growing base of research and data that will be 
costly for EPA and demanding of stakeholders. States, water systems and 
other stakeholders will not only continue their active participation in 
helping EPA develop these new regulatory products, they will also have 
the burdens of implementing the new regulations and programs already 
developed since 1996. EPA, in turn, will have the additional 
responsibilities of assisting with, and overseeing, this implementation 
as the law specifies.
    All of us in the drinking water community, including EPA, will face 
difficult choices on how to balance our efforts and resources to 
address all of the requirements under the law. Other key challenges 
flow from this most basic challenge. As we face the task of setting new 
drinking water standards, EPA must make sure that we have the science 
and information we need to make good, well-founded regulatory decisions 
on these standards. The Administration and the Congress increased 
funding for drinking water research shortly after passage of the 1996 
Amendments. Much of the increase for health effects research has 
supported the M/DBP rules. We have developed a long-term research plan 
in support of the rules, and are working with many partners, such as 
the National Institutes of Health and the Centers for Disease Control. 
We would like to express appreciation to the National Institute of 
Environmental Health and Safety for their assistance as we conduct the 
research in support of our rulemakings. To meet the statutory 
requirements and deadlines for the new rulemakings, we must initiate 
research and data collection to evaluate the contaminants on the 
Contaminant Candidate List and to undertake the six-year review of 
existing standards. Under the 1996 Amendments, EPA is also required to 
establish a National Contaminant Occurrence Database that is available 
to the public. In fiscal year 2000, we will begin to shift resources to 
support research of contaminants on the Contaminant Candidate List. Our 
challenge is to balance these research needs over the next several 
years to ensure that we have the science we need to make sound 
regulatory decisions.
    A third challenge is the issue of data quality. Accurate 
information about the quality of our drinking water and its compliance 
with drinking water standards is vital to establishing new rules, 
evaluating the success of our programs, judging compliance trends and 
establishing priorities, and providing the public with information 
about drinking water quality. We have made great progress in making our 
information about drinking water quality available to the public. We 
have also found in doing so that the old adage applies: namely, that if 
you make data widely available, you must be exacting about the quality 
of that data, and you may need to improve it. We have recently had that 
experience with drinking water violations data in our Safe Drinking 
Water Information System (SDWIS). As we made SDWIS data available on 
the Internet, water systems pointed out errors in the information. We 
have developed with our stakeholders, and are implementing, a data 
reliability action plan to characterize and correct the data quality 
problems and put in place a long-term process to ensure data newly 
entered is correct.
                        drinking water research
    Drinking water continues to be one of EPA's highest priority areas 
of research because of the public concern with drinking water safety 
and the need to: enhance our understanding of the health effects of 
chemical and microbial contaminants in drinking water; reduce 
uncertainties in the assessment of exposure and risks to these agents; 
and, develop more cost-effective methods of water treatment for both 
large and small systems in the U.S. EPA's total annual investment in 
drinking water research in recent years has doubled, growing from a 
level of $20.8M for the Office of Research and Development (ORD) in 
fiscal year 1995 to $41.5M in the fiscal year 2000 President's Budget.
    To respond to the critical research needs and requirements 
identified in the Safe Drinking Water Act Amendments of 1996, EPA's 
drinking water research program has focused on the high priority 
science needs in the areas of health effects, exposure, risk 
assessment, and risk management. The scientific quality of EPA's 
research activities has been ensured through the development of peer-
reviewed research plans for Microbial Pathogens and Disinfection By-
Products (1997) and for Arsenic (1998), along with a strict adherence 
to the peer-review process for all technical and scientific products. A 
number of the important underlying scientific issues that are of 
concern to the drinking water program are also being addressed through 
the EPA's core research program to improve health risk assessment.
    EPA has strived to meet the extensive research demands of the 1996 
Amendments by establishing new drinking water research partnerships 
with other federal agencies such as the Centers for Disease Control and 
Prevention and the National Institute for Environmental Health 
Sciences, and with outside research organizations such as the American 
Water Works Association Research Foundation. By strengthening the 
extramural research grants program, known as the STAR program, in 
drinking water, EPA has been able to substantially increase the 
involvement of the academic community in helping to solve the many 
difficult research challenges faced by the Agency.
Research on Microbial Pathogens and Disinfection By-Products
    EPA's research activities on microbial pathogens and DBPs in 
drinking water are consistent with the highest priorities identified in 
the Research Plan for Microbial Pathogens and Disinfection By-Products 
in Drinking Water. This research program represents hundreds of 
projects to support more informed risk management decisions for the 
Stage 1 and Stage 2 DBP rules and the new microbial rules that apply to 
surface water and ground water.
Microbial Pathogens.
    EPA research on waterborne pathogens in recent years has provided 
new information and methods to better characterize and control the 
risks posed by microbial contaminants in drinking water. Studies to 
determine the infectious dose of two important waterborne pathogens, 
Cryptosporidium and Norwalk virus, have demonstrated that exposure to 
low levels of these agents in drinking water may cause infection in 
healthy humans. Less conventional treatment methods such as membrane 
filtration and alternatives to chlorination (e.g. ozonation) have been 
evaluated to determine their effectiveness in removing or inactivating 
waterborne pathogens. New technologies have been developed for 
increasing the operational efficiency of treatment processes to control 
microbial and chemical contaminants, and new methods for monitoring and 
predicting disinfectant concentrations in the distribution system have 
been developed to help ensure the safety of drinking water delivered at 
the tap.
    Current areas of emphasis include research to determine the nature 
and magnitude of waterborne disease in the U.S., and the development of 
simple inexpensive and accurate detection methods for well-known 
waterborne pathogens such as Cryptosporidium and for emerging pathogens 
such as microsporidia. EPA researchers are also developing cost-
effective water treatment systems for small systems, and are conducting 
research to better understand how microbial intrusion into the 
distribution system occurs and can be prevented.
Disinfection By-Products.
    In the area of disinfection byproducts, EPA has been a leader in 
development of an expanding scientific data base to assess DBP health 
effects. New and improved tools for conducting toxicology and 
epidemiology research on these substances are being applied to better 
understand the mechanisms by which effects occur in laboratory animals 
and humans, and to characterize the nature and magnitude of the problem 
in both the general population and in subpopulations that may be more 
susceptible to harm. In addition to the long-standing research program 
addressing the carcinogenic potential of DBPs, a major new investment 
has been made to better understand whether adverse reproductive, 
immunological, or neurologic effects may also be of concern.
    As with microbial issues, DBP methods development is an essential 
focus both to improve occurrence information, and to expand our 
knowledge about what DBPs are formed from different treatment 
processes. To address these needs, EPA is developing analytical methods 
to support large-scale exposure surveys and facilitate regulatory 
compliance monitoring. Researchers are also applying highly sensitive 
analytical techniques to identify previously uncharacterized by-
products that are formed with the use of alternative disinfectants.
    Finally, EPA is conducting a range of studies to determine the 
effectiveness of various treatment processes in minimizing and 
controlling the formation of DBPs, with a special focus on the needs of 
small systems.
Research on Arsenic
    The Safe Drinking Water Act Amendments of 1996 mandate that EPA 
promulgate a new regulation for arsenic by January 2001, and develop a 
plan for long-term research. EPA has designed and initiated 
implementation of a research plan which describes high priority 
research activities to address key areas of scientific uncertainty. 
Researchers at EPA are conducting studies to better characterize the 
toxicity of arsenic and the factors that influence human 
susceptibility. Improved analytical methods are being developed to 
better distinguish toxic forms of arsenic in the diet and in biological 
materials. Another important area of research is the development of 
arsenic treatment technologies for small water systems.
Research on the Contaminant Candidate List (CCL)
    As mentioned previously, the EPA has established a Contaminant 
Candidate List (CCL) to aid in priority setting for the Agency's 
drinking water program. Contaminants in the Regulatory Determination 
Priority category are considered to have sufficient data available, or 
data that can be quickly collected, to evaluate both exposure and risk 
to public health and will be considered for regulation by August 2001. 
Contaminants listed under the Research or Occurrence Priorities 
category require additional data for making a determination. To 
determine the specific data needs in each of these categories and to 
prioritize contaminants for research, the Agency initiated the 
development of a strategic research plan for the CCL in May 1998. EPA 
has been working on a more refined plan that will identify research 
needs and priorities for all chemical and microbial contaminants on the 
list. The types of needs addressed by the plan include information on 
the health effects and occurrence of CCL contaminants, as well as 
validated analytical methods and effective treatment technologies.
    A three-phase approach is being used to define the data needs for 
contaminants on the CCL. The current CCL represents the results of a 
Phase I analysis in which the available data on a particular 
contaminant were evaluated to determine if and in which category it 
should be placed on the list. In a Phase II screening-level analysis, 
minimum data set requirements are established to evaluate the adequacy 
of available health effects data, analytical methods, occurrence 
information, and treatment removal potential. Contaminants on the CCL 
are subjected to intensive research efforts in Phase III to develop 
more robust data sets in each of the areas described above.
    Research on a number of critical contaminants on the CCL (e.g., 
MTBE, sulfate, and waterborne microbial pathogens such as Norwalk 
virus) is already being conducted by EPA, and general solicitations 
have been made under the Agency's external grants program. Additional 
Phase II and III research needs for CCL contaminants will be addressed 
beginning in fiscal year 2000, following the priorities outlined in the 
CCL research plan that is currently under development.
Looking to the Future
    EPA is conducting a detailed, comprehensive analysis of research 
needs and resource requirements to address the entire spectrum of 
drinking water research issues in the future. This analysis includes an 
examination of the needs for DBPs, arsenic, chemical and microbial 
contaminants on the CCL, and substances for which national drinking 
water standards have already been established but must be reevaluated 
in the coming years. EPA will seek the guidance of the Agency's Science 
Advisory Board, outside experts and the drinking water stakeholders to 
make sure that the highest priority needs are being addressed in the 
most sound scientific manner. Another key to meeting the research 
challenges of the future will be to continue to leverage capabilities 
and resources with other Federal agencies, the drinking water industry, 
academia, and other outside organizations. We are confident that by 
following this path, we will ensure that future drinking water 
regulations and risk management decisions will be focused on the most 
important public health problems and based on the best available 
science.
                               conclusion
    In 1996 the Administration and Congress gave the American people a 
sensible and comprehensive law to protect public health. The law 
dramatically increased the effort needed from all members of the 
drinking water community, and challenged each of them by giving them a 
key role in ensuring the safety of our nation's drinking water 
supplies. I am happy to report that all participants have accepted this 
challenge. Implementation of the Act is moving forward very 
successfully. In the past two years, EPA and its partners have created 
a framework that embodies the principles of the 1996 Amendments, and 
developed many of the tools necessary to provide cost-effective public 
health protection into the 21st Century.
                                 ______
                                 
  Responses of Charles Fox to Additional Questions from Senator Crapo
    Question 1. Have stakeholders communicated to you their reaction to 
the research budget request? Where their comments considered in the 
development of the funding plan?
    Response. The EPA has received a number of comments from 
stakeholders regarding the adequacy of the drinking water research 
budget. Some of these comments have indicated concerns that the budget 
is inadequate to meet the extensive near-and long-term regulatory 
needs, particularly in the areas of health effects research, small 
systems technologies, and analytical methods development. In assessing 
the resource needs for fiscal year 2000, EPA determined that the 
overall level of funding requested was adequate to meet the near-term 
requirements of the Safe Drinking Water Act (SDWA) Amendments in a 
timely and scientifically sound manner. The specific priorities within 
the funding plan reflect careful consideration of the comments provided 
by the stakeholders. We are committed to working closely with 
stakeholders to conduct a comprehensive evaluation of research needed 
to support the longer-term requirements of the wide range of regulatory 
activities facing the Agency in the coming years. This comprehensive 
evaluation will inform the Agency's future budget requests.

    Question 2. The fiscal year 2000 request calls for a reduction in 
research spending from $4.4 million to $2.8 million for the arsenic, 
radon, and sulfate rules. Is this funding reduction appropriate to meet 
this mandate?
    Response. The discontinuation of funding for fiscal year 1999 
Congressional earmarks in the fiscal year 2000 budget request accounts 
for a decrease in this area of approximately $1.5 million from the 
fiscal year 1999 enacted level. When this is taken into account, the 
fiscal year 2000 budget request actually shows a steady level of 
funding from the fiscal year 1999 enacted. All of these funds will be 
used to address important research needs for arsenic. No additional 
research is considered necessary to meet the mandates for the radon and 
sulfate rules.

    Question 3. The Needs Survey estimates that public water system 
infrastructure requirements over the twenty-year period from 1996-2014 
total $138 billion. Is the EPA on track to address those needs through 
SRF? If other sources are envisioned, could you outline those?
    Response. Of the $138 billion in need identified in the Needs 
Survey, only $12.1 billion is needed now for compliance with the SDWA. 
EPA believes that this need is the appropriate target for the Drinking 
Water State Revolving Loan Fund (DWSRF). Other needs identified in the 
Needs Survey include distribution piping replacement, new storage 
tanks, and treatment for contaminants that cause unpleasant tastes or 
odors.
    Congress authorized $9.6 billion for the DWSRF through fiscal year 
2003. In addition to the DWSRF, other federal agencies make funds 
available for drinking water infrastructure improvements. The most 
significant include Water and Waste Water Loans and Grants from the 
Rural Utility Service in the Department of Agriculture and the 
Department of Housing and Development's Community Development Block 
Grants. When the DWSRF was proposed, the Administration did not 
envision that EPA or the federal government would fulfill the entire 
need. EPA also anticipates that many projects will be funded locally.

    Question 4. The Needs Survey only estimates costs for complying 
with current standards, not future ones. How would you estimate the 
additional infrastructure needs to meet future regulations?
    Response. The Needs Survey includes costs for some recently 
promulgated, but not yet effective, regulations. Of the $138 billion of 
capital improvements identified by the 1995 Needs Survey, approximately 
$14 billion were related to the costs of the Disinfection Byproducts 
Rule (DBPR) and the Interim Enhanced Surface Water Treatment Rule 
(IESWTR). These rules protect against microbial contaminants and by-
products of disinfection. Cost estimates for these regulations were 
taken from Regulatory Impact Analyses (RIAs) conducted by EPA. These 
costs were based on EPA's best knowledge of existing infrastructure and 
on estimates of the paths most likely to be adopted by water systems 
reaching compliance. These cost estimates are approximate, and should 
not be considered as accurate as the cost estimates for existing 
regulations derived from the Needs Survey.
    EPA does not have cost estimates for other future rules because the 
precise method of regulation has not been set. The 1999 Need Survey 
Report to Congress is due in February of 2001. This report will include 
cost estimates for other new rules, including Radon, Radionuclides, 
Arsenic, and improvements for treatment of microbiological 
contaminants.

    Question 5. If new information shows that a standard is more 
stringent than needed to achieve a targeted level of protection, do you 
interpret the statute as allowing the EPA to permit a higher numerical 
value that maintains the same level of public protection?
    Response. Yes, under certain circumstances. Scientific 
understanding of the health effects of drinking water contaminants is 
continually evolving. Similarly, information concerning the occurrence 
of potential drinking water contaminants is improving. Data and 
information about both the health effects and occurrence of drinking 
water contaminants will be thoroughly examined as EPA fulfills the 
statutory requirements of Section 1412(b)(9) of the Safe Drinking Water 
Act which requires that National Primary Drinking Water Regulations 
(NPDWRs) be reviewed, and revised as appropriate, every 6 years.
    In carrying out these provisions, EPA will also adhere to other 
relevant statutory requirements in this context, including the 
requirements that Maximum Contaminant Levels (MCLs) be set as close as 
feasible to the Maximum Contaminant Level Goal (MCLG) [Section 
1412(b)(4)(B)] and that revised drinking water regulations provide for 
equivalent or greater human health protection than the regulations they 
replace (Section 1412(b)(9)). An example of a situation that would 
represent a clear cut case of an NPDWR that would warrant a higher 
numerical value would be where new information indicates that the MCLG 
should be revised upward to a level greater than the current MCL. Under 
these circumstances, a higher MCL (than the current standard) would be 
appropriate.

    Question 6. What funding levels are you requesting under the 
following categories: Operator Certification, Wellhead Protection, 
Small System technical Assistance?

    Question 7. Do you envision these activities being funded by set-
asides in the DWSRF?
    Response. EPA has not requested specific funding under any of these 
categories. However, we believe that adequate funding exists through 
the DWSRF set-asides and other sources, and EPA is encouraging States 
to implement these programs using DWSRF set-asides.
    Operator Certification. The DWSRF provides two sources of funding 
for operator certification activities. First, a State may set aside up 
to 10 percent of its allotment for State program management, which 
includes activities related to operator certification programs. States 
reserved $38 million (3 percent) from their fiscal year 1997 grants to 
fund activities under this set-aside, which also includes activities 
related to the public water system supervision, source water protection 
and capacity development programs. States are required to provide a 1:1 
match for funds reserved for this set-aside.
    The second avenue of funding is from a national set-aside that the 
Administrator may take from the annual appropriation of DWSRF funds. 
The Administrator can set-aside funds to provide grants to States for 
the reimbursement of the costs of training operators of small water 
systems serving fewer than 3,300 persons. EPA is currently evaluating 
alternatives concerning the funding for operator certification for 
small systems and will be publishing a future Federal Register notice 
requesting comments.
    Wellhead Protection. A State may set aside up to 15 percent of its 
capitalization grant to fund a variety of other State activities, which 
can include assistance for development and implementation of wellhead 
protection programs, source water protection programs (fiscal years 
1996 and 1997 only), and capacity development strategy implementation. 
A State can direct no more than 10 percent of the grant for any one 
activity eligible under the set-aside. States reserved $136 million (11 
percent) from this set-aside in fiscal year 1997. Most of the funds 
($111 million, 9 percent) were reserved to conduct source water 
assessments of ground water and surface water sources of drinking 
water, an activity which could only be funded using the fiscal year 
1997 appropriation. A portion of the remaining funds was directed 
towards wellhead protection. We anticipate seeing a greater amount of 
funding from this set-aside directed towards wellhead protection in the 
future as States move to implement protection measures for ground water 
sources of drinking water in source water protection areas.
    Small System Technical Assistance. EPA did not request specific 
funding under Section 1442(e) for small system technical assistance, 
because current funding levels far exceed the $15 million authorized 
under this section. In fiscal year 1999 EPA is also managing $9.555 
million for significant technical assistance and training initiatives 
for small water systems using Congressionally earmarked funds. The 
Rural Community Assistance Program is receiving $1.555 million in 
fiscal year 1999. The National Rural Water Association is receiving $8 
million for the Drinking Water Training and Technical Assistance 
Program and the Wellhead/Ground Water Protection Program. States may 
also take a set-aside from the DWSRF for technical assistance to small 
systems. States set aside 1.6 percent, or $20.2 million, of their 
fiscal year 1997 capitalization grants for this purpose. States that 
have received fiscal year 1998 funds have set aside approximately the 
same percentage.
                                 ______
                                 
