[Congressional Record Volume 148, Number 15 (Friday, February 15, 2002)]
[Senate]
[Pages S898-S908]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. WARNER:
  S. 1957. A bill to amend the Internal Revenue Code of 1986 to provide 
for additional designations of renewal communities; to the Committee on 
Finance.
  Mr. WARNER. Mr. President, I am pleased today to introduce 
legislation that will provide for greater economic growth, job creation 
and improve the availability of affordable housing in some of our 
Nation's most distressed communities. The legislation calls for the 
designation of a second round of Renewal Communities.
  The Renewal Communities program is an economic development initiative 
that was included in the Fiscal Year 2001 Consolidated Appropriations 
Act. The communities designated under the program benefit from a 
variety of tax incentives designed to attract new companies and enhance 
business opportunities in an area. Wage credits, a zero capital gains 
rate on new investments and similar tax breaks for business related 
expenditures will augment the efforts of State and local governments to 
promote job growth and restore economic stability in their communities.
  The Consolidated Appropriations Act signed into law on December 21, 
2000, provided for the designation of 40 Renewal Communities. The 
Department of Housing and Urban Development was responsible for the 
selection and designation of the new RCs. The Department announced the 
list of 40 communities, which will share over $17 billion in tax 
incentives, on January 24, 2002.
  The designations are based on poverty rates, median income, and 
unemployment rates in the community. The most recent Department of 
Commerce census data available during the application process was from 
1990. This was an issue of timing as passage of the legislation 
overlapped with the compilation of new census data in 2000.
  The use of the 1990 census data, however, severely limited the 
ability of many cities and localities which may be eligible based on 
the most recent data. The 1990 data does not reflect the economic 
shifts which have taken place over the last decade throughout the 
country.
  In the Commonwealth of Virginia, many communities have been 
devastated economically by plant closings since the census in 1990. The 
unemployment figures continue to rise when more businesses are forced 
to close down as the adverse financial effects begin to filter through 
the community.
  My legislation would provide for the designation of an additional 
twenty renewal communities with the requirement that the most recent 
2000 census data would be used. I believe that a second round of 
Renewal Community designations would be appropriate and fair to those 
communities excluded by the limits of timing out of their control.
  We cannot move forward as a Nation when the gap in the economy 
stability of our local communities grows deeper and they are left 
behind. This is something the Federal Government can do to stimulate 
the economy from the ground up and at the same time help those who need 
it most.
  I encourage my colleagues to support this initiative. I ask unanimous 
consent that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1957

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. ADDITIONAL DESIGNATIONS OF RENEWAL COMMUNITIES.

       (a) In General.--Section 1400E of the Internal Revenue Code 
     of 1986 (relating to designation of renewal communities) is 
     amended by redesignating subsection (f) as subsection (g) and 
     by inserting after subsection (e) the following new 
     subsection:
       ``(f) Additional Designations Permitted.--
       ``(1) In general.--In addition to the areas designated 
     under subsection (a), the Secretary of Housing and Urban 
     Development may designate in the aggregate an additional 20 
     nominated areas as renewal communities under this section, 
     subject to the availability of eligible nominated areas. Of 
     that number, not less than 5 shall be designated in areas 
     described in subsection (a)(2)(B).
       ``(2) Period designations may be made and take effect.--A 
     designation may be made under this subsection after the date 
     of the enactment of this subsection and before January 1, 
     2003. Subject to subparagraphs (B) and (C) of subsection 
     (b)(1), such designations shall remain in effect during the 
     period beginning on January 1, 2003, and ending on December 
     31, 2010.
       ``(3) Modifications to eligibility determinations.--The 
     rules of this section shall apply to designations under this 
     subsection, except that population and poverty rate shall be 
     determined by using the most recent census data available.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.
                                 ______
                                 
      By Mr. McCAIN:
  S. 1958. A bill to provide a restructured and rationalized rail 
passenger system that provides efficient service on viable routes; to 
eliminate budget deficits and management inefficiencies at Amtrak 
through the establishment of an Amtrak Control Board; to allow for the 
privatization of Amtrak; to increase the role of State and private 
entities in rail passenger service; and, to promote competition and 
improve rail passenger service opportunities; to the Committee on 
Commerce, Science, and Transportation.

 Mr. McCAIN. Mr. President, the time has come for us to have an 
open debate to consider the future of rail passenger service in this 
Nation. Given Amtrak's financial situation, which is extremely 
precarious, I strongly believe we must work together to pass 
legislation this year that will provide for a restructured, 
revitalized, and streamlined rail passenger network. This will be no 
easy task. It will take commitments by all parties, including the 
Administration, Congress, Amtrak, states and municipalities, and the 
private sector.
  No one can argue with the fact that Amtrak is in a financial crisis, 
with growing and substantial debt obligations already totaling over 
$3.3 billion. The Department of Transportation Inspector General, DOT-
IG, issued a report just two weeks ago which found that Amtrak 
experienced its largest losses in history in Fiscal Year 2002. 
Specifically, the DOT-IG found ``Amtrak lost $1.1 billion last year'' 
and ``Amtrak is no closer to operating self-sufficiency now than it was 
in 1997.''
  The Amtrak Reform and Accountability Act of 1997, provided Amtrak 
with the statutory reforms Amtrak said were needed to enable it to 
address its financial and operational problems existing at the time. In 
turn, the Act directed Amtrak to reach operational self-sufficiency 
five years after enactment, which is December 2, 2002. The Act also 
established the Amtrak Reform Council, ARC, to oversee Amtrak and 
notify the Congress if it found Amtrak would not be able to meet its 
statutory obligations.
  Despite repeated press statements and testimony by Amtrak officials 
over the past four years that Amtrak was well on its way to fulfilling 
its statutory directives, on November 9, 2001, the ARC issued a finding 
that Amtrak will not be operationally self-sufficient as required by 
law. The ARC found there are major inherent flaws and weaknesses in 
Amtrak's institutional design and that it must be restructured. The 
recent DOT-IG report confirmed the ARC's finding that Amtrak would not 
meet its statutory mandate.
  Finally, two weeks ago, even Amtrak officials admitted it cannot live 
up to the claims they had been making. At a recent press conference 
Amtrak's President stated, ``Everybody knows that you can't make a 
profit while running a network of unprofitable trains''. Unfortunately, 
Amtrak officials are

[[Page S899]]

seeking to place blame for its financial problems everywhere other than 
where it most justly belongs.
  As I mentioned, the 1997 Reform Act provided Amtrak with the tools it 
said it needed to reinvent itself. It was provided labor, liability, 
and procurement reforms. The Act even eliminated the mandated route 
structure established in the 1970 act that created Amtrak, and 
authorized Amtrak to run like a private business.
  Following the Senate's passage of the Act in 1997, Amtrak's President 
at the time, Tom Downs, sent a letter dated November 5, 1997 to Senator 
Hollings and myself praising the compromise legislation. He stated 
that, ``enactment of the Amtrak Reform and Revitalization Act of 1997 
would be the single most significant action the Congress can take to 
aid Amtrak in achieving operating self-sufficiency by 2002.'' Mr. Downs 
further commended ``The legislation reforms contained in the bill will 
allow Amtrak to operate in a more businesslike, cost effective manner, 
thus allowing greater productivity and increased savings.''
  Although Amtrak has received over $5 billion in Federal assistance 
since the reform bill's enactment, and received the authority to 
implement management and structural changes, little if anything has 
been accomplished since the Reform Act's enactment. Amtrak loses money 
on almost all of its 41 routes, but instead of cutting even one 
unprofitable route, Amtrak added routes. One such route initiated in 
Janesville, WI, resulted in a per passenger subsidy of over $1,000.00. 
Where is the rationale in such a business decision? Moreover, Amtrak's 
debt load has tripled since we approved the Reform Act, and now amounts 
to over $3.3 billion. Clearly, Amtrak officials did not take the 
statutory mandates seriously.
  Today, I am introducing legislation to fundamentally transform rail 
passenger transportation in America. The bill offers a new approach to 
reform Amtrak's 30-year subsidy program that has funded rail passenger 
service. It is designed to promote rail passenger service on viable 
routes or where States will provide support when it is considered a 
necessary form of public transportation. That does not equate to a 
route in every Congressional district and may not even equate to a 
route in every State, but nor, it should be noted, does the present 
``national system.''
  The legislation I am offering today is one approach for how our 
Nation's rail passenger system can be permitted to evolve. I recognize 
that it may not garner the support of every member, but I encourage my 
colleagues to approach the debate on the future of rail passenger 
service with an open mind. The American public demands more than the 
status quo. We should as well. The public's expectations must be 
balanced with the level of financial commitment that the Nation can 
afford. I ask that a summary of the Rail Passenger Improvement Act of 
2002 be printed in the Record immediately following my remarks.
  I don't believe that the measure I am introducing could be the only 
approach that Congress considers. There are many proposals and ideas 
that merit our consideration. For example, on February 7th, the Amtrak 
Reform Council submitted its report on a restructuring and 
rationalization plan. I hope the Congress will give careful 
consideration to the ARC's proposal. Other ideas to restructure 
Amtrak's route system include the creation of a Route Closure 
Commission modeled after the Department of Defense's Base Realignment 
and Closure Commission. This is an idea that has been raised in recent 
years and should not be disregarded. Above all, we must get to work now 
and determine how best to address Amtrak's financial and operational 
crisis.
  While it might seem easier to simply throw more money at Amtrak 
instead of making tough policy decisions, we would be failing in our 
Congressional responsibilities if we were to do this. To put rail 
passenger service back on track in this country, we need to address a 
number of tough questions. For example, what is the future for 
intercity rail passenger transportation? Where does it attract 
passengers and where doesn't it? Does rail passenger service have to 
equate to ``Amtrak'' or can we accept the fact that after 30 years, it 
is time to find a new approach? Where might high-speed rail service 
actually attract enough passengers to be economically viable? How does 
it fit into our national transportation system? What financial 
obligation will we be imposing on American taxpayers to pay for rail 
passenger service and what can they realistically expect for their 
payments?
  I have continually doubted Amtrak could live up to the promises it 
has made over the years. I reached this conclusion after years of 
listening to promises from Amtrak officials about what it could deliver 
if Congress gave it more money. Those promises have been broken time 
after time. There has been an endless flow of subsidy requests from 
Amtrak since its creation 30 years ago, even though it was to be free 
of all Federal assistance two years after it was established. Instead, 
Amtrak has received over $25 billion in direct subsidies.
  The ARC, the DOT-IG, the General Accounting Office (GAO), and others 
warned us that Amtrak was not going to live up to the rosy scenarios it 
had been painting over the past several years. Ironically, while we are 
criticizing private auditors for failing to ensure disclosure of the 
true financial picture of Enron, Congress has had clear indication from 
public auditors that Amtrak was not financially solvent but chose to 
ignore those warnings. Shouldn't we halt the double standard with 
respect to our reaction to public and private audit findings?
  We all need to face the fact that Amtrak is in dire financial straits 
and action must be taken once and for all to address the underlying 
problems with Amtrak. The findings presented by the ARC and the DOT-IG 
make it clear that Amtrak's Board and management have been unable to 
execute the changes that need to be taken to turn Amtrak's finances 
around. As the DOT-IG recently stated: ``Amtrak is no closer to 
operating self-sufficiency now than it was in 1997.''
  Amtrak's management has recently started to question publicly the 
statutory requirement for Amtrak to achieve operational self-
sufficiency. At a press conference held last week when Amtrak admitted 
it was not living up to its repeated claims of success, Amtrak's 
President referred to the self-sufficiency deadline as an 
``impractical, inappropriate and destructive concept to move forward 
with.'' I find this statement shockingly untimely.
  In the four years that have passed since the Reform Act became law, 
Amtrak officials have repeatedly said they were on the ``glide-path to 
operational self-sufficiency.'' Not once in testimony before Congress 
did Amtrak officials raise concerns now held by Amtrak's President that 
the once highly regarded Reform Act was no more than an ``impractical, 
inappropriate and destructive concept'' that would hamper Amtrak's 
ability to produce results and turn Amtrak around. So I have to ask, 
why now? Were these same views held by Amtrak officials during the 
reform bill's enactment? That would not appear to be the case given the 
November 1997 letter I quoted from earlier. Why haven't we heard Mr. 
Warrington's critical views until now?
  Again, the Reform Act provided the statutory reforms that Amtrak 
requested so it could operate more like a private business. Why has its 
President suddenly decided to call its mandates into question? Maybe 
it's because management has made no progress towards meeting the 
requirements mandated by the law, requirements that Amtrak agreed to in 
exchange for the reforms it requested and was granted? Requirements, 
that until now, Amtrak said it would meet.
  Since we now know Amtrak officials cannot make the tough decisions 
necessary to improve Amtrak's operating and financial condition, the 
legislation I am proposing creates an Amtrak Control Board, modeled 
after the D.C. Control Board that was so successful in turning around 
the financial crisis of the Government of the District of Columbia. The 
Amtrak Control Board would be directed to help address Amtrak's 
financial crisis and facilitate Amtrak's privatization.
  Moreover, I believe we need to allow the States to take a greater 
role in determining where rail passenger service should be provided. 
Perhaps it is only in the Northeast, or maybe just on State-supported 
corridors. To help States retain passenger rail service

