[Congressional Record Volume 151, Number 95 (Thursday, July 14, 2005)]
[Senate]
[Pages S8311-S8317]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CHAFEE (for himself, Mrs. Clinton, Mr. Inhofe, and Mr. 
        Jeffords):
  S. 1400. A bill to amend the Federal Water Pollution Control Act and 
the Safe Drinking Water Act to improve water and wastewater 
infrastructure in the United States; to the Committee on Environment 
and Public Works.
  Mr. CHAFEE. Mr. President, 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. 1400

       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 
     Infrastructure Financing Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                TITLE I--WATER POLLUTION INFRASTRUCTURE

Sec. 101. Technical assistance for rural and small treatment works.
Sec. 102. Projects eligible for assistance.
Sec. 103. Water pollution control revolving loan funds.
Sec. 104. Affordability.
Sec. 105. Transferability of funds.
Sec. 106. Costs of administering water pollution control revolving loan 
              funds.
Sec. 107. Water pollution control revolving loan funds.
Sec. 108. Noncompliance.
Sec. 109. Authorization of appropriations.
Sec. 110. Critical water infrastructure projects.

              TITLE II--SAFE DRINKING WATER INFRASTRUCTURE

Sec. 201. Preconstruction work.
Sec. 202. Affordability.
Sec. 203. Safe drinking water revolving loan funds.
Sec. 204. Other authorized activities.
Sec. 205. Priority system requirements.
Sec. 206. Authorization of appropriations.
Sec. 207. Critical drinking water infrastructure projects.
Sec. 208. Small system revolving loan funds.
Sec. 209. Study on lead contamination in drinking water.
Sec. 210. District of Columbia lead service line replacement.

                        TITLE III--MISCELLANEOUS

Sec. 301. Definitions.
Sec. 302. Demonstration grant program for water quality enhancement and 
              management.
Sec. 303. Agricultural pollution control technology grant program.
Sec. 304. State revolving fund review process.
Sec. 305. Cost of service study.
Sec. 306. Water resources study.

                TITLE I--WATER POLLUTION INFRASTRUCTURE

     SEC. 101. TECHNICAL ASSISTANCE FOR RURAL AND SMALL TREATMENT 
                   WORKS.

       (a) In General.--Title II of the Federal Water Pollution 
     Control Act (33 U.S.C. 1281 et seq.) is amended by adding at 
     the end the following:

     ``SEC. 222. TECHNICAL ASSISTANCE FOR RURAL AND SMALL 
                   TREATMENT WORKS.

       ``(a) Definition of Qualified Nonprofit Technical 
     Assistance Provider.--In this section, the term `qualified 
     nonprofit technical assistance provider' means a qualified 
     nonprofit technical assistance provider of water and 
     wastewater services to small rural communities that provide 
     technical assistance to treatment works (including circuit 
     rider programs and training and preliminary engineering 
     evaluations) that--
       ``(1) serve not more than 10,000 users; and
       ``(2) may include a State agency.
       ``(b) Grant Program.--
       ``(1) In general.--The Administrator may make grants to 
     qualified nonprofit technical assistance providers that are 
     qualified to provide assistance on a broad range of 
     wastewater and stormwater approaches--
       ``(A) to assist small treatment works to plan, develop, and 
     obtain financing for eligible projects described in section 
     603(c);
       ``(B) to capitalize revolving loan funds to provide loans, 
     in consultation with the State in which the assistance is 
     provided, to rural and small municipalities for 
     predevelopment costs (including costs for planning, design, 
     associated preconstruction, and necessary activities for 
     siting the facility and related elements) associated with 
     wastewater infrastructure projects or short-term costs 
     incurred for equipment replacement that is not part of 
     regular operation and maintenance activities for existing 
     wastewater systems, if--
       ``(i) any loan from the fund is made at or below the market 
     interest rate, for a term not to exceed 10 years;
       ``(ii) the amount of any single loan does not exceed 
     $100,000; and
       ``(iii) all loan repayments are credited to the fund;
       ``(C) to provide technical assistance and training for 
     rural and small publicly owned treatment works and 
     decentralized wastewater treatment systems to enable those 
     treatment works and systems to protect water quality and 
     achieve and maintain compliance with this Act; and
       ``(D) to disseminate information to rural and small 
     municipalities with respect to planning, design, 
     construction, and operation of publicly owned treatment works 
     and decentralized wastewater treatment systems.
       ``(2) Distribution of grant.--In carrying out this 
     subsection, the Administrator shall ensure, to the maximum 
     extent practicable, that technical assistance provided using 
     funds from a grant under paragraph (1) is made available in 
     each State.
       ``(3) 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.
       ``(4) Annual report.--For each fiscal year, a qualified 
     nonprofit technical assistance provider that receives a grant 
     under this subsection shall submit to the Administrator a 
     report that--
       ``(A) describes the activities of the qualified nonprofit 
     technical assistance provider using grant funds received 
     under this subsection for the fiscal year; and
       ``(B) specifies--
       ``(i) the number of communities served;
       ``(ii) the sizes of those communities; and
       ``(iii) the type of financing provided by the qualified 
     nonprofit technical assistance provider.
       ``(c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $25,000,000 for 
     each of fiscal years 2006 through 2010.''.
       (b) Guidance for Small Systems.--Section 602 of the Federal 
     Water Pollution Control Act (33 U.S.C. 1382) is amended by 
     adding at the end the following:
       ``(c) Guidance for Small Systems.--
       ``(1) Definition of small system.--In this subsection, the 
     term `small system' means a system--
       ``(A) for which a municipality or intermunicipal, 
     interstate, or State agency seeks assistance under this 
     title; and
       ``(B) that serves a population of 10,000 or fewer 
     households.

[[Page S8312]]

       ``(2) Simplified procedures.--Not later than 1 year after 
     the date of enactment of this subsection, the Administrator 
     shall assist the States in establishing simplified procedures 
     for small systems to obtain assistance under this title.
       ``(3) Publication of manual.--Not later than 1 year after 
     the date of enactment of this subsection, after providing 
     notice and opportunity for public comment, the Administrator 
     shall publish--
       ``(A) a manual to assist small systems in obtaining 
     assistance under this title; and
       ``(B) in the Federal Register, notice of the availability 
     of the manual.''.