  Responses of Charles Fox to Additional Questions from Senator Graham
    Question 1. What is EPA doing to ensure that small water systems 
have the technical and financial resources necessary to comply with new 
drinking water regulations?
    Response. EPA is committed to ensuring that all Americans served by 
regulated water systems, regardless of the size of their water system, 
receive the public health protection benefits envisioned in the Safe 
Drinking Water Act (SDWA), as amended. The Agency recognizes the 
significant challenges faced by small water systems in achieving SDWA 
compliance. We have a variety of initiatives underway designed to help 
ensure that small water systems have the technical and financial 
resources necessary to comply.
    The capacity development provisions of the 1996 SDWA amendments 
offer a powerful tool for ensuring that small systems acquire and 
maintain the technical, financial, and managerial capacity they need 
for SDWA compliance. EPA has been working with the States, small water 
systems, technical assistance providers, and other stakeholders to 
implement these provisions in the most effective manner possible. 
Working with our stakeholders we have developed appropriate guidance 
and information to assist the States in developing programs to ensure 
that new systems demonstrate adequate capacity prior to start-up and 
that existing systems receive assistance in acquiring and maintaining 
technical, financial, and managerial capacity. We have established a 
Small Systems Team within the Office of Ground Water and Drinking Water 
to provide programmatic focus on small systems issues. That team has 
established a network of coordinators in each of EPA's 10 regional 
offices.. Through this network we are working directly with the States 
to assist them in developing programs to enhance and ensure small 
system capacity. Within the past year we have provided direct, detailed 
technical assistance to about two dozen States who requested it. Our 
focus has been on assisting States to fashion programs suited to their 
unique circumstances and taking advantage of the full range of 
flexibility offered by the SDWA amendments.
    Closely related to Capacity Development is the Drinking Water State 
Revolving Fund (DWSRF). EPA is providing States with a total of nearly 
$2.8 billion for fiscal years 1997-1999, with which they are 
capitalizing their own drinking water revolving funds. These DWSRF's 
provide financial assistance to systems for compliance with SDWA 
objectives. At a minimum, States are required to target at least 15 
percent of their assistance to small systems. Information from the 
States show that, to date, over 50 percent of loans made have gone to 
small systems. DWSRF assistance to systems generally takes the form of 
loans at or below market interest rates. States have the option of 
offering additional subsidies, including forgiveness of principal, to 
systems they determine to be disadvantaged. States also have the option 
of setting aside funds from their DWSRF to support a number of SDWA 
priority initiatives including capacity development, operator 
certification, and source water protection, all of which will help 
small water systems improve their public health protection. Finally, 
States may also take an additional optional set-aside from the DWSRF 
for technical assistance to small systems. States set aside 1.6 
percent, or $20.2 million, of their fiscal year 1997 capitalization 
grants for this purpose. States that have received fiscal year 1998 
funds have set aside approximately the same percentage.
    EPA's Office of Ground Water and Drinking Water manages a 
significant technical assistance and training initiative for small 
water systems using Congressionally earmarked funds. The Rural 
Community Assistance Program is receiving $1.555 million in fiscal year 
1999. Working through their six regional affiliates they cover all 50 
States. They are providing on-site technical assistance to small water 
systems helping these systems assess their needs, prioritize their 
needs, and develop and assist in implementing a plan of action 
including steps necessary for compliance with SDWA. The National Rural 
Water Association conducts two major projects. The first, funded at 
$4.2 million in fiscal year 1999, is the Drinking Water Training and 
Technical Assistance Program which reaches the 48 contiguous States and 
Alaska. Through this program rural water system staff receive classroom 
training and on-site training. The second program is the Wellhead/
Ground Water Protection Program, funded at $3.8 million in fiscal year 
1999. This program covers the 48 contiguous States, and helps systems 
complete the five-step wellhead protection program with on-site 
technical assistance.
    EPA has also established a network of Technology Assistance Centers 
to assist small systems with technical issues. These centers provide a 
wide range of services including development of training materials and 
assessment of technologies. The centers are located at the University 
of New Hampshire, Pennsylvania State University, Charles County 
Community College, Western Kentucky University, University of Missouri, 
University of Alaska Southeast, California State University, Montana 
State University, and the University of Illinois.
    For sometime the EPA's Office of Research and Development (ORD) has 
conducted a significant amount of research to help small communities 
cost-effectively provide drinking water that meets national drinking 
water standards. While much of this research has been conducted in 
association with specific communities, the overarching objective is to 
provide research information that can be applied to small community 
problems in general.
    For example, in 1989, a small systems technology initiative was 
launched that consisted of cooperative efforts among EPA, water utility 
management, and equipment manufacturers to field demonstrate cost-
effective technologies that were appropriate for use by small 
communities. One such study was in the King's Point subdivision of 
Suffolk, Virginia. This three-year study showed that reverse osmosis 
point-of-use (POU) treatment units were the best alternative for the 
community to reduce naturally occurring fluoride in their water. The 
results from this study provided information supporting the inclusion 
of centrally managed POU treatment as a compliance option in the 1996 
SDWA amendments.
    ORD is also evaluating innovative technologies such as pulsed UV 
and integrated electrotechnology inactivation of Cryptosporidium, a 
water-borne pathogenic protozoan.
    A spiral-wound ultrafiltration membrane package plant, bag filters, 
cartridge filters, and onsite oxidant generation are technologies under 
study at our research facilities in Cincinnati. Also, the Environmental 
Technology Verification (ETV) program being administered by ORD is 
providing small communities with verified cost and performance data for 
treatment technologies that address common small community problems 
such as microbials, particulates, and disinfection byproducts.
    As ORD provides technical assistance and does research on small 
system issues, many reports and peer-reviewed journal articles are 
produced. These documents are used by other organizations such as the 
National Drinking Water and National Small Flows Clearinghouse at West 
Virginia University to help small systems. In addition, internal ORD 
documents such as a small systems resource directory has provided 
information on research and contacts that can provide assistance. 
Technology Transfer documents include: Drinking Water Treatment for 
Small Communities, Wastewater Treatment/Disposal for Small Communities, 
Wellhead Protection: A Guide for Small Communities, and Optimizing 
Water Treatment Plant Performance Using the Composite Correction 
Program.

    Question 2. How is EPA working with the States to allow appropriate 
flexibility in implementation, as allowed for in the Act?
    Response. States are extensively involved in the development of 
guidance, policies, and regulations. States are given an opportunity to 
not only help shape the policies as they are being developed but are 
also provided a chance to review and comment on the policies at various 
stages of their development. Often a State/EPA workgroup is formed to 
provide a forum for States and EPA to discuss issues and recommend 
approaches to addressing them. For instance, State/EPA workgroups were 
formed to help shape the drinking water State revolving fund program 
and to develop operator certification guidelines. Other times, EPA 
develops a working group of representatives of EPA, States, and other 
stakeholders to provide advice on regulations and emerging policies. To 
get this advice, EPA has greatly expanded the SDWA-authorized National 
Drinking Water Advisory Council. EPA has created several working groups 
of the Council to provide input on specific EPA actions, including 
consumer confidence reports, operator certification requirements, 
capacity development strategies, the contaminant candidate list, and 
source water assessment and protection programs.
    EPA recognizes that State programs vary widely and that a ``one-
size-fits-all approach'' is not the best way to manage the national 
drinking water and ground water program. The extensive State 
involvement in the development of our policies and regulations has 
helped identify areas where greater flexibility is needed and, as a 
result, where the statute allows flexibility, our policies, guidelines, 
and regulations have left some room for States to tailor programs to 
meet State specific needs as well as national requirements.
    For example, the operator certification guidelines allow States to 
develop their own method for classifying water systems and to specify 
the training that is required for operators within each classification. 
The Drinking Water State Revolving Fund (DWSRF) guidelines allows 
States to develop their own system for prioritizing infrastructure 
projects as long as it meets the minimum criteria specified in the Safe 
Drinking Water Act. It also allows States to decide the amount and type 
of set-asides to take from the DWSRF capitalization grants, up to the 
limits specified in the statute. The alternative monitoring guidelines 
allows States to modify the monitoring requirements of public water 
systems depending on the vulnerability of the system to contamination 
and if a source water assessment was completed for the system.
    State and local flexibility is a hallmark of the Congress' and 
EPA's intended approach to the Source Water Assessment and Protection 
Program, both in regards to how these programs are designed and how 
they will be used. In guidance to the States, EPA provided considerable 
flexibility for States to choose what methods and benchmarks they will 
use to: establish source water protection areas; identify significant 
potential contamination sources in those areas; determine the 
susceptibility of the public water supply to these identified potential 
contamination sources; and provide such information to the public. The 
source water assessment results will also provide the information 
necessary for water systems to seek help from States in protecting 
source water, or initiating local government efforts. States may use 
set asides in the Drinking Water State Revolving Fund to protect source 
water (1 ) if they choose to adopt source water petition programs to 
voluntarily reduce existing contamination, (2) to develop or continue 
other types of source water protection programs, which can focus on 
preventing contamination, or (3) for loans for certain source water 
protection activities.
    Another example is in capacity development. EPA's capacity 
development guidance to States was designed to give States the maximum 
flexibility to meet the requirements of SDWA to develop and implement a 
program to ensure that drinking water systems have the technical, 
managerial, and financial capacity to provide water that meets EPA 
public health standards. States are taking full advantage of this 
flexibility. For example, South Dakota enacted specific statutory 
changes authorizing their Secretary of Environment and Natural 
Resources to issue rules establishing what new water systems would have 
to demonstrate. The State has promulgated regulations requiring new 
systems to obtain a Certificate of Approval, which requires systems to 
complete a business plan review, an operations and maintenance manual, 
a construction inspection, and a notice of completion. The State of New 
York took a very different approach to the new systems issue. They 
built their program around a variety of already existing statutes and 
regulations. Their program involves close coordination among a number 
of different State agencies, including the New York State Departments 
of Health, Environmental Conservation and Public Service and the Office 
of the State Comptroller. New systems in New York demonstrate capacity 
during their application for water supply, their plan and specification 
review, and for privately owned systems during their proposed rate 
review.

    Question 3. How does EPA implement guidance documents developed to 
assist States and the regulated community as opposed to regulations?
    Response. Regulations contain mandatory requirements and deadlines 
that States and public water systems must comply with. Guidance 
documents are developed to provide assistance to States and water 
systems but do not contain mandatory requirements. The Safe Drinking 
Water Act Amendments of 1996 required EPA to develop guidance, not 
regulations, for States in many areas. States are mandated by the Act 
to meet certain requirements in these areas, and the EPA guidance 
provides assistance with ways to meet those requirements. In most 
cases, as with the Source Water Assessment and Protection Guidance and 
the Capacity Development Guidance, EPA provides substantial technical 
and financial assistance to States to implement their programs.
    EPA has also developed guidelines that States must follow in order 
to receive a drinking water State revolving fund grant or to not be 
subject to statutory grant withholding provisions for operator 
certification and capacity development. EPA developed these guidelines 
with extensive State input and the guidelines are designed to provide 
States with an overall framework to use while still allowing for 
considerable State flexibility.

    Question 4. How is EPA evaluating the costs and benefits of radon 
reduction in drinking water vs. ambient air?
    Response. Costs and benefits of reducing radon in drinking water 
were published in the Health Risk Reduction and Cost Analysis (HRRCA) 
in February 1999 for various radon levels. EPA also developed two 
implementation scenarios, one assuming 50 percent State participation 
in Multimedia Mitigation (MMM) programs and one assuming 100 percent 
State participation in MMM. The cost per life saved through reducing 
radon in drinking water is estimated to be $5.9 to $11 .3 million 
(depending upon the radon level selected), compared to $700,000 per 
life saved through reducing radon in indoor air.
Background
     Drinking Water Costs--Capital and O&M costs were 
calculated for systems, based on typical estimated design and average 
flow rates.
     Drinking Water Benefits--The calculated health benefits 
are attributable to the reduced incidence of fatal and non-fatal lung 
and stomach cancer cases. Value of a Statistical Life (VSL) estimates 
were applied to each fatal cancer avoided which involves inferring 
individuals' implicit tradeoffs between small changes in mortality risk 
and monetary compensation. Willingness to pay (WTP) to avoid chronic 
bronchitis was used to estimate the WTP to avoid non-fatal lung and 
stomach cancers.
     Indoor Air Costs and Benefits--MMM program costs were 
estimated by multiplying the cost per fatal cancer case avoided 
($700,000) by the number of fatal cases avoided in reducing radon in 
drinking water from the AMCL (4,000 psi/l) to each of the lower levels 
analyzed in the HRRCA. As expected, the annual costs of implementing 
MMM are, on average, significantly lower compared to reducing radon 
exposures in drinking water alone.
    The National Academy of Sciences (NAS) Report--The report confirmed 
that indoor air contamination arising from soil gas typically accounts 
for the bulk of total individual risk due to radon exposure. Radon in 
domestic water generally contributes a small proportion of the total 
radon in indoor air.
                                 ______
                                 
  Responses of Charles Fox to Additional Questions from Senator Boxer
    Question 1. As you know, my children's health provision of the 1996 
amendment required EPA to consider the risks drinking water 
contaminants presents to children and other vulnerable subpopulations 
as it sets standards for those contaminants. How is this provision 
being implemented? For example, in the proposed analysis for radon 
health risk reduction issue in this past Friday, how were risks to 
children's health considered?
    Response. Current Office of Water Approaches--The Safe Drinking 
Water Act was enacted in 1974 by the United States Congress. In 1986, 
Congress updated the program to set mandatory guidelines for regulating 
key contaminants. The Section 1412 of the SDWA requires EPA to publish 
Maximum Contaminant Level Goals (MCLGs) and promulgate National Primary 
Drinking Water Regulations (NPDWRs) for contaminants that may cause any 
adverse effect on human health and that are known or anticipated to 
occur in public water systems. The MCLG for each contaminant is to be 
set at a nonenforceable level at which ``no known or anticipated 
adverse effect on the health of persons occur and which allows an 
adequate margin of safety''. The NPDWR is to include enforceable 
Maximum Contaminant Levels (MCLs) that are to be set as close to MCLG 
as possible with the consideration of other factors such as treatment 
technology.
    The 1996 SDWA amendments stipulated that, in establishing maximum 
contaminant levels (MCLs), the Agency should consider ``the effects of 
the contaminant on the general population and on groups within the 
general population such as infants, children, pregnant women, the 
elderly, individuals with a history of serious illness or other 
subpopulations that are identified as likely to be at greater risk of 
adverse health effects due to exposure to contaminants in drinking 
water than the general population.'' On April 21, 1997, the President 
signed an Executive Order (13045) that ordered agencies to provide an 
evaluation of the environmental health or safety effects on children in 
planned regulations that are economically significant.
    EPA's Office of Water has historically considered risks to 
sensitive populations in the determination of the MCLGs. EPA generally 
reviewed all available data and asked the following questions for each 
contaminant:
    1. Is there information which shows that the contaminant causes 
effects in the developing fetus or impairs ability to conceive and bear 
children?
    2. Is there information which shows that the contaminant causes 
other noncancer systemic effects? If so, are children or other 
vulnerable subpopulations more likely to be affected by it than the 
general population?
    3. Is there information which show the contaminant causes cancer?
    The MCLG for each specific contaminant is then established based on 
the available evidence of carcinogenicity or noncancer adverse health 
effects from drinking water exposure using EPA's guidelines for risk 
assessment. For carcinogens, when a linear low dose extrapolation is 
used, the MCLG is set at zero. For noncarcinogens, the MCLG is based on 
a quantitative reference dose (RfD) derived from the no-observed-
adverse-effect level (NOAEL) or a lowest observed toxic endpoint 
(developmental/reproductive or other systemic effect) with uncertainty/
modifying factors. An uncertainty factor of 10 has usually been applied 
for additional margins of safety for sensitive subpopulations. The 
safety factor is employed where there is uncertainty concerning 
differences in intra-species (i.e., within the human population) 
responses to a particular contaminant. Such a safety factor can be 
reduced where definitive intra-species dose-response information exists 
for the contaminant being considered. However, currently ``the 
sensitive subpopulations'' is not further divided into subcategories 
such as children.
    Special efforts are now in progress to ensure that the 
aforementioned policy and statutory requirements regarding sensitive 
subpopulations and Executive Order 13045 protecting children from 
environmental health and safety risks are followed in establishing 
drinking water assessments, advisories or other guidance, and standards 
for various contaminants. The efforts that have been made for radon, 
specified in this inquiry, are described below.
    Health Risk Reduction and Cost Analysis (HRRCA) for Radon in 
Drinking Water--As a part of 1996 SDWA amendment requirements for 
radon, EPA completed its HRRCA for radon in drinking water on February 
5, 1999. (The HRRCA was formally published in the Federal Register on 
February 26, 1999.) The purpose of the HRRCA is to provide a factual 
analysis of the costs, risk reduction benefits, and other impacts of 
controlling radon levels in drinking water, and to obtain public 
comments. Although the HRRCA does not include any decisions regarding 
the choice of a MCL for radon in drinking water, it will be used to 
support a new EPA regulation proposal for radon in drinking water (to 
be published by August 6, 1999).
    As also required by the SDWA 1996 amendment, EPA arranged for the 
National Academy of Sciences (NAS) to assess the health risks of radon 
in drinking water. The risk estimates of waterborne radon used in the 
HRRCA Report was based on the NAS prepublication copy of the ``Risk 
Assessment of Radon in Drinking Water'' (NAS, 1998). The NAS Report 
represents a comprehensive assessment of scientific data gathered to 
date on radon in drinking water. The report, in general, confirms 
earlier EPA scientific conclusions and analyses of the total risk of 
radon in drinking water (USEPA, 1994). The NAS estimated individual 
lifetime fatal cancer risks associated with exposure to radon from 
domestic water use for both ingestion and inhalation pathways. The 
results show that the inhalation of radon decay products derived from 
the volatilized radon accounts for most (about 89 percent) of the 
individual risk associated with domestic water uses, with almost all of 
the reminder (11 percent) resulting from directly ingesting radon in 
drinking water. Inhalation of radon progeny is associated primarily 
with elevated risk of lung cancer, while ingestion exposure is 
associated primarily with elevated risk of stomach cancer.
    EPA requested NAS to estimate the risks to susceptible population 
(i.e. infants, children, pregnant women, elderly, and seriously ill 
persons). NAS concluded that there is insufficient information to 
permit separate estimates for susceptible populations of lung cancer 
caused by inhalation of the decay products derived from waterborne 
radon. The NAS report did note, however, that approximately 30 percent 
of the fatal lifetime cancer risk is attributed to exposure between 
ages 0 and 10 The NAS identified smokers as the only group that is more 
susceptible to inhalation exposure of radon progeny. Inhalation of 
cigarette smoke and radon progeny result in a greater increased risk 
than if the two exposures act independently to induce lung cancer.
    The report did note, that approximately 30 percent of the lifetime 
cancer risk from ingested radon is attributable to exposure between age 
0 to 10. However, the ingested radon only accounts for a small 
percentage (11 percent) of the total risk of waterborne radon. EPA has 
also asked NAS to review teratogenic and reproductive risks of radon. 
NAS concluded that there is no scientific evidence of teratogenic and 
reproductive risks associated with radon in tissues from either 
inhalation or ingestion.
References
    NAS, 1998. Risk Assessment of Radon in Drinking Water. National 
Research Council, National Academy of Sciences.
    USEPA, 1994. Report to the United States Congress on Radon in 
Drinking Water, Multimedia Risk and Cost Assessment of Radon (EPA 811-
R-94-001)
    USEPA. 1999. Health Risk Reduction and Cost Analysis from Radon in 
Drinking Water (EPA-815-Z-99-002), Office of Water, U.S. Environmental 
Protection Agency.

    Question 2. The 1996 amendments also include a provision requiring 
EPA to study what degree children and other vulnerable subpopulations 
are likely to experience elevated health risks, including risks of 
cancer, from contaminants in drinking water. The study must be 
completed by August 6, 2000. Has EPA begun this study? Please detail 
the progress that has been made in the study.
    Response. EPA has initiated a number of activities to characterize 
whether and to what degree subpopulations such as infants, children, 
pregnant women, the elderly, or individuals with a history of serious 
illness may be likely to experience elevated health risks from exposure 
to contaminants in drinking water. Several studies that will provide 
baseline data for identifying vulnerable subpopulations and health 
risks have either been completed or will soon be finalized. These 
include analyses of the demographics of sensitive populations and of 
age-related illness and death caused by microbial diseases, 
characterization of the chronic effects of microbial illnesses, 
evaluation of the potential immunotoxic effects of chemical 
contaminants in drinking water, and assessment of water consumption 
rates based on sex, age, racial, ethnic, socioeconomic and geographic 
distributions.
    In addition to these activities, EPA is conducting laboratory and 
field research to evaluate the extent to which exposure to disinfection 
by-products may be associated with adverse reproductive outcomes (see 
response to Question No. 3 below). Studies are underway to evaluate if 
there are subgroups within the general population that may be at 
increased risk of cancer or other adverse health effects because of 
differences in ability to metabolize chemical contaminants to which 
they are exposed through the drinking water. Finally, EPA is conducting 
studies in the laboratory and field to characterize host factors (e.g., 
immune status) that may impact the risks posed by waterborne microbial 
pathogens such as Cryptosporidium. The results of these analyses and 
research activities will be fully described in the Report to Congress 
that will be submitted on schedule in August of 2000.