[[Page S900]]

where they believe it is needed, I also think that we should allow the 
States to spend their Federal transportation dollars on rail passenger 
service.
  In some areas of the country, such as the Northeast and on the West 
Coast where service is supported by State contributions, rail passenger 
service seems to be working. We cannot ignore the fact, however, that 
all but two of Amtrak's intercity lines operate at a substantial 
financial loss. And while Amtrak has experienced an increase in its 
ridership, the actual ridership numbers are dismal compared to other 
passenger modes, including intercity bus transportation and air travel. 
After 30 years and over $25 billion of taxpayers' investment, Amtrak is 
used by less than 1 percent of the traveling public.
  Our urban areas are facing ever-increasing transportation congestion. 
Americans are spending more and more time sitting in traffic as they 
try to get to and from work. And each and every one of us has 
experienced first hand the frustrations of flight delays due to new 
security measures and capacity limitations in our aviation system. It 
is our responsibility to work to remedy these problems by developing 
and enacting sound federal transportation policies.
  Amtrak is a failed experiment. While the legislation I am offering 
may not be the approach the majority of the members will support, I 
assure my colleagues that I will do everything in my power to halt the 
historical authorization pattern that has taken place for 30 years. I 
will strongly oppose any measure simply to reauthorize Amtrak in 
exchange for Amtrak promises. If we do that again, in a few years 
Amtrak will be back again explaining why it was unable to fulfill its 
promises and Amtrak will be seeking yet even more money and making even 
more promises. This same pattern has continued for 30 years.

  The Rail Passenger Service Act of 1970, which created the National 
Rail Passenger Corporation, also known as Amtrak, to free the freight 
industry from the burden of running passenger trains, was enacted with 
the intent to provide Amtrak Federal support for only two years. 
Clearly, that did not occur. After receiving appropriations for $40 
million in direct grants, $100 million in loan guarantees, in addition 
to capital acquired from participating railroads, Amtrak was unable to 
fulfill the intent of the authorizing legislation. Two years later, 
Amtrak was back before Congress asking for more money in exchange for 
more promises.
  By 1978, after four trips to Congress to ask for more Federal money, 
Amtrak had received $2.5 billion in federal funding. But that level of 
funding was still not enough. When Amtrak came back seeking more 
Federal assistance, Congress responded like it always had. It passed 
legislation authorizing millions for operating, capital and debt 
reduction expenses. In exchange for this funding, Amtrak agreed to be 
operated and managed as a for-profit corporation and to turn around its 
money losing ways. Again, Amtrak failed to fulfill its promises.
  This pattern has continued during the past 30 years. Amtrak has come 
to Congress year after year seeking a handout. Each time, Amtrak has 
made promises in return for more federal assistance. Each time, Amtrak 
has failed to achieve what was expected. Enough is enough.
  It is interesting to note that before the 1978 law was enacted, the 
GAO warned that Amtrak would have to make serious cuts in its route 
structure if it was to avoid continual dependence on Federal subsidies. 
And here we are nearly 25 years later and the GAO and the DOT-IG are 
repeating these same realities. Is the Congress finally going to give 
credence to these auditors' findings?
  If rail passenger service is ever going to be successful, we must 
take action to provide for a restructured and rationalized system. We 
need to hear from the Administration, the States, and the American 
public in order to develop sound Federal policy to permit safe, 
efficient, and cost-effective rail passenger service in areas that can 
attract riders. Now is the time for all interested parties to come 
together and chart a new course for intercity rail passenger 
transportation.
  The summary follows.

The Rail Passenger Service Improvement Act--Summary of Major Provisions

       Purpose: to enable the emergence of a new rail passenger 
     system that would be overseen by the Department of 
     Transportation, but operated by competing franchises, 
     including Amtrak; to require Amtrak's restructuring, 
     financial stabilization and privatization through the 
     creation of an Amtrak Control Board; and to require States to 
     play a bigger role with regard to routing decisions and 
     financial responsibilities. Specifically the legislation:
       Directs the Secretary of Transportation to establish a Rail 
     Passenger Development and Franchising Office within the 
     Federal Railroad Administration (FRA). Beginning October 1, 
     2003, the Secretary would be authorized to contract out rail 
     passenger service to franchises that meet specified safety 
     and liability requirements, provided such operations would 
     not result in a significant downgrade in rail freight 
     service. Franchises would be required to demonstrate efforts 
     to reach mutual agreements with freight carriers to obtain 
     trackage access prior to being awarded a contract.
       Directs Amtrak to restructure into three separate 
     subsidiaries to be managed as for-profit businesses with 
     transparent accounting systems: Amtrak Operations, Amtrak 
     Maintenance, and Intercity Rail Reservations. Each subsidiary 
     would be privatized no later than four years after enactment.
       Establishes an Amtrak Control Board, modeled after the DC 
     Control Board, to help address Amtrak's financial crisis. The 
     Amtrak Control Board would direct Amtrak's operational 
     restructuring, approve budgets and financial plans, and 
     oversee privatization.
       Requires States to play a greater role, both in route 
     decisions and financial contributions, to allow for a more 
     utilized route system to evolve, with service provided on 
     viable routes or where States contribute to cover operating 
     losses. Beginning October 1, 2003, Amtrak would halt service 
     over any route where revenues do not cover expenses unless 
     states contribute financial support to cover losses.
       Gives States flexibility to use highway trust fund dollars 
     on rail passenger service at each state's discretion.
       Authorizes funding to address rail passenger security and 
     tunnel life-safety needs.
       Authorizes funding for Amtrak operating and Railroad 
     Retirement obligations on a reduced sliding scale. Authorizes 
     funding for the Secretary of Transportation to address rail 
     passenger capital costs and the backlog of infrastructure 
     investment identified by the DOT-Inspector General to bring 
     the Northeast Corridor up to a ``state of good repair.'' 
     Other users and states along the corridor would also 
     contribute to capital costs, much like States must contribute 
     toward highway and airport infrastructure. In exchange for 
     eliminating financial obligations, Amtrak must give up rights 
     and ownership to the Northeast Corridor for which the 
     Secretary already holds a 999-year mortgage.
                                 ______
                                 
      By Mr. HARKIN (for himself, Mr. fitzgerald, and Mr. Johnson):
  S. 1960. A bill to amend the Biomass Research and Development Act of 
2000 to encourage production of biobased energy products, and for other 
purposes; to the Committee on Agriculture, Nutrition, and Forestry.
 Mr. HARKIN. Mr. President, I am introducing today the Biobased 
Energy Incentives Act of 2002. I am pleased to be joined by Senators 
Fitzgerald and Johnson. This legislation amends the Biomass Research 
and Development Act of 2000 and establishes a biobased energy incentive 
program within the Department of Agriculture.
  The program provides payments to eligible biofuels producers through 
the Commodity Credit Corporation for using certain commodities to 
produce ethanol and biodiesel. All ethanol and biodiesel producers will 
be eligible to participate in the program. However, payment levels will 
be a little higher for smaller producers, giving them a better chance 
to compete with their larger counterparts. Payments to any one producer 
will be capped at 7 percent of the total funds made available for a 
fiscal year.
  This legislation comes at the right time. The Department of 
Agriculture has run a bioenergy program on a pilot basis for the past 
two years. It has shown very promising initial results. In Iowa, for 
instance, the program has helped bring down the price of soy diesel. 
Cedar Rapids now has dozens of vehicles that run on a blend of soy and 
regular diesel. Over the same time that this program has operated, the 
U.S. ethanol industry has established production records almost every 
month. Nearly 20 new ethanol plants began construction last year, 
assuring continued expansion of the industry.
  Yet there is no guarantee the Department will continue the program. A 
continuation is not in the Administration's budget proposal for fiscal 
year 2003. We can't afford to see this type of initiative flounder or, 
worse yet, end.

[[Page S901]]

 Our bill, if passed, will require the Department of Agriculture to run 
a bioenergy program indefinitely with secure funding.
  The benefits of this legislation are obvious. Increased renewable 
fuel production lessens our dependence on foreign oil, provides 
environmental and public health gains, bolsters farm income, creates 
jobs and boosts economic growth, especially in rural areas. This also 
contributes to a sound homeland security strategy. The Nation must 
become energy independent, and domestically produced renewable fuels, 
along with other forms of renewable energy like wind power and biomass, 
play an important part in this endeavor.
  I want to thank Senator Fitzgerald and Senator Johnson for co-
sponsoring this legislation with me. Their leadership in this area will 
be essential in moving the bill forward. I am hopeful we can pass this 
bill quickly to help secure a brighter future for our nation's farmers 
and fellow citizens.
  I ask that the text of the bill be printed in the Record.
  The bill follows.

                                S. 1960

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Biobased Energy Incentive 
     Act of 2002''.