     SEC. 102. 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.--Funds in each 
     State water pollution control revolving fund shall be used 
     only for--
       ``(1) providing financial assistance to any municipality or 
     an intermunicipal, interstate, or State agency that 
     principally treats municipal wastewater or domestic sewage 
     for construction (including planning, design, associated 
     preconstruction, and activities relating to the siting of a 
     facility) of a treatment works (as defined in section 212);
       ``(2) implementation of a management program established 
     under section 319;
       ``(3) development and implementation of a conservation and 
     management plan under section 320;
       ``(4) providing financial assistance to a municipality or 
     an intermunicipal, interstate, or State agency for projects 
     to increase the security of wastewater treatment works 
     (excluding any expenditure for operations or maintenance);
       ``(5) providing financial assistance to a municipality or 
     an intermunicipal, interstate, or State agency for measures 
     to control municipal stormwater, the primary purpose of which 
     is the preservation, protection, or enhancement of water 
     quality;
       ``(6) water conservation projects, the primary purpose of 
     which is the protection, preservation, and enhancement of 
     water quality; or
       ``(7) reuse, reclamation, and recycling projects, the 
     primary purpose of which is the protection, preservation, and 
     enhancement of water quality.''.

     SEC. 103. WATER POLLUTION CONTROL REVOLVING LOAN FUNDS.

       Section 603(d) of the Federal Water Pollution Control Act 
     (33 U.S.C. 1383(d)) is amended--
       (1) in paragraph (6), by striking ``and'' at the end;
       (2) in paragraph (7), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(8) to carry out a project under paragraph (2) or (3) of 
     section 601(a), which may be--
       ``(A) operated by a municipal, intermunicipal, or 
     interstate entity, State, public or private utility, 
     corporation, partnership, association, or nonprofit agency; 
     and
       ``(B) used to make loans that will be fully amortized not 
     later than 30 years after the date of the completion of the 
     project.''.

     SEC. 104. AFFORDABILITY.

       (a) In General.--Section 603 of the Federal Water Pollution 
     Control Act (33 U.S.C. 1383) is amended--
       (1) by redesignating subsections (e) through (h) as 
     subsections (f) through (i), respectively; and
       (2) by inserting after subsection (d) the following:
       ``(e) Types of Assistance for Disadvantaged Communities.--
       ``(1) Definition of disadvantaged community.--In this 
     subsection, the term `disadvantaged community' means the 
     service area, or portion of a service area, of a treatment 
     works that meets affordability criteria established after 
     public review and comment by the State in which the treatment 
     works is located.
       ``(2) Loan subsidy.--Notwithstanding any other provision of 
     this section, in a case in which the State makes a loan from 
     the water pollution control revolving loan fund in accordance 
     with subsection (c) to a disadvantaged community or a 
     community that the State expects to become a disadvantaged 
     community as the result of a proposed project, the State may 
     provide additional subsidization, including--
       ``(A) the forgiveness of the principal of the loan; and
       ``(B) an interest rate on the loan of zero percent.
       ``(3) Total amount of subsidies.--For each fiscal year, the 
     total amount of loan subsidies made by the State pursuant to 
     this subsection may not exceed 30 percent of the amount of 
     the capitalization grant received by the State for the fiscal 
     year.
       ``(4) Extended term.--A State may provide an extended term 
     for a loan if the extended term--
       ``(A) terminates not later than the date that is 30 years 
     after the date of completion of the project; and
       ``(B) does not exceed the expected design life of the 
     project.
       ``(5) Information.--The Administrator may publish 
     information to assist States in establishing affordability 
     criteria described in paragraph (1).''.
       (b) Conforming Amendment.--Section 221(d) of the Federal 
     Water Pollution Control Act (33 U.S.C. 1301(d)) is amended in 
     the second sentence by striking ``603(h)'' and inserting 
     ``603(i)''.

     SEC. 105. TRANSFERABILITY OF FUNDS.

       Section 603 of the Federal Water Pollution Control Act (33 
     U.S.C. 1383) (as amended by section 104(a)(1)) is amended by 
     adding at the end the following:
       ``(j) Transfer of Funds.--
       ``(1) In general.--The Governor of a State may--
       ``(A)(i) reserve not more than 33 percent of a 
     capitalization grant made under this title; and
       ``(ii) 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)(i) reserve for any year an amount that does not 
     exceed 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
       ``(ii) 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)).''.

     SEC. 106. COSTS OF ADMINISTERING WATER POLLUTION CONTROL 
                   REVOLVING LOAN FUNDS.

       Section 603(d)(7) of the Federal Water Pollution Control 
     Act (33 U.S.C. 1383(d)(7)) is amended by striking ``4 
     percent'' and inserting ``6 percent''.

     SEC. 107. WATER POLLUTION CONTROL REVOLVING LOAN FUNDS.

       Section 603 of the Federal Water Pollution Control Act (33 
     U.S.C. 1383) is amended by striking subsection (h) (as 
     redesignated by section 104) and inserting the following:
       ``(h) Priority System Requirement.--
       ``(1) Definitions.--In this subsection:
       ``(A) Restructuring.--The term `restructuring' means--
       ``(i) the consolidation of management functions or 
     ownership with another facility; or
       ``(ii) the formation of cooperative partnerships.
       ``(B) Traditional wastewater approach.--The term 
     `traditional wastewater approach' means a managed system used 
     to collect and treat wastewater from an entire service area 
     consisting of--
       ``(i) collection sewers;
       ``(ii) a centralized treatment plant using biological, 
     physical, or chemical treatment processes; and
       ``(iii) a direct point source discharge to surface water.
       ``(2) Priority system.--In providing financial assistance 
     from the water pollution control revolving fund of the State, 
     the State shall--
       ``(A) give greater weight to an application for assistance 
     by a treatment works if the application includes such other 
     information as the State determines to be appropriate and--
       ``(i) an inventory of assets, including a description of 
     the condition of those assets;
       ``(ii) a schedule for replacement of the assets;
       ``(iii) a financing plan indicating sources of revenue from 
     ratepayers, grants, bonds, other loans, and other sources;
       ``(iv) a review of options for restructuring the treatment 
     works;
       ``(v) a review of options for approaches other than a 
     traditional wastewater approach that may include actions or 
     projects that treat or minimize sewage or urban stormwater 
     discharges using--