    Question 3. As EPA moves forward with the second stage of the DBP 
rule], I would like to know whether it has a research agenda designed 
to build on the work performed in California [that reported higher 
miscarriage rates among women who drank more tap water than bottled 
water early in pregnancy].
    In particular, I understand that the Centers for Disease Control 
(CDC) and ATSDR have identified some discrete studies it could perform 
to add to the body of California's work. Is EPA coordinating with the 
CDC and ATSDR? Does it plan to perform these studies? What action is 
EPA planning to take to conduct such studies so that we can be sure 
that EPA's second rule of disinfection by-products protects pregnant 
women?
    Response. Epidemiology and toxicology research to evaluate this 
potential threat to pregnant women has become a major focus of the 
EPA's drinking water health effects research program in recent years. 
EPA convened two expert panels of epidemiologists, toxicologists and 
exposure assessors in 1993 and 1997 to review the existing epidemiology 
and toxicology literature. The original California study was one of the 
publications that was critically reviewed by the panel in 1997. The 
panels' research recommendations have been used to guide EPA's research 
program in these areas, with a specific objective of providing the 
types of data that will support more scientifically sound regulatory 
decisions to protect sensitive subpopulations. A description of the 
studies being conducted or supported by EPA to address this issue is 
provided below:
    (a) Studies of birth defects. The EPA is collaborating with CDC to 
evaluate if there is an association between exposure to DBPs and birth 
defects in different cities in the U.S. Data from at least two cities 
being investigated will be available in time for the DBP Stage 2 
negotiations.
    We are currently coordinating with representatives from CDC and 
ATSDR to evaluate the nature and time frame of studies that could be 
conducted in additional cities in the U.S. with established birth 
defect registries. We are also looking internally and externally to 
identify sources of funds that might be made available immediately to 
support these studies. If it is determined that studies will yield 
valuable data and can be completed and peer reviewed within a time 
frame to be used for the second DBP rule, we will do what is necessary 
to ensure that support for these studies is made available to CDC in a 
timely manner.
    (b) Follow-up to California study on spontaneous abortions. EPA is 
supporting a reanalysis of the California study population using 
improved estimates of exposure to DBPs. A more complete DBP exposure 
data base is being developed by asking water utilities in the study 
areas to provide additional information, including levels of other 
types of by-products (e.g., haloacetic acids). This analysis will be 
completed in time for the DBP Stage 2 deliberations.
    (c) Study of DBP exposures and birth weight in Colorado. This 
recently completed study has evaluated possible associations between 
changes in birth weight and exposure to residual chlorine and selected 
DBPs.
    (d) Identification of geographic areas for additional reproductive 
epidemiology studies. EPA is co-sponsoring a research effort through 
the Microbial/Disinfection By-Product (M/DBP) Research Council to 
evaluate various areas of the U.S. that may be suitable for 
epidemiology studies of drinking water and adverse reproductive 
outcomes. The final report of this evaluation will be available within 
the next two months.
    (e) ``California-type'' study of drinking water and spontaneous 
abortions in other parts of the U.S. EPA is supporting this major 
investment in a new study, in coordination with the M/DBP Research 
Council, to replicate the California spontaneous abortion study in 
another location in the U.S. This study will be initiated in 1999. Due 
to the time required to plan and implement such a complex, prospective 
study, the results will not be available until after the Stage 2 
deadline.
    (f) Pilot study of male reproductive effects. EPA is evaluating 
methods for conducting a large population-based male reproductive 
health study. Components of this effort include the development of a 
questionnaire specific to male reproductive effects, and the 
development of a container for home semen collection that is easy to 
use and that preserves specimen integrity. A full scale study is 
planned for 2000, with the results available after the Stage 2 
deadline.
    (g) Toxicology of DBPs. EPA has established a comprehensive in-
house research program that is focused on improving the scientific 
basis for assessing the potential reproductive risks associated with 
exposure to DBPs and mixtures of by-products in drinking water. 
Screening level toxicity studies are being conducted in collaboration 
with the National Institute of Environmental Health Sciences (NIEHS) to 
identify which DBPs may be of public health concern. EPA scientists are 
conducting research to characterize dose-response relationships for 
priority DBPs and to determine if there is a biological basis for the 
effects reported in epidemiology studies. A large number of these 
studies are already completed, and additional data will be available in 
time for the Stage 2 deliberations.
    Due to the long length of time required to conduct large scale 
epidemiology studies, the results of some new research (e.g., the 
replication of a ``California-type'' study in another part of the 
country) will not be completed until after the Stage 2 regulatory 
deadline. However, a number of these important studies that are 
evaluating potential risks to pregnant women will be completed in time 
for the rulemaking.

    Question 4. In the case of developing a research strategy for 
microbial and disinfection by-products, EPA ensured that all 
stakeholders, including the public, were involved in crafting that 
strategy. I commend you for ensuring that the process was inclusive. I 
have heard concerns, however, that in other cases public input has not 
been sought. In the development of the research program for arsenic, 
for example, I understand that the public was not involved until very 
late in the process.
    How can EPA's Office of Research and Development ensure that the 
public is involved in the very beginning of EPA's development of such 
research strategies? What specific steps can EPA take?
    Response. The EPA is committed to ensuring that all stakeholders 
have an opportunity to be involved in the development of the Agency's 
research strategies. The EPA receives public input during the 
development of these research strategies through an open process that 
involves Agency-sponsored stakeholder meetings, technical workshops and 
conferences, formal peer reviews conducted by the EPA Science Advisory 
Board or the Board of Scientific Counselors, and public comment 
periods. These same opportunities will be provided during 1999 and 2000 
as the EPA prepares the new strategic research plan for chemicals and 
microbes on the Contaminant Candidate List (CCL), and the comprehensive 
drinking water research strategy that will cover all priority areas of 
drinking water research.
    In the case of arsenic, EPA developed a final, peer-reviewed 
research plan within 18 months. Despite the tight time frame for 
developing this plan, the EPA provided multiple opportunities for input 
through public meetings, scientific meetings and workshops to develop a 
draft plan that was peer reviewed by ORD's Board of Scientific 
Counselors in January, 1997. In addition, the draft research plan was 
discussed with stakeholder groups prior to the plan's finalization. 
This included individual consultation by senior Agency officials with 
environmental groups such as Natural Resources Defense Council. 
Finally, EPA issued the draft research plan for a formal public comment 
period. Thus, in combination, these activities provided significant 
opportunities for full and open participation in this drinking water 
research planning process. These activities improved the quality of the 
ultimate research plan and promoted better understanding of our arsenic 
research priorities and their relationship to our rulemaking 
requirements. The EPA is now communicating the results of research 
being conducted under the plan through a continuing series of 
stakeholder meetings and scientific workshops.

    Question 5a. Has EPA made any progress in doing the research 
necessary to support a drinking water standard for MTBE? What research 
is EPA currently performing in this area?
    Response. The Agency recognizes MTBE as a priority and is taking 
steps to ensure that there will be a sound scientific basis to support 
the development?of a drinking water standard for this contaminant. To 
address the need for additional information on occurrence, EPA has 
included MTBE in the proposed Unregulated Contaminant Monitoring 
Regulation, which will be finalized by August 1999. This will require 
all large and a representative sample of small and medium community 
water systems nationwide to monitor for MTBE in ground and surface 
water. This comprehensive data will provide a better understanding of 
MTBE occurrence patterns across the nation.
    EPA also recently issued a document entitled ``Oxygenates in Water: 
Critical Information and Research Needs'' (December 1998), which 
identifies needed information and research in the areas of source 
characterization, transport, transformation, environmental occurrence, 
exposure, aquatic toxicity, health effects, release prevention and 
contaminant removal. This document also lists over 40 projects related 
to oxygenates in water that are currently underway or anticipated to be 
conducted by EPA as well as other organizations.
    Selected research activities in which EPA is participating include:
     Staff from EPA Region IX are working with scientists from 
the Lawrence Livermore National Laboratory to identify methods for 
assessing aquifer vulnerability to contamination from MTBE.
     EPA has provided funds to the University of California-
Davis to monitor the fate and effects of MTBE in Donner Lake, 
California.
     EPA Region IX in collaboration with ORD is initiating a 
study of MTBE exposure levels during showering.
     ORD investigators are collaborating with scientists from 
the Centers for Disease Control and Prevention in a study of the human 
metabolism of MTBE following oral, inhalation and dermal exposures.
    In addition to these studies, EPA is requiring the fuels industry 
to perform health effects testing under the Clean Air Act for 
conventional and oxygenated gasoline, including gasoline with MTBE. The 
final notification to industry was issued in November 1998. These 
inhalation data, including pharmacokinetics data collected under CAA 
Section 211 and separately by scientists at EPA and the Chemical 
Institute of Toxicology, are expected to contribute to a health risk 
assessment of MTBE (and other oxygenates) by ingestion as well as by 
inhalation.

    Question 5b. Generally speaking, can EPA make any progress setting 
standards for candidate contaminants [on the CCL] given the research 
constraints it faces?
    Response. A number of contaminants on the CCL have already been 
identified as having sufficient data available to evaluate both 
exposure and risk to the public health, and these will be considered 
for regulation by the August 2001 statutory deadline for regulatory 
determinations. Many other contaminants on the list will require 
extensive additional data on health effects, monitoring methods, 
treatment or occurrence before a regulatory determination can be made. 
A CCL strategic research plan that will guide the priorities for 
research on these contaminants is being developed by EPA and will be 
coordinated with interested stakeholders.
    Some studies of CCL contaminants have been initiated while the 
comprehensive plan is being developed. Among this work is research on a 
number of critical contaminants (e.g., MTBE, perchlorate), and targeted 
requests for applications have already been published under EPA's 
Science to Achieve Results (STAR) program of university-based, 
competitive, extramural grants.
    The funding level for priority contaminants (e.g., M/DBP, arsenic) 
and elements of the Contaminant Candidate List (CCL) are considered 
adequate for fiscal year 1999 and 2000. EPA is currently conducting a 
comprehensive evaluation of resource needs for the balance of the CCL 
and other Congressionally mandated parts of the drinking water research 
program for fiscal year 2001 and beyond. This comprehensive evaluation 
will inform the Agency's future budget requests.
                               __________
 Prepared Statement of Jerry C. Biberstine, Drinking Water Specialist, 
Colorado Department of Public Health and Environment, on behalf of the 
           Association of State Drinking Water Administrators
                              introduction
    The Association of State Drinking Water Administrators (ASDWA) is 
pleased to provide written testimony to the Senate Committee on 
Environment and Public Works, Subcommittee on Fisheries, Wildlife, and 
Drinking Water on implementation of the Safe Drinking Water Act (SDWA) 
of 1996. ASDWA represents the 56 states and territorial drinking water 
programs directly responsible for implementing the provisions of the 
SDWA. States currently regulate approximately 170,000 public water 
systems that deliver drinking water to over 273 million people 
nationwide.
                                summary
The Successes
    ASDWA is pleased to report that the states, EPA, and the water 
utilities nationwide have made significant progress in implementing the 
numerous new provisions of the SDWA over the last two and one half 
years. All states now have drinking water state revolving loan programs 
in place and to date, 354 loans have been made totaling around $850 
million. This number also includes funds being leveraged by several 
states. Fifty-two states and territories met the February 6, 1999 
deadline to submit source water assessment and delineation programs to 
EPA for final review and approval. The remaining states are completing 
their public involvement process and will be submitting their programs 
in the near future.
    All states have completed and published two state annual compliance 
reports to provide specific drinking water compliance information to 
the public. States are currently working on the third report which is 
due by July 1 to EPA. Five state programs to prevent the formation of 
new non-viable water systems have been formally approved by EPA and 36 
are on track to meet the deadline for this requirement. States are 
actively seeking new administrative penalty authorities as well.
    States have also been very active in the numerous stakeholder 
committees giving thousands of hours of their time working with EPA and 
others to develop many of these new programs as well as working on the 
Unregulated Contaminant Monitoring Rule, the Interim Enhanced Surface 
Water Treatment Rule, the Stage 2 D/DBP Rule, the Consumer Confidence 
Report Rule, the Radionuclides and Radon Multi-Media Regulations, the 
Arsenic Rule, Operator Certification Guidelines, and modifications to 
the Lead and Copper Rule to name just a few. States are also working on 
the National Ground Water Report due to Congress in August 1999 and are 
working diligently with EPA and other interested stakeholders in 
developing and implementing a data reliability action plan to 
significantly improve the quality of the drinking water data provided 
to the public. All of this work has been accomplished in addition to 
states continuing to implement the numerous pre-1996 provisions of the 
law.
The Challenges
    All of this new work represents an enormous challenge for state 
drinking water programs as they continue to implement the many rules 
established before the 1996 Amendments to the law. These challenges 
cannot be met without the assistance of all the stakeholders who had a 
hand in the law's creation. This assistance must include adequate 
funding, technical assistance, support, flexibility, and reasoned and 
rational implementation requirements and schedules. Specifically, 
states are concerned about funding and staff resources, state input 
into the regulatory development process, the timing of the various new 
programs, identifying priorities among all of the new requirements, and 
the establishment of artificial barriers that may significantly hinder 
full and effective implementation.
    In order to be successful, states believe that a reasoned, rational 
approach to implementation requirements and schedules must be adhered 
to. States have already been put in a position where one new 
regulation--the Consumer Confidence Report Rule-will become effective 
before many have their own state rules in place. This leads to 
confusion on the part of the water utilities and public as to which 
agency--the state or Federal Government-is responsible for implementing 
the provisions in the rule. This rule also establishes artificial 
barriers to success by requiring utilities to report results in numbers 
that are not used anywhere else by EPA or the states. This will require 
water utilities to convert numbers, the public to understand how to 
relate those numbers to different numbers published elsewhere, and for 
the states to convert the numbers back to assess compliance with form 
and content requirements.
    Funding and staff resources are two additional challenges that 
states face. States are finding themselves in a position where there is 
an ever-widening spectrum of state capabilities to respond to these 
many new requirements. While some states can access and utilize the 
many new funding sources that are available, others cannot. Political 
issues of using drinking water SRF funds for non-capital improvements 
such as for program implementation have become concerns in several 
states. A number of states have hiring caps that will not enable them 
to hire new staff to fully implement the many new provisions in the 
law. There is concern that the enormous expectations engendered by 
these new rules and programs may not be able to be met by all states.
    States are committed to meeting these new challenges and want to be 
successful. This success, however, will be dependent on the resources 
and implementability of these new provisions. To address many of these 
issues, the states jointly crafted a document in October at the ASDWA 
Annual Conference entitled, Safe Drinking Water Act Implementation 
Principles. These principles describe a program path or alignment under 
which states believe implementation of the SDWA will be best achieved. 
A copy of the Principles is attached to this document.
                                overview
    As members of Congress and this subcommittee are aware, the new 
SDWA, which was passed on August 6, 1996, greatly expanded requirements 
on state programs as well as water utilities in the provision of safe 
drinking water to the citizens of this nation. While the old law 
focused primarily on providing safe water through the regulation of 
specific contaminants in finished water, the new law includes expansive 
new programs designed to ensure improved quality of source water as 
well as improved operations and management at water utilities and new 
provisions to inform the public about the quality of their drinking 
water. The following list represents many of the new programs mandated 
in the law.
     New and expanded operator certification requirements
     Source water assessments and delineations
     A drinking water state revolving loan fund
     Capacity development programs to ensure water system 
technical, financial, and managerial capabilities
     State Annual Compliance Reports on water system compliance
     Federal Annual Compliance Reports
     Consumer Confidence Reports
     New small system initiatives
     Unregulated contaminant monitoring
     Development of a National Contaminant Occurrence Database
     A new standard setting process incorporating peer-reviewed 
science
     New state administrative penalty enforcement provisions
     Changes to the PWS definition to include systems using 
irrigation water for potable purposes
    The strong foundation of the new law is based on improved public 
health protection and risk reduction, sound science, state flexibility, 
and funding for state programs, research, and infrastructure needs. The 
intent of Congress was also to expand the role of the public in 
participation in drinking water issues. Throughout the statute, 
reference is made to citizen and technical advisory groups, public 
outreach and education, and public/private efforts to improve water 
quality. EPA acknowledged this new approach and has incorporated public 
outreach and involvement in many of the Agency's decision-making 
activities over the course of the last two and one-half years.
                         the state perspective
Resources
    Many of these new initiatives and programs represent significant 
new challenges to states as well as water utilities. In the negotiation 
of the SDWA of 1996, the authorizers recognized these new burdens and 
authorized funding to ensure that these provisions did not become 
unfunded mandates. The statute authorizes $100 million per year for 
state PWSS grants to implement the program, $1 billion each year for a 
drinking water SRF, $35 million each year for health effects research 
and an additional $10 million each year from the SRF for this research, 
$30 million each year to train and certify small system operators, 
funding for technology assistance and finance centers, funding for sole 
source aquifer and wellhead protection programs, funding for ground 
water protection grants, funding for demonstration projects for a New 
York City watershed protection program, $10 million each year for 
unregulated contaminant monitoring in small systems and an additional 
$2 million each year from the SRF, $5 million each year for source 
water petition programs, funding for colonias, $12.5 million each year 
for studies of harmful substances in drinking water, funding for water 
borne disease occurrence studies, and health care provider training and 
a public education campaign.
    While the states agreed to support many of these new initiatives 
during the reauthorization process, the understanding was that there 
would be money authorized and requested to ensure full implementation 
of these many new provisions. To date, EPA has requested no new funding 
for state PWSS programs and while they have requested increasing 
funding for the Drinking Water SRF, the fund is still not at its 
authorized level. States are also concerned that the Drinking Water SRF 
may become the primary funding mechanism of ``convenience'' with the 
serious risk of eroding the corpus of an already limited fund which, 
according to EPA's own estimated need of $138.4 billion, will not be 
sufficient to fully fund actual and anticipated infrastructure needs. 
Adequate funding for research is also critical if we are to ensure that 
future regulations are based on occurrence and meaningful public health 
protection.
    While states are authorized to take up to 30 percent of their SRF 
funding for various set-asides, it can be politically and financially 
unfeasible for states to take this ``share.'' At the state level they 
face strong opposition to reducing the corpus of the SRF fund and 
further reduce the amount of funding available for much needed capital 
improvement projects. Some of the set asides also come with a high 
price where states are required to match funding dollar for dollar with 
``new'' state funds.
    On the other side, some states are facing a challenge of limited 
personnel due to hiring freezes and ceilings at the state level. They 
are being asked to do more and more with no new or limited additional 
staff. Thus for some, more money may not be the answer unless those 
funds can be used for contracting vehicles to implement some of these 
new programs. In order for all states to be successful, Congress, EPA, 
and other stakeholders must understand this situation and use this as a 
factor when programs and regulations are being developed. The intent is 
not to develop programs to meet the lowest common denominator but to 
understand that regulations can be made easier or harder to implement 
and that artificial barriers that unduly complicate these new 
provisions should be limited to ensure the ability of all states to 
maximize full and effective implementation.
Implementation and Timing
    To ensure full implementation of the many new provisions in the 
law, states were prepared to address new schedules in an orderly and 
efficient manner that allowed them the ability to write, adopt, and 
implement rules in the two years authorized by the law. Thus as some 
programs would be in the initial stages of adoption, others would be at 
the implementation phase, and still others would be winding down. This 
was envisioned as a way for states to maximize potentially limited 
personnel and resources. Unfortunately, the timing of several new 
provisions are putting states in a position where they must redirect 
resources and personnel to programs before they have even adopted their 
own state regulations. The Consumer Confidence Report Rule is an 
example of where systems must submit their reports a year before states 
are required to have even adopted the regulation. This establishes a 
situation of partial primacy where EPA is implementing all or parts of 
the rule until states have primacy. If the states to not want EPA to 
implement the rule, then they must redirect their resources to tackle 
this effort earlier than they anticipated and using resources that had 
been directed for some other activity. This type of artificial barrier 
to full and effective implementation is untenable for the states, for 
the water systems, and for the public.
    On a positive note, the Agency does appear to be committed to 
ensuring that training and guidance documents are available at or near 
the time of rule promulgation to allow states and the Regions to 
proceed expeditiously with implementation. The Agency should be 
complimented on this commitment and encouraged to ensure that this 
process continues as new rules are promulgated. EPA Headquarters, the 
Regions, and the states also need to build on communication tools such 
as newsletters, mailings, and the internet such that vehicles exist to 
ask questions, receive timely responses, share questions and answers 
raised by all parties, and share drafts of developing programs. States, 
through ASDWA, would like to work with EPA to ensure that these 
communication vehicles are developed and used to the benefit of all 
those implementing the new law.
Public Involvement and Decision Making
    ASDWA would like to commend EPA for their efforts over the last two 
and a half years in encouraging and seeking public involvement in the 
regulatory, policy, and guidance development process. By bringing the 
major affected stakeholders to the table, issues, concerns, and 
perspectives can be identified and shared providing a greater 
understanding as regulations are developed by EPA. It appears that, for 
the most part, the National Drinking Water Advisory Council (NDWAC) 
working group process has been effective in including interested 
stakeholders. Clearly, a broader perspective assists the Agency in 
developing their policies and regulations.
    While public involvement may ultimately lead to greater stakeholder 
buy-in and support of the final product, it also tends to lend itself 
to establishing regulations and programs that are more complex and 
sometimes overly prescriptive in an effort to meet numerous, sometimes 
conflicting positions. States are ultimately responsible for 
implementing these new provisions and their suggestions and 
recommendations on how to ensure maximum efficiency and effectiveness 
needs to be strongly supported by the Agency.
                               conclusion
    In conclusion, Congress, states, EPA, and other stakeholders should 
be commended for the broad vision and approach taken in the new SDWA to 
ensure the protection of drinking water from source to tap with the 
involvement of the public and interested consumers. As we celebrate the 
25th Anniversary of the SDWA this year, we should be proud of the 
accomplishments achieved to date and the opportunity for greater public 
health protection in the future.
    States, as the implementers of these new provisions, are committed 
to ensuring their success. The opportunities are many. The challenge 
will be whether collectively we can structure the provisions of the new 
law such that they are fully and efficiently implemented for the good 
of all consumers in this country. We must together ensure that the 
positive momentum and success achieved to date will continue to be 
realistic and possible in the future.
    ASDWA appreciates the opportunity to provide this testimony and 
looks forward to working with EPA, Congress, and other stakeholders to 
ensure effective implementation of the new provisions of the SDWA of 
1996.
                                 ______
                                 