     SEC. 2. PRODUCTION OF BIOBASED ENERGY PRODUCTS.

       The Biomass Research and Development Act of 2000 (7 U.S.C. 
     7624 note; Public Law 106-224) is amended--
       (1) by redesignating section 310 as section 311; and
       (2) by inserting after section 309 the following:

     ``SEC. 310. PRODUCTION OF BIOBASED ENERGY PRODUCTS.

       ``(a) Definitions.--In this section:
       ``(1) Biobased energy product.--The term `biobased energy 
     product' means biodiesel or ethanol fuel.
       ``(2) Biodiesel.--The term `biodiesel' means a monoalkyl 
     ester that meets the requirements of ASTM D6751.
       ``(3) Eligible commodity.--The term `eligible commodity' 
     means wheat, corn, grain sorghum, barley, oats, rice, 
     soybeans, sunflower seed, rapeseed, canola, safflower, 
     flaxseed, mustard, crambe, sesame seed, cottonseed, and 
     cellulosic commodities (such as hybrid poplars and switch 
     grass).
       ``(4) Eligible producer.--The term `eligible producer' 
     means a producer that--
       ``(A) uses an eligible commodity to produce a biobased 
     energy product; and
       ``(B) enters into a contract with the Secretary under 
     subsection (b)(2).
       ``(5) New producer.--The term `new producer' means an 
     eligible producer that has not used an eligible commodity to 
     produce a biobased energy product during the preceding fiscal 
     year.
       ``(b) Biobased Energy Incentive Program.--
       ``(1) Establishment.--The Secretary shall establish a 
     biobased energy incentive program under which the Secretary 
     shall make payments to eligible producers to promote the use 
     of eligible commodities to produce biobased energy products.
       ``(2) Contracts.--
       ``(A) In general.--To be eligible to receive a payment, an 
     eligible producer shall enter into a contract with the 
     Secretary under which the producer shall agree to increase 
     the use of eligible commodities to produce biobased energy 
     products during 1 or more fiscal years.
       ``(B) Quarterly payments.--Under a contract--
       ``(i) the eligible producer shall agree to increase the use 
     of eligible commodities to produce biobased energy products 
     during each fiscal year covered by the contract; and
       ``(ii) the Secretary shall make payments to the eligible 
     producer for each quarter of the fiscal year.
       ``(3) Amount.--Subject to paragraphs (6) through (8), the 
     amount of a payment made to an eligible producer for a fiscal 
     year under this subsection shall be determined by 
     multiplying--
       ``(A) the payment quantity for the fiscal year determined 
     under paragraph (4); by
       ``(B) the payment rate determined under paragraph (5).
       ``(4) Payment quantity.--
       ``(A) In general.--Subject to subparagraph (B), the payment 
     quantity for payments made to an eligible producer for a 
     fiscal year under this subsection shall equal the difference 
     between--
       ``(i) the quantity of eligible commodities that the 
     eligible producer agrees to use, under the contract entered 
     into with the Secretary, to produce biobased energy products 
     during the fiscal year; and
       ``(ii) the quantity of eligible commodities that the 
     eligible producer used to produce biobased energy products 
     during the preceding fiscal year.
       ``(B) New producers.--The payment quantity for payments 
     made to a new producer for the first fiscal year of a 
     contract under this subsection shall equal 25 percent of the 
     quantity of eligible commodities that the eligible producer 
     uses to produce biobased energy products during the fiscal 
     year.
       ``(5) Payment rate.--
       ``(A) In general.--Subject to subparagraph (B), the payment 
     rate for payments made to an eligible producer under this 
     subsection for the use of an eligible commodity shall be 
     determined by the Secretary to compensate the eligible 
     producer for the local value of--
       ``(i) in the case of corn, 1 bushel of corn for each 3 
     bushels of additional corn that is used to produce a biobased 
     energy product; and
       ``(ii) in the case of each other eligible commodity, an 
     equivalent quantity determined by the Secretary.
       ``(B) Small-scale producers.--The payment rate for payments 
     made to an eligible producer that has an annual capacity of 
     less than 60,000,000 gallons of biobased energy products 
     shall be at least 25 percent higher than the payment rate for 
     other eligible producers, as determined by the Secretary.
       ``(6) Proration.--If the amount made available for a fiscal 
     year under subsection (d)(2)(A) is insufficient to allow the 
     payment of the amount of the payments that eligible producers 
     (that apply for the payments) otherwise would have a right to 
     receive under this subsection, the Secretary shall prorate 
     the amount of the funds among all such eligible producers.
       ``(7) Overpayments.--If the total amount of payments that 
     an eligible producer receives for a fiscal year under this 
     section exceeds the amount the eligible producer should have 
     received under this subsection, the producer shall repay the 
     amount of the overpayment to the Secretary, plus interest (as 
     determined by the Secretary).
       ``(8) Limitation.--No eligible producer shall receive more 
     than 7 percent of the total amount made available for a 
     fiscal year under subsection (d)(2)(A).
       ``(9) Recordkeeping and monitoring.--To be eligible to 
     receive a payment under this subsection, an eligible producer 
     shall--
       ``(A) maintain for at least 3 years records relating to the 
     production of biobased energy products; and
       ``(B) make the records available to the Secretary to verify 
     eligibility for the payments.
       ``(10) Other requirements.--To be eligible to receive a 
     payment under this subsection, an eligible producer shall 
     meet other requirements of Federal law (including 
     regulations) applicable to the production of biodiesel or 
     ethanol fuel.
       ``(c) Availability of Biobased Energy Products.--The 
     Secretary shall establish a program to encourage wider 
     availability of biobased energy products to consumers of 
     gasoline and diesel fuels.
       ``(d) Funding.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     shall use the funds, facilities, and authorities of the 
     Commodity Credit Corporation to carry out this section.
       ``(2) Fiscal year limitations.--The amount of funds of the 
     Commodity Credit Corporation used to carry out this section 
     shall not exceed--
       ``(A) in the case of subsection (b), $150,000,000 for 
     fiscal year 2003 and each subsequent fiscal year; and
       ``(B) in the case of subsection (c), $10,000,000 for fiscal 
     year 2003 and each subsequent fiscal year.''.
                                 ______
                                 
      By Mr. GRAHAM (for himself, Mr. Crapo, Mr. Jeffords, and Mr. 
        Smith of New Hampshire):
  S. 1961. A bill to improve financial and environmental sustainability 
of the water programs of the United States; to the Commerce on 
Environment and Public Works.

 Mr. GRAHAM. Mr. President, I ask that the text of the bill be 
printed in the Record.

                                S. 1961

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Water 
     Investment Act of 2002''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.

       TITLE I--FEDERAL WATER POLLUTION CONTROL ACT MODIFICATIONS

Sec. 101. Definitions.
Sec. 102. Funding for Indian programs.
Sec. 103. Requirements for receipt of funds.

            TITLE II--SAFE DRINKING WATER ACT MODIFICATIONS

Sec. 201. Planning, design, and preconstruction costs.
Sec. 202. State Revolving Loan Fund.
Sec. 203. Additional subsidization.
Sec. 204. Private utilities.
Sec. 205. Competition requirements.
Sec. 206. Technical assistance for small systems.
Sec. 207. Authorization of appropriations.

      TITLE III--INNOVATIONS IN FUND AND WATER QUALITY MANAGEMENT

Sec. 301. Transfer of funds.
Sec. 302. Demonstration program for water quality enhancement and 
              management.
Sec. 303. Rate study.
Sec. 304. Effects on policies and rights.

                   TITLE IV--WATER RESOURCE PLANNING

Sec. 401. Findings.

[[Page S902]]

Sec. 402. Definition of Secretary.
Sec. 403. Actions.
Sec. 404. Report to Congress.
Sec. 405. Authorization of appropriations.

     SEC. 2. PURPOSES.

       The purposes of this Act are--
       (1) to modernize State water pollution control revolving 
     funds and the allocation for those funds to ensure that the 
     funds distributed reflect water quality needs;
       (2) to streamline State water pollution control assistance 
     programs and State drinking water treatment assistance 
     programs to maximize use of Federal funds and encourage 
     maximum efficiency for States and localities;
       (3) to provide additional structure to the water supply 
     research conducted in the United States; and
       (4) to ensure that the Federal Government is performing the 
     appropriate role in analyzing regional and national water 
     supply trends.

       TITLE I--FEDERAL WATER POLLUTION CONTROL ACT MODIFICATIONS

     SEC. 101. DEFINITIONS.

       Section 502 of the Federal Water Pollution Control Act (33 
     U.S.C. 1362) is amended by adding at the end the following:
       ``(24) Disadvantaged community.--The term `disadvantaged 
     community' means a community or entity that meets 
     affordability criteria established, after public review and 
     comment, by the State in which the community or entity is 
     located.
       ``(25) Small treatment works.--The term `small treatment 
     works' means a treatment works (as defined in section 212) 
     serving a population of 10,000 or less.''.

     SEC. 102. FUNDING FOR INDIAN PROGRAMS.

       Section 518 of the Federal Water Pollution Control Act (33 
     U.S.C. 1377) is amended by striking subsection (c) and 
     inserting the following:
       ``(c) Reservation of Funds.--
       ``(1) In general.--For fiscal year 1987 and each fiscal 
     year thereafter, the Administrator shall reserve, before 
     allotments to the States under section 604(a), not less than 
     0.5 percent nor more than 1.5 percent of the funds made 
     available under section 207.
       ``(2) Use of funds.--Funds reserved under this subsection 
     shall be available only for grants for the development of 
     waste treatment management plans and for the construction of 
     sewage treatment works to serve--
       ``(A) Indian tribes;
       ``(B) former Indian reservations in Oklahoma (as determined 
     by the Secretary of the Interior); and
       ``(C) Native villages (as defined in section 3 of the 
     Alaska Native Claims Settlement Act (43 U.S.C. 1602)).''.

     SEC. 103. REQUIREMENTS FOR RECEIPT OF FUNDS.