       ``(I) decentralized or distributed stormwater controls;
       ``(II) decentralized wastewater treatment;
       ``(III) low impact development technologies;
       ``(IV) stream buffers;
       ``(V) wetland restoration; or
       ``(VI) actions to minimize the quantity of and direct 
     connections to impervious surfaces;

       ``(vi) demonstration of consistency with State, regional, 
     and municipal watershed plans;
       ``(vii) a review of options for urban waterfront 
     development or brownfields revitalization to be completed in 
     conjunction with the project; or
       ``(viii) provides the applicant the flexibility through 
     alternative means to carry out responsibilities under Federal 
     regulations, that may include watershed permitting and other 
     innovative management approaches, while achieving results 
     that--

       ``(I) the State, with the delegated authority under section 
     402(a)(5), determines meet permit requirements for permits 
     that have been issued in accordance with the national 
     pollution discharge elimination system under section 402; or
       ``(II) the Administrator determines are measurably superior 
     when compared to regulatory standards;

       ``(B) take into consideration appropriate chemical, 
     physical, and biological data that the State considers 
     reasonably available and of sufficient quality;
       ``(C) provide for public notice and opportunity to comment 
     on the establishment of the system and the summary under 
     subparagraph (D);
       ``(D) publish not less than biennially in summary form a 
     description of projects in the State that are eligible for 
     assistance under this title that indicates--
       ``(i) the priority assigned to each project under the 
     priority system of the State; and
       ``(ii) the funding schedule for each project, to that 
     extent the information is available; and

[[Page S8313]]

       ``(E) ensure that projects undertaken with assistance under 
     this title are designed to achieve, as determined by the 
     State, the optimum water quality management, consistent with 
     the public health and water quality goals and requirements of 
     this title.
       ``(3) Savings clause.--Nothing in paragraph (2)(A)(viii) 
     affects the authority of the Administrator under section 
     402(a)(5).''.

     SEC. 108. NONCOMPLIANCE.

       Section 603 of the Federal Water Pollution Control Act (33 
     U.S.C. 1383) (as amended by section 105) is amended by adding 
     at the end the following:
       ``(k) Noncompliance.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     assistance (other than assistance that is to be used by a 
     treatment works solely for planning, design, or security 
     purposes) shall be provided under this title to a treatment 
     works that has been in significant noncompliance with any 
     requirement of this Act for any of the 4 quarters in the 
     previous 8 quarters, unless the treatment works is in 
     compliance with, or has entered into, an enforceable 
     administrative order to effect compliance with the 
     requirement.
       ``(2) Exception.--A treatment works that is determined 
     under paragraph (1) to be in significant noncompliance with a 
     requirement described in that paragraph may receive 
     assistance under this title if the Administrator and the 
     State providing the assistance determine that--
       ``(A) the entity conducting the enforcement action on which 
     the determination of significant noncompliance is based has 
     determined that the use of assistance would enable the 
     treatment works to take corrective action toward resolving 
     the violations; or
       ``(B) the entity conducting the enforcement action on which 
     the determination of significant noncompliance is based has 
     determined that the assistance would be used on a portion of 
     the treatment works that is not directly related to the cause 
     of finding significant noncompliance.''.

     SEC. 109. 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) $3,200,000,000 for each of fiscal years 2006 and 
     2007;
       ``(2) $3,600,000,000 for fiscal year 2008;
       ``(3) $4,000,000,000 for fiscal year 2009; and
       ``(4) $6,000,000,000 for fiscal year 2010.
       ``(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).''.

     SEC. 110. CRITICAL WATER INFRASTRUCTURE PROJECTS.

       (a) Establishment.--Not later than 180 days after the date 
     of enactment of this Act, the Administrator shall establish a 
     program under which grants are provided to eligible entities 
     for use in carrying out projects and activities the primary 
     purpose of which is watershed restoration through the 
     protection or improvement of water quality.
       (b) Project Selection.--
       (1) In general.--The Administrator may provide funds under 
     this section to an eligible entity to carry out an eligible 
     project described in paragraph (2).
       (2) Equitable distribution.--The Administrator shall ensure 
     an equitable distribution of projects under this section, 
     taking into account cost and number of requests for each 
     category listed in paragraph (3).
       (3) Eligible projects.--A project that is eligible to be 
     carried out using funds provided under this section may 
     include projects that--
       (A) are listed on the priority list of a State under 
     section 216 of the Federal Water Pollution Control Act (33 
     U.S.C. 1296);
       (B) mitigate wet weather flows, including combined sewer 
     overflows, sanitary sewer overflows, and stormwater 
     discharges;
       (C) upgrade publicly owned treatment works with a permitted 
     design capacity to treat an annual average of at least 
     500,000 gallons of wastewater per day, the upgrade of which 
     would produce the greatest nutrient load reductions at points 
     of discharge, or result in the greatest environmental 
     benefits, with nutrient removal technologies that are 
     designed to reduce total nitrogen in discharged wastewater to 
     an average annual concentration of 3 milligrams per liter;
       (D) implement locally based watershed protection plans 
     created by local nonprofit organizations that--
       (i) provide a coordinating framework for management that 
     focuses public and private efforts to address the highest 
     priority water-related problems within a geographic area, 
     considering both ground and surface water flow; and
       (ii) includes representatives from both point source and 
     nonpoint source contributors;
       (E) are contained in a State plan developed in accordance 
     with section 319 or 320 of the Federal Water Pollution 
     Control Act (33 U.S.C. 1329, 1330); or
       (F) include means to develop alternative water supplies.
       (c) Local Participation.--In prioritizing projects for 
     implementation under this section, the Administrator shall 
     consult with, and consider the priorities of--
       (1) affected State and local governments; and
       (2) public and private entities that are active in 
     watershed planning and restoration.
       (d) Cost Sharing.--Before carrying out any project under 
     this section, the Administrator shall enter into a binding 
     agreement with 1 or more non-Federal interests that shall 
     require the non-Federal interests--
       (1) to pay 45 percent of the total costs of the project, 
     which may include services, materials, supplies, or other in-
     kind contributions;
       (2) to provide any land, easements, rights-of-way, and 
     relocations necessary to carry out the project; and
       (3) to pay 100 percent of any operation, maintenance, 
     repair, replacement, and rehabilitation costs associated with 
     the project.
       (e) Waiver.--The Administrator may waive the requirement to 
     pay the non-Federal share of the cost of carrying out an 
     eligible activity using funds from a grant provided under 
     this section if the Administrator determines that an eligible 
     entity is unable to pay, or would experience significant 
     financial hardship if required to pay, the non-Federal share.
       (f) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $300,000,000 for 
     each of fiscal years 2006 through 2010.

