[Congressional Record Volume 148, Number 15 (Friday, February 15, 2002)]
[Senate]
[Pages S901-S907]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      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.
                                 ______