       (a) Grants to States for Establishment of Revolving 
     Funds.--Section 601(a) of the Federal Water Pollution Control 
     Act (33 U.S.C. 1381(a)) is amended by striking ``for 
     providing assistance (1)'' and all that follows and inserting 
     the following: ``for providing assistance for eligible 
     projects in accordance with section 603(c).''.
       (b) Projects Eligible for Assistance.--Section 603 of the 
     Federal Water Pollution Control Act (33 U.S.C. 1383) is 
     amended by striking subsection (c) and inserting the 
     following:
       ``(c) Projects Eligible for Assistance.--
       ``(1) In general.--Funds available to each State water 
     pollution control revolving fund shall be used only for--
       ``(A) providing financial assistance to a municipality, 
     intermunicipal, interstate, or State agency, or private 
     utility, for construction (including costs for planning, 
     design, associated preconstruction, and necessary activities 
     for siting the facility and related elements) of treatment 
     works (as defined in section 212);
       ``(B) implementation of a management program established 
     under section 319;
       ``(C) development and implementation of a conservation and 
     management plan under section 320;
       ``(D) water conservation projects or activities that 
     provide 1 or more water quality benefits; or
       ``(E) reuse, reclamation, or recycling projects that 
     provide 1 or more water quality benefits.
       ``(2) Maintenance of fund.--
       ``(A) In general.--The fund shall be established, 
     maintained, and credited with repayments.
       ``(B) Availability.--Any balances in the fund shall be 
     available in perpetuity for providing financial assistance 
     described in paragraph (1).
       ``(3) Approaches.--Projects eligible to receive assistance 
     from a State water pollution control revolving fund under 
     this title may include projects that use 1 or more 
     nontraditional approaches (such as land conservation, low-
     impact development technologies, redevelopment of waterfront 
     brownfields, watershed management actions, decentralized 
     wastewater treatment innovations, and other nonpoint best 
     management practices).''.
       (c) Extension of Loans; Types of Assistance.--Section 
     603(d) of the Federal Water Pollution Control Act (33 U.S.C. 
     1383(d)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by striking ``, at terms not to 
     exceed 20 years'';
       (B) by striking subparagraph (B) and inserting the 
     following:
       ``(B)(i) annual principal and interest payments shall 
     commence not later than 1 year after the date of completion 
     of any project for which the loan was made; and
       ``(ii) except as provided in subparagraph (C), each loan 
     shall be fully amortized not later than 20 years after the 
     date of completion of the project for which the loan is 
     made;'';
       (C) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (D) and (E), respectively;
       (D) by inserting after subparagraph (B) the following:
       ``(C) in the case of a disadvantaged community, a State may 
     provide an extended term for a loan if the extended term--
       ``(i) terminates not later than the date that is 30 years 
     after the date of completion of the project; and
       ``(ii) does not exceed the expected design life of the 
     project.'';
       (E) in subparagraph (D) (as redesignated by subparagraph 
     (C)), by inserting ``, or, in the case of a privately owned 
     system, demonstrate that adequate security exists,'' after 
     ``revenue''; and
       (F) in subparagraph (E) (as redesignated by subparagraph 
     (C)), by inserting ``State loan'' before ``fund'';
       (2) in paragraph (6), by striking ``and'' at the end;
       (3) by redesignating paragraph (7) as paragraph (10);
       (4) by inserting after paragraph (6) the following:
       ``(7) subject to subsection (e)(2), by a State to provide 
     additional subsidization (including forgiveness of principal) 
     to 1 or more treatment works for use in developing technical, 
     managerial, and financial capacity in accordance with 
     subsection (i);
       ``(8) by a State to provide additional subsidization 
     (including forgiveness of principal) to 1 or more treatment 
     works for a purpose other than a purpose specified in 
     paragraph (7) or (9), except that--
       ``(A) for the first fiscal year that begins after the date 
     of enactment of this paragraph and each fiscal year 
     thereafter, the total amount of subsidization provided by a 
     State under this paragraph shall not exceed 15 percent of the 
     amount of all capitalization grants received by the State for 
     the fiscal year;
       ``(B) notwithstanding section 204(b)(1), the State, as part 
     of an assistance agreement between the State and each 
     applicable treatment works, shall ensure, to the maximum 
     extent practicable, that additional subsidization provided 
     under this paragraph is directed through the user charge rate 
     system to disadvantaged users within the residential user 
     class of the community (as defined by the State based on 
     affordability criteria and after an opportunity for public 
     review and comment) in which the treatment works is located; 
     and
       ``(C) a community that receives assistance as a 
     disadvantaged community under paragraph (9) shall not be 
     eligible for assistance under this paragraph;
       ``(9) subject to subsection (e)(2), by the State to provide 
     additional subsidization (including forgiveness of principal) 
     to a disadvantaged community, or to a community or entity 
     that the State expects to become a disadvantaged community as 
     the result of a proposed project, that receives a loan from 
     the State under this title; and''; and
       (5) in paragraph (10) (as redesignated by paragraph (3)), 
     by striking ``that such amounts shall not exceed 4'' and 
     inserting ``that, beginning in fiscal year 2003, those 
     amounts shall not exceed 5''.
       (d) Limitations.--Section 603(e) of the Federal Water 
     Pollution Control Act (33 U.S.C. 1383(e)) is amended--
       (1) by striking ``(e)'' and all that follows through ``If a 
     State'' and inserting the following:
       ``(e) Limitations.--
       ``(1) Prevention of double benefits.--If a State''; and
       (2) by adding at the end the following:
       ``(2) Total amount of subsidies.--For each fiscal year, the 
     total amount of loan subsidies made by a State under 
     paragraphs (7) and (9) of subsection (d) may not exceed 30 
     percent of the amount of all capitalization grants received 
     by the State for the fiscal year.''.
       (e) Consistency With Planning Requirements.--Section 603(f) 
     of the Federal Water Pollution Control Act (33 U.S.C. 
     1383(f)) is amended--
       (1) by striking ``A State may'' and inserting the 
     following:
       ``(1) In general.--A State may'';
       (2) by striking ``320 of this Act.'' and inserting 
     ``320.''; and
       (3) by adding at the end the following:
       ``(2) Community development.--A State that provides 
     financial assistance from the water pollution control 
     revolving fund of the State shall ensure that applicants for 
     the assistance consult and coordinate with, as appropriate, 
     agencies responsible for developing any--
       ``(A) local land use plans;
       ``(B) regional transportation improvement and long-range 
     transportation plans; and
       ``(C) State, regional, and municipal watershed plans.''.
       (f) Priority System Requirement.--Section 603 of the 
     Federal Water Pollution Control Act (33 U.S.C. 1383) is 
     amended by striking subsection (g) and inserting the 
     following:
       ``(g) Priority System Requirement.--
       ``(1) Definition of state agency.--In this subsection, the 
     term `State agency' means

[[Page S903]]

     the agency of a State having jurisdiction over water quality 
     management (including the establishment of water quality 
     standards).
       ``(2) Development.--
       ``(A) In general.--Notwithstanding section 216, each State 
     agency shall develop and periodically update a project 
     priority system for use in prioritizing projects that are 
     eligible to receive funding from the water pollution control 
     revolving fund of the State in accordance with subsection 
     (c).
       ``(B) Requirements.--In developing the project priority 
     system, a State agency shall--
       ``(i) take into consideration all available water quality 
     data for the State; and
       ``(ii) provide for public notice and opportunity for 
     comment, including significant public outreach.
       ``(3) Summary of projects.--
       ``(A) In general.--Each State agency, after public notice 
     and opportunity for comment, shall biennially publish a 
     summary of projects in the State that are eligible for 
     assistance under this title.
       ``(B) Inclusions.--The summary under subparagraph (A) shall 
     include--
       ``(i) the priority assigned to each project under the 
     priority system of the State developed under paragraph (2); 
     and
       ``(ii) the funding schedule for each project, to the extent 
     that such information is available.
       ``(4) Statement of policy.--It is the policy of Congress 
     that projects in a State that are carried out using 
     assistance provided under this title shall be funded, to the 
     maximum extent practicable, through a project priority system 
     of the State that, in the estimation of the State, is 
     designed to achieve optimum water quality management, 
     consistent with the public health and water quality goals and 
     requirements of this Act.''.
       (g) Additional Requirements for Water Pollution Control 
     Revolving Funds.--Section 603 of the Federal Water Pollution 
     Control Act (33 U.S.C. 1383) is amended by adding at the end 
     the following:
       ``(i) Technical, Managerial, and Financial Capacity for 
     Optimal Performance.--
       ``(1) Definition of state agency.--In this subsection, the 
     term `State agency' has the meaning given the term in 
     subsection (g)(1).
       ``(2) Strategy.--
       ``(A) In general.--Not later than 3 years after the date of 
     enactment of this subsection, each State agency shall 
     implement a strategy to assist treatment works in the State 
     receiving assistance under this title in--
       ``(i) attaining and maintaining technical, managerial, 
     operations, maintenance, and capital investments; and
       ``(ii) meeting and sustaining compliance with applicable 
     Federal and State laws.
       ``(B) Requirements.--In preparing the strategy described in 
     subparagraph (A), the State shall consider, solicit public 
     comment on, and include in the strategy--
       ``(i) a description of the institutional, regulatory, 
     financial, tax, or legal factors at the Federal, State, and 
     local levels that encourage or impair the development of 
     technical, managerial, and financial capacity; and
       ``(ii) a description of the manner in which the State 
     intends to use the authorities and resources of the State to 
     assist treatment works in attaining and maintaining 
     technical, managerial, and financial capacity.
       ``(3) Determination by administrator.--Except as provided 
     in subsection (k), if the Administrator determines that a 
     State agency has not developed or implemented a strategy in 
     accordance with paragraph (2), the Administrator shall--
       ``(A) withhold 20 percent of each capitalization grant made 
     to the State under this title after the date of the 
     determination; and
       ``(B) permit the State a 1-year period, beginning on the 
     date on which funds are withheld under subparagraph (A), 
     during which the State may implement a strategy in accordance 
     with paragraph (2).
       ``(4) Reallotment of funds.--
       ``(A) In general.--If, after the 1-year period described in 
     paragraph (3)(B), the Administrator is not satisfied that a 
     State has carried out adequate corrective action relating to 
     the development and implementation of a strategy required 
     under paragraph (2), the Administrator shall reallot all 
     funds of the State withheld by the Administrator as of that 
     date in accordance with subparagraph (B).
       ``(B) Requirements for reallotment.--The Administrator 
     shall reallot funds under subparagraph (A)--
       ``(i) only to States that the Administrator determines to 
     be in compliance with this subsection; and
       ``(ii) in the same ratio provided under the most recent 
     formula for the allotment of funds under this title.
       ``(5) Condition for receipt of assistance.--
       ``(A) In general.--Except as provided in subparagraph (B) 
     and subsection (k), beginning on the date that is 3 years 
     after the date of enactment of this subsection, the State 
     shall require each treatment works that receives significant 
     assistance under this title to demonstrate adequate 
     technical, managerial, and financial capacity, including the 
     establishment and implementation by the treatment works of an 
     asset management plan (for which the Administrator may 
     publish information to assist States in determining required 
     content) that--
       ``(i) conforms to generally accepted industry practices; 
     and
       ``(ii) includes--

       ``(I) an inventory of existing assets (including an 
     estimate of the useful life of those assets); and
       ``(II) an optimal schedule of operations, maintenance, and 
     capital investment required to meet and sustain performance 
     objectives for the treatment works established in accordance 
     with applicable Federal and State laws over the useful life 
     of the treatment works.