              TITLE II--SAFE DRINKING WATER INFRASTRUCTURE

     SEC. 201. PRECONSTRUCTION WORK.

       Section 1452(a)(2) of the Safe Drinking Water Act (42 
     U.S.C. 300j-12(a)(2)) is amended in the second sentence--
       (1) by striking ``(not'' and inserting ``(including 
     expenditures for planning, design, and associated 
     preconstruction and for recovery for siting of the facility 
     and related elements but not''; and
       (2) by inserting before the period at the end the 
     following: ``or to replace or rehabilitate aging collection, 
     treatment, storage (including reservoirs), or distribution 
     facilities of public water systems or provide for capital 
     projects to upgrade the security of public water systems''.

     SEC. 202. AFFORDABILITY.

       Section 1452(d)(3) of the Safe Drinking Water Act (42 
     U.S.C. 300j-12(d)(3)) is amended in the first sentence by 
     inserting ``, or portion of a service area,'' after ``service 
     area''.

     SEC. 203. SAFE DRINKING WATER REVOLVING LOAN FUNDS.

       Section 1452(g) of the Safe Drinking Water Act (42 U.S.C. 
     300j-12(g)) is amended--
       (1) paragraph (2)--
       (A) in the first sentence, by striking ``4'' and inserting 
     ``6''; and
       (B) by striking ``1419,'' and all that follows through 
     ``1933.'' and inserting ``1419.''; and
       (2) by adding at the end the following:
       ``(5) Transfer of funds.--
       ``(A) In general.--The Governor of a State may--
       ``(i)(I) reserve not more than 33 percent of a 
     capitalization grant made under this section; and
       ``(II) 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)(I) reserve for any fiscal year an amount that does 
     not exceed the amount that may be reserved under clause 
     (i)(I) for that year from capitalization grants made under 
     section 601 of that Act (33 U.S.C. 1381); and
       ``(II) 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. 204. OTHER AUTHORIZED ACTIVITIES.

       Section 1452(k)(2)(D) of the Safe Drinking Water Act (42 
     U.S.C. 300j-12(k)(2)(D)) is amended by inserting before the 
     period at the end the following: ``(including implementation 
     of source water protection plans)''.

     SEC. 205. PRIORITY SYSTEM REQUIREMENTS.

       Section 1452(b)(3) of the Safe Drinking Water Act (42 
     U.S.C. 300j-12(b)(3)) is amended--
       (1) by redesignating subparagraph (B) as subparagraph (D);
       (2) by striking subparagraph (A) and inserting the 
     following:
       ``(A) Definition of restructuring.--In this paragraph, the 
     term `restructuring' means changes in operations (including 
     ownership, accounting, rates, maintenance, consolidation, and 
     alternative water supply).
       ``(B) Priority system.--An intended use plan shall provide, 
     to the maximum extent practicable, that priority for the use 
     of funds be given to projects that--
       ``(i) address the most serious risk to human health;
       ``(ii) are necessary to ensure compliance with this title 
     (including requirements for filtration); and
       ``(iii) assist systems most in need on a per-household 
     basis according to State affordability criteria.
       ``(C) Weight given to applications.--After determining 
     project priorities under subparagraph (B), an intended use 
     plan shall further provide that the State shall give greater 
     weight to an application for assistance by a community water 
     system if the application includes such other information as 
     the State determines to be necessary and--

[[Page S8314]]

       ``(i) an inventory of assets, including a description of 
     the condition of the assets;
       ``(ii) a schedule for replacement of assets;
       ``(iii) a financing plan indicating sources of revenue from 
     ratepayers, grants, bonds, other loans, and other sources;
       ``(iv) a review of options for restructuring the public 
     water system;
       ``(v) demonstration of consistency with State, regional, 
     and municipal watershed plans; or
       ``(vi) a review of options for urban waterfront development 
     or brownfields revitalization to be completed in conjunction 
     with the project;''; and
       (3) in subparagraph (D) (as redesignated by paragraph (1)), 
     by striking ``periodically'' and inserting ``at least 
     biennially''.

     SEC. 206. 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) $1,500,000,000 for fiscal year 2006;
       ``(B) $2,000,000,000 for each of fiscal years 2007 and 
     2008;
       ``(C) $3,500,000,000 for fiscal year 2009; and
       ``(D) $6,000,000,000 for fiscal year 2010.
       ``(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).''.

     SEC. 207. CRITICAL DRINKING WATER INFRASTRUCTURE PROJECTS.

       (a) Establishment.--Not later than 180 days after the date 
     of enactment of this Act, the Administrator of the 
     Environmental Protection Agency shall establish a program 
     under which grants are provided to eligible entities for use 
     in carrying out projects and activities the primary purpose 
     of which is to assist community water systems in meeting the 
     requirements of the Safe Drinking Water Act (42 U.S.C. 300f 
     et seq.).
       (b) Project Selection.--A project that is eligible to be 
     carried out using funds provided under this section may 
     include projects that--
       (1) develop alternative water sources;
       (2) provide assistance to small systems; or
       (3) assist a community water system--
       (A) to comply with a national primary drinking water 
     regulation; or
       (B) to mitigate groundwater contamination.
       (c) Eligible Entities.--An entity eligible to receive a 
     grant under this section is--
       (1) a community water system as defined in section 1401 of 
     the Safe Drinking Water Act (42 U.S.C. 300f); or
       (2) a system that is located in an area governed by an 
     Indian Tribe, as defined in section 1401 of the Safe Drinking 
     Water Act (42 U.S.C. 300f);
       (d) Priority.--In prioritizing projects for implementation 
     under this section, the Administrator shall give priority to 
     community water systems that--
       (1) serve a community that, under affordability criteria 
     established by the State under section 1452(d)(3) of the Safe 
     Drinking Water Act (42 U.S.C. 300j-12), is determined by the 
     State to be--
       (A) a disadvantaged community; or
       (B) a community that may become a disadvantaged community 
     as a result of carrying out an eligible activity; or
       (2) serve a community with a population of less than 10,000 
     households.
       (e) Local Participation.--In prioritizing projects for 
     implementation under this section, the Administrator shall 
     consult with, and consider the priorities of, affected 
     States, Tribes, and local governments.
       (f) Cost Sharing.--Before carrying out any project under 
     this section, the Administrator shall enter into a binding 
     agreement with 1 or more non-Federal interests that shall 
     require the non-Federal interests--
       (1) to pay 45 percent of the total costs of the project, 
     which may include services, materials, supplies, or other in-
     kind contributions;
       (2) to provide any land, easements, rights-of-way, and 
     relocations necessary to carry out the project; and
       (3) to pay 100 percent of any operation, maintenance, 
     repair, replacement, and rehabilitation costs associated with 
     the project.
       (g) Waiver.--The Administrator may waive the requirement to 
     pay the non-Federal share of the cost of carrying out an 
     eligible activity using funds from a grant provided under 
     this section if the Administrator determines that an eligible 
     entity is unable to pay, or would experience significant 
     financial hardship if required to pay, the non-Federal share.
       (h) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $300,000,000 for 
     each of fiscal years 2006 through 2010.