           Safe Drinking Water Act Implementation Principles
    The following principles describe, from the states' perspective, a 
program path or alignment under which implementation of the Safe 
Drinking Water Act (SDWA) will work the best:
    1. States are EPA's principal partners in implementing safe 
drinking water programs, and have the knowledge of and experience with 
local needs.
    2. States are committed to making the fullest possible use of the 
authorities in the SDWA to improve drinking water safety.
    3. States are committed to making maximal use of available 
resources to address the highest priority health protection and risk 
reduction measures.
    4. Needs for the National program, state programs, and public water 
systems are great and funding at full authorized levels is imperative.
    5. States need maximal freedom to focus on outcomes rather than 
process, and to prioritize workloads to address the highest health 
needs in the state first.
    6. States need consistent, clearly articulated, and predictable 
processes for EPA review and approval of new and revised state program 
efforts.
    7. States need to be able to engage in orderly rule adoption and 
implementation, and EPA rules need to accommodate this.
    8. State programs welcome direct assistance with implementation 
efforts from EPA Headquarters, EPA Regions, and other organizations and 
stakeholders to leverage all available resources.
    9. States require clear, consistent, and unified expectations from 
EPA for ongoing programs that are in sync with available resources.
    10. Routine Regional oversight of state programs needs to be 
consistent, reasonable, and appropriate in scope.
                                 ______
                                 
  Responses of Jerry Biberstine to Additional Questions from Senator 
                                 Crapo
    Question 1. Are states and water systems adequately prepared to 
meet the ground water rule? What are the key challenges states face 
with this rule?
    Response. The answer to the first question will very much depend on 
how the final rule is written and the expectations for state and water 
system implementation. States have been very active in the rule 
development process over the last several years, and more recently over 
the last one to two yours. We have advised EPA about the concerns and 
issues that states and water systems will face during implementation 
and have indicated that modifications to EPA's proposed approach are 
needed.
    A key challenge that states face include the enormous number of 
ground water systems that may potentially be impacted by the rule. The 
majority of these systems are small and typically require a more 
intensive technical assistance approach to reach compliance. While EPA 
has projected that perhaps 5 to 15 percent of wells nationwide may be 
contaminated, they are still the early stages of identifying an 
appropriate microbial indicator organism as well as an analytical 
method that would allow for cost-effective, routine monitoring. 
Therefore, it will be difficult to evaluate which if any, wells are 
contaminated without extremely resource intensive and costly site-by-
site analysis. States have requested that EPA stab coordinate Ground 
Water Rule activities involving well sensitivity with the work that 
states are now beginning on the Source Water Assessment and Protection 
(SWAP) Program to ensure that the information gathered under the SWAP 
can be used to meet the requirements of the Ground Water rule.
    An appropriate and cost-effective analytical method must also be 
approved and in use by an adequate number of laboratories before 
monitoring begins under the rule and, increased source water monitoring 
should only be triggered when the state has sound reason to believe 
that a source may be susceptible to contamination.
    The timing of the rule may also pose a problem. While it is 
important to move expeditiously, promulgation of the rule should occur 
only after the technical issues have been resolved. The EPA must also 
allow states adequate time to write, adopt, and begin implementing the 
rule before monitoring or other required elements become effective.

    Question 2. What is the Federal vs. State division of funds used 
and projected for drinking water spending at the local level? Do you 
believe this is an appropriate cost-sharing?
    Response. The Safe Drinking Water Act (Sec. 1443 (a)(3) indicates 
that a grant shall be made to the states to cover not more than 75 per 
centum of the cost of carrying out the public water supply supervision 
program. ASDWA and others have tracked the contribution of state and 
Federal funds over the last 10 years and have found that nationally, 
the states continue to contribute approximately 65 percent of the 
funding while the Federal Government contributes 35 percent. That said, 
some additional funding is now available to state programs under the 
drinking water SRF if they are able to find a one-to-one match with new 
state dollars and if they can obtain approval to use the set-aside for 
state program implementation rather than water system construction 
costs.
    While states currently are paying a disproportionate share to 
implement the Federal SDWA, the bigger question is whether the funds 
currently available from all sources are adequate to effectively and 
fully implement all the provisions of the SDWA. Our answer to that 
question would be ``no.'' To evaluate the difference between resources 
needed and resources available, the Office of Water at EPA is currently 
conducting a resource gap analysis for drinking water, waste water, 
UIC, and ground water programs. Once this work is completed, we expect 
to have a better understanding of the unmet needs related to each of 
the programs--particularly drinking water. Our initial investigation 
seems to indicate that a significant number of states will simply not 
have the necessary staffing and resources to carry out the drinking 
water program over the next several years. We hope to work with your 
committee, the Appropriations Committee, and EPA to evaluate state 
program needs and identify and find sufficient sources of funding to 
allow these programs to fully achieve the goals set forth in the SDWA 
for public heals protection.

    Question 3. How many states have co-mingled funds between the 
drinking water and clean water revolving funds?
    Response. To date, very few states have co-mingled (e.g., 
transferred) funds between the drinking water and clean water revolving 
loan funds. According to staff at EPA, New York, Colorado, Maryland, 
and possibly New Jersey are considering transferring funds from the 
clean water to the drinking water SRF.
    The ability to transfer the funds is at the discretion of the 
Governor and cannot occur until at least a year after the state has 
received its first drinking water capitalization grant. Our 
understanding is that for the most part, it will take a few years 
before the states are comfortable with the drinking water SRF program 
and its administration and have a better sense of the cumulative need 
on the drinking water side. Once the program has become ``stabilized,'' 
more states may decide to transfer funds.

    Question 4. Are any systems being dissuaded from applying for SRF 
loans because of Federal or state rules for qualification?
    Response. ASDWA does not believe that any systems are being 
dissuaded from applying for SRF loans although some states may have 
constitutional or statutory prohibitions against loaning Federal money 
to private water systems. In some instances, states are actively 
seeking to change these prohibitions where possible while others arc 
attempting to address this concern through use of state match or other 
funds that may not have such a restriction.
    The program should also be reviewed within the next year or two to 
evaluate whether some of the restrictions and requirements in the 
program itself, like the environmental cross-cutters, are dissuading 
systems, particularly small systems, from applying for loans or 
establishing barriers to full and effective use of the funding.
                               __________
 Prepared Statement of Merril Bingham, Director of Public Works, Provo 
City Water Resources, on behalf of the American Water Works Association
                              introduction
    Good morning Mr. Chairman. I am Merril Bingham, Director of Public 
Works for the City of Provo, Utah. I am also the Chair of the 
Legislative Committee of the American Water Works Association (AWWA) 
Water Utility Council. I am here today on behalf of AWWA.
    AWWA appreciates the opportunity to present its views on the 
implementation of the Safe Drinking Water Act (SDWA) Amendments of 
1996. AWWA is the world's largest and oldest scientific and educational 
association representing drinking water supply professionals. The 
association's 55,000 members are comprised of administrators, utility 
operators, professional engineers, contractors, manufacturers, 
scientists, professors and health professionals. The association's 
membership includes over 3,900 utilities which provides over 80 percent 
of the nation's drinking water. Since our founding in 1881, AWWA and 
its members have been dedicated to providing safe drinking water.
    In my role as Public Works Director, among other duties, I have 
primary responsibility for Provo's drinking water supply. Provo has a 
population of approximately 112,000 people and is located at the base 
of the Wasatch Mountain range 45 miles south of Salt Lake City. Provo 
is home to Brigham Young University, which, with an enrollment of 
35,000 students, is the largest privately-owned university in the 
nation. At present, we utilize about 8.5 billion gallons of drinking 
water annually with peak day demands slightly in excess of 50 million 
gallons. Our water supply source is primarily ground water in the form 
of canyon springs and valley deep wells.
    AWWA utility members are regulated under the Safe Drinking Water 
Act (SDWA) and other statutes. AWWA believes few environmental 
activities are more important to the health of this country than 
assuring the protection of water supply sources, and the treatment and 
distribution of a safe and healthful supply of drinking water. AWWA 
strongly believes that the successful implementation of the reforms of 
the SDWA Amendments of 1996 is essential to effective regulations that 
protect public health.
                       epa drinking water program
    The Environmental Protection Agency (EPA) drinking water program 
took on greatly increased responsibilities in the 1996 SDWA amendments. 
These responsibilities included developing a new regulatory process 
requiring additional science and risk analysis for regulations, 
creating a contaminant occurrence data base and methodology to select 
contaminants for regulation, promulgating microbial and disinfectant/
disinfection by-products regulations, identifying new treatment 
technologies for small systems, administering the newly created 
drinking water state revolving fund, and developing regulations and 
guidelines for consumer confidence reports, operator certification 
programs, source water assessment and monitoring relief.
    In satisfying these requirements, EPA has involved the public in 
the regulatory process to an extent not equalled by any other federal 
agency and stands as a model for federal rule making. EPA has involved 
private citizens, scientists, drinking water professionals, medical 
professionals, public health officials, economists, and environmental 
and consumer advocacy representatives, as well as other experts, to 
provide recommendations on how to carry out these new regulatory 
responsibilities. AWWA believes that the EPA Office of Groundwater and 
Drinking Water has made a good faith effort to implement the spirit and 
intent of the 1996 SDWA Amendments. The EPA Office of Groundwater and 
Drinking Water is to be commended for taking this exemplary approach 
for public involvement which should result in better regulations that 
protect public health.
    Many of the new regulations are either in their infancy or not yet 
promulgated, so there is not yet much experience to determine whether a 
specific regulation will work as intended in accordance with the 1996 
SDWA reforms. However, AWWA does have a major concern that the EPA 
drinking water research program is not adequate to provide the good 
science necessary to support new contaminant regulations. There is also 
a long-term concern that the authorizations for the new drinking water 
state revolving fund will not be adequate to address the needs 
identified to comply with SDWA regulations. In this statement, AWWA 
will focus on the research and infrastructure needs, highlight some 
regulations of concern and outline potential future SDWA issues.
                    drinking water research funding
    The use of best-available, peer-reviewed good science as the 
foundation of the new drinking water standard-setting process under the 
SDWA amendments of 1996 will require extensive drinking water 
research--particularly health effects research. Funding for drinking 
water research is becoming more of a critical issue. The 1996 SDWA 
Amendments require EPA to develop comprehensive research plans for the 
Microbial/Disinfection By-Products (M/DBP) Rule Cluster and arsenic. 
The plans have been completed but the plans are not readily 
understandable to all stakeholders and do not develop relative 
priorities between all the high priority projects. While tracking is 
marginally improving, EPA still has difficulty assessing research gaps 
as well as developing future priorities. It is AWWA's opinion that the 
EPA resources directed to drinking water research does not meet the 
statutory needs of the 1996 SDWA Amendments and will ultimately result 
in either delayed regulations or regulations promulgated without the 
necessary research to support good science.
    AWWA believes that there is a serious problem regarding the amount 
of funding currently allocated to contaminant research. EPA informal 
research funding projections discussed with stakeholders indicate a 
shortfall to meet drinking water research needs from fiscal year 1999 
through fiscal year 2005. Due to the extensive amount of research 
needed to determine whether to regulate contaminants on the Contaminate 
Candidate List (CCL), annual research needs are expected to ``bulge'' 
in fiscal year 2000 through fiscal year 2003. These projections show 
research needs rising to $56-$57 million annually, leaving a shortfall 
of approximately $20 million per year. Although EPA projections 
indicate that drinking water research needs will begin to decline after 
the ``bulge'', there is no firm basis on which to assume that research 
funding needs will decline.
    EPA contends that they have substantially increased drinking water 
research funding over the past few years, but it is not clear how this 
additional funding is being used to address critical drinking water 
research needs. An estimated total of over $150 million is needed for 
the combined arsenic and M/DBP research plans which will result in 
finalizing regulations within the next five years as required by the 
SDWA amendments of 1996. This figure does not include other needed 
drinking water research on radon, sulfate, and other contaminants that 
will require additional occurrence, treatment, and health effects 
research based on the CCL. It has become evident that EPA's research is 
focusing on M/DBP's and arsenic, which are important, but little 
research is being done on the contaminants on the CCL to make future 
regulatory decisions and much of that research is not focused on the 
drinking water regulatory needs. Without a substantial investment on a 
continuing annual basis and a research program focused on drinking 
water regulatory needs, EPA and public water suppliers cannot assure 
the American public that the contaminants selected for regulation are 
the appropriate ones or that health standards have been adequately 
established.
    We need to break the cycle of drinking water research lagging 
behind the regulatory needs. Assume that EPA develops an overall 
contaminant research plan that is peer reviewed by mid-1999. Then, EPA 
issues a research request, receives proposals, selects specific 
proposals, and contracts for the research. This process will take at 
least six months, so the research would not start until early 2000. 
Most research takes a minimum of two to three years to complete, with 
an added year for complete peer review, so the results would not be 
available until well past the statutory deadline for the first round of 
regulatory determinations (2001). Since EPA has put a strong emphasis 
on meeting statutory deadlines, the result may be the promulgation of 
regulations without the good science which was envisioned in the 1996 
SDWA Amendments.
       microbial, disinfectant & disinfection by-products cluster
    This ``cluster'' of regulations is the most significant and 
potentially the most costly of all drinking water regulations required 
in the 1996 SDWA amendments. It includes Disinfectant/Disinfection By-
Product Rules, Enhanced Surface Water Treatment Rules, a filter 
Backwash rule and the Groundwater rule. The regulations in this 
``cluster'' require substantial research all of which will not be 
completed by the time indicated in the SDWA.
    Research on microbial contaminants and disinfectants and 
disinfection by-products is a critical need. Each day there are roughly 
50,000 deaths in the world attributed to microbial contamination of 
drinking water. Much of this threat has essentially been eliminated in 
the United States through disinfection of drinking water. However, it 
is now known that disinfection of drinking water can produce chemical 
by-products, some of which are suspected human carcinogens or may cause 
other toxic effects. Controlling risks from these by-products must be 
carefully balanced against microbial risks to ensure that when reducing 
disinfection levels to lower by-product risk, significant microbial 
risks are not created.
    Research on disinfectants and disinfection by-products, as endorsed 
by the National Academy of Sciences and EPA's Science Advisory Board, 
is essential. The cost to the nation of disinfection by-products 
regulations under the SDWA will certainly be in the billions and could 
be as high as $60 billion or more depending on the final rule. An 
appropriate investment in health effects research will ensure that 
costs of regulation will be commensurate with the health benefit and 
not driven to extremes because of the lack of data.
    Cryptosporidium has emerged as a microbial pathogen of major 
concern to drinking water supplies. The Centers for Disease Control, in 
correspondence with EPA, has pointed out that extensive research on the 
health implications of this pathogen and dramatic improvements in 
analytical methods for its detection are necessary before it is 
possible to evaluate the public health implications of its occurrence 
at low levels and determine the appropriate regulatory response. 
Adequate funding for research on cryptosporidium is essential to 
protect the health of millions of Americans.
    The final Filter Backwash Rule, which will prevent unsafe 
concentrations of contaminants in the drinking water treatment process, 
is scheduled to be promulgated by August 2000. However, this rule has 
become a major concern since there is not much data on which to base a 
regulation and the potential for significant compliance costs.
    The final Groundwater Rule, which will provide for the additional 
treatment or other protective measures of drinking water from 
groundwater when necessary, is scheduled to be promulgated in November 
2000; however, there is a lack of data on which to base a regulation 
and what data is available is under debate. This rule, as currently 
reported, will be very expensive for small groundwater systems and 
states to implement.
                                arsenic
    The 1996 SDWA Amendments requires EPA to propose a revised arsenic 
regulation by January, 2000, and promulgate a final regulation by 
January, 2001. The National Academy of Sciences' (NAS) comprehensive 
review of the arsenic risk assessment, which is expected to be 
available by later this month, will be a critical component. The 1996 
SDWA Amendments also require EPA to develop a comprehensive research 
plan on low-levels or naturally occurring arsenic. The objective of the 
plan was to develop an extensive arsenic research program. The plan has 
been completed but has not yet been fully executed. The key issue for 
the arsenic regulation is that the health effects data and the results 
of the health effects research needs to be available by mid-1999 to 
meet the deadlines in the SDWA. Only five major arsenic research 
projects have been started so far. Since EPA has not made a significant 
start on the bulk of the necessary health effects (which will take 
several years to complete), it is likely that very little of the 
necessary research will be completed in time to be used in developing a 
revised arsenic regulation.
    The lack of realistic prioritization of the arsenic research, from 
the AWWA viewpoint, has minimized the potential for the ongoing 
research to substantially reduce the uncertainty in the arsenic risk 
assessment. The ongoing research projects may (or may not) be the 
specific projects that could have the most impact in reducing that 
uncertainty, but nobody know for sure at this point. AWWA is concerned 
that some of the ongoing research may simply lead to the need for more 
research rather than give answers that are meaningful for the 
regulatory process.
              drinking water state revolving fund (dwsrf)
    According to the EPA Drinking Water Infrastructure Needs Survey 
released on January 31, 1997, $12.1 billion is needed in the immediate 
future to protect drinking water supplies. Of this amount, $10.2 
billion, or 84 percent, is needed to protect water from microbial 
contaminants which can produce immediate illness or death. According to 
the needs survey, between 1995 and 2015, a total of $138.4 billion will 
be needed to upgrade the infrastructure of the nation's water utilities 
to meet requirements of the SDWA. It is also important to note that 
this figure does not include other drinking water infrastructure needs, 
such as replacing aging transmission and distribution facilities, which 
are not eligible for DWSRF funding.
    If the current authorized DWSRF funding level of $1 billion per 
year is maintained to 2015 only $20 billion plus approximately $4 
billion state match for a maximum total of approximately $24 billion 
will be available to meet these needs from the DWSRF. Since 
appropriations have not matched authorizations and there are 
indications that the actual needs, just for the projects eligible under 
current SDWA DWSRF criteria, may be underestimated by about 55 percent 
(which may be reflected in the next EPA needs survey), the shortfall 
may be greater.
    AWWA believes that the total drinking water infrastructure need is 
in the $325 billion range (in 1998 dollars) in capital investment, 
which could easily translate into a much higher need for available 
funds over 20 years.
    AWWA does not expect that federal funds will be available for 100 
percent of the infrastructure needs of the nation's water utilities. 
The SURF is a loan program with a state match. Ultimately, the rate-
paying public will have to pay for the nation's drinking water 
infrastructure, regardless of whether financing comes from the SURF or 
other sources. However, AWWA does believe that SURF funding is a major 
issue for future Congressional oversight to ensure that federal funding 
is adequately available to meet the intended purposes of the SDWA. 
Oversight should take place in the context of the total need and how 
the needs should be apportioned among the various financing mechanisms 
and sources.
    The DWSRF program is still in its infancy so the outlay of funds 
for loans and available funds has not yet become critical. However, 
DWSRF authorized funding levels is an issue which Congress may need to 
address in the future, possibly before the next scheduled 
reauthorization of the SDWA.
                           future sdwa issues
    The next reauthorization of the SDWA will clearly take drinking 
water into the 2010 timeframe. AWWA believes that it is not too early 
to begin exploring future issues and possible innovative solutions now. 
EPA and Congressional forums must be held to explore the future of 
drinking water. The 25th Anniversary of the SDWA this year would be an 
ideal time to start the process. I will briefly outline a few issues 
and questions that should be addressed to develop the issues most 
important to the next SDWA reauthorization.
    a. The individual contaminant-by-contaminant regulatory approach 
should be examined to determine if there is a more efficient and 
effective means to regulating drinking water. We are already 
approaching the point where regulating one contaminant may cause a 
problem with regulating another contaminant.
    b. The total cost of providing drinking water should be studied. 
What are the cost issues facing the nation's water systems (including 
infrastructure repair and replacement and paying for new treatment 
technologies)? Should the SURF be expanded to include total needs? How 
can resources be more efficiently allocated among local, state and 
federal governments, and water systems?
    c. Are there feasible alternatives to centralized treatment and 
distribution for compliance with the SDWA to provide safe drinking 
water? Are we reaching a point of creating such stringent standards 
that standards cannot be maintained in a distribution system? After 
all, less than one percent of treated water is used for human 
consumption. Can consolidation and restructuring provide economies of 
scale and still comply with more stringent standards? Is the reduction 
in health risk relevant when compared with the health risk of all the 
other ingested products?
    d. Should the drinking water program be decentralized to provide 
local consumer driven decision-making on how to provide safe drinking 
water in the community? Can safe drinking water be provided through a 
regulatory system in which EPA sets broad health goals and local 
communities have flexibility to chose how to meet those goals? Should 
compliance be based on community risk reduction aggregate goals and 
cost/benefit analysis? Are there creative alternatives for providing 
drinking water for vulnerable subpopulations without driving treatment 
costs to an unaffordable level? This also requires a clear definition 
of what vulnerable subpopulations really are (eg: certainly AIDS 
patients and cryptosporidium is clear; however, far less clear is the 
issue of smokers and radon).
    e. What can be done to assure the availability of an adequate 
drinking water supply in the future? There needs to be a closer 
integration of various statutes (e.g., Clean Water Act, Clean Air Act, 
Superfund, etc.) to protect drinking water sources to assure an 
adequate and clean supply of water. Drinking water priorities should be 
set appropriately. The use of gray water systems, reclaimed waste 
water, desalinization and conservation measures should be studied. The 
Clean Water Action Plan is a step in the right direction for 
integration of water resource management and stewardship.
    AWWA believes that addressing the above issues and questions will 
provide potential solutions for coping with localized or regional water 
shortages, new strains of contaminants, and unaffordable treatment 
costs or technological challenges which had not been anticipated or 
addressed by the 1996 SDWA Amendments. Some of these issues also may 
emerge in the next five years.
                                summary
    In conclusion, I want to highlight the main points of the 
testimony:
     AWWA believes that the EPA Office of Groundwater and 
Drinking Water has made a good faith effort to implement the spirit and 
intent of the 1996 SDWA Amendments.
     AWWA has a major concern that the EPA drinking water 
research program is not adequate to provide the good science necessary 
to support new contaminant regulations.
     The regulations in the Microbial, Disinfectant & 
Disinfection By-Products ``cluster'' require research, all of which 
will not be completed by the deadlines indicated in the SDWA.
     It is likely that very little of the necessary research 
will be completed in time to be used in developing a revised arsenic 
regulation.
     AWWA has a long-term concern that the authorizations for 
the new drinking water state revolving fund may not be adequate to 
address the needs identified to comply with SDWA regulations.
     AWWA believes that Congress and EPA should hold forums to 
begin exploring future SDWA issues and possible innovative solutions 
now.
    This concludes the AWWA statement on the implementation of the 1996 
Safe Drinking Water Act Amendments. I would be pleased to answer any 
questions or provide additional material for the committee.
                                 ______
                                 