       ``(B) Exception.--Notwithstanding subparagraph (A), a 
     treatment works may receive assistance under this title if 
     the State determines that the assistance would enable the 
     treatment works to attain adequate technical, managerial, and 
     financial capacity.
       ``(j) Restructuring.--Notwithstanding section 204(b)(1), 
     except as provided in subsection (k), a State may provide 
     assistance from the water pollution control revolving fund of 
     the State for a project only if the recipient of the 
     assistance--
       ``(1) has considered--
       ``(A) consolidating management functions or ownership with 
     another facility;
       ``(B) forming public-private partnerships or other 
     cooperative partnerships; and
       ``(C) using nonstructural alternatives or technologies that 
     may be more environmentally sensitive; and
       ``(2) has in effect a plan to achieve, within a reasonable 
     period of time, a rate structure that, to the maximum extent 
     practicable--
       ``(A) reflects the actual cost of service provided by the 
     recipient; and
       ``(B) addresses capital replacement funds; and
       ``(3) has in effect, or will have in effect on completion 
     of the project, an asset management plan described in 
     subsection (i)(5).
       ``(k) Exemption for Assistance Solely for Planning, Design, 
     and Preconstruction Activities.--Subsection (j) and 
     paragraphs (3) and (5) of subsection (i) shall not apply to 
     assistance provided under this title that is to be used by a 
     treatment works solely for planning, design, or 
     preconstruction activities.
       ``(l) Technical Assistance.--
       ``(1) Definition of qualified nonprofit technical 
     assistance provider.--In this subsection, the term `qualified 
     nonprofit technical assistance provider' means a nonprofit 
     entity that provides technical assistance (such as circuit-
     rider programs, training, and preliminary engineering 
     evaluations) to small treatment works that--
       ``(A) serve not more than 3,300 users; and
       ``(B) are located in a rural area.
       ``(2) Grant program.--
       ``(A) In general.--The Administrator may make grants to a 
     qualified nonprofit technical assistance provider for use in 
     assisting small treatment works in planning, developing, and 
     obtaining financing for eligible projects described in 
     subsection (c).
       ``(B) Distribution of grants.--In carrying out this 
     subsection, the Administrator shall ensure, to the maximum 
     extent practicable, that technical assistance provided using 
     funds from a grant under subparagraph (A) is made available 
     in each State.
       ``(C) Consultation.--As a condition of receiving a grant 
     under this subsection, a qualified nonprofit technical 
     assistance provider shall consult with each State in which 
     grant funds are to be expended or otherwise made available 
     before the grant funds are expended or made available in the 
     State.
       ``(3) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $7,000,000 
     for each of fiscal years 2003 through 2007.
       ``(m) Competition Requirements.--
       ``(1) In general.--The requirements described in section 
     204(a)(6) shall apply to each specification for bids for 
     projects receiving assistance under this title.
       ``(2) Single bids.--Nothing in this subsection prohibits a 
     recipient of assistance under this title that receives only 1 
     bid for a project described in paragraph (1) from accepting 
     the bid and carrying out the project.
       ``(n) No Judicial Review.--A determination by a State to 
     provide financial assistance under this title shall not be 
     subject to judicial review.''.
       (h) Allotment of Funds.--Section 604(a) of the Federal 
     Water Pollution Control Act (33 U.S.C. 1384(a)) is amended by 
     striking subsection (a) and inserting the following:
       ``(a) Formula.--
       ``(1) Allocation.--
       ``(A) In general.--Except as provided in paragraph (2) and 
     subject to subsection (b), funds made available to carry out 
     this title for each of fiscal years 2003 through 2006 shall 
     be allocated by the Administrator as follows:
       ``(i) Amounts of $1,350,000,000 or less.--$1,350,000,000 
     (or, if the total amount made available for the fiscal year 
     is less than that amount, the total amount made available) 
     shall be allocated in accordance with a formula that 
     allocates to each State the proportional share of the State 
     needs identified in the most recent survey conducted under 
     section 516(2), except that the minimum proportionate share 
     provided to each State shall be 1.1 percent of available 
     funds.
       ``(ii) Amounts between $1,350,000,000 and $1,550,000,000.--
     Amounts greater than $1,350,000,000 but less than 
     $1,550,000,000 made available for the fiscal year shall be 
     allocated by the Administrator in accordance with a formula 
     that allocates to each State a proportionate share equal to 
     the difference between--

[[Page S904]]

       ``(I) the amount received under clause (i); and
       ``(II) the amount that the State would have received under 
     section 205(c);

     in cases in which an amount received by the State under 
     clause (i) is less than the amount that would have been 
     received by the State under section 205(c).
       ``(iii) Amounts greater than $1,550,000,000.--Any amounts 
     equal to or greater than $1,550,000,000 that are made 
     available for the fiscal year shall be allocated in 
     accordance with a formula that allocates to each State the 
     proportional share of the State needs identified in the most 
     recent survey conducted under section 516(2), except that the 
     minimum proportionate share provided to each State shall be 
     1.1 percent of available funds.
       ``(B) Subsequent fiscal years.--For fiscal year 2007 and 
     each fiscal year thereafter, funds shall be allocated in 
     accordance with a formula that allocates to each State the 
     proportional share of the State needs identified in the most 
     recent survey conducted pursuant to section 516(2), except 
     that the minimum proportionate share provided to each State 
     shall be 1 percent of available funds.
       ``(2) Private utilities.--If a State elects to include the 
     needs of private utilities in the needs survey used to 
     develop the allocation formula described in paragraph (1), 
     the State shall ensure that the private utilities are 
     eligible to receive funds under this title.''.
       (i) Audits, Reports, and Fiscal Controls; Intended Use 
     Plan.--Section 606 of the Federal Water Pollution Control Act 
     (33 U.S.C. 1386) is amended--
       (1) in subsection (c)--
       (A) by inserting ``(including significant public 
     outreach)'' after ``review''; and
       (B) by striking paragraph (1) and inserting the following:
       ``(1) a summary of the priority projects developed under 
     section 603(g) for which the State intends to provide 
     assistance from the water pollution control revolving fund of 
     the State for the year covered by the plan;''; and
       (2) in subsection (d)--
       (A) in the subsection heading, by striking ``Report'' and 
     inserting ``Reports'';
       (B) by striking ``Beginning the'' and inserting the 
     following:
       ``(1) In general.--Beginning in the''; and
       (C) by adding at the end the following:
       ``(2) Report on technical, managerial, and financial 
     capacity.--Not later than 2 years after the date on which a 
     State first adopts a strategy in accordance with section 
     603(j)(2), and annually thereafter, the State shall submit to 
     the Administrator a report on the progress made in improving 
     the technical, managerial, and financial capacity of 
     treatment works in the State (including the progress of the 
     State in complying with the amendments to section 603 made by 
     the Water Investment Act of 2002).
       ``(3) Availability.--A State that submits a report under 
     this subsection shall make the report available to the 
     public.''.
       (j) Authorization of Appropriations.--The Federal Water 
     Pollution Control Act is amended by striking section 607 (33 
     U.S.C. 1387) and inserting the following:

     ``SEC. 607. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--There are authorized to be appropriated 
     to carry out this title--
       ``(1) $3,200,000 for each of fiscal years 2003 and 2004;
       ``(2) $3,600,000 for fiscal year 2005;
       ``(3) $4,000,000 for fiscal year 2006; and
       ``(4) $6,000,000 for fiscal year 2007.
       ``(b) Availability.--Amounts made available under this 
     section shall remain available until expended.
       ``(c) Reservation for Needs Surveys.--Of the amount made 
     available under subsection (a) to carry out this title for a 
     fiscal year, the Administrator may reserve not more than 
     $1,000,000 per year to pay the costs of conducting needs 
     surveys under section 516(2).''.
       (k) Conforming Amendment.--Section 216 of the Federal Water 
     Pollution Control Act (33 U.S.C. 1296) is amended--
       (1) in the first sentence, by inserting ``in accordance 
     with section 603(g)'' before ``the determination''; and
       (2) by striking the ``Not less than 25 per centum'' and all 
     that follows.

            TITLE II--SAFE DRINKING WATER ACT MODIFICATIONS

     SEC. 201. PLANNING, DESIGN, AND PRECONSTRUCTION COSTS.

       Section 1452(a)(2) of the Safe Drinking Water Act (42 
     U.S.C. 300j-12(a)(2)) is amended in the second sentence by 
     striking ``(not'' and inserting ``(including planning, 
     design, and associated preconstruction expenditures but 
     not''.

     SEC. 202. STATE REVOLVING LOAN FUND.

       (a) In General.--Section 1452(a)(3)(B)(ii) of the Safe 
     Drinking Water Act (42 U.S.C. 300j-12(a)(3)(B)(ii)) is 
     amended by inserting ``and the formation of regional 
     partnerships'' after ``procedures''.
       (b) Public Outreach.--Section 1452(b) of the Safe Drinking 
     Water Act (42 U.S.C. 300j-12(b)) is amended in paragraphs (1) 
     and (3)(B) by inserting ``(including significant public 
     outreach)'' after ``comment'' each place it appears.
       (c) Types of Assistance.--Section 1452(f) of the Safe 
     Drinking Water Act (42 U.S.C. 300j-12(f)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (C), by striking ``and'' at the end; 
     and
       (B) by adding at the end the following:
       ``(E) the recipient of the loan funds considers, during the 
     planning and engineering phase of each project for which the 
     loan funds are received--
       ``(i) consolidating management functions or ownership with 
     another facility;
       ``(ii) forming public-private partnerships or other 
     cooperative partnerships; and
       ``(iii) using nonstructural alternatives or technologies 
     that may be more environmentally sensitive;
       ``(F) the recipient of the loan funds has in effect a plan 
     to achieve, within a reasonable period of time, a rate 
     structure that, to the maximum extent practicable--
       ``(i) reflects the actual cost of service provided by the 
     recipient; and
       ``(ii) addresses capital replacement funds; and
       ``(G) the recipient of each loan that reflects a 
     significant capital investment has in effect, or will have in 
     effect on completion of the project, an asset management plan 
     (for which the Administrator may publish information to 
     assist States in determining required content) that--
       ``(i) conforms to generally accepted industry practices; 
     and
       ``(ii) includes--

       ``(I) an inventory of existing assets (including an 
     estimate of the useful life of the assets); and
       ``(II) an optimal schedule of operations, maintenance, and 
     capital investment required to meet and sustain performance 
     objectives;'';

       (2) in paragraph (4), by striking ``and'' at the end;
       (3) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (4) by adding at the end the following:
       ``(6) to reduce costs incurred by a municipality in issuing 
     bonds.''.
       (d) Consultation and Coordination With State Agencies; 
     Judicial Review.--Section 1452(g) of the Safe Drinking Water 
     Act (42 U.S.C. 300j-12(g)) is amended by adding at the end 
     the following:
       ``(5) Consultation and coordination with state agencies.--A 
     State that provides financial assistance from the drinking 
     water revolving fund of the State shall ensure that 
     applicants for the assistance consult and coordinate with, as 
     appropriate, agencies responsible for developing any--
       ``(A) local land use plans;
       ``(B) regional transportation improvement and long-range 
     transportation plans; and
       ``(C) State, regional, and municipal watershed plans.
       ``(6) No judicial review.--A determination by a State to 
     provide financial assistance under this section shall not be 
     subject to judicial review.''.
       (e) Other Authorized Activities.--Section 1452(k)(1) of the 
     Safe Drinking Water Act (42 U.S.C. 300j-12(k)(1)) is amended 
     by striking subparagraph (D) and inserting the following:
       ``(D) Make expenditures for the development and 
     implementation of source water protection programs.
       ``(E) Provide assistance for consolidation among community 
     water systems for the purpose of--
       ``(i) meeting national primary drinking water standards; or
       ``(ii) making more efficient use of funds made available 
     under subsection (a)(2).''.