     SEC. 208. SMALL SYSTEM REVOLVING LOAN FUNDS.

       Section 1442(e) of the Safe Drinking Water Act (42 U.S.C. 
     300j091(e)) is amended--
       (1) in the first sentence, by striking ``The Administrator 
     may provide'' and inserting the following:
       ``(1) In general.--The Administrator may provide''; and
       (2) by adding at the end the following:
       ``(2) Small system revolving loan fund.--
       ``(A) In general.--In addition to amounts provided under 
     this section, the Administrator may provide grants to 
     qualified private, nonprofit entities to capitalize revolving 
     funds to provide financing to eligible entities described in 
     subparagraph (B) for--
       ``(i) predevelopment costs (including costs for planning, 
     design, associated preconstruction, and necessary activities 
     for siting the facility and related elements) associated with 
     proposed water projects or with existing water systems; and
       ``(ii) short-term costs incurred for replacement equipment, 
     small-scale extension services, or other small capital 
     projects that are not part of the regular operations and 
     maintenance activities of existing water systems.
       ``(B) Eligible entities.--To be eligible for assistance 
     under this paragraph, an entity shall be a small water system 
     (as described in section 1412(b)(4)(E)(ii)).
       ``(C) Maximum amount of loans.--The amount of financing 
     made to an eligible entity under this paragraph shall not 
     exceed--
       ``(i) $100,000 for costs described in subparagraph (A)(i); 
     and
       ``(ii) $100,000 for costs described in subparagraph 
     (A)(ii).
       ``(D) Term.--The term of a loan made to an eligible entity 
     under this paragraph shall not exceed 10 years.
       ``(E) Annual report.--For each fiscal year, a qualified 
     private, nonprofit entity that receives a grant under 
     subparagraph (A) shall submit to the Administrator a report 
     that--
       ``(i) describes the activities of the qualified private, 
     nonprofit entity under this paragraph for the fiscal year; 
     and
       ``(ii) specifies--

       ``(I) the number of communities served;
       ``(II) the sizes of those communities; and
       ``(III) the type of financing provided by the qualified 
     private, nonprofit entity.

       ``(F) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $25,000,000 
     for each of fiscal years 2006 through 2010.''.

     SEC. 209. STUDY ON LEAD CONTAMINATION IN DRINKING WATER.

       (a) In General.--As soon as practicable after the date of 
     enactment of this Act, the Administrator of the Environmental 
     Protection Agency shall enter into a cooperative agreement 
     with the National Academy of Sciences to carry out a study to 
     analyze existing market conditions for plumbing components, 
     including pipes, faucets, water meters, valves, household 
     valves, and any other plumbing components that come into 
     contact with water commonly used for human consumption.
       (b) Components.--In conducting the study under subsection 
     (a), the National Academy of Sciences shall evaluate for each 
     category of plumbing components described in subsection (a)--
       (1) the availability of plumbing components in each 
     category with lead content below 8 percent, including those 
     between 0 percent and 4 percent and those between 4 percent 
     and 8 percent;
       (2) the relative market share of the plumbing components;
       (3) the relative cost of the plumbing components;
       (4) the issues surrounding transition from current market 
     to plumbing components with not more than 0.2 percent lead;
       (5) the feasibility of manufacturing plumbing components 
     with lead levels below 8 percent; and
       (6) the use of lead alternatives in plumbing components 
     with lead levels below 8 percent.
       (c) Report.--Not late than 1 year after the date of 
     enactment of this Act, the National Academy of Sciences shall 
     submit to the Committee on Environment and Public Works of 
     the Senate and the Committee on Energy and Commerce of the 
     House of Representatives a report describing the findings of 
     the study under this section.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $500,000.

     SEC. 210. DISTRICT OF COLUMBIA LEAD SERVICE LINE REPLACEMENT.

       (a) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out lead service line replacement 
     in the District of Columbia $30,000,000 for each of fiscal 
     years 2007 through 2011.
       (b) Lead Service Line Replacement Assistance Fund.--
       (1) In general.--Of the funds provided under subsection 
     (a), not more than $2,000,000 per year may be allocated for 
     water service line replacement grants to provide assistance 
     to low-income residents to replace the privately-owned 
     portion of lead service lines.
       (2) Limitation.--Individual grants shall be limited to not 
     more than $5,000.
       (3) Definition of low income.--For the purpose of this 
     subsection, the term ``low-income'' shall be defined by the 
     District of Columbia.

                        TITLE III--MISCELLANEOUS

     SEC. 301. DEFINITIONS.

       In this title:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior, acting through the Director of the United 
     States Geological Survey.