 Responses of Merril Bingham to Additional Questions from Senator Crapo
    Question 1. How would a comprehensive contaminant research program, 
as described in your testimony, operate? Would it eliminate 
inconsistencies across individual regulations and optimize resources?
    Response. The goal of having a comprehensive contaminant research 
and regulatory program would be to eliminate inconsistencies across 
individual regulations and optimize resources. How to attain that goal 
is the issue to be discussed among stakeholders. One means for this 
discussion will be the Environmental Protection Agency's (EPA) Futures 
Forum which will be held later this year as part of the celebration of 
the SDWA 25th Anniversary.
    The Environmental Protection Agency, through the SDWA, has 
regulated most contaminants on a contaminant-by-contaminant basis. 
Regulations are developed for each contaminant that include a specific 
standard, the best available technology (BAT) for treatment, and an 
analytical method. Utilities will analyze their water for each of the 
regulated contaminants and determine their potential compliance 
strategy based on each individual contaminant.
    However, many water treatment technologies are effective for a 
class of contaminants. For example, conventional coagulation and 
sedimentation removes a portion of most inorganic chemicals to 
realistic levels. Granular Activated Carbon (GAC) is effective for the 
removal of many synthetic organic chemicals. Some advanced technologies 
could be considered, as part of the regulatory process, to be effective 
against a class or a group of chemicals and some microbes, and that 
group could be regulated as a class, rather than a contaminant-by-
contaminant basis. These advanced technologies could be considered to 
``leap-frog'' the current approach and regulate a broader class of 
contaminants. Regulation by group or class can also help eliminate 
conflicting treatment requirements for individual contaminants.
    Research on advanced technologies is ongoing. Wholesale changes in 
water treatment technologies cannot be undertaken without full-scale 
operational data in a variety of waters. All recognized and proven 
treatment technologies should be made available as appropriate in a 
menu of options available for public choice in satisfying regulatory 
compliance.
    We must keep an open mind and evaluate all regulatory options such 
as broad-based federal public health standards met through local public 
choices. However, alternative regulatory approaches may require an 
amendment to the SDWA to authorize regulation of contaminants by group 
or class rather than on the contaminant-by-contaminant approach 
currently authorized in the SDWA. That is why this issue needs to be 
discussed and possible alternatives developed for the next 
reauthorization of the SDWA.
    The other aspect of this question addresses the research program 
necessary to achieve a more comprehensive drinking water regulations.
    The cycle of the necessary research lagging behind the regulatory 
development process needs to be broken and research must be focused on 
classes of contaminants. An integrated, comprehensive drinking water 
research program is needed to achieve this. Research schedules that 
meet regulatory needs must be developed. A research tracking system 
needs to be developed so that the researchers and their EPA project 
officers can be held accountable. With meaningful Congressional 
appropriations and oversight, EPA, the drinking water community and 
consumers can work together to ensure that sound science yields the 
most appropriate regulations and practices possible for provision of 
safe drinking water for all the people in America.
    It also is suggested that EPA work closely with other federal 
agencies such as the Centers for Disease Control and Prevention (CDC), 
the National Institutes of Health, the US Department of Agriculture, 
the US Army Corps of Engineers, etc., to leverage resources so that the 
research efforts can be maximized. The Congress and EPA need to 
continue to look for innovative research partnerships to get the job 
done, similar to what was developed for the Microbial/Disinfectant By-
Products (M/DBP) cluster of regulations and arsenic. Congress should 
also consider funding these partnerships for drinking water research 
independent of other environmental research to give the drinking water 
program, a public health program that affects every person in the 
United States, the priority it deserves.
    Recent discussions with the EPA Administrator regarding the 
strategic planning of drinking water research have indicated the 
possibility of a stakeholder effort dedicated to resolution of this 
issue.

    Question 2. If not all ``infrastructure'' costs are estimated in 
the $138 billion needs assessment and are not eligible for SRF dollars, 
how do you envision those needs will be met?
    Response. AWWA does not expect that federal funds will be available 
for 100 percent of the infrastructure needs of the nations water 
utilities. The DWSRF is a loan program with a state match which is more 
of a stimulus for funding than a total answer. Ultimately, the rate-
paying public will have to pay for the nations drinking water 
infrastructure, regardless of whether financing comes from the DWSRF or 
other sources. However, AWWA does believe that DWSRF funding is a major 
issue for future Congressional oversight to ensure that federal funding 
is adequate to meet the intended purposes of the SDWA. Oversight should 
take place in the context of the total need and how funding the needs 
should be apportioned among the various financing mechanisms.
    Congress; the Environmental Protection Agency (EPA); other federal, 
state and local government agencies; public water suppliers; and other 
interested parties need to examine the funding options for drinking 
water costs in the near-term. The following are options to consider in 
determining how the funding sources can be more efficiently allocated 
among local, state and federal governments and private capital and 
considering what the ratepaying public can bear:
     Increase DWSRF Authorizations: AWWA believes that DWSRF 
funding is a major issue for near-term Congressional oversight to 
ensure that federal funding is adequately available to meet the 
intended purposes of the SDWA. The DWSRF program is still in its 
infancy so the outlay of funds for loans and available funds has not 
yet become critical. However, it is clear that the current DWSRF 
authorized funding levels do not meet the needs identified by EPA for 
SDWA compliance as was the intent. Increased DWSRF federal 
capitalization funding is an issue which Congress should address in the 
future, possibly before the next scheduled reauthorization of the SDWA 
as part of a total water infrastructure funding policy.
     Expand DWSRF Eligibility: The upgrading, rehabilitation 
and replacement of aging drinking water distribution systems currently 
is not eligible for DWSRF loans, unless related to compliance with a 
drinking water regulation. However, these infrastructure funding needs 
are the largest part of the total need identified for the next twenty 
years. As drinking water regulations become more stringent, upgrading 
the distribution system, like protecting drinking water sources, 
becomes a larger factor in maintaining the regulated safety level until 
the water reaches the consumer. At some point, it may be necessary to 
expand regulation into the distribution system for compliance. 
Consideration must be given to expanding DWSRF eligibility beyond SDWA 
compliance to include the total drinking water system infrastructure 
needs.
     Federal Grants: It is becoming increasingly apparent that 
in many areas, both urban and rural, there is not a sufficient tax-base 
to build a drinking water system that can comply with the requirements 
of the SDWA. Consideration needs to be given to establishing an 
appropriate grant program based on need, with a local and state cost 
share, to build viable drinking water systems for needy areas. Any 
grant program must be incorporated into the mix of other SDWA capacity 
development measures that can be taken to provide a viable water supply 
for the public involved. These grants could come from a variety of 
federal sources such as the Bureau of Reclamation, the US Army Corps of 
Engineers, rural development programs, and urban development programs 
or even a new program. Such grants could be used for such things as 
replacing aging distribution systems in economically disadvantaged 
urban or rural communities.
     Private Capital: The role of private capital in meeting 
infrastructure needs is important and increasing. In the public water 
supply sector, various forms of privatization are taking place 
including purchase of assets, contract operations, and design-build-
operate arrangements. Many local governments and local government 
organizations are evaluating privatization alternatives. Private 
capital can be a significant portion of funding drinking water 
infrastructure needs and must be factored into an assessment of the 
total need.

    Question 3. How would you propose to decentralize the drinking 
water program for decision-making purposes?
    Response. This question really has no answer at this time. However, 
the current regulatory compliance requirements of the SDWA should be 
evaluated to determine if they will continue to meet the needs of 
providing safe drinking water to the American public in the early part 
of the twenty-first century. This evaluation should begin now so that 
options for consideration can be developed prior to the next 
reauthorization of the SDWA.
    Congress and the Environmental Protection Agency (EPA should hold 
forums involving public water suppliers and other interested parties to 
explore and develop options to address this issue. Some of the 
questions to be asked are: Should the drinking water program be 
decentralized to provide local consumer driven decisionmaking on how to 
provide safe drinking water in the community? Can safe drinking water 
be provided through a regulatory system in which EPA sets broad health 
goals and local communities have flexibility to choose from a broad 
menu of treatment and provision methods that answer how to meet those 
goals? Should compliance be based on community risk reduction aggregate 
goals and cost/benefit analysis? Are there creative alternatives for 
providing drinking water for vulnerable subpopulations without driving 
treatment costs to an unaffordable level? This also requires a clear 
definition of vulnerable subpopulations (e.g. AIDS patients and 
cryptosporidium is clear; however, far less clear is the issue of 
smokers and radon). Can self-regulation of public water systems based 
on federally mandated performance goals improve compliance?
    There has been a movement in the United States away from federal 
domination of the regulatory process and decentralizing more decisions 
to state and local governments. This raises the question of how much of 
the drinking water regulatory program can be decentralized and still 
assure safe drinking water to the American public. There is a wide 
range of options to meet varying needs to consider. All options for 
providing safe drinking water should be made available as appropriate 
in a menu of options available for public choice in satisfying 
regulatory compliance.
                               __________
Prepared Statement of Erik D. Olson, Senior Attorney, Natural Resources 
                            Defense Council
                                summary
    Drinking water treatment improvements begun at the turn of the 20th 
Century have advanced public health protection enormously, but much of 
the nation's drinking water infrastructure now is aging and outdated. 
We must modernize our water systems and safeguard the nation's water 
supplies from new and emerging contaminants. The 1996 SDWA Amendments 
should help to encourage better health protection, and EPA should be 
commended for its generally open public process used to date in 
implementing most of this law. There are several areas of concern, 
however, in the implementation of the new Act:
     Health Effects Research funding must be assured and 
increased, particularly in light of a court decision effectively 
eliminating the SRF set-aside for such research. EPA must immediately 
fund certain high-priority joint research with CDC and ATSDR on 
disinfection byproducts' reproductive effects, though existing data on 
these effects are sufficient to warrant expeditious public health 
prevention measures. EPA also needs additional resources to address 
emerging contaminants on the contaminant candidate list. EPA should be 
open in developing these research plans, as in the case of the 
Microbial and Disinfection Byproducts Council--rather than using a 
largely closed-door approach as in the case of arsenic. The required 
vulnerable subpopulations research has lagged; EPA must open up the 
process for planning this work and make it a high priority.
     Public Right-to-Know about tap water contamination will 
help to build public understanding of tap water challenges, and of the 
need for investment in drinking water protection and infrastructure 
improvement. The EPA right-to-know report rules issued in 1998 are a 
major step forward, commendably developed with much public 
participation. The public's understanding should be enhanced with 
improvements in the reports recommended in this testimony. 
Additionally, a major campaign to educate to the public to expect and 
understand the reports.
     Source Water Assessment and Protection provisions in the 
law pose major opportunities to improve drinking water protection in a 
cost-effective and environmentally beneficial manner. To date, the 
program has had some success with many states submitting SWAP plans to 
EPA in February 1999. However, progress in the future is not clear 
because many states have made no commitment to having an open public 
process for implementing the source water assessments, and most states 
have said they plan to do no significant new source water monitoring--
meaning little new information will be gathered to inform decision 
makers or the public on pollution sources. Additionally, there is a 
clear need for regulatory teeth to address major source water 
polluters.
     State Revolving Fund (SRF) funding will be inadequate to 
address the more than $138 billion in needs for drinking water source 
protection, treatment upgrades, and distribution system improvements. 
This shortfall makes meaningful public participation in the state 
priority-setting for spending SRF money extremely important, but most 
states have done little to truly involve the public. Thus, we recommend 
that states be required to set aside a percentage of their SRF 
allotment to fund real public participation. In addition, we are 
concerned that some states are likely to fund growth through the SRF 
rather than funding the backlog of infrastructure improvement needs.
     New Standards for Microbes, Disinfection Byproducts, 
Arsenic, Groundwater, Filter Backwash, and Radon must be issued over 
the next few years, yet EPA resources for these efforts are inadequate. 
These rules will be determinative as to whether the ``Third 
Revolution'' in drinking water protection--involving true multiple 
barriers to contamination in the form of source water protection, 
advanced ``leap frog'' treatment technologies, and modern distribution 
system management--will occur in the early 21st Century, or whether the 
nation's aging and often outdated water supplies will continue to 
inadequately address these emerging problems and to deteriorate.
     Drinking Water Compliance and Small Systems Problems 
Continue to Plague the Program, as documented in the attached USA Today 
series and in EPA's own 1998 Annual Compliance Report, which showed 
widespread violations of the Act and inadequate state and EPA 
enforcement against even the most recalcitrant violators. The program 
also needs to improve its data collection and management program, 
including routine audits of federally-funded state programs. The new 
SDWA small system viability provisions could begin to reduce these 
problems, but substantial additional resources are needed to assure 
that these programs bear fruit. Additionally, small system technical 
assistance should be granted on a competitive basis to the applicant 
who demonstrates that they can deliver accurate technical assistance to 
small systems in a cost-efficient manner.
                                 ______
                                 