     SEC. 203. ADDITIONAL SUBSIDIZATION.

       Section 1452(d)(1) of the Safe Drinking Water Act (42 
     U.S.C. 300j-12(d)(1)) is amended--
       (1) by striking ``Notwithstanding any other provision'' and 
     inserting the following:
       ``(A) In general.--Notwithstanding any other provision''; 
     and
       (2) by adding at the end the following:
       ``(B) Subsidization for disadvantaged users.--
       ``(i) In general.--Subject to clause (ii), a State may 
     provide additional subsidization under subparagraph (A) for a 
     fiscal year for a community that does not meet the definition 
     of a disadvantaged community if the State, as part of the 
     assistance agreement between the State and the recipient of 
     the assistance, ensures that the additional subsidization 
     provided under this paragraph is directed through the user 
     charge rate system to disadvantaged users within the 
     residential user class of the community (as defined by the 
     State based on affordability criteria).
       ``(ii) Maximum amount.--Assistance provided by a State 
     under clause (i) shall not exceed 15 percent of the amount of 
     the capitalization grant received by the State for the fiscal 
     year.
       ``(iii) Guidance.--The Administrator may publish guidance 
     to assist States in identifying disadvantaged users described 
     in clause (i).''.

     SEC. 204. PRIVATE UTILITIES.

       Section 1452(h) of the Safe Drinking Water Act (42 U.S.C. 
     300j-12(h)) is amended--
       (1) by striking ``The Administrator'' and inserting the 
     following:
       ``(1) In general.--The Administrator''; and
       (2) by adding at the end the following:
       ``(2) Private utilities.--If a State elects to include the 
     needs of private utilities in the needs survey under 
     paragraph (1), the State shall ensure that the private 
     utilities are eligible to receive funds under this title.''.

     SEC. 205. COMPETITION REQUIREMENTS.

       Section 1452 of the Safe Drinking Water Act (42 U.S.C. 
     300j-12) is amended by adding at the end the following:
       ``(s) Competition Requirements.--
       ``(1) In general.--Except as provided in paragraph (2), as 
     a condition of receipt of

[[Page S905]]

     funds under this section, no specification for bids prepared 
     for projects to be carried out using the funds shall be 
     written in such a manner as to contain any proprietary, 
     exclusionary, or discriminatory requirement, other than 
     requirements based on performance, unless such requirements 
     are necessary to test or demonstrate a specific thing or to 
     provide for necessary interchangeability of parts and 
     equipment. If, in the judgment of a recipient of funds, it is 
     impractical or uneconomical to make a clear and accurate 
     description of the technical requirements, a `brand name or 
     equal' description may be used as a means to define the 
     performance or other salient requirements of a procurement, 
     and in doing so the recipient need not establish the 
     existence of any source other than the brand or source so 
     named.
       ``(2) Single bids.--Nothing in this subsection prohibits a 
     recipient of assistance under this title that receives only 1 
     bid for a project described in paragraph (1) from accepting 
     the bid and carrying out the project.''.

     SEC. 206. TECHNICAL ASSISTANCE FOR SMALL SYSTEMS.

       (a) Small Public Water Systems Technology Assistance 
     Centers.--Section 1420(f) of the Safe Drinking Water Act (42 
     U.S.C. 300g-9(f)) is amended--
       (1) in paragraph (2), by inserting ``technology 
     verification, pilot and field testing of innovative 
     technologies, and'' after ``shall include''; and
       (2) by striking paragraph (6) and inserting the following:
       ``(6) Review and evaluation.--
       ``(A) In general.--Not less often than every 2 years, the 
     Administrator shall review and evaluate the program carried 
     out under this subsection.
       ``(B) Disqualification.--If, in carrying out this 
     subsection, the Administrator determines that a small public 
     water system technology assistance center is not carrying out 
     the duties of the center, the Administrator--
       ``(i) shall notify the center of the determination of the 
     Administrator; and
       ``(ii) not later than 180 days after the date of the 
     notification, may terminate the provision of funds to the 
     center.
       ``(7) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $5,000,000 
     for each of fiscal years 2003 through 2007, to be distributed 
     to the centers in accordance this subsection.''.
       (b) Environmental Finance Centers.--Section 1420(g) of the 
     Safe Drinking Water Act (42 U.S.C. 300g-9(g)) is amended by 
     striking paragraph (4) and inserting the following:
       ``(4) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $1,500,000 
     for each of fiscal years 2003 through 2007.''.

     SEC. 207. AUTHORIZATION OF APPROPRIATIONS.

       Section 1452 of the Safe Drinking Water Act (42 U.S.C. 
     300j-12) is amended by striking subsection (m) and inserting 
     the following:
       ``(m) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to carry out this section--
       ``(A) $1,500,000 for fiscal year 2003;
       ``(B) $2,000,000 for each of fiscal years 2004 and 2005;
       ``(C) $3,500,000 for fiscal year 2006; and
       ``(D) $6,000,000 for fiscal year 2007.
       ``(2) Availability.--Amounts made available under this 
     subsection shall remain available until expended.
       ``(3) Reservation for needs surveys.--Of the amount made 
     available under paragraph (1) to carry out this section for a 
     fiscal year, the Administrator may reserve not more than 
     $1,000,000 per year to pay the costs of conducting needs 
     surveys under subsection (h).''.

      TITLE III--INNOVATIONS IN FUND AND WATER QUALITY MANAGEMENT

     SEC. 301. TRANSFER OF FUNDS.

       (a) Water Pollution Control Fund.--Section 603 of the 
     Federal Water Pollution Control Act (33 U.S.C. 1383) is 
     amended by adding at the end the following:
       ``(i) Transfer of Funds.--
       ``(1) In general.--A Governor of the State may--
       ``(A) reserve up to 33 percent of a capitalization grant 
     made under this title and add the funds reserved to any funds 
     provided to the State under section 1452 of the Safe Drinking 
     Water Act (42 U.S.C. 300j-12); and
       ``(B) reserve in any year an amount up to the amount that 
     may be reserved under subparagraph (A) for that year from 
     capitalization grants made under section 1452 of that Act (42 
     U.S.C. 300j-12) and add the reserved funds to any funds 
     provided to the State under this title.
       ``(2) State match.--Funds reserved under this subsection 
     shall not be considered to be a State contribution for a 
     capitalization grant required under this title or section 
     1452(b) of the Safe Drinking Water Act (42 U.S.C. 300j-
     12(b)).''.
       (b) Safe Drinking Water Fund.--Section 1452(g) of the Safe 
     Drinking Water Act (42 U.S.C. 300j-12(g)) is amended--
       (1) in paragraph (2), by striking ``4'' and inserting 
     ``5''; and
       (2) by adding at the end the following:
       ``(5) Transfer of funds.--
       ``(A) In general.--A Governor of the State may--
       ``(i) reserve up to 33 percent of a capitalization grant 
     made under this section and add the funds reserved to any 
     funds provided to the State under section 601 of the Federal 
     Water Pollution Control Act (33 U.S.C. 1381); and
       ``(ii) reserve in any year an amount up to the amount that 
     may be reserved under clause (i) for that year from 
     capitalization grants made under section 601 of that Act (33 
     U.S.C. 1381) and add the reserved funds to any funds provided 
     to the State under this section.
       ``(B) State match.--Funds reserved under this paragraph 
     shall not be considered to be a State match of a 
     capitalization grant required under this section or section 
     602(b) of the Federal Water Pollution Control Act (33 U.S.C. 
     1382(b)).''.

     SEC. 302. DEMONSTRATION PROGRAM FOR WATER QUALITY ENHANCEMENT 
                   AND MANAGEMENT.

       (a) Establishment.--
       (1) In general.--As soon as practicable after the date of 
     enactment of this Act, the Administrator of the Environmental 
     Protection Agency (referred to in this section as the 
     ``Administrator'') shall establish a nationwide demonstration 
     program to--
       (A) promote innovations in technology and alternative 
     approaches to water quality management or water supply; and
       (B) reduce costs to municipalities incurred in complying 
     with--
       (i) the Federal Water Pollution Control Act (33 U.S.C. 1251 
     et seq.); and
       (ii) the Safe Drinking Water Act (42 U.S.C. 300f et seq.).
       (2) Scope.--The demonstration program shall consist of 10 
     projects per year, to be carried out in municipalities 
     selected by the Administrator under subsection (b).
       (b) Selection of Municipalities.--
       (1) Application.--A municipality that seeks to be selected 
     to participate in the demonstration program shall submit to 
     the Administrator a plan that--
       (A) is developed in coordination with--
       (i) the agency of the State having jurisdiction over water 
     quality or water supply matters; and
       (ii) interested stakeholders;
       (B) describes water impacts specific to urban and rural 
     areas;
       (C) includes a strategy under which the municipality, 
     through participation in the demonstration program, could 
     effectively--
       (i) address those problems; and
       (ii) achieve the same water quality goals as those goals 
     that--

       (I) could be achieved using more traditional methods; or
       (II) are mandated under--

       (aa) the Federal Water Pollution Control Act (33 U.S.C. 
     1251 et seq.); and
       (bb) the Safe Drinking Water Act (42 U.S.C. 300f et seq.); 
     and
       (D) includes a schedule for achieving the goals of the 
     municipality.
       (2) Types of projects.--In carrying out the demonstration 
     program, the Administrator may select projects relating to 
     such matters as--
       (A) excessive nutrient growth;
       (B) urban or rural pressure;
       (C) a lack of an alternative water supply;
       (D) difficulties in water conservation and efficiency;
       (E) a lack of support tools and technologies to 
     rehabilitate and replace water supplies;
       (F) a lack of monitoring and data analysis for distribution 
     systems;
       (G) nonpoint source water pollution;
       (H) sanitary overflows;
       (I) combined sewer overflows;
       (J) problems with naturally-occurring constituents of 
     concern; or
       (K) problems with erosion and excess sediment.
       (3) Responsibilities of administrator.--In selecting 
     municipalities under this subsection, the Administrator 
     shall--
       (A) ensure, to the maximum extent practicable--
       (i) the inclusion in the demonstration program of a variety 
     of projects with respect to--

       (I) geographic distribution;
       (II) innovative technologies used for the projects; and
       (III) nontraditional approaches (including low-impact 
     development technologies) used for the projects; and

       (ii) that each category of project described in paragraph 
     (2) is adequately represented;
       (B) give higher priority to projects that--
       (i) address multiple problems; and
       (ii) are regionally applicable;
       (C) ensure, to the maximum extent practicable, that at 
     least 1 small community having a population of 10,000 or less 
     receives a grant each year; and
       (D) ensure that, for each fiscal year, no municipality 
     receives more than 25 percent of the total amount of funds 
     made available for the fiscal year to provide grants under 
     this section.
       (4) Cost sharing.--
       (A) In general.--Except as provided in subparagraph (B), 
     the non-Federal share of the cost of a project carried out 
     under this section shall be at least 20 percent.
       (B) Waiver.--The Administrator may reduce or eliminate the 
     non-Federal share of the cost of a project for reasons of 
     affordability.
       (c) Reports.--
       (1) Reports from municipalities.--A municipality that is 
     selected for participation in the demonstration program shall 
     submit to the Administrator, on the date of completion of a 
     project of the municipality and on each of the dates that is 
     1, 2, and 3 years after that date, a report that describes 
     the effectiveness of the project.
       (2) Reports to congress.--Not later than 2 years after the 
     date of enactment of this Act, and every 2 years thereafter, 
     the Administrator shall compile, and submit to the

[[Page S906]]

     Committee on Environment and Public Works of the Senate, and 
     the Committee on Transportation and Infrastructure and the 
     Committee on Energy and Commerce of the House of 
     Representatives, a report that describes the status and 
     results of the demonstration program.
       (d) Incorporation of Results and Information.--To the 
     maximum extent practicable, the Administrator shall 
     incorporate the results of, and information obtained from, 
     successful projects under this section into programs 
     administered by the Administrator.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $20,000,000 for 
     each of fiscal years 2003 through 2007.

     SEC. 303. RATE STUDY.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, the National Academy of Sciences shall 
     complete a study of the public water system and treatment 
     works rate structures for communities in the United States 
     selected by the Academy in accordance with subsection (c).
       (b) Required Elements.--
       (1) Rates.--The study shall, at a minimum--
       (A) determine whether public water system and treatment 
     works rates for communities included in the study adequately 
     address the cost of service, including funds necessary to 
     replace infrastructure;
       (B) identify the manner in which the public water system 
     and treatment works rates were determined;
       (C) determine the manner in which cost of service is 
     measured;
       (D)(i) survey existing practices for establishing public 
     water system and treatment works rates; and
       (ii) identify any commonalities in factors and processes 
     used to evaluate rate systems and make related decisions; and
       (E) recommend a set of best industry practices for public 
     water systems and treatment works for use in establishing a 
     rate structure that--
       (i) adequately addresses the true cost of service; and
       (ii) takes into consideration the needs of disadvantaged 
     individuals and communities.
       (2) Affordability.--The study shall, at a minimum--
       (A) identify existing standards for affordability;
       (B) determine the manner in which those standards are 
     determined and defined;
       (C) determine the manner in which affordability varies with 
     respect to communities of different sizes and in different 
     regions; and
       (D) determine the extent to which affordability affects the 
     decision of a community to increase public water system and 
     treatment works rates (including the decision relating to the 
     percentage by which those rates should be increased).
       (3) Disadvantaged communities.--The study shall, at a 
     minimum--
       (A) survey a cross-section of States representing different 
     sizes, demographics, and geographical regions;
       (B) describe, for each State described in subparagraph (A), 
     the definition of ``disadvantaged community'' used in the 
     State in carrying out projects and activities under the Safe 
     Drinking Water Act (42 U.S.C. 300f et seq.);
       (C) review other means of identifying the meaning of the 
     term ``disadvantaged'', as that term applies to communities;
       (D) determine which factors and characteristics are 
     required for a community to be considered ``disadvantaged''; 
     and
       (E) evaluate the degree to which factors such as a 
     reduction in the tax base over a period of time, a reduction 
     in population, the loss of an industrial base, and the 
     existence of areas of concentrated poverty are taken into 
     account in determining whether a community is a disadvantaged 
     community.
       (c) Selection of Communities.--The National Academy of 
     Sciences shall select communities, the public water system 
     and treatment works rate structures of which are to be 
     studied under this section, that include a cross section of 
     communities representing various populations, income levels, 
     demographics, and geographical regions.
       (d) Report to Congress.--On completion of the study under 
     this section, the National Academy of Sciences shall submit 
     to Congress a report that describes the results of the study.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $1,000,000 for 
     each of fiscal years 2003 and 2004.

     SEC. 304. EFFECTS ON POLICIES AND RIGHTS.

       (a) In General.--Nothing in this Act--
       (1) impairs or otherwise affects in any way, any right or 
     jurisdiction of any State with respect to the water 
     (including boundary water) of the State;
       (2) supersedes, abrogates, or otherwise impairs the 
     authority of any State to allocate quantities of water within 
     areas under the jurisdiction of the State; or
       (3) supersedes or abrogates any right to any quantity or 
     use of water that has been established by any State.
       (b) State Water Rights.--Notwithstanding any other 
     provision of law, with respect to the implementation of this 
     Act and amendments made by this Act--
       (1) the management of and control over water in a State 
     shall be subject to and in accordance with the laws of the 
     State in which the water is located;
       (2) Congress delegates to each State the authority to 
     regulate water of the State, including the authority to 
     regulate water in interstate commerce (including regulation 
     of usufructuary rights, trade, and transportation); and
       (3) the United States, and any agency or officer on behalf 
     of the United States, may exercise management and control 
     over water in a State only in compliance with the laws of the 
     State in which the water is located.

                   TITLE IV--WATER RESOURCE PLANNING

     SEC. 401. FINDINGS.

       Congress finds that--
       (1) there is ever-growing demand and competition for water 
     from many segments of society, including municipal users, 
     agriculture, and critical ecosystems;
       (2) population growth in the United States will continue to 
     place increasing pressure on the water supply of the United 
     States;
       (3) because sources of water do not follow political 
     boundaries--
       (A) the availability of water is increasingly becoming a 
     regional issue; and
       (B) it is more difficult to take action--
       (i) to monitor the state of water resources;
       (ii) to prepare for water shortages or surpluses;
       (iii) to prevent the occurrence of water shortages or 
     surpluses; or
       (iv) to respond to emergency situations;
       (4)(A) water shortages or surpluses can--
       (i) impact public health;
       (ii) limit economic and agricultural development; and
       (iii) damage ecosystems; and
       (B) the United States often suffers serious economic and 
     environmental losses from water shortages or surpluses;
       (5) there is no national policy to ensure an integrated and 
     coordinated Federal strategy to monitor the state of the 
     water resources of the United States;
       (6) periodic assessments of the water resources of the 
     United States are necessary; and
       (7)(A) Congress has recognized and deferred to the States 
     the authority to allocate and administer water within the 
     borders of the States;
       (B) the courts have confirmed that this is an appropriate 
     role for the States; and
       (C) Congress should continue to defer to States on laws and 
     regulations governing the appropriation, distribution, and 
     control or use of water.

     SEC. 402. DEFINITION OF SECRETARY.

       In this title, the term ``Secretary'' means the Secretary 
     of the Interior, acting through the Director of the United 
     States Geological Survey.

     SEC. 403. ACTIONS.

       (a) Assessment.--
       (1) In general.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall conduct an 
     assessment of the state of water resources in the United 
     States.
       (2) Components.--The assessment shall, at a minimum--
       (A) identify areas in the United States that are at 
     significant risk for water shortages or water surpluses, as 
     those shortages or surpluses pertain to support of human or 
     ecosystem needs, in--
       (i) the short term (1 through 10 years);
       (ii) the middle term (11 through 20 years); and
       (iii) the long term (21 through 50 years); and
       (B) identify areas in each category described in 
     subparagraph (A) in which water resource issues cross 
     political boundaries.
       (3) Report.--On completion of the assessment, the Secretary 
     shall submit to Congress a report that describes the results 
     of the assessment.
       (b) Water Resource Research Priorities.--
       (1) In general.--The Secretary shall coordinate a process 
     among Federal agencies (including the Environmental 
     Protection Agency) to develop and publish, not later than 1 
     year after the date of enactment of this Act, a list of water 
     resource research priorities that focuses on--
       (A) monitoring; and
       (B) improving the quality of the information available to 
     State, tribal, and local water resource managers.
       (2) Use of list.--The list published under paragraph (1) 
     shall be used by Federal agencies as a guide in making 
     decisions on the allocation of water research funding.
       (c) Information Delivery System.--
       (1) In general.--The Secretary shall coordinate a process 
     to develop an effective information delivery system to 
     communicate information described in paragraph (2) to--
       (A) decisionmakers at the Federal, regional, State, tribal, 
     and local levels;
       (B) the private sector; and
       (C) the general public.
       (2) Types of information.--The information referred to in 
     paragraph (1) may include--
       (A) the results of the national water resource assessment;
       (B) a summary of the Federal water research priorities 
     developed under subsection (b);
       (C) near real-time data and other information on water 
     shortages and surpluses;
       (D) planning models for water shortages or surpluses (at 
     various levels, such as State, river basin, and watershed 
     levels);
       (E) streamlined procedures for States and localities to 
     interact with and obtain assistance from Federal agencies 
     that perform water resource functions; and

[[Page S907]]

       (F) other materials, as determined by the Secretary.

     SEC. 404. REPORT TO CONGRESS.

       Not later than 2 years after the date of enactment of this 
     Act, and every 2 years thereafter through fiscal year 2007, 
     the Secretary shall submit to Congress a report on the 
     implementation of this title.

     SEC. 405. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated to the Secretary to 
     carry out this title $3,000,000 for each of fiscal years 2003 
     through 2007, to remain available until expended.