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

       (a) Establishment.--

[[Page S8315]]

       (1) In general.--As soon as practicable after the date of 
     enactment of this Act, the Administrator shall establish a 
     nationwide demonstration grant program to--
       (A) promote innovations in technology and alternative 
     approaches to water quality management or water supply; or
       (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 grant program shall consist 
     of 10 projects each 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 participate 
     in the demonstration grant 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 or rural 
     areas;
       (C) includes a strategy under which the municipality, 
     through participation in the demonstration grant program, 
     could effectively--
       (i) address water quality or water supply problems; and
       (ii) achieve the water quality goals that--

       (I) could be achieved using more traditional methods; and
       (II) are required under--

       (aa) the Federal Water Pollution Control Act (33 U.S.C. 
     1251 et seq.); or
       (bb) the Safe Drinking Water Act (42 U.S.C. 300f et seq.); 
     and
       (D) includes a schedule for achieving the water quality or 
     water supply goals of the municipality.
       (2) Types of projects.--In carrying out the demonstration 
     grant program, the Administrator shall provide grants for 
     projects relating to water supply or water quality matters 
     such as--
       (A) excessive nutrient growth;
       (B) urban or rural population pressure;
       (C) lack of an alternative water supply;
       (D) difficulties in water conservation and efficiency;
       (E) lack of support tools and technologies to rehabilitate 
     and replace water supplies;
       (F) lack of monitoring and data analysis for water 
     distribution systems;
       (G) nonpoint source water pollution (including stormwater);
       (H) sanitary overflows;
       (I) combined sewer overflows;
       (J) problems with naturally occurring constituents of 
     concern;
       (K) problems with erosion and excess sediment;
       (L) new approaches to water treatment, distribution, and 
     collection systems; and
       (M) new methods for collecting and treating wastewater 
     (including system design and nonstructural alternatives).
       (3) Responsibilities of administrator.--In providing grants 
     for projects under this subsection, the Administrator shall--
       (A) ensure, to the maximum extent practicable, that--
       (i) the demonstration program includes 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) 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 community having a population of 10,000 or fewer 
     individuals receives a grant for each fiscal 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 total cost of a project funded 
     by a grant under this section shall be not less than 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 grant recipients.--A recipient of a grant 
     under this section shall submit to the Administrator, on the 
     date of completion of a project of the recipient 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 submit to the 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) Research and Development.--
       (1) In general.--As soon as practicable after the date of 
     enactment of this Act, the Administrator shall, through a 
     competitive process, award grants and enter into contracts 
     and cooperative agreements with research institutions, 
     educational institutions, and other appropriate entities 
     (including consortia of such institutions and entities) for 
     research and development on the use of innovative and 
     alternative technologies to improve water quality or drinking 
     water supply.
       (2) Types of projects.--In carrying out this subsection, 
     the Administrator may select projects relating to such 
     matters as innovative or alternative technologies, 
     approaches, practices, or methods--
       (A) to increase the effectiveness and efficiency of public 
     water supply systems, including--
       (i) source water protection;
       (ii) water use reduction;
       (iii) water reuse;
       (iv) water treatment;
       (v) water distribution and collection systems; and
       (vi) water security;
       (B) to encourage the use of innovative or alternative 
     technologies or approaches relating to water supply or 
     availability;
       (C) to increase the effectiveness and efficiency of new and 
     existing treatment works, including--
       (i) methods of collecting, treating, dispersing, reusing, 
     reclaiming, and recycling wastewater;
       (ii) system design;
       (iii) nonstructural alternatives;
       (iv) decentralized approaches;
       (v) assessment;
       (vi) water efficiency; and
       (vii) wastewater security;
       (D) to increase the effectiveness and efficiency of 
     municipal separate storm sewer systems;
       (E) to promote new water treatment technologies, including 
     commercialization and dissemination strategies for adoption 
     of innovative or alternative low impact development 
     technologies in the homebuilding industry; or
       (F) to maintain a clearinghouse of technologies developed 
     under this subsection and subsection (a) at a research 
     consortium or institute.
       (3) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $20,000,000 
     for each of fiscal years 2006 through 2010.
       (f) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section (other than 
     subsection (e)) $20,000,000 for each of fiscal years 2006 
     through 2010.

     SEC. 303. AGRICULTURAL POLLUTION CONTROL TECHNOLOGY GRANT 
                   PROGRAM.

       (a) Definitions.--In this section:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Agricultural commodity.--The term ``agricultural 
     commodity'' means--
       (A) agricultural, horticultural, viticultural, and dairy 
     products;
       (B) livestock and the products of livestock;
       (C) the products of poultry and bee raising;
       (D) the products of forestry;
       (E) other commodities raised or produced on agricultural 
     sites, as determined to be appropriate by the Secretary; and
       (F) products processed or manufactured from products 
     specified in subparagraphs (A) through (E), as determined by 
     the Secretary.
       (3) Agricultural project.--The term ``agricultural 
     project'' means an agricultural pollution control technology 
     project that, as determined by the Administrator--
       (A) is carried out at an agricultural site; and
       (B) achieves demonstrable reductions in air and water 
     pollution.
       (4) Agricultural site.--The term ``agricultural site'' 
     means a farming or ranching operation of a producer.
       (5) Producer.--The term ``producer'' means any person who 
     is engaged in the production and sale of an agricultural 
     commodity in the United States and who owns, or shares the 
     ownership and risk of loss of, the agricultural commodity.
       (6) Revolving fund.--The term ``revolving fund'' means an 
     agricultural pollution control technology State revolving 
     fund established by a State using amounts provided under 
     subsection (b)(1).
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.
       (b) Grants for Agricultural State Revolving Funds.--
       (1) In general.--As soon as practicable after the date of 
     enactment of this section, the Administrator shall provide to 
     each eligible State described in paragraph (2) 1 or more 
     capitalization grants, that cumulatively equal no more than 
     $1,000,000 per State, for use in establishing, within an 
     agency of the State having jurisdiction over agriculture or 
     environmental quality, an agricultural pollution control 
     technology State revolving fund.
       (2) Eligible states.--An eligible State referred to in 
     paragraph (1) is a State that agrees, prior to receipt of a 
     capitalization grant under paragraph (1)--
       (A) to establish, and deposit the funds from the grant in, 
     a revolving fund;

[[Page S8316]]