    Good morning, I am Erik D. Olson, a Senior Attorney at the Natural 
Resources Defense Council (NRDC), a national non-profit public interest 
organization dedicated to protecting public health and the environment. 
We have over 400,000 members nationwide. I also serve as a national 
coordinator of the Campaign for Safe and Affordable Drinking Water, an 
alliance of over 300 public health, medical, consumer, environmental, 
HIV/AIDS, and other groups committed to improving the quality of the 
nation's drinking water. I speak today, however, only on behalf of 
NRDC.
      background on drinking water protection in the united states
    As a nation, the United States has made significant progress in 
protecting our drinking water over the past century. In the mid- and 
late-19th Centuries, widespread deaths and serious illness swept across 
the nation due to cholera and typhoid, in large measure spawning the 
public health movement. Indeed, in the late 1800's here in Washington, 
DC, hundreds of deaths per year were attributed to these waterborne 
diseases. Between the last turn of the century and World War I, many of 
the nation's larger water supplies installed water treatment using 
coagulation and sedimentation, filtration, and chlorine disinfection. 
There is no doubt that these treatments yielded enormous public health 
benefits, and over time the scourge of cholera and typhoid was largely 
eliminated from the United States.
                      new public health challenges
    However, we now face many new, and other long-standing (but in some 
cases newly-recognized) drinking water quality problems. The vast 
majority of the nation's big water utilities continue to rely upon the 
same World War I-era technologies that served us well for the past many 
decades, but that are not up to meeting many current water quality 
challenges.\1\ For example, these technologies (coagulation & 
sedimentation, filtration, and chlorination) as currently configured in 
many water systems apparently are inadequate to fully remove 
Cryptosporidium, the chlorine-resistant protozoan that sickened over 
400,000 people in Milwaukee and killed about 100 in 1993,\2\ and has 
caused at least 35 other waterborne disease outbreaks in the U.S., 
United Kingdom, and elsewhere.\3\
---------------------------------------------------------------------------
    \1\ B. Cohen and E. Olson, Victorian Water Treatment Enters the 
21st Century (NRDC, 1994).
    \2\ E. Olson, You Are What You Drink . . . (NRDC, 1995).
    \3\ G. Craun, et al., Waterborne Outbreaks of Cryptosporidiosis J. 
American Water Works Association v. 90, no. 9, at 81-91 (Sept. 1998).
---------------------------------------------------------------------------
    Indeed, according to informal 1987 estimates by scientists from the 
Centers for Disease Control and Prevention (CDC), about 940,000 
Americans got sick and 900 died a year from waterborne microbial 
illness caused by contaminated tap water.\4\ More recent 1999 informal 
CDC estimates are that from 200,000 to 1,300,000 Americans are sickened 
by microbes in drinking water per year, with 50 to 1,200 losing their 
lives as a result.\5\ Other published estimates of U.S. waterborne 
disease range from 400,000 waterborne illnesses per year to 27 million 
per year, with a central estimate of over 7 million per year published 
by waterborne disease experts from Tufts University Medical School and 
EPA (though this is not an official EPA figure).\6\ The SDWA now 
requires EPA and CDC with developing new estimates of the total number 
of waterborne diseases in the U.S. by August 2001.
---------------------------------------------------------------------------
    \4\ Bennett, J.V., et al, Infectious and Parasitic Diseases, in 
Closing the Gap: The Burden of Unnecessary Illness, R. Amler & H.B. 
Dull, eds. (Oxford U. Press, 1987) (this is not an official CDC 
estimate, though it was informally developed by CDC scientists).
    \5\ Presentation of Dr. Dennis Juranek, CDC, at EPA Microbial and 
Disinfection Byproducts Health Effects Stakeholder Meeting, February 
12, 1999.
    \6\ Morris, R. and R. Levin, Estimating the Incidence of Waterborne 
Infectious Disease Related to Drinking Water in the United States, in 
E. Richard, ed., Assessing and Managing the Health Risks from Drinking 
Water Contamination (International Association of Hydrological 
Sciences, Great Britain, 1996).
---------------------------------------------------------------------------
    Moreover, many of the byproducts of our modern chemical age, such 
as many synthetic organic industrial chemicals and pesticides, 
generally are not removed by current treatment technologies, often 
slipping right through the treatment plant and reaching our taps. 
Additionally, most public water supplies have little or no formal 
system in place to protect their source water from contamination, so 
they must rely upon existing and sometimes inadequate government 
pollution controls. Finally, the underground pipes that take our 
drinking water from the treatment plant to our homes--the so-called 
distribution system--is in many cities and small towns across America 
crumbling. Many of these old pipes are filling with sediment, and are 
sometimes harboring, or allowing infiltration (through ``cross-
connections'' with sewer lines or other contaminated water), of 
bacteria which may carry disease. These pipes also often contain 
significant amounts of lead, which can leach into the water and harm 
children and infants.
    The good news is that we now know far more about these contaminants 
and how to remove them from our drinking water than ever before. We are 
on the cusp of a ``Third Revolution'' in drinking water delivery: the 
First Revolution began many centuries ago with the provision of piped 
water using aqueducts and bringing water to homes. At the turn of the 
20th Century, the Second Revolution brought us coagulation & 
sedimentation, filtration, and chlorination, and their enormous 
benefits. The Third Revolution, now just beginning, will involve 
``multiple barriers'' to tap water contamination, including meaningful 
protection of source waters, installation of modern water treatment 
technologies (such as membranes, granular activated carbon, potentially 
ultraviolet radiation and other more advanced disinfectants and other 
treatments), and improved distribution systems. EPA has estimated, 
based on state figures, that the beginnings of this revolution will 
cost over $138 billion. This figure is widely viewed as a substantial 
underestimate.
                the role of the safe drinking water act
    Many of the recent improvements in drinking water have been spurred 
by the Safe Drinking Water Act. First signed into law by President Ford 
in 1974, this Act took the significant step of effectively making 
enforceable about two dozen previously voluntary U.S. Public Health 
Service drinking water standards, most of which dated back to 1962 or 
even to 1942. In 1986, unhappy with the pace of EPA standard setting, 
Congress amended the Act to require the agency to issue or revise 
standards for 83 named contaminants by 1989, and then to add standards 
for 25 new contaminants every 3 years thereafter--a provision that 
never was implemented.
                        the 1996 sdwa amendments
    The most recent amendments, the SDWA Amendments of 1996, took a 
somewhat new tack, emphasizing the need for greater focus and research 
on the highest risk contaminants--including those most risky to 
children and other vulnerable people. The new law also focused on the 
public's right to know about their tap water, the need for public 
involvement in decisions about their drinking water, the necessity of 
federal financial assistance to water systems, and the desire for 
greater state flexibility. The new law also required new steps to 
assess source water contamination, and to address small system 
problems.
    Additionally, the 1996 Amendments modified the standard setting 
provisions to require certain cost and benefit assessments, and to 
allow consideration of certain costs and benefits in specified 
contexts--provisions which have not yet been used (The December 1998 
Microbial and Disinfection Byproduct rules, and the February 1999 radon 
risk assessments and cost-benefit analyses, were completed under other 
contaminant-specific risk/benefit provisions of the new SDWA, rather 
than the new general SDWA cost-benefit analysis provisions). 
Congressional efforts to heap even more economic and cost-benefit 
analytical requirements on top of these requirements through some form 
of omnibus regulatory reform legislation or similar law would disrupt 
the delicately-crafted and negotiated provisions in the SDWA, wreak an 
administrative nightmare and gridlock, and undercut the public health 
goals of the SDWA.
               implementation of the 1996 sdwa amendments
    We agree with the January 1999 General Accounting Office study's 
conclusion that it is too early to judge whether the new law has been a 
success.\7\ However, implementation to date has lead to some important 
successes as well as well as some difficulties.
---------------------------------------------------------------------------
    \7\ GAO, Safe Drinking Water Act: Progress and Future Challenges in 
Implementing the 1996 Amendments, GAO/RCED-99-31 (January 1999).
---------------------------------------------------------------------------
    State Revolving Fund (SRF). Clearly, the SDWA 1996 Amendments have 
led to the pumping of major new and urgently-needed resources to states 
and public water systems. For example, several billion dollars in 
capitalization grants for State Revolving Funds have been appropriated 
or authorized. These SRF resources are expected to yield significant 
improvements.
    It is clear, however, as the GAO has noted, that the current 
funding for the SRF will be far from adequate to address the needs for 
drinking water infrastructure upgrades. While it is manifest that the 
federal government will not be able to fund all these needed 
improvements, there is an urgent need to help water systems and states 
to pay for the more than $138 billion in needed improvements in source 
water protection, water treatment, and upgrades of aging distribution 
systems.
    In some states the public has been invited to assist the state in 
setting funding priorities--including whether major investments will be 
made in prevention-oriented source water assessment and protection. 
However, we have been troubled by the lack of meaningful public 
involvement in other states in decision-making over how those funds 
will be used and how many other state decisions are made. We believe 
that states should be required to set aside a portion of their federal 
SRF and Public Water System Supervision grants (which have increased 
from about $50 million/year to over $90 million/year over the past five 
years) for real public involvement activities. We also are concerned 
that some states may use their SRF funds to pay for water system 
growth, despite the clear ban in the Act on such use of the funds.
    Health Effects Research. On the research front, Congress has 
increased EPA's drinking water research budget, a move that we and the 
public interest community, the water industry, and states strongly 
support. Still, however, as noted by GAO's recent report, there is a 
need for an additional $10 to $20 million per year in EPA resources for 
drinking water research, particularly in the health effects research 
area.
    As EPA undertakes its ongoing efforts to conduct research on 
contaminants such as disinfection byproducts, microbes, arsenic, and 
others, the agency has had few resources to put into research into 
emerging contaminants. For example, EPA has virtually no resources 
available to conduct research on the health effects of contaminants on 
the Contaminant Candidate List, such as important unregulated microbes 
(some of which were discussed in Monday's front page Washington Post 
article on the emerging evidence on the possible role of microbial 
organisms in causing chronic diseases such as cardiovascular disease, 
arthritis, ulcers and kidney stones). Neither has EPA sufficient 
resources to update its more than 80 currently regulated drinking water 
contaminants.
    In some cases, EPA's decision making on research priorities has 
been open and has effectively involved the public--as in the case of 
the Microbial and Disinfection Byproduct (M/DBP) research, where the 
agency and the American Water Works Association Research Foundation 
formed a research council with members of the water industry, public 
interest community, EPA, states, and others for a truly inclusive 
process.
    Our single critique of the agency's efforts on M/DBP issues has 
been the lack of emphasis, until relatively recently, on conducting 
sufficient research on the potential birth defects and spontaneous 
abortions that may be caused by disinfection byproducts. It is 
important for EPA, CDC, and ATSDR fund ``piggy back'' and other similar 
expedited epidemiological research on these effects to maximize the 
data available for making decisions during upcoming ``Stage 2'' 
disinfection byproduct rules, due in 2002. We and many others believe 
strongly that enough is known now about the adverse effects of DBPs on 
health to warrant expeditious public health prevention action to put 
into place modern source protection actions and treatment technologies 
that will reduce exposure to these chemicals while also improving 
microbial protection. But additional research clearly would be helpful 
to narrow the uncertainties.
    In other cases, EPA has been far less open and inclusive in its 
research planning. In the case of arsenic, the agency formed a joint 
committee with the water industry to map out its research priorities, 
effectively impeding meaningful public involvement and creating ill 
will. Subsequent public notice and comment on the agency's arsenic 
research plan following substantial complaints from the public about 
this closed-door process failed to redress the perception of undue 
industry influence on EPA's arsenic research planning.
    Similarly, the Agency's research on the effects of drinking water 
contamination on vulnerable subpopulations--required to be provided to 
Congress by August 2000 under the SDWA Sec. 1458(a)--has not included 
any meaningful public planning or discussion; it is unclear from the 
outside whether any significant new research in this area is planned or 
underway. Overall, however, we believe that EPA has improved its 
research planning and quality in the drinking water arena, though it 
should be more open and less exclusive in establishing its future 
overall drinking water research agenda, perhaps using a successful 
model like the M/DBP Research Council.
    Upcoming Microbial/Disinfection Byproducts, Arsenic, Groundwater, 
Filter Backwash, and Radon Rules. There are many challenges facing EPA 
in the drinking water standard setting arena. The agency must tackle 
some of the thorniest, most long-standing drinking water problems in 
the next few years. Arsenic, a known human carcinogen that is found in 
the tap water of over 50 million Americans at significant levels, is 
still governed by a woefully antiquated tap water standard set in 1942 
based on bad science and not amended since.\8\ EPA must update that 
standard by 2001 under the SDWA.
---------------------------------------------------------------------------
    \8\ E. Olson, J. Watts, D. Rosenberg, and P. Schwartz, Trouble on 
Tap: Arsenic, Radioactive Radon, and Trihalomethanes in Our Drinking 
Water (NRDC, 1995).
---------------------------------------------------------------------------
    Similarly, EPA must deal more comprehensively with Cryptosporidium, 
which is found in raw or finished water by water suppliers serving over 
45 million Americans,\9\ and must also begin to consider seriously how 
to control other emerging microbial disease-carrying organisms. 
Disinfection byproducts (DBPs), linked in numerous human 
epidemiological studies and animal tests to cancer and more recently to 
reproductive harms such as birth defects and spontaneous abortions, are 
found at substantial levels in over 100 million Americans' tap 
water.\10\
---------------------------------------------------------------------------
    \9\ E. Olson, You Are What You Drink (NRDC, 1995).
    \10\ E. Olson, J. Watts, D. Rosenberg, and P. Schwartz, Trouble on 
Tap: Arsenic, Radioactive Radon, and Trihalomethanes in Our Drinking 
Water (NRDC, 1995).
---------------------------------------------------------------------------
    These microbial and disinfection byproduct contaminants will be 
addressed in rules expected to be issued in 2002. These new rules will 
likely necessitate significant upgrades in the nation's drinking water 
source protection and treatment and distribution system infrastructure. 
EPA's interim approach in issuing the December 1998 Stage 1 DBP and 
Interim Enhanced Surface Water Treatment Rule was essentially to 
require water systems to ``do as well as you can with what equipment 
you've got.'' The new rules will have to go beyond simply tuning up our 
existing, often out-of-date treatment.
    Additionally, the filter backwash rule will be critical to ensuring 
that water filtration plants are not simply using their filters to 
concentrate the microorganisms they are filtering out, and then 
reintroducing those microbes into the water.
    Groundwater contamination with microbes also remains a problem. EPA 
is developing a groundwater rule, but this will have to be fully 
integrated with other EPA rules and state activities.
    Radon, is another known human carcinogen in tap water EPA must soon 
regulate. The National Academy of Sciences has just verified that radon 
from tap water likely causes about 180 fatal cancers per year (and many 
more cancers are caused by indoor radon seepage into buildings from 
soil).\11\
---------------------------------------------------------------------------
    \11\ National Academy of Sciences, National Research Council, Risk 
Assessment of Radon in Drinking Water (1998).
---------------------------------------------------------------------------
    As these rules are issued, attention must be paid to how these 
contaminant-specific rules, and the pollution prevention provisions of 
the SDWA and Clean Water Act will be better integrated into an 
effective program to protect public health and the environment. We 
believe that ultimately it may be fruitful for the nation to consider 
an approach to drinking water protection that encourages broad source 
water protection combined with new ``leap frog'' treatment technologies 
and distribution system management techniques that can prevent or 
remove contamination by a broad spectrum of chemicals and 
microorganisms. This could lead to greater public health protection, 
while relieving cities, towns, and water utilities from the treadmill 
of ever-changing contaminant-by-contaminant regulation and monitoring, 
which is fraught with uncertainty that makes long-term planning 
difficult, and which is often reactive to new contaminant research, 
monitoring, scientific discoveries, and public concerns.
    Consumer Right-to-Know About Tap Water Contamination. To redress 
these and other tap water problems, public involvement will be crucial. 
The 1996 SDWA required water suppliers to issue annual right-to-know 
reports (or ``Consumer Confidence Reports''), which will tell the 
public about which contaminants are in their drinking water.
    This will be the real test of whether EPA, States, and the nation's 
water systems are able to work in partnership with us and others to 
educate and involve the public in the fight for better drinking water 
protection. If effectively implemented and combined with a meaningful 
public education campaign, the right to know rules will help to empower 
the public to address the challenges ahead as major infrastructure 
investments are needed. However, to achieve this goal, EPA must 
dedicate substantial additional resources to work to educate specific 
groups such as health care providers, the immunocompromised, pregnant 
women, the frail elderly, children's' organizations, other vulnerable 
populations, and the general public, to help them anticipate and 
understand these reports.
    EPA's rules for these reports, issued in August 1998, will begin to 
make this goal a reality. However, aggressive state and water utility 
steps to go beyond the minimum requirements of the rules will be 
necessary to assure that the public is fully informed.
    We were especially pleased with EPA's excellent public outreach and 
participation in developing these rules. Still, there is room for 
improvement in the rules. For example, we believe that water systems 
should be required to mail their reports to all consumers who drink the 
water (including all postal patrons in served areas--not just those who 
pay water bills), and should have to reveal levels of all contaminants 
they find in their tap water at levels of potential health concern--
even if they are not required to monitor for them under the SDWA. 
Additionally, the health effects of all contaminants found should be 
required to be noted in the reports, as should the names of the 
specific sources of the pollution found in drinking water, and actions 
consumers can take to protect themselves. A clearer requirement for 
translation of the reports for substantial non-English-speaking 
populations also would be helpful, as would a requirement that 
consumers be more expeditiously notified of newly-found contaminants of 
potential health concern, or contaminants with substantially increased 
levels compared to previous public reports.
    Drinking Water Compliance Problems--Including Ongoing Problems With 
Small Systems--and the Need to Improve Databases. There continue to be 
problems with the current drinking water compliance program, as is 
discussed in detail in the attached USA Today series published in 
October 1998. We are hopeful that the new SDWA small system viability 
provisions will help to reduce some of these problems, but additional 
state and federal resources will be needed to make a major dent in the 
small system compliance problem. We strongly believe that all EPA-
funded (whether state or EPA-administered) small system technical 
assistance should be granted only after competitive bidding, as 
suggested in a 1998 EPA Inspector General's report.
    Improved state data collection and reporting on compliance and 
enforcement to EPA is needed, with EPA audits of state records and 
reports. Moreover, compliance remains a problem for many EPA health 
standards, and state and EPA enforcement of the SDWA remains 
unacceptably weak. The vast majority of health standard and major 
monitoring violations--and even the majority of EPA-defined 
``significant non-compliers''--are not subjected to formal enforcement 
action, even after extended or serious health-threatening 
violations.\12\ Small system noncompliance remains a substantial 
problem, and many large systems also violate EPA health standards, 
according to state and EPA records.
---------------------------------------------------------------------------
    \12\ E. Olson, You Are What You Drink . . . (NRDC, 1995); E. Olson, 
Think Before You Drink (NRDC, 1993). NRDC also has reviewed more recent 
EPA data and verified that these trends have continued in recent years, 
as illustrated by the data presented in EPA's Providing Safe Drinking 
Water In America (September 1998) and other EPA data reviewed by NRDC.
---------------------------------------------------------------------------
    Source Water Assessment and Protection. Finally, strong state and 
EPA efforts are needed to make the source water assessment and 
protection efforts work. The public must be meaningfully involved in 
all states, and funding decisions at the state level must emphasize the 
need for these prevention-oriented activities (not just building new 
treatment plants), and for public involvement in making these 
decisions. In addition, we have found that in most states, there is no 
plan for new monitoring of contamination when source water assessments 
are being completed--in essence, most states plan to use existing 
monitoring data. We are deeply troubled by this approach, because it is 
clear that in many cases, additional monitoring will be needed to 
identify current and potential sources of pollution for our drinking 
water supplies. Clean Water Act and SDWA programs also must be better 
integrated, and more teeth are needed to prevent polluted runoff, 
animal feeding operations, and other major unregulated or under-
regulated pollution sources.
                              conclusions
    In sum, while there remain some significant implementation issues, 
it is too early to render a verdict on the 1996 SDWA Amendments. We 
believe that there are hopeful signs that the public's right to know 
will be ensured, that public health protection--particularly for the 
most vulnerable among us such as children--will be improved, and that 
some progress will be made towards addressing source water 
contamination problems. The true tests of EPA, states, and water 
systems will come over the next few years. What happens in these years 
could determine whether the Third Revolution in safe drinking water 
delivery occurs smoothly and deliberately, or is hampered by delays, 
fits and starts. We remain cautiously optimistic that the future will 
bring safer tap water for all Americans in the 21st Century.
                                 ______
                                 
 Responses of Erik D. Olson to Additional Questions from Senator Crapo
    Question 1. How would you characterize public participation in the 
establishment of regulations and standards to date? If poor, would you 
lay blame with EPA, state agencies, or stakeholder groups?
    Response. Generally, EPA's Office of Ground Water and Drinking 
Water is to be commended for the open process it has used in developing 
new regulations and standards under the 1996 Safe Drinking Water Act 
Amendments. The agency generally has made a genuine, good-faith effort 
to involve the public in its standard-setting processes under the new 
law. The two areas of concern we have, however, regarding public 
participation under the SDWA are:
    (1) EPA sometimes has adopted a one-sided process in developing 
certain guidance documents or in drafting research plans. For example, 
in developing the ``operator certification'' requirements, EPA 
established a special committee which included only state and EPA 
officials to develop these requirements. EPA then provided what seemed 
to some participants to be a pro forma review of the products of the 
state-EPA work group by a broader set of stakeholders, in which it was 
apparent that EPA had essentially granted states veto power over any 
different or additional operator certification requirements. Similarly, 
EPA dissolved a broad stakeholder committee on the drinking water SRF, 
replacing it with a committee that included only state and EPA 
representatives, without public interest or other groups' 
participation, creating a vacuum in public participation. Moreover, 
when EPA was developing the arsenic in drinking water research agenda, 
the agency consulted only with the water industry (through the American 
Water Works Association Research Foundation), without public notice or 
participation. After we learned of the industry-EPA group and strongly 
objected, EPA did allow public comments on the arsenic research plan, 
but EPA then jointly reviewed research proposals in a closed-door 
process with AWWARF. EPA followed a far better approach in negotiating 
the microbial and disinfection byproducts rules and research agenda, in 
which the agency was inclusive, and engendered much good will and, 
ultimately, a better and more widely-accepted product.
    (2) Some states have failed to involve the general public or public 
interest community meaningfully in their implementation of the SDWA. 
For example, several states told representatives of the environmental 
community and other public interest groups that there would be no 
opportunity to review or participate in the development of state 
``intended use plans'' (IUPs). These IUPs are crucial documents, as 
they dictate how federal SRF funds will be spent in the state. These 
states offered only a pro forma, after-the-fact review of the IUP, 
after a notice in the state register. Similarly, while public 
participation in the development of source water assessments was highly 
successful in some states, in other states members of the environmental 
community were denied meaningful participation in development of these 
assessments, with only a last-minute general request for comments as an 
apparent afterthought.