  Mr. JEFFORDS. Mr. President, I rise today to join my colleagues 
Senator Graham, Senator Crapo, and Senator Smith of New Hampshire in 
introducing the Water Investment Act of 2002. This legislation seeks to 
provide additional resources to States, Tribes, and localities to meet 
water infrastructure needs. Simultaneously, it seeks to move the state 
of the art in water program management forward by increasing the 
flexibility offered to States in administering their water programs, 
ensuring that ``next generation'' of water quality issues receive the 
appropriate focus, and institutionalizing financial management capacity 
into our Nation's water systems.
  Mr. President, this legislation is critical to our Nation's future. 
We tend to take clean water in our faucets and well-functioning, hidden 
sewage treatment systems for granted in this country. However, without 
vigilance, these luxuries can quickly disappear. The Water Investment 
Act of 2002 will help our communities be vigilant.
  This legislation authorizes funding of over $20 billion over 5 years 
nationwide for clean water and $15 billion over 5 years nationwide for 
safe drinking water projects.
  There is significant new flexibility attached to these funds.
  Many of the provisions already authorized in the Safe Drinking Water 
Act which allow an extension of loan terms and more favorable loan 
terms (including principal forgiveness) for disadvantaged communities. 
In States such as my home State of Vermont, these types of provisions 
are critical as small communities struggle to meet water quality needs.
  Recognizing the needs of larger communities with diverse income 
groups within their borders, this bill includes a new opportunity for 
States to provide more favorable loan terms to communities that may not 
be disadvantaged as a whole, but may have pockets of disadvantaged 
individuals as long as the community can demonstrate that the financial 
benefit they received will be directed through the rate structure 
toward disadvantaged individuals (based on income) in their service 
area.
  The bill makes the authority to transfer funds between the Safe 
Drinking Water Act and Clean Water Act State revolving funds permanent.
  There is financial accountability built into the Water Investment Act 
of 2002. We have included provisions for both the Clean Water Act and 
the Safe Drinking Water Act that are designed to help water utilities 
better manage their capital investments using asset management plans, 
rate structures that account for capital replacement costs, and other 
financial management techniques. We encourage utilities to seek 
innovative solutions by asking them to review options for 
consolidation, public-private partnerships, and low-impact technologies 
before proceeding with a project.
  Whenever one mentions ``consolidation'', concerns are often raised 
about inadvertently providing incentives for excessive or uncontrolled 
growth. This legislation recognizes that concern and includes a 
provision that specifically requires States to ensure that water 
projects are coordinated with local land use plans, regional 
transportation improvement and long-range transportation plans, and 
state, regional and municipal watershed plans. As a package, this 
legislation will help ensure that utilities seek the most efficient 
organizational structure to meet their water quality needs.
  I am also very pleased that the bill includes provisions ensuring 
that ``next generation'' of water quality issues receives the 
appropriate focus. As I worked on this legislation, I became aware that 
there are opportunities to use low-impact technologies to solve water 
quality issues that may or may not be considered by states and 
localities as they seek to solve water quality issues. In response, our 
bill includes several incentives for use of non-structural 
technologies. We specifically state in the statute that these 
approaches are eligible to receive funding under the Clean Water Act 
State Revolving Fund and require that recipients of funds consider the 
use of low-impact technologies. In addition, we authorize a 
demonstration program at $20 million per year over 5 years to promote 
innovations in technology and alternative approaches to water quality 
management and water supply. This program requires that a portion of 
the projects use low-impact development technologies.
  The use of nontraditional technologies is the focus in the Water 
Investment Act to ensure that nonpoint source pollution receives 
appropriate emphasis under the Clean Water Act. The modifications this 
bill makes to the priority listing requirements in the Clean Water Act 
ensure that nonpoint source projects will be a part of the equation 
when funding decisions are made at the State level.
  The bill also addresses eligibility issues. It clarifies that 
planning, design, and associated preconstruction costs are eligible for 
funds under the Clean Water Act and Safe Drinking Water Act State 
Revolving Funds as stand-alone items. This ensures that small 
communities who may not have the resources available to get a project 
ready to go on their own can receive assistance.
  Small communities will also benefit from a provision in the bill that 
allows privately-owned wastewater facilities to access the Clean Water 
Act State Revolving Fund Already permitted under the Safe Drinking 
Water Act, this will allow small, privately-owned wastewater systems 
such as those located in trailer parks, to obtain much-needed financial 
assistance.
  To ensure that both public and private small systems can actually 
develop the projects to solve problems, our legislation provides three 
main types of technical assistance for small communities. It authorizes 
$7 million per year over 5 years for technical assistance to small 
systems serving less than 3300 people located in a rural area. It 
reauthorizes the Small Public Water Systems Technology Assistance 
Centers for an additional $5 million per year over 5 years. Finally, it 
reauthorizes the Environmental Finance Centers for $1.5 million per 
year over 5 years.
  We have heard from many organizations that public participation in 
the execution of the state revolving loan funds needs to be increased. 
I hope that every individual interested in how water quality projects 
are selected and prioritized in their States takes full advantage of 
existing opportunties for public participation. Our legislation takes 
action to ensure that there is ample opportunity for public comment 
when developing project priority lists and intended use plans.
  There are a multitude of additional provisions in this legislation 
that I will leave to my colleagues to discuss. I want to thank Senator 
Graham for his leadership on this legislation and Senators Crapo and 
Smith for their dedication to introducing a bi-partisan package today 
and their willingness to find a compromise when we needed one.
  Water infrastructure is a major priority for the Environment and 
Public Works Committee during this Congress. We plan to begin an 
aggressive schedule to move this legislation through the Senate on 
February 26 with our first committee hearing, followed by our second 
hearing on February 28 and a markup in early March. I recognize that 
this issue is of great importance to every Senator, and I look forward 
to working with each of you to pass this important legislation that is 
so important to our Nation's water quality and drinking water safety.
                                 ______
                                 
      By Mr. WYDEN (for himself, Mrs. Murray, and Mr. Smith of Oregon):
  S. 1962. A bill to provide for qualified withdrawals from the Capital 
Construction Fund for fishermen leaving the industry for the rollover 
of Capital Construction Funds to individual retirement plans; to the 
Committee on Finance.
 Mr. WYDEN. Mr. President, today I am pleased to introduce, for 
myself, Mrs. Murray, and Mr. Smith of Oregon, the Capital Construction 
Fund Qualified Withdrawal Act of 2002.

[[Page S908]]

  The groundfish fishery in Oregon and adjoining States in the Pacific 
Northwest continues to face daunting challenges as a result of the 
groundfish fishery disaster, resulting in a more than 40-percent drop 
in the income of Oregon fishers since 1995. To assist in rebuilding 
healthy groundfish stocks, my goal remains to reduce overcapitalization 
in the groundfish fishery. We want to get the right number of fishers 
out there, at the right time, catching the right number of fish. This 
legislation supports this effort by reforming the Capital Construction 
Fund in a way that will ease the transition for groundfish fishers away 
from fishing.
  The Capital Construction Fund, CCF, was created by the Merchant 
Marine Act of 1936, as amended in 1969, 46 U.S.C. 1177. CCF has been a 
way for fishers to accumulate funds, free from taxes, for the purpose 
of buying or refitting fishing vessels. The program has been a success; 
however, the CCF's usefulness has not kept up with the times, and today 
the CCF is exacerbating the problems facing U.S. fisheries, including 
the West Coast groundfish fishery.
  CCF works like an Individual Retirement Account, IRA, in that 
deposits to the fund earn interest and are deducted from the 
fishermen's taxable income. But unlike IRAs, there is no limit on 
contributions to the CCF; so fishers are able to accumulate funds 
quickly. In Oregon, the amounts in the accounts range from $10,000 to 
over $200,000.
  The problem my legislation will address is that fishers lose up to 70 
percent of their funds in taxes and penalties if they withdraw funds 
from the CCF for purposes other than buying new vessels or upgrading 
current vessels. Because of the environmental problems plaguing 
commercial fishing, as well as the overcapitalization of the fishing 
fleet, fishermen who want to opt out of fishing are penalized for doing 
so.
  This bill takes a significant step towards helping fishermen and 
making the West Coast groundfish fishery and the commercial fishing 
industry sustainable by amending the CCF to allow non-fishing uses of 
investments. This bill amends the Merchant Marine Act of 1936 and the 
Internal Revenue Code to allow funds currently in the CCF to be rolled 
over into an IRA or other types of retirement accounts, or to be used 
for the payment of an industry fee authorized by the fishery capacity 
reduction program, without adverse tax consequences to the account 
holders.
  I look forward to working with my colleagues to pass this 
legislation, and I ask that the text of the bill be printed in the 
Record.
  The bill follows.

                                S. 1962

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as ``The Capital Construction Fund 
     Qualified Withdrawal Act of 2002''.

     SEC. 2. AMENDMENT OF THE MERCHANT MARINE ACT OF 1936 TO 
                   ENCOURAGE RETIREMENT OF CERTAIN FISHING VESSELS 
                   AND PERMITS.

       (a) In General.--Section 607(a) of the Merchant Marine Act, 
     1936 (46 U.S.C. App. 1177(a)) is amended by adding at the end 
     the following: ``Any agreement entered into under this 
     section may be modified for the purpose of encouraging the 
     sustainability of the fisheries of the United States by 
     making the termination and withdrawal of a capital 
     construction fund a qualified withdrawal if done in exchange 
     for the retirement of the related commercial fishing vessels 
     and related commercial fishing permits.''.
       (b) New Qualified Withdrawals.--
       (1) Amendments to merchant marine act, 1936.--Section 
     607(f)(1) of the Merchant Marine Act, 1936 (46 U.S.C. App. 
     1177(f)(1)) is amended--
       (A) by striking ``for:'' and inserting
     ``for--'';
       (B) by striking ``vessel'' in subparagraph (A) and 
     inserting ``vessel;'';
       (C) by striking ``vessel, or'' in subparagraph (B) and 
     inserting ``vessel;'';
       (D) by striking ``vessel.'' in subparagraph (C) and 
     inserting ``vessel;''; and
       (E) by inserting after subparagraph (C) the following:
       ``(D) the payment of an industry fee authorized by the 
     fishing capacity reduction program under section 312(b) of 
     the Magnuson-Stevens Fishery Conservation and Management Act 
     (16 U.S.C. 1861a(b));
       ``(E) in the case of any such person or shareholder for 
     whose benefit such fund was established or any shareholder of 
     such person, a rollover contribution (within the meaning of 
     section 408(d)(3) of the Internal Revenue Code of 1986) to 
     such person's or shareholder's individual retirement plan (as 
     defined in section 7701(a)(37) of such Code); or
       ``(F) the payment to a person or corporation terminating a 
     capital construction fund for whose benefit the fund was 
     established and retiring related commercial fishing vessels 
     and permits.''.
       (2) Secretary to ensure retirement of vessels and 
     permits.--The Secretary of Commerce by regulation shall 
     establish procedures to ensure that any person making a 
     qualified withdrawal authorized by section 607(f)(1)(F) of 
     the Merchant Marine Act, 1936 (46 U.S.C. App. 1177(f)(1)(F)) 
     retires the related commercial use of fishing vessels and 
     commercial fishery permits.
       (c) Conforming Amendments.--
       (1) In general.--Section 7518(e)(1) of the Internal Revenue 
     Code of 1986 (relating to purposes of qualified withdrawals) 
     is amended--
       (A) by striking ``for:'' and inserting
     ``for--'';
       (B) by striking ``vessel, or'' in subparagraph (B) and 
     inserting ``vessel;'';
       (C) by striking ``vessel.'' in subparagraph (C) and 
     inserting ``vessel;'';
       (D) by inserting after subparagraph (C) the following:
       ``(D) the payment of an industry fee authorized by the 
     fishing capacity reduction program under section 312 of the 
     Magnuson-Stevens Fishery Conservation and Management Act (16 
     U.S.C. 1861a);
       ``(E) in the case of any person or shareholder for whose 
     benefit such fund was established or any shareholder of such 
     person, a rollover contribution (within the meaning of 
     section 408(d)(3)) to such person's or shareholder's 
     individual retirement plan (as defined in section 
     7701(a)(37)); or
       ``(F) the payment to a person terminating a capital 
     construction fund for whose benefit the fund was established 
     and retiring related commercial fishing vessels and 
     permits.''.
       (2) Secretary to ensure retirement of vessels and 
     permits.--The Secretary of the Treasury by regulation shall 
     establish procedures to ensure that any person making a 
     qualified withdrawal authorized by section 7518(e)(1)(F) of 
     the Internal Revenue Code of 1986 retires the related 
     commercial use of fishing vessels and commercial fishery 
     permits referred to therein.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by this Act shall apply to withdrawals 
     made after the date of enactment of this Act.

                          ____________________