       (B) to provide, at a minimum, a State share in an amount 
     equal to 20 percent of the capitalization grant;
       (C) to use amounts in the revolving fund to make loans to 
     producers in accordance with subsection (c); and
       (D) to return amounts in the revolving fund if no loan 
     applications are granted within 2 years of the receipt of the 
     initial capitalization grant.
       (c) Loans to Producers.--
       (1) Use of funds.--A State that establishes a revolving 
     fund under subsection (b)(2) shall use amounts in the 
     revolving fund to provide loans to producers for use in 
     designing and constructing agricultural projects.
       (2) Maximum amount of loan.--The amount of a loan made to a 
     producer using funds from a revolving fund shall not exceed 
     $250,000, in the aggregate, for all agricultural projects 
     serving an agricultural site of the producer.
       (3) Conditions on loans.--A loan made to a producer using 
     funds from a revolving fund shall--
       (A) have an interest rate that is not more than the market 
     interest rate, including an interest-free loan; and
       (B) be repaid to the revolving fund not later than 10 years 
     after the date on which the loan is made.
       (d) Requirements for Producers.--
       (1) In general.--A producer that seeks to receive a loan 
     from a revolving fund shall--
       (A) submit to the State in which the agricultural site of 
     the producer is located an application that--
       (i) contains such information as the State may require; and
       (ii) demonstrates, to the satisfaction of the State, that 
     each project proposed to be carried out with funds from the 
     loan is an agricultural project; and
       (B) agree to expend all funds from a loan in an expeditious 
     and timely manner, as determined by the State.
       (2) Maximum percentage of agricultural project cost.--
     Subject to subsection (c)(2), a producer that receives a loan 
     from a revolving fund may use funds from the loan to pay up 
     to 100 percent of the cost of carrying out an agricultural 
     project.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $50,000,000.

     SEC. 304. STATE REVOLVING FUND REVIEW PROCESS.

       As soon as practicable after the date of enactment of this 
     Act, the Administrator shall--
       (1) consult with States, utilities, and other Federal 
     agencies providing financial assistance to identify ways to 
     expedite and improve the application and review process for 
     the provision of assistance from--
       (A) the State water pollution control revolving funds 
     established under title VI of the Federal Water Pollution 
     Control Act (33 U.S.C. 1381 et seq.); and
       (B) the State drinking water treatment revolving loan funds 
     established under section 1452 of the Safe Drinking Water Act 
     (42 U.S.C. 300-12);
       (2) take such administrative action as is necessary to 
     expedite and improve the process as the Administrator has 
     authority to take under existing law;
       (3) collect information relating to innovative approaches 
     taken by any State to simplify the application process of the 
     State, and provide the information to each State; and
       (4) submit to Congress a report that, based on the 
     information identified under paragraph (1), contains 
     recommendations for legislation to facilitate further 
     streamlining and improvement of the process.

     SEC. 305. COST OF SERVICE STUDY.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, the Administrator shall enter into a 
     contract with the National Academy of Sciences for, and the 
     National Academy of Sciences shall complete and provide to 
     the Administrator the results of, a study of the means by 
     which public water systems and treatment works selected by 
     the Academy in accordance with subsection (c) meet the costs 
     associated with operations, maintenance, capital replacement, 
     and regulatory requirements.
       (b) Required Elements.--
       (1) Affordability.--The study shall, at a minimum--
       (A) determine whether the rates at public water systems and 
     treatment works for communities included in the study were 
     established using a full-cost pricing model;
       (B) if a full-cost pricing model was not used, identify any 
     incentive rate systems that have been successful in 
     significantly reducing--
       (i) per capita water demand;
       (ii) the volume of wastewater flows;
       (iii) the volume of stormwater runoff; or
       (iv) the quantity of pollution generated by stormwater;
       (C) identify a set of best industry practices that public 
     water systems and treatment works may use in establishing a 
     rate structure that--
       (i) adequately addresses the true cost of services provided 
     to consumers by public water systems and treatment works, 
     including infrastructure replacement;
       (ii) encourages water conservation; and
       (iii) takes into consideration the needs of disadvantaged 
     individuals and communities, as identified by the 
     Administrator;
       (D) identify existing standards for affordability;
       (E) determine the manner in which those standards are 
     determined and defined;
       (F) determine the manner in which affordability varies with 
     respect to communities of different sizes and in different 
     regions; and
       (G) 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).
       (2) 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) Use of Results of Study.--On receipt of the results of 
     the study, the Administrator shall--
       (1) submit to Congress a report that describes the results 
     of the study; and
       (2) make the results available to treatment works and 
     public water systems for use by the publicly owned treatment 
     works and public water systems, on a voluntary basis, in 
     determining whether 1 or more new approaches may be 
     implemented at facilities of the publicly owned treatment 
     works and public water systems.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $1,000,000 for 
     each of fiscal years 2006 and 2007.

     SEC. 306. WATER RESOURCES STUDY.

       (a) Assessment.--
       (1) In general .--The Secretary shall--
       (A) not later than 2 years after the date of enactment of 
     this Act, conduct an assessment of water resources in the 
     United States; and
       (B) update the assessment every 2 years thereafter.
       (2) Components.--The assessment shall, at a minimum--
       (A) measure the status and trends of--
       (i) fresh water in rivers and reservoirs;
       (ii) groundwater levels and volume of useable fresh water 
     stored in aquifers; and
       (iii) fresh water withdrawn from streams and aquifers in 
     the United States; and
       (B) provide those measurements for--
       (i) watersheds defined by the 352 hydrologic accounting 
     units of the United States; and
       (ii) major aquifers of the United States, as identified by 
     the Secretary.
       (3) Report.--Not later than 1 year after the date of 
     completion of the assessment and every 2 years thereafter, 
     the Secretary shall submit to Congress a report--
       (A) describing the results of the assessment; and
       (B) containing any recommendations of the Secretary 
     relating to the assessment that--
       (i) are consistent with existing laws, treaties, decrees, 
     and interstate compacts; and
       (ii) respect the primary role of States in adjudicating, 
     administering, and regulating water rights and uses.
       (b) Water Resource Research Priorities.--
       (1) In general.--The Secretary shall coordinate a process 
     among Federal agencies and appropriate State agencies 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) water supply monitoring;
       (B) means of capturing excess water and flood water for 
     conservation and use in the event of a drought;
       (C) strategies to conserve existing water supplies, 
     including recommendations for repairing aging infrastructure;
       (D) identifying incentives to ensure an adequate and 
     dependable supply of water;
       (E) identifying available technologies and other methods to 
     optimize water supply reliability, availability, and quality, 
     while safeguarding the environment; and
       (F) improving the quality of water resource 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;

[[Page S8317]]