    Question 2. How do you interpret EPA's authority to revise 
standards?
    Response. The Safe Drinking Water Act provides that EPA must review 
and revise each national primary drinking water regulation no less 
often than every 6 years, and that ``any revision . . . shall be 
promulgated in accordance with this section except that each revision 
shall maintain, or provide for greater, protection of the health of 
persons.'' SDWA Sec. 1412(b)(9). This provision is self-explanatory in 
that it was intended to avoid ``backsliding'' of tap water health 
standards. It was adopted in light of a major controversy leading into 
the 1996 Amendments as to whether EPA should be allowed to weaken 
existing health standards based on the new provisions in the law. The 
Senate Environment Committee and all of Congress came down squarely in 
favor of maintaining or strengthening health protections. The law 
allows health standards to be revised only downwards--with EPA 
authorized to adopt only stricter or equally protective public health 
protections, not weaker standards.
                               __________
   Prepared Statement of Gurnie Gunter, Director, Kansas City Water 
Services Department, on behalf of the Association of Metropolitan Water 
                            Agencies (AMWA)
    Good morning, I'm Gurnie Gunter, Director of the Kansas City (Mo.) 
Water Services Department, and I serve on the Board of Directors of the 
Association of Metropolitan Water Agencies (AMWA). Thank you for 
inviting me to testify before the subcommittee.
    I am here today to represent AMWA--an Association comprised of the 
nation's largest publicly-owned water suppliers altogether serving over 
100 million people with clean, safe drinking water.
                              introduction
    Largely through the efforts of the Senate Environment and Public 
Works Committee and its counterpart in the House, the Safe Drinking 
Water Act was reauthorized in 1996. The statute's reform was 
accomplished through a strong bipartisan effort at a time when there 
was serious disagreement over the question of reforming EPA's 
regulatory process. Much to this committee's credit, the 1996 drinking 
water amendments are held up as an example, by many in Congress, the 
Administration and many others, as the way regulatory reform ought to 
happen.
    Making sure the reforms instituted by the 1996 statute are 
implemented is one of the many important jobs of this subcommittee. The 
success, or failure, of the 1996 amendments will impact whether the 
reforms used in this statute are ones to be emulated in other important 
environmental and public health laws.
                             implementation
    It has been two and one half years since passage of the Safe 
Drinking Water Act Amendments of 1996 and the Environmental Protection 
Agency (EPA), assisted by the States, water supply community, 
environmentalists and others, has managed to implement numerous key 
provisions. Much of EPA's work was accomplished through a stakeholder 
process developed with the help of the National Drinking Water Advisory 
Council. Through this process, the agency considered each stakeholder's 
views. The agency's efforts to meet the deadlines of the 1996 
Amendments serves as a model of how the rulemaking process ought to 
work.
    So that implementation of the statute stays on schedule, EPA is 
hard at work developing a new database to house information on 
contaminant occurrence in raw water sources; the agency has already 
developed a list of 60 contaminants they are considering for future 
study; agency staff are developing new ways to measure costs and 
benefits of future regulations; States are evaluating the 
susceptibility of water supplies to pollution; the first ever drinking 
water loan fund is making awards to assist with compliance; and water 
suppliers are gearing up to mail out their first Consumer Confidence 
Reports.
    Two major rules, the Disinfectant/Disinfection Byproducts Rule and 
the Interim Enhanced Surface Water Treatment Rule, have also been 
promulgated since enactment of the 1996 amendments. However, because a 
negotiated rulemaking process was used to develop these two rules, 
Congress took great care not to alter the results of those 
negotiations. Therefore, the real impact of the 1996 amendments will 
become clearer this year with a new round of rules governing 
disinfection byproducts, and pathogens, arsenic, radon and ground water 
on the table for development.
                  new regulatory development framework
    These and other contaminants will be regulated under a new 
regulatory framework mandated under the 1996 amendments. EPA will focus 
on contaminants that actually occur in drinking water and, moreover, at 
levels of public health concern. Rather than setting standards for a 
prescribed list of contaminants as previously required by the 1986 
amendments, EPA is now required to develop a list of contaminants for 
possible regulation, study them and every 5 years make a decision on 
not fewer than 5 whether they should be regulated. In order for EPA to 
make a decision to regulate, or not, research is essential.
    The Office of Ground Water and Drinking Water has made considerable 
effort to satisfy this new framework: construction of the occurrence 
data base is underway and a list of 60 contaminants has been developed 
for further consideration. Remaining, however, is the actual research 
to support the new framework.
        priority contaminants (contaminant candidate list--ccl)
    While funds to support current rule development exists, research on 
candidates for future regulation are getting little or no funding. Both 
the General Accounting Office (GAO) and the National Drinking Water 
Advisory Council (NDWAC) have raised the issue of research funding to 
support future rules that need to be based on sound science. As 
regulatory development under the 1996 amendments begins on new 
contaminants, research needs escalate quickly. NDWAC and GAO estimate a 
shortfall of between $10 and $20 million annually to address the 
regulation of future contaminants. Without a substantial amount of 
research, the 1996 Amendments could be undermined, and Congress' intent 
to change the way regulations are developed would not be accomplished.
    Funding the necessary research to support development of future 
regulations is a priority for AMWA in fiscal year 2000 and the near 
future. In order for the scientific data to be available in time to 
make sound scientific decisions, research must begin now. As we have in 
the past, the drinking water community is prepared to work in 
partnership with Congress and the Administration to ensure that 
sufficient data is available to make informed decisions.
    In addition to future regulatory development, EPA, according to the 
Amendments, must review all drinking water regulations periodically and 
revise them as appropriate. This represents a further demand for 
research that cannot be met by the agency's current research budget.
        microbial and disinfection byproducts: the second stage
    The next major rulemaking that could potentially impact all surface 
water systems and many ground water systems is the second stage of the 
microbial and disinfection byproducts rulemaking. So the Stage 2 rules 
would be based on more science than was available for Stage 1, EPA and 
the water supply community committed to providing millions of dollars 
to conduct health effects research and occurrence studies. To date, the 
nation's largest water systems have invested well over $100 million in 
this data collection effort.
    The uncertainties we face without this information cannot be over 
emphasized. Because of the inherent risk trade-offs between microbial 
pathogen control and disinfection byproduct reduction, coupled with the 
lack of data on the health effects of alternative disinfectants 
compared to the chlorine based disinfectants typically used, the very 
real possibility exists that billions of dollars may be spent on 
changing the way we treat water without lessening public health risks, 
or, even worse, actually increasing those risks.
    Unfortunately, there have been significant delays in collecting 
contaminant occurrence and treatment data, and in executing the 
necessary health effects research program. The optimistic timeframe set 
by negotiators, and adopted into law, in large part was driven by the 
statutory deadlines of the old law. In retrospect, a more realistic 
view of the timeframes involved would have given more time considering 
the unprecedented magnitude of the research effort.
    As a result, negotiations on the second stage of the M/DBP Rules, 
scheduled to start this spring to meet a promulgation date for final 
rules of May 2002, may do so without the benefit of studies that are 
ongoing but not yet completed.
    A few weeks ago, EPA held a workshop to assist all interested 
parties in understanding the state of the science on DBPs and microbial 
contaminants. Next week they will hold another workshop on the state of 
treatment technologies. The question that will need to be answered 
after both science and technology are reviewed, is what do we know, or 
not know, and where does that lead us. AMWA is committed to looking at 
the science that is completed and treatment that is available. We are 
also committed to looking at the research that is underway but won't be 
available in the timeframe laid out in the law, and asking the question 
what more will we know a year or two from now and should we ask 
Congress for more time so the science can be completed. The expenditure 
of billions of dollars in public funds requires all of us to ask these 
questions so that when the money is spent the public is sure that the 
money has been spent wisely.
    AMWA requests that the subcommittee remain open to the option of 
altering the compliance date for Stage 11 of the M/DBP should reason 
dictate.
                              good science
    For the first time, EPA proposed, as part of the Stage I D/DBP 
rule, a non-zero Maximum Contaminant Level Goal (MCLG) for chloroform 
based on the scientific evidence that its dose response curve is 
nonlinear at low doses. EPA and experts in the field have long sought 
specific information on the mode of action of contaminants. By knowing 
the mode of action of a contaminant that causes cancer in animals, it 
is possible to make a determination of whether or not the same mode of 
action would apply at lower doses or even be applicable to humans at 
all.
    A first time change such as this from a conservative default 
assumption based on scientific data will always be controversial and 
should be carefully explored and justified as it appears EPA and 
outside expert workgroups have done. And, although EPA chose not to 
finalize the MCLG for chloroform in the final Stage I D/DBP rule at a 
level other than zero, if the review to be conducted by the Science 
Advisory Board (SAB) provides support for the non-zero level, we 
believe that the agency's commitment to the use of good science 
dictates that an MCLG other than zero be finalized in Stage II.
    The non-zero MCLG for chloroform is important for another reason. 
Chloroform is the most commonly formed disinfection byproduct. Efforts 
to control byproducts as required by regulation have focused on 
chloroform reduction in the past since it is also the easiest to 
control. To the extent that chloroform isn't part of the risk equation, 
such efforts might have the unintended consequence of increasing risks 
from other byproducts. It should be no surprise that following the best 
science will work out to be the best in the long run.
              public information and cost-benefit analysis
    The 1996 Amendments throughout stress the use of good science as a 
vital underpinning of regulatory efforts. In addition to science, the 
statute adds two significant right-to-know and public information 
provisions. The first as mentioned earlier are the so-called consumer 
confidence reports that water suppliers are required to provide their 
customers annually beginning this year. The other requires EPA to 
present information on public health effects and to conduct and publish 
an analysis of quantifiable and nonquantifiable benefits and costs. 
This provision does not require the Administrator to demonstrate that 
the dollar value of the benefits are greater (or lessor) than the 
dollar value of the cost, but it does require her to make a 
determination with respect to the relative costs and benefits of each 
national primary drinking water regulation when it is proposed. AMWA 
urges this subcommittee to ensure that the letter and intent of the law 
are followed and that this analysis is conducted for all future 
rulemakings.
              drinking water state revolving loan program
    For the first time in the history of drinking water, there is a 
Federal loan program designed to assist water suppliers meet the 
demands of the drinking water law. With $138 billion in unmet 
infrastructure needs, including $34 billion for immediate needs, there 
is a great demand for the program. It is important, then, for EPA to 
provide for a fully funded loan program in its future budget requests 
and for Congress to appropriate those funds.
                               conclusion
    EPA, States, and public water systems face the challenge of making 
the 1996 Amendments work as Congress intended. The burdens are 
considerable, but the result will be a stronger drinking water program 
and continued protection of the nation's drinking water. But if EPA and 
the States are to meet those challenges and burdens, adequate resources 
must be made available. The onus is on EPA to request appropriate funds 
from Congress and on Congress to satisfy EPA's requests. In addition, 
we encourage the agency to continue its current approach to 
implementation of the Act and to embrace the regulatory tools Congress 
provided it in 1996. AMWA will continue to support the agency, and we 
look forward to a close working relationship with you as well.
    Thank you for this opportunity to testify. If we can be of any 
future assistance, please contact us.
                               __________
 Prepared Statement of Steve Levy, Executive Director, Atlantic States 
                 Rural Water and Wastewater Association
                              introduction
    Chairman Crapo, Chairman Chafee, members of the committee, my name 
is Steven Levy. I am Executive Director of the Atlantic States Rural 
Water and Wastewater Association, serving Connecticut and Rhode Island 
and the Maine Rural Water Association. I am here today on behalf of the 
National Rural Water Association, a federation of 47 state rural water 
associations representing over 17,000 water and wastewater systems. For 
the past 16 years, like my colleagues across the country, I have been 
in the field helping small water systems provide safe drinking water. 
While you are familiar with the number and type of water systems in 
your state, I would like to identify some national facts regarding 
small community water systems.
                 facts on small community water systems
     53,335 of the 56,747 community water systems in the 
country (94 percent) serve populations of less than 10,000 persons. 
According to EPA the average size community water system serves less 
than 150 homes.
     In Maine, 420 of the 436 community water systems serve 
less than 10,000 persons and one system larger than 100,000 persons. In 
Montana, 688 of the 694 community water systems serve less than 10,000 
persons and there is not one system larger than 100,000 persons. In 
Rhode Island, 82 percent of systems serve less than 10,000. In Idaho, 
789 of the 800 community water systems serve populations less than 
10,000.
     The small water systems make no profits, are locally 
governed by rural citizens whose families drink the water, and were 
built to improve public health by eliminating the use of contaminated 
wells, shallow wells, streams, bogs, or cisterns as their drinking 
water source. Prior to the development of water systems, families 
hauled water from dozens of miles away to cisterns and collected runoff 
from roofs.
     Currently more than 1.1 million rural Americans live in 
homes without piped water. The primary reason these 405,855 families 
don't have water is they cannot afford it.
     Due to economies of scale, families on rural water systems 
often pay over $50.00 a month for service.
    Each state rural water association membership is comprised of small 
non-profit water systems and small towns. All members have water supply 
operation as their primary daily activity. Membership averages about 
400-500 communities per state, with systems from all geographic areas 
of each state. These are active members--who continuously participate 
in the training and technical assistance program in an effort to 
improve their drinking water. This program actively assists all small 
water systems whether they are members of the state association or not. 
With a significant turnover in water operators and board members--and 
the ever increasing regulatory burden--the need for training and 
technical assistance remains constant.
          section 1.0 drinking water quality is a local issue
    The problem with the Safe Drinking Water Act is that improving 
drinking water in small communities is more of a RESOURCE problem than 
a REGULATORY problem. Every community wants to provide safe water and 
meet all drinking water standards. After all, local water systems are 
operated by people whose families drink the water every day, who are 
locally elected by their community, and who know, first-hand, how much 
their community can afford. Without the support of local people, 
regulations alone won't protect drinking water.
    It was not a regulation that caused the individuals to act locally 
to start systems which provided the most dramatic public improvement 
ever in their community. Many interest groups petition this committee 
to authorize more and more, ever stringent federal unfunded mandates on 
small communities with the intention of improving public health on the 
communities' behalf. Unfortunately this does not work and things aren't 
that simple. The key to long-term improvement is local support, local 
education and available resources. We continually ask for the list of 
the small communities that need to improve their drinking water and are 
not willing to take the steps to do it. Such a list does not exist. 
Organizations that advocate increasing unfunded mandates on small 
communities should take their case directly to the local community. If 
they can get the community's support then we would back any new 
standard or policy. The problem has been that small communities don't 
support most of these policies at the local level because they waste 
limited resources on non-priority projects.
    Mr. Chairman, my experiences starting water systems is very similar 
to thousands of others in every state. Small water systems were started 
to improve the public health. No one forced us to start these systems, 
which always required hundreds of hours of our time and often a lot of 
our money. In most cases small water systems made dramatic improvements 
in public health providing an alternative for families from gathering 
their drinking water from untreated streams, shallow and contaminated 
wells, and collecting their water off the roofs and cisterns. Millions 
of rural families still have water delivered to their homes. According 
to the USDA at least 2.2 million rural Americans live with critical 
quality and accessibility problems with their drinking water, including 
an estimated 730,000 people who have no running water in their homes. 
About five million more rural residents are affected by less critical, 
but still significant, water problems, as defined by the federal Safe 
Drinking Water Act. These problems include undersized or poorly 
protected water sources, a lack of adequate storage facilities, and 
antiquated distribution systems.
           section 1.1 epa's significant non-compliance study
    Recently, EPA conducted a study on systems with a ``history of 
significant non-compliance'' as mandated under the 1996 Amendments. 
This list showed:
     No widespread contamination of the country's drinking 
water.
     All local government systems are taking immediate steps 
(often in advance of EPA notice) to quickly remedy any and all non-
compliance.
     Most all noncompliance (including SNC non-compliance) is 
procedural.
     Many systems don't know they are a SNC.
    Most all of this non-compliance can be quickly remedied by 
providing these system was immediate, simple, technical assistance. For 
example, Idaho Rural Water conducted a program in cooperation with the 
state to bring SNCs into compliance. Idaho Rural Water found that most 
SNCs studied can be returned to compliance through on-site assistance. 
Of the 30 systems identified by the state for the study; 29 were able 
to return to compliance through technical assistance by Idaho Rural 
Association. Most of the technical assistance consisted of an initial 
phone call and a one hour on-site contact.
    In addition to Idaho, EPA studies have confirmed our conclusions. A 
January 1998 report from the U.S. Environmental Protection Agency 
Office of Compliance (OECA) found dramatic improvement in small 
community compliance with EPA drinking water rules after receiving ON-
SITE technical assistance.
    The EPA's pilot project looked at small and very small public water 
system compliance with the federal Safe Drinking Water Act in three 
states, Colorado, Iowa, and Alaska. In these states, EPA utilized NON-
REGULATORY assistance and training programs operated by small 
communities themselves as an alternative to regulatory enforcement 
(like fines and penalties) to solve noncompliance. The results are 
impressive. According to the EPA report's findings, after assistance 
was provided: of the 153 small water systems in Colorado with chronic 
noncompliance, 62 percent of the noncompliant community systems came 
into compliance and 59 percent of the non-community systems achieved 
compliance. Of the 280 systems in Iowa in noncompliance which received 
technical assistance 89 percent of the systems did not receive failure 
to monitor notices in the subsequent monitoring period.
    This study is very significant because it quantified environmental 
results and progress by documenting actual success rates for specific 
programs. It is difficult to say what is working until you can measure 
it--this is a common problem with environmental programs. This type of 
``hard'' results analysis should be used as a model for most federal 
environmental programs.
   section 2.0 long-term success is dependent on local responsibility
    The challenge of balancing local flexibility in a federal 
regulatory structure was a key goal of the 1996 Amendments--especially 
with regard to small communities. The Act has initiated a new approach 
of greater emphasis on technical assistance and a new commitment to 
local initiative which has greatly improved small community compliance 
with the law and promoted local responsibility for protection of 
drinking water resources. This approach has already resulted in 
enhanced environmental improvement. For example, over 2,900 communities 
have adopted source water protection programs, and 2,300 are in the 
process of adopting programs, utilizing the Act's expanded wellhead/
groundwater protection programs.
    The only way to achieve long-term success in ground water 
protection is to have the people who benefit from a cleaner environment 
actually take responsibility for protecting it. Once committed, local 
elected officials have brought together diverse groups such as farmers 
and manufactures. Local leaders (who speak the same language) are more 
effective than federal regulators at finding agreement among the 
diverse groups. According to most local Mayors and Councils 
participating in the program--``this is the best federal environmental 
program our Town has ever participated in''--a progressive, 
environmentally friendly, land-use program supported in small 
communities. Local folks taking care of themselves--and taking 
responsibility for protecting their own drinking water is the only way 
to sustain long-term protection of drinking water. Increasing the 
number and the stringency EPA regulations will not help folks without 
water get water. And more regulations won't help poor communities who 
can't afford them (see Attachment One). Providing resources to the 
folks at the grassroots level and recognizing local initiative has 
resulted in more environmental improvement than the regulatory 
alternative of increased enforcement. We encourage you to continue this 
effort. The dramatic increase in regulations over the next five years 
(due to the Amendments of 1996) will require expanded assistance to 
rural and system systems. (Table One list the schedule for new 
regulation under the 1996 Act)
 section 2.1 montana case study in local responsibility for protection 
                            local resources
    Under the local grassroots approach in Montana, 115 systems have 
been covered over the past five years for less than $350,000. Of which, 
54 have been completed and ten have been granted testing waivers. On 
the other hand, under the EPA approach $500,000 was spent over eight 
years to complete five public groundwater protection programs. National 
programs that don't have the backing of local government will likely 
result in similar lags and high cost experienced in the groundwater 
programs. Table Two documents the over 4,900 local communities that 
have adopted enforceable groundwater protection programs. Many local 
plans have evolved into county wide plans and some are expanding to 
cover watersheds. This bottom-up approach is far outpacing EPA's 
efforts for a fraction of the cost. In fact, many local officials have 
commented that EPA's source water program (authorized in the SDWA) will 
not be nearly are comprehensive, enforceable, nor environmental 
progressive as the rural water ground water protection. These official 
are concerned that EPA's program will confuse local systems and may act 
as a disincentive for locals to adapt a more protective program.
               section 3.0 review of sdwa implementation
    In key provisions of the 96 Amendments, EPA staff have included 
federal authority in their regulations not provided in the Act. In 
other provisions, the agency has limited state and local government 
authority where the Act provided the agency with discretion including 
Capacity Development, Consumer Confidence Reports, Ground Water 
Disinfection Rule and others we been commented on and written to you in 
the past. We hope that in the future EPA will implement regulations in 
a manner consistent with the spirit and the intent of the law.
    Three MAJOR EPA proposals, Radon, Arsenic, Disinfection Byproducts 
Stages II, Ground Water Rules represent a significant threat to ability 
of small communities to supply safe and affordable drinking water. 
These rules may have a negative impact on public health in rural 
communities because the process EPA is using to determine rules do not 
adequately assess the public health challenges in small communities and 
will force communities to spend limited resources on low risk public 
health threats. We feel EPA is moving in a direction, under these 
Rules, contrary to the intent of the 1996 Safe Drinking Water Act 
(SDWA). We urge you to provide common-sense in implementing these rules 
or clarify the scope of the EPA's regulatory authority. The following 
summarizes our concerns with these four critical rules.
Ground Water Rule
     Small communities feel that the rule should clearly 
demonstrate ground water contamination before requiring systems to 
disinfect or take any other steps. The law provides EPA shall develop a 
rule that requires disinfection ``as necessary'' for ground water 
system. As necessary should mean: when contaminated. Not water that 
``may potentially'' become contaminated. EPA is proposing developing a 
rule that regulates what a community must do to prevent contamination--
a major change in the federal regulatory model. All EPA instruction on 
how to run a community (water system) to prevent contamination should 
be NON-regulatory (i.e., information, grants, training, education etc. 
to encourage towns to adopt the latest practices). The Rule should 
clearly demonstrate ground water contamination (physical, chemical, 
biological, or radiological substance or matter in the water) before 
requiring systems to disinfect or take any other steps. This common 
sense, ``innocent until proven guilty'' idea is the direction that the 
small communities feel EPA should adopt.
Radon Rule
     EPA is likely to propose a radon maximum contaminant level 
in the range of 200-500 pCi/l. This level is lower than radon levels in 
outdoor air. The National Academy of Sciences (NAS) recently released a 
report on radon which determined a general background level of radon in 
outdoor air of 0.4 pCi/l (water to air transfer ratio in homes is 
10,000 to 1). The straightforward multiplication of these values yields 
0.4 pCi/l is equivalent to 4000 pCi/l in water. In essence, a standard 
of 200-500 pCi/l, will force communities to spend millions to ensure 
their water is less of a health risk than naturally occurring outdoor 
air. Under the SDWA of 96, a community can comply with the outdoor air 
equivalent if it initiates a multimedia mitigation program. However, 
EPA appears to be requiring overly prescriptive mitigation program 
rather than an education/technical assistance approach. For example, 
EPA is proposing that ``results'' will be required under multimedia 
program. However, the NAS feels that because of background activities 
that it was not possible to measure the effectiveness of any particular 
program element. We strongly feel that small communities have better 
more important things to do with their funds and resources than to 
reduce the risk of drinking water lower than outdoor air. And we urge 
you to limit EPA's authority to a radon standard that is no more 
stringent than the risk equivalent of naturally occurring air.
Disinfection Byproducts
     EPA is in the process of developing a rule to regulate 
disinfection byproducts (DPBs Stage II). EPA has already promulgated a 
Stage I rule for DPBs. EPA acknowledges there was not adequate 
information on health effects science to justify Stage I levels. The 
maximum contaminant levels set under Stage I were overly stringent and 
will likely result in more harm than good in small systems. However our 
immediate concern over this rule is EPA's indication that they will be 
including small systems under Stage II. EPA's move is contrary to what 
was agreed too under Stage I which was the basis reauthorization and 
was partially codified in the 1996 Act. The Stage I ``agreement in 
principal'' provided a ``backstop'' that would limit Stage II MCLs to 
``surface water systems serving at least 10,000 people.'' This was 
endorsed in the 1996 Act's Conference Committee Statement, ``all 
further negotiations for the Stage II regulations for the control of 
DBPs should follow and be consistent with the considerations that led 
to an agreement regarding the proposed rule for Stage I.'' We feel that 
EPA's proposal to extend Stage II levels to small systems is: (1) not 
supported by the health effects' science, (2) provides a final rule 
deadline years before the necessary public health data will be 
available, (3) would result in an overall decrease in public health 
protection in rural and small communities, and (4) is contrary to the 
Stage I agreement (backstop) which was the basis for reauthorization.
           section 3.1 review of specific committee questions
    (1) Ground Water Rule Schedule for Promulgation: We are not nearly 
as concerned with EPA's expedited schedule in promulgating this rule, 
as we are with the actual content of this rule as described above.
    (2) Variances: We are not aware of any variances being granted in 
any state. The variance provision has proved unworkable because it is 
unclear how it works. To make it workable we would recommend the 
following changes: make the income threshold consistent with the CDBG 
(HUD) and USDA thresholds for affordability, allow variances be 
provided for all contaminants solely at the state's discretion (EPA 
review bureaucratizes the process), and provide for an immediate 
exemption if EPA has not identified an affordable alternative 
treatment. We would be happy to work with the committee further on 
improving the variance systems.
    (3) The Recent GAO Report: We do not agree with GAO . . . that it 
is too early to gauge EPA's success in implementing the SDWA. We feel 
that GAO should have concentrated more on the content of the rules and 
the specifics of their statutory authorization. GAO focuses on EPA's 
success in meeting rule deadlines. EPA's timeliness of promulgation is 
insignificant when compared to the content of regulations. This was the 
heart of the Congressional debate on reauthorization, the specific 
words in statute make all the difference. For example, GAO analyzes the 
EPA's ``implementation . . . [of] the provisions to ensure the 
viability of the thousands of smaller water systems . . .'' GAO 
adoption of the term ``ensure'' (which is not in the statute) to gauge 
EPA's success in implementation reflects a lack of understanding of 
statue and ability to gauge implementation. Senator Kempthorne 
specifically made a case that EPA is to ``assist'' systems with 
viability. This one word changes the entire authority in that 
provision. This is significant, and GAO should focus on this critical 
implementation issue.
    Rural Water continues to press EPA to stick to the specific 
provisions and intent in the SDWA of 1996. In closing, I would like to 
again thank the committee for this hearing, ask for your continued 
support for additional technical resources to the grassroots level, 
your assistance to clarify the intent and meaning of key provision in 
the 96 Amendments, and your resistance to calls from interest groups 
for more and more, ever stringent federal unfunded mandates on 
communities. Unfortunately things aren't that simple. The key to long-
term improvement is local support, local education and available 
resources. Mr. Chairman, my name is Steven Levy. I am Executive 
Director of the Atlantic States Rural Water and Wastewater Association 
and the Maine Rural Water Association, serving the States of Rhode 
Island, Connecticut, and Maine. I am here today on behalf of the 
National Rural Water Association.
    I testified before this committee in May of 1990 on financing 
environmental facilities. I discussed the plight of the Long Pond Water 
Company, a tiny 160 customer, private, unfiltered, surface water supply 
in Sorrento, Maine. They faced the daunting prospect of COMPLIANCE with 
the Safe Drinking Water Act which required them to install a filter 
plant. Their story demonstrates the impact of the SDWA on small 
communities.
    The company and the Town wanted to comply but did not know how to 
pay for the $1 million mandate. That mandate did not come with any 
funding and most small towns don't know what to do when hit by such 
costs. They did what thousands of other communities do in every state . 
. . they called their rural water association. Each year rural water 
associations will assist the Long Ponds of America handle the onslaught 
of EPA regulations.
    With Rural Water's help, the town stepped up and accepted the 
challenge of bringing that water system into compliance. Our technical 
assistance program helped create a nonprofit water district and rural 
water helped them secure a U.S. Department of Agriculture funding for 
$1.5 million to pay for the new treatment plant and a new stand pipe. 
Average water rates climbed from $81 per year to over $500 per year.
    The point of this story is that small towns will take the necessary 
measures to protect their water. However they need common-sense 
assistance, provided in a simple form that small towns can understand 
and it takes someone going to that town, sitting down with them evening 
after evening, and working with then through the ENTIRE process and 
getting them an answer they can understand. Giving them a copy of the 
federal register and phone number to call would help them. No one else 
does this except rural water technical assistance. We also help show 
them how and where to find funding such as the USDA and the SRFs--which 
can require complicated paperwork.
    Each time we help out a community they know how to do it on their 
own next time. THIS IS KEY--ENCOURAGING LOCAL responsibility. If the 
community does not accept and support measures to protect their water, 
no amount of regulation will protect it.
    Long Pond's troubles are not over, the water system is now in need 
of $1 million funding package from the State Revolving Loan Fund to 
replace their antiquated transmission line. This is the case with small 
systems in every state. The flood of new regulations is increasing over 
the next five years. Consumer confidence report, radon, ground water 
rule, operator certification, source water protection, disinfection 
byproducts, and others. We urge the committee to expand the technical 
assistance under the act and tell your systems to utilize it. We also 
urge you to expand the capital resources available to small system, 
especially the USDA water and sewer grant and loan program.
    Enormous progress has been made in drinking water protection since 
the passage of the 1986 and 1996 amendments. Most of the progress has 
been made by local people taking local action and being educated 
through technical assistance.
    For example:
     In Rhode Island and Connecticut, rural water has assisted 
44 communities and 13 non-community systems develop source water 
protection plans and SOC waiver forms, saving thousands of dollars per 
system in testing costs.
     EPA Rulemaking has been especially challenging to our 
smaller public water systems, who often lack full-time trained help and 
can't take full advantage of the waivers in the Act. This is where we 
come in . . . in Maine our staff helped 175 community and non-transient 
systems complete wellhead assessments and SOC waiver forms. Total 
savings were about $186,000.
     Nationwide, the Act has initiated a new approach of 
greater emphasis on technical assistance and a new commitment to local 
initiative which has greatly improved small community compliance with 
the law and promoted local responsibility for protection of drinking 
water resources. This approach has already resulted in enhanced 
environmental improvement. For example, over 2,900 communities have 
adopted source water protection programs, and 2,300 are in the process 
of adopting programs, utilizing the Act's expanded wellhead/groundwater 
protection programs. The list is included with my written testimony.
    The only way to achieve long-term success in ground water 
protection is to have the people who benefit from a cleaner environment 
to actually take responsibility for protecting it. Local folks taking 
care of themselves--and taking responsibility for protecting their own 
drinking water is the only way to sustain long-term protection of 
drinking water. And more regulations won't help poor communities who 
can't afford them. Providing resources to the folks at the grassroots 
level and recognizing local initiative has resulted in more 
environmental improvement than the regulatory alternative of increased 
enforcement. We encourage you to continue this effort.
                               __________
 Prepared Statement of Andrew M. Chapman, Elizabethtown Water Company, 
        on behalf of the National Association of Water Companies
    Good morning, Mr. Chairman. My name is Andrew M. Chapman. I am the 
President and CEO of Elizabethtown Water Company, an investor-owned 
community water system serving a population of one million in central 
New Jersey. I am also a Vice President and member of the Executive 
Committee of the National Association of Water Companies (NAWC), a non-
profit trade association that exclusively represents the nation's 
private and investor-owned drinking water utility industry. Its 
membership--over 320 companies in 42 states--provides safe, reliable 
drinking water to nearly 21 million Americans every day.
    Mr. Chairman, NAWC is pleased that you and your subcommittee have 
scheduled this oversight hearing on the implementation of the 1996 
Amendments to the Safe Drinking Water Act (SDWA). With its emphasis on 
public participation and right-to-know, the requirements for sound 
science and cost-benefit analysis in the regulatory process, and the 
creation of a state revolving loan fund (SRF) for infrastructure 
improvements, the 1996 Act represents a new paradigm for environmental 
legislation and an achievement that this committee and Congress should 
be justly proud of.
    NAWC supported the 1996 Act and we are happy to report that, based 
on our experience over the past two years, its overall implementation 
to date has been successful. Officials at the Environmental Protection 
Agency should be commended, in particular, for meeting the Act's 
deadlines while involving interested stakeholders in the process of 
developing regulations and guidelines in a fashion that is truly 
unprecedented. Although we have concerns which I will discuss and we 
can see problems developing that should be addressed, overall we 
believe that to date EPA, the state primacy agencies, and the various 
stakeholder groups have worked in a positive and cooperative manner 
towards implementation of the letter and spirit of the legislation.
                      consumer confidence reports
    One conspicuous example of this success was the announcement by the 
President on August 11, 1998, of the Consumer Confidence Reports (CCR) 
final rule. Pursuant to this rule all community water systems will be 
required to disclose to their customers each year the state of their 
drinking water supply--something that many NAWC companies have been 
doing for many years. Generally the reports will include information on 
the sources of drinking water, potential sources of contamination, the 
health effects of any violations, and precautionary advisories for 
people with special medical problems. We strongly believe in the 
public's right to have relevant information about their drinking water, 
and we believe that the final rule strikes a proper balance by 
requiring the disclosure of important information at a level of detail 
that is meaningful and understandable.
                       state revolving loan funds
    The plain language of the SDWA Amendments of 1996, as well as the 
legislative history, makes it clear that Congress intended DW-SRF funds 
to benefit all customers of public water systems, regardless of the 
ownership of the systems. This policy was a deliberate departure from 
that of the Clean Water Act SRF which provides funds to publicly owned 
wastewater systems only. Because of this change, the Senate Committee 
Report made eligibility of private systems explicit: ``Drinking water 
systems eligible for [DW-SRF] assistance are those public water systems 
(as defined by the Act) that are community water systems (whether 
publicly or privately owned) . . .''
    EPA has supported this policy, and EPA officials should be 
commended for their efforts to implement the SRF equitably. In 
particular, we appreciate EPA's recent announcement that 
``reimbursement'' is permitted for costs incurred after state approval 
of a project but before execution of a loan agreement. Such 
reimbursement for privately-owned companies might not have been 
permitted under a strict interpretation of the Act which does not allow 
``refinancing'' for privately-owned companies. This common-sense 
interpretation by EPA was critical in some states, including New 
Jersey, where approval of a project typically takes place many months 
prior to the execution of a loan agreement.
    In spite of the best efforts of EPA, however, implementation of the 
SRF has been uneven in the states. According to a recent survey by 
NAWC, only 11 SRF applications have been approved for NAWC companies 
since the 1996 Amendments became effective, for a total of $40 million 
spread across 8 states (Arizona, California, Connecticut, Iowa, Maine, 
New Hampshire, New Jersey and Pennsylvania).
    Most significantly, 19 states, through their constitutions, 
statutes or official policies, have declared privately-owned systems to 
be ineligible for SRF assistance. Presently EPA is considering a policy 
that would base a state's SRF allocation only on those infrastructure 
needs that the state has determined to be eligible. This makes perfect 
sense. Why award an allocation to a state for infrastructure needs 
which the state has no intention of assisting? NAWC believes that such 
a revised policy would be fair and proper for all water systems and 
their customers, as well as the states. We urge EPA to formally 
announce such a policy soon. If EPA concludes that it lacks legal 
authority, we urge Congress to make such authority explicit.
                epa regulatory standard setting process
    Mr. Chairman, one of the most important objectives of the 1996 SDWA 
Amendments, and one which NAWC heartily endorses, is to make EPA 
regulations as rational as possible, based on the best science 
available. To accomplish this, we believe that it is critical for EPA 
to develop a process that will enable decision-makers to focus on 
important issues in a timely fashion. For example, we believe that EPA 
should emphasize early, statistically valid, contaminant occurrence 
monitoring before investing heavily in health studies and other 
contaminant analyses.
    Consequently, we have provided EPA with a detailed paper presenting 
our concerns and specific recommendations. I would like to emphasize 
that these concerns are industry wide. Our paper has been specifically 
endorsed by the American Water Works Association (AWWA), the 
Association of Metropolitan Water Agencies (AMWA) and the Association 
of State Drinking Water Administrators (ASDWA). In summary, the 
objectives of this paper are to facilitate the development of a 
regulatory development process that:
     Complies with the explicit requirements of the SDWA;
     Focuses only on the most important and critical issues 
needed to produce credible and effective National Primary Drinking 
Water Regulations (NPDWRs);
     Provides a framework that increases the consistency of 
decisions among the various NPDWRs; and
     Provides a high level of public health protection for the 
resources expended, both by the agency in the development of the 
regulation, and by the drinking water utilities in their compliance.
    With respect to the requirement that regulatory decisions be based 
on the best science available, we are compelled to record our 
disappointment in EPA's recent decision to promulgate an MCLG for 
chloroform of zero despite acknowledging in the preamble to the 
Disinfectants/Disinfection Byproduct Rule that, ``The Agency recognizes 
the strength of the science in support of a non-linear approach for 
estimating carcinogenicity of chloroform.'' We urge EPA to keep an open 
mind and to reconsider this determination after completing its 
deliberations with the Science Advisory Board.
                   adequate funding for epa research
    Mr. Chairman, NAWC is seriously concerned that without increased 
research funding over the next several years, EPA will either fail to 
meet statutory deadlines for regulating contaminants, or will fail to 
meet the requirements of the Act for standards based on sound science. 
The January 1999, GAO Report on the Safe Drinking Water Act cites EPA 
estimates of annual funding shortfalls for research and data collection 
in the range of $10 million to $20 million per year for fiscal years 
1999 through 2005.
    These concerns are shared by other experts. The National Drinking 
Water Advisory Council (NDWAC) has concluded that:

          [S]hortfalls in the [drinking water] program's funding and 
        research to support basic SDWA public health objectives . . . 
        will substantially hinder attainment of the SDWA quality and 
        sound science requirements or will result in missing statutory 
        deadlines for priority rulemakings.
          A comprehensive, targeted and fully funded research program 
        on drinking water health effects, exposure, treatment and 
        analytical methods is essential to the success of the new 
        statutory framework and to achieving the full potential of the 
        SDWA reforms.

    We endorse NDWAC's recommendation that, ``The Administrator should 
request full funding for drinking water activities to address 
shortfalls which threaten the scientific and programmatic integrity of 
the program.'' Mr. Chairman, we recognize that this committee is not 
responsible for EPA appropriations, but we urge you, during the budget 
and appropriations process, to be supportive of requests to meet the 
funding levels necessary to fulfill the Act's mandates and to protect 
the public health.
                  water contamination tort litigation
    Mr. Chairman, NAWC wishes to express its grave concern about a new 
kind of lawsuit which we believe seriously threatens America's drinking 
water industry and the water quality regulatory system under which it 
has successfully operated for many years. In California, the 
plaintiff's bar has organized and commenced, as of now, eleven mass 
tort lawsuits against several community water systems (both public 
agencies and private companies) for allegedly delivering contaminated 
water, even though the companies claim to have been in full compliance 
with state and federal standards. As you know, these standards have 
been developed by regulatory agencies over many years based on the 
health effects of contaminants, measurement capabilities, and technical 
feasibility. They are the product of extensive Congressional debate 
over both the need to protect public health and the cost of treatment.
    If twelve jurors, after hearing ``scientific'' testimony from 
plaintiffs' ``expert witnesses'', conclude that the national standards 
are inadequate to protect the public health, water systems across the 
country will need to consider whether to comply with uniform national 
standards or the new standards set by the litigation. Furthermore, the 
costs of defending these lawsuits will place upward pressure on water 
prices. Ultimately, the substantial judgments that could result from 
these lawsuits could threaten the financial stability of water systems 
across the country.
    On March 12, 1998, the California Public Utilities Commission 
instituted its own investigation into the adequacy of existing drinking 
water standards. This investigation has resulted in a temporary stay of 
the judicial proceedings. The California PUC has set May 1999, as its 
goal for a final determination of its investigation. Depending on that 
determination and its impact on the underlying tort lawsuits, Congress 
may wish to examine more closely the potential impact of these lawsuits 
on the national drinking water standards program, as well as possible 
legislative remedies. Given the widely-acknowledged success of the SDWA 
since its enactment 25 years ago, we believe that it would be most 
unfortunate, if not potentially disastrous, if the heart of the Act--
uniformly enforced national drinking water standards--were to be eroded 
or destroyed by civil litigation.
             reliability of the sdwis compliance database.
    Last summer NAWC and its member companies, along with other 
associations, expressed serious concern about the inaccuracy and 
unreliability of much of the SDWIS compliance information displayed to 
the public on the Internet through EPA's Envirofacts Warehouse. We were 
pleased when EPA officials responded positively and immediately and 
began the development and implementation of a system for correcting 
existing errors and ensuring future reliability. In addition, 
disclaimers have been placed on the website for some states, and just 
last week EPA agreed to place ``flags'' next to specific information 
that has been challenged as incorrect, and not yet corrected.
    Since the system relies on information provided by state agencies, 
the problems are complex and vary from state to state. Much remains to 
be done. However, we want to emphasize our appreciation for EPA's 
prompt response to a problem with serious potential for eroding public 
confidence in drinking water quality.
                               conclusion
    In conclusion, Mr. Chairman, the National Association of Water 
Companies wants to express its gratitude to the subcommittee for the 
opportunity to share its views on the implementation of the SDWA 
Amendments of 1996. As we approach the 25th anniversary of the original 
Act, we can all be grateful for, and proud of, the substantial 
improvements that have been made in the delivery of safe and reliable 
drinking water to the American public. You have also listened to our 
concerns about current and potential problems and our recommendations 
for dealing with them.
    Essentially, NAWC views the 1996 Act as the expression of a 
partnership between Congress, EPA, the states and tribes, public water 
systems and the consuming public to commit ourselves to maintaining the 
best public drinking water delivery system in the world. We believe 
that the partnership is effective and we look forward to working with 
Congress and this committee in continued pursuit of this goal.
                                 ______
                                 
 Responses of Andrew Chapman to Additional Questions from Senator Crapo
    Question 1. Currently, the state SRF allocations are based on 
infrastructure needs for both private and public systems. Should the 
EPA prepare future allotment formulas based on the needs of systems 
eligible to receive funds from that state?
    Response. Yes. Current SRF allocations are based on the 
infrastructure needs of all systems in a state, even for those states 
that deny SRF eligibility to privately-owned systems. Such denial of 
eligibility is contrary to the intent of Congress that SRF proceeds be 
available to meet the needs of all drinking water systems, regardless 
of ownership. It is also unfair to the customers of the private systems 
that are denied assistance and to the majority of the states who have 
complied with Congressional intent. We believe that EPA can and should 
address this non-compliance by notifying all states that in the future 
their SRF allocations will based only on the needs of eligible systems. 
This proposal is not punitive. Nor is it federal intrusion. It would 
merely enforce the allocation of federal tax dollars in the manner that 
Congress has mandated.

    Question 2. How much does it cost your company in time and 
resources to participate in the needs assessment survey?
    Response. Because my company, Elizabethtown Water Company, is 
extremely proactive and constantly planning ahead, the information 
sought by the EPA infrastructure needs survey is readily available, and 
it probably costs our company no more than than $5,000 to comply. For 
smaller systems who may not have the resources for adequately planning 
the costs may be proportionately higher. Ironically, these small 
companies may be the systems most in need of SRF assistance.

    Question 3. You have indicated that participating in state needs 
surveys is burdensome and your companies are ineligible for funding in 
many states. It is my understanding that your companies consider 
participation in the survey an unreasonable expectation in states in 
which they do not also qualify for State Revolving Fund assistance. 
Would it be NAWC's preference to not participate or simply to receive 
access to the find?
    Response. Our very strong preference would be for all systems and 
their customers to have access to the fund.
    It is certainly true that private companies in states where they 
are not eligible may have mixed feelings about participating in a 
voluntary needs survey which can only result in more funding going to 
their competition. Nonetheless, we are not aware of any NAWC company 
that has refused to participate. Our advice is that they should 
participate, for two reasons. First, quite apart from the SRF, the 
needs assessment provides valuable information about the state of the 
nation's water infrastructure, and it should be as accurate and 
complete as possible. Second, it is our aim to persuade each of the 
nineteen non-complying states to change their policy and include all 
systems. We believe this can best be accomplished by taking a 
constructive, cooperative approach, rather than one of confrontation.

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