       (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 assessments 
     under subsection (a);
       (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 including 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
       (F) other water resource materials, as the Secretary 
     determine appropriate.
       (d) Report to Congress.--Not later than 2 years after the 
     date of enactment of this Act, and every 2 years thereafter 
     through fiscal year 2009, the Secretary shall submit to 
     Congress a report on the implementation of this section.
       (e) Savings Clause.--Nothing in this section--
       (1) modifies, supercedes, abrogates, impairs, or otherwise 
     affects in any way--
       (A) any right or jurisdiction of any State with respect to 
     the water (including boundary water) of the State;
       (B) the authority of any State to allocate quantities of 
     water within areas under the jurisdiction of the State; or
       (C) any right or claim to any quantity or use of water that 
     has been adjudicated, allocated, or claimed--
       (i) in accordance with State law;
       (ii) in accordance with subsections (a) through (c) of 
     section 208 of the Department of Justice Appropriation Act, 
     1953 (43 U.S.C. 666);
       (iii) by or pursuant to an interstate compact; or
       (iv) by a decision of the United States Supreme Court;
       (2) requires a change in the nature of use or the transfer 
     of any right to use water or creates a limitation on the 
     exercise of any right to use water; or
       (3) requires modifying the delivery, diversion, non-
     diversion, allocation, storage, or release from storage of 
     any water to be delivered by contract.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated--
       (1) to carry out the report authorized by this section, 
     $3,000,000, to remain available until expended; and
       (2) to carry out the updates authorized by subsection 
     (a)(1)(B), such sums as are necessary.
  Mr. GREGG. Mr. President, sustained military operations in 
Afghanistan and Iraq have brought to light another example of how 
outdated and burdensome government policies can punish generous 
employers. Employers that continue to pay their employees now on active 
duty in the uniformed services are experiencing tax and pension 
difficulties that are discouraging this pro-worker, patriotic gesture. 
Apparently, when it comes to companies showing their respect for their 
employees called to serve, there is special meaning to the old cliche 
``no good deed goes unpunished.''
  The National Committee for Employer Support for the Guard and 
Reserve, a nationwide association, reports that thousands of employers 
across the country have signed a pledge of support and have gone above 
and beyond the requirements of the law in support of their National 
Guard and Reserve employees. This includes many of our Nation's largest 
and most reputable corporations, including 3M, McDonalds, Wal-Mart, 
Home Depot, Liberty Mutual and many others. These commendable companies 
provide reservist employees who are on active duty with ``differential 
pay'' that makes up the difference between their military stipend and 
civilian salary.
  In New Hampshire, some of the most remarkable stories of corporate 
patriotism can be found. BAE Systems of Nashua has 110 people serving 
in the Guard and Reserves, 11 of whom are currently deployed overseas. 
They provide differential pay to all their called-up employees and 
continuing access to benefits to family members. The company even 
provides a stipend to make up the lost pay of active duty spouses of 
company employees when the spouse's employer is not able to provide 
differential pay.
  Consider also the account of Mr. Marian Noronha, Chairman and Founder 
of Turbocam, a manufacturer based in Dover, New Hampshire. An immigrant 
from India, Mr. Noronha has not only provided his employees with 
differential pay and continued family health benefits, but has also 
extended to each of his activated employees a $10,000 line of credit. 
His active duty reservist and Guard employees have used this money to, 
among other things, purchase personal computers so their families can 
communicate with them while they are overseas. Several other New 
Hampshire private-sector companies, including Hitchiner Manufacturing 
Company in Milford, have exemplary records when it comes to dealing 
with reservist employees.
  Under current law, employers of reservists and guardsmen called up 
for active duty are required to treat them as if they are on a leave of 
absence under the Uniformed Services Employment and Reemployment Rights 
Act of 1994 (USERRA). The Act does not require employers to pay 
reservists who are on active duty. But as I have pointed out, many 
employers pay the reservists the difference between their military 
stipends and their regular salaries. Some employers provide this 
``differential pay'' for up to three years. For employee convenience, 
many of these companies also allow deductions from the differential 
payment for contributions to their 401(k) retirement plans.
  The conflict arises, however, because a 1969 IRS Revenue Ruling 
considers the employment relationship terminated when active duty 
begins. This ruling prevents employers from treating the differential 
pay as wages for income tax purposes, resulting in unexpected tax bills 
at the end of the year for these military personnel. Further, the 
contributions made to the worker's retirement account potentially 
invalidate, disqualify, the employer's entire retirement plan which 
could make all amounts immediately taxable to plan participants and the 
employer.
  The Uniformed Services Differential Pay Protection Act that I am 
introducing today clarifies that differential wage payments are to be 
treated as wages to current employees for income tax purposes and that 
retirement plan contributions are permissible. The bill does the 
following:
  Differential wage payments would be treated as wages for income tax 
withholding purposes and reported on the worker's W-2 form. This means 
that active duty personnel will not be hit with end-of-the-year tax 
bills.
  No New Taxes: The legislation does not change present law, and 
deferential wage payments will not be subject to Social Security and 
unemployment compensation taxes.
  Definition: ``Differential wage payments'' are defined to mean any 
payment which: 1. is made by an employer to an individual while he or 
she is on active duty for a period of more than 30 days, and 2. 
represents all or a portion of the wages the individual would have 
received from the employer if he or she were performing service for the 
employer.
  An individual receiving differential wage payments would continue to 
be treated as an employee for purposes of the rules applicable to 
qualified retirement plans, removing the threat that contributions on 
his or her behalf would invalidate the employer's entire plan.
  Distributions Protected: Clarifying language is included to ensure 
that individuals would continue to be permitted to take distributions 
from their accounts when they leave their jobs for active duty. Thus, 
the right to receive distributions will be preserved even though 
individuals are treated as current employees for contribution purposes. 
The bill includes a prohibition on making elective deferrals or 
employee contributions for six months after receiving a distribution.
  Satisfying Nondiscrimination Rules: In order to avoid disruptions in 
retirement savings plans and to remove disincentives, employers could 
disregard contributions to retirement savings accounts based on 
differential wage payments for nondiscrimination testing purposes, 
provided that such payments are available to all mobilized employees on 
reasonably equivalent terms.
  In summary, the Uniformed Services Differential Pay Protection Act 
upholds the principle that employers should not be penalized for their 
generosity towards our Nation's reservists and members of the National 
Guard.
                                